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HomeMy WebLinkAboutAEA Board Meeting Nov 22 2010ATEEN I[=ALASKAxyrAlaskaIndustrialDevelopmentandExportAuthority NOahbwhd=10. AGENDA | Alaska Energy Authority Board Meeting Monday,November 22,2010 at 10:30 a.m. Anchorage,Alaska CALL TO ORDER ROLL CALL BOARD MEMBERS AGENDA APPROVAL ROLL CALL STAFF,PUBLIC PUBLIC COMMENTS PRIOR MINUTES -October 20,2010 NEW BUSINESS A.Railbelt Large Hydro -presentation by Bryan Carey,AEA B.FY2010 AEA Financial Statements -KPMG C.AEA Resolution No.2010-05 -Appointment of Officers DIRECTOR COMMENTS A.Director's Status Report of AEA Programs and Projects B.Next regularly scheduled meeting Friday,December 3,2010 BOARD COMMENTS ADJOURNMENT 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 AUTHORITYKk*K Alaska Industrial DevelopmentandExportAuthority Alaska Energy Authority BOARD MEETING MINUTES November 22,2010 Anchorage and Juneau,Alaska;Rancho Mirage,California 1.CALL TO ORDER Chairman Patrick Galvin called the meeting of the Alaska Energy Authority to order on November 22,2010 at 10:35 a.m. 2.ROLL CALL:BOARD A quorum was established. Members present:Chairman Patrick Galvin (Commissioner,Department of Revenue);Mike Felix (Public Member);and Robert Sheldon (Public Member). Members participating via conference call:Susan Bell (Commissioner,Department of Commerce,Community &Economic Development)from Juneau,AK;and Vice Chairman John Winther (Public Member)from Rancho Mirage,California. 3.AGENDA APPROVAL The agenda was approved as presented. 4.ROLL CALL:STAFF,PUBLIC Staff present in Anchorage:Mike Harper (AEA Acting Executive Director);Chris Anderson (Deputy Director-Commercial Finance);Sara Fisher-Goad (Deputy Director-Operations);Valorie Walker (Deputy Director-Finance);and Shirley Kelly (EDA),public member. Participating via teleconference:Peter Crimp (Deputy Director-AEEE);Shauna Howell (Executive Assistant);and Eric Lidji (Petroleum News). 5.PUBLIC COMMENTS There were no public comments. 6.PRIOR MINUTES The minutes of October 20,2010 were approved as presented. 813 West Northern Lights Boulevard *Anchorage,Alaska 99503 www.aidea.org ©907/771-3000 ®FAX 907/771-3044 ®Toll Free (Alaska Only)888/300-8534 ©www.akenergvauthoritv.org AEA Board Meeting November 22,2010 Meeting Minutes Page 2 7.NEW BUSINESS 7A.-Railbelt Large Hydro presentation by Bryan Carey,Project Manager Mr.Harper discussed the Large Hydro project staff has been studying at the direction of the Legislature.A Preliminary Decision Document is coming out and we would like to give the Board an overview of the project.Discussions continue with the Governor's office to finalize the document. Mr.Carey stated the Legislative session last year provided AEA $10 million to pursue planning, design,and preliminary permitting in regards to large railbelt hydro Susitna,Chakachamna, Glacier Fork and other projects.The most talked about are Susitna Watana and Chakachamna. Chakachamna is west of Anchorage at the base of Mt.Spurr,and Watana is on the Susitna River. Mr.Carey presented the Board with a slideshow and discussion noting the Susitna project is not the same project as the one in the 80's.It is a single dam at Watana vs.the two dam concept which was proposed back in the 80's.It was thought in the 80's that salmon do not travel past Devil Canyon;Watana is about 30 miles above Devil Canyon.More recent information shows some salmon make it to Watana but for the most part it is a minimal number.If the dam was to be built,Watana would be flooding the valley to 700 feet deep,39 miles long and 2 miles wide. Right now there is a braided river channel.It is 900 feet from the bottom of the valley to where the terrain starts flattening out on top. The water remains within the valley area keeping it a fairly narrow reservoir.There is still a significant amount of water storage which becomes one of the key issues to Watana.There's enough storage to carry water over into the winter,which can dispatch energy anytime.During the 80's,Watana was originally designed to go up to 885 feet.When the State ran into funding problems,the idea was to bring Watana to 700 feet and go down river to build at Devil Canyon, and then come back up to Watana and raise its height up to 885 feet. Chakachamna is across from Anchorage,at the base of Mt.Spurr;one of the more important parts of the plan would be a diversion tunnel through the mountains to McCarthy River.We have a good idea what the Susitna energy will be year-to-year,where in the case of Chakachamna there is still going to be a substantial amount of water required to remain within the existing river going downstream because salmon use that river when they go through to Lake Clark National Park and Preserve. Down river from the lake you also have the Trading Bay State Game Refuge.Enough water is required going down river so that wetlands remain and salmon spawning is not affected.That is a large issue in regards to how much energy comes out of the project.Any water that flows for the refuge or otherwise means less energy for the project. Mr.Carey showed a photo of Barrier Glacier and noted that the ground in front is covered with debris and vegetation.The glacier is several hundred feet thick at this point and historically, used to move against the left far side and choke off the water that would be in the lake.In 1971 a glacier outburst flood dropped the lake level to within 15 feet in a few days. AEA Board Meeting November 22,2010 Meeting Minutes Page 3 Glacier Fork is much smaller than the other two.The Knik Glacier is south of the Glacier Fork canyon.It is a deep canyon which is nice for building the dam.The downside is that there's very little winter storage.This project would produce a lot of energy July to August.We arepursuingareconnaissancestudytoseeifitwouldmakesenseforsummertimeenergy. Susitna will get the State to a 50%renewable goal,but Chakachamna has to do it in conjunction with other projects and Glacier Fork doesn't get you very far along. The railbelt average annual energy is currently around 5,300 to 5,400 gigawatt hours.Susitna Watana is approximately 2,600 gigawatt hours.Susitna would come in around 50%of what the railbelt currently uses in energy per year,and Chakachamna would be in the area of 1,000 to 1,300 gigawatt hours,about a quarter or less of the annual railbelt energy. Owned by AEA,Bradley Lake Hydro is located south of Homer,125 feet tall and came online in 1991.Watana would be similar to Bradley,but substantially taller at 700 feet. Susitna Watana reservoir is 39 miles long,up to 2 miles wide and is above where most of the salmon are located.Some of the impacts will be positive in regard to fisheries.During the 80's the Susitna study showed mainstream habitat for the salmon judged to be a positive impact.If you construct the dam,most of the silt would settle out and the water immediately below would be similar to the Kenai river. With Chakachamna,the energy number is a lot more flexible and would not be known for several years into the planning and permitting process.We believe the most likely energy would be 800 to 1,300 gigawatt hours.It could be less than that,but you would not know what that number would be for several years and several million dollars.Because you divert water from one basin to another,you are affecting Trading Bay Game Farm Refuge,Lake Clark National Park and Preserve,and Redoubt Bay State Critical Habitat area.It is likely to have a moderate to severe impact. Susitna energy occurs more during the summer than utilities prefer,with the flows and the power generation almost directly proportionate during the summer months.In August you get 400 megawatts of power and during the winter you get 200-250,depending on the month.Ona yearly basis,the flows down river can vary 25%or more.On an aggressive schedule,Watana could be permitted and constructed in 11-12 years.The benefit of hydroelectric projects is that hydros have more than a 100-year life,and long-term,stable,low cost energy which does not depend on a fuel source going up with inflation or demand,or affected by world events. Depending on how it's funded,the money stays in state and is not sent overseas for fuel. Mr.Felix asked if studies are being done?Mr.Carey replied they are being done right now,as we did not have statute authority to file FERC documents. Chairman Galvin noted that there is a lot of momentum in pursuing hydro projects in the Legislature and Administration.Mr.Carey said AEA will soon distribute the Preliminary Decision Document,which will compare and address the two projects for people to read and make a decision on the projects. AEA Board Meeting November 22,2010 Meeting Minutes Page 4 Mr.Felix asked is this going to be an either/or on both projects?Mr.Carey said he doubted it would be both in a short period of time.In the next 10-15 years,it's unlikely both projects would proceed.In a 50-year time span,maybe both can proceed. Mr.Winther asked who will be the final decision maker on the project? Chairman Galvin said,Mr.Carey stated,AEA does not have the current authority to approve the project the way it stands now.The Legislature will have to approve money to pursue it further, and then make a decision on how to manage it.Those two would go hand-in-hand as interest in the project advances,as early as this coming session. Chairman Galvin also added that part of the study AEA is compiling,is to evaluate the pros and cons of the various projects.The other consideration as you go on along these lines,because of the size of the project and environmental concerns,is you're likely to go through the process with a primary option and an alternative,to compare the positives and negatives of the project. Reasons to keep multiple projects in the evaluation phase should be determined in the early stages. 7B.FY2010 AEA Financial Statements.Elizabeth Stuart of KPMG presented an overview of the FY2010 financial statements included in Board member packets. Ms.Stuart noted that an audit was conducted in September/October.The first report is a letter to the Board of Directors describing how we conduct an audit.If weaknesses in internal control were identified we would communicate that;KPMG would communicate any significant changes in accounting policies or new policies adopted.Neither occurred in FY10.The most significant judgment involved in the audit was the allowance for loan losses.In the loan portfolio there is an $800,000 allowance for loan losses.KPMG evaluated management's estimates and process for developing that allowance and thought it was reasonable in relationship with the financial statements. Ms.Stuart added that the financial statements consist of three parts:the first is a management's discussion and analysis which is written by management and covers an overview of the activities that occurred during the current year compared to the prior two years.A clean opinion is on page 8 of the financial statements.The opinion is followed by the financial statements, then footnotes which provide further information about accounting policies as well as matters contained in the financial statements. Ms.Walker noted that no action needs to be taken by the Board. Ms.Stuart said she wished to highlight the Audit in accordance with OMB Circular A-133,a single audit report which is required when you have certain federal grant funding.It is more than a compliance audit.No items were required to be reported.Management will submit this to the State,after which it will be submitted to the federal grants agency. Chairman Gavin commended Valorie for the great job she and her staff do. 7C.AEA Resolution No.2010-05 Appointment of Officers AEA Board Meeting November 22,2010 Meeting Minutes Page 5 Mr.Harper said Resolution No.2010-05 is to appoint Peter Crimp as Deputy Director- Alternative Energy &Energy Efficiency and to be an Assistant Secretary of the Authority.Given the increase in Alternative Energy and Energy Efficiency programs and projects,a new position for Deputy Director was created.Mr.Crimp was offered the position and we are asking the Board to appoint him by Resolution as a Secretary of the Authority,in absence of the Executive Director to sign certain documents. Chairman Galvin said this action was proposed by Steve Haagenson and is being carried through the administrative process.He asked Mr.Harper to describe the current structure of the officers and their duties. Mr.Harper said up until Mr.Haagenson was hired,we had one Executive Director for both AIDEA and AEA.A new Executive Director position was created for AEA,which lead to new duties and responsibilities.New funds came into the agency in the alternative energy and energy efficiency side. Currently,AEA administers $150 million and more than 120 grants.HB152 created the Renewable Energy Fund Program and allocated $250 million for alternative energy projects. This created a tremendous amount of responsibility and additional duties and it was necessary to add a Deputy Director. AIDEA currently has Deputy Directors for Commercial Finance,Finance,Operations,and Development Finance. Mr.Bjorkquist said the Deputy Director for Finance,Valorie Walker,Deputy Director for Credit, Chris Anderson,and Deputy Director for Operations,Sara Fisher-Goad,are all Assistant Secretaries.The three share duties between AIDEA and AEA.All the Deputy Directors have shared duties between AIDEA and AEA,with the exception of the Deputy Director of Business Development of AIDEA.He also stated Valorie Walker is an Assistant Sectary/Treasurer. Chairman Galvin added that this gives a sense of the historic structure of having the Deputy Directors who also serve as Secretaries. Mr.Harper noted Mr.Crimp has been with AEA for 20 years.He is a forester by trade and holds a Masters in Forestry.He was with DNR in Fairbanks and has grown with our agency. Mr.Crimp has been responsible for taking a small program that was funded by Denali Commission and growing it and is largely responsible for a good portion of the initiative for the creation of the Renewable Energy Fund grants. Chairman Gavin added that the Legislature is very engaged in the grant process and Mr.Crimp is responsive to them.Peter was very much involved in structuring the way AEA went through that grant process and being diligent as the Legislature expected him to be in pursuing that and Mr.Haagenson was very impressed with that effort and that influenced his interest in moving towards that structure where Peter can be a leader of that group. Mr.Sheldon asked if the staff that he pulled together was already AEA staff or staff from prior experience? AEA Board Meeting November 22,2010 Meeting Minutes Page 6 Mr.Harper stated that we pulled together people in the agency but added new staff as well. Engineers,Project Managers,Planners,not just under his supervision,but also new staff in the Finance and Personnel areas. Mr.Sheldon asked if a number of these Deputy Directors are wearing multiple hats with AIDEA and AEA and also asked if Mr.Crimp would have multiple hats as well? Ms.Fisher-Goad stated AEA programs and staff have grown and the AEEE programs have a statewide perspective and it made sense to move them out from rural energy to reflect the statewide nature of the programs. Mr.Bjorkquist clarified that AEA does not have any employees.All employees are AIDEA employees including the Executive Director of AEA,but there are designated staff that are dedicated to serving AEA. MOTION:Mr.Felix moved to adopt AEA Resolution No.2010-05.Seconded byCommissionerBell.There being no discussion,the question was called.A roll call vote was taken and the motion passed unanimously. 8.DIRECTOR COMMENTS A.)In the interest of time,Mr.Harper referred members of the Board to their packets for program and project fact sheets. B.)Next scheduled Meeting:December 3,2010 9.BOARD COMMENTS Commissioner Bell thanked both Sara Fisher-Goad and Chris Rutz in sending the information that was requested on the position description and the last process in selecting an Executive Director.Her first thought was to place an ad and get resumes.As a Board,once we start reading materials we need to think about the position description and the qualities and compensation.Commissioner Bell suggested that we didn't want to dive into that discussion. Rather,she asked Chris Rutz to share the emails he had sent with the whole Board and look at it and discuss it at the December 3 Board meeting. Chairman Galvin stated that his recommendation would be to plan on bringing this to a closureattheDecember3%meeting.That will allow time to get information distributed to the other Board members for their review. Chairman Galvin closed the meeting noting that he will moving out of the position of Commissioner of Revenue;in turn,he would be giving up his position on this Board and his successor will be taking this spot.In the interest for a smooth transition it would be hisrecommendationthatameetingbeheldonDecember3”and close out that meeting with theelectionofaChairman.His time will be over December 6". AEA Board Meeting November 22,2010 Meeting Minutes Page 7 10.ADJOURNMENT There being no further business of the Board,the meeting was adjourned at 11:20 a.m. Ve [hep -- Mike Harper,Acting Ex¢cutive Director/Secretary Alaska Energy Authority Alaska Energy Authority BOARD MEETING MINUTES October 20,2010 Anchorage,Alaska and Beijing,China (teleconference) 1.CALL TO ORDER Chairman Patrick Galvin called the meeting of the Alaska Energy Authority to order on October 20, 2010 at 12:57 p.m. 2.ROLL CALL:BOARD MEMBERS A quorum was established. Members present:Chairman Patrick Galvin (Commissioner,Department of Revenue);Susan Bell (Commissioner,Department of Commerce,Community &Economic Development);John Winther (Public Member)and Mike Felix (Public Member). Participating via teleconference:Robert Sheldon (Public Member),China. 3.AGENDA APPROVAL The agenda was approved as amended. 4.ROLL CALL:STAFF,PUBLIC Staff present in Anchorage:Steve Haagenson (AEA Executive Director);Ted Leonard (AIDEA Executive Director);Jim Hemsath (Deputy Director-Development);Chris Anderson (Deputy Director-Credit);Sara Fisher-Goad (Deputy Director-Operations);Mike Harper (Deputy Director- Rural Energy);Valorie Walker (Deputy Director-Finance);Jim Strandberg (Project Manager); Karsten Rodvik (External Affairs Project Manager);Shauna Howell (Executive Assistant);and Sherrie Siverson (Executive Assistant) Others present in Anchorage:Brian Bjorkquist (Department of Law);Mike Nave (Department of Law). 5.PUBLIC COMMENTS There were no public comments. 6.PRIOR MINUTES The minutes of August 11,2010 and September 3,2010 were approved as presented. AEA Board Meeting October 20,2010 Meeting Minutes Page 2 7.NEW BUSINESS 7A.AEA Resolution No.2010-04 Appointment of an Acting Executive Director Chairman Galvin referred to Mr.Haagenson's letter of resignation stating his last day will be October 31,2010.He said although Mr.Haagenson provided enough notice to have an Executive Director selected and in place in time for the transition,it was requested we hold off until after the election matters settle down and appoint an interim acting Executive Director for a couple of months,then recruitment process would commence.He recommended the BoardconsiderappointingMikeHarpertothisinterimposition.H noted Mr.Harper has served atvariousintervalsasActingExecutiveDirectorwhenMr.Haagenson was out of town;his manyyearswiththeAuthority,and his knowledge of the issties#:.He does not intend to seek the position long term.Chairman Galvin stated it w a.good fit given Mr.Harper's background and established position with the Authority. Chairman Galvin explained the relationship b tween AIDEA and AEA:3.completely intertwined.The AEA Executive Director is an employee'IDEA and since the AIDEA Executive DirectoroverseesAIDEA,technically,the AEA ExecutiWehaveapreviousresolutionfrom,the AIDEA|establishes an esol AEA sfEX Chairman Galvin disct sed the ruitment process.During the last recruitment process,a third party contractor was hire "Manage it.He said he didn't see the value of the third party contractor,and felt that 'staff could solicit,organize and select resumes and a Board subcommittee could weed through the resumes and select the interviewees.The Board subcommittee would come up with the wording in the advertisement.Mr.Felix said the difficult part would be the Board defining what they want in an Executive Director.Ms.Bell agreed and pointed out there will be new Board members by then and asked what the cost was for the last recruitment.Ms.Fisher-Goad stated the contract was probably under $20,000,but at that time the focus was on the AIDEA Executive Director and very little was done under that contract for the AEA Executive Director recruitment.She said she would double check the figure and will make sure the Board knows.Mr.Winther seemed to think the position was defined for the last AEA Board Meeting October 20,2010 Meeting Minutes Page 3 recruitment.Chairman Galvin said it was,but wasn't very explicit.Ms.Fisher-Goad pointed out that previously one person served as the Executive Director for both AIDEA and AEA,so the first thing done was to split the position description.Mr.Sheldon asked if the materials were circulated in the past could be distributed to the Board members.Chairman Galvin reiterated that in pursuing the initial recruitment steps,it would be good to have a Board subcommittee take the initial role of defining the position description and identify the attributes we are looking for and asked for volunteers to serve on or Chair the subcommittee.Mr.Felix and Commissioner Bell volunteered to serve;Chairman Galvin pointed out their work will be transparent to the rest of the Board and they could commentat any time;he would like to getthesolicitationoutwithinthenext30daystobeopen20to30:days then make a selection at theendoftheyear.Mr.Felix asked if the two Board subcommittee members could distributematerialstotheBoardandhavethemvoteelectronicariousitems.Chairman Galvin deferred this question to Mr.Bjorkquist who stated tw xembers working together is not e Reynolds Creek Hydro Island,AK near Hydaburg, "2S::in 3 days.Due to this deadline,E Fund to”allow them to nail down their cost il,be working with the Governor's office on this.By November ide comparison of Chakachamna and Susitna.Following a will determine which project will be primary for the FERClicenseandwhic!ternate.We need to get the FERC license moving forward. e Alaska Intertie Agreement -The Energy Authority gave us a four-year notice ofcancellationoftheIntertieAgreements,Healy to Wasilla and Anchorage to Fairbanks. The utilities got together and analyzed it.They looked at separating the two agreements,into Operating Rules in the System and Governance Rules (incorporates all the AEA issues).They are very close on the Operating Rules being a separate document.This opens it up to a larger participation across the Railbelt.We were given a three-month extension to get this finalized and get it filed with the RCA and will be signed in January. AEA Board Meeting October 20,2010 Meeting Minutes Page 4 e Larsen Bay Transfer -We have been trying to transfer Larsen Bay Hydro to the community for the past nine years and that transfer has been completed,except for an insurance issue. e Fire Island -CIRI is trying very hard to get the project built,but the utilities are resisting due to reliability and cost.At a meeting yesterday,they said the cost of regulation would be more than the cost of power delivery.CIRI is trying to find someone in the Railbelt to help them,as they must be under construction by December or they lose 30% appreciation credit.Even if they lose the credit,they are still going to push forward to get the project built.We are trying to keep all parties talking.e Mt.Spurr Geothermal-We met with Ormat and they:are moving the project forwardandexpecttobedrillingnextsummer;however,t 1s an issue with the transmission line site 50 miles in.It's a 50 MW project to possib enlarged in the future.There's apossibilitytheycouldsharethetransmissionlinostWitChakachamna,which is in the same area.te, e Other Items -Mr.Haagenson announ ¢cy &Conservation openEAnastakthankedthe Next scheduled meeting,Frid 9.BOARD COMMENTS: w "*¥IDEX [=ALASKAYeotAlaskaIndustrialDevelopmentandExportAuthority MEMORANDUM TO:Board of Directors Alaska Energy Authority FROM:Michael pekicl>-Acting Executive Director DATE:November 22,2010 SUBJECT:Financial Reports Included with your packet are the June 30,2010 Financial Statements,Audit in Accordance with OMB Circular A-133 and Letter to the Board of Directors. Elizabeth Stuart and Corrine Fiedler of KPMG,LLP,will be in attendance at the meeting to discuss the reports and to answer any questions the Board may have. :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 ALASKA ENERGY AUTHORITY RESOLUTION NO.2010-05 RESOLUTION OF THE ALASKA ENERGY AUTHORITY RELATING TO THE APPOINTMENT OF PETER CRIMP AS DEPUTY DIRECTOR-ALTERNATIVE ENERGY &ENERGY EFFICIENCY,AND AS ASSISTANT SECRETARY OF THE AUTHORITY;AND RELATED MATTERS WHEREAS,the By-laws of the Alaska Energy Authority (the "Authority”)provide that the Executive Director of the Authority is the Secretary-Treasurer of the Authority,and set out the duties and responsibilities of the Executive Director,Secretary,and the Treasurer of the Authority; WHEREAS,the By-Laws of the Authority provide that the Board of Directors of the Authority may assign to some other person or persons 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; WHEREAS,the By-Laws of the Authority provide that the Board of Directors may assign all or part of the duties and responsibilities of the Executive Director,Secretary and Treasurer to some other person or persons;and that officers of the Authority shall perform such other duties and functions as may from time to time be delegated by the Executive Director,or as may be required by the Board or the By-Laws,Regulations or policies and procedures of the Authority; WHEREAS,the Board of Directors has determined it is in the best interests of the Authority,and desirable and proper,that Peter Crimp be appointed as Deputy Director- Alternative Energy &Energy Efficiency and Assistant Secretary of the Authority,and be assigned certain duties,functions,and responsibilities as may from time to time be delegated by the Executive Director as may from time to time be delegated by the Executive Director,or as may be required by the Board or the By-Laws,Regulations or policies and procedures of the Authority; NOW,THEREFORE,BE IT RESOLVED BY THE ALASKA ENERGY AUTHORITY AS FOLLOWS: Section 1.Peter Crimp is hereby appointed to be the Deputy Director-Alternative Energy &Energy Efficiency,and to be an Assistant Secretary of the Authority. Section 2.As Deputy Director-Alternative Energy &Energy Efficiency,Mr.Crimp shall perform any and all duties,functions or responsibilities as shall from time to time be delegated by the Executive Director or as may be required by the Board or the By-Laws, Regulations or policies and procedures of the Authority. Section 3.As Assistant Secretary,Mr.Crimp shall perform any and all duties of the Secretary as shall from time to time be delegated by the Executive Director or as may be required by the Board or the By-Laws,Regulations or policies and procedures of the Authority. Section 4.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 or Assistant Secretary-Treasurer of the Authority as Acting Executive Director.The Acting Executive Director shall have all the duties and powers of the Executive Director of the Authority during the period the Executive Director is unavailable. Section 5.This Resolution shall become effective immediately upon its passage and approval. DATED at Anchorage,Alaska,this 22nd day of November 2010. Chair ATTEST [SEAL] Secretary AEA/Appointment of Officers Resolution No.2010-05 Page 2 of 2 W xx =<"AIDEN (=ADSVXAlaskaIndustrialDevelopmentxdaExportAuthority Revised November 16,2010 Alaska Energy Authority Program Fact Sheet:Rural Power Systems Upgrade Program Current Status: Forty-eight communities have benefited from powerhouse and distribution upgrades between calendar years 2000 through October 2010.Thirteen additional communities are currently undergoing construction upgrades or are scheduled in 2011.Five additional communities are in conceptual design or final design stage.Akutan and Tazimina are the latest projects to be substantially complete.Akutan, Chignik Bay,and Unalakleet are currently under active construction with crews on site. Program Background: The Rural Power System Upgrade (RPSU)program concentrates on power production and delivery, including diesel powerhouses,hydroelectric,and electrical distribution.Typical projects include powerhouse upgrades or replacements,distribution line assessments and upgrades,tine extensions to new customers,demand-side improvements and repairs to generation and distribution systems. Efficiency,reliability,safety and sustainability are primary drivers throughout the conceptual design, final design and construction process.Identification,development and interoperability of available renewable energy sources is a high priority.It is not uncommon to see a 30%-40%increase in fuel savings after a new powerhouse project is completed. Realities of Rural Power in PCE Communities w Hydro 5.6%or 23,473,000 kWh g@ Diesel 93.7%or 394,000,000 kWh g Wind <1%or 2,867,000 kWh From FY2009 Power Cost Equalization (PCE)report.Does not include Kodiak, Juneau,Sitka,Vaidez,etc.Thesearenot PCE eligible 813 West Northern Lights Boulevard *Anchorage,Alaska 99503-2495 www.aidea.org *907/269-3000 *FAX 907/269-3044 ®Toll Free (Alaska Only)888/300-8534 ©www.akenergyauthority.org AEA Program Fact Sheet Rural Power System Upgrade Page 3 The program effort includes: e Rebuilding or replacement of old,hazardous,worn out,inefficient and non-code compliant diesel generation,hydroelectric turbines and distribution systems; ¢Inclusion,integration and collaboration with heat recovery systems and viable renewable energy projects; ©Utilization of local force account labor and technical assistance to rural communities through AEA personnel and/or contractors with experience in rural construction. 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 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 technica!and administrative problems due to lack of economies of scale and/or lack of specialized skills in the community.The RPSU program targets these smaller entities. Annual Fuel Savings from New Powerhouses 900,000 on'Projected:: £800,000 :With Additional Upgrades .:Fig ithout Additional Upgrades By:ai700,000 i ;tbe 600,000 i id 's .t PDoork owiPoh:500,000 :ag ;Be BhHio400,000 be GG 6SPfmp:ik baaesOs:oe300,000 a ook ied a ts eere?et oe £Lt200,000 CHM EGP OH i fe ba gd 100,000 any eons ans eae ea pe bbe ad ab: >eS YY &s $£SF FS 8 Funding: System upgrades to be funded are identified through a variety of methodologies,including technical assistance,advancement by the local community or direction from the Legislature.The Denali Commission has historically provided the majority of funds.Other sources include Community Development Block Grants (CDBG),Indian Community Development Block Grants (ICDBG)and Rural Utility Service (RUS). AEA Program Fact Sheet Rural Power System Upgrade Page 3 ALASKA ENERGY AUTHORITY RURAL POWER SYSTEM UPGRADES PROJECT STATUS AS OF NOVEMBER 2010 Completed Projects Projects In Progress |Phase Remaining Projects AVEC North Slope Akiachak Chignik Bay (distrib)PH 3 |[Akhiok i BoroughAkutan(distrib)Hoonah PH 3 |[AniakAngoonIglugigPH3|[Birch CreekArcticVillageKarluk(distrib)PH 3 ||Chalkyitsik Atka (pwrhs)Pelican (hydro)PH 3 ||Chefornak (distrib) Atmautiuak (distrib)Ruby PH 3 |[Chignik LagoonBeaverTakotna(distrib)PH 3 |[Ciarks Point Buckland Tazimina (hydro)PH 3 |[Cold Bay Chefornak (pwrhs)Unalakleet PH 3 |[Deering (distrib) Chenega Bay Yakutat PH 3 ||/Egegik Chignik Bay (pwrhs)Akiak (pwrhs)PH 2 [|/Ekwok Chignik Lake Chitina (hydro)PH 2 }[Galena Chitina (pwrhs)Fart Yukon PH 2 |lJiliamnaChuathbalukAtmautluak(pwrhs)PH 1 |[Kake Crooked Creek Central PH 1 ||Kasaan Deering (pwrhs)Koliganek PH 1 |[Kobuk Diomede Larsen Bay (pwrhs)PH 1 |[Lake MinchuminaElfinCoveTwinHillsPH1|[Lime Village Faise Pass Manley Hot Springs Golovin McGrath Gustavus Metlakatla Hughes Napaskiak Karluk (pwrhs)Nelson Lagoon King Cove Newtok Kipnuk Nikolai Kokhanok Nunam Iqua Kongiganak Perryville Communities Kotlik Platinum connected Koyukuk Point Baker to an Intertie Kwethiuk Port Alsworth Kwigillingok Port Heiden Larsen Bay (hydro)Port Protection Lavelock Rampart Manokotak Red Devil Napakiak Saint George Nikolski Saint Paul Ouzinkie (pwrhs/hydro)Sand Point Pedro Bay Tanana Seldoy Pilot Point Tatitlek South Naknek |Pelican (pwrhs)Telida Thome Bay: Sleetmute Tuntutuliak (distrib) Stevens Village Venetia Nota communitos which Stony River Whale Pass Nae cove boush,Takotna (pwrhs)White Mtn AP&T,of connected byintertie,are not partofTenakeeSpringsAEA's Rural Power Tuluksak System Upgrade (RPSU) Tuntutuliak (pwrhs)Program,For informationWhiteMountian(distrib)please contact the relevant entity. 48 Projects Completed (at least substantially complete) 10 Projects in Construction Phase 3 3 Projects in Final Design Phase 2 5 Projects in Conceptul Design Phase 1 . 44 Projects Remaining VGAG Approved:Program Manager or Designee Date Ww oe "AIDEN f=NSA Alaska tndustrial DevelopmentandExportAuthority Revised November 15,2010 Alaska Energy Authority Program Fact Sheet:Alternative Energy and Energy Efficiency Programs Current Status: RE Fund:108 Round IV applications were received,requesting $123.1 million.AEA staff and contractors are currently evaluating the applications and intend to have this process completed by the end of the year.After the projects are evaluated and ranked,AEA will submit project fundingrecommendationstotheLegislaturebyJanuary28,2011. Energy Efficiency:AEA is providing 98 communities with grants totaling $5.1 million for energy audits and efficiency measures through the ARRA-funded Alaska Small Cities EE and Conservation Block Grant program.An additional $3.3 million is being provided to 21 communities through the Village Energy Efficiency Program (VEEP).AEA recently received a USDOE grant for $700,000 to support energy efficiency baseline assessment,outreach and policy review.AEA and its partners also unveiled a one- stop website www.akenergyefficiency.org that provides the public with information and tools to increase efficiency.AEA has initiated an industrial energy audit program focused on seafood processing plants and will soon start a pilot commercial energy audit program. Emerging Energy Technology Fund:AEA is working with the Governor's office to assemble advisory committee members.A funding solicitation and regulations are being drafted.In addition to Alaska's $2.4 million appropriation for the program,Denali Commission will provide $3.2 million for projects. Overview: Alaska Energy Authority's (AEA's)Alternative Energy and Energy Efficiency (AEEE)program currently manages and funds projects and initiatives totaling $188 million in state and federal funding. Program Descriptions: 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 eight separate program areas: Alaska Energy Inventory (cooperative project of AEA and Alaska DNR}is compiling renewable and fossil resource data,energy supply and usage,and other information useful for energy planning and development. 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;assesses the viability of recovering fish oil from fish processing wastes. Program Descriptions,continued: 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 AEA Program Fact Sheet Alternative Energy and Energy Efficiency Programs Page 2 Combined Heat and Power Program provides assistance in developing projects that improve the overall efficiency of power systems by recovering "waste heat”from diesel-fueled and other generators. Energy Efficiency &Conservation Program focuses on reducing energy use in larger facilities such as schools,community buildings,water treatment plants,and commercial buildings.Current initiatives include the federally funded Energy Efficiency and Conservation Block Grants,the Village Energy Efficiency Program,industrial energy audits,a building energy monitoring pilot project,and a statewide public education and outreach program. Geothermal Program supports projects such as the Chena Hot Springs power plant;organizes workshops and training sessions;coordinates state assistance in developing other potential projects such as Mt.Spurr on the Railbelt and Makushin in Unalaska. Hydroelectric Program provides technical assistance through staff and contractors for hydro feasibility assessment;manages public funding for project construction. Ocean and River Energy Program evaluates technology and feasibility of converting wave motion,tidal and river flow into power in partnership with Alaska 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;assists with Railbelt wind integration studies. 0 **,All Reviewed November 10,2001 =ENERGY AUTHORITY Alaska Industrial DevelopmentandExportAuthority Alaska Energy Authority Program Fact Sheet:Bulk Fuel Program Current Status: In 2009,AEA completed bulk fuel upgrades in Levelock,Point Baker and Napakiak.A pipeline project was also completed in Newtok.Currently,five projects are under construction and three are in design. 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 program criteria.Upgrading bulk fuel facilities reduces the cost of energy by reducing or eliminating fuel loss from leaks and spills.In addition,by providing enough capacity for current and planned needs,communities may purchase fuel in larger quantities at a lower cost per gallon. bulk fuel storage facilities were constructed in the 1970's or earlier.Some of these facilities are at the end of their design life and do not comply with state and federal codes and regulations.Some have tanks,pipes and other equipment that leak fuel.Regulatory agencies may prohibit fuel!deliveries to these facilities.Communities often do not have funds for replacing these storage facilities. m Alaska's remote communities rely on diesel fuel storage for heating and power generation.Many of the Since 2000,the Denali Commission has provided funding to replace community bulk fuel facilities.Due diligence is carried out to ensure that project participants meet Denali Commission and AEA sustainability standards.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,and estimated operation and maintenance costs.The plan also includes the establishment of a repair and replacement fund so that when equipment fails,the community will have the resources and savings to repair or replace it. Program Progress: The bulk fuel program receives most of its funding through the Denali Commission.Funding increased substantially in 2000 when the Denali Commission started to fund bulk fuel projects.A total of 21 tank farm projects were completed prior to 2000.As of December 2009,an additional 68 communities have been completed for a total of 89.Approximately 29 communities have not received upgrades. Depending on funding,three or four communities are receiving upgrades per year. DS 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 Ww re "IDEN (=AAlaskaIndustrialDevelopmentandExportAuthority Revised November 16,2010 Alaska Energy Authority Program Fact Sheet:Emergency Response Program Current Status: Major emergency responses include: 2009 e Stevens Village during Spring break-up ®Kipnuk's unexpected major equipment failures ®Kobuk to Shungnak tieline e Chefornak distribution e -_Larsen Bay distribution e Stevens Village Program Description: The Emergency Response program provides on-call,as-needed emergency action response to mitigate extended power outages and electrical hazards that present imminent 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. 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 Ww ye ="AIDEN [=ALASKAENERGYAUTHORITY Alaska Industrial DevelopmentandExportAuthority Revised November 10,2010 Alaska Energy Authority Program Fact Sheet:Loan Programs Current Status: Power Project Fund (PPF) Number of loans:4 Outstanding portfolio balance:S$1,175,899 Committed &un-disbursed funds:$13,502,949 Uncommitted funds:$28,878,158 As of October 31,2010,there were no loans past due 90 days or more. Program Background: The PPF program provides loans to local utilities,local governments or independent power producers for the development or upgrade of electric power facilities,including conservation,bulk fuel storage and waste energy conservation.The loan term is related to the productive life of the project,but cannot exceed 50 years.Interest rates vary between tax-exempt rates at the high end and zero on the low end.This rate is equal to the percentage that is the average weekly yield of municipal bonds for the 12 months preceding the date of the loan commitment.Alaska Energy Authority sold $24,254,116 of the Power Project Loan portfolio to AIDEA on September 30,2010. Current Status: Bulk Fuel Revolving Loan Fund (BFRLF) Number of loans:39 Outstanding portfolio balance:S 7,398,821 Committed &un-disbursed funds:S 2,463,205 Uncommitted funds:S$5,609,448 As of October 31,2010,there were no loans past due 90 days or more. Program Background: The purpose of the BFRLF program is to assist communities,utilities or fuel retailers in small rural communities in purchasing emergency,semi-annual or annual bulk fuel supplies.Loans are for the purchase of new fuel.Loans are not provided for fuel already purchased,in the process of being used or already consumed.The Alaska State Legislature appropriated an additional $5.5 million to this revolving loan fund in August 2008. 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 ALASKA ENERGY AUTHORITY*”Alaska tndustrial DevelopmentandExportAuthority Revised November 15,2010 Alaska Energy Authority Program Fact Sheet:Renewable Energy Fund Current Status: 108 Round IV applications were received,requesting $123.1 million.AEA staff and contractors are currently evaluating the applications and intend to have this process completed by the end of the year. After the projects are evaluated and ranked,AEA will submit project funding recommendations to the Legislature by January 28,2011. Overview: The Alaska State Legislature created the Renewable Energy Fund (REF)in 2008,with the intent to appropriate $50 million annually for five years.This legislation placed Alaska at or near the forefront of the 50 states in funding for renewable energy.The Legislature authorized Alaska Energy Authority (AEA)to manage the REF project application process,project evaluations,recommendations, completion of grant agreements and disbursement of funds to grantees. Program Progress: To jumpstart the program,the Legislature appropriated $100 million in 2008.During the 2009 session, the Legislature appropriated $25 million.An additional $25 million was approved by the Governor in 2010.To date,AEA has recommended more than 130 projects.Grants have been awarded for more than 90%of the projects.Of the $150 million appropriated,nearly $40 million has been disbursed for eligible grant expenditures. Renewable Energy Fund construction projects selected for grant funding (feasibility,reconnaissance, and design projects not included on this list). 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 w rk =)ENERGY AUTHORITYAlaskaIndustrialDevelopmentandExportAuthority Revised November 15,2010 Alaska Energy Authority Program Fact Sheet:Training Program Current Status: The Alaska Energy Authority (AEA),along with the Denali Commission Training and the Alaska State Energy Sector Program (ASESP)Funds,provide training opportunities to local residents for their energy projects and infrastructure.For FY 2011,the Denali Training Fund provided $57,000 and the ASESP provided $175,000 which helps fund:three Bulk Fuel Operator classes;two Power Plant Operator classes;one Advanced Power Plant Operator class;one Hydro Power Plant Operator class. 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 ¢Power Plant Operator Training e Advanced Power Plant Operator Training e Hydro Power Plant Operator Training 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 Oo "<yIDEN [=ALASKASYAlaskaindustria}DevelopmentWaleExportAuthority Reviewed November 10,2010 Project Fact Sheet:BRADLEY LAKE HYDROELECTRIC PROJECT CURRENT STATUS:The lake level is at normal for this time of year.No major projects are scheduled this upcoming winter. PROJECT COST:$328 million (original cost plus major capital improvements through June 30,2009). DESCRIPTION: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. PURPOSE:The Bradley project provides 5-10%of the annua!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. Oo SOURCE OF FUNDS:Legislative appropriations and AEA revenue bonds repaid by participating utilities.PARTICIPANTS: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%). BENEFITS: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. ADDITIONAL 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.In 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 2008,Bradley produced 287,000 MWh of power at a cost of approximately $.054 per kWh. 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. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org «907/771-3000 ©FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 e www.akenergyauthority.org wrxoO "AIDEN (=NSISAlaskaindustrialDevelopmentandExportAuthority Reviewed:November 10,2010 AEA Project Fact Sheet:RAILBELT LARGE HYDRO PROJECTS Current Status:Engineering &environmental contractors are being solicited by RFPs.A Preliminary Decision Document is being prepared that will indicate which of the two large hydro projects is the primary and which is the alternative project.Public meetings to educate and take comment will follow later this winter. Description:The Railbelt Integrated Resource Plan identified large Hydro projects as a preferred energy source for the region.These funds will enable AEA to carry out 1)needed geotechnical work,permitting and initial conceptual design for the Susitna Hydro Project ($6 million),2)feasibility and field studies related to the proposed Lake Chakachamna Hydro Project ($3 million)and 3)conceptual design and preliminary permitting for Glacier Fork and other hydroelectric projects ($1 million).If in the course of this project ,AEA determines one of the hydroelectric projects has a "fatal flaw”or feature that makes it unfeasible,funds designated for that project will be used on the remaining hydro projects. Purpose:Pursue feasibility studies,planning,design,and permitting of large hydroelectric projects to diversify the railbelt energy source,reduce the volatility of future fuel price changes on energy costs, and lower the future cost of energy. Background/History:A large scale hydroelectric project on the Susitna River,Alaska was proposed in the 1980's to provide hydroelectric power for the Railbelt,and was pursued by the predecessor of AEA.The project was tabled in 1985,when oil prices dropped precipitously.Also in the late 1970's and early 1980's a smaller hydroelectric project at Chakachamna Lake,Alaska was investigated and dropped. Glacier Fork is another potential railbelt hydropower project that was identified recently.Little is know about Glacier Fork. Source of Funds:FY2011 Legislative appropriation. Project Cost:$10M Participants:Alaska Energy Authority Benefits:A large hydroelectric project would provide the railbelt region with a long term stable economical source of renewable energy.In addition,the only way that the State of Alaska can meet the Renewable of 50%renewable by 2025 is to have a large railbelt hydroelectric project. CP 813 West Northern Lights Boulevard *Anchorage,Alaska 99503-2495 www.aidea.org ©907/269-3000 *FAX 907/269-3044 ®Toll Free (Alaska Only)888/300-8534 ©www.akenergyauthority.org Ww ox = ENERGY AUTHORITY Alaska Industrial DevelopmentandExportAuthority Reviewed November 15,2010 Alaska Energy Authority Program Fact Sheet:Power Cost Equalization Program Current Status: Effective October 1,2008,the power cost for which PCE is paid (the "ceiling”)was raised from $.525 to $1.00.For FY2011,the base rate was raised from $0.1412 to $0.1439.As of August 31,2010,the actual program cost for FY 2010 was $31.7 million. 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 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 AEA Program Fact Sheet Power Cost Equalization Program Page 2 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.The total invested assets of the Fund on January 31,2010 were $322.8 million. PCE Statistical Report The Alaska Energy Authority published its annual PCE Statistical Report for Fiscal Year 2009.This report provides statistical data on the program for the fiscal year ended June 30,2009.Approximately 77,518 people living in 184 communities participated in the FYO9 program.FY09 appropriations allowed for PCE payments at 100%during the fiscal year,totaling approximately $37 million. The FYO9 report may be found at:www.akenregyauthority.org wo "AIDEN f=ASA Alaska industrial DevelopmentandExportAuthority Revised November 16,2010 Alaska Energy Authority Program Fact Sheet:Technical Assistance Program Current Status: To date from fal!of 2009,the Technical Assistance Program has assisted the communities of:Akiak, Chitina,Chefornak,Hughes,King Cove,Kipnuk,Koyukuk,Kwethluk,Newtok,Ouzinkie,Pedro Bay, Takotna,and Tuluksak. Program Description: The purpose of the Technical Assistance Program is to help eligible utilities 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.The program provides training, consultation,on-site assistance with maintenance and minor repairs,and other related technical assistance. The ability a community has and the methods it uses to maintain and operate its powerhouse have a significant impact on generation efficiency.Keeping diesel generation systems operational and maintained has a direct influence on the energy produced for each gallon of diesel fuel consumed. Operator training,spare parts availability,automatic system monitoring,data trending and data analysis along with prompt maintenance and repair are key factors in keeping reliability,efficiency and performance high. The Technical Assistance Program is administered by the Alaska Energy Authority (AEA)and is available to all eligible electric utilities.Participating electric utilities receive support services from AEA. e AEA makes visits to eligible electric utilities based on need over the course of the year to provide training and recommendations concerning operations and routine maintenance activities.There is no charge to the utility for these services. e The Technical Assistance Program does not provide funding for major repairs or reconstruction of electrical systems. e The participating utility's power plant operator and/or utility staff must be available for training and consultation during the time of the Technical Assistance Program visit.Power plant operators will be required to maintain written performance logs in between visits. e The program relies heavily on Remote Monitoring or SCADA (Supervisory Control And Data Acquisition).The system allows remote trouble shooting,reduction in travel costs and verification of efficiency.A SCADA system helps assure the successful integration of renewable energy sources. 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 Services under the Technical Assistance 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. _wR "AIDEN (=NOs Alaska industrial Development and Export Authority Reviewed November 15,2010 Project Fact Sheet:LARSEN BAY HYDROELECTRIC PROJECT CURRENT STATUS:Upgrades to the Larsen Bay Hydro Facility are complete and the community and AEA have executed a Facility Conveyance Agreement to complete the turnover of the hydro facility to the community.The city utility supplies a portion of the cannery's energy needs to increase utility revenues and enable repayment of bond funds.The utility has agreed to allow the use PCE payments to aid in repayment of their PPF loan. PROJECT COST:$320,000 from CDBG grant DESCRIPTION:The Larsen Bay hydro facility has experienced numerous significant operating issues over the last several years,which have resulted in delaying the ownership transfer from AEA to the community.The most significant issue is the reliability of the existing hydro switchgear and controls. The improvements included: e Replacement of the existing unreliable hydro switchgear and controls with new modern switchgear that includes data acquisition and remote monitoring capabilities.This milestone is complete. Repair ice damage to the water intake structure.This milestone was completed in January 2009. Supply a portion of the cannery domestic load to facilitate increased use of hydropower without negatively impacting the power to the community and increase revenue to the city.This milestone was substantially completed spring of 2007. e Execution of the Facility Conveyance Agreement.This milestone was completed September 9,2010. PURPOSE:The project intent is to increase the reliability and use of the hydroelectric system in order to facilitate the turnover of ownership of the system to the City of Larsen Bay. SOURCE OF FUNDS:!n 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 BENEFITS:Once operating reliably and efficiently,the hydro will displace the majority of the city's diesel fuel used for electrical generation.The utility can now provide a portion of the cannery's energy needs resulting in increased revenue to the utility.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 hydro facility over to the City after the improvements have been completed and the facility has proven its reliability. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org @ 907/771-3000 «FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 e www.akenergyauthority.org Larsen Bay Hydroelectric Project Page 2 of 3 Project Fact Sheet ADDITIONAL 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,which provides a safe 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 or make bond payments 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. Because the Project has a long history that may not be well-known,following is a summary of the key milestones and financing arrangements leading up to the 2006 agreement approved by the City Council. In 1987,AEA loaned the City $493,694,from AEA's Power Project Fund (PPF loan)for construction of a hydroelectric project at Larsen Bay,Alaska,located on Kodiak Island.The Project originally was anticipated to cost approximately $525,000. By 1990,the available funds were spent but much work remained to be done,and the total estimated cost had increased to $1.8 million.The City requested that AEA take over construction management and ownership of the Project.in 1990,AEA granted the City an additional $501,000 for the Project.The grant agreement included a project management plan under which AEA took a more active role in managing construction of the project.The plan indicated that after grant close-out,ownership would be transferred to the City.A PPF loan agreement executed in 1990 also said the City shall own the Project. In 1991 it became apparent that more funds were needed to complete the project.The City did not have the ability to secure the funds,and AEA agreed to issue $855,000 in revenue bonds for the project.AEA and the City entered into a Cooperative Agreement for the completion and operation of the project,which provided that the City would retain ownership of the project until it reached commercial operation,and then the City would transfer ownership to the Authority.(However,AEA has nothing in its files showing that ownership actually was transferred to AEA.)The Cooperative Agreement also provided that revenues from the City's electric utility system would be used to pay off the bonds,and that the City would pay AEA annual project costs,including operations and maintenance costs and debt service. By the mid-1990s,the City was unable to meet its debt obligations from electric utility revenues.In 1995,the former Alaska Division of Energy (successor to AEA)agreed to reduce the interest rate on the PPF loan to 0%. Although we can find no written agreement from 1995,AEA affirmed this reduction of the interest rate in a 2002 resolution. In 1999,the Division of Energy,AEA,and the City agreed that AEA would pay off the outstanding bonds (then approximately $750,000)and the City would pay the outstanding balance of the PPF loan (approximately $528,000)in annual installments of $35,000 at no interest.Again,we cannot find a written agreement from 1999, but AEA described and affirmed this agreement in its 2002 resolution. AEA Board Resolution 2002-01 affirmed the previous agreements and authorized payment by AEA of the remaining outstanding revenue bonds.The modification of the PPF loan to a zero-interest loan was conditioned on the City keeping current on its annual installments of $35,000,but if the City defaulted interest would again be imposed. The resolution also reflected that the 1999 agreement included a separate provision whereby AEA would receive 11 annual payments of $11,725 (a total of approximately $129,000 over 11 years)assigned from Kodiak Salmon Packers'power payments,representing debt on bond proceeds used to extend power lines from the Project to the Larsen Bay Hydroelectric Project Page 3 of 3 Project Fact Sheet , cannery.After the board enacted this resolution,AEA paid $215,128 to redeem all outstanding bonds from the 1991 issuance. In 2005,AEA and the City signed a letter agreement describing the status of the Project and the parties'financial arrangements,and agreeing that the City would take over ownership and operation of the Project upon AEA's completion of minor repairs to it.In 2006,AEA and the City signed a second letter revising the 2005 letter agreement,which the City Council approved by City Resolution No.06-07 dated May 10,2006.The letter agreement as revised in 2006 included provisions in which: AEA agreed to forgive the City's obligation to repay the amounts paid by AEA to pay off the outstanding bonds. The City agreed to repay $528,000 in principal and interest owing on the PPF loan (representing the amount owed in 2002 when AEA agreed the loan would become a zero-interest loan).The City agreed to make annual payments to AEA of $35,000 each state fiscal year (July 1 -June 30)until the $528,000 is repaid,beginning Fiscal Year 2007 (July 1,2006 -June 30,2007).The first source of money for repayment is Power Cost Equalization (PCE)payments payable by AEA to the City,the second source will be the fund described in paragraph [g],and the third source will be any other moneys available to the City.The parties agreed that beginning July 1,2006,AEA will withhold PCE payments payable to the City until the $35,000 obligation is paid for the fiscal year,after which AEA will send the rest of the PCE payments for the fiscal year to the City. The City agreed to repay $128,975 in 11 annual payments of $11,725 (a total of $128,975 over 11 years),representing payment for bond funds used to extend powerlines from the hydroelectric project to the Icicle Seafoods (formerly Kodiak Salmon Packers)cannery,which bonds have since been repaid by AEA.These payments are to be from the proceeds of power sales to the cannery (including cold storage and domestic uses)without recourse to other City assets.The City will assign © to AEA its rights to payment under any power sales agreement between the City and Icicle or its successor.Icicle or its successor is to make payments for hydroelectric power directly to AEA beginning with the first payment due on or after July 1,2006,and the City will copy AEA with the monthly invoices to Icicle or its successor for power usage.AEA will notify the City when it has received payment of $11,725 in a fiscal year,after which Icicle or its successor will make payments to the City. AEA agreed to forgive the City's obligation to repay AEA's unreimbursed out-of-pocket expenses for operations,maintenance,administrative expenses,and other activities associated with the hydroelectric project since 2002,which presently total approximately $129,448. AEA agreed to provide project management services for work to repair improve the Hydroelectric Project,using a Community Development Block Grant of approximately $500,000 to repair the Project and make water diversion and waterflow enhancements.AEA agreed to transfer,and the City agreed to accept,ownership of and all responsibility for operations,maintenance,repair and replacement of the Hydroelectric Project upon completion of the repair work with the CDBG grant. The CDBG grantor subsequently reduced the grant to $320,000 for the repairs to the existing Hydroelectric Project when it was discovered that the rights to the diversion stream had been transferred to the Wildlife Refuge and the Wildlife Refuge refused to provide the necessary stream rights for the improvements. WK xk "AIDEN [=ALASKA Alaska industrial DevelopmentandExportAuthority Revised October 7,2010 Project Fact Sheet:ALASKA INTERTIE CURRENT STATUS:The Intertie is currently in operation.Several repair and renovation projects have been authorized by the Intertie Operating Committee and AEA has started to pursue the projects.The projects are the STATIC VAR COMPENSATOR replacement project and the TOWER 195 RELOCATION project.There is $10M available to accomplish this work. The continued operation of the intertie is changing with an emerging gas shortage in Cook Inlet,which reduces the ability for Chugach Electric and Municipal Light and Power to generate economy energy for sale to GVEA. Operation is expected to continue,but with reduced power flows.The line is also being used for GVEA to transfer energy south under conditions with gas supplies to Chugach are curtailed,either during maintenance periods or during extreme cold weather conditions.The Alaska Intertie Contract is now under renegotiation between Railbelt Utilities,AEA,and one other interested party,Doyon Utilities.A short extension agreement is nearing completion, and is presently being circulated for signature,to extend the agreement for another 3 months.. PROJECT COST:Initial capitals costs of $124 million.Warranty and repair and replacement fund is paid into by utilities to cover costs. 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),Anchorage 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). BENEFITS: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. 813 West Northern Lights Boulevard @ 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 Intertie Page 2 of 2 Project Fact Sheet ADDITIONAL 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. silibaleLanze |baydhrovallacti Ae RaxeuneeDevakeprnanti Coumall Railbelt Hydro Locations wrrcseaeae myer 99 er Aer pn rad Porn AMO STINT St Aa ata dace -rad 2 .Oath 4 prey amen nae iad ad S snl de 2 tg2oo'.,roa RA rer ered te a me 7 ..7 a at .S04 ve oe an fe Tye 6%.po yo aleeEE/ .BOE _-;ee et ean are '2 st :a woe fg abwenteoyyaA -.4 ¥le af fw :F reer.Nansaogb e 4 *-ade ca ra -+ .ob ge .ai, :,>'"t '<8 "é ea?ae #0 :#ot .ig Se ., ' 4 4 -Jf 4 ,'4 are 3 : we ue é ry GOLD CREEK 4 .?« rans ee7aie'ae Chakachatna¢tNRAERT,RYSR:REFSyOTE4ae!eeawanenameel ¥™.greene ee |, := Susitna Low Watana a fq .ve et Oa pare ee hee Tg a reo ee!se kp ay ;ete ieesGAAPNED,Bae>SE me oe eae ag get ' pai wv 4 'aWay AW wae ; Me beFeeCPee :" %, 153°COw Chakachamna Hydroelectric Project} 4 Vicinity Map &WON*,ean Ke?ves,J PROPOSED INTAKE"|yO'i a -oe"t{bdmiihakachaietRiv>oy?ta.aan ente5 a"peracreTUNNELa]al ae-o icHRP ospeermenseevm-Newukta Stoughy4oaeee|PROPOSED POWERHOUSEa>-S7Afdy.a E z Trading Bay yOtateGameRefuge oe ca i bo ack eee ue!Se httely:aoe" peESkeptaes4tisavre ad "bh ga -oe8Rmshae3Laanei oFtatheeOea'anh arn<\)TheoatedeyDeri..£3,°yessets 2 He sy aA "3 e iRosetet wS us aw im cond sonore]te POOR OORT CY co HE 20.2011 We e Hydroelectric a aglak BgtrauyinRUResere tistk Bradle ee 3 oqae ae ga x:rt,Ia Fa phateaateeLeeam me Sicaaba.ay?cat ikSap 5 Susitna Energy &Environmental: =Energy -Installed capacity 600 MW -Average energy 2600 GWhr/yr -About 50%of annual railbelt energy «=Environmental -Reservoir 39 miles long &maximum of 2 miles wide -Site is approximately 30 miles above extent ofsignificantsalmonhabitat -Susitna River downstream of dam will have the same annual flow with modified seasonal timing -Some fisheries impacts will be positive -Some loss of wildlife habitat 10 Chakachamna Energy &Environmental: «=Energy -Installed capacity 300 MW -Average energy 800-1300 GWhr/yr -Project energy will be reduced by environmental flows -Environmental flows (Project Energy)to be decided by resource agencies =Environmental -Project would divert water from one basin to another -Salmon travel through and likely spawn in lake -Trading Bay State Game Refuge downstream of Lake -Lake Clark National Park &Preserve upstream of lake Hydroelectric Benefits e Greater than 100 year life e Expandable for future growth e Predictable,secure,clean,low cost energy e Provides dispatchable energy and stabilizes the grid e Investment in Alaska Infrastructure e Alaskan jobs and funds stay in-state long term e Hydro necessary to achieve States 50%renewable statewide energy policy Myo 7 7 OM Pre pr le syrnwS1IAW lv (Moock,|4 *Ede do nem LSet _bbbwing'dle an ePrA us) Tr (i ROW is (, | ,Dee lin vy he Ow scene D (Sties\ 4 Ke ginge AAR Carve DrSPy,; v oa PP PCa,mt ontfO7o>Sus;teh /)ions 12 J JSapp-/¢OMGLMD Crrnl eg 09?Wh hy,'C .CD mid 37 nules Ons -Ae pe Sela,SO -[S05 Mwy (1 ;ID yc bife ER ors,LateaJestStraiesaetnaQere,"Prelin -OL CiS bm Clee me SG don.C ;2)F/colo Fen anced Kn lst ValorieRot, £Detn":A41Cr L ra f 'fjetle,to Boara'.WM ioidane toe (oo lostes MO 200TOCSorg14e"Mo Cervec {bas coe <P - - 3)Posolurton 2010-05 Vote,Cr m6 Dep ty DivechWeve:th,Feiik AES EE ae.Cormaissigner kdl New DD 4.AEA.Appoinds by toateSeeverartyFrecuS49ning;Mike -oveyVitus +arscwree Baio!|abins. Pye.Sheldar nered VES Ue ek,” o /Uh QA1nN OLS i)fF;vovell.° Director Corned oNLoeb =poets -Feed S ewe er Or 4wd Dee.35 Yes. 2 Undede om ED el ynlTHe Process, aie [analy (Comper cai on ely Bone.ChaviS Autre,-distrib te into 7 2%