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HomeMy WebLinkAboutAEA Board Meeting Feb 14 2008==)ENERGY AUTHORITYxyeaEhaIndustrialDevelopmentExportAuthority AGENDA Alaska Energy Authority Board of Directors Thursday,February 14,2008 Anchorage,Alaska 1.CALL TO ORDER 2.BOARD OF DIRECTORS ROLL CALL 3.PUBLIC ROLL CALL 4.PUBLIC COMMENTS 5.PRIOR MINUTES -January 25,2008 6.OLD BUSINESS 7.NEW BUSINESS A.Executive Director Search 8.DIRECTOR COMMENTS A.Director's Status Report of AEA Programs and Projects e Alaska Intertie Project Update e AEA Project Fact Sheets,Update and Discussion B.Next meeting date April 10,2008 9.BOARD COMMENTS 10.ADJOURNMENT 813 West Northem 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 JANUARY SM T W T F 23467891011 13 14 15 16 17 18 20 Ql)22 23 24 25 27 28 29 30 31 FEBRUARY SM TWTF I 3 aos 6 7 810I12131415 17 19 20 21 22 24 25 26 27 28 29 MARCH SM TWTF 23 4 567 9 10 11 1213 14161718192021232425262728 APRIL SM TWTF 1234 6 7 8 91011 13 14 15 16 17 18 20 21 22 23 24 25 27 28 29 30 MAY SM TWTF 1 2 4 56789 11 12 13 14 15 16 18 19 20 21 22 2325@6)27 28 29 30 JUNE SM TWTF 1 2 3 4.5 68910142)13 15 16 17 18 19 20222324252627 29 30 S 5 12 19 26 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 19 21 22 23 24 25 26 28 29 30 31 AUGUST M TWTF S 1 2 4 5 6789 11 12 13 14 15 16 18 19 20 21 22 23 25 26 27 28 29 30 SEPTEMBER M TWTFS GQ)2 345 68910111213 15 16 17 18 19 20 22 23 24 25 26 27 29 30 OCTOBER M T W T F :29 65a11516!20 n 22 23 24 2 27 28 29 30 31 Ss 3 4 10 11 18 5 NOVEMBER M TWTFS 1 3 4 567810(il)12 13.14 15 17 18 19 20 21 22 24 25 2622 28 29 DECEMBER M TWTES 12 345 6 8 9 10 11}12 13 15 16 17 18 19 20222324Q5)26 27 29 30 31 proversWw EN [=ALASKAca)ENERGY AUTHORITY*AAlaska Industrial DevelopmentandExportAuthority MINUTES Alaska Energy Authority Board of Directors Thursday,February 14,2008 Anchorage,Alaska 1.CALL TO ORDER Chairman Kelsey called the meeting of the Alaska Energy Authority to order on February 14,2008 at 3:05 p.m.A quorum was established. 2.BOARD OF DIRECTORS ROLL CALL Directors present in Anchorage:Chair John Kelsey (Public Member);Deputy Commissioner Brian Andrews (Designee for Department of Revenue);and Commissioner Emil Notti (Department of Commerce,Community &Economic Development). Directors joined meeting in progress by teleconference:Mr.John Winther (Vice Chair,Public Member)and 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);James Hemsath (Deputy Director-Development);Valorie Walker (Deputy Director-Finance);Mark Schimscheimer (Project Manager);Jim Strandberg (Project Manager);Brenda Fuglestad (Administrative Manager);and Sherrie M.Siverson (Administrative Assistant). Others Present:Brian Bjorkquist (Department of Law);and Christine Vecchio (MEA Ratepayers Alliance). 4.PUBLIC COMMENTS VERBATIM Christine Vecchio,MEA Ratepayers Alliance:My name is Christine Vecchio.|am with the MEA Ratepayers Alliance.|wanted to make some comments on a couple of things.|was at the meetingonthe25"of January and |am sorry |walked in late to the AIDEA portion but this has to do with the selection of your Executive Director for AEA and once again,|think you know that |am a big proponent of public input and public process to this particular authority.First of all,|did a lot of thinking about the situation that you are facing.Which is the possibility of looking at AIDEA and AEA and looking at AEA as possible Energy Authority for the State of Alaska and what that all entails.| don't know where you are in that process,but as a public,|would say consumer,interested citizen, since |have been getting myself more informed about the energy situation here in Alaska,|started out trying to find information on a variety of issues about energy in Alaska and |could not find,when |started out,one particular centralized place for information.As |am learning more about the Alaska Energy Authority and in particular,through the REGA Study,if as a citizen,|know that |can call up,say AEA,and say |need this particular information on what kind of projects are being done along the railbelt that address renewable energy,or geothermal energy,or coal plants,or what is the status now of energy being generated along the railbelt,what about distribution transmission,and know that |can get that information from an authority such as AEA. 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 | February 14,2008 Meeting Minutes Page 2 That,|think,provides invaluable public service because |am finding out that the days of thinking that experts only,utility people,or only state agency people get to make decisions about where Alaska is going to get its energy,how its going to be distributed to the state are over. Today,what is really necessary is to get the informed pubic involved because we have a lot of people out there who sometimes know more about energy in this particular case and some of the issues that we get concerned about living our daily lives than say people who might be in decision- making positions.|am very hopeful that the agency will,the authority will take a look and use as a model your REGA study because what that study has done from day one has provided a structure for the public to input as far as what they call stakeholders.Secondly,|can go to the AEA website, pull out any information 1 need as far as what proceedings happened here at your AEA Board meeting,what's going on with projects going on around the state from the Alaska Energy Authority and get information that can help me become an informed citizen to make decisions regarding,in this particular case,energy. Also,|would like to commend the staff because |can call in and ask a question and if they don't have an answer they will refer me to someone who does,or shoot me to a document,or say this,or | will get something right away and |can share this then with people in my community who are concermed about energy but who may not have the good fortune that |have that |can adjust my working hours and come to these meetings and give you my input.|take it as a responsibility that | can go back,share what information |have,and perhaps have no call directly or |can say this is what we are concerned about. For me,|don't know where you are in the selection process for your Executive Director,but for me your Executive Director will set a certain tone for the Authority and if he or she can be a person that is knowledgeable,that does have experience and most of all,will keep the Authority working in an open,transparent process where public can share their concerns,can give their opinions and you as decision-makers are doing things openly,|think we have something.We'll have something going where we can come up with intelligent decisions because today |know there are so many differing opinions about sources of fuel,how do we distribute,do we keep all these separate utilities going or not,you know,and |have my own opinions.For me what is most important is |know that there is a place that |can come to,that other people can come to,that we know that decision making will be made taking into account a variety of different views.Also for me,what is most important is to,| would say,focus on quality of life issues.Because it is easy to go ahead and generate electricity,or get our energy as cheaply bottom line in dollars and cents as we can,but |think what is facing us today,not just here in Alaska,but in the world,is what are we using our energy for?What is it that our life is about or lives are about that gets reflected in how we produce,generate and get our energy to live our lives and what kind of quality of life do we live? 1 am hoping that in your search for an Executive Director that you will very strongly consider someone who will emphasize openness,transparency and keep with the public input and I'll even go so far as to say as you might even consider on the AEA Board,or part of the AEA structure,a continuous input from perhaps an advisory board,getting input from different aspects of the community and having that advisory board be part of the decision-making process and making recommendations to it.So thank you very much.|know the decisions you have to make and essentially how you are going to structure AEA and AIDEA is something you have,that will have,| think,important and meaningful consequences.But !would like to stress somewhere where the focus can be on intelligent,on finding intelligent energy solutions for the State of Alaska.Thank you very much. END VERBATIM AEA Board Meeting February 14,2008 Meeting Minutes Page 3 Ms.Fisher-Goad noted for the record that Commissioner von Scheben and Mr.Winther have joined the meeting. 5.PRIOR MINUTES The January 25,2008 minutes were approved as presented. 6.OLD BUSINESS There was no old business. 7.NEW BUSINESS TA.Executive Director Search Brian Bjorkquist suggested that at the end of this session,the Board should entertain a motion to recess and reconvene Monday,February 18,2008,at 10:15am to pursue the Executive Director Search and conduct interviews. 8.DIRECTOR COMMENTS Ms.Fisher-Goad stated that current information on AEA-owned projects,studies,and rural energy projects was emailed to Board Members and in the future it will be included in the packets.FY07 Power Cost Equalization (PCE)Statistical Reports were distributed today.AEA receives numerous requests from Legislators with respect to the cost of power in the small rural utilities that are able to take advantage of PCE.This report provides that information.The report also reflects the high cost of power in rural Alaska. 9.BOARD COMMENTS Chairman Kelsey and Deputy Commissioner Andrews confirmed that the Governor and her Administration is looking to this Board to come up with an Energy Plan in the near future. Commissioner von Scheben queried Ms.Fisher-Goad about the status of an employee survey. Ms.Fisher-Goad stated that she would email board members information from the Procurement Manager on potential vendors who could perform the employee survey. MOTION:Commissioner Notti moved to go into Executive Session to discuss Alaska Intertie Negotiations.Seconded by Deputy Commission Brian Andrews.There being no discussion,the question was called.A roll call vote was taken and the motion passed unanimously. EXECUTIVE SESSION:3:21pm The AEA Board reconvened its regular meeting at 3:52 p.m. A quorum was established.Chairman Kelsey advised that the Board had not taken any formal action on the matters discussed. AEA Board Meeting February 14,2008 Meeting Minutes Page 4 10.ADJOURNMENT MOTION:Commissioner von Scheben moved to recess the AEA Board Meeting at 4:59 p.m.on Thursday,February 14,2008 and reconvene on at 10:15 a.m.on Monday, February 18,2008.Seconded by Commissioner Notti.There being no discussion,the question was Called.A roll call vote was taken and the motion passed unanimously. SaraFisher Goad,Acting Executive Director/Secretary Alaska Energy Authority Wyk Ww"AIBEN [=ALASKASyAlaskaIndustrialDevelopmentWwasExportAuthority MINUTES Alaska Industrial Development and Export Authority and Alaska Energy Authority Continuation of February 14,2008 Board Meeting Monday,February 18,2008 10:15am Joint Board Meeting Anchorage,Alaska 1.CALL TO ORDER Chairman Kelsey called the meeting to order at 10:30 a.m.A quorum was established. 2.BOARD OF DIRECTORS ROLL CALL Members present in Anchorage:John Kelsey (Chair -Public Member);Commissioner Patrick Galvin (Department of Revenue);Commissioner Emil Notti (Department of Commerce,Community &Economic Development);and Commissioner Leo von Scheben (Department of Transportation & Public Facilities). Member participating via teleconference:John Winther (Vice-Chair,Public Member). 3.PUBLIC ROLL CALL Staff Present in Anchorage:Sara Fisher-Goad (Acting Executive Director);Sherrie Siverson (Administrative Assistant);joined meeting after Executive Session:Christopher Rutz (Procurement Manager). Public Present:Deputy Commissioner Brian Andrews (Department of Revenue)and Brian Bjorkquist (Department of Law). 4,PUBLIC COMMENTS No public comments were heard. 5.PRIOR MINUTES No prior minutes were reviewed. 6.OLD BUSINESS There was no old business. 7.NEW BUSINESS TA.Executive Director Search MOTION:Commissioner Galvin moved to go into Executive Session to discuss the strategy for negotiations with perspective applicants,interviews with candidates for the AEA Executive Director,and compensation for the Acting Executive Director.Seconded by Commissioner Notti.There being no discussion,the question was called.A roll call vote was taken and the motion passed unanimously. EXECUTIVE SESSION:10:31 a.m. 813 West Northern Lights Boulevard *Anchorage,Alaska 99503-2495www.aidea.org ©907/771-3000 *FAX 907/771-3044 ®Toll Free (Alaska Only)888/300-8534 *www.akenergyauthority.org AIDEA and AEA Joint Board Meeting February 18,2008 Meeting Minutes Page 2 The joint meeting of the AIDEA and AEA Board of Directors reconvened at 4:32 p.m. A quorum was established.Chairman Kelsey advised that the Board had not taken any formal action on the matters discussed. 9.BOARD COMMENTS Commissioner von Scheben on behalf of the Board thanked Sara for serving as Acting Executive Director and also commended her on a job well done.He also reiterated his desire to pursue an employee survey. Ms.Fisher-Goad informed the Board that there were several issues,including at least one loan, which may require board action before the April meeting. Commissioner von Scheben asked if a proposal that includes the scope and budget for an employee survey could be ready for the April meeting.Ms.Fisher-Goad replied that staff has a rough scope of work and estimates a budget of $15-25K. Mr.Christopher Rutz confirmed that staff could issue an RFP,similar to the process followed for the Executive Director Search.There are three firms that could do a survey,depending on what level of involvement the Board would like to have and whether they wish to review the scope of work in advance. Commissioner von Scheben stated that he would like management to notify staff about the survey and questionnaire to be filled out and returned by each employee,after which each employee should be interviewed personally by the third-party consultant.A debriefing paper will then be presented to the Chairman,who will decide if he wants to forward it to board members and/or management. Ms.Fisher-Goad asked if this can be taken as the Board's direction for staff to move forward and pursue a vendor,including signing a contract.This course of action was confirmed by the Chairman and Commissioner von Scheben. Mr.Rutz said that one of the consultants he spoke with suggested group or departmental interviews in addition to individual interviews. Commissioner von Scheben confirmed he was open to the consultants'suggestions and wants the Executive Directors to have documented feedback from staff as soon as they begin their new positions. Commissioner von Scheben reiterated that the Chairman should receive the feedback and decide how to disseminate the confidential information.Mr.Bjorkquist did not see any legal issues with this plan. Deputy Commissioner Andrews asked if a board meeting could be convened on short notice if the Governor's office takes action on their letter of recommendation for an AEA Executive Director.Mr.Bjorkquist replied that a board meeting can be scheduled with a three-day notice for an emergency meeting and a five-business-day notice for a regular meeting. AIDEA and AEA Joint Board Meeting ;February 18,2008 Meeting Minutes Page 3 Mr.Rutz provided an overview of the process the Growth Company will follow in their search for an AIDEA Executive Director.AIDEA will publish the job description.If the Growth Company has any questions,we will consult with Deputy Commissioner Andrews.The Growth Company will then do three levels of interviews:1)create a list of interview questions;2)conduct phoneinterviews;and 3)provide the Board with a list of all applicants and their suggested short list of candidates for interviews with the Board.The Board will then have the opportunity to respond and schedule interviews for the last week of March. 10.ADJOURNMENT There being no objection and no further business of the Board,the meeting was adjourned at 4:41 Sara Fisher Goad,Acting Executive Director/Secretary Alaska Industrial Development and Export Authority and Alaska Energy Authority 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. AEA Board Meeting January 25,2008 Meeting Minutes Page 2 I 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.1!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. Sara Fisher Goad,Acting Executive Director/Secretary Alaska Energy Authority /=ALASKA|€ENERGY AUTHORITY, **Alaska Industrial DevelopmentandExportAuthority Revised February 8,2008 Project Fact Sheet:ALASKAINTERTIE CURRENT STATUS:The Intertie is currently in operation.Several Repair and Renovation projects are before the Intertie Operating Committee and AEA,requiring funding.The projects are the STATIC VAR COMPENSATOR replacement project and the TOWER 195 RELOCATION project.An AEA team has met with representatives of the participating utilities to consider negotiating a new agreement for intertie operations,to replace the existing agreement which will terminate in October 2010. 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.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. 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). 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: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 maintenance and operations services. 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. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org «907/771-3000 e FAX 907/771-3044 @ Toll Free (Alaska Only)888/300-8534 e www.akenergyauthority.org ALASKA ENERGY AUTHORITY"FilDike*Alaska Industrial DevelopmentandExportAuthority Revised February 5,2008 Project Fact Sheet:ALASKA-BC INTERTIE STUDY CURRENT STATUS:The re-appropriation of funds to allow for construction of the Petersburg to Kake intertie is presently included in the Governor's budget bill,and is being considered by the Legislature.Not further actions are taking place on this project pending action on this re- appropriation.The British Columbia government is reviewing the potential construction of a backbone intertie to near the Alaska-BC border.This project depends in part on the evaluation by private mining companies of the economics of major mines near the Alaska BC border.AEA continues to monitor the situation,since construction of this Canadian intertie is key to Alaska's ability to export power from the Thomas Bay projects. 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 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 through construction of a 67-mile electrical transmission intertie.The completion of this intertie would also deliver excess power from Lake Tyee to Ketchikan. 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,examine the construction of a transmission backbone that that would entice private or local government entities to develop 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 proper administration of funds.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. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org e 907/771-3000 e FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 «www.akenergyauthority.org 'ik:ie,éie. axe *Alaska Industrial DevelopmentandExportAuthority con ALASKA ENERGY AUTHORITY Reviewed:February 7,2008 Project Fact Sheet:BRADLEY LAKE HYDROELECTRIC PROJECT CURRENT STATUS:Inspections indicate Bradley is in good condition.In 2006,the governor control system was replaced.Bradley's responsiveness to changes in output improved greatly.In 2007,the turbine runners were replaced.No major projects are planned for 2008.Bradley continues to perform well and maintenance activities are proceeding as planned. PROJECT COST:$317 million (original cost plus major capital improvements through June 30,2007) SOURCE OF FUNDS:State appropriations and AEA revenue bonds repaid by participating utilities PARTICPANTS:Under the Power Sales Agreement,100%of the project's capacity has been sold to the power purchasers:Chugach Electric Association,Inc.(30.4%);Municipality of Anchorage (25.9%);Alaska Electric Generation &Transmission Cooperative,Inc.(25.8%;acting on behalf of Homer Electric Association, Inc.(12.0%)and Matanuska Electric Association,Inc.(13.8%));Golden Valley Electric Association,Inc. (16.9%);and City of Seward (1.0%) SCOPE OF PROJECT:The project has 126 MW of installed capacity hydroelectric project located 27 air miles southeast of Homer on the Kenai Peninsula.The project consists of Bradley Lake,a 125 foot high concrete faced,rock filled dam structure,three diversion structures,a 19,063 ft.long power tunnel and vertical shaft, generating plant,interior substation,20 miles of transmission line,and substation.Due to its remote location, the project has its own airstrip,boat dock,residential quarters,and utility system.The project is normally automatically operated by remote dispatch by Chugach Electric Association from Anchorage. BACKGROUND:The power generation potential of Bradley Lake was first studied by the U.S.Corps of Engineers and presented in a report dated March 1955.The project was authorized by Congress in 1962,but, despite its feasibility,federal funds were not available for its construction.The Alaska Energy Authority (then Alaska Power Authority)assumed responsibility for the project in 1982.Preliminary plans and field investigations started in 1982.In April 1984,the Authority submitted an application for license to the Federal Energy Regulatory Commission (FERC).The license to construct the project was issued on December 31, 1985.tn December 1987 the Authority and the railbelt utilities entered into a Power Sales Agreement to delineate responsibilities.Project was declared in commercial operation September 1,1991.Bradley has been producing power for 16 years.In 2007 Bradley produced 392,000 MWh of power at a cost of approximately $.039 per kWh.The Bradley project provides 5-10%of the annual railbelt electric power needs at the lowest generation cost.Bradley is most important to the railbelt electric system during the cold winter months.Demand for both electric power and gas for heat is at its highest.Utilities limited by available gas are able to use Bradley power to meet the high electric demand. A Bradley Project Management Committee (BPMC)was formed in 1993 with representatives from each of the power purchasers and Alaska Energy Authority.The BPMC is responsible for the management,operation, maintenance,and improvement of the project,subject to the non-delegable duties of the Alaska Energy Authority. ECONOMIC/SOCIAL EFFECTS:Authority ownership now assures the railbelt area of a long-term source of power at a stable cost and promotes economic development in the region. 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 «www.akenergyauthority.org /=ALASKA, €=__ENERGY AUTHORITYxaeAlaskaIndustrialDevelopmentandExportAuthority Revised February 8,2008 PROJECT FACT SHEET:Larsen Bay Hydroelectric Project CURRENT STATUS:Upgrades to the Larsen Bay Hydro Facility are in progress. Replacement of the switchgear controls and repairs to the intake structure is scheduled for Spring 2008. PURPOSE:The project intent is to increase the reliability,power quality and efficiency of the hydro system at Larsen Bay. DESCRIPTION:The Larsen Bay hydro facility has experienced many operating problems over the last few years.The problems are mainly related to the aging of the control switchgear, much of which was installed twenty years ago.Improvements that will be made to the hydroelectric facilities to improve operational reliability will include the replacement of the hydro switchgear controls with new load-sending,data acquisition and remote monitoring capabilities. Additionally ice flow damage to the water intake structure will be repaired.Operationally a portion of the cannery domestic load will be isolated in order to facilitate increased use of hydro power during the summer without impacting the power to the city. SOURCE OF FUNDS:In 2004,the City of Larsen Bay applied for and received a CDBG Grant to upgrade the hydro facility.In 2005,AEA negotiated a Grant Agreement with the City of Larsen Bay and CDBG to manage the hydro upgrade project.Subsequently,the project was awarded $320,000 from CDBG. PARTICIPANTS:Alaska Energy Authority and the City of Larsen Bay ECONOMIC/SOCIAL EFFECTS:When operating efficiently the hydro can displace 90%of the communities diesel fuel used for electrical generation.Sales to the cannery during the summer of 2007 allowed the City of Larsen Bay to pay its loan obligations for FY 2007 and 2008.The intent is to turn the facility over to the City after the improvements have been made and the facility has proven its reliability BACKGROUND:This 475-kilowatt project went into commercial operation in mid-1991 with construction costs of approximately $1.6 million.In addition to producing electricity for this isolated Kodiak Island community,the project replaced the City of Larsen Bay's old water supply system and provides a better source of water with reduced maintenance and improved water quality.The original intent of the hydro project was to turn the facility over to the City of Larsen Bay once it had been demonstrated to be operationally viable over a few years.The hydro operated only intermittently and unreliably for many years;therefore the community would not agree to accept the facility until these problems were worked out.In 2004,the City of Larsen Bay agreed to seek CDBG funding to make improvements to the hydro facility. 813 West Northern Lights Boulevard*Anchorage,Alaska 99503-2495www.aidea.org ©907/269-3000 *FAX 907/269-3044 *Toll Free 'Alaska Only)888/300-8534 ©www.akenergyauthority.org /=ALASKAi €=__>ENERGY AUTHORITY*bike Alaska Industrial DevelopmentandExportAuthority Revised February 8,2008 Project Fact Sheet:RAILBELT ELECTRICAL GRID AUTHORITY STUDY CURRENT STATUS:The Consultant,Black and Veatch (B&V)has conducted stakeholder interviews.The project has been delayed for approximately one month,to allow the Railbelt Utilities time to review the scope of work for the project and determine how they would supply operating information.This process was recently completed,and the project is proceeding with the support of the utilities.B&V is coordinating with Railbelt Utilities to obtain accurate generation and transmission data needed for system modeling.AEA has assembled the project Advisory Work Group,and this new committee is scheduled to meet 19 February. Current project completion is projected to be June 2008. PURPOSE:This Railbelt Electrical Grid Authority (REGA)study will identify a range of grid authority business structures to own,operate,control,maintain and operate the future Railbelt Electrical generation and transmission Grid This business structure alternatives could range from 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. DESCRIPTION:Black and Veatch (B&V)was hired as consultant to AEA to perform the analysis of the potential of a Railbelt Electrical Grid Authority in increasing cost effectiveness and reliability in the operation of the Railbelt transmission grid.B&V will analyze operation costs,look at current and future generation sources,look at current and future electrical demands and develop a series of future scenarios with recommendations for a grid authority. This work will be done in conjunction with the Railbelt utilities,through extensive interviews with affected stakeholders and subject matter experts and with the guidance and feedback of an advisory work group. SOURCE OF FUNDS:This study is funded by a legislative appropriation of $800,000. PARTICIPANTS:Black and Veatch;Alaska Energy Authority;Homer Electric Association; Chugach Power;Anchorage Municipal Light and Power;Matanuska Electric Association; Golden Valley Electric Association;and a variety of stakeholders as represented on the advisory group and through interviews. BACKGROUND: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. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495www.aidea.org e 907/771-3000 ¢FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 @ www.akenergyauthority.org /=ALASKAdt©ENERGY AUTHORITY**Alaska Industrial DevelopmentandExportAuthority Revised February 8,2008 Project Fact Sheet:TEELAND DOUGLAS TRANSMISSION LINE PROJECT CURRENT STATUS:Project meetings continue.The ML&P team is now beginning outreach and public information processes that include meetings with local government officials.An Initial meeting with MEA Assistant Manager Tuckerman Babcock was held to inform MEA of the project plan. DESCRIPTION:The legislature appropriated $20.3M to AEA in 2002,to upgrade and extend the line from the Teeland Substation on Knik-Goose Bay Road to the Douglas substation 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 by MEA. 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 Alaska Intertie Project. 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:It was determined that the most effective way to construct the line was to have ML&P manage all construction activities.This decision was the result of a collaborative effort between AEA and the Intertie participant utilities.The project has been approved by the Intertie Operating Committee. 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 «www.akenergyauthority.org aN €ENERGY AUTHORITYaxextAlaskaIndustrialDevelopmentandExportAuthority Revised February 8,2008 Project Fact Sheet:SWAN-TYEE INTERTIE CONSTRUCTION COMPLETION CURRENT STATUS:An additional grant amount of $46.2M was signed on December 17, 2007.Four Dam Pool have selected Commonwealth Associates,Inc.as the project manager for the construction.An advance on the project was provided in late January,2008 to allow the grantee to exercise a discount for prompt payments to the prime construction contractor,and to speed procurement of transformers and towers that will be purchased by the four dam pool power agency and provided as owner furnished equipment and materials to the construction effort.Preparatory work for engineering design and construction contracts has begun. DESCRIPTION:This project will complete the construction of the 57-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.The work will be completed in the 2008 and 2009 construction seasons.The intertie will be owned and operated by the four dam pool power agency. 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.!n 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.Tne Four Dam Pool Power Agency cleared the Right-of-Way and purchased and installed tower foundations,construction was stopped when these funds were expended.The region was able to secure an appropriation of $46.2 M for completion of the project. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org ®907/771-3000 «FAX 907/771-3044 e Toil Free (Alaska Only)888/300-8534 e www.akenergyauthority.org ALASKA ENERGY AUTHORITY Alternative Energy and Energy Efficiency Program Overview Alaska Energy Authority's (AEA)Alternative Energy and Energy Efficiency (AEEE)program manages and funds 27 projects and initiatives totaling $32.9 million in state and federal funding.An AEEE update is available on AEA's website at www.akenergyauthority.org Program Description The AEEE program promotes the use of renewable resources as alternatives to fossil fuel-based power and heat,and measures to improve energy production and end use efficiency.In rural areas the program may support developing local sources of coal and natural gas as diesel alternatives.The AEEE program is divided into seven separate program areas: Biomass Energy Program develops projects using wood,sawmill residue,and municipal wastes for energy; tests air emissions and performance of fish oil and diesel blends as fuel;and assesses the viability of recovering fish oil from fish processing wastes. Diesel Generation Efficiency Program provides assistance in developing projects that use high efficiency generators and recover "waste heat”from diesel generators. End Use Efficiency (Conservation)Program has completed 40%of a project upgrading lighting and heating efficiency in over 150 schools and other facilities in 50 villages,is conducting energy audits,and working with Alaska Housing Finance Corporation to develop statewide efficiency policy recommendations and demonstrate impact of aggressive,village-wide measures in Nightmute. Geothermal Program supports projects such as the Chena Hot Springs power plant,organizes workshops and training sessions,and coordinates state assistance in developing other potential projects such as Mt. Spurr on the Railbelt and Makushin in Unalaska via a statewide development plan. Hydroelectric Program provides technical assistance through staff and contractors for hydro feasibility assessment and manages public funding for project construction. Ocean and River Energy Program evaluates technology and feasibility of converting wave motion and tidal and river flow into power in partnership with Alaskan utilities and Electric Power Research Institute. Wind Program assists utilities and communities in resource evaluation,training,environmental assessment,regional development,conceptual design and economic feasibility of rural wind-diesel systems,and Railbelt wind integration studies. Funding AEA's alternative energy program has received funding since the early 1980s from the US Department of Energy (USDOE)and has recently expanded with funding from the Denali Commission and the EPA. Recently,AEA and the Denali Commission released two RFPs offering $9.4 million in alternative energy and efficiency funding.Earlier Energy Cost Reduction RFPs have provided $8.4 million in grant funds to match $12.4 million in local funds for projects that are displacing or will displace 1.4 million gallons per year of diesel and equivalent natural gas.For more detail,see the AEA's Biennial AEEE Assistance Plan at www.akenergyauthority.org ALASKA ENERGY AUTHORITY Bulk Fuel Program Current Status In 2007,bulk fuel upgrades were completed in the communities of Unalakleet,Seldovia,King Cove,and Pelican.Twelve communities are in the design process. Program Description The goal of Alaska Energy Authority's (AEA)Bulk Fuel program is to upgrade non-compliant bulk fuel facilities in communities that meet criteria.Upgrading bulk fuel facilities reduces the cost of energy by eliminating fuel loss from leaking tanks,spills,and fires.In addition,by providing enough capacity for current and foreseeable future the communities may purchase fuel in larger quantities at a lower cost per gallon.; Alaskan remote communities rely on diesel fuel storage for heating and power generation.Many of the bulk fuel storage facilities were constructed in the 1970's or earlier.These facilities are at the end of their design life and do not meet fire code and may leak.Regulatory agencies may prohibit fuel deliveries these facilities.Communities did not have funds for replacing the storage facilities. Since 2000,the Denali Commission has been providing funding to replace community bulk fuel facilities. Due diligence is performed on possible participants to ensure that if they are in debt that they are paying on their loans.Participants sign a Business Operating Plan.The Business Operating Plan lays out the existing fuel facility organizational structure,the qualifications of responsible people,AEA required training,estimated operation and maintenance costs,and the establishment of a repair and replacement fund,so that when equipment fails,the community will have the knowledge and savings to repair or replace it. Program Progress The bulk fuel program receives most of its funding through the Denali Commission.A total of 21 communities were completed in years previous to 2000.In 2000,funding increased substantially when the Denali Commission started to fund bulk fuel projects.As of December 2007,an additional 62 communities have been completed for a total of 83.Approximately 35 communities have not received upgrades.Depending on funding,five to ten communities are receiving upgrades per year. ALASKA ENERGY AUTHORITY Circuit Rider Program Current Status The Circuit Rider Program provides technical assistance to help rural utilities with the operation and maintenance of their electrical generation and distribution system.In 2007,31 utilities participated. Program Description The Circuit Rider Program is administered by the Alaska Energy Authority (AEA)and is available to alll eligible electric utilities.Electric utilities participating in this program will receive support services available from AEA. The purpose of the circuit rider maintenance program under 3 AAC 108.200 -3 AAC 108.220 is to assist eligible utilities to improve the efficiency,safety,and reliability of power systems and reduce the risk and severity of emergency conditions or emergency disruptions in the operation of community power systems,by providing training,consultation,on-site assistance with maintenance and minor repairs,and other related technical assistance. e The CRM program runs on a fiscal year from July 1 to June 30. e All applications will be evaluated and placed on priority list. e AEA will make one or more visits to eligible electric utilities over the course of the fiscal year to provide training and provide recommendations concerning operations and routine maintenance activities.There will be no charge to the utility for these services. e Participating utilities are responsible for the purchase of all supplies,parts and equipment used for routine maintenance and minor repairs that are made during Circuit Rider visits.These items must be available at the utility's workplace prior to the arrival of AEA staff. e The Circuit Rider program does not provide funding for major repairs or reconstruction of electrical systems. e The participating utility's power plant operator and/or other utility staff must be available for training and consultation during the time of the Circuit Rider staff visit.Power plant operators will be required to maintain written performance logs in between Circuit Rider visits. e Utilities participating in the Circuit Rider program will be required to sign a letter acknowledging their understanding of the terms and conditions of the services provided by the program,prior to the first visit. Program Progress Services under the Circuit Rider program are limited to village electric utilities with a demonstrated need for assistance with preventative operations and maintenance activities,utility training and emergency prevention.The program is not intended to serve electric utilities that have sufficient financial and technical resources to perform routine operations and maintenance activities. ALASKA ENERGY AUTHORITY Emergency Response Program Current Status In 2007,23 communities where assisted.Major responses included Beaver when their powerhouse burned to the ground and Diomede with unexpected major equipment failures. Program Description The Emergency Response program provides on-call,as-needed emergency action response to mitigate extended power outages and electrical hazards that present eminent threat to life or property. This program is designed to respond to an emergency or potential emergency situation before disaster or major loss occurs.It provides funding for continuance of government activities.It allows for procurement of manpower,materials and equipment for emergency response to electrical generation and distribution system emergencies and disasters in Alaska. Program Progress Emergency response is provided on an as-needed basis only.Well-managed utilities with adequate technical and financial resources are not candidates for these services.Besides helping rural communities,AEA works with State and Federal agencies on an as-needed case by case basis to resolve electrical generation and distribution system emergencies throughout Alaska. ALASKA ENERGY AUTHORITY Power Cost Equalization Program Current Status The FYO8 PCE appropriation was $26,760,000.00 and is currently being paid at the 100%level.Current budget projections indicate that further funding will be required to maintain payments at the 100% level.Without further funding,the levels will be reduced to approximately 89%for the last three months of the fiscal year. During FYO7,87 utilities serving 183 communities participated in the PCE program.The FYO7 PCE appropriation was $25,619,000.00,of which $25,436,750.95 has been disbursed to date.The FYO7 PCE funding levels were 100%for the first six months,and 89%for the second six months.This resulted in an annualized average funding level of 94.5% Program Description The goal of Alaska Energy Authority's (AEA)Power Cost Equalization program is to provide economic assistance to customers in rural areas of Alaska where the kilowatt-hour charge for electricity can be three to five times higher than the charge in more urban areas of the state.PCE only pays a portion of approximately 30%of all kWh's sold by the participating utilities. PCE fundamentally improves Alaska's standard of living by helping small rural areas maintain the availability of communications and the operation of basic infrastructure and systems,including water and sewer,incinerators,heat and light.PCE is a core element underlying the financial viability of centralized power generation in rural communities. The Legislature established different functions for AEA and the Regulatory Commission of Alaska (RCA) under Alaska Statutes 42.45.100-170,which govern PCE program responsibilities. AEA determines eligibility of community facilities and residential customers and authorizes payment to the electric utility.Commercial customers are not eligible to receive PCE credit.Participating utilities are required to reduce each eligible customer's bill by the amount that the State pays for PCE. RCA determines if a utility is eligible to participate in the program and calculates the amount of PCE per kWh payable to the utility.More information about the RCA may be found at www.state.ak.us/rca. PCE Endowment Fund The PCE Endowment Fund was created and capitalized in FY 2001 with Funds from the Constitutional Budget Reserve and the Four Dam Pool Project sale proceeds.The PCE Endowment Fund is an Alaska Energy Authority Fund managed by the Department of Revenue;it is invested to earn at least 7%over time.$182.7 million was appropriated to the fund in FY 2007.The deposit occurred in October 2006. AS 42.45.085 provides that 7%of the PCE Endowment Fund's 3 year monthly average market value may be appropriated to the PCE Rural Electric Capitalization Fund for annual PCE program costs.After the FY 2007 capitalization,7%of the market value equals the estimated full funding amount for the program. ALASKA ENERGY AUTHORITY Rural Power Systems Upgrade Program Current Status Between the calendar years 2000 through 2007,32 communities have benefited from powerhouse and distribution upgrades.15 additional communities are currently undergoing or are scheduled for construction upgrades in 2008.13 more communities are in conceptual design or final design stage. Program Description The Rural Power System Upgrade (RPSU)program concentrates on powerhouse and electrical distribution upgrades.Typical project include powerhouse upgrades or replacements,distribution line assessments and upgrades,line extensions to new customers,demand-side improvements and repairs to generation and distribution systems.Energy efficiency,reliability,safety and sustainability are primary drivers during the conceptual design,final design and construction process.Identification of available alternative energy and interoperability with any existing alternative energy sources is high priority with the rising cost of fuel and carbon emissions concerns. Examples of programmatic efforts include: °Rebuilding or replacement of worn-out,inefficient diesel generator units. Rebuilding or replacement of old,hazardous and non-code compliant distribution systems. Construction of new power generation systems that meet State and Federal codes. Inclusion of waste heat recovery systems in new powerhouses. Force account labor and technical assistance to rural communities through AEA personnel and/or contractors with experience in rural construction. System upgrades to be funded may be identified through a variety of ways,including via technical assistance,advanced by the local community or directed by the Legislature.The Majority of funds are via the Denali Commission.Other sources include Community Development Block Grant (CDBG),Indian Community Development Block Grant (ICDBG)and Rural Utility Service (RUS). Program Progress Electricity provides for lighting,communications,heat and power necessary to operate infrastructure that supports all other elements needed in any community to permit safe and healthy living conditions. In rural communities throughout Alaska,electricity is generated by a small local "system”(generation and distribution)using diesel fuel at a cost that is three to five times higher than that in urban parts of the state.Of the 200 rural communities,approximately half are served by cooperatives or another form of utility that performs under a well-established organization.Others are served by very small entities, many which experience technical and administrative problems due to lack of economies of scale and/or lack of specialized skills in the community. ALASKA ENERGY AUTHORITY Training Program Current Status The Alaska Energy Authority (AEA),along with the Denali Commission Training Fund,provides training Opportunities to local residents for their energy projects and infrastructure.In FYO7,the AEA Training Program provided training to 131 rural Alaskans.For FY08,the program was funded at $416,435 and at least 118 rural Alaskans are expected to be trained. Program Description The intent of this training is to ensure that community personnel have the best skills with which to sustain their energy infrastructure in a business-like manner.With proper training,utilities can keep their facilities code-compliant and sustainable. The training program currently offers the following courses: e Bulk Fuel Operator Training e =Itinerant Bulk Fuel Operator Training e Bulk Fuel Business Training e Power Plant Operator Training e Advanced Power Plant Operator Training e =Electric Utility Business Training e PCE Utility Clerk Training In the past,Hydro Power Plant Training was offered.It was decided that it is sufficient to conduct this training every two years.Therefore,funding for Hydro Power Plant Training will be requested in FY09.