HomeMy WebLinkAboutIntertie Managment Commitee Meetings 11-01-2013 3AGENDA
INTERTIE MANAGEMENT COMMITTEE
Regular Meeting
3:00 p.m.,Friday,November 1,2013
Alaska Energy Authority
813 W Northern Lights Blvd,Anchorage,Alaska
1.CALL TO ORDER
2.ROLL CALL (for committee members)
3.PUBLIC ROLL CALL (for all others present)
4.PUBLIC COMMENT
5.AGENDA COMMENTS/MOTION FOR APPROVAL
6.APPROVAL OF PRIOR MEETING MINUTES -August 27,2013
7.OLD BUSINES
A.Open Access Discussion
8.NEWBUSINESSELD Business
A.RELIABILITY STANDARDS
\)Resolution 13-3 -Operating and Reliability Standards Language Clean-up
9.NEXT MEETING DATE
10.ADJOURNMENT
To participate via teleconference,dial 1-800-315-6338,enter code 3994#
ALASKA INTERTIE MANAGEMENT COMMITTEE
Friday,November 1,2013 -3:00 PM
**PLEASE WRITE LEGIBLY**
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Sara Fisher Qouad Ned-xen Ovrector
ALASKA ENERGY AUTHORITY
Intertie Management Committee
IMC:Nov.1,2013 'ovAw "KY
Roll Call Agenda Minutes 8/27/13 Res.13-3
Roll call from tonto bottom ending with Chair Yes No Yes No Yes No Yes No Yes
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olden Valley Electric Association ”/
Matanuska Electric Association ”/
Alaska Energy Authority ”/,
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Yes No Yes No Yes No Yes No Yes
Golden Valley Electric Association
Matanuska Electric Association
Alaska Energy Authority
Municipal Light &Power
Chugach Electric Association
Next Meeting:
ATTENDANCE -IMC Regular Meeting Nov.1,2013 3:00 pm
"Phone COMMITTEE MEMBERS ALTERNATE
')4 Brad Evans,Chairman .CEA |yy Burke Wick .-
S .James Posey,Vice Chairman |MLP ./Jeff Warner
J Gene Therriault,Secretary/Treasurer AEA /Sara Fisher-Goad
4 |/Cory Borgeson .|GVEA .Allen Gray Coare_|/|Evan "Joe”Griffith MEA Y Gary Kuhn
Public Members COUNSEL |
Bernie Smith :Kirk Gibson,McDowell Rackner &
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AEA Staff
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Alaska Intertie Management Committee
MEETING MINUTES
Tuesday,August 27,2013 Or 'aX rokAnchorage,Alaska 6<3 Gr €ctCoryé]
1.CALL TO ORDER
Chair Brad Evans called the meeting of the Alaska Intertie Management Committee to order on
August 27,2013 at 2:35 p.m.A quorum was established.
2.ROLL CALL
Members present:Bradley Evans (Chugach Electric);Jim Posey -Anchorage Municipal Light
&Power (AML&P);Joe Griffith -Matanuska Electric Association (MEA);Cory Borgeson -
Golden Valley Electric Association (GVEA);and Gene Therriault -Alaska Energy Authority
(AEA).
3.PUBLIC ROLL CALL
Public present in Anchorage:Jeff Warner (AML&P);Louis Agi (AML&P);Bob Day (Homer
Electric);Brian Bjorkquist (Department of Law);Burke Wick (Chugach Electric),Brian Hickey
(Chugach Electric);Bernie Smith -Regulatory Commission of Alaska;Kirk Warren (AEA);Teri
Webster (AEA);Henri Dale (AEA consultant-phone);Kirk Gibson (McDowell Rackner &
Gibson PC-phone).
4,PUBLIC COMMENT
Mr.Day stated he is here,even though he was not invited.He commented Homer Electric
Association (HEA)is open to working with the other utilities to ensure proper system operation,
which is evidenced by HEA's work over the past couple of years with the Railbelt Reliability
Council (RRC)on the standards they produced.Mr.Day said it is hard to cooperate with the
other utilities when HEA is not invited to a meeting that appears to be mostly about HEA.Mr.
Day stated it is hard to cooperate on the rules HEA has worked on for many years when they are
modified and adopted,again,without input from HEA.Mr.Day noted HEA is not part of the
IMC.Mr.Day does not believe that this is,or can be,the reliability governing body and finds
this pretty hard to deal with.
5.AGENDA COMMENTS/MOTION FOR APPROVAL
MOTION:Mr.Griffith made a motion to approve the agenda.Motion seconded by Mr.
Posey.The motion was approved unanimously.
6.APPROVAL OF PRIOR MEETING MINUTES-June 26,2013;July 9,2013
AIMC Meeting Minutes-August 27,2013 Page 1 of 6
MOTION:Mr.Borgeson made a motion to approve the minutes of June 26,2013,and July
9,2013.Motion seconded by Mr.Griffith.The motion was approved unanimously.
7.NEW BUSINESS
TA.Amendment to add an extension to the Amended and Restated Alaska Intertie
Agreement regarding implementation date for new methodology for allocation of
Intertie Capacity
Chair Evans requested an explanation regarding the reason for the deadline.Mr.Bjorkquist
stated in the Alaska Intertie Agreement there was an initial deadline of July 1,2013 for the
adoption regarding implementation of new methodology for allocation of intertie capacity.That
July 1,2013 deadline date was extended to September 1,2013.
Chair Evans noted draft language was distributed to all the participants.Chair Evans stated he
understands there was some concern over the open access language and the position of the
parties.He requested input from Mr.Bjorkquist regarding how to move forward procedurally.
Mr.Bjorkquist suggested discussing the open access language and the comments regarding the
open access language.He believes efforts have been made to move this open access issue
forward.The record speaks for itself on the good faith of every side working on the process.
MOTION:Mr.Borgeson made a motion to adopt the open access language rules that was
presented and discussed at the last meeting.Motion seconded by Mr.Griffith.Roll call
was taken,with Mr.Therriault voting against.The motion fails.
Mr.Therriault expressed his appreciation for the work Mr.Hickey has completed toward this
effort.He stated that AEA's comments include the issues that need additional time to review.
Mr.Therriault proposed extending the deadline to adopt the open access language,rather than
having the default language take effect.This time extension will address AEA's current concerns
and ultimately lead to language that is acceptable by everyone.
Chair Evans requested an explanation regarding the issues prohibiting the adoption of the
proposed draft open access language.Mr.Therriault stated AEA's concerns were outlined in
their written comments and also included in the suggested language put forth by Mr.Bjorkquist.
Mr.Therriault stated one area of concern related to the grandfather rights regarding capacity and
whether that is the sensible thing to do.
Mr.Bjorkquist commented there are several different topics of concern,which are detailed in the
track changes notes inserted into a copy of the proposed open access language provided by AEA.
He stated one of the concerns is that the open access language appears to create some barriers to
entry into the market.This includes the grandfather rights,which go beyond what the utilities'
rights are today and would go in the direction of closing access,rather than opening access.
Mr.Bjorkquist stated another concern relates to how the IMC executes the necessary
implementation steps for any new user so there are no perceptions of conflicts of interest or of
the IMC preventing access to third-parties.An example of this is the studies that are required
AIMC Meeting Minutes-August 27,2013 Page 2 of 6
before access is granted and the obligation on the new user to pay for all of these studies could
create the perception that the IMC,who is controlling the asset,could use that as a barrier to
enter into the market.Mr.Bjorkquist said AEA believes better ways of implementation should
be discussed.
Mr.Bjorkquist noted another issue is the IMC,as the transmission provider,is not prepared to
provide all of the obligated ancillary services included in the proposed open access rules.There
needs to be a mechanism to have those services in place or to have an implementation period to
get to the point where those types of services can be provided.Other issues include incomplete
components to the open access rules,such as fee schedules that do not exist yet.
Mr.Bjorkquist suggested having an implementation plan for addressing these concerns.He
stated AEA tried to be helpful in identifying the issues,but did not want to dictate the answers
and wants to be careful not to create unintended consequences.He requesteda little bit more
time to solve these issues and problems.
Mr.Griffith commented the transmission system is already operating just fine without the
mechanisms Mr.Bjorkquist defined.Mr.Griffith stated the utilities that run the system in
Alaska are present today and believes they do a pretty good job.Mr.Griffith requested Mr.
Bjorkquist state who the "we"is,that has the concerns.
Mr.Bjorkquist advised there are two different issues Mr.Griffith is discussing.One issue is the
utilities operating the railbelt system and the other issue is the agreement dealing with the intertie
providing a mechanism for open access.Mr.Griffith said the intertie is Douglas to Healy and
wanted to know what happens to his segment.Mr.Bjorkquist commented that is one of the
difficulties in dealing with the intertie,because the intertie is unto itself.It is an asset within the
railbelt that is not regulated by the Regulatory Commission of Alaska and this agreement on how
it operates has to stand on its own.Mr.Bjorkquist stated his use of the word "we"referred to
AEA and the IMC at different times.
Mr.Griffith asked who the transmission expert is at AEA.Mr.Bjorkquist responded Henri Dale,
Kirk Warren and Gene Therriault are working on these issues dealing with implementing an
open access system on the intertie.Mr.Griffith stated there must be an understanding of how the
systems work to talk about open access and it cannot be done in a void.
Mr.Posey commented he understands where the state is and hopefully,they understand this has
a cost involved,especially for Fairbanks.He said if some sort of good agreement cannot be
reached,it is possible RCA could step in and he does not believe anybody would want that.He
suggested staying basically within the bounds of economically what has worked for a long time
without changing to a totally different system with parties who do not want to live by the current
rules or who do not have big enough pocketbooks to buy their way into the system.
Mr.Borgeson does not expect an answer today,but asked who AEA owes duties to and who they
are trying to protect.Mr.Borgeson commented the work on the open access rules are in a form
that is acceptable at this point.The additional work or changes that may be needed can be
accomplished by amendments.Mr.Borgeson stated he does not think another extension is
AIMC Meeting Minutes-August 27,2013 Page 3 of 6
needed.He is in favor of the motion and suggests moving forward with the open access rules in
place.
MOTION:Mr.Therriault made a motion to adopt the second amendment to the amended
restated Alaska Intertie agreement as amended,which includes extending the adoption
deadline to November 15,2013.Motion seconded by Mr.Posey.Roll call taken,with Mr.
Borgeson and Mr.Griffith voting no.The motion carries.
Chair Evans stated the wording is confusing and reads as if there is no current methodology.He
commented there is current methodology and asked if this amendment is only addressing how
open access would change that methodology for allocation of capacity on the intertie.Mr.
Bjorkquist agreed.Chair Evans noted there are many issues associated with open access and
changing the methodology of allocation.He asked if AEA has the same understanding.Mr.
Bjorkquist and Mr.Therriault stated they have the same understanding.
Mr.Griffith expressed his concern that some of the items in the first paragraph have already been
completed.Amendments to the original motion were addressed.
Chair Evans commented there are 75 days until the new deadline and it is important for the
participants and others who are crafting the language to attend the meetings to have their voices
heard.He believes there are some difficult issues to consider.Mr.Griffith believes the biggest
issue to resolve is the grandfather rights because the state clearly does not agree with them.
Chair Evans suggested the formation of a special committee,which the participants can staff any
way they want,to develop the language on the open access rules and to develop a methodology
for allocation of capacity on the intertie.The special committee would bring a recommendation
back to the IMC.Mr.Gibson commented the bylaws require a motion be made for the creation
of any special committee.
MOTION:Mr.Griffith made a motion to create a special committee to address the issues
regarding Item 7A.Motion seconded by Mr.Posey.The motion was approved
unanimously.
Members to the special committee will be provided by the end of the week and a meeting of the
special committee will be scheduled.
7B.Discuss a budget for an Under Frequency load shed study
Chair Evans began the discussion by stating this item does not have a lot to do with asset
management and AEA because it is the other part of this group that has been the source of the
operating protocols,reliability standards and reserves for close to 30 years,even though some
would not acknowledge that effort.Chair Evans recommended being proactive in studying and
making the appropriate changes to the thresholds,settings,load amounts,et cetera,rather than
waiting for things to become highly problematic and conducting the study under duress,
AIMC Meeting Minutes-August 27,2013 Page 4 of 6
Mr.Griffith agreed with Chair Evans'comments and believes the study should occur post
January 1,2015.He commented the utilities that operate the system should be responsible for
paying for the studies.
Chair Evans commented this item is not going to be part of the usage of the intertie because it
serves a different purpose.Mr.Griffith believes this is Operating Committee (OC)business.
Mr.Warner stated there is a System Studies Subcommittee within the OC,which is represented
by all five utilities.Mr.Wick stated there is also a Reliability Protection Subcommittee.Chair
Evans recommended those two OC subcommittees combine and formulate a scope of work.
That recommendation was agreed upon.Next steps could include asking for budgetary quotes or
conducting an RFP process.
Mr.Therriault asked if Chair Evans was proposing that the IMC budgetary process not be used
to cover this expense,but instead find another way to fund the study.Chair Evans stated a
funding source,other than the IMC,will be determined.He recommended having a discussion
to decide where the money will be held in order to pay for the work.
Mr.Borgeson expressed appreciation for the current dialog and thanked Chair Evans for
addressing these issues.Mr.Borgeson stated he will work to make a fair administrative process
that is not too complicated.
7C.Review Homer Electric Load Balancing Authority and letter
Mr.Therriault commented he is not sure that the discussion of this Load Balancing Authority
(LBA)is an item for the IMC to take action on.It is his understanding this is on the reliability
side of things and is not sure if this motion by the IMC is the appropriate way forward.
Mr.Griffith stated the IMC is the intertie coordinating and balancing entity.There is no other
appropriate entity and believes the IMC is the appropriate group for this action.Chair Evans
stated the IMC has previously acted in this capacity and the IMC developed and agreed on the
operating protocols.Chair Evans asked Mr.Therriault for clarification.Mr.Therriault
commented this is in the purview of the IMC,but does not know if this is an item that the IMC
would actually vote on.He requested Mr.Dale clarify further.Mr.Dale explained with the
amendments and restatements in 2011,the reliability aspects were diluted significantly to being
asset managers and to the things that affect the state owned portion of the intertie itself.
Chair Evans commented that is a specious argument and completely disagrees,because the IMC
never handed it off to anybody.Chair Evans stated he gets why Mr.Dale is saying what he is
saying and understands who is paying Mr.Dale's paycheck.Chair Evans noted the State of
Alaska had an obligation to hand it to somebody,but the parties could not agree and so it was
parked.Mr.Dale agreed there is a hole right now as to whom to hand it off to.Chair Evans
commented to Mr.Dale that after 30 years of the IMC manning the post,the State of Alaska
conveniently wants to walk away from it,without creating an organization or someone to hand it
off to and until the State of Alaska hands it off,the State of Alaska is still manning the post.
Mr.Griffith commented he associates himself with the Chair Evans'comments.
AIMC Meeting Minutes-August 27,2013 Page 5 of 6
Chair Evans commented the path the State of Alaska is taking is not curing anything.The only
cure is to put this stuff out on the table and say this is what needs to be done and if an agreement
cannot be reached,then the next step is taken.Chair Evans stated these protocols have been
operating this system for 30 years and it is very frustrating to get business done when an
organization that includes everybody to do this,does not exist.Chair Evans noted Homer wants
to implement a load balancing area and is hearing the State say to just walk away from it.
Walking away from it is not going to implement a load balancing area.Chair Evans commented
it does not work by magic.The protocols have to be agreed upon.People have to roll up their
sleeves and do the job.
Mr.Dale stated the comments by Chair Evans still do not make the IMC the appropriate body,
even though there is no party in existence to hand it off to.Chair Evans commented it is like the
State's position is as a lifeguard and they're walking away from the kid drowning.
Mr.Griffith believes it is absolutely mandatory that the operators of the system get this
appropriately articulated and dealt with.He feels it was pretty well crafted.
Chair Evans noted the custody of transfer points have to maintain a certain protocol.These are
the rules that create a property implemented load balancing area that functions well with counter
parties and their systems,whether they are a member of the reliability group or not.
MOTION:Mr.Griffith made a motion to approve the draft letter of August 27 to Homer
Electric.Motion seconded by Mr.Posey.The motion was approved unanimously.
8.NEXT MEETING DATE
The next meeting will be at the call of the Chair.
9.ADJOURNMENT
There being no further business of the AIMC,the meeting adjourned at 3:53 pm.
xo Moq BankBradleyEvan,Chairman»
e Lrucaul IeneTheffiault,Secretary
AIMC Meeting Minutes-August 27,2013 Page 6 of 6