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Intertie Managment Commitee Meetings 09-18-2014 2
Intertie Management Committee Regular meeting MEETING MINUTES Thursday,September 18,2014 Anchorage,Alaska 1.CALL TO ORDER Chair Brad Evans called the meeting of the Intertie Management Committee to order on Sept.18,2014 at 2:40 p.m.A quorum was established. 2.ROLL CALL FOR COMMITTEE MEMBERS Brad Evans Chugach Electric Association (CEA) Cory Borgeson Golden Valley Electric Association (GVEA) Joe Griffith Matanuska Electric Association (MEA) Gene Therriault Alaska Energy Authority (AEA) 3.PUBLIC ROLL CALL Burke Wick (CEA);Lou Agi (ML&P);Sara Fisher-Goad,Kelli Veech,Jocelyn Garner,Kirk Warren, Sandie Hayes,and Teri Webster (AEA);Bernie Smith (Regulatory Commission of Alaska (RCA));Kirk Gibson (McDowell Rackner &Gibson PC);John Foutz (City of Seward). 4.AGENDA APPROVAL MOTION:Mr.Borgeson made a motion to approve the agenda as presented.Motion seconded by Mr. Griffith.The motion was adopted without objection. 5.PUBLIC COMMENTS There were no public comments. 6.APPROVAL OF PRIOR MINUTES -June 30,2014 MOTION:Mr.Griffith made a motion to approve the prior minutes of June 30,2014.Motion seconded by Mr.Borgeson.The motion was approved unanimously. 7.NEW BUSINESS 7A.Election of Officers Nominations were taken for the Chairman of the IMC. MOTION:Mr.Evans nominated Joe Griffith for the position of the Chairman.The motion was seconded by Mr.Borgeson.No other nominations were presented.A vote was called to elect Joe Griffith as the Chairman for the IMC and the motion passed unanimously. Nominations were taken for the Vice Chairman of the IMC. MOTION:Mr.Borgeson nominated Brad Evans for the position of the Vice Chairman.The motion was seconded by Mr.Griffith.No other nominations were presented.A vote was called to elect Brad Evans as the Vice Chairman for the IMC and the motion passed unanimously. The Alaska Energy Authority will remain the permanent Secretary/Treasurer per the bylaws. IMC Meeting Minutes-Sept.18,2014 Page 1 of 2 7B.Taking of Pooled Reserves by Nonmembers,RCA complaint They discussed how to develop a rate for providing reserve to nonmember utilities and what role the RCA can play in enforcing an interconnection agreement.Tariffs and Regulatory Affairs subcommittee was given the assignment to determine the next steps needed with the RCA. Consul was given the assignment to determine if the City of Seward can be a non-participate user. 8.Reports 8A.Operators Report The Operator Report was given by Mr.Lou Agi.He gave an update on the Healy SVC.Many of the harmonics have been eliminated but it is not complete yet.This causes a restriction with GVEA transmission but it is not an issue. 8B.IOC Report Mr.Burke Wick gave a brief report stating there are no significant outages scheduled in the next quarter and the tie is in operation. 8C.Budget Report The Budget report was given by Mr.Kirk Warren.There are minimal incurred expenses yet for FY2015. Draft FY14 Final is out stating $2M in revenue and an estimated $1.9M in expenses. 9.COMMITTEE ASSIGNMENTS Operators and Mr.Griffith are to meet with the Tariffs and Regulatory Affairs Committee to discuss pooled reserves. 10.NEXT MEETING DATE Not determined. 11.ADJOURNMENT There Being rther business of the IMC,the meeting adjourned at 3:50 p.m. co ene Therfiault,Secretary To obtain an audio of the full meeting,contact Teri Webster (AEA)at 907-771-3074. 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IMC:Sept 18,2014 6c)hoe Ke ot Oe |\)\orn ection V1 |0 oo4RollCallAgendaMinutesixElection€*Co Budget KyyRollcallfromtoptobottomendingwithChair; fos Yes No Yes No Yes No Yes No Yes No Golden Valley Electric Association uw uw uv Matanuska Electric Association ”" Alaska Energy Authority "”A " Municipal Light &Power '"Louw Dai - Chugach Electric Association Vie Y Ae |TOTAL I I I || Roll call from top to bottom ending with Chair Yes No Yes No Yes No Yes No Yes No Golden Valley Electric Association Matanuska Electric Association Alaska Energy Authority Municipal Light &Power Chugach Electric Association a ||I Next Meeting: ATTENDANCE -IMC Sept 18,2014,2:30 pm "Phone =Ss COMMITTEEMEMBERS =s---S sésACLT ERATE|a"Brad Evans,Chairman ||CEA -'Burke Wick OO Jim Trent,Vice Chairman .|.MLP :_"Jeff Warner Gene Therriault,Secretary/T reasurer AEA |.Sara Fisher-Goad :Cory Borgenson GVEA .Allen Gray Evan "Joe”Griffith ..MEA 7 Gary Kuhn 'Public Members ||COUNSEL |Bernie Smith -RCA 7 |oe 7 -Kirk Gibson,McDowell Rackner &|--Brian Hickey CEA OO :-|-'Gibson PC -. : |Lou Agi ML&P |a |Brian Bjorkquist,Dept.of Law | |BobDay-HEA |; ee ee ee AEA Staff Sandie Hayes Teri Webster Kirk Warren Powe De An Fo wt Z Boebs- ALASKA INTERTIE MANAGEMENT COMMITTEE MEETING Thursday,September 18,2014 -2:30 PM **PLEASE WRITE LEGIBLY** NAME Organization/email [BLR IE S0O/Z LVOLY Jpork.(IU-CEA Zyoctlyn Gornec KEAtMLapeteAsA-J Cow faxat Acv4eJSandsyeloses A SFE cy clc WawrenYicleQibsem clohn Foutz 10. 11. ALASKA INTERTIE MANAGEMENT COMMITTEE AGENDA Thursday,September 18,2014 2:30 p.m.-4:00 pm Alaska Energy Authority,Board Room 813 W.Northern Lights Boulevard,Anchorage,Alaska CALL TO ORDER ROLL CALL FOR COMMITTEE MEMBERS PUBLIC ROLL CALL AGENDA APPROVAL PUBLIC COMMENTS APPROVAL OF PRIOR MINUTES -June 30,2014 NEW BUSINESS A.ELECTION OF OFFICERS (Action item) B.TAKING OF POOLED RESERVES BY NON MEMBERS,RCA COMPLAINT REPORTS A.OPERATORS REPORT B.INTERTIE OPERATING COMMITTEE REPORT C.BUDGET REPORT COMMITTEE ASSIGNMENTS NEXT MEETING DATE ADJOURNMENT To participate via teleconference,dial 1-888-585-9008 and use conference room code 467 050 126 Intertie Management Committee Regular meeting MEETING MINUTES Monday,June 30,2014 Anchorage,Alaska 1.CALL TO ORDER Chair Brad Evans called the meeting of the Intertie Management Committee to order on June 30,2014 at 10:30 a.m.A quorum was established. 2.ROLL CALL FOR COMMITTEE MEMBERS Brad Evans Chugach Electric Association (CEA). Cory Borgeson Golden Valley Electric Association (GVEA)_ Joe Griffith Matanuska Electric Association (MEA)*<,”.Jeff Warner Municipal Light &Power (ML&P)er Gene Therriault Alaska Energy Authority (AEA)oo 3.PUBLIC ROLL CALL a .arr "a lk won & ia et 4BurkeWickandBrianHickey(CEA);Allen Gray,Dan Bishop,'and Mike Wright (GVEA);Aung Thuya (ML&P);Kelli Veech,Katherine Beale,and Teri Webster (AEA). a ae an4.AGENDA APPROVAL aa MOTION:Mr.Griffith madea motion to approve the agenda aspresented Motion seconded by Mr.Therriault.The motion was adopted without obj ection:;on\se?5.APPROVAL OFPRIOR MINUTES -March 1,2014 and May 8,2014SeboysMOTION:Mr.Griffith made a motion to approve the prior minutes of March 11,2014 and May 8,2014.Motion seconded by Mr.Theriault.The motion was approved unanimously.wf a e * * 6.PUBLIC COMMENTS..SC=on SOCe4°a : There were no public comments.*.&'7 Rn oeRT.boR 7.NEW BUSINESS -ig7A.Approval of FY15 Budget fyaEThecommitteemembersreviewedand discussed at length the line items in the budget. MOTION:Mr.Therriault made a motion to amend the FY15 proposed budget as presented to the following:1)Allocate FERC 924 Property Insurance of $145,000 under MIRCR calculation;2)Reduce FERC 566 Intertie Ground Patrols from $40,000 to $25,000.The motion was seconded by Mr.Griffith.A vote was called and the motion passed unanimously. MOTION:Mr.Therriault made a motion to adopt the FY 15 budget of $2,677,780 with the following stipulations:1)Provide greater level of detail for line items FERC 566 -Private Line Telephone Service for AKI SCADA of $110,000;FERC 566 SLMS -Support Contract/Battery Changeout of $60,000; FERC 920 -IMC Administrative Costs of $150,000;2)Direct budget subcommittee to revise budget presentation for improved legibility and comparability for Railbelt budget structure.The motion was seconded by Mr.Griffith.A vote was called and the motion passed unanimously. IMC Meeting Minutes-June 30,2014 Page 1 of 2 7B.Clarification on newest Alaska Intertie Agreement The IOC will be reviewing the list of inconsistencies in terms and misspellings in the approved Second Amended and Restated Alaska Intertie Agreement that was passed in March.They will report back to the IMC with their recommended changes. 7C.IMC /OC Subcommittee Members -Participation by non-IMC members Public participation and subcommittee meetings notices were discussed.The Chair assigned the Tariffs and Regulatory Affairs subcommittee to create a standard for all of the subcommittees to follow. 7D.Level of Detail on Meeting Minutes vt. .- "=Members discussed the level of detail in the current IMC meeting minutes.To slim down the meetingminutes,only a brief summary and the action items will be included iin future meeting minutes.The audiorecordingisalwaysavailabletolistentothefullmeeting.Se «,} 7E.Operators Report -1OC ant .a *. The IOC Operator Report was given by Mr.Warner:>_"i ae PsMr.Gibson gave an overview of the Memorandum to the IMC regarding Homer Electric Association not beingin compliance with the spinning reserve requirements containedin the Railbelt Standards.It wasdiscussedtohavetheIMCsubmittotheRCAaRulemakingpétitiontohavetheReliabilityStandardsenforcedtoallutilities.The Chair assignedtheiissue,to the Tariffs and Regulatory Affairs subcommitteetocreateaprocessonhowanon-intertie member jjoins;the pool éand pays.a fair share of the costs and toincludeitintheRulemakingpetition.a abel ty - 8.COMMITTEE ASSIGNMENTS '7ae et Budget committee-Follow through onnthe motion made with the adoption of the budget.Tariffs and Régulatory Affairs -Create standards for all subcommittees;RCA Rulemaking petition.Operations,Maintenance and Scheduling-Ensure the definitionsin the Second Amended and RestatedAlaska'Intertiee Agreement are consistent with the index of definitions.%8 "et,9.NEXTMEETINGDATE,,":".rae mt va Not determined."is,oy "EO,oe10.ADJOURNMENT rdPodTherebeingnofurtherbusinessofthe IMC,the meeting adjourned at 1:00 p.m. Bradley Evans,Chairman Gene Therriault,Secretary To obtain an audio of the full meeting,contact Teri Webster (AEA)at 907-771-3074. IMC Meeting Minutes-June 30,2014 Page 2 of 2 ALASKA INTERTIE QUARTERLY REPORT THROUGH June 30 2014 REVENUES GVEA ML&P CEA MEA Interest and Capital Credit TOTAL REVENUES EXPENSES FERC 562 -Station Operation Expenses GVEA-Substation Electricity Usage FERC 566 -Miscellaneous Transmission Expense Private Line Telephone Service for AKI SCADA (GVEA) Cell Phone Comm.Svc for Weather Monitoring (ATT) SLMS -Support Contract/Battery Changeout (08-007-EPSI) Intertie Ground Safety Patrol -(08-007-HDR) FERC 567 -Transmission Expenses -Rents Rents -Alaska Railroad MEA-Talkeetna Storage PSSE Key Replacement FERC 569 Maintenance of Structures MEA -Maintenance of Structures FERC 570 -Maintenance of Station Equipment GVEA -Healy,Cantwell,Goldhill GVEA -CWS-Battery Replacement GVEA -Standby Generator Set Standardization at CWS GVEA -Replace Protective Relay Schemes -Healy GVEA -Repair 4S2 Switch -Cantwell GVEA -Mobile Substation Access GVEA -RPU Replacement -Cantwell GVEA -Recloser Control Replacement GVEA -Transformer Protection Upgrades CEA -Teeland Substation MEA -Replace Protective Relay Schemes -Douglas MEA-Dougias Substation FERC 571 -Maintenance of Overhead Lines GVEA -Northem Maintenance GVEA -Northern ROW Clearing GVEA -Landing Pads GVEA -Re-level Structures &Adjust Guys GVEA -Repair Tower 692 MEA-Southern Maint (Incl Ground Inspect)MEA-Special Patrols [Incl Foundation Inspections] MEA -Southern ROW Clearing Talkeetna North MEA -Contingency MEA -TWR 195 Repair Monitoring Intertie Operating Costs FERC 920 -AEA Administrative Costs Personal Services,Travel and Other Costs Misc.Studies -Cyber Security Study Misc.Studies -System Stability Study FERC 920 -IMC Administrative Costs IMC Administrative Costs -Audit IMC Administrative Costs -Legal FERC 924 -Property Insurance AK Intertie -Insurance Insurance Risk Assessment intertie Administrative Costs TOTAL EXPENSE SURPLUS (SHORTAGE) H:\Accounting\AEA FY14 FS Shared Files\AK Intertie\FY14 Quarterly Report AKI 6 30 14.x!s Revised FY14 ACTUALS OVER Budget @ 06/30/14 (UNDER) 1,718,650 1,544,716.62 (173,933) 101,146 43,896.00 (57,250)118,264 58,782.00 (59,482)93,469 75,111.60 (18,357) -293.39 293 2,034,528 |1,722,799.64 (308,729 7,000 6,466.33 (534) 7,000 6,466.33 (834) 106,000 27,818.82 (78,481)15,000 15,639.36 539 60,000 61,791.92 (8,208) 40,000 13,620.22 (26,380) 221,000 108,470.31 (112,530) 400 700.00 300 7,200 7,200.00 ° 1,000 :(1,000) 8,600 7,900.00 (700) -2,378.48 2,375 .2,378.48 2,375 65,000 347,788.85 282,789 °1,893.00 1,893 250,000 °(250,000)45,000 °(45,000)80,000 °(80,000) 35,000 (35,000) .70,942.43 70,942 330,000 .(330,000)17,200 6,967.63 (10,242) 822,200 427,581.84 (394,618) 153,000 22,251.20 (130,749) 50,000 °(50,000)26,000 ©(26,000)20,000 .(20,000)70,000 40,990.77 (29,009)15,000 54,365.56 39,366 25,000 °(25,000)20,000 °(20,000)10,000 -(10,000) 389,000 117,607.53 (271,392)1,447,800 670,401.46 (777,399) 50,000 33,897.65 (16,102)50,000 2,550.00 (47,450)180,000 22,600.00 (157,500) 280,000 68,947.55 (221,082) 34,000 68,020.80 24,02134,000 58,020.80 24,021 145,000 202,836.42 57,836 445,000 202,836.42 67,836 459,000 319,804.77 (139,195) 1,906,800 990,206.23 (916,593.77) 124,728 732,593.38 607,864 INTERTIE MANAGEMENT COMMITTEE BYLAWS Dated:November 18,2011 TABLE OF CONTENTS Article 1.STATEMENT OF OBJECTIVES ..........ceeccssccssecesecsccseceeesseessscessrsesseesseeeesesatenssensesaees 1 Article 2,AUTHORITY OF INTERTIE MANAGEMENT COMMITTEE ............cccsccesceesseesseees 1 Article 3.OFFICES ........ccccsessesssesessccesscsnecescesnessscceseseesanecseesseesesensessseressseaceesaeeseescessaeeeeenseeseeneees 1 Article 4.REPRESENTATIVES ...000..cccccessecssecssseeseeeeccsecesacceneessessaceessesseeesssenseeeeseusesseesesesensess 2 Article 5.IMC MEETINGS..........cceeesscssssseccsccesseesncesessessecnccneessecsacesecssesueeseesssteneeeneeeedsensenessnsensees 2 5.1 Annual Meeting..........cceeesssssecessesseeceecescceesescensceecsassaceessasessscessesssesceecersrsceseessssecensessaeenseaseaeees 2 5.2 --_Regular Meetings.........cc cscsssecsssssesreesseessescsseccnsecssssacessssecsessscscsonsssesessesascaeecnessseseasestennsossesesees 2 5.3 Special Meetings...........ssscsscssccsssesssssssssensececesesssessecsscecesassscereseossnssenseasenssssccessessesssenearsesesscesnaees 2 5.4 Notice of Meetings...essesesssceesssesseceesscecccceceaseceseesssstcceesessessceeseeseaesaseesesasssesensseasseceaseeees 2 5.5 Waiver of Notice...ecscsssessssecsscrsscsscessssssseecssonsssssesssessansessesseonscessssessssessonsroesssosessecseasoeesesoaes 3 5.6 -_-Place of Meetings...escssescccsecscsceersessseseeserecesecesencassesssesscsnscenscactseasscanesennesentseeeseesensssenssees 3 5.7 --Teleconferences.20.0.0...seeeccesceececeesceeceaceseesscusccvessesseessesessseaceasoesssesceecsacsnsvsevaseaeneesissaceaesnseeseeees 3 5.8 Minutes of MeetingS..........ccssecsscscssscsssesesessssscsssssesssesssonsasecesseeessessssstsessssseossscssesesessesosssesoorenees 3 5.9 -»-Manner Of Acting..........ccsesscsescesescesccceenesessceessceuecsucesesenscsensccucnsnseesceaacensssnseesscecesceseusarsasensseeenesegs 4 5.10 Conduct of Meetings...........cccsccsscsscsccssssenescenscencesscesssseescesacsuecesseeesusecneeceesenacaveansescneeneseneeeeeaeees 6 5.11 Open Meetings.......ce ecsessssssecesscsscsssesssssssseesscsscsssesesesseoesssessessacscensessessssensccesseescssssnsoearseesesnes 6 Article 6.COMMITTEES ........cccceeescecesecceeessneeessaneeceseessceecneaececsaceseneeesaeersaneeseseeesneaeesenseesesseeesenseees 7 6.1 Designation.........cccsccccscsssssscssccescesseescessessseesssescnesenssessessenscsassssvacensesessceseusatsnassneessaseneenecoasenasanse 7 6.2 ---POWETS....es seesscenrncencsenctcesesecnscssicesdsessecssrseessarecssssesssecessoessenestesssessasssessesssesessseossacsssesessessssooneessesens 7 6.3 Committee Decisions.0...eececsscesersceeceececsesesceerssssnccesssssesceacoeessersoseeaseaesecesesscenesnaseaeenssesenees 7 6.4 IMC Approval of Committee Decisions............:ccsssccsscseresesseoeceseceeseeseseensesseesseeeensneseneesscessseesaeess 7 GS Term,00...eeecereceeeenssecesceecsecscuscsscscceessssressaeesscnssesssssseesssesesensesesirssceesseseesscsessesessteorsenssseesssoosnsens 7 Article 7,OFFICERS .0.0.....ccccsscccssccsseeceseeecsncessacecseessesseeseseeesncensescseesaeenscessaeessesesseeecseeeneesenaserseeens 7 TAL NUMDE!T.oo eee cescccccsnenssesssseasoeosenescacssessesessseosssssnsssssssesnssrecsavsescnsosecseeseneensonsessecossssasecanersonssans 7 7.2 Election and Term of Off1CEe.........ce essscsseeeserserscccecerecsssosevssssseosessessssenscsssoeesssesssvaceccesersoesnnes 7 7.3 Removal.oo.ee eseeeeeeeesseneseesncseessesenecessseseessssesassssascnessssssseseersessesseesnsssesesasensesessesseceaseaeasoeres 7 TA -VACANCIES.00...seeeeeeeesceeeeneecceceeeesceccecescesesssesesscessessdssesssssssessacssscoseseossssssesssessessrenassessassseressaseeoes 7 TS CHAITMAN.00sec eseeeeeeeeeececeeeteneesceesencscenesassessesassssssesacercasonsaeessesesecosseussesessaessesessesessesesessrsseeesenvaee 7 7.6 Vice Chairman...00....ee eececssccesececeesensccceesnessnerenecsssscessseceescsssessesseessosonsesassecseseesesssnsenssuseaaeesseceeses 8 77 Secretary/Treasures,.........ccccssccssccsscccesecssseceenceenseseccosersetsacessensacsneasesdesoeessasesesssseesersesseessssesseeasnees 8 Article 8.INDEMNIFICATION......cece eesssecseeecesesesscssnsesessssavessecsesssesensesesssseaseassesesuseseneeesseses 8 TABLE OF CONTENTS Article 9.ANNUAL BUDGETS AND DETERMINATION OF RATES.........ccsccscceceeseeteeeeeeeeees 9 9.1 Budget Process..........:scssssccssssscsessenscessecssssccesssvesaucenseesentecensesenssecssescssceesseseueeeesseseeesesseecssensceseees 9 9.2 Auditing Standards and Procedures............c:ccssccssssssccesseestsesecssseseesecesscencecescerscseassssssasesessneeeaesnees 9 9.3 Standards for Capital Asset Acquisition and ACCOUNTING............ee ceeesescsecessesceseceenereecseeeeseneseess 9 Article 10.IMC FUNDS AND ASSETS...eeseeccsseeensececnecenscesesteresseesesseessnseesseoonseeonatenes 10 10.1 Required Funds.......cc csscssssecsssscccscseseseosscessecsesesnesesesescseecsacosonseceseeessorsnacsesesesesessssesssseeseeeres 10 Article 11,INSURANCE...ceescssscsscesstesceesessseecsecenscsscecesaseseeeaesesceseasesseesseesaeecesesseesseesaeoes 10 T1.1 Coverage Limits...eeeccecsessecsescessnecsssencoeseesececececneecessessesesessssessnecsoeensseesanecesstessasonseansesons 10 11.2 Sel f-Insurance.........ce ceececesscecscnssenssesassseecsssesssescesenseessnsesessesesessasssssseessecesssesseosesoneconseresoetes 10 11.3 Insurance Claim Proceeds...........es essesscssescssesscsseessscesesssaseeeonsscssssseesseesseesssecessesensssssssosssnscsenees 10 11.4 -Arnnual Review...ccc sesessecscsceseccsscnseesseessesesscessessecesssesssesessssessesonesssseceesssssansessessesceesssseeneas 10 Article 12.PROCEDURES FOR DISPUTE RESOLUTION....00.oo.ee ec eeeeceeseeeereeeseneeenerenneeeeee 10 12.1 Procedural Rules...........cessssssssssescsssosssessesssseesscessessncenncensvonssonesesssesseeseaesasseesesasseesesscsoosssssonseeees 10 12.2 -Arbitration...eee ecesecsssesesscsecesesssssssesessosssccssssssesnsessesesoesssesesssonsesaesonsessecsnecseesnsconesonsonesenneses 10 12.3)Costs of Arbitration...ec ceseetscseccsessesssersscensccssssscsscssesssscasscussccusceessessesensnsesssesssesssseneeeees 11 12.4 Judicial Review..........csscsssecsscecscssscssssssesscsensescsessasencesscenseesssesssessessssosssnsesesesssesseeesssessonessosonseeees 11 Article 13.REIMBURSEMENT OF COSTS...eeseeeseeseecesneessseerssaeessseesseeeessseesssasesgeseseeeegs 11 13.1 Reimbursement of Costs........ec ccessssesccsssesecseecnessecseesecssceecessecseecssseessssseeesssssesssccssesssesssaeeeseeoes 11 Article 14.OTHER POLICIES..0...eee eeesseccssseeeneeeesneeesseeesssecssasesssasessasessesssseonsscseseeesssesosses 11 14.1 Numbering of Resolutions,00...cssssssssscessnsessseescescsssssessesssssssescessesessecesssscessooeesssosssoosesoeesees 11 14.3 COmtracts.....ccsessecsscssccesssecssnssesseessecessesseecsssesnesssensseesssssessseecsessesecsecsscesecneeusucecssnrsnsssseesescoesons 11 14.4 Required Notice of New Intertie Capacity Allocation Methodology............cecssesscceetssceessseens 11 Article 15,AMENDMENTS .....0.....ccccccssescecessesceeeesscceeseacersssceeensscueeesenscseesenseeesesseeestsacessoranterenaes 11 15.1 Amendment of Bylaws....0......cscscsssccssscsscsescsseenscosssesesesnsessssecesessnsscseesssesseesesesseeesesessessssseessnsees 11 INTERTIE MANAGEMENT COMMITTEE BYLAWS Article 1. STATEMENT OF OBJECTIVES The Intertie Management Committee ("IMC")shall be responsible for the management, operation,maintenance,and improvement of the Alaska Intertie Project (the "Intertie"),subject to the non-delegable duties of the Alaska Energy Authority ("AEA")and in accordance with the provisions of the Amended and Restated Alaska Intertie Agreement,dated November 18,2011 ("AIA”). All members of the IMC ("IMC Members”)have a substantial long-term interest in the prudent management,operation,maintenance and improvement of the Intertie.The responsibilities of the IMC are derived from:(i)the delegation to the IMC of certain duties involving the management,operation,maintenance and improvement of the Intertie;(ii)the obligations of the IMC Members and Intertie Users to pay the annual Intertie Costs set forth in the AIA;and,(iii)the other obligations,duties,and responsibilities of the IMC as set forth in the AIA. These Bylaws set forth the policies and procedural rules of the IMC established pursuant to the authority granted the IMC in the AIA,as it may be amended from time to time.The capitalized terms included in these Bylaws shall have the meaning specified in Exhibit B to the AIA. Article 2. AUTHORITY OF INTERTIE MANAGEMENT COMMITTEE The IMC exists and operates pursuant to the terms of the AIA.In the event the authority of the IMC to act is at issue or otherwise challenged,the IMC shall first make a finding as to its authority.If the IMC determines that it has authority to consider the matter,it shall decide the issue on its merits.If the IMC determines that it does not have authority to consider the matter, the matter will be subject to immediate judicial resolution.If the court determines that the IMC in fact had authority to consider the matter,the matter shall be remanded for IMC action. Article 3. OFFICES The IMC shall have no physical office but shall have a mailing address at the Alaska Energy Authority,whose representative shall be the permanent Secretary of the IMC. Page 1 of 12 -Intertie Management Committee Bylaws (November 2011) Article 4. REPRESENTATIVES The IMC membership consists of AEA and the Participants.In order to be eligible to be an "IMC Member,”the entity or organization shall comply with the requirements of the AIA. IMC Members that are not current on their financial obligations for Intertie Costs as well as any costs or assessments approved by the IMC shall not be eligible to vote on matters before the IMC or counted in the calculation of a quorum or majority. Each IMC Member eligible to vote shall designate one representative and one alternate representative to the IMC.Each IMC Member shall annually notify all other IMC Members in writing of the names,addresses and telephone numbers of its representative and designated alternate.An IMC Member may change its designated representative or alternate representative at any time by providing written notice of such change to the IMC with a copy to all IMC Members.The alternate representative shall serve as the designated representative in the absence of the designated representative. No IMC Member shall obtain an additional vote through merger with,acquisition of,or assignment from any other IMC Member.Under no circumstances shall an IMC Member have or have the right to control,more than one vote on IMC matters,or have more than one voting representative,directly or indirectly,through another organization. Article 5, IMC MEETINGS 5.1 Annual Meeting.The annual meeting of the IMC shall be the first regular meeting of the Fiscal Year (July 1 through June 30).The annual meeting shall be used for the purpose of electing officers and transacting such other business as may come before the IMC. 5.2 Regular Meetings.Regular meetings shall be held as needed,but in all events at least twice a year,with the specific date and time to be determined by the IMC. 5.3 Special Meetings.Special meetings of the IMC may be called by the Chairman or by three IMC Members at any time by so advising the Secretary of the IMC.Business at a special meeting of the IMC shall be limited to the purpose stated in the notice of such special meeting. 5.4 Notice of Meetings.Public notice shall be given by the Secretary for all IMC meetings. 5.4.1 Notice of regular meetings of the IMC shall be given at least five (5) days before the date of the meeting by: (a)mailing notice to all IMC Members,alternates,and persons or organizations who have filed with the IMC a written request to receive notice,or Page 2 of 12 -Intertie Management Committee Bylaws (November 2011) (b)providing an email or other electronic notice to all IMC Members,alternates,and persons or organizations who have filed with the IMC a written request to receive notice,and (c)publishing a notice on the State of Alaska's public meeting calendar. 5.4.2 Notice for all meetings shall include the date,time and place of the meeting,and if the meeting is by teleconference,the call-in number and,if applicable,the location of a teleconferencing facility from which IMC Members and the public can participate. 5.4.3.Written notice of special meetings shall be given in as far in advance as is reasonable before the time specified for such meeting.Such notice of special meetings shall state the purpose or purposes for which the meeting is called. Business at a special meeting shall be limited to the purposes stated in the notice of such special meeting. 5.4.4 The IMC shall make a good faith effort to give reasonable notice to the public of all its meetings,but,to the extent permitted by law,the inadvertent failure to accomplish any one of the public notice requirements shall not invalidate any action of the IMC. 5.5 Waiver of Notice.Whenever any notice is required to be given to any IMC Member,a waiver of the notice requirement in writing,signed by the person or persons entitled to such notice,whether before or after the time stated in the notice,shall be deemed equivalent to the giving of such notice. 5.6 Place of Meetings.The Chairman of the IMC may designate any place as the place of meeting for any annual,regular or special meeting of the IMC. 5.7 Teleconferences.Attendance and participation by any or all representatives of the IMC Members at any meeting of the IMC may be by teleconference so long as all IMC Members can be heard and hear all of the proceedings.For purposes of these Bylaws,the term "teleconference”shall include any electronic means of communication meeting the requirements of these Bylaws.The votes at a meeting held by teleconference,or a meeting with an IMC Member participating by teleconference,shall be taken by roll call.Participation by teleconference shall constitute presence in person at the meeting.Materials that are to be considered at a meeting that is by teleconference shall be made available at the teleconference location(s)or distributed electronically. 5.8 Minutes of Meetings.Written Minutes shall be kept for all regular and special meetings of the IMC.All decisions or agreements made shall be reduced to writing,including all matters voted upon and each IMC Member's vote on those matters.Minutes of the IMC meetings shall be transmitted by mail,hand delivery,or electronically to each IMC Member following each meeting.The official copy of the Minutes for each meeting shall be signed by the Chairman and the Secretary. Page 3 of 12 -Intertie Management Committee Bylaws (November 2011) 5.9 Manner of Acting. 5.9.1 IMC actions may be taken by any reasonable voting method,provided that any IMC Member may request a public roll call vote.All actions taken via teleconference shall be by roll call vote.All decisions of the IMC shall be reduced to writing including all matters voted upon and each IMC Member's vote on these matters. 5.9.2 An IMC Member abstaining from a vote shall not be counted towards any voting requirement.The minimum percentage required to transact business shall be determined from the total number of IMC Members not abstaining. 5.9.3.Except for those matters which expressly require a unanimous vote,the vote of a minimum percentage of all IMC Members,or other special voting parameters,the presence of at least two-thirds of the IMC Members shall constitute a quorum for the transaction of business.The mere presence of a sufficient number of IMC Members in a common location to constitute a quorum shall not constitute a meeting of the IMC. 5.9.4 An IMC Member,or their representative,who is present at a meeting of the IMC at which action on an IMC matter is taken,shall be presumed to have assented to such action unless the dissent or abstention of the IMC Member or representative is indicated and recorded in the meeting minutes at the time of the action. 5.9.5 The following matters shall require the affirmative vote of a minimum of 75 percent of the members of the IMC constituting greater than 66 percent of the total Annual System Demand of all members of the IMC,including the affirmative vote of AEA (except as noted). (a)Adoption of budgets,determination of annual Intertie Costs,the allocation of Intertie Costs,annual budgets,and rates for use of the Intertie. (b)Determination of the maximum Intertie transfer capability, Intertie transfer capacity allocation methodology,access to Intertie transfer capacity,or allocation of capacity among Users. (c)Establishing the estimated annual Payment Obligation of each Intertie User for each fiscal year,together with a schedule of equal monthly payments for each Intertie User and/or IMC Member that such Intertie User and/or IMC Member shall be required to make during that year;and to determine the costs to be collected from Users for Intertie Transactions. (d)Determining the actual annual Intertie Costs after the conclusion of each fiscal year. Page 4 of 12 -Intertie Management Committee Bylaws (November 2011) 4\s quorum (e)Determining the appropriate amount,coverage,and limits of insurance for or related to the Intertie. (f)Establishing the minimum funding amounts for the Reserve Fund. (g)Selecting among alternative methods for funding Improvements or Required Work. (h)Approving Improvements,and the design and specifications for Required Work or Improvements. (i)Adopting or amending these Bylaws. Gj)Adopting or amending operating policies and procedure or Reliability Standards,including any sanctions for non-compliance with them.AEA's affirmative vote not required with respect to adopting or amending operating policies and procedures. (k)Determining costs attributable to the Intertie,including the determination of the allocation of costs for Improvements,and Required Work.: (I)Determining the disposition of insurance claim proceeds. (m)Determining whether new Participants have met the requirements of the AIA. (n)Designating,subject to the requirements of the AIA,which Participant(s)will operate the Intertie. (0)Approving limitations to the right to terminate the AIA as part of bond or other debt financing. (p)Approving decisions of the Operating Committee or other special committee and any resolutions concerning the authority of a special purpose committee. (q)Referring an issue to arbitration pursuant to Section 12.2 of these Bylaws. All other matters,including the election and removal of officers,shall require the affirmative vote of a simple majority of the IMC Members constituting the quorum present and voting at the meeting where the matter is considered. 5.9.6 |The unanimous concurrence of all IMC Members shall be necessary for the adoption or amendment of procedures for dispute resolution. Page 5 of 12 -Intertie Management Committee Bylaws (November 2011) 5.10 Conduct of Meetings.Robert's Rules of Order shall govern the conduct of IMC meetings except where in conflict with these Bylaws or any specific procedural rules adopted by the IMC. 5.11 Open Meetings.The IMC has determined that Alaska public policy favors openness and public access and the IMC shall conduct its business in public inaccordance with the following policies: 5.11.1 Scheduled Meetings.All scheduled meetings of the IMC and any of its special purpose committees shall be open to the public except as otherwise provided in these Bylaws. 5.11.2 Executive Sessions.If any subjects to be discussed at a meeting are subjects that may potentially be discussed in an executive session,the meeting shall first be convened as a regular or special meeting and the question of holding an executive session to discuss matters that come within the subjects contained in Section 5.11.3 of these Bylaws shall be determined by a majority vote of the IMC. No subjects may be considered at the executive session except those mentioned in the motion calling for the executive session unless auxiliary to a subject specified in the motion.No action may be taken during the executive session.Only IMC Members,designated alternates,and attorneys for the IMC or for IMC Members may attend an executive session,unless the motion calling for the executive session specifies other persons whom the IMC wishes to attend. 5.11.3 Executive Session Subjects.To the extent permitted by law,the following subjects may be discussed in an executive session: (a)Matters the immediate knowledge of which would clearly have an adverse effect upon the finances of AEA,the Intertie,or the IMC or any of its Members; (b)Subjects that tend to prejudice the reputation and character of any person;provided,however,the person may request a public discussion; (c)Matters which by law,municipal charter or ordinance are required to be confidential; 5.11.4 Exclusions.Sections 5.11.1,5.11.2,and 5.11.3 shall not apply to: (a)Informal discussions by and between IMC Members where official business is not conducted;or (b)Formal or informal meetings and discussions by and between IMC Members in which all parties indicate they are acting individually as representatives of AEA or individual Participants and not as the assembled IMC and at which no IMC business is conducted and no votes are taken or decisions made. Page 6 of 12 -Intertie Management Committee Bylaws (November 2011) Article 6. COMMITTEES 6.1 Designation.The IMC shall establish an Operating Committee and may establish other special purpose committees from time to time,subject to such conditions as may be prescribed by the IMC.The designation of any such special purpose committee shall not relieve the IMC or any IMC Member of any responsibility imposed by law or the AIA. 6.2 Powers.Special purpose committees may act upon IMC matters only when given prior authorization by the IMC.The IMC shall formalize the authorization by adopting a resolution which details the scope of the special purpose committee's authority to act. 6.3 Committee Decisions.Decisions made by a special purpose committee shall be by affirmative vote of a majority of the members of the special purpose committee,unless otherwise directed by the IMC. 6.4 IMC Approval of Committee Decisions.All decisions of the Operating Committee and any other special purpose committees established under this Article 6 affecting AEA,the Participants,Intertie operations,or Users shall be subject to the approval of the IMC. 6.5 Terms.Unless otherwise specifically provided by the IMC,the members of each special purpose committee shall serve from the date of appointment until the date of the next annual meeting of the IMC. Article 7. OFFICERS 71 Number.The officers of the IMC shall initially consist of a "Chairman”,a "Vice Chairman”,and a "Secretary/Treasurer”.The offices of Chairman and Secretary shall not be held by the same person.The IMC may elect such other officers and agents as it shall deem necessary. Those officers shall hold office for such terms and shall exercise such powers and perform such duties as shall be determined from time to time by the IMC. 7.2 Election and Term of Office.Initially only the Chairman and Vice Chairman shall be elected by the IMC.The AEA representative shall be the permanent Secretary/Treasurer. Only IMC Members or their alternates shall be eligible to serve as officers.Each officer shall hold office until a successor is elected and accepts office unless the officer resigns or is removed by the IMC. 7.3 Removal.Any officer elected by the IMC may be removed upon a vote made in accordance with Section 5.9 of these Bylaws. 7.4 WVacancies.In the event any vacancy occurs in any elected office of the IMC,the remaining IMC Members shall elect a successor to the office at the next regular meeting of the IMC. 7.5 Chairman.The Chairman shall preside at all meetings of the IMC and shall perform such other duties and have such other authority as the IMC may prescribe. Page 7 of 12 -Intertie Management Committee Bylaws (November 2011) 7.6 Vice Chairman.The Vice Chairman shall act under the direction of the Chairman, and in the absence or disability of the Chairman or if the office of the Chairman is vacant,shall perform the duties of the Chairman,and from time to time shall perform such other duties and have such other authority as the Chairman or IMC may prescribe. 77 Secretary/Treasurer.All of the duties set forth in Sections 7.7.1 and 7.7.2 below shall be assigned to the Secretary/Treasurer. 7.7.1 Secretary Duties.The Secretary shall act under the direction of the Chairman in regard to secretarial duties.Subject to the direction of the Chairman or the IMC,the Secretary shall attend all meetings of the IMC and keep a record of the proceedings.In the Secretary's absence,the Chairman shall designate another IMC Member to keep a record of the proceedings.The Secretary shall perform the duties of the Chairman if the Chairman and Vice Chairman are absent or not able to perform such duties.The Secretary shall perform like duties for committees when required.The Secretary shall give or cause to be given notice of all meetings of the IMC and special meetings of the IMC and shall perform such other duties as may be prescribed by the Chairman or the IMC.The Secretary may incur reasonable expenses associated with keeping a record of the proceedings,including the compensation and travel costs incurred to retain a person to keep such records. 7.7.2 Treasurer Duties.The Treasurer shall act under the direction of the IMC in regard to duties of the Treasurer.Subject to the direction of the IMC and to the terms of the AIA,the Treasurer shall have control of the IMC funds and securities and shall keep full and accurate accounts of receipts and disbursements in books belonging to the IMC,and shall immediately deposit all monies and other valuable instruments in the name and to the credit of the IMC in such depositories as may be designated by the IMC.The Treasurer shall disburse the funds of the IMC as may be directed by the IMC or as otherwise provided in the AIA,taking proper vouchers for such disbursements,and shall render to the Chairman and the IMC at its regular meetings or when the IMC so requires,an accounting of all the Secretary/Treasurer's transactions as Treasurer and of the financial condition of the IMC.The IMC may secure a bond in an adequate amount to cover the actions of the Treasurer. Article 8. INDEMNIFICATION To the extent legally permitted and financially able to do so from IMC-controlled assets or with insurance,the IMC shall indemnify and hold IMC Members,their representatives,and IMC officers harmless against all claims and liabilities which they or any of them incur as a party defendant to any proceeding (other than a proceeding filed by or on behalf of the IMC),based on any authorized action of any such person as an IMC Member or as an officer of the IMC within the scope of the IMC Member's office.For purposes of this provision,"IMC Member"means a designated IMC representative,an alternate representative,an authorized agent of the IMC who is otherwise employed by the IMC,or any authorized employee of the IMC. Page 8 of 12 -Intertie Management Committee Bylaws (November 2011) Article 9. ANNUAL BUDGETS AND DETERMINATION OF RATES 9.1 Budget Process.The Alaska Intertie Agreement and any bond resolutions or debt covenants shall provide the basis for the IMC's formal budget process.The IMC shall adopt a detailed budget process.In addition to the budgeted amounts in the AIA,AEA and the IMC shall also provide annual budgets detailing the estimated costs relating to any other requirement, insurance,or the Intertie-specific administrative and general costs to be paid to the AEA. 9.2 Auditing Standards and Procedures. 9.2.1 An annual audit shall be performed by qualified independent auditors selected by the IMC,to be completed on or before the first day of December of each year. 9.2.2 The primary purpose of the audit is to verify expenses.The scope of the audit shall include the operating and maintenance costs relating to the Intertie,the annual Intertie-specific costs of AEA,and AEA and IMC assets,liabilities and costs,including all funds administered by AEA and the IMC,necessary to establish a true-up of the annual Intertie Costs. 9.2.3.The annual financial statements shall disclose the comparison of actual operating results to the annual budget. 9.2.4 To the extent necessary,the IMC,individual IMC Members,and AEA shall make available to the auditors such records and schedules as are required for the auditors'examination of the financial statements in a timely manner. 9.3 Standards for Capital Asset Acquisition and Accounting.To provide for a comprehensive,consistent policy of ownership and control of the Intertie,AEA and the IMC have designated AEA as the owner of all capital assets acquired for and included in the Intertie. Subject to the terms of the AIA,the IMC has been delegated all responsibilities for the management,operation,maintenance,improvement,and control of all capital assets comprising the Intertie. 9.3.1 Capital assets include an asset acquired for the benefit of the Intertie that has a value of $2,500 or more and a useful life of at least one year. 9.3.2.The IMC shall transfer ownership of any assets held in trust for the Intertie to AEA. 9.3.3.The IMC will have primary control and management under the AIA of all capital assets whether purchased with State of Alaska or Participant funds. The IMC shall manage all proceeds derived from sales upon retirement of these capital assets as well as the purchase of additional capital assets for the benefit of the Intertie. Page 9 of 12 -Intertie Management Committee Bylaws (November 2011) 9.3.4 To the extent that purchase costs can be minimized through the State of Alaska's purchasing power,AEA may make purchases on behalf of the IMC as the "Purchasing Agent".To the extent other purchasing alternatives are preferable,the IMC may use those procedures. Article 10. IMC FUNDS AND ASSETS 10.1 Required Funds.In addition to any requirements imposed by a bond resolution or other debt covenants,the IMC may establish any special purpose funds it deems appropriate. Article 11. INSURANCE 11.1 Coverage Limits.Insurance shall be secured and maintained in types and amounts as are customary in the electric utility industry for facilities of similar types and sizes as the Intertie and in compliance with the requirements of the AIA.The determination of "customary insurance"shall be made by the IMC in concert with any insurance consultant employed by the AEA. 11.2 Self-Insurance.The amounts and types of insurance determined "customary," including the minimum amounts required that may be in any Bond Resolution,may be maintained through self-funded insurance methods. 11.3 Insurance Claim Proceeds.Disposition of insurance claim proceeds for damage or destruction of the physical facilities or application of any other insurance proceeds accruing to the Intertie shall be determined by the IMC. 11.4 Annual Review.AEA and the IMC together shall annually review the insurance types and amounts carried with respect to the Intertie. Article 12. PROCEDURES FOR DISPUTE RESOLUTION 12.1 Procedural Rules.The IMC shall perform its decision-making responsibilities consistent with the AIA and any duly adopted procedural rules. 12.2 Arbitration.The IMC may refer any matter within the IMC's authority to arbitration.Unless otherwise unanimously agreed to by IMC Members,arbitration shall be conducted before an arbitrator selected under the guidelines of the American Arbitration Association and the arbitration shall be conducted in accordance with the commercial arbitration rules of the American Arbitration Association then in effect.In addition,the arbitrator must have education and experience in the particular matter being arbitrated.The arbitrator shall have no authority,power,or jurisdiction to alter,amend,change,modify,add to or delete any of the provisions of the AIA and the decision of the arbitrator shall be subject to judicial review as an IMC decision,in accordance with Section 12.4,below. Page 10 of 12 -Intertie Management Committee Bylaws (November 2011) 12.3.Costs of Arbitration.The costs incurred in connection with the arbitration shall be apportioned by the arbitrator as she or he deems appropriate. 12.4 Judicial Review.Any action,or failure to act,of the IMC shall be subject to judicial review.The reviewing court shall (a)set aside any IMC action found to be arbitrary,capricious or otherwise not in accordance with law or with the terms of the AIA or these Bylaws,and (b) order the IMC to take action if such action has been unreasonably withheld or delayed.Failure of any party to appeal any IMC decision shall not constitute a waiver of the right to appeal any future decision.Judicial review shall be governed by the laws of the State of Alaska and shall be filed in the Superior Court for the State of Alaska,Third Judicial District at Anchorage. Article 13. REIMBURSEMENT OF COSTS 13.1 Reimbursement of Costs.Unless otherwise agreed to in advance by the IMC,each IMC Member shall be responsible for the cost of travel and other expenses for its representatives. Application for reimbursement of IMC-approved costs and expenses must be made to the Secretary of the IMC. Article 14. OTHER POLICIES 14.1 Numbering of Resolutions.All resolutions and actions adopted by the IMC shall be assigned a number.The first part of the number shall be the last two digits of the year in which the resolution or action is adopted (e.g.,Resolution No.11-).The second part shall be a sequential number reflecting the order in which the resolution or action was adopted,beginning with the number "1,"and increasing by one with the adoption of each subsequent resolution or action.The Secretary of the IMC shall establish and maintain an official journal for recording resolutions,and actions of the IMC. 14.3 Contracts.The presiding officer of the IMC shall be authorized to execute contracts approved by the IMC.The IMC may provide other requirements for the execution of contracts. AEA may designate one of its officers or employees to execute contracts approved by the IMC. The IMC's approval of the execution of a contract shall specify the person or persons authorized to execute such contract. 14.4 Required Notice of New Intertie Capacity Allocation Methodology.The IMC shall provide at least thirty (30)days for the public to comment on any proposed Intertie capacity allocation methodology or for the review of any current Intertie capacity allocation methodology. Article 15. AMENDMENTS 15.1 Amendment of Bylaws.These Bylaws may be altered,amended,or repealed and new Bylaws may be adopted by the IMC at any regular or special meeting,subject to the voting requirements set out in Section 5.9 of these Bylaws. eekekke Page 11 of 12 -Intertie Management Committee Bylaws (November 2011) The Secretary hereby certifies that this is a true and correct copy of the Bylaws approved by the IMC on November 18,2011.CH.-CS --Laecretary Page 12 of 12 -Intertie Management Committee Bylaws (November 2011)