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Home My WebLink AboutAK Intertie Agreement 1985ALASKA INTERTIE AGREEMENT ' Among ALASKA POWER AUTHORITY; MUNICIPALITY OF ANCHORAGE,ALASKA,d.b.a.MUNICIPAL LIGHT AND POWER; CHUGACH ELECTRIC ASSOCIATION,INC.; CITY OF FAIRBANKS,ALASKA, MUNICIPAL UTILITIES SYSTEM;GOLDEN VALLEY ELECTRIC ASSOCIATION,INC.;ALASKA ELECTRIC GENERATION and TRANSMISSION COOPERATIVE,INC. This agreement (hereinafter "Agreement"),is made and enteredintothis2Aga'day of Proce,Sqn-__,1985,between ALASKAPOWERAUTH»public corporation of the State of Alaska("APA");THE MUNICIPALITY OF ANCHORAGE,ALASKA,d.b.a.MUNICIPAL LIGHT AND POWER,a municipal corporation ("AMLP");CHUGACHELECTRICASSOCIATION,INC.,a non-profit electric cooperativemembershipcorporationoftheStateofAlaska("CEA");THE CITY OF FAIRBANKS,ALASKA,MUNICIPAL UTILITIES SYSTEM,a municipal:corporation ("FMUS");GOLDEN VALLEY ELECTRIC ASSOCIATION,INC.,anon-profit electric cooperative membership corporation of theStateofAlaska("GVEA");and ALASKA ELECTRIC GENERATION and TRANSMISSION COOPERATIVE,INC.,(""AEGTC")of which Homer Electric Association,Inc.("HEA")and Matanuska Electric Association, Inc.("MEA")are members.These entities are sometimes hereinafter referred to individually as "Participant”orcollectivelyas"Participants".The Participants other than APAaresometimesreferredtoindividuallyas"Utility Participant”or collectively as "Utility Participants." WITNESSETH WHEREAS,AMLP,CEA,FMUS,GVEA,and AEGTC each own and operate electric utility facilities,or will in the future,and are each engaged in the business of providing electric Power and Energy to customers,and WHEREAS,APA is constructing the electrical transmissionfacilitiestointerconnecttheUtilityParticipantsinNorthcentralAlaskawiththeUtilityParticipantsinSouthcentralAlaska("Intertie"')and is willing to make these electrical transmission facilities available to the Utility Participants for electrical Power and Energy transactions to improve reliability and economical Power and Energy deliveries to the Utility Participants'customers under the Alaska Energy ProgramestablishedbyA.S.44.83.3800;and WHEREAS,the Utility Participants desire to improve theirreliabilityandengageintransactionsofelectricalPowerand -l- Energy with each other under individual contractual arrangementsbetweentheUtilityParticipantsusingtheIntertie;and WHEREAS,the Intertie will interconnect the electric utilitysystemssothattheywillbeoperatedinelectricalsynchronism;an WHEREAS,the Utility Participants desire to establish individualrightsforthetransfercapabilityoftheIntertieandamethodofdeterminingcostsfortheserights;and WHEREAS,AMLP,CEA,FMUS,GVEA,and AEGTC have,in addition, entered into a separate agreement providing for Reserve Capacity and Operating Reserve Responsibility which is included asAddendumNo.1 to this Alaska Intertie Agreement,the purpose oftheAddendumbeingtoprovideaseparateagreementoftheUtilityParticipantswithrespecttoReserves; NOW,THEREFORE,IN CONSIDERATION of the mutual covenants in this Agreement,the Participants agree as follows: ARTICLE 1 Definitions Definitions are specified as Exhibit "A"attachedheretoandincorporatedhereinbythisreference.is Exhibit "A"shall remain in effect during the term of this Agreement,but may be amended as agreed in writing by all the Participants. ARTICLE 2 Term and Effective Date Section 2.1 Effective Date This Agreement will become effective as of the date set forth above and will,unless otherwise terminated as provided for in this Agreement,continue in effect until terminated as provided for in Section 2.2 of this Article.No costs will be assessed against the Participants under thisAgreementuntiltheIntertieisinCommercialOperation.No Participant assumes any obligationbysigningthisAgreementuntilallnamed Participants have signed. Section 2.2 Termination 2.2.1 This Agreement may be terminated at any time by 2.2.2 2.2.3 Section 3.1 3.1.1 3.1.2 3.1.3 mutual consent of all Participants. Any Participant may terminate its participation inthisAgreementbygivingatleast48monthsadvancewrittennotice.APA may terminate thisAgreementbygivingatleast48monthsadvancewrittennoticewhenAPAdeterminessuchactionto be required to improve Power systems serving theAlaskaRailbeltUtilities.Unless it is otherwise agreed any Participant which terminates itsparticipationwillcontinuetobeliableonlyfor Intertie-related costs due and payable before thedateofitstermination. Any Participant shall have the right to terminateitsparticipationinthisAgreementwithin30calendardaysfollowingAPA's encumbrance of any debt obligation which is a cost recoverable by APAunderArticle8ofthisAgreement.APA shallnotifyallParticipantsinwritingatleast90calendardaysinadvanceofanencumbranceofsuchdebtobligation,including the amount and terms of-the obligation.Each Participant shall notify APA in writing of its intention either to terminate ornotto-terminate its participation in this Agreement within 60 calendar days following receipt of such APA notice of its intention toencumberadebtobligation. ARTICLE 3 General Interconnected Operation Participants shall cooperate and assist in atimelymannerintheenergization,testing andoperationoftheIntertiesoasnottoimpairordelaytheinterconnectedoperationofthe Intertie.. Participants shall operate their electrictransmissionsystemsinterconnectedand_shallcooperateinfurnishingorreceivingthroughthepoint(s)of interconnection of their systems suchquantitiesofelectricPowerandEnergyasmayfromtimetotimeberequiredbyagreementbetweentheParticipantsinaccordancewiththetermsand provisions of this Agreement. The systems of the Participants shall operateinterconnectedcontinuouslyundernormal 3.1.4 3.1.5 3.1.6 3.1.7 3.1.8 conditions and the Participants shall cooperate inkeepingthefrequencyoftheinterconnected Systems of the Participants at 60Hz as closely as practicable,and in keeping the interchange ofPowerandEnergybetweenthesystemsoftheParticipantsascloselyaspracticabletothescheduledamounts.If synchronous operations oftheParticipants'systems are interrupted,the Participants shall cooperate to remove the causeoftheinterruptionassoonaspracticableandrestoretheir.systems to normal interconnected operating condition. Participants shall maintain standards establishedbytheOperatingCommitteeforthecontroloftime error and shall take appropriate corrective action to reduce time error upon receipt of a time errorcorrectionnotification.The Intertie Operator of the Southern Group has the responsibility toimplementthetimeerrorcorrectionproceduresas developed by the Operating Committee established under Article 9.In addition,the Intertie- Operator of the Southern Group will coordinate each time correction to assure that it will start and end at the same time and will be made at the same rate by all interconnected systems. The systems of the Participants shall normally be operated and maintained to minimize,in accordancewithPrudentUtilityPractices,the likelihood ofadisturbanceoriginatinginthesystemofoneParticipantcausingimpairmenttotheserviceofthesystemofanotherParticipantorofanyother system with which any Participant is interconnected. Each Participant shall be responsible for thereactivevolt-ampere requirements of its system.Reactive volt-amperes may be interchanged between systems from time to time,subject to agreement between the Participants. Each Participant shall maintain voltage levels onitssystematanypointofinterconnectionasaredeemedappropriatebytheOperatingCommitteeandarecompatiblewithinterconnectedoperationswith other systems. To the extent it can be controlled,no Participant shall impose any abnormal load upon the facilitiesofanotherParticipant.If emergency conditionsariseonthesystemofoneParticipantwhich -4- i vanes Be 3.1.9 overload the facilities of another Participant,the Participant upon whose system the emergencyarisesshalltakestepsimmediatelytoreducetheloadonsuchoverloadedfacilitiestotheirsafe and proper capacity,even though this may requirethatParticipanttodropload. Unintentional interchange of Power and Energybetweeninterconnectedsystemswilloccurbecauseoftheimpossibilityofcontinuouslycontrolling generation exactly to equal the load.It is recognized that,due to the manner in which the systems of the Participants are interconnected or may be interconnected with each other and withothersystems,a portion of the Power and Energy scheduled for delivery between two such interconnected systems may not flow directly from the supplier to the receiver over the intended route through the transmission systems of.the Participants,but may result in inadvertent flows through other systems.Therefore,because of these conditions: 3.1.9.1 All intentional Power and =Energydeliveriesbetweenthesystemofone Participant and the system of another Participant will be scheduled in advance. 3.1.9.2 It shall be the responsibility of each Participant to maintain the net PowerandEnergyflowingintoandoutofitssystemduringeachhour so-thatdeliveriesare,as near as practicable, equal to the net scheduled amount.Thedifferencebetweenthenetscheduled deliveries and the actual net deliveries will be balanced out in-kind in accordance with principles and practices established by the Operating Committee. 3.1.9.3 When there is a scheduled Power and Energy delivery by one Participant toanotherParticipant,and a portion of the scheduled Power and Energy actually flows through other systems which are not part of the scheduled transmissionpath,the portion of the Power andEnergyflowingthroughsuchothersystemswillbeconsideredashavingbeendeliveredbythescheduledsupplier by the scheduled transmission path. -5- 3.1.10 3.1.12 3.1.9.4 It is not the intent to grant any Participant any right generally to use the system of any other Participant as an intermediary in Power and Energy flows,mor will the consent by a Participant to any such inadvertent flow through its system in a particular casecreateanyrightforthecontinuanceofsuchflows.When such inadvertent flow is objectionable to a Participantexperiencingtheflow,the Participantsshallcooperatetopreventsuchflow from occurring normally and to minimize inadvertent flows of this character. .Each Participant shall provide on its electric system the necessary communications,telemeteringandcontrolfacilitiesatthepoints:ofinterconnectionandotherappropriatelocations. In addition to meter records,the Participants,shall keep such log sheets and other records (asdeterminedbytheOperatingCommittee)as may be needed to afford a clear history of the various scheduled and actual movements of Power and Energy into and out of the systems of the Participants. The originals of all such meter records,log sheets and other records shall be open toinspectionduringnormalbusinesshours'by representatives of each Participant.Each Participant shall furnish to the OperatingCommitteeappropriatedatafrommeterregistrationsandothersourcesonthetimebasis required by the Operating Committee when such dataisusefulforsettlements,special tests, operating records or for other purposes not inconsistent with this Agreement. All Intertie Power and Energy transfers betweentheParticipantsshallbescheduledinadvanceand all Intertie billings shall be based on thoseschedulesratherthanonmeteredquantities.Each Participant will notify the Intertie Operatordispatcher(s)and other Participants with which itisdirectlyinterconnectedbeforeintentionally taking Power or Energy.Additions or modifications to these established schedules may be made by the dispatchers of the ParticipantspursuanttocriteriaestablishedbytheOperating Committee. Section 3.2 Utility Responsibility 3.2.1 Each Utility Participant is responsible for its own real and reactive load,plus'reserves necessary and adequate to meet its respectiveobligations,and will operate and maintain its system and perform all duties and exercise all rights under this Agreement in a manner consistent with Prudent Utility Practices. 3.2.2 Each Utility Participant will be responsible foritsReserveCapacityObligationandaportionof the required interconnected system Operating Reserves as provided for in Addendum No.1 to this Agreement. 3.2.3 Each Utility Participant will implement.an automatic load shedding system in accordance with the criteria developed by the Operating Committee. When such criteria require installation of a coordinated automatic load shedding program applicable to a Utility Participant and its°* wholesale electric utility customers,the Utility Participant must see that such a program is implemented on the wholesale electric utility customer's system.In the alternative,if such a program is not implemented,the Utility Participant must provide the equivalent of thewholesaleelectricutility's program requirementandinstallitontheUtilityParticipant's own utility system,which may include,if the wholesale utility customer is not participating in the program in a fashion that meets such criteria,automatic shedding of the wholesale utility's total system if necessary.In accordance with the guidelines established by the Operating Committee,Utility Participants shall coordinate,operate andsetautomaticloadsheddingsystemstoachieve maximum benefits to Participants. 3.2.4 Through the Operating Committee,Participantsshallcoordinatethesettingandoperationof protective relays and control devices so as tomaximizeprotectionoffacilitieswithoutunnecessarilyrestrictingPowerfloworinhibiting system reliability. 3.2.5 Utility Participants shall regulate the intercon-nected system real and reactive Power flow andvoltageasrequiredbytheIntertieOperators,which shall be in accordance with the procedures set down by the Operating Committee. -7- wee eo Section 3.3 Section 3.4 Section 4.1 4.1.1 4.1.2 Curtailment of Service Except as otherwise specifically prohibited,anyUtilityParticipantwillhavetherighttorefusetodeliverPowerorEnergyunderthisAgreement,or,having begun such delivery,to curtail,restrict or discontinue such delivery,whenever,in such Utility Participant's judgment,suchdeliverywillendangeritsfacilitiesorinterferewithitsobligations,now existing or hereaftercreatedconsistentwiththisAgreement,to its customers or to other electric utilities. Other Agreements The respective systems of the Participants are nowormaybeinterconnectedwithothersystems,andotheragreementsforinterconnection,mutualassistance,pooling,Power supply and transmission services may exist.Future agreements may beenteredintobetweenParticipantsandother systems provided they are not in conflict with any' provision of this Agreement.The Participantsagreetoconductoperationsunderanyexistingagreementstoavoidaconflictwiththis Agreement.While the Participants intend toassisteachotherwhenrequested,such other agreements may limit the capabilities available to the Participants to provide assistance under thetermsofthisAgreement. ARTICLE 4 Utility Participant Utility Participant An electric utility holding a Certificate ofPublicConvenienceandNecessityfromtheAlaska Public Utilities Commission,or an organizationwhosemembersholdsuchacertificateandnormally operate interconnected with a Participant orParticipantssignatorytothisAgreement,may at its option become a Utility Participant under this Agreement.'APARWillebecomegagUrilityzParticipant;atysichatimetasyitésel]suPower;togasparty.sthatyignotmrasiParticipantJandelspeconnectéduntostheParticipants"#intéerconnected#system) An electric utility seeking Utility Participant status shall give 48 months written notice to the Participants of its intention.Such changes or modifications to this Agreement necessary to -8- sep provide for an additional Utility ParticipantshallbemadebyanaddendumtothisAgreement Signed by all parties., 4.1.3 An electric utility can have Participant statusandrepresentationthroughoneorganizationor corporate entity only.No Participant is to havemorethanonevoteorrepresentativedirectlyor indirectly through another organization with whichitisaffiliated.It is the intent of this Section to limit Participant representation and voting so tHat no Participant can control orexercisecontrolthroughanyorganizational structure more than its single Participant status. ARTICLE 5 Associate Participant Section 5.1 Associate Participant 5.1.1 An electric utility holding a Certificate of Public Convenience and Necessity from the Alaska» Public Utilities Commission,or an organization whose members hold such a certificate and normally operate interconnected with a Participant may a become an Associate Participant by complying with Subsection 5.1.2 of this Section.The Alaska Power Administration may become an AssociateParticipantbycomplyingwithSubsection5.1.2 of this Section. 5.1.2 An electric utility desiring Associate ParticipantstatusshallnotifyAPAinwriting.In thenotice,the Associate Participant must designate the name and address of a person to receive correspondence. 5.1.3 Upon receiving written notice of an electricutilitydesiringAssociateParticipantstatus,APAshallnotifyallParticipants.The AssociateParticipantshallreceiveallsubsequentnotices,meeting minutes,reports,all correspondencepertainingtothisAgreement,and will be notifiedofthescheduledmeetingsonatimelybasis. Section 5.2 Associate Participant's Participation 5.2.1 An Associate Participant will have the right toattendallmeetingsandreceivecopiesofnotices,meeting minutes and reports on the activities involving this Agreement. e5.2.2 An Associate Participant may participate in themeetings,but its vote or input on the activities andoperationsoftheIntertiewillbethroughaUtilityParticipantwithwhomtheAssociateParticipantisdirectlyinterconnected. Section 6.1 Section 7.1 i 7.1.1 7.1.2 7.1.3 ARTICLE 6 Addendum No.1 to the Agreement Reserve Capacity Agreement Signatories. Utility Participants who sign this Agreement shallalsosignAddendumNo.1,Reserve Capacity andOperatingReserveResponsibility,attached to thisAgreement.If additional Utility Participants sign this Agreement,they must also sign Addendum No.l. ARTICLE 7 Minimum Rights of the Utilities to Use the Intertie Facilities Minimum Intertie Transfer Capability Rights("MITCR"). Utility Participants shall have the right of firstrefusaltoanallocatedportionofthemaximum Intertie transfer capability plus an allotment of capability not scheduled or used by the otherParticipantsforthepurposeoftransmittingor receiving Power and Energy over the Intertie. The Intertie transfer capability shall be sharedinproportiontothesizeoftheUtility Participants of the Northern and Southern GroupsasdescribedinSection7.2 of this Article.If a Utility Participant is not using all or part ofitsMITCRineachdirection,other Utility Participants have the right to use that unusedparttomaketransfers'across the Intertie,eitherasapurchaseorsaleofPowerand/or Energy.Inadditionto.its minimum rights,each UtilityParticipantshallhavearighttoanallocationofanyunscheduledorunusedMITCRoftheother Participants.. During emergencies when it is necessary to use theIntertietotransferEnergytomaintainsystemintegrity,a Participant's MITCR will be adjusteduntilsuchEnergyisrescheduledasScheduledOutageservice.To the extent practical suchMITCRadjustmentshallbesharedproportionally among the Participants. -10- *sme Section 7.2 7.2.1 7.2.2 7.2.3 Determination of the MITCR The Operating Committee shall determine the MITCRbyJunefirsteachyear,or when a new ParticipantbecomesapartytothisAgreement.The MITCR ofeachParticipantshallbecalculatedasfollows: The MITCR shall be determined by June 1eachyearbasedontheaverageofthe three most recent Annual System DemandsoftheUtilityParticipants.The MITCRfortheremainingportionoftheinitialfiscalyearissetoutinExhibitD.Temporary reductions of MITCR may berequiredforinterimperiodsduetomaintenance,safety or equipmentfailure.The MITCR shall be determined separately for the Utility Participants of the Northern Group and of theSouthernGroup.A Utility Participant's MITCR shall be the ratio of its average Annual System Demarid to the sum of theaverageAnnualSystemDemandsofitsrespectivegroupmultipliedbytheIntertietransfercapabilityoftheIntertie.(Exhibit D of this Agreementcontainsadeterminationoftheinitial MITCR.) The minimum Intertie transfer capability notscheduledorusedbyaParticipantshallbe available to the other Participants in the samegroup(i.e.,Northern or Southern)on an allocatedbasisinthesameproportionastheirMITCRistothetotalMITCRoftheirgroup.A ParticipantwhoseunusedMITCRisbeingusedbyotherParticipantsshallhavetherighttomakeuseofitsfullentitlementimmediatelyuponnotificationoftheParticipantswhoareusingalloraportion of its MITCR. A Participant.has the right to transfer on acontractbasisallorpartofitsMITCRtootherParticipantswithreasonablewrittennoticetoallParticipants.A Participant whose unused MITCR isbeingusedbyanotherParticipantshallbepaidatitsrequestbytheusingParticipantaproratedamountoftheIntertieCapacityRatedeterminedby the following formula: -ll- Section 7.3 Section 7.4 7.4.1 7.4.2 P =ICR x CP x HR/THR P -is the monthly payment due the ParticipantwhoseMITCR,or portion thereof,is being used byanotherParticipant; ICR -is the Intertie Capacity Rate defined inSection8.2.6 of this Agreement; CP -is the average amount of capacity in kilowatts which is used by another Participant; HR -is the number of hours in the month during which the unused MITCR was scheduled by anotherParticipant;° THR -is the total number of hours in the month. Intertie Transfer Capability The maximum Intertie transfer capability of the° Intertie is 70 MW.The Operating Committee,with the approval of APA,may establish a differentmaximumIntertietransfercapability.NoprovisionofthisAgreementshallprohibitAPA from reducing the maximum [Intertie transfer capability during periods for maintenance, equipment failure,safety considerations or other reasonable causes involving Prudent Utility Practices.Such temporary reductions of maximum Intertie transfer capability shall proportionally reduce the MITCR of each Utility Participant for that temporary period. Modifications and Additions to the Intertie Modifications and additions to the Intertie shall be designed and constructed so as not to reducetheIntertiereliability,subject to Prudent Utility Practice and reasonable economics.Design for such modifications shall be submitted to the Operating Committee for review and comment.ThecommentsoftheOperatingCommitteeshallbe incorporated into the design of the modificationsandadditionsastheyrelatetotheoperationand reliability of the Intertie. APA shall have the right to make additions,deletions or changes to the Intertie including taps to the line to provide electrical services atlocationswhichitdeemsbeneficialand -12- oe 7.4.3 7.4.4 Section 7.5 Section 7.6 reasonable.Costs related to modifications oradditionscoveredbythisSection7.4.2 will notbechargedtotheParticipantsasacostof Intertie use unless such modifications are of direct benefit to the Participants as determined in advance by the Operating Committee. Participants shall have the right to requestadditions,deletions or changes to the Intertie. The request shall be in writing to APA withjustificationfortheaddition,deletion or change.APA will not unreasonably withhold making such additions,deletions or changes.AnymodificationshallbeattheexpenseoftherequestingParticipant(s)unless such modificationisofdirectbenefittootherorallParticipants as determined in advance by the Operating Committee,in which case the Operating Committee shall determine how the Utility Participants willsharethecost. APA shall give reasonable .notice to all' Participants before making any modification as provided herein. Cantwell Tap The electric utility serving the community of Cantwell,Alaska located along the route of the Intertie transmission line shall have the right to use Intertie capacity to provide electric service to Cantwell customers.When the utility is a Participant to this agreement,such requiredcapacitywillbeprovidedbythatParticipant'sMITCR.The cost of this service to this utility will be the same as for the Participants underArticle8ofthisAgreement.The cost of a substation and associated facilities necessary to provide transmission access to the Intertie shall not be borne by the Utility Participants as partofthecostoftheIntertie. Susitna Construction Power APA is responsible for providing Power and EnergyforconstructionoftheSusitnaHydroElectricProject.APA reserves the right to tap_theIntertieanduseIntertiecapacityasrequiredfor construction Power for the Susitna Project.Termsandconditionsapplicabletosuchatapshallbesubjecttonegotiationandagreementbyall Participants. -13- Section 7.7 Bradley Lake Hydro Electric Generation Project APA shall have the right to transfer to participants in the Bradley Lake Project Power and Energy on the Intertie subject to the terms of this Agreement. ARTICLE 8 Cost to Utility Participants for Intertie Transfer Capability Rights Section 8.1 Intertie Costs 8.1.1 Costs incurred in operating and maintaining the Intertie and the Annual Debt Service on any bonds or other debt issued by APA for -the initial Intertie facilities,including the debt incurred on renewals and replacement of those facilities, shall be shared by the Utility Participants. Intertie costs shall be shared by the Utility Participants in accordance with Alaska Statute44.83.398(£)which includes,at a minimum,the. following costs: 8.1.1.1 "Operation and Maintenance Costs"are all operation costs as provided for inArticle10ofthisAgreementandall maintenance costs as provided for in Article 12 of this Agreement,plus any applicable taxes,but excludinguninsuredliabilityresultingfrom deductible provisions of propertyinsurancepolicies.The cost ofTransmissionServicefortheIntertie Facilities owned by Matanuska Electric Association as provided for under the "Transmission Service Agreement between Matanuska Electric Association,Inc., which is a member of AEGTC,and Alaska Power Authority,"dated ,shall be a part of the Operation =andMaintenanceCostsunderthisArticle8. 8.1.1.2 "Extraordinary Maintenance and Replace- ment Costs"are uninsured liability resulting from deductible provisions ofpropertyinsurancepolicies,costs offacilitymaintenance,renewals,and replacements. 8.1.1.3 "Annual Debt Service Cost"is interest on,and amortization charges sufficient -14- Sri onee 8.1.2 8.1.3 Section 8.2 8.2.1 8.2.2 to retire,any bonds or other debt issued by APA for construction of the Intertie,plus the debt service coverage factor determined by APA to be necessaryforthemarketabilityofitsbonds. It is anticipated that all costs for constructionoftheinitialIntertiefacilitieswillbepaidthroughdirectappropriationfromthelegislatureoftheStateofAlaska.However,any amount not appropriated will be subject to recovery in accordance with Section 8.1.1 of this Agreement. Intertie costs will be estimated and budgeted annually by APA for the ensuing fiscal year,JulylsttoJune30.APA shall annually develop apreliminaryIntertiebudgetfromtheIntertie Maintenance budget,the Intertie operating budget, the Annual Debt Service costs and APA's administrative expense associated with the Intertie.The preliminary Intertie budget shall be provided to the Participants 13 months before- the first day of the budget fiscal year for theirreviewandcomment.Written comments of the Participants shall be submitted to APA by July15thofyearprecedingthebudgetfiscalyear.Based on the preliminary Intertie budget and the comments from the Participants,APA shall annually establish the Intertie budget and submit it to the APA Board of Directors for approval. Calculation of Unit Intertie Costs On or before March lst of each year the UtilityParticipantsshallsubmittoAPAprojectedusageoftheIntertieinkwhonamonthlybasisforthe following fiscal year. APA shall prepare a preliminary Intertie annualusage,estimate in kwh's and provide the same totheP&rticipants by April lst of the same year. The preliminary Intertie annual usage estimateprovidedunderthisSection,with the use of otherhistoricorrelevantinformationshallinnoevent be less than the amount equal to 30 percent of the kwh's that could be transferred by continuous operation of the Intertie at the maximum ratedtransfercapacity,(initially established at 70MW)of the Intertie during that fiscal year.Theprojectedusageinkwh's when in excess of the 30percentdescribedaboveshallnotexceedthetotal projected usage of the Participants. -15- 8.2.3 8.2.4 8.2.5 8.2.6 Section 8.3 Section 8.4 8.4.1 Utility Participants shall provide,by each MayIst,their written comments to APA on _thepreliminaryIntertieannualusageestimate. Based on the preliminary Intertie annual usage estimates of the Participants and commentsreceived,APA shall establish the estimated annual Intertie usage in kwh's for the following fiscal year. The "Intertie Energy Rate"for the following fiscal year,expressed in cents per kwh shall becalculatedbydividing83.5 percent of the totalannualcostoftheIntertieasbudgetedinthe Intertie budget under Section 8.1 of this Article by the annual Intertie usage as established under Section 8.2.4 of this Article. The "Intertie Capacity Rate"for the following fiscal year expressed in dollars per kw shall becalculatedbydividing16.5 percent of the total annual cost of the Intertie as budgeted in the- Intertie budget under Section 8.1 of this Article,by the sum of the Participant's MITCR,as determined under Section 7.2 of Article 7. Initial Calculation of Unit Intertie Costs Following execution of this Agreement,sufficient time may not be available to establish initial Intertie budget,usage and unit Intertie costs inaccordancewithsections8.1 and 8.2 of this Article.Accordingly,such initial budget,usage,and unit Imntertie costs for the initial fiscal year,or portion thereof,shall be determined by APA, Allocation of Intertie Costs Each Utility shall be obligated to reimburse APA monthly the sum of the following: 8.4.1.1 The receiving Participant's scheduleduseoftheIntertieforthemonth multiplied by the Intertie Energy Rate in effect for that period;plus 8.4.1.2 The Participant's MITCR in accordancewithSection7.2 of Article 7 multiplied by one-twelfth of the Intertie CapacityRateineffectforthatperiod. -16- 8.4.2 8.4.3 8.4.4 8.4.5 8.4.6 Section 9.1] 9.1.1 A Utility Participant's obligation to pay inaccordancewiththisSectionmaybereducedifitcanbedemonstratedthatAPAhasnotmetits responsibility to maintain the transmission line in accordance with Prudent Utility Practices. Such payment reduction shall be limited to a proration for the period of reduced Intertie transfer capacity. For billing purposes only,the scheduled use oftheIntertieinanymonthshallbetheproductof the scheduled Intertie transfer at the Intertie Point of Interconnection and the number of hours each schedule was in effect during that calendar month. For billing purposes only,the Participant'sscheduleduseoftheIntertieforeachhourofa day shall be the final schedule for delivery submitted to the Intertie Operator of its group. Should APA's annual revenues received under' Subsection 8.4.1 of this Section exceed actual annual Intertie costs,revenues in excess of the Intertie costs shall be refunded to the contributing Participants in proportion to the amount of dollars billed to Participants to thetotaldollarsbilledforuseoftheIntertiein the fiscal year in which the revenues were accrued. Should APA's revenues received under Subsection 8.3 of this Section be less than the actual Intertie costs,the revenue deficiency shall be allocated among the Utility Participants in thesameproportionastheUtilityParticipants'MITCR are shared as defined under Article 7 of this Agreement.APA shall bill the UtilityParticipantstheirproportionateshareofthis deficiency. ARTICLE 9 Operating Committee Establishment of the Operating Committee The Participants hereby establish an operatingcommittee,the "Operating Committee”.TheOperatingCommitteeshallconsistofonerepresentativeofeachParticipant,designated inwritingbyeachParticipant,and each Participantmayalsodesignateanalternatewhomayactinthesteadoftherepresentativeattheoptionofthat -17- Participant.A Participant may at any time changeitsrepresentative,or alternate,on the OperatingCommitteeandshallpromptlynotifyinwritingtheotherparticipantsofanychangeinsuchdesignation.The members of the OperatingCommitteeshalldesignatetheChairmanoftheOperatingCommitteeannuallyatthefirstmeeting of each calendar year.Recommendations and decisions of the Operating Committee shall be adopted if approved by 75 percent majority vote ofthetotalmembership.Only Utility Participants shall have the right to vote on the Operating Committee on issues covered by Addendum No.1 and on automatic load shedding issues. 9.1.2 The Operating Committee shall establish operating procedures and standard practices with respect tothisAgreementfortheguidanceofdispatchers.andotheremployeesastomattersaffectingIntertie operations pursuant to this Agreement and shall recommend arrangements for metering, communications and other services and facilities.: The Operating Committee has no authority to modify any of the provisions of this Agreement or tomodifyorsetratesunlessexpresslyprovidedfor(fetes herein.The establishment of any procedure or 8 practice or determination by the OperatingCommittee,within the scope of the Operating Committee's responsibility,shall be effectivewhensignedbythedesignatedrepresentativesof at least 75 percent of the Participants. Section 9.2 Procedural Responsibilities of the Operating Committee 9.2.1 The Operating Committee shall meet at leastquarterlyeachyearandatsuchtimesasdeemednecessarybytheChairmanoranytwoofthe Participants. 9.2.2 Written minutes shall be kept for all meetings of the Operating Committee,and major decisions oragreementsmadebytheOperatingCommitteeshallbereducedtowriting. 9.2.3 The Operating Committee shall prepare and submitanexpensebudgettoAPAundersection10.3 ofthisagreementannuallytoprovideforCommitteeexpensesotherthantheexpensesofeachCommitteemember,which shall be borne by the represented brine Participant. -18- poke a aod ,.. ore atta Section 9.3 9.3.1 9.3.2 Operating Committee Authority,Procedures and Appeal. The representatives constituting the OperatingCommitteeshallhaveequalauthority,and all decisions made and direction given must be by 75percentmajorityvoteofthetotalmembersofthe Committee.A Participant casting a negative vote in an approved decision of the Operating Committee shall have the right to appeal the decision in accordance with 9.3.2 of this Article.An appealmustbedeliveredinwritingtothechairmanof the Operating Committee within five working daysofcastingthenegativevote. If the Operating Committee is unable to agree on a matter within its jurisdiction,such matter shall be resolved by unanimous agreement of the General Managers of the Utility Participants and the Executive Director of the Alaska Power Authority or their designated representatives.Should theGeneralManagersoftheUtilityParticipantsand:° the Executive Director of the Alaska Power Authority or their representatives fail to reachanunanimousagreementwithin20workingdays,then the matter shall be submitted to binding arbitration in the following manner. 9.3.2.1 Arbitration shall be conducted before a board of three arbitrators selected under the guidelines of the AmericanArbitrationAssociationandthe arbitration shall be conducted in accordance with the commercial arbitration rules.of the American Arbitration Association then in effect. In addition,the arbitrators must have education and experience in the particular matter being arbitrated. 9.3.2.2 The Participant(s)desiring arbitrationshalldemandarbitrationbygiving written notice to the other Participants.The notice shall conformtotheproceduresoftheAmericanArbitrationAssociationandshall include a statement of the facts or circumstances causing the controversy and the resolution,determination or relief sought. -19- 9.3.2.3 Before the matter is presented to theBoardofArbitrators,a conference shall be held by the Participants to attempttoresolvethecontroversyor,if resolution is not possible,to stipulatetoasmanyfactsaspossible,to clarifyandnarrowtheissues,and to agree in writing to the issues to be submitted to arbitration. 9.3.2.4 The Board of Arbitrators shall have no authority,power or jurisdiction to alter,amend,change,modify,add to,ordeleteanyoftheprovisionsofthis Agreement,nor to consider any issues arising other than from the language in,and authority derived from,this Agreement.The opinion and findings oftheBoardofArbitratorsshallbe reduced to writing and shall be bindingontheParticipants15daysafterthe Board of Arbitrators issues a decision- unless all Participants jointly agree onanalternatesolution. 9.3.2.5 The costs incurred in connection with the arbitration shall be apportioned bytheBoardofArbitratorsasitdeems appropriate. Section 9.4 Procurement of Services The Operating Committee shall have the right todirectlyprocureservicestheCommitteerequiressolongas_sufficient budgeted funds areavailable. Section 9.5 Waiver of Payment or Right to Recourse Except for the provisions of Section 9.3 of thisArticle,nothing contained in this Agreement shallbeconstruedtoconstituteawaiverorsurrender by any Participant of its right to any action,inlaworequity,to enforce all provisions of this Agreement and its rights hereunder. Notwithstanding the foregoing,in the event of areferralofamattertoaBoardofArbitrators pursuant to this Agreement,or a judicial or administrative proceeding on account of any disputed matter,all Participant(s)shall continue to make payments in accordance with this Agreement until the matter has been finally determined,at -20- Section 10.1 10.1.1 10.1.2 10.1.3 which time any necessary adjustments shall be made as provided for in Article 16 of this Agreement. ARTICLE 10 Operation of the Intertie Responsibility for Operation of the Intertie With the concurrence of the other Participants, APA delegates and AMLP and GVEA assume the responsibility for the operation of the Intertie under the guidelines of this Agreement and the Operating Committee. AMLP shall operate the southern one-half of theIntertieincluding,but not limited to,the terminal facilities,communication facilities,and the Intertie transmission line to the Midpoint of the transmission line between the Douglas:and Healy Substations (more specifically illustrated and defined in the Intertie facilities diagram in Exhibit B of this Agreement)within AMLP's Control. Area,and the midpoint of the Intertie transmission line shall be deemed to be the point of interconnection between GVEA and AMLP. 10.1.2.1 APA will contract with MEA,which is a member of AEGTC,for use of a portion of MEA's transmission facilities to provide,along with other facilitiesprovidedbyAPA,transmission facilities that will be a part of the Intertie between the Douglas and TeelandSubstations.This being a part of the Intertie,APA delegates to AMLP,andAMLPassumes,APA's responsibility for operation under the APA -MEA Agreementforthesetransmissionfacilities. GVEA shall operate the northern one-half of theIntertie,including but not limited to,theterminalfacilities,communication facilities,and the Intertie transmission line to the Midpoint of the Intertie transmission line between the Douglas and Healy Substations (more specificallyillustratedanddefinedintheIntertiefacilities diagram in Exhibit "B"”of this Agreement)withinGVEA's Control Area,and the Midpoint of the Intertie transmission line shall be deemed to be the point of interconnection between AMLP and GVEA. -2)- a10.1.4 AMLP and GVEA acting in concert shall: 10.1.4.1 Closely and continually coordinate all the activities and transactions involving the Intertie operation; 10.1.4.2 Coordinate the Intertie Transactions to insure that at all times,to the extent possible,the Intertie System isoperatedtoprovidereliableand economic service; 10.1.4.3.Coordinate the scheduling of all Intertie Transactions by the Participants in the Northern and Southern Groups in accordance with the provisions of this Agreement,and inform all Participants of the scheduledtransactions;, 10.1.4.4 Develop the procedures'for restoration of service on the Intertie for: interruptions due to either Scheduled orForcedOutages,and have _personneltrainedtocarryoutsuchoperationalprocedurestoinsurethe Intertie reliability; 10.1.4.5 Maintain communications with each other and the other Participants usingadequatemethodsofdataacquisitionsufficientforreliablesystemcontrol of the operation of the Intertie; 10.1.4.6 Maintain complete and accurate hourly records of all operations,Intertie Transactions and activities involving the Intertie,and promptly publish and distribute such records to all Participants at regular intervals as established by the Operating Committee. Any Participants who desire it shall be provided,at their own expense,direct access to all telemetry gathered from the Intertie; 10.1.4.7 Coordinate the responsibilities delegated to them in this Agreement to minimize duplication; 10.1.4.8 Abide by the terms and conditions of other contracts or agreements involving -22- 2 toe st Section 10.2 10.2.1 10.2.2 10.2.3 the operation of the Intertie System,solongastheydonotconflictwiththis Agreement; 10.1.4.9 At all times operate the Intertie in a safe and responsible manner consistent with Prudent Utility Practices and the directives and instructions of the Operating Committee. Suspension of Work in Performance of Duties of the Intertie Suspension for Convenience.The APA may order AMLP and/or GVEA in writing to suspend,delay,orinterruptalloranypartoftheworkinvolvedin operation of the Intertie for such period of time as the Operating Committee determines to.beappropriatefortheconvenienceof,and in the best interest of,Intertie operation. Adjustments of Cost.If the performance of all or” any part of the work is,for an unreasonable period of time,suspended,delayed,or interrupted by an act of APA,or by the failure of APA to act within a reasonable time,an adjustment shall be made for any increase in the cost of performanceofthisAgreementnecessarilycausedbysuch unreasonable suspension,delay or interruption.However,no adjustment shall be made under this Section for any suspension,delay or interruption to the extent: 10.2.2.1 That performance would have been =sosuspended,delayed or interrupted by anyothercause,including the fault or negligence of AMLP or GVEA;or 10.2.2.2 That an adjustment is provided for orexcludedunderanyotherprovisionof this Agreement. Time Restriction on Claim.No claim under this Article shall be allowed: 10.2.3.1 For any costs incurred more than 20 daysbeforeAMLPorGVEAshallhavenotified APA in writing of the act or failure to act involved (but this requirement shall not apply as to a claim resulting from asuspensionorder);and -23- Leccttenennt Section 10.3 10.3.1 Doe May 10.3.2 10.3.3 10.3.4 10.3.5 10.2.3.2 Unless the claim is asserted in writingassoonaspracticableafterthe termination of such suspension,delay,or interruption,but not later than the date of final payment under.this Article. Budget for Operation of the Intertie For purposes of calculation of unit Intertie costs pursuant to Article 8,Section 8.2 of thisAgreement,and to provide information required to obtain operations budget appropriations from the legislature,AMLP and GVEA shall develop annually and submit to APA a suggested scope of operations and budget for operation of the Intertie no laterthan14monthsbeforethefirstdayofthebudget fiscal year.The budget developed by the Intertieoperatorsmayincludealldirectexpensesandan allocated portion of such other expenses as interest,depreciation and margin requirements,among others.All costs allocated to the Intertie' Operator budget shall be consistent with generally accepted utility accounting principles.APA shallestablishapreliminaryscopeofoperationsandbudget,based on the Operating Committee,AMLP and GVEA submittals,and provide it to the Utility Participants 13 months before the first day of the budget fiscal year for their review and comments. Utility Participants shall provide writtencommentsonthepreliminaryscopeofoperations and budget to APA 12 months before the first dayofthebudgetfiscalyear. Based on the preliminary scope of operations andbudgetandthecommentsreceived,APA shallestablishtheIntertieoperatingbudget,which isthe-final scope of operations and budget. With the written approval of all Participants,thefinal:scope of operations and budget will bedeemedtobethefixedcostfeeforoperationof the Intertie for the ensuing fiscal year.APA will pay AMLP and GVEA under section 10.6 of thisArticle10foroperationofthe Intertie,one-twelfth of the fixed fee thus established. If the Participants are unable to agreeunanimouslythatthefinalscopeofoperationsandbudgetisthefixedcostfeeforoperationoftheIntertie,then AMLP and GVEA shall each determine, -24- BBE using records and accounts maintained under °Section 10.4 of this Article 10,the cost to its system to provide operation of the Intertie inaccordancewiththisAgreementandshallbillAPAmonthlyforthese_services.APA will thenreimburseAMLPandGVEAundersection10.6 of this Article 10. 10.3.6 APA shall present the final operations budget to the Alaska Legislature in a manner consistent withthe.Executive Budget Act (AS 37.07 andamendments),and shall take all steps necessary to secure an appropriation,or appropriations,fromthelegislatureinanamountadequatetocoverthe budget submitted and approved under thisAgreement.° Section 10.4 Accounting and Records In maintaining accounts for operation of the Intertie,AMLP and GVEA will follow the system of accounts prescribed for public utilities and- licensees by the Federal Energy Regulatory Commission.AMLP and GVEA will furnish the APA such operating and financial statements relatingpeneetooperationoftheIntertieasmaybereasonably requested by the APA.If receipt of such operating and financial statements is undulydelayed,the APA may,with its own staff,perform all work necessary to collect such data asreasonablydesired.Such work shall be performed at a time and in a manner to prevent unreasonable interference with AMLP and GVEA operations. Section 10.5 Audits 10.5.1 At the discretion of APA or by request of amajorityoftheParticipants,an audit shall beconductedwithrespecttothemattersprovidedfor in this Agreement by independent auditorsaccordingtosuchprogramsandproceduresasagreedtobytheParticipants,and allParticipantsshallbefurnishedcopiesofthereport.The cost of making such audits shall besharedbytheParticipantsinthesameproportionastheMITCRweresharedduringtheperiodcovered by the audit.The Participants,contract agentsandanyotherpartyinvolvedwiththeoperationoftheIntertieshallprovideand/or make availabletheinformationandrecordsrequiredforthe sponta audit.The cost of any audit required by a ee Participant beyond the scope of the above audit shall be borne by such Participant. - 25- aivsicion 10 5.2 Section 10.6 Section AMLP and GVEA shall allow their books of accounts to be audited with respect to matters provided forinthisAgreementbysuchstateofficialsor agencies as may be authorized and directed by law to make those audits.To the extent permitted bylaw,Participants shall have the same authority toauditthebooksofaccountsoftheAPAwith respect to the operation of the Intertie. Payment of Operators. If a fixed cost fee for operation of the Intertieisestablishedundersection10.3.4 of this article,then within 30 days of the end of each month APA will pay to AMLP and GVEA one-twelfth ofthefixedcostfeeforoperationoftheIntertie. _If the Participants have not agreed upon a fixedcostfeeforoperationoftheIntertieunder section 10.3.4 of this article,then the APA will reimburse AMLP and GVEA within 30 days of the receipt of their invoices.©However,such reimbursement is subject to adjustment upon. discovery of an error,dispute of billing,or audit. ARTICLE 11 Scheduling of Power and Energy on the Intertie ll.1 11 ll ll. Section -l.1 1.2 1.3 ll.2 ll 2.1 Scheduling Responsibility AMLP shall have the responsibility for schedulingthetransfersontheIntertiefortheParticipants of the Southern Group and coordinating them with GVEA under the provisions of this Agreement and the direction of the Operating Committee. GVEA shall have the responsibility for schedulingthetransfersontheIntertiefortheParticipants of the Northern Group and coordinating them withAMLPundertheprovisionsofthisAgreementand the direction of the Operating Committee. AMLP and GVEA shall each have the responsibility for coordinating schedules within their respective Groups. Power and Energy Schedules The amount of electric Power and Energy to be transferred on the Intertie under this Agreement will be based upon hourly schedules provided by the Participants making the Intertie Transaction. -26- These schedules shall be provided to,andcoordinatedwith,AMLP and GVEA.AMLP and GVEA will timely inform all Utility Participants of thetransferschedulesontheIntertie. 11.2.2 Power and Energy shall be scheduled on an hourlybasisandtheschedulesmaybemadeforthenexthour(s),day(s),week(s)or month(s)in advance. 11.2.3 Schedules for all transfers on the Intertie shall be furnished to the respective Intertie Operatorsbefore3:00 P.M.prevailing local time each dayforPowerandEnergytobedelivered'across theIntertieforeachclockhourofthefollowing24-hour period.This schedule shall be/updated eachdayandanadditionalone-day schedule will befurnishedtoprovideacontinuingseven-dayschedule. Short-term schedules of transfers on the Intertie may not be made or changed on'an hour-by-hourbasisunlesscoordinatedinadvancewiththe- Intertie Operators. ll.fo=11.2.5 Provisions of this Section may be modified byactionoftheOperatingCommitteeasprovidedforunderthisAgreement. 'Section 11.3 Intertie Schedule Limitations The maximum schedule of Power and Energy of any Participant on the Intertie shall be limited to the Participant's MITCR unless additional MITCR are allocated from the unscheduled and/or unused Intertie Transfer Capability Rights of other Participants.MITCR not being used by the Participant holding them may be used by other Participants needing them to make additional transfers over and above their allocation of MITCR under Article 7 of this Agreement. ARTICLE 12 Maintenance of the Intertie Facilities Section 12.1 Maintenance Responsibility 12.1.1 APA will maintain the Intertie facilities which it owns.APA may provide for the maintenance of theIntertiefacilitiesbycontractingwithqualified -27- parties to perform maintenance on its behalf or provide it by qualified staff under the direction of APA.Maintenance shall be scheduled, coordinated and accomplished in accordance with Prudent Utility Practices so as to minimize disturbance on the Intertie that would impairserviceoftheParticipants'systems. 12.1.2 The Intertie shall be maintained in good working condition,optimizing the availability of theIntertiewithinpracticalandcostconstraints.After a failure of the Intertie,it shall be returned to service in the shortest possible time within the constraints of practical maintenance procedures. Section 12.2 Maintenance Budget and Costs 12.2.1 APA shall develop an Intertie maintenance budget, :an annual budget and schedule for the maintenance of the Intertie,each year based on the budgets developed by any contractors providing the- Intertie maintenance.This budget will be reviewed with the Participants sufficiently in advance of the commencement of the fiscal year involved so that each Participant will be able to submit its comments for consideration prior to finalization of the budget.Budgets for more than one year will be required for the Participants' long range fiscal requirements.APA will prepareandfurnishtheParticipantsacopyofsuchlong range fiscal requirements. 12.2.2 APA will maintain complete and accurate records ofcostsassociatedwithmaintenanceoftheIntertie. Maintenance of the Intertie will follow the system of accounts prescribed for public utilities andlicenseesbytheFederalEnergyRegulatory Commission. ARTICLE 13 Measurement of Electric Power and Energy Section 13.1 Metering 13.1.1 The electric Power and Energy delivered through interconnection facilities of the Intertie shall be measured by nonreversible watt-hour meters and15-minute interval demand meters. 13.1.2 APA shall be responsible for installation, -28- 13.1.3 Section 14.1] 14.1.1 14.1.2 ownership,operation and maintenance of initialfacilitiesnecessary,as determined by APA,to interface with AMLP and GVEA equipment presently installed or being installed.The AMLP and GVEA equipment shall be that necessary to provide for the initial Intertie operation only.The initial facilities shall be provided directly by APA or through a separate,reimbursable agreement with the Participant involved.Participants shall permit other Participants to use the available metered data for the purpose of telemetering the data as required for their operations. The Operating Committee shall agree upon Intertie related metering equipment before its installa- tion.Each Participant hereby grants 'to all other Participants the right to install and maintain attheotherParticipants'cost,equipment in.the other Participants'substations.Each Participant has the right to install and maintain at its cost,equipment in another Participant's substation if the equipment is necessary to perform Intertie' functions under this Agreement.The installationandmaintenanceshallbecoordinatedwithstaffof the Participant owning and operating the facilities on which the meters are to be intalled. Ingress and egress shall be granted to the other Participants to install,remove or maintain the equipment.Each Participant shall coordinate suchactivitiesthroughtheotherParticipant's dispatcher. ARTICLE 14 Transmission Losses Intertie Transmission and Transmission Service Losses Losses in the Intertie System createdby IntertietransfersshallbedeterminedbytheIntertie Operators through engineering studies,calculationandPowerflowprograms,and procedures as established by the Operating Committee. The Participant supplying Power and Energy shallalsoprovidePowerandEnergylosseswhichoccurfromthetransfer.Such losses shall be provided at the time of the transfer unless otherwise agreed by the affected Participants. -29- wateth 14.1.3 Transfer schedules shall include losses for such oo transfers.When transfers reduce losses in a Participant's system which is not a part of theIntertie,the losses in that system caused by thetransfershallbeconsideredzero. Section 14.2 Intertie Transmission Loss Compensation. 14.2.1 The Intertie Facilities located on the AMLP side of the Intertie Point of Interconnection will be operated in AMLP's Control Area;thus the losses that occur on-Intertie Facilities on the AMLP side will occur in AMLP's Control Area as part of AMLP's system losses. 14.2.2 The Intertie Facilities located on.the GVEA side of the Intertie Point of Interconnection will be operated in GVEA's Control Area;thus the lossesthatoccuronIntertieFacilitiesontheGVEA:side will occur in GVEA's Control Area as part ofGVEA's system losses.: ARTICLE 15 Transmission Service Section 15.1 Transmission Service to Access the Intertie Each Participant shall have the right to schedule,on the intervening transmission systems of anotherParticipant,transfers of Power and Energy to andfromtheAlaska[Intertie.This right may be exercised when the rated capacity of theinterveningParticipant's transmission facilities available to transfer Power and Energy is determined by the intervening Participant to haveadequatecapacitytoaccommodatethetransfer.Adeterminationofadequatecapacityshallnotbe unreasonably withheld by the intervening Participant.If the intervening Participantdeterminescapacitytobeinadequate,thisdeterminationshallbedocumentedinwritingto the requesting Participant with the justification for the limitation of capacity in its transmissionsystem.The intervening Participant reserves theright,within the exercise of Prudent Utility Practice,to interrupt or curtail such servicehereunderatanytimethetransfercapabilityofthetransmissionfacilitiesinvolved,in the opinion of the intervening Participant,is less -30- than the actual or proposed loading of thefacilities.Such interruptions or curtailments, other than for the intervening Participant's own internal transmission requirements for its systemload,shall be shared pro rata among all Power andEnergyschedulesthatreducethetransfer capability of the intervening Participant'stransmissionsystematthetimeof=suchinterruptionorcurtailment.The rated transfer capacity of any intervening Participant's transmission system shall be determined in advancebytheinterveningParticipant,or by =anengineeringanalysisacceptabletothe Participants involved. Section 15.2 Provision for Adequate Transmission Service Facilities The Participants shall not limit,through inadequate facilities,Transmission Service access to the Intertie.If a Participant that is providing,or is to provide Transmission Service' to other Participants for the transmission of Power and Energy across its system for transfer on the Intertie,determines that its transmission eatam system does not have adequate capacity for theattedesiredleveloftransfer,a Participant desiringahigherleveloftransfermayrequestthe intervening Participant to provide or constructadditionaltransmissioncapability ffor the requesting Participant's use.This request shallbegranted,at least to the level of therequestingParticipant's MITCR.The additionalfacilitiesmayrequirespecialcompensationbytherequestingParticipant.The arrangement for and cost sharing of such facilities will be providedforunderaseparateagreementbetween'the Participants involved,and shall be based on cost of service principles. Section 15.3 Compensation for Transmission Service 15.3.1 The Participant providing Transmission Serviceshallbecompensatedmonthlyfortheuseofthe Transmission Service Facilities.The Transmission Service billing shall be the appropriateTransmissionServiceRatedefinedinExhibitCof this Agreement,multiplied by the appropriatequantitiesmeteredatthepointofinterconnectionoftheParticipants.Monthly demand billingsinoesiashallbetheproductoftheContractTransmissionServicecapabilityratetimesthetransfercapabilitycontractedforduringthebilling period. -3]- oe 15.3.2 Losses that occur as a result of thecessTransmissionServicetransfersshallbesuppliedinkindbytheresponsibleParticipantunderArticle14ofthisAgreement. Section 15.4 Transmission Service Rates 15.4.1 Exhibit C of this Agreement sets out the formulaforcalculatingtheTransmissionServiceRates.Exhibit C may be amended in writing under Article15ofthisAgreement. 15.4.2 The Participant providing Transmission Serviceshallmakeavailablereasonableexpenseand operating information necessary to verify actionsundertakenunderArticle15ofthisAgreement. ARTICLE 16 Billing and Payments Section 16.1 Billing * A supplying Participant shall bill the receiving _Participant monthly,normally not later than 15 -_days after the end of the calendar month to which the bills apply.Bills shall be due and payablewithin15daysfromdatethebillsarepostmarked|or hand-delivered.Interest on any unpaid amountfromthedatedueuntilthedatepaymentis received shall accrue at the annual legal rateunderAlaskalawforpost-judgment interest,orproratafractionthereof. Section 16.2 Dispute of Billing If a purchasing Participant disputes the chargessubmittedbyasupplyingParticipantunderthis Agreement,the purchasing Participant shallneverthelesspaythefullamountwhendueandpayableandgivenotificationinwriting,within 90 days of the date the bill is rendered,to the supplying Participant stating the grounds on which charges are disputed and the amount in dispute. If settlement of the dispute results in a refund, the refund shall include interest at the annual legal rate under Alaska law for post-judgment interest,or pro rata fraction thereof,from the date of overpayment to the date of refund. ee -32- Section 17.1 Section 17.2 17.2.1 ARTICLE 17 Insurance and Liability Insurance During the term of this Agreement,eachParticipantshallpurchaseandmaintaininsurance with a carrier or carriers satisfactory to the Operating Committee and the APA,covering injurytopersonsorpropertysufferedbyanyParticipant|or a third party,as a result of errors, omissions,or operations which arise both out ofandduringthecourseofthiscontractbythe-'<Participant or by any of its subcontractors.The coverage shall also provide protection against injuries to all employees of the Utility Participant and the employees of any of its subcontractors engaged in work under this Agreement.If approved by the Operating Comittee and the APA,a Participant may self-insure for theWorker's Compensation Insurance and,up to a maximum of $250,000,for the other types of> insurance required by this Article.A copy of the insurance policies and undertaking to self-insure,if any,will be furnished to the Operating Committee and the APA before beginning operations under this Agreement. Types of Insurance The following insurance must be purchased by eachParticipanttocoverthoseoperationsofthe Participant performed under this Agreement: Worker's Compensation Insurance:Each Participant shall provide and maintain,for all employees of the Participant engaged in work under thisAgreement,Workers'Compensation Insurance as required by AS 23.30.045.The Participant isresponsibleforWorkers'Compensation Insuranceforanyofitssubcontractorswhodirectlyor indirectly provide services under this Agreement.Each insurance policy must include: (a)Statutory coverage for states in which employees are engaging in work; (b)Employer's Liability Protection in the amountof$2,000,000 per occurrence; (c)Broad Form All States Endorsement; (d)Coverage as required by all State and Federal 33- Acts where applicable; (e)Voluntary Compensation Endorsement. The Worker's Compensation Insurance policy shallcontainawaiverofsubrogationinfavorofthe other Participants.Any Participant who is self-insured hereby waives subrogation in favor of the other Participants. 17.2.2 Comprehensive General Liability Insurance:Each Participant shall purchase and maintaincomprehensivegeneralliabilityinsurancesubjecttothefollowinglimitsofliability: (a)Bodily Injury and Property Damage Liability-of a minimum of $10,000,000 Combined Single Limitseachoccurrenceandaffordinginsurance.forPremises-Operations,Owners and Contractors'Protective,Independent .Contractors, Products/Completed Operations,Blanket Contractual Liability,Broad Form Property,Damage,Personal- Injury Liability,Incidental Errors and Omissions. (b)Automobile Liability Insurance covering all vehicles.Such insurance shall provide coverageofnotlessthat$10,000,000 Combined Single LimiteachoccurrenceforBodilyInjuryandProperty Damage Liability. (c)Owned Aircraft (if applicable)and Non-Owned Aircraft with seating capacity of five seats orless,except for commercial,scheduled flights,with limits of liability not less_ than: $5,000,000 -Bodily Injury per occurrence; $1,000,000 for Passenger Liability per seat;and $5,000,000 for Property Damage Liability per occurrence.Coverage must include Slung Cargo Exposures.If an aircraft with more than fiveseatcapacityisused,special coverage and limits must be obtained and approved by the Operating Committee. (d)Owned Watercraft (if applicable)and Non-Owned Watercraft (if applicable)with limitsofliabilitynotlessthat$5,000,000 peroccurrenceasprovidedinthe"In Rem Endorsement"under "Maritime Coverage B"'. The other Participants shall be included as additionalinsuredsininsurancerequiredinthisSection17.2.2ofArticle17andshallnotbytheirinclusionberesponsibletotheinsurancecarrierforpaymentofpremiumstherefor.These insurance policies must also -34- tes 38contain a cross liability or severability of interestendorsement. Section 17.3 Other Insurance Coverage Requirements 17.3.1 Each Participant will bear the cost of the required insurance.Insurance required to be maintained under this Article 17 may be maintained as part of any other policy or policies of the Participant so long as the coverage of such policy or policies is substantially the same as if such coverage were maintained under a separate policy. 17.3.2 These policies must provide that any cancellation,non-renewal or material change be upon 30 days notice to all named insureds.EachParticipantmustprovidetheOperatingCommittee and the APA with evidence or insurance.Insurance companies,or self-insurers,shown on .-thecertificateofinsurancemusthavefinancial ratings acceptable to the APA.Failure to furnish satisfactory evidence of insurance or lapse of the policy is a material breach of this Agreement. ARTICLE 18 Indemnity Section 18.1]Indemnity 18.1.1 Each Participant shall,as to all actions takenpursuanttoorundercolorofthisAgreement,defend and indemnify the other Participants,theiragents,servants,employees and officers,from allcostsincludingwithoutlimitationattorneyfees,court costs,any amounts arising or recoveredundertheWorkman's Compensation Act or other law or decree,and any other amounts which the other Participants,their agents,servants,employeesandofficersbecomeobligatedtopayonaccountof any demands,claims,liabilities or losses arisingorallegedlyarisingoutof,or in any wayconnectedwith,the acts or omissions of the indemnifying Participant,its agents,servants, employees or officers. 18.1.2 Each Participant shall defend and indemnify theotherParticipantsfromandagainstanyclaimor liability,including any related loss or cost,caused by or resulting from the design,construction,installation,operation ormaintenanceofanyoftheelectricfacilitiesowned,operated or maintained by the indemnifyingParticipant,or by reason of the acts or omissionsofitsagents,servants or employees in connectiontherewith.. 35- Section 18.2 Comparative Negligence Each Participant agrees that any liability,including costs of defense and attorney fees,forclaimsarisingfromtheconcurrentnegligenceof two or more Participants will be apportionedaccordingtotherespectivepercentageoffault attributable to each Participant as determined byagreementorbythetrieroffact. ARTICLE 19 Warranty Denial and Exclusivity of Contract Section 19.1 APA Denial of Warranty APA does not warrant the Intertie facilities it owns as fit for their intended use or _thereliabilityoravailabilityoftheIntertiefor intended operations covered by this Agreement.NOSection 19.Exclusivity of Contract The terms of this Agreement and any provisions adopted by reference or otherwise incorporated into this Agreement set forth the full intent of the Participants regarding the matters covered by this Agreement.However,this Agreement does not supercede related Intertie written agreements, such as the maintenance agreements between the APA and Intertie Participants,but is to be interpreted consistently with them. ARTICLE 20 Uncontrollable Forces Section 20.1 20.1.1 A Participant will not be in default in perfor-mance of any obligation hereunder,other than the obligation to make payments as provided in thisAgreement,if failure of performance is due touncontrollableforcesandwithoutthefaultor negligence of that Participant.Strikes,lockoutsandotherlabordisturbancesareconsidered uncontrollable forces and nothing in this Agreement will require a Participant to settle alabordisputeagainstitsbetterjudgment. 20.1.2 If a Participant,by reason of an uncontrollableforce,is rendered unable,wholly or in part,to -36- perform its obligations under this Agreement(other than its obligations to pay money),then upon that Participant giving notice and particulars of the uncontrollable force,its obligation to perform will be suspended during the continuance of any inability so caused,but for no longer period,and the effects of such cause shall,so far as possible,be remedied with all reasonable dispatch;provided,however,that the settlement of labor disputes shall be considered wholly within the discretion of the Participant involved.The affected Participant will not be responsible for its delay in performance underthisAgreementduringdelayscausedby=anuncontrollableforce,nor will such uncontrollable force give rise to claim for damages or constitute 'default. ARTICLE 21 Waivers Any waiver at any time by a Participant of itsrightswithrespecttoadefaultunderthis Agreement,or with respect to any other matterarisinginconnectionwiththisAgreement,shall not be deemed a waiver with respect to any other default or matter.Any delay short of the statutory period of limitations in asserting or enforcing any right shall not be deemed a waiver of such right. ARTICLE 22 Successors and Assigns;No Third Party Beneficiaries Section 22.1 Successors and Assigns This Agreement shall be binding upon and inure tothebenefitofthesuccessors,legalrepresentativesorassignsoftherespectiveParticipants.However,no Participant shallassignthisAgreementnoranyparthereofwithouttheexpresswrittenconsentofthe-otherParticipants,which consent shall not beunreasonablywithheld.Nor shall a Participant berelievedofitsobligationshereunderbyanassignmentoflessthanallofthebenefitsandburdenshereunderorimposeadditionalobligations or burdens on the other Participants by anassignmentofthisAgreementoranyparthereof. 37- Section 22.2 Section 25.1 25.1.1 No Third-Party Beneficiaries The provisions of this Agreement shall not create any rights in favor of any person,corporation,or association not a Participant in this Agreement,and the obligations herein assumed are solely for the use and benefit of the Participants to this Agreement. ARTICLE 23 Governing Law This Agreement is made subject to,and shall be governed by and construed in accordance with,thelawsoftheStateofAlaskaandtheauthority 'granted to the individual Participants thereunder. ARTICLE 24 Captions Captions of the various articles herein are- intended for convenience of reference only andshallnotdefineorlimitanytermsorprovisions. ARTICLE 25 Notices Any notice or demand under this Agreement isproperlygivenifsentbyregisteredorcertifiedmailandaddressedtotheGeneralManager, Municipality of Anchorage,Alaska,Municipal Light and Power,1200 East First Avenue,Anchorage, Alaska 99501;Executive Director,Alaska Power Authority,334 W.Fifth Avenue,Anchorage,Alaska99501;General Manager,Chugach ElectricAssociation,Inc.,Pouch 6300,Anchorage,Alaska 99503 or 5601 Minnesota Avenue,Anchorage,Alaska 99502;General Manager,City of Fairbanks,Municipal Utilities System,P.O.Box 2215,645FifthAvenue,Fairbanks,Alaska 99707;General Manager,Golden Valley Electric Association,Inc.,P.O.Box 1249,Fairbanks,Alaska 99707 or 758 Illinois Street,Fairbanks,Alaska 99701;and Interim General Manager,Alaska ElectricGenerationandTransmissionCooperative,Inc., P.O.Box 1148,Palmer,Alaska 99645.The -38- foregoing designations of the name or address towhichnoticesordemandsaretobedirectedmaybechangedatanytimebywrittennoticegivenbyanyParticipanttoallothers. 25.1.2 Any notice or request of a routine character in connection with the delivery of Power and Energy,or in connection with the operation of facilities,shall be given in the manner the OperatingCommittee,or the authorized representatives oftheParticipants,from time to time arranges. ARTICLE 26 Amendments Neither this Agreement nor any part hereof may beterminated,amended,supplemented,waived or modified except by an instrument in writing signedbyalltheParticipants. ARTICLE 27 Agreement Approval and Transmittal This agreement shall not be effective until the ere Administrator of the Rural Electrification Administration grants any required approval.TheAPAwilltransmitthisagreementwiththeAlaska Public Utilities Commission.By signing this agreement,a Participant does not subject itself to rate regulation by the Alaska Public Utilities Commission. ARTICLE 28 Construction of Agreement Each Participant has participated fully in the drafting and negotiation of this Agreement. Accordingly,the Agreement will not be construedagainstanyparticularParticipant,orParticipants,as the drafter. IN WITNESS WHEREOF,the Participants have caused this Agreementtobeexecutedinquintupletbytheirdulyauthorizedofficersor representatives as of the day and year first above written. -39- ow ALASKA POWER AUTHORITY Approved as to form: Otfice of the'Attorney General By:VIELE SUBSCRIBED AND SWORN TO before me this 12/4 day of,1985 last written. MUNICIPALITY OF ANCHORAGE,-ALASKA dba MUNICIPAL LIGHT & POWER By: v A --ltuniespal Manager - Ly "SUBSCRIBED AND SWORN TO before me this _397?@¢day ofLoopyfee!»1985 last written. y Commission Expires:LILIA CHUGACH ELECTRIC ASSOCIATION, INC.ms bad Thidle General Manager SUBSCRIBED AND SWORN TO before me this aL)day ofOztonLier/_,1985 last written. "Notary Public,State of AlaskaMyCommissionExpires://-§-58 -40- eet pe CHUGACH ELECTRIC ASSOCIATION, INC.By:One LY MuneUf"OS President of the Board SUBSCRIBED AND SWORN TO before me this lg pe day ofWetabor,1985 last written. Notary Public,State of AlaskaMyCommissionExpires://-£-&S5 CHUGACH ELECTRIC ASSOCIATION,INC. By:ma .ne a7 . Vice-President of the Board 0)WS 19 AND SWORN TO before me this [7H day of,1985 last written. Notary Public,State of AlaskaMyCommissionExpires://-f--§ CITY OF F ANKS,ALASKA IIATIES SYSTEM /(Title) SUBSCRIBED AND SWORN TO before me this /9Z{%,day ofLees.baw ,1985 last written. Notary Public,Statg¢of Alaska My Commission Expires:sy-/7-27 -4l- Lace my GOLDEN VALLEY ELECTRIC ASSOCIATION,INC.beh nalCony.atta SUBSCRIBED AND SWORN TO before me this /¢7 day of»1985 last written. \Decem FL.,1985 last written. Aut ()CowittheNotaryPublidyState of AlaskaMyCommissionExpiires;:My CommissicnExpires:"January17,1987 ALASKA ELECTRIC GENERATION and* (Title) SUBSCRIBED AND SWORN TO before me this ae day of 42- Aetna,AGES Agreement reached by the General Managers of the Utility Participants onDecember15,1994. The General Managers unanimously agree in settlement of the ML &P Appeal of July 17.1992 as follows 1.Motions |and 2 of the December 12,1994 letter from ML &P on the matter of the Appeal are referred back to the [OC for further consideration and recommendation to the General Managers. 2.The selling of energy generated from a Utility Participant's required spinning reserve by the loading of the unit(s)designated as maintaining spinning reserve capacity may only occur if the provisions for spinning reserves or load shed in lieu of the spin,as written in B-2.4.2 of Addendum No.|of the Intertie Agreement,are complied with by purchasers or sellers. 3.The Utility Participants shall beginning Jan.1,1995 maintain a daily record of spinning reserves on an hourly basis,power quality,and continuity of Intertie power transfer.The daily report shall be compiled by the Northern and Southern Intertie Operators from inputs received from their respective Utility Participants.The format.criteria,and specific contents shall be as directed by the IOC.The report shall be summarized quarterly and submitted in writing by the Northern and Southern Intertie Operators to the IOC for review for contract compliance and for other purposes of the Utility Participants. 4.It is understood that this agreement shall prevent any Utility Participant from making any and all claims against any other Utility Participant as relates to past operations under the terms of the Alaska Intertie Agreement,its Addendum and Exhibits. Signed, Thomas R.Stahr mentalejorpstadGeneralManagerGeneralManager Municipal Light &Power yhElectricAssociationMikeMAW General Manager Golden Valley Electric Association W4 S46VincenzoMottolaRobertHufman Electric Utility Executive a General Manager AEG &T Fairbanks Municipal Utility SystemsZocrrna{iy tage Norman Story Wayne Carmony General Manager General Manager Homer Electric Association Matanuska Electric Association (Member of AEG &T)(Member of AEG &T) ADDENDUM NC.1 TO THE ALASKA INTERTIE AGREEMENT RESERVE CAPACITY AND OPERATING RESERVE RESPONSIBILITY This Addendum No.1 is made this _33,./day of Get cms De pois+964,by the Utility Participants,THE MUNICIPALITY OF AN RAGE,ALASKA,d.b.a.MUNICIPAL LIGHT &POWER;CHUGACH ELECTRIC ASSOCIATION,INC.;THE CITY OF FAIRBANKS,ALASKA,MUNICIPAL UTILITIES SYSTEM;GOLDEN VALLEY ELECTRIC ASSOCIATION,INC.; and ALASKA ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE,INC.,signatories to the Alaska Intertie Agreement,datedYernabrx23,1985,hereinafter referred to as "Agreement"'.Thesignatorypartiesarehereinafterreferredtoas"UtilityParticipants". WITNESSETH WHEREAS THE MUNICIPALITY OF ANCHORAGE,ALASKA,d.b.a.MUNICIPAL LIGHT &POWER;CHUGACH ELECTRIC ASSOCIATION,INC.;THE CITY OF FAIRBANKS,ALASKA,MUNICIPAL UTILITIES SYSTEM;GOLDEN VALLEY. ELECTRIC ASSOCIATION,INC.;and ALASKA ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE,INC.are all Utility Participants and signatories to the Alaska Intertie Agreement;and WHEREAS the ALASKA POWER AUTHORITY is a Participant and signatorytotheAlaskaIntertieAgreement;and WHEREAS the signatories to the Alaska Intertie Agreement desire to have a separate agreement involving only Utility Participantswithreserverequirementresponsibilityontheinterconnected system; NOW THEREFORE,the Utility Participants agree as follows: ARTICLE A Reserve Capacity Section A-l.] A-1.1.1 Each Utility Participant expects and is expectedtomaintainutilityresponsibilityforitsownloadand,as a part of such responsibility,shallmaintainorotherwiseprovideforannually,Accredited Capability in an amount equal to orgreaterthanitsmaximumSystemDemandforsuchyearplussuchUtilityParticipant's ReserveCapacityObligation,as set forth in Subsection A-1.1.2 of this Section. A-1.1.2 The Reserve Capacity Obligation of a UtilityParticipant,for any year,shall initially be Addendum No.1 -1 of 8 A-1.1.3 Section B-2.1 B-2.1.1 B-2.1.2 Section B-2.2 B-2.2.1 equal to thirty (30)percent of the projectedAnnualSystemDemandofthatUtilityParticipant.The Reserve Capacity Obligation of theParticipantsmaybeadjustedfromtimetotimebytheOperatingCommittee. The Operating Committee may determine the annual Accredited Capability for each Utility Participant. ARTICLE B Responsibility for Operating Reserve Operating Reserve Each Utility Participant shall provide SpinningReserveandNon-Spinning Reserve as required.by Section B-2.2 of this Article equal to or greater than the Operating Reserve Obligation of the Participant.As soon as practicable,but not toexceedfourhours,after the occurrence of an.incident which uses Operating Reserves,each Utility Participant shall restore its Operating Reserve Obligation by the procedures determined by the Operating Committee. The Operating Reserves,Operating ReserveObligationandUtilityParticipant's Allocationmaybemodifiedoradjustedfromtimetotimeby the Operating Committee. Total Operating Reserve Obligation The Total Operating Reserve Obligation at any timeshallinitiallybeanamountequalto150percent of the capability of the largest generating unitcontingencyinoperationontheinterconnected systems of the Utility Participants. B-2.2.1.1 The Spinning Reserve portion of thetotalIntertieSystemshallnotbeless than an amount equivalent to 100 percent of the Declared Capability.of the largest generating unit contingency inoperationontheinterconnectedsystems..of the Utility Participants.TheDeclaredCapabilitywillbeas determined by the Utility Participant. B-2.2.1.2 The balance of the Total Operating Reserve Obligation shall be maintained with Non-Spinning Reserve. Addendum No.1 -2 of 8 mere” B-2.2.2 B-2.2.3 Section B-2.3. B-2.3.1 Section B-2.4 B-2.4.1 Generating unit capability for Operating Reservesshallbedeterminedbythefollowingcriteria: a.It shall not be less than the load on the machine at any particular time nor greaterthan(b)below. b.It shall not exceed that maximum amount of load (MW)that the unit is capable ofcontinuouslysupplyingforatwo-hour period, or immediately supplying through action ofautomatiegovernorcontrols. The criteria specified in this section may be modified or changed by the Operating Committee. Utility Participant's Allocation of Operating Reserves The Operating Reserve Obligation of a UtilityParticipantshallbethatpercentageoftheTotal Operating Reserve Obligation determined by the'Operating Committee in accordance with thefollowingformulabasedonthecapabilityof largest generating unit contingency in operation at each Utility Participant. B-2.3.1.1 Individual Utility Participant Reserve Allocation Formula IOR =TOR x Us/Ut IOR Individual Utility Participant Operating Reserve Requirement TOR =Total Operating Reserve Requirement Us =A Utility Participant largest on-line generation unit capability Ut =Sum of each Utility Participant's Us Operating Reserve Calculation System Spinning Reserve shall be calculated at anygiveninstantasthedifferencebetweenthesumofthenetcapabilityofallgeneratingunitsonlineintherespectivesystemandtheintegrated Systems Demand of the system involved. Addendum No.1 -3 of 8 B-2-.4.2 B-2.4.3 B-2.4.4 B-2.4.5 B-2.4.6 B-2.4.7 A Utility Participant's Spinning Reserve may besatisfiedbyanautomaticallycontrolledloadsheddingprogram.The load shedding program shall assure that controlled load can be dropped to meet the requirements of Spinning Reserve and in such a manner as to maintain system stability and notcauseobjectionablesystemconditionsorcascadingeffectsinotherUtilityParticipants'systems. The Operating Committee shall review and approvetheUtilityParticipant's load shedding program that will be used to satisfy its Spinning Reserverequirements.| The Operating Committee may establish procedurestoassurethattheOperatingReserveisavailable on the systems of the Participants at all times.Whenever a Participant is unable to meet its Operating Reserve Obligation,that UtilityParticipantwillimmediately,within two hours, advise all other Utility Participants and make arrangements to restore its Operating Reserve Obligation. Prudent Utility Practices shall be followed in distributing Operating Reserve,taking intoaccounteffectiveutilizationofcapacityinanemergency,time required to be effective,transmission limitations and local area requirements. A Participant may arrange for one or more otherUtilityParticipantstosupplypartorallofits Operating Reserve requirement. In an emergency,any Utility Participant,upon request by another Utility Participant,shall supply to such requesting Utility Participant partorallofitsOperatingReserveuptothefullamountofitsAvailableAccreditedCapability.A Utility Participant experiencing an emergency is not required to maintain its Operating ReserveObligation.There shall be no obligation of aUtilityParticipanttosupplyOperatingReserveif the requesting Utility Participant is not makingfulluseofitsAvailableAccreditedCapability. Except as otherwise agreed,a Utility ParticipantsupplyingaportionorallofanotherUtilityParticipant's Operating Reserve during any monthshallbepaidbythepurchasingUtilityParticipantanamountequaltowhicheveris greater of the following: Addendum No.1 -4 of 8 eT, B-2.4.7.1 110 percent of the Incremental Cost of supplying such service;or B-2.4.7.2 The Incremental Cost of supplying such service plus one-half of the overall savings involved in such transaction, which overall savings shall be equal tothedifferencebetweentheIncremental Cost of the selling Utility Participant and the Decremental Cost of the purchasing Utility Participant. B-2.4.8 If a Utility Participant fails to provide adequateOperatingReserve,other than because of a forced outage,during any such period the deficient Participant shall pay to the other Utility 'Participants an amount equivalent to two times thecostavoidedbythedeficientUtilityParticipantfornotstartingand/or operating any generating unit or units which would ordinarily be used to provide adequate Operating Reserve.Should the Utility Participant not have adequate Accredited: Capability to provide the Operating Reserves,it shall pay the other Utility Participants two times the cost for starting and operating the highest cost generating unit on the deficient Utility Participant's system.This payment shall be shared by the other Utility Participants in the same proportion that their individual AnnualSystemDemandistothenon-deficient UtilityParticipants'total Annual System Demand.Payments under this section B-2.4.8 of thisArticleBshallbewaivedforthefirstyearof operation of the Intertie. IN WITNESS WHEREOF,the Utility Participants have executed this Addendum No.1 to the Alaska Intertie Agreement in quintuplet by their authorized officers or representatives as of the day and year first above written. MUNICIPALITY OF ANCHORAGE, ALASKA dba MUNICIPAL LIGHT & POWERBy:th Aukalumerga!lawasGOr- / >SUBSCRIBED AND SWORN TO before me on the 34377 _dayofODE:,1985. Addendum No.1 -5 of 8 Lhe teenNotaryPublic,State of AlaskaMyCommissionExpires:SLU-$G CHUGACH ELECTRIC ASSOCIATION, INC. oO \S General Manager- ley Fe AND SWORN TO before me on the /Y"A'davof By: fy,1985. Notary Public,State of A aoeMyCommissionExpires:fi -P-f.. CHUGACH ELECTRIC ASSOCIATION, ory INC. By:Queer seshmta XX President of the Board UBSCRIBED AND SWORN TO before me on the [7 HA.dayofDounler/1985. Notary Public,My Commission Expires:({/-§-§5 CHUGACH ELECTRIC ASSOCIATION, INC. 4By:Qaesed 2H Ze eee Lf &Vice-President of the Board Addendum No.1 -6 of 8 SUBSCRIBED AND SWORN TO before me on the /7 44 dayofbecomber»1985. 7 - 'Notary Public,State of PSEBMyCommissionExpires:5-4. Lf (Title) SUBSCRIBED AND SWORN TO before me on the _/fZ%"dayofDerrenJaw11985. robs iS aie of Alaska My Commission Expires:so-/7-y7 GOLDEN VALLEY ELECTRIC ASSOCIATION,INC.By:MWe.J M,Cen.Ma YO.(Titley} b V4,SUBSCRIBED AND SWORN TO before me on the /dayofMycomber,1985. irate0 GuatNotaryLepeleOL.AdedrtcKaa ExpiresMyCommissionExpires:serezrsit 1997 Addendum No.1 -7 of 8 -™'of /E ALASKA ELECTRIC GENERATION and TRANSMISSION COQPERATIVE,INC. UBSCRIBED AND SWORN TO before me on the //7*%4 day ,1985. Addendum No.1 -8 of 8 rote, Taeet SaDOWNFPWWbdEXHIBIT A ALASKA INTERTIE AGREEMENT ABBREVIATIONS AND DEFINITIONS ABBREVIATIONS AMLP -Municipality of Anchorage,Alaska d.b.a., Municipal Light and Power APAdm -Alaska Power Administration APA -Alaska Power Authority CEA -Chugach Electric Association FMUS -Fairbanks Municipal Utilities System GVEA -Golden Valley Electric Association AEGTC -Alaska Electric Generation and Transmission Cooperative,Inc.,of which Homer Electric Association, Inc.and Matanuska Electric Association,Inc.are members. Definitions Accredited Capability of a Participant -The (a)netgeneratingcapabilityofaParticipant,plus (b)thevalueinkilowattsassignedtothatParticipant's purchases and/or firm commitments for Power from electric suppliers under contracts now existing orhereaftercreated,and minus (c)the value in kilowatts assigned to any commitment of that Participant todeliverpowertoanyelectricsupplierorsupplierspursuanttoanyvalidorderorunderseparatecontractorcontractsnowexistingorhereaftercreated.TheAccreditedCapabilityofaParticipantmaybe determined and assigned by the Operating Committee in accordance with the provisions of this Agreement. Annual System Demand -The highest System Demandoccurringduringthe12-month period ending with the current month.: 'Available Accredited Capability of a Participant - Accredited Capability adjusted for generating capacity out of service for maintenance or repair. Exhibit A -1 of 10 wore p 4.Commercial Operation -That date and time Intertie construction,testing,and energization is complete andAMLPandGVEAareinitiallyinterconnectedinsynchro-nous operation and supporting relaying,metering and control systems are adequate to allow reliable trans- mission of power and energy across the Intertie. Contract Power -Power and Energy to be available atalltimesduringtheperiodcoveredbythecommitment,except that such Power and Energy may be interrupted in the event conditions arise during the period covered by the commitment which in the judgment of the supplier would require curtailment of electric service to the supplier's own systen. Contract Transmission Service -A service providing for transmission of electric Power and Energy in bulk from one utility through the utility's transmission system providing the transmission service to another utility. This service is intended to be available at all times during the period covered by the commitment;provided however,if the transmission system involved has. experienced a reduction in transmission capabilityrequiringareductionintransfers,the utilitysupplyingthetransmissionservicehastherightto notify and require the receiving utility to reduce its transfer in the sam=percentage as the reduction in transmission system transfer capability. Control Area -An interconnected system of one or more utilities which manually or automatically controls allgenerationtomeetthetotalload,plus or minus thepoweritisdeliveringorreceivingfromneighboring systems. Control Area Service -Exercising operating control of the resources necessary to meet the loads within acontrolareaonaninstantaneousandcontinuousbasis. The Participant exercising operating control for Control Area Service shall; a.Regulate generating facilities and other powerresourcestoeffectinstantaneousandcontinuous supply of the power requirements of the loads within the Control Area. b.Regulate generating facilities to assist in thecontroloffrequencyandtimecorrection. c.Monitor continuously the power flows between itsControlAreaandtheControlArea(s)with which it is interconnected. Exhibit A -2 of 10 10. ll. 12. 13. 14, Declared Capability -The current capability of ageneratingunitwhichisnotgreaterthanthepublishedcapabilityoftheunit. Decremental Cost -The cost of fuel,operating laborandmaintenancewhichwouldhavebeenincurredto provide the Operating Reserves at any time and whichareavoidedbytheotherParticipant,including thecostofavoidingthestartingandoperatingofageneratingunitorunitsandaproportionalamountoftheannualdebtserviceonthecapitalinvestmentof the highest cost:(per kw)generating unit on thereceivingParticipant's system.The decremental costofOperatingReservesshallbethetotalofsuch avoided costs to the receiving Participant.In situations where a Participant would have incurred replacement fuel costs which are higher than the cost of existing fuel supply,replacement costs shall be utilized. Decremental Energy Cost -The cost of fuel,operatinglaborandmaintenancewhichwouldhavebeenincurredto' generate the next unit of Energy required at any timeandwhichisavoidedbythepurchaseofEnergyfromtheotherParticipant,including the cost of avoiding the starting and operating of a generating unit or units.The decremental cost per kilowatt hour for anyparticulartransactionshallbethetotalofsuchcosts divided by the kilowatt hours scheduled for delivery to the receiving Participant.In situations where aParticipantwouldhaveincurredreplacementfuelcostswhicharehigherthanthecostofexistingfuelsupply, replacement costs shall be used. Economy Energy -Energy that is delivered from a utility with a lower incremental production cost to autilitytodisplacegenerationatahigherincrementalcost.This Energy schedule may usually be interrupted with little or no notice. Emergency Energy -Energy that is delivered to autilitywhichdoesnot,as a result of a Forced Outage,have sufficient generating capacity,either on its ownsystemorarrangedforfromotherutilities,to carryitscustomerloadresponsibility. Emergency Outage (Forced Outage)-Any unanticipated,unscheduled outage of generating or transmissionfacilitiesforotherreasonsthanplannedmaintenance.Such outage classification shall not exceed a period of four hours. Exhibit A -3 of 10 15. 16. 17. 18. 19, 20. 21. Energy (Electric)-As commonly used in the electricutilityindustry,electric energy means kilowatt hours(kwh). Incremental Cost -The cost of fuel,operating labor,maintenance and a proportional amount of the annualdebtserviceonthecapitalinvestmentofthenext generating unit that would be used to provide the required capability and Energy.It shall include the cost of starting and operating any generating unitrequiredtoprovidesuchEnergy.The incremental cost of supplying Operdting Reserve shall be the total ofsuchcostsfortheperiodoftime situations where a Participant will incur replacementfuelcostswhicharehigherthanthe involved.In cost of the existing fuel supply,replacement costs shall be used. Incremental Energy Cost -The cost of fuel,operatinglaborandmaintenancetogeneratethenextunitof Energy required at any time,including the cost ofstartingandoperatinganygeneratingunitwhichmustbestartedasaresultofsupplyingsuchEnergy.The-> incremental cost per kilowatt hour for any particular transaction shall be the total of such costs divided by the kilowatt hours scheduled for receiving Participant. delivery In situations to the where a Participant will incur replacement fuel costs which arehigherthanthecostofexistingfuelsupply, replacement costs shall be used. Interruptible Transmission Service -A service provid-ing for transmission of electric Energy in bulk fromoneutilitysystemthroughtheutility's transmissionsystemprovidingthetransmissionservicetoanothermadeavailablewiththe understanding that it can be curtailed or interruptedatanytimewithlittleornonoticeatthediscretion utility.This service of the supplier. Intertie -The transmission facilities is owned by or under contract to the Alaska Power Authority intercon- necting the Northern Group with the Southern Group. Intertie Point of Interconnection -The Midpoint of the Intertie transmission line between the Healy Substation and Douglas Substation,which "is also theinterconnectionbetweenAMLP's and GVEA's Areas. Intertie Operators -The operators at the point of Control control centers of AMLP and GVEA,which are the utilities that have operational responsibility for the Intertie. Exhibit A 4 of 10 22. 23. 26. 27. 28. 29. 30. 31. 32. 33. Intertie System -The Participants of the AlaskaIntertieAgreementfunctioningasaninterconnectedelectricalsystem. Intertie Transaction -Transfer of electric energy or acommitmenttoprovidereservecapacitybetweentheutilitiessignatorytotheAlaskaIntertieAgreementintheNorthernGroupandtheSouthernGroupusingthe Intertie. Midpoint of the Intertie -The midpoint of the Intertie is at structure Nod.382.The structure is Type E,a 45°L,three-guyed deadend structure.It is locatedapproximately84.6 miles from the initiation point at the Douglas Substation. MITCR -Minimum Intertie Transfer Capability Rights discussed in Article 7. Net Generating Capability -That amount of kilowatts,less station use,that all the generating facilities of a system could normally supply simultaneously under> criteria established by the Operating Committee.The capability of the generating units which are tempo-rarily out of service for maintenance or repair shallbeincludedintheNetGeneratingCapability. Non-Spinning Reserve -All unloaded generating capabil- ity not meeting the Spinning Reserve criteria that canbemadefullyeffectivein45minutes. Northern Group -FMUS,GVEA. Operating Committee -The committee established by Article 9 of this agreement. Operating Reserve -The sum of Spinning and Non-Spinning Reserves. Operating Reserve Obligation -That amount of Spinning Reserve and Non-Spinning Reserve which a Participant is obligated under the terms of this Agreement to provide for the purpose of maintaining continuity of service. Planned Maintenance -Any anticipated and scheduledoutageofgeneratingortransmissionfacilitiesthatisplannedinadvanceoftheequipmentbeingremovedfrom service. Participant -Any entity which is a Participant to this Agreement. Exhibit A -5 of 10 34. 35. 36. 37. 38. 39. 40. Power (Electric)-The time rate of generating,trans-ferring or using electric Energy,usually expressed inkilowatts.- Prudent Utility Practices -Prudent Utility Practicesataparticulartimemeansanyofthepractices,methods and acts which,in the exercise of reasonable judgment in light of the facts known at the time the decision was made,would have been expected to accomplish the desired result at the lowest reasonablecostconsistentwithreliability,safety and expedition,including but not limited to the practices, methods and acts engaged in or approved by a significant portion of the electrical utility industrypriorthereto.In applying the standard of Prudent Utility Practices to any matter under the Agreement, equitable consideration should be given to_the circumstances,requirements and obligations of each oftheParticipants,and the fact that the Participants are cooperatives,public corporations,or politicalsubdivisionsoftheStateofAlaska'with prescribed statutory powers,duties and responsibilities.It is. recognized that Prudent Utility Practice are not in-tended to be limited to the optimum practices,methods or acts to the exclusion of all others,but rather is a spectrum of possible practices,methods or acts whichcouldhavebeenexpectedtoaccomplishthedesiredresultatthelowestreasonablecostconsistentwith reliability,safety and expedition.Prudent UtilityPracticesincludedueregardformanufacturers' warranties and the requirements of governmental author- ities having jurisdiction. Reserve Capacity -The excess in kilowatts of a system's Net Generating Capability over its maximum System Demand for any period. Reserve Capacity Obligation -The capacity which aParticipantisobligatedtoreserveanduseforthepurposeofmaintainingcontinuityofservice. Scheduled Outage -Any outage of generating or trans-mission facilities which is scheduled in advance to be out of service. Southern Group -AMLP,CEA,AEGTC,APAdm. Spinning Reserve -The amount of unloaded generatingcapabilityofaParticipantconnectedto_andsynchronizedwiththeinterconnectedsystemoftheParticipantsandreadytotakeload.Spinning Reserveallocationtoanygeneratorshallnotexceedtheamount Exhibit A -6 of 10 of generation increase that can be realized immediatelyfromnormalgovernorcontrol. 41.System Demand -That number of kilowatts which is equal to the kilowatt-hours required in any clock hour, attributable to Energy required during such hour forsupplyofEnergytoasystem's consumers,including system losses,and also including any wheeling losses occurring on other systems and supplied for trans- mission of such Energy,but excluding generatingstationusesandexcludingwheelinglossessuppliedby another system.- 42.Total Operating Reserve Obligation -That amount ofSpinningReserveandNon-Spinning Reserve of the Participants collectively required to maintain conti- nuity of service. 43.Transmission Service -Service provided by the use of the transmission system of a Participant directlyconnectedtotheIntertieforwheelingofpowerand energy through its system for another Participant.. 44,Transmission Service Facilities -The integrated transmission facilities of the transmitting utility, Ee excluding power plant step-up transformation and radialaneslinestoloadsorgenerators. 45.Utility Participant -Any Participant other than APAuntilAPAbecomesaUtilityParticipantunderArticle4 of the Agreement. ALASKA POWER AUTHORITY Office of the Attorney General By:LIA UBSCRIBED AND SWORN TO before me this 25 day of ,1985 last written. Exhibit A -7 of 10 \neieasele MUNICIPALITY OF ANCHORAGE, ALASKA dba MUNICIPAL LIGHT & POWER . cBy:of.F Muywe wal Nha wager(Title)wi) SUBSCRIBED AND SWORN TO before me this 237a dayofLi»1985 last written. CHUGACH ELECTRIC ASSOCIATION, INC. \ By: J General ManagerSUBSCRIBEDANDSWORNTObeforemethisVIZ dayof,1985 last written. of Wreee Notary Public,State oMyCommissionExpires:/-f-&£ CHUGACH ELECTRIC ASSOCIATION, INC. A edBy:eget IP LAE President of the Board SUBSCRIBED AND SWORN TO before me this /7%dayryftY__,1985 last written. Exhibit A -8 of 10 fas 5Sree (frvitienoon"Notary Public,State ofAlaskaMyCommissionExpires://-f-50 CHUGACH ELECTRIC ASSOCIATION, INC. -By :.7.2 ww Vice-President of the Board 1 SUBSCRIBED AND SWORN TO before me this/7 dayoff/,1985 last written.; (fneswe Notary Public,State ofAlaskaMyCommissionExpires://-§-66 CITY OF FAIRB MUNICIPAL U S,ALASKA IES SYSTEM MANAGER ](Title) Exhibit A -9 of 10 shotSelahintaate] SUBSCRIBED AND SWORN TO before me this _/g&dayof,1985 last written. nega SpE RREEEC Of RlaskaMyCommissionExpires:/o-/7-¥7 GOLDEN VALLEY ELECTRIC ASSOCIATION,INC. (so.e Me,Y.(Title)J SUBSCRIBED AND SWORN TO before me this [Eth day-of Doopentun ,1985 last written. Kj.Cmct teNotdryPuAidyState of AlaskaMyCoumievionExpiresss227mtrerixo-rerrelcrememary.737 ALASKA ELECTRIC GENERATION and TRANSMISSION COOPERATIVE,INC. of Decenbee Exhibit A -10 of 10 memeoae EA GCbnmmeeaf sss=y :ail pp om 1!pewter terme re reseesy<---!i it ba '*FOOLER 1 fy Seen amen Saeed ar;Tee sere eine!!oa j j > ioad --srorie 2!j feasts i!:.ert iat |!3s Pt wayLeyas31<8 72 ° aru bs ;L "="2 ' 'i ee ayan!menMacon rhs one ;CANTWELL .HEALY 2 PMIDPOIRTOFIMTERTIEcaraois H wv” mom imememens74i Crepe myAPAwi_fc Tereeome m2:iisey 11SKy forenoon >|iS oe.PFCLOCR wo,3:18 MOONOw watt 1)MUG :!3 s Coruna a ve esere dng to4 oeia:1 bomen ANS . 3 ry |brPOOPryEiPFEpCia:ch oSeh,a mn.aa TEELANDaeei34.5K¥ mat fowl 4[ete [Iioon CIMT we 2ESL4g 1S eva tne(oun quel EXHIBIT B ALASKA INTERTIE AGREEMENT INTERTIE FACILITIES DIAGRAM suv CIAMUIT mm 1i:treetMBSistlon LEGEND OWNERSHIP OF INTERTIE PACILITIES ome BOUNDARY OF APA INTERTIE-FACILITIES ,BOUNDARY OF FACILITIES OWNED"BY PARTICIPATING COMPANIES sommoneoennms APA LINE mameOVER LINE EXHIBIT B-1 of 3 2. .0 0 EXHIBIT C ALASKA INTERTIE AGREEMENT TRANSMISSION SERVICE RATES The Transmission Service Rates shall be developed inaccordancewiththerateformulasprovidedinSection2ofthisExhibitC.Such Transmission Service Rates shall be developed using the most recent test period approved for rate making purposes.The formulas as provided in this exhibit shall remain in effect until changed by the Participants to the Intertie Agreement. Transmission Service Rate Formulas 2.1 Calculation of the Interruptible Transmission Service Rate shall be in accordance with the following rate formula and the definitions in Section 2.3 of this Exhibit C.- -2.1.1 Interruptible Transmission ;d+e Service Rate (¢/kwh)formula =a+b+tcec#t 4 £ 2.2 The Contract Transmission Service Rate will be a two part rate:(1)an energy rate and (2)a demand rateandbecalculatedinaccordancewiththefollowingrate formulas and the definitions in Section 2.3 of this Exhibit C. The demand rate formula is developed as an annual rate. For periods less than a year,the rate shall be proportionally reduced. 2.2.1 Contract Transmission Service Rate formulas: 2.2.1.1 Energy Rate (¢/kwh)=atbite= 2.2.1.2 Annual Demand Rate =dt+e g ($/kw) 2.2.1.3 Monthly Demand Rate =d+t+e ($/kw)12g 2.3 Transmission Service Rate Definitions a ="Operating and Maintenance Expenses"(O &MExpenses)shall be those expenses defined in the Exhibit C -1 of 6 Federal Energy Regulatory Commission (FERC)Uniform System of Accounts that are associated with the transmission facilities used in providing the involved Transmission Service.The accounts to be used in the appropriate proportions todeterminetheTransmissionServiceRateareas follows: 556 System control and load dispatching560Operationsupervisionandengineering561Loaddispatching562Stationexpenses563Overheadlineexpense564Undergroundlineexpense566Miscellaneoustransmissionexpense 567 Rents . 568 Maintenance supervision and engineering 569 Maintenance structures 570 Maintenance of station equipment 571 Maintenance of overhead lines 572 Maintenance of underground lines 573 Maintenance of miscellaneous transmission plant Administrative and General Expenses"(A &G Expenses)shall be those expenses defined in the Federal Energy Regulatory Commission (FERC)Uniform System of Accounts that are associatedwiththetransmissionfacilitiesusedinproviding the involved Transmission Service.The accounts to be used in the appropriate proportions to determine the Transmission Service Rate are as follows: 920 Administration and general salaries 921 Office supplies and expenses 923 Outside services employed 924 Property insurance 925 Insurance and damages 926 Employee pension and benefits 930.2 Miscellaneous general expense 932 Maintenance of general plant "Tax Expenses"shall be those tax expenses defined in the Federal Energy Regulatory CommissionAccount408.1 directly associated with thetransmissionfacilitiesusedinprovidingthe Transmission Service other than income taxes. "Depreciation Expense”shall be the annual Exhibit C -2 of 6 ° depreciation expenses defined in Federal Energy |Regulatory Commission Account 403 and 407 that are associated with the transmission facilities used in providing the Transmission Service. e ="Capital Costs"shall be the annual interest expenses defined in Federal Energy RegulatoryAccount427onthetransmissionplantofallcapitalizedcostsassociatedwiththetransmission facilities used in providing the Transmission Service. f ="Kilowatt hours'shall be the total annual kilowatt hours at transmission system input to betransferredbythetransmissionfacilitiesusedin providing the Transmission Service for the test period referred to in section 1.0 of this ExhibitC. g ="Kilowatts of transfer capacity"shall be the peakloadinkwonthetransmissionfacilities providing the Transmission Service for the test' period referred to in section 1.0 of this Exhibit C. MUNICIPALITY OF ANCHORAGE,ALASKA dba MUNICIPAL LIGHT AND POWERLlBost -thang fanaa SUBSCRIBED AND SWORN TO before me this .23?day ofJpenba,»1985 last written. ALASKA POWER AUTHORITY ..pl bllideeZiDifeosefcoe Exhibit C -3 of 6 Dwealate-SUBSCRIBED AND SWORN TO before me this zed day of Cerrmlere ,1985 last written.; Mee ubLic,Ed eo:€f3 RSKaTVaitokon'3Exodress CHUGACH ELECTRIC ASSOCIATION, INC. General Manater SUBSCRIBED AND SWORN TO before me this /7*%hy day of,1985 last written. Geeen bere Soar)Obpistinury) Notary Public,State of AlaskaMyCommissionExpires://-f-4¢,SF CHUGACH ELECTRIC ASSOCIATION, INC. By:rez 22 wifi7Ja', President of the Board SUBSCRIBED AND SWORN TO before me this HA day of ,1985 last written 4 otary Public,State of AlaskaMyCommissionExpires://-,£(-f5 CHUGACH ELECTRIC ASSOCIATION, INC. By:(paceth.el.ZFca heLeVice-President of the Board. Exhibit C -4 of 6 7 SUBSCRIBED AND SWORN TO before me this J1t day oflasAp?,1985 last written. Notary Public,State of AlaskaMyCommissionExpires:-S-S& '(litle) SUBSCRIBED AND SWORN TO before me this /7Ze day ofDeebehag,1985 last written. .No y Pu ic,State of AlaskaainiaihMyCommissionExpires:,g-/7-¥7 GOLDEN VALLEY ELECTRIC ASSOCIATION,INC.By:MWe de.KLECrew.Maw (Title)(J SUBSCRIBED AND SWORN TO before me this /G¥A day ofDarga|1985 last written.- My Commission Expires:Wy stmivten yeh Exhibit C -5 of 6 ALASKA ELECTRIC GENERATION and TRANSMISSION COOPERATIVE,INC. 'IN By::or \nse SM(Title) SUBSCRIBED AND SWORN TO before me this //%/day of,1985 last-written. Exhibit C -6 of 6 wien? EXHIBIT D Minimum Intertie Transfer CapabilityRightsDetermination Minimum Intertie Transfer Capability Rights (MITCR)for theUtilityParticipantsfortheyears1985-86,1986-87,and 1987-88willbeassetoutbelow.. Annual System Demand (mw)(June Ist -May 3lst) Three Year 1981-82 1982-83 1983-84 '*Average AMLP 114 121 127 120.67 121 MW CEA .214.6 223 224.4 220.37 220 MW AEGTC 134.6 149.3 156.6 .146.8 147 MW Southern Group Utility Participants Total 483 MW FMUS 26.5 28.2 28.2 27.6 28 MW GVEA 67.9 72.2 74.6 71.56 72 MW Northern Group Utility Participants Total 100 MW The following table lists the percentages by which Intertie usewillbeallocatedifthereisaconflict. AMLP 121 =248 =.25 488 CEA 220 =450 =.45 488 FMUS 28 =28 =.28 GVEA 72 =72 =.72 AEGTC 147 =301 =.30 ery :3:) EXHIBIT D -1 of 4 Minimum Intertie Transfer Capability Rights (MITCR)of eachUtilityParticipantfortheyears1985-86,1986-87 and 1987-88 issetoutbelowbasedontheIntertieTransferCapabilityof70ow. Utility Participant'sMinimumIntertieTransfer Capability Rights AMLP -25 X 70 mw =17.5 mw CEA -45 X 70 mw =31.5 mw FMUS .28 X 70 mw =19.6 mw GVEA .72 X 70 mw =50.4 mw AECTC .30 X 70 mw =21.0 mw 140.0 mw a BL AUTHOR YTYBYLO Exeutive beech Ne |ORs AND SWORN (Title) CITY OF PAT S,ALASKA MUNICIP TIES SYSTEM BY 7 CITY MANAGER (Title) SUBSCRIBED AND SWORN TO before me this s7@m day ofLrecelag,_,1985. Notar:ublic,State/of Alaska My Commission Expires:sg -/7.r7 EXHIBIT D -2 of 4 MUNICIPALITY OF ANCHORAGE, ALASKA dba MUNICIPAL LIGHT & POWERBY Ll 4 4 JMunwere}Dawa Gekitle) SUBSCRIBED AND SWORN TO before me this 2"day ofeT,,1985.feLoLa\AYAL2 Notary /fublic,State ofAlaska My C ission Expires:ZALES GOLDEN VALLEY aASSOCIATI BY MfTat.Maw. Q a(Title) SUBSCRIBED AND SWORN TO before me this Jit day ofeogwhtA,1985. ( General Manager :SUBSCRIBED AND SWORN TO before me this Vee day ofpeanLee1985.f,,oP..:mn / Notary Public,State of AlaskaMyCommissionExpires:{/A §-f£S& EXHIBIT D -3 of 4 een, Poremter , "ez z ' CHUGACH ELECTRIC ASSOCIATION,INC. / 2BY_ Dyed 22)zhp<%i<-)/_- President of the Board SUBSCRIBED AND SWORN TO before me this /74 day of8S:Serbia OprestivnterNotaryPublic,State or AlaskaMyCommissionExpires://-£- CHUGACH ELECTRIC ASSOCIATION,I°C. Mo pep hla 6”et\tym4Vice-President of the = SUBSCRIBED AND SWORN TO before me this [zt say of19854...ay 7) otary Public,State of AlaskaMyCommissionExpires:]/-¥-££ ALASKA ELECTRIC GENERATION and ION Ny INC, fa cia dn(Title) SUBSCRIBED AND SWORN TO/before this s7#day of 1985._"one!a "State or AlagkyMyCommissionExpires:L/L PF/¢ BY EXHIBIT D -4 of 4 AMENDMENT NO.1 TO THE ALASKA INTERTIE AGREEMENT ARTICLE 17 -INSURANCE AND LIABILITY This Amendment No.1 is made this Zr4 day of March[991,by the Participants,ALASKA POWER AUTHORITY,now the AlaskaEnergyAuthority,a public corporation of the State of Alaska ("AEA");the MUNICIPALITY OF ANCHORAGE,ALASKA d/b/a MUNICIPAL LIGHT &POWER ("AML&P");CHUGACH ELECTRIC ASSOCIATION,INC.("Chugach");THE CITY OF FAIRBANKS,ALASKA,MUNICIPAL UTILITIES SYSTEM ("FMUS");GOLDEN VALLEY ELECTRIC ASSOCIATION,INC. ("GVEA");and ALASKA ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE,INC.("AEG&T"),signatories to the Alaska IntertieAgreement,dated December 23,1985,hereinafter referred to as "Agreement.”The signatory parties are hereinafter referred to as "Participants." WITNESSETH WHEREAS THE MUNICIPALITY OF ANCHORAGE,ALASKA,d/b/a MUNICIPAL LIGHT &POWER;CHUGACH ELECTRIC ASSOCIATION,INC.;THE CITY OF FAIRBANKS,ALASKA,MUNICIPAL UTILITIES SYSTEM;GOLDEN VALLEY ELECTRIC ASSOCIATION,INC.;and ALASKA ELECTRIC GENERATION AND TRANSMISSION COOPERATIVE,INC.,are all Utility Participants andsignatoriestotheAlaskaIntertieAgreement;and WHEREAS the AEA is a Participant and signatory to the Alaska Intertie Agreement;and WHEREAS the signatories to the Alaska Intertie Agreement desire to have Article 17 amended; NOW THEREFORE,the Participants agree as follows: ARTICLE 17 Insurance and Liability Section 17.1 Insurance During the term of this Agreement,each Participant shall purchase and maintain insurance with a carrier or carriers satisfactory to the Operating Committee andtheAEAcoveringinjurytopersonsorpropertysuffered by any Participant or a third party,as a result of errors,omissions,or operations which arise both out of and during the course of this contract by the Participant or by any of its subcontractors.Thecoverageshallalsoprovideprotectionagainstinjuries to all employees of the Utility Participant and the employees of any of its subcontractors engaged in work under this Agreement. If approved by the Operating Committee and the AEA, AML&P,FMUS and the AEA may qualify for certain levels of self-insurance.Any such undertaking to self-insure will be furnished to the Operating Committee and theAEAbeforebeginningoperationsunderthisAgreement.' As an additional alternative,group policies shall be acceptable under Section 17.2 of this Agreement if such policies meet the expressed coverage requirements individually and collectively for the signatories of this Agreement.Any other alternative allowed under Sections 17.2 must provide identical or better limits of coverages required for each of the exposures,as specified in that Section 17.2. Section 17.2 Types of Insurance 17.2.1 The following insurance must be provided by each Participant to cover'those operations of the Participants performed under this Agreement: Worker's Compensation Insurance:Each Participant shall provide and maintain,for all employees of the Participant engaged in work under this Agreement, Worker's Compensation Insurance as required by AS 23.30.045.Statutory worker's compensation coverage may be provided through purchase of insurance,self- insurance (in the case of AML&P,FMUS and the AEA only) or a combination of both.A self-insurance program must provide a high level of statutory excess over the self-insured level. Each Participant shall require Worker's CompensationInsuranceforanyofitssubcontractorswhodirectly orindirectlyprovideservicesunderthisAgreement.Each insurance policy must include: (a)Statutory coverage for states in which employees are engaging in work; (b)Employer's Liability Protection of not less than $500,000 per occurrence; 1 Where in this Article 17 the AEA is entitled to self- insurance and there are requirements for approval by the Operating Committee and AEA for such self-insurance,the AEA shall not participate in such approval. - 2- (Cc)Broad Form All States Endorsement; (d)Coverage as required by all State and Federal Acts where applicable; The Worker's Compensation Insurance policy shall contain a waiver of subrogation in favor of the other Participants.Any Participant who is self-insured hereby waives subrogation in favor of the other Participants. AML&P,FMUS and the AEA may self-insure for Worker's Compensation Insurance up to the maximum filed and approved with the State Department of Labor. A copy of the insurance policies and/or descriptions of self-insurance program will be furnished to the Operating Committee and the AEA on February 1 of each year. 17.2.2 Comprehensive General Liability Insurance:Each Participant shall purchase and maintain comprehensive general liability insurance subject to the following limits of liability: (a)Bodily Injury and Property Damage Liability of a minimum of $5,000,000 Combined Single Limits each occurrence and affording insurance for Premises- Operations,Owners'and Contractors'Protective, Independent Contractors,Products/Completed Operations,Blanket Contractual Liability,Broad Form Property Damage,and Personal Injury Liability. (b)Automobile Liability Insurance covering all vehicles.Such insurance shall provide coverage of not less than $5,000,000 Combined Single Limit each occurrence for Bodily Injury and Property Damage Liability. (c)Owned Aircraft (if applicable)and Non-Owned Aircraft with seating capacity of five seats or less,except commercial,scheduled flights,with limits of liability not less than:$5,000,000 - Bodily Injury per occurrence;$1,000,000 forPassengerLiabilityperseat;and $5,000,000 for Property Damage Liability per occurrence.Coverage must include Slung Cargo exposures.Ifanaircraftwithmorethanfive-seat capacity is used,special coverage and limits must be obtained and approved by the Operating Committee. (d)Owned Watercraft (if applicable)and Non-Owned Watercraft (if applicable)with limits of liability not less than $5,000,000 per single occurrence as provided in the "In Rem Endorsement" under "Maritime Coverage B." If approved by Operating Committee and the AEA,AMLE&P, FMUS and the AEA may self-insure any or all of the required coverages in (a),(b),(c),and (d)above. Participants intending to pursue this alternative coverage must provide proof of solvency to be approved annually by the Operating Committee and the AEA.The Operating Committee and the AEA shall establish the guidelines to insure such solvency.Members who have in place approved alternative coverage shall notify the Operating Committee and the AEA on semi-annual basis of any fluctuation(s)that may reduce or limit their solvency as originally approved by the Operating Committee and the AEA. The other Participants shall be included as additional insured as respects insurance required in this Section 17.2.2 of Article 17 and shall not by their inclusion be responsible to the Insurance carrier for payment of premium therefor.These insurance policies must also contain a cross liability or severability of interest endorsement. Section 17.3 Other Insurance Coverage Requirements 17.3.1 Each Participant will bear the cost of the required insurance.Insurance required to be maintained underthisArticle17maybemaintainedaspartofanyotherpolicy orpoliciesoftheParticipantsolongasthecoverageofsuchpolicyorpoliciesissubstantiallythesameasifsuchcoverage were maintained under a separate policy. 17.3.2 These policies must provide that any cancellation, non-renewal or material change be upon 30 days'notice to all named insured.Each Participant must provide the Operating Committee and the AEA with evidence of insurance.Insurance companies,or self-insurers,shown on the certificate of insurance must have financial ratings acceptable to the AEA.Failure to furnish satisfactory evidence of insurance or lapse of the policy is a material breach of this Agreement. IN WITNESS WHEREOF,the Participants have executed this AmendmentNo.1 to the Alaska Intertie Agreement in several counterparts by their authorized officers or representatives as of the day andyearfirstabovewritten. Approved as to form:li LoCrate)Shin ?725 -7/Office/'of thé Attorney General fe°we ;MalesTitle eee7 SUBSCRIBED AND SWORN TO before me this g Gry day of Jebnuarey 1"du rat (shotNotaryPublifjeStateof AlaskaMyCommissiExpires:Oct /J,1923 MUNICIPALITY OF ANCHORAGE,ALASKAd/b/a MUNICIPAL LIGHT POWER weeby:Ltt 2 Seec Mtn dn in.Title try AND SWORN TO before me this rt day of Geen199PiCNichesNotéryPublic,State of Alaska My Commission Expires:Q2-2WFLHED CHUGACH ECTRIC ASSOCIATION, INC. SUBSCRIBED AND SWORN TO before me this %<-day of EREmedeeenreKetCawZaNotaryPublic,State of AlaskaMyCommissionExpires:07/322 ao CHUGACH ELECTRIC ASSOCIATION, INC. by:eee Te D2,>Président of the Board SUBSCRIBED AND SWORN TO before me this ZsXday of -74eugey/_,1999.Aland Klelfemug DNotaryPublic,State of Alaska My Commission Expires:(S-/7-52 CHUGACH ELECTRIC ASSOCIATION, INC.a Cweoth?Looe of the BoardSUBSCRIBEDANDSWORNTObeforeme'this'"GCday ofThee ney1999. Comat A LZ :Ah Lemme °pre naet " a 'Notary Public,State of@Alaska My Commission Expires:yJ7-Z2 gs CITY OF FAIRBANKS,ALASKA MUNICIPAL UTILITIES SYSTEM By:eeeLeiCMaragaeeMa. i994 AND SWORN TO before me this 77%day of "i.4%199).| rodKehr.Co ht Bo et Notary Public,State of AlaskaMyCommissionExpires:Pe by fore fogttisd GOLDEN VALLEY ELECTRIC ASSOCIATION,INC.Mh,Kall,Michhbel P.KellyGeneralManbaar Title_WE a l,ooG AND SWORN TO before me this day of ' Notary Public,Statef AlaskaMyCommissionExpires: 4-277-72 ALASKA ELECTRIC GENERATION and TRANSMISSION COOPERATIVE,INC. By:Ge g Arno.Seats!Adtercm VEAP.Vang BeTitle SUBSCRIBED AND SWORN TO before me this At day of Here Lh ¢19301995 /. hes abeetPublic,"Stat?of AlaskaMyCommissionExpires:/7-2A7-GR -7-LCB\gma450.doc an , sarge epe nee se Ae ee"a ALASKA POWER AUTHORITY "S334 WEST Sth AVENUE -ANCHORAGE,ALASKA 99501 Phone:(907)277-7641 (907)276-0001 November 25,1985 Mr.Robert Martin,Jr. General Manager Chugach Electric Association,Inc. Pouch 6300 Anchorage,Alaska 99502-0300 Dear Mr.Martin: Enclosed is a copy of each of the Alaska Intertie Agreement and OperatingAgreementforTestingtheAlaskaIntertie.These are for your reference and are copies of the final agreements to be used for signature purposes.Typo- graphical and grammatical corrections have been made where needed from the agreements that all utilities have approved for execution. _The major changes are the addition of two signature spaces for Chugach Elec- tric Association and the deletion of "per named insured"requirements from Section 17.2.2(a).Insurance notification periods were also reduced from 60 to 30 days.The maximum capability for testing purposes has been increased from 20MW to 7OMW and the expiration date in Section BB-1 changed to January 31,1986 from October 1,1985. You will be contacted regarding a convenient time to sign the agreements as it will take 8 signatures for the originals for full execution. Sincerely, awa <s Morris Associate Executive Director of Planning Enclosure as stated. EM:it cc:Mike Massin,Municipal Light &Power,w/attachment John Marshall,Chugach Electric Association,w/attachment Ken Ritchey,Matanuska Electric Association,w/attachment Sam Matthews,Homer Electric Association,w/attachment Larry Colp,Fairbanks Municipal Utility Systems,w/attachment Bob Orr,Golden Valley Electric Association,w/attachment Paul Diener,Seward Light &Power,w/attachment 1975/481/2 nd aed DISTRIBUTION LIST November 25,1985 Mr.Michael P.Kelly General Manager Golden Valley Electric Association,Inc. P.O.Box 1249 Fairbanks,Alaska 99707 Mr.Robert Martin,Jr. General Manager Chugach Electric Association,Inc. Pouch 6300 Anchorage,Alaska 99502-0300 Mr.James F.Palin General Manager Matanuska Electric Association,Inc.P.O.Box 1148 Palmer,Alaska 99645 Mr.Virgil Gillespie General Manager Fairbanks Municipal Utility Systems P.O.Box 2215 Fairbanks,Alaska 99707 Mr.Thomas Stahr General Manager Anchorage Municipal Light &Power 1200 East First Avenue Anchorage,Alaska 99501 Mr.Kent Wick General Manager Homer Electric Association,Inc. P.0.Box 429 Homer,Alaska 99603 ¥b¥Mr.Wick 1975/V/481 Posies” Alaska Power Authority State of Alaska May 19,1986 Mr.Michael P.Kelly General Manager Golden Valley Electric Association,Inc. P.O.Box 1249 Fairbanks,Alaska 99707 Subject:Insurance Provisions of the Alaska Intertie Agreement Dear Mr.Kelly: Attached for your inclusion with your copies of the IntertieAgreementisamemorandumfromDivisionofRiskManagementreducing ©certain insurance requirements.This action was taken in response totheassertionthatamaximumof$6,000,000 was available to the COOP :utility participants. The actions required under Article 17 have not been completed as yet.:Copies of the insurance policies are required to be submitted to the:Operating Committee and the Power Authority.Division of Risk Manager needs full copies to verify that the contractual requirementsofArticle17arecoveredineachutility's insurance policies.The lowering of the limits for Section 17.2.2(a)and (b)will reduce .insurance costs over the costs to provide the $10,000,000 coverage. This will help keep the Intertie rates down. Call Ed Morris or me if you have further questions. Sincerely, gitst-eRobertD.Heath Executive Director RDH/EM:kyf Attachment as stated cc:Operating Committee G.Manni D.Hitchcock 4398/597 PO.Box 190869 704 EastTudor Road Anchorage.Alaska 99519-0869 (907)561-7877 MEMORANDUM TO: THRU: FROM: Ed Morris DATE:May 12,1986AlaskaPowerAuthorityFILENO.:. TELEPHONENO.:465.9380 Don Hit k ;. Direct SUBJECT:=Anchorage/FairbanksDiviofRiskManagementIntertieInsurance Depdftment of Administration RequirementsALASKAPECEIVED,BYTy ha A This will confirm our several conversations concerning :adjustment of mitimity jm gf liability insurance requiredfromcontractorsonuioeage/Fairbanks Intertie. Under Section 17.2.2(a)and (b)the minimum acceptable limitisreducedfrom$10,000,000.to $5,000,000.combined single limit per occurrence.oo All other terms and conditions under the Intertie Agreementshallremainunchanged? * ":. XC?Ou,: Beetle P]onn/ . aa :z aries ale int.ee ae :2 eae ote Aten Sete.SS.BM eS 2 Oe ase r State of Alaska oo a ae