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AEA Annual Report 1992
Statement from Gov.Walter J.Hickel -->.ee Among the realities confirmed by our experience at Prudhoe Bay is that we cannot save ourselves rich,we can only produce ourselves rich. Wisely,though,we can save some of what we produce for use in the future,and we have. Currently some of the funds we saved are held in the Railbelt Energy Fund and the Intertie Reserve fund.The Alaska Energy Authority has suggested that now is the time to invest those energy reserves,along with excess funds left over from the construction of Bradley Lake,in future energy needs. Over the past 16 years,the Authority has proven itself capable of not only constructing the major projects needed to meet a growing demand for power,but also has acted to stabilize energy costs throughout rural Alaska. The Authority has now proposed the next logical step;a finan- cial restructuring that will enable it to build the intertie projects necessary to make energy available where it is needed to support economic develop- ment,and at the same time provide power cost equalization for rural Alaska. Restructuring the Authority at this critical time would enable our savings to be used for the purposes for which they were set aside -to enable future generations to benefit from the oil wealth of the past 15 years through energy reliability and economic diversification. The restructuring of the Alaska Energy Authority is a top priority in our effort to bring meaning and.substance to economic diversification.The achievements of the Authority to this point have been substantial,and I look forward to an even more productive Energy Authority for years to come. Sincerely, Walter J.Hickel Governor of Alaska Contents 1 Executive Director's Statement 2 What is the Authority's Mission? 4 What were the Authority's accomplishments in 1992? 16 What are the Authority's strengths? 18 What are the Authority's concerns? 24 Where is the Authority going? 26 Chairman of the Board's Statement 27 Financial Statements Executive Director's _Statement I hope you have noticed something different about this 1992 Annual Report of the Alaska Energy Authority.If you are like me,when an annual report shows up on your desk you skim the opening sentences and then immediately go to the financial statements at the back.What is implicit in this is that the editorial section of the annual report is generally not viewed as a useful,working document. I wanted to change that with this report.The Authority has a number of programs and financial capabilities available to Alaskans involved in energy generation,transmission and distribution.To make it easier for readers interested in more information about a particular program,loan fund or bonding,we have printed the name and telephone number of the appropriate Authority staff person at the end of this report. This annual report also adds two new topic areas:"What are the Authority's concerns?”and "Where is the Authority going?”In the first topic, we attempt to take a "big picture”look at Alaska's energy situation rather than break up that picture and try to make it fit with available Authority programs. With the second topic,we attempt to address concerns we foresee in meeting Alaska's energy needs and apprise the reader of new initiatives being under- taken by the Authority. The Authority is facing some very significant issues and opportunities with regard to its future.These issues and opportunities will be consolidated in a forthcoming Strategic Plan.A consultant was selected in September to work with the Authority Board of Directors and personnel,as well as other state agencies and utilities,to develop the Plan.The Plan is an attempt to focus our efforts on developing the proper role of the Authority in planning and implementing future energy projects and programs in Alaska. I expect the documents comprising the Strategic Plan will be available in January 1993.I urge those of you involved in energy issues as well as the general public to study the documents and provide your views and concerns to the Board of Directors. Related to the Strategic Plan is a proposal to financially restructure the Authority.Basically, the restructuring would combine Railbelt Energy and Intertie funds into a fund that would be used to finish the Anchorage-Fairbanks Intertie and construct interties in southeast Alaska and in the Copper Valley region.The fund would establish a steady level of funding for the Power Cost Equalization program for the next 20 years,and set up a program to promote energy conservation.The restructur- ing also would enable the Authority to project its funding into the future and plan accordingly. It is my hope that both the Strategic Plan and the financial restructuring will pass legislative muster and be placed into effect at the end of the upcoming legislative session. Finally,we hope to establish a working relationship with the Alaska Rural Development Council.The Authority supports the Council and its objectives,and hopes to play a leading role in helping it work effectively. You are welcome to contact me or any of the Authority's staff members for assistance or further clarification of the services the Authority offers.We look forward to continue working with you on meeting the energy needs of Alaska. Sincerely, Foret chryyas Ronald A.Garzini What is the Authority's mission?; a The Alaska Energy Authority (the Authority)is a public corporation of the State of Alaska led by a seven-member board of directors appointed by the Governor.It was created by the Alaska Legislature in 1976 to promote,develop and advance the general prosperity and economic welfare of the people of Alaska by providing a means of constructing,acquiring,financing and operating power projects and facilities that tap Alaska's vast natural resources to produce electricity and heat.The Authority accomplishes its mission through technical assistance programs,construction and operation of power projects,grants,loans and bond financing. Between 1982 and 1991,the Authority acquired and constructed large power generation and transmission systems such as the four hydroelectric projects that make up the Four Dam Pool,the Bradley Lake Hydroelectric Project and the Anchorage-Fairbanks Intertie.The Four Dam Pool includes the Solomon Gulch,Swan Lake,Terror Lake and Tyee Lake hydroelectric projects,respec- tively providing power to the communities of Valdez,Glennallen and Copper Center;Ketchikan; Kodiak and Port Lions;and Petersburg and Wrangell.The Bradley Lake Hydroelectric Project, located near Homer,began commercial operation in September 1991,and more than doubled the Authority's electrical generation capacity and annual energy output.Electricity generated by the project is distributed throughout the Kenai Peninsula and Anchorage area,and also is sent to Fairbanks via the Anchorage-Fairbanks Intertie. The combined installed capacity of the Authority's hydroelectric systems is 164 megawatts with the potential to add another 65 megawatts through expansion of the existing plants.The Author- ity owns more than 420 miles of transmission lines,which include the 170-mile Anchorage-Fairbanks Intertie,five transmission lines which tie hydroelectric projects to local power grids and four low- voltage lines that link communities.A sixth hydroelectric project at Larsen Bay on Kodiak Island began commercial operation in July 1991.In total,the Authority has in excess of $900 million in operating project assets. Daily operation and maintenance of the Four Dam Pool projects and the Anchorage- Fairbanks Intertie are under contract with local utilities.The Larsen Bay Project is operated by the City of Larsen Bay.Currently,the Bradley Lake project is operated and maintained by Authority personnel.The Authority oversees or monitors the utilities'operation of these facilities to assure proper maintenance and compliance with contract terms,licenses,permits,environmental regulations, safety and technical standards.Revenue collected from each operating project is used by the Authority to pay its debt service,and to fund operations and maintenance,administrative activities and capital projects. "...to promote,develop and advance the general prosperity and economic welfare of the people of Alaska by providing a means of constructing,acquiring,financing and operating power projects and facilities that tap Alaska's vast natural resources to produce electricity and heat."" In accomplishing its energy programs,the Authority also provides direct grants and loans to communities and electric utilities and helps them obtain market financing for energy-related activities. The Authority administers the Power Cost Equalization program,which helps offset the high cost of power in rural Alaska.In addition,the Authority manages an active conservation and alternative energy program,which includes both national and international involvement and research on tech- nologies such as biomass,battery storage for diesel electric systems,photovoltaic applications,wind, small hydro,fuel cells and wireless power transmission. In recent years,as the major capital projects neared completion and state revenues began declining,the Authority increased its efforts toward meeting local power needs with emphasis on rural Alaska.Most of the Authority's current projects are geared toward helping rural communities with stand-alone power systems maintain and upgrade power generation equipment,and to encourage them to join a cooperative or electrification association.The potential for sharing power resources through transmission line interties in rural Alaska also is under study.Long range projections and planning are needed to provide for system improvements and statewide development of power resources. What were the Authority's accomplishments in 1992?.eesti In accomplishing its programs and projects during 1992,the Alaska Energy Authority administered more than 250 agreements worth more than $500 million with a small staff of 74 positions.The Authority ended the year with assets in excess of $900 million. Programs One of the most important functions of the Authority is its ability to use direct loans or financial market assistance to promote the development of low-cost power systems around the state. Loan Programs The Authority administered more than $29.5 million in new and outstanding loans during 1992 under three loan funds:the Power Project Loan Fund,the Bulk Fuel Revolving Loan Fund and the Rural Electrification Revolving Loan Fund. The Power Project Loan Fund provides financing for development of new,small-scale power projects,conservation facilities,bulk fuel storage,transmission and distribution lines or potable water supply projects.As of June 30,1992,some 30 loans were outstanding with a total balance of $24.2 million. The Rural Electrification Revolving Loan Fund is designed to assist local utilities in extending electrical service to previously unserved areas.As of June 30,1992,a total of 13 loans were outstanding with a balance of $4.5 million. The Bulk Fuel Revolving Loan Fund provides rural communities with loans to purchase fuel oil in bulk to obtain lower prices and to save transportation costs.As of June 30,1992,there were 50 loans outstanding with a balance of $770,276. Power Cost Equalization (PCE)Program The Power Cost Equalization (PCE)program was established by the Alaska Legislature in 1984 as a statewide program aimed at reducing consumer cost of electricity in rural Alaska communi- ties where diesel-fired generation meets more than 75 percent of a community's electrical require- ment.During 1992,97 utilities serving 167 communities with a total population of about 66,000 were eligible to participate in the PCE program. PCE PROGRAM -FISCAL YEAR 1991 STATISTICS* PRODUCTION STATISTICS PARTICIPATING STATISTICS Total mwh sold 286,508 Population served 67,223 PCE eligible mwh Communities served 160 Residential 86,066 Participating utilities 96 Commercial 24,999 Total customers 25,906 Community facilities 19,703 Residential 19,816 Total PCE eligible mwh Commercial 4,895 as a %of total mwh sold 46 Community facilities 1,195 Average monthly PCE eligible kwh Residential 367 FINANCIAL STATISTICS Commercial 430 Total required PCE payments $19,607,435 Community facilities 25 Average PCE payment per eligible kwh $0.150 EFFICIENCY STATISTICS Average annual required PCE Kwh sold per gallon of fuel oil 12.2 payment per customer $757 Operating expenses per total kwh sold $0.133 *Latest available statistics 4}----a ee oe The purpose of PCE is to equalize the cost of power statewide at close to the combined average cost per kilowatt hour in Anchorage,Fairbanks and Juneau.About 45 percent of the electric- ity used by consumers of participating utilities is eligible for PCE credit. The PCE program added more than $15 million to the disposable income of rural Alaskans in FY 92 in the form of reduced electricity rates,and about $18 million are expected to be disbursed during FY 93.This adds cash to local economies and may help offset costs of other state and federal! public assistance programs.During the past 12 years,the PCE and similar programs that preceded it have returned nearly $160 million to rural energy consumers in rate reductions. During 1992,the Authority also prepared a report on cost reduction options of this program in response to a statement of legislative intent.Among the various options,several changes were selected by the Legislature to contain program costs with minimum impact on residential customers. The considered changes received support in the legislative process;however,the related bill did not pass by the closing of the session.Similar legislation is expected to be reconsidered in the course of the 1993 legislative session. The Authority's technical assistance and rural construction pro- grams have helped make rural power systems more efficient.The average fuel efficiency of diesel electric generators for all participating villages,for example,has increased by more than 10 percent.Program regulations established in 1990 set minimum standards for fuel efficiencies scaled to utility size.Utility technical and financial data are collected from the program participants and used internally to determine utility capacity,performance and other system operating parameters.The Authority periodically publishes statistical reports on the PCE program.The reports are widely used by the participating utilities,their consultants and local and state offices. Grants The Authority grants funds to rural communities for work on projects that meet funding objectives for a number of different energy programs.Construction activities are managed by community representatives with training,assistance and oversight provided by Authority staff. Grant projects optimize the use of local labor and training in construction trades,as well as operation and maintenance of utility equip- ment.The goal of local community participation is to instill a sense of ownership in the projects through involvement in all phases of construction and management. Electrical Service Line Extension Fund The Electrical Service Line Extension Fund was established by the Alaska Legislature in 1991 to provide matching funds to electric utilities to help defray the high costs of extending new electrical service to residences and small businesses.The fund provides grants for up to 60 percent of the cost of site preparation and construction for qualifying projects.Matching funding of at least 40 percent of total eligible project costs must be contributed by the applicant.Projects to improve existing distribution facilities also are eligible under this program,but are given lower priority in the project selection process. As of October 1992,eight of the nine Electrical Service Line Extension Fund projects which received FY 92 funding had been completed.These projects are located at Klawock,Kake,Sheep Mountain,Fish Lake,Bruce Lake,South Shirley Lake,Old Ridge Trail and Panguingue Creek. The Authority also awarded a number of contracts for Electrical Service Line Extension projects in FY 93.Contracts with a total value of $1,830,649 were awarded to Chugach Electric Association Inc.,Copper Valley Electric Association Inc.,Matanuska Electric Association Inc., Tlingit &Haida Regional Electrical Authority,Sand Point Electric Inc.,Far North Utilities Inc., Alaska Power &Telephone Company and Homer Electric Association Inc. Circuit Rider Maintenance Program The Circuit Rider Maintenance Program began in 1988 to provide training to local operators, to improve maintenance and operations of small community electric utility systems,to reduce operating costs,to prevent safety hazards and emergency situations from arising,to safeguard the state's financial investment in power systems,and reduce the need for future capital demands on the state.The program budget for FY 92 was $500,000,and funds were used to serve 40 communities. The Authority is striving to assist villages to become more self-reliant in managing their power systems by training village utility workers to improve their abilities to independently maintain and repair their equipment.The Authority is in its third year of a program that includes a videotape training series and sponsorship of power plant operators at week-long courses in diesel mechanics. The Authority also is developing a curriculum in conjunction with the Alaska Vocational Technical Center in Seward for village utility operators,managers and administrative personnel. In the near future,because of continued downturn in state revenues,communities must develop the capability to maintain their own electric systems without substantial outside assistance. To that end,the Authority has endeavored to "regionalize”utilities,or group them to create better economic results by consolidating utility administration,purchasing and other activities.This regionalization reduces costs to individual utilities by using one or two trained staff people to do preventive maintenance work in participating villages.Contracts currently are in place with the Council of Athabascan Tribal Governments,Kotzebue Electric Association Inc.and the Kodiak Island Village Electric Utility Cooperative to provide services to villages in their respective areas.In the future,the cost burden of operating the circuit rider program will be borne by participating utilities. Power Systems Upgrades Program The Power Systems Upgrades Program provides for the design and construction of new power systems and upgrades of existing electric generation and distribution systems in rural commu- nities.In 1992,this included constructing a new distribution system for Eagle Village.At Ivanof Bay, a new distribution system was constructed and the power house was rebuilt.Work also took place in Port Alsworth,White Mountain and Rampart,among others, A tural utility receiving improvements to its electrical system under this program is required to employ a qualified operator and to participate in the Circuit Rider Maintenance Program to ensure reliable power to the community and that the system is properly operated and maintained. Life Health Safety Program The Life,Health and Safety Program assists utilities and communities in correcting prob- lems that pose an immediate threat to people,such as exposed or uninsulated wiring,unfenced substations,inadequate grounding,sagging distribution conductors,leaking fuel storage tanks and code compliance inadequacies.Once upgraded,the rural utility is required to hire a qualified operator and to participate in the Authority's Circuit Rider Maintenance Program to ensure that the system is properly operated and maintained,thus protecting the state's investment in the system.More than 60 villages were identified in 1992 as potential candidates for the Life,Health,and Safety Program. About one-half of the villages were surveyed as part of the Rural Alaska Bulk Fuel Assessment Program. Waste Heat Recovery Program The Waste Heat Recovery Program assists communities with the design and installation of equipment used to capture waste heat from operating diesel generators for use in heating community buildings such as schools,water treatment plants or recreational facilities.Waste heat may be used for space heating or to heat domestic water.During 1992,the Authority worked with 28 communities under the waste heat program.Activities included site visits to the 10 waste heat systems owned by the Authority and to community-owned systems,and planning and design work for construction of new waste heat systems.A $250,000 legislative appropriation is being used to identify additional waste heat sites,after which engineering work and financing will be completed.The Authority hopes the effort will result in several new waste heat projects which would be financed by revenue from heat sales. <Arctic piping Waste Heat Recovery System End user heat exchanger Power Plant oe End User |Power Plant Heat ||End user Heat Exchanger Exchanger Diesel Engine ||=[O229aG creas |¢Boiling|CI ,al eee ee NeLe Arctic Piping Rural Technical Assistance Program The Rural Technical Assistance Program provides communities access to Authority staff expertise in mechanical,electrical and civil engineering as well as economic and administrative matters relating to rural energy systems.Rural utilities,communities and school districts can use the program to address electrical system safety and health hazards,utility operating costs,system efficiencies and waste heat alternatives.Authority staff can also evaluate and recommend electrical system upgrades,power plant and bulk fuel storage relocation and assist with equipment procurement upon request. Depending upon staff recommendations,technical assistance visits may lead to participation in other Authority programs such as Rural Power Systems Upgrades,Metering Installation or Circuit Rider Maintenance. The Rural Technical Assistance Program is also used to fund the state-matching portion of the federal grant for the Alaska Bioenergy Program,which assists communities in using waste wood and municipal solid waste as energy resources. Metering and Rural Data Acquisition Program Regulations for the Authority's Power Cost Equalization program require participating utilities to install and maintain totalizing demand meters,fuel meters and station service meters in order to adequately monitor system power use and fuel consumption,and to evaluate system efficiency.Utilities having technical or financial problems in implementing the requirements may petition the Authority for assistance under this program.In addition,accurate metering is used by utilities and the agency to troubleshoot deficiencies and operating problems,and to plan for system upgrades and efficiency improvements.Budget levels for the program allowed metering installation in 20 communities during FY 92. Two years ago,the Authority developed a simple, inexpensive monitoring device to record and transmit utility system operating data via telephone modem from small power plants at remote locations to Anchorage.The device records time-coded information regarding system demand,electric energy consumption and tempera- tures in rural power plants.The information can then be used to troubleshoot systems without requiring an expensive trip to the site.This remote monitoring application could be of specific use by regional utilities that operate a number of remote systems from a central location.During 1992,the Authority acquired remote data from eight communities. Power Statistics Report The annual "Alaska Electric Power Statistics”report provides information to the public on the installed capacity of electric generators,fuel use and the number of kilowatt hours produced by electric generating plants in Alaska each year.The report is jointly funded by the Authority and the Alaska Systems Coordinating Council,an association of a number of Alaska's electric power systems. The report is widely used by utilities,communities,government agencies,military installations and private businesses in Alaska and other states. In recent years,the Authority has expanded this document to include statistics on typical monthly residential electric bills and on frequency of interruptions in electrical service.The report also contains summary information and trends on electric utilities since 1960.Data on growth in electrical load are often used as indicators of economic activity in particular areas of the state. Rural Construction Assistance Program The Rural Construction Assistance Program is unique in that it requires no direct state funding.The program was initiated because communities,utilities and housing authorities requested technical assistance on energy-related projects from the Authority.One particular entity had already secured funding for a project,but did not have the expertise to administer it.Under this program,the Authority has participated in technical and financial feasibility studies for developing North Slope Borough coal;extending transmission lines in Mentasta,Ekwok,Tuluksak and Shageluk;installing waste heat systems in Buckland,Beaver,Akiak,Manokotak and Clarks Point;and,planning or arranging for tax exempt financing for Slana and Galena. Emergency Response Coordination The Authority is organized to respond to energy emergencies in a number of different ways. It is a member of the Mutual Assistance Program,sponsored by the Alaska Systems Coordinating Council (ASCC),an association of 17 utilities,the Authority and the federal Alaska Power Adminis- tration.The ASCC coordinates utility resources and provides guidelines for member utilities to request and provide emergency assistance.Each of the utilities that participates in the Mutual Assistance Program can contact participating utilities and request personnel,equipment and spare parts.Under a written agreement,the responding utility has pledged to provide assistance when possible. The Authority also has responsibilities in the event of natural disasters or civil defense emergencies with respect to electric power.State law requires the Authority to coordinate utility requests for assistance and logistics support in the event of an emergency.The Authority participates in annual emergency training exercises with other agencies to assure high skill levels in emergency response.In the event of a village emergency,the Alaska Division of Emergency Services can request the Authority to prepare cost estimates and oversee repair or reconstruction of power generation and distribution facilities. In addition,the Authority coordinates with the U.S.Department of Energy,energy offices in other states and other state agencies in Alaska in planning for energy supply emergencies.This cooperative program addresses both short and long-term fuel shortages and the impact of these shortages on different sectors of the population. Projects Developing the state's energy resources is a crucial element in the diversification of Alaska's economy.The Authority has worked to provide that element through the construction of major hydroelectric projects and the development of energy alternatives.Among the corporation's property assets are six operating hydroelectric projects,420 miles of transmission line,including the 170-mile Anchorage-Fairbanks Intertie and 10 waste heat projects.Energy alternatives currently under study and in various stages of development include biomass,hybrid systems to reduce the use of diesel generation,small-scale hydroelectric projects,fuel cells,an absorption-freezer process that uses waste heat and wireless power transmission. Began commercial operation Operator: Installed capacity Expansion potential Average annual rated energy output Annual firm energy output Bradley Lake Hydroelectric Project The Bradley Lake Hydroelectric Project,ending its first 10 months of operation in 1992,produced 335,967 megawatt hours (mwh)of electric- ity.This exceeds the predicted firm projection of 329,000 mwh for this period by nearly 7,000 mwh.Power from the project was transmitted to the state's main power grid via two parallel,20-mile-long,115 kV transmission lines connected to Homer Electric Association's transmission system. Bradley power was sold to six Railbelt and Kenai Peninsula utilities.Chugach Electric Association consumed 103,846 mwh,or 30.4 percent of production during the first year of Bradley Lake power produc- tion which ended May 31,1992.Anchorage Municipal Light &Power consumed 99,175 mwh (25.9%);Golden Valley Electric Association used 53,502 mwh (16.9%);Matanuska Electric Association used 47,059 mwh (13.8%);Homer Electric Association used 29,992 mwh (12%);and SewardhseoryAboryElectricSystemused3,394 mwh (1%).90 magawats (nominal)The 90-megawatt Bradley Lake project was taken out of serviceAdditional45megawattsforonemonthinlateMarch1992fortunneldewatering,inspection and 376,000 megawatt-hours minor repairs.The project went back on line in late April.329,000 megawatt-hours Also accomplished during 1992 was the third and final phase of project construction which involved restoration and rehabilitation of the project site and the installation of electrical stability support equipment - static var compensators -at two locations within the Kenai transmission line grid.These $5.6 million and $14.9 million contracts were the substantial final part of the Bradley Lake project in terms of capital expenditures.The project is licensed by the Federal Energy Regulatory Commission (FERC). The Bradley Lake project received the Outstanding Civil Engineering Achievement Award of the Pacific Northwest Council of the American Society of Civil Engineers in 1991.The regional council,representing professional]civil engineers in Alaska,Washington,Oregon,Idaho and Mon- tana,forwarded the project to a panel of judges as a nominee for the national organization's annual Outstanding Civil Engineering Achievement Award. Larsen Bay Hydroelectric Project The 475-kilowatt Larsen Bay Hydroelectric Project completed its first year of commercial operation on June 30,1992.The project,which was constructed at a cost of $2.1 million,produced 406,225 kwh of electricity during the first year of operation.A tap off of the project's penstock replaces the city's old water supply and provides a better source of water with reduced maintenance and improved water quality. Began commercial operation July 1,1994 Operator City of Larsen Bay Installed capacity 475 kilowatts Annual firm rated energy output:run-of-river project Estimated 520,000 kilowatt-hours Four-Dam Pool Projects The Solomon Gulch,Swan Lake, Terror Lake and Tyee Lake hydroelectric projects collectively make up the Four Dam Pool.These projects are licensed by FERC and provide power to the communi- ties of Valdez,Glennallen,Ketchikan, SWAN LAKE HYDROELECTRIC PROJECT Began commercial operation June 1984 Operator Ketchikan Public Utilities Installed capacity 22 megawatts Annual rated firm energy output 68,000 megawatt-hours Average annual rated energy output +85,400 megawatt-hours FY 92 sales 70,307 megawatt-hours Kodiak,Petersburg and Wrangell.The Authority sells wholesale power from these Began commercial operation projects to local utilities under the terms of peer45-year power sales agreements signed in hen im ono)output1985.Under the agreement operations, maintenance and debt costs are pooled so FY 92 sales that the same rate is charged for electricity drawn from any of the four projects. A Project Management Commit- tee (PMC)comprised of the Authority and representatives from the purchasing utilities establishes annual operating budgets,sets power purchase rates,makes decisions on insurance and technical standards,and performs other management duties. Power sales from the Four Dam Pool continued to remain strong in FY 92. SOLOMON GULCH HYDROELECTRIC PROJECT Copper Valley Electric Association 30,000 megawatt-hours 37,800 megawatt-hours 40,161 megawatt-hours Average annual rated energy output July 1982 12 megawatts A total of 246,411 mwh were sold to purchasing utilities. TERROR LAKE HYDROELECTRIC PROJECT Began commercial operation Installed capacity Expansion potential Annual firm energy output Average annual rated energy output Anchorage-Fairbanks Intertie The Authority owns and operates the 170-mile,345 kV trans- mission line intertie,which runs between Wasilla and Healy.This major energy link allows Golden Valley Electric Association in Fairbanks to purchase power produced in the Anchorage and Kenai Peninsula areas where lower cost fuels such as natural gas and hydroelectric sources are available.The power is then transmitted to the Fairbanks area and resold, replacing higher-cost energy produced locally. The Authority contracts operations and maintenance of different portions of the line and substations to participating utilities:Chugach Electric Association,Golden Valley Electric Association,Anchorage Municipal Light &Power and the Alaska Electric Generation and Transmission Cooperative.Wheeling charges are set to recover the Authority's operation and maintenance expenses.The Authority estimates the Intertie saves Fairbanks consumers about $7 million per year. April 1985 Operator Kodiak Electric Association 20 megawatts 10 megawatts 136,800 megawatt-hours 139,700 megawatt-hours FY 92 sales 99,364 megawatt-hours TYEE LAKE HYDROELECTRIC PROJECT Began commercial operation May 1984 Operator Thomas Bay Power Authority Installed capacity 20 megawatts Expansion potential 10 megawatts Average annual rated energy output 130,000 megawatt-hours Annual firm energy output 130,000 megawatt-hours FY 92 sales 36,579 megawatt-hours Energy Alternatives Because of high oil costs,the Authority has an ongoing goal of exploring alternative fuel sources for generation of heat and electricity. Biomass The Bioenergy Program,administered by the Authority since 1985,is funded jointly by the state and the U.S.Department of Energy.It sepports economic development by seeking to replace high-cost fossil fuels with lower-cost biomass fuels such as wood residue,municipal solid waste and agricultural waste.Biomass utilization is environmentally sensitive,because it weighs environmental disposal costs associated with burning,landfill or recycling. During 1992,the Authority worked with the State of Alaska departments of Environmental Conservation and Community and Regional Affairs as well as with federal agencies to develop economic-and environmentally-sensitive biomass projects.A feasibility study for a $3 million electric generating plant in southeast Alaska that would be fueled by wood waste was initiated in FY 92.In addition to helping meet area power demands,the project could significantly reduce land-fill costs and environmental problems associated with wood chip leachate in land fills.Use of municipal solid waste as a possible fuel source for electric generation is the subject of a current feasibility study underway with the Fairbanks North Star Borough.This effort is part of a larger Borough waste management alternatives study.The Authority also sponsored construction of a wood-fired heating system at the state correctional facility in Sutton,which saved about $8,000-$10,000 in oil heating costs last year.The goal of the Bioenergy Program is to encourage projects that produce energy and help reduce solid waste disposal problems.; Heat to Building Sutton Correctional Facility Wood-Fired Heating System é Ty ;||Hw | -$1"}i}LTT]yt Accumulator Wood-fired Wood-fired Tank Boiler Boiler 12 Small Hydro The Iiamna,Newhalen,Nondalton Electric Cooperative Inc.(INNEC)has received several direct appropriations from the legislature to investigate the potential of siting a small hydroelectric facility at Tazimina Falls.INNEC is now preparing a FERC license application for the proposed Tazimina Hydroelectric Project and planning preliminary survey work.The project would be located north of Iliamna Lake.The project would have minor environmental impacts because it would only divert a portion of the water flow from the top of the falls to its base.There would be no large dam or impoundment required.The total estimated cost of the Tazimina project is $9.4 million.An updated financial analysis of the project has indicated that a state contribution of $5 million would allow the project to come on-line without major rate shock.The balance of the construction cost would be financed by revenue bonds to be repaid from future power sales.In 1992,$2.5 million was appropri- ated towards construction.. Another proposed small hydro project is located on Delta Creek,about five miles north of the community of King Cove.The King Cove project would produce an estimated 3.9 gigawatt hours of electricity per year using a 700 kilowatt turbine generator.The estimated construction cost is $5.7 million.An Authority analysis concluded the project is technically and economically feasible,given a $3 million state equity contribution with the balance of the funding provided by revenue bonds to be repaid from power sales. Other locations under consideration for small-scale hydroelectric projects include Akutan and Atka in the Aleutian Islands and Dorothy Lake and Black Bear Lake in southeast Alaska. Tazimina Falls Hybrid Hydro/Battery/Diesel The Authority is working with Calista Corporation and Sandia National Laboratories on a generation system that would provide power to two mining operations currently in production in the Nyac Mining District as well as to the villages of Tuluksak,Akiak,Kwethluk and Akiakchak on the Kuskokwim River northeast of Bethel.As envisioned,the $10 million system would use run-of-river hydroelectric power for about nine months of the year.Diesel-powered units would generate electric- ity the rest of the year.The diesel units would be smaller than those currently in use because energy would be stored in batteries during off-peak hours for use during periods of increased demand. The Authority also continued work on an effort to site a hybrid renewable-micro-grid power system in rural Alaska.The system would use wind energy and photovoltaics to charge batteries.The battery power would be used to supplement a diesel engine generating system and reduce fuel consumption. Alternative Energy Resource Utilization paxSolar Energy Hydro-Electric (I Battery OV Q9O0T seO75E Diesel Generator Wind Energy Community Load Fuel Cells In 1992,an Authority grant was matched with Alaska Science and Technology Foundation funding to test the laboratory performance of a 70 kilowatt direct-conversion fuel cell operating on sulfur-free diese]fuel.Using liquid fuel and air,the fuel cell produces electricity,pure water and excess heat.This is an efficient,emerging technology which may have application in the small, remote power systems in Alaska.This process will test fuel cell performance under controlled conditions.Following the test,an effort will be made to bring a fuel cell to Alaska for field testing. Absorption Freezer Alaska seafood could command higher prices in the world market if more refrigeration and freezing were used early in harvesting and processing.However,there is a lack of refrigeration, freezing and ice-making capacity in a number of locations that harvest significant volumes of fish.In some cases ice is flown to sites where it is used to cool fish which are then shipped back to a proces- sor.The Authority is engaged in a project which will develop and demonstrate a new absorption- refrigeration system in Kotzebue,a system which uses waste heat from existing electrical generating plants rather than requiring additional generating capacity to meet new freezer load.Other villages could benefit from the technology being developed for Kotzebue.The Authority contributed $55,000 to the project in FY 92 and will spend another $144,000 on the project in the coming year. Wireless Power Transmission The concept of transmitting electric energy through the air without transmission lines has been around since the early 1900s.However,it took the development of microwave technology to bring the concept to a point where it could be tested.Canadian researchers in 1987 successfully flew a small,pilotless airplane on microwave power beamed from the ground.The ability to transmit microwave energy through the air that can then be converted to electric energy could prove useful for some of Alaska's remote communities.Although commercial application of the technology is many years away,the Authority is discussing the potential for a demonstration project in Alaska with the engineering firm of Arthur D.Little,Raytheon Corporation and Texas A &M University.The group's objective is to successfully transmit 100 kilowatts of power a distance of five miles. What are the Authority's -=-___ strengths? Through more than a decade and a half of conceiving,financing,constructing and operating more than $1 billion of energy-related assets and devoting an increasing amount of its resources to help solve rural energy needs,the Authority has developed a number of financial and human resource skills that can be used to solve energy problems. Financing Capabilities The Authority has several loan programs and the state's authorization to issue bonds to finance projects.This means the Authority can identify a project,determine whether it is economi- cally feasible,and arrange the financing-be it a loan or bonding -for the project or act as a wholesaler of financing.In the wholesaler role,the Authority can combine similar projects that by themselves could not obtain favorable interest rates in the bond market.The projects,once combined, can then be taken to the bond market as a package by the Authority. Bulk Fuel Revolving Loan Fund The most active loan program is the Bulk Fuel Revolving Loan Fund which assists rural communities with a population of no more than 2,000 in making bulk purchases of fuel oil.By consolidating the fuel needs into one large order,communities can take advantage of once-a-year barge service and buy fuel at competitive wholesale prices.The maximum amount of a bulk fuel loan is $50,000.The loan must be repaid within one year. Rural Electrification Revolving Loan Fund The Rural Electrification Revolving Loan Fund is a 2 percent loan program designed to assist local utilities in extending electrical service to previously unserved areas.This program is not funded for new loans,and current activities are related to the administration of the outstanding loans. Power Project Fund The Power Project Fund was established to provide financing for small-scale power and potable water projects.Loans from the fund can be used to finance all phases of project development from feasibility studies,licensing and permit applications,design and engineering to construction and expansion.Virtually any power project that uses non-nuclear fuels or waste heat would qualify for a loan,including transmission and distribution lines and bulk fuel storage facilities.Organizations that are eligible for Power Project Fund loans include electric utilities,regional electric authorities, municipalities,cities,boroughs,regional and village corporations,village councils and non-profit marketing cooperatives. Rural Electrification Administration (REA)Borrower As a federal REA-certified borrower,the Authority has access to all the financing tools available to REA electric cooperatives,including a preferred bond rating.This bond rating is higher for the Authority than other state agencies and municipal governments because Authority bonding is limited only to power projects. The Authority uses its excellent bond rating and its ability to issue bonds to aid small utilities that do not have the resources to win REA certification or to complete the necessary paperwork to maintain that certification. Technical Resources Through its Rural Reconnaissance and Rural Feasibility programs completed in the 1980s, the Authority has developed a wealth of information on potential energy needs and options to meet those needs.Recent investigations into economic feasibility of projects have included a proposal to tap geothermal energy near Dutch Harbor in the Aleutian Islands,the completed Larsen Bay Hydro- electric Project,the ongoing Tazimina and King Cove hydroelectric projects,and the emerging power needs in southeast and southcentral Alaska.56 Personnel Over the years,the Authority has put together a trained team of mechanical,civil,electrical, project and coal processing engineers.This team is complimented by economists,accountants, administrative staff,procurement specialists and project managers with expertise that spans the breadth of energy projects in Alaska.The projects undertaken and completed have been both large- and small-scale,urban and rural,and have reflected virtually every technique and type of equipment imaginable for arctic construction. The use of this expertise has not been limited to the specific project at hand.For all projects,the Authority can,and believes it must,train utility operators,managers and the local labor force to maintain and manage new facilities to maximize efficiency and protect the state's investment. With today's greater sensitivity to the environ- mental aspects of power generation and distribution,the Authority has an ongoing effort to keep its personnel abreast of changing state and federal environmental regulations.This commitment to environmental training is not limited to staff.The Authority regularly sponsors seminars on changing rules and regulations with participa- tion by staff,the Alaska Department of Environmental Conservation,federal agencies and local utility operators and managers. What are the Authority's concerns?_ Most of Alaska's more than 300 rural towns and villages individually own and operate the electric utilities which serve their areas.There are a few notable exceptions,such as the Alaska Village Electric Cooperative Inc.which owns utilities in 49 villages in western Alaska,the Middle Kuskokwim Electric Cooperative which owns utilities in five villages in the Kuskokwim area,the Alaska Power &Telephone Company,which owns utilities in four communities in southeast Alaska and three in eastcentral Alaska;and the Tlingit &Haida Regional Electrical Authority which owns utilities in five towns in southeast Alaska. Although almost all villages now have some sort of central power plant and electrical distribution system,Alaska's rural areas lag far behind the rest of the nation in terms of power reliability,the ability to respond to load growth,and progress toward establishing regional cooperative efforts.The well-developed energy infrastructure characteristic in the Lower 48 states is not present in Alaska. This checkerboard development of independent power systems has resulted in a lack of system efficiency for the small utilities.Poor economies of scale and the cost of fuel transportation result in higher operating costs which,in turn,cause high per-kilowatt hour costs to consumers. Anchorage,Fairbanks and Juneau consumers enjoy electric costs of less than 12 cents per kilowatt hour,but the cost of electricity in rural Alaska easily ranges between 40 and 65 cents per kilowatt hour and higher before the Authority's Power Cost Equalization funds are applied to rural utility rates. The impact of high electricity costs on rural consumers is exacerbated by per capita and household incomes well below those of Alaska's more populous areas. "Alaska's rural areas lag far behind the rest of the nation in terms of power reliability,the ability to respond to load growth,and progress toward establishing regional cooperative efforts."cents/kwhUrban and Rural Power Costs 45 -Rural -_- 40 -rs 35 - a30- 25 Urban -_-a 20 - 15 -. ”4 10 -; al i i I l a oz oz ao-Qa S [or N x Cc fe)x [s]a B35oa<xO”"xf =3$8 Su £5 CH §2 3 2 8 3B 2 E 2 secy6USDC>ec a =]=D ®x 9 9 ooosoYgs865eyg2oIz®&&£Eh £O 5 5 ><x z oO oxect@2s-os 2 <2 :Cc <<uw uw a.a 2 a Source of information is "Alaska Electric Power Statistics,"17th Edition,November 1992. Facilities Maintenance A shortage of trained local utility staff to operate and maintain rural power systems is recurring in rural Alaska and contributes to a lack of system efficiency.The consumer base of most village utilities simply is not large enough to support the level of trained personnel needed to keep the systems maintained and operating at high efficiency.:a.'PRAMRdyatheaDwindling State Revenues System inefficiencies,high power costs and a shortage of trained personnel combine to place many small utilities in a precarious financial position.The Authority has loan and grant programs to assist Communities in purchasing fuel,forming bulk fuel purchasing cooperatives,and developing maintenance programs to help reduce utility operating costs.But,all of these programs have statutory and funding limitations.The already serious financial straits faced by many rural utilities can be expected to worsen as revenue from North Slope oil production continues its inexorable decline and the state is forced to reduce its budget accordingly. Bulk Fuel Storage Another major concern of the Authority is the environmental cost associated with energy projects in Alaska.Responding to new code requirements and regulations is,and will continue to be,a driving force behind the cost of projects,whether they are rehabilitative efforts on existing systems or construction of new power or bulk fuel storage facilities.Many existing facilities are not in compli- ance with current codes and have deteriorated because of a lack of consistent preventive maintenance programs. Last March,the Authority released a summary report on the condition of rural bulk fuel storage facilities,along with recommendations for repairs.The report was prepared in response to village concerns that fuel distributors may deny fuel delivery due to the poor conditions of fuel storage facilities.A total of 44 communities were surveyed in the report,and detailed engineering studies were prepared for 32 communities. Code and regulatory violations were encountered at virtually all of the tank farm facilities surveyed.Common deficiencies observed included a lack of secondary containment dikes and security fencing,poor piping systems and active leaks.The estimated cost for complete repair and renovation of 236 facilities in the 32 communities studied came to $46.88 million. In order to protect public safety and the environment,ensure continued delivery of vital petroleum products,and reduce future liability for tank farm owners and the state,the existing bulk fuel facilities in rural Alaska must be repaired and renovated to meet current code and regulatory requirements.Corrective action is not optional,it is mandatory.The operations and maintenance programs must also be instituted to reduce future replacement and environmental mitigation costs. atoeoaneek Air Quality The recently signed 1990 amendments to the U.S.Clean Air Act are expected to affect a number of rural utilities.The amendments lower the permit threshold limits for air pollutants from 250 tons per year down to 100 tons per year.On a practical basis,the amendments lower the size of generators requiring a permit from about 1,750 kilowatts to about 550 kilowatts.In addition to permitting costs,utilities will be required to pay a yet-to-be-determined fee for every ton of pollutants emitted over the 100-ton limit.Villages with populations of about 500 or more most likely will be required to obtain permits for their utilities. Clean air for our future... me) Energy Conservation Conservation of energy and power is a priority for the Authority.A well-developed energy conservation program can often forestall the need to add expensive incremental power generation to handle an increase in peak loads.The key to any successful conservation program is to look at supply and demand together,not in isolation,to develop solutions appropriate to the situation.In Alaska villages,this means attention to the thermal energy,or heat-producing,side of power generation as well as to electricity.More than one-half of rural utility energy production is waste thermal energy, with the rest being produced as electricity. Across Alaska... Population Centers Assisted by the Authority's Projects and Programs Akhiok Akiachak -Akiak Akiakchak Akutan Alakanuk Aleknagik Allakaket Ambler Anchorage Andreafsky -Angoon -Aniak Anvik Arctic Village Atka Atmautluak Bean Creek Beaver Bethel Bettles Birch Creek Black Bear Lake Bradley Lake -Brevig Mission Bruce Lake -Buckland Central Chalkyitsik Chefomak Chenega Bay Chevak Chignik Chignik Lake Chitina 'Chuathbaluk Circle Circle Hot Springs Coffman Cove Cold Bay 'Copper Center -Cordova Craig -Crooked Creek Deering _ Dillingham Diomede Eagle Eagle Village Eek Egegik Ekwok Elfin Cove Elim -Emmonak Fairbanks False Pass Fish Lake -Fort Yukon Galena -Gambell Glennallen - Golovin Goodnews Bay ™ Grayling Greens Creek -Gustavus Haines Healy Hollis Holy Cross - Homer -Hoonah Hooper Bay Hughes =Huslia Hydaburg Igiugig Tliamna Ivanof Bay - Kake -Kaltag Kasaan Kasigluk Ketchikan Kiana King Cove -Kipnuk Kivalina ™Klawock _ Kobuk -Kodiak Kokhanok Koliganek Kongiganak Kotlik Kotzebue -»Koyuk Kwethluk Kwigillingok Larsen Bay Levelock Lime Village Lower Kalskag Manley Manokotak Marshall McGrath McKinley Village -Mekoryuk Mentasta -Minto Mountain Village Naknek »-Napakiak "Napaskiak Nelson Lagoon New Stuyahok Newhalen Newtok Nightmute -Nikolai Nikolski - Noatak Nome Nondalton Noorvik ..Northway .Nulato _.Nunapitchuk Old Harbor -Oscarville Ouzinkie Panguingue Creek -Pedro Bay -Pelican Perryville Petersburg - Pilot Point Pilot Station -Pitkas Point -Port Alsworth Port Heiden Port Lions Quinhagak . Rampart » Red Devil - Ruby Russian Mission -Sand Point --Savoonga Scammon Bay Selawik --Shageluk -Shaktoolik Sheep Mountain -Sheldon Point -Shishmaref Shungnak Sitka Skagway Slana Sleetmute Solomon Gulch St.George St.Mary's St.Michael St.Paul - Stebbins - Stevens Village --Stony River Swan Lake .-Fakotna Tatitlek Tazimina Telida Teller -Tenakee Springs Terror Lake -Tetlin Thorne Bay Togiak -Tok -Toksook Bay - -Tuluksak --Tuntutuliak - -Tununak Twin Hills Tyee Lake -Unalakleet -Unalaska Upper Kalskag -Valdez Venetie - Wales White Mountain Wrangell >Yakutat 22} e e e eee e,0 %_°e ° e "8 °°e °eoeee ee ee e°e e .°;e &%e * °»28 ° "enn©e °*e °*e"s ee - bd es e e e e ee” »e © e ® @ °@ e A) e ®*e -)Fairbanks e©eo e @ @ Anchorage @ @®ee@ @ e@ e ; ee _- ® eo Jo%e uneau ee eebd(00%, _@ Where is the Authority going?.--_----.--- The Alaska Energy Authority has reached a major crossroads.The Authority was created 16 years ago to channel some of Alaska's new-found oil wealth into energy development projects.The Authority first worked to construct and acquire large scale projects,and it became the builder and owner of several large hydroelectric projects and related transmission facilities.The Authority also served as the implementing agency for specific projects initiated and funded by the Alaska Legisla- ture.Over the years,that role grew to include responding to energy emergencies,expanding the availability of power and improving energy efficiency in rural areas,and managing the Power Cost Equalization (PCE)program. Strategic Plan and Financial Restructuring The time has come for the Authority to reassess its mission and the structure needed to carry out its mission.To that end,the Authority has initiated a long-term Strategic Plan for the agency which is due for completion by early 1993. On a separate,although related front,the Authority is engaged in a financial restructuring to help cope with statewide energy needs and the expected decline in overall state revenue.At the core of this financial restructuring are the Railbelt Energy Fund and the Railbelt Intertie Reserve within the state's General Fund.The Authority believes these funds should be configured to enable the construc- tion of various intertie improvements on a long-term,self-supporting basis,while setting aside a portion of these funds as an annuity to enable continued funding of the PCE program.The Authority believes such an annuity approach could also be used as an excellent means to guarantee funding levels for statewide energy conservation programs. Federal Initiatives The Authority must take a leading role in developing a state energy policy,and in imple- menting the programs and projects to reach those energy policy objectives. Of immediate interest in southeast Alaska is the pending acquisition by the Authority of the 78 megawatt Snettisham Hydroelectric Project from the federal Alaska Power Administration in Juneau.In September 1987,the Energy Authority proposed the purchase,which would be funded by an issue of revenue bonds sized such that no significant increase in Juneau power costs would be required.The proposal was accepted by the Power Administration,and a purchase agreement was signed in February 1989.Federal legislation to provide Congressional approval for the sale has been introduced and is under consideration.The formula in the purchase agreement would result in a purchase price in the range of $65 million to $71 million. A related effort is the possibility of interconnecting power grids with British Columbia.In conjunction with interties between southeast Alaska population centers,interties with British Colum- bia utilities would increase system reliability and make power available for development projects on both sides of the border. In the coming months,the Authority also intends to develop a strong relationship with the Alaska Rural Development Council.The council is a newly-formed state and federal cooperative venture which will work with the private sector to assist rural Alaska reach a better future based on local needs and wishes.The Authority believes the council can be an effective vehicle to coordinate state and federal assistance to rural Alaska. Most of the Authority's generating capacity is hydroelectric,although other energy sources such as fuel cells,biomass,wind and solar power have been and are being pursued.Coal,however,is believed to be the next major energy resource of choice to be developed in Alaska.The state has low sulfur coal reserves estimated at between 5 trillion and 6 trillion tons,which is from one-third to one- half of all U.S.coal reserves.On an energy equivalent basis,Alaska's coal reserves are equal to more than 1,000 Prudhoe Bay oil fields. A new window of opportunity with coal is opening for Alaska.This opportunity is driven by stringent federal Clean Air Act amendments which place a premium on low sulfur coal;by federal support in developing new technology for burning coal with far less emissions than current technol- ogy allows;and by an increasing desire by nations --especially along the Pacific Rim -to decrease their reliance on imported oil from the Middle East. Alaska coal may offer the best opportunity for significant economic growth,but it is not the only energy resource the Authority has targeted for cooperative ventures with federal agencies.Wind, biomass,wireless power transmission,small coal and hydroelectric projects have also been discussed, and will be the subject of future Authority initiatives with federal agencies such as the Department of Energy. Rural Liaison and Technical Assistance The Authority intends to promote a "shared resource”approach with communities and utilities participating in energy projects and programs.In rural communities,more emphasis will be placed on local community support for projects -both through funding contributions and through the commitment of local personnel to training and operational management of utilities. In 1990 the Authority initiated production of a videotape training series and provided for a power panel to be used in operator instruction at the Alaska Vocational Technical Center (AVTC)in Seward.This is in keeping with an Authority goal of seeking community involvement in energy projects and,when the projects are completed,leaving them in the hands of trained personnel. Even with enhanced better trained utility staff,many village utilities will face difficult times in future years as funding sources decrease.For these utilities,the Authority believes efforts should begin to regionalize power generation capabilities by forming combinations of utilities.Some regionalization has already taken place and is demonstrating its worth.Having one utility able to handle the power demands of several communities will make for greater system reliability and efficiency,and should enhance that utility's financial base.Connecting villages with interties, achieving economies of scale through bulk fuel purchases and equipment and insurance purchases will also represent an initial step at creating infrastructure for future development. Chairman of the Board's Statement The Alaska Energy Authority begins 1993 with a sense of revitalization.We have a new member on the Board of Directors,a new Executive Director for the Authority,and a new direction! The Board's newest member is Robert L.Hufman,owner of Utilities Consulting Service of Fairbanks.Mr.Hufman,who joined the Board of Directors in August,also brings to the board a wealth of utility experience from his previous association with Golden Valley Electric Association Inc.of Fairbanks. The Authority's new Executive Director is Ronald A.Garzini,who left his position as assistant Commissioner of the Department of Commerce and Economic Development to take over the job as chief executive in September.A resident of Alaska since 1970,Mr.Garzini was Staff Director of the Fairbanks North Star Borough during construction of the Trans-Alaska Pipeline.He moved to Seward in 1982 to accept the position of City Manager where he also served as Utility Manager over the electric utility which served the eastern Kenai Peninsula.As such,he was a signatory on the Bradley Lake Hydroelectric Project.During more than five years with the Municipality of Anchorage,Ron served as Chief of Operations and as Municipal Manager. While a strategic plan and a proposed financial restructuring of the Authority will determine the agency's long-term direction,I would like to report on a new direction that the Authority currently has underway. Alaska has more than 150 individual electric utilities,more than the Pacific Northwest states combined.Many of these small utilities do not have the customer base to generate the revenue necessary to support trained operational and managerial personnel.Another result of the development of power systems on a village-by-village basis has been a lack of system efficiency for small utilities. In the latter half of 1992,the Authority embarked on an effort to "regionalize”small utilities either with an already existing electric cooperative or by grouping several utilities together.This allows utilities to reap the benefits of economies of scale in terms of parts inventories,purchase of fuel in bulk quantities and centralized billing and accounting functions.The effort also broadens the overall customer base and provides the expanded electric cooperative or new regional utility with the additional resources needed to enhance operational and managerial skills. Initial efforts at regionalization have meet with success and have been well-received by the small utilities involved,many of which were either very receptive when approached with the concept or initiated the discussions without prior prompting from the Authority. It is the Authority's intent to continue the regionalization effort on a village-by-village basis during 1993. There are many areas of Alaska's energy system that need a great deal of improvement. Alaska's future can be bright if we work now to provide the energy needed to power the future. Meeting the requirement for clean,efficient energy in all parts of Alaska is a challenge that must be addressed now.The Alaska Energy Authority,in cooperation with both the private and public sectors, stands ready to accept the challenge. Sincerely, Robert Martin Jr. 26 Financial Statements June 30,1992 and 1991 DELOITTE &TOUCHE Independent Auditors'Report Board of Directors Alaska Energy Authority Anchorage,Alaska We have audited the accompanying combined balance sheets of the Alaska Energy Authority as of June 30,1992 and the related combined statements of revenues and expenses,statements of changes in equity,and cash flows for the years then ended.These financial statements are the responsibility of the Authority's management.Our responsibility is to express an opinion on these financial statements based on our audit.The financial statements of the Alaska Energy Authority for the year ended June 30,1991 were audited by other auditors whose report,dated October 19,1991,expressed an unqualified opinion on those statements. We conducted our audit in accordance with generally accepted auditing standards.Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial _Statements are free of material misstatement.An audit includes examining,on a test basis,evidence supporting the amounts and disclosures in the financial statements.An audit also includes assessing the accounting principles used and significant estimates made by management,as well as evaluating the overall financial statement presentation.We believe that our audit provides a reasonable basis for our opinion. In our opinion,the 1992 combined financial statements referred to above,present fairly in all material respects,the financial position of the Alaska Energy Authority as of June 30,1992 and the results of operations,changes in equity,and its cash flows for the years then ended in conformity with generally accepted accounting principles. Our audit was conducted for the purpose of forming an opinion on the financial statements as a whole. The supplemental schedules listed in the table of contents are present for the purpose of additional analysis and are not a required part of the financial statements.This additional information is the responsibility of the Alaska Energy Authority management. Such information has been subjected to the auditing procedures applied in our audit of the basic financial statements and,in our opinion,are fairly stated in all material respects when considered in relation to the basic financial statements taken as a whole. Dot TockOctober2,1992 EXHIBITS I Combined Balance Sheet I Combined Statement of Revenues and Expenses il Combined Statement of Changes in Equity IV Combined Statement of Cash Flows Notes to Combined Financial Statements 27 ALASKA ENERGY AUTHORITY Combined Balance Sheet 28 ASSETS AND OTHER DEBITS PROPERTY,PLANT AND EQUIPMENT Property,plant and equipment in service Less:accumulated depreciation Construction work in progress NET PROPERTY,PLANT AND EQUIPMENT OTHER ASSETS Restricted cash and investments Power Project Fund loans Rural Electrification Revolving Loan Fund loans Deferred projects cost Unamortized bond issuance cost TOTAL OTHER ASSETS CURRENT ASSETS Due from State of Alaska Operating revenue receivable Accrued interest receivable Current portion of notes receivable _ Bulk Fuel Revolving Loan Fund loans Other TOTAL CURRENT ASSETS TOTAL ASSETS LIABILITIES AND FUND EQUITY FUND EQUITY Contributed capital Deficit TOTAL FUND EQUITY LONG-TERM DEBT,NET OF CURRENT PORTION Bonds payable Power Development Revolving Loan Fund loans payable Power Project Fund loans payable Rural Electrification Revolving Loan Fund loans payable Arbitrage interest payable TOTAL LONG-TERM DEBT CURRENT LIABILITIES Accounts payable Retainage payable Current portion of long-term debt and loans payable Due to State of Alaska Power Development Revolving Loan Fund accrued interest Other loan funds accrued interest Other Other accrued interest Deferred revenue TOTAL CURRENT LIABILITIES TOTAL LIABILITIES TOTAL LIABILITIES AND FUND EQUITY ¢Exhibit! 1992 $921,771,912 130,873,586 790,898,326 790,898,326 73,766,180 23,550,524 4,462,306 2,798,834 43,323 104,621,167 2,788,478 9,780,138 2,974,938 752,022 710,276 27,413 17,093,265 $912,612,758 $631,706,219 (420,450,152) 511,256,067 161,220,054 184,571,726 23,550,524 4,462,306 1,503,172 375,307,782 3,797,581 224,026 3,502,298 9,372,513 721,527 5,535,011 2,895,953 26,048,909 401,356,691 $912,612,758 June 30 199] $630,678,236 108,797,624 521,880,612 271,489,888 793,370,500 90,110,700 25,351,579 4,571,481 14,461,917 46,904 134,542,581 4,497,413 9,565,456 3,986,093 758,528 782,751 139,367 19,729,608 $947,642,689 $629,629,738 (101,511,456) 528,118,282 162,484,783 184,571,726 25,351,579 4,571,481 1,221,353 378,200,922 7,167,264 1,797,904 1,541,279 9,946,451 773,304 13,309 5,529,790 14,554,184 41,323,485 419,524,407 $947,642,689 ALASKA ENERGY AUTHORITY Combined Statement of Revenues and Expenses +Exhibit Il Year Ended June 30 1992 1991 REVENUES TT a State of Alaska appropriations $33,646,649 $26,302,838 Revenue from other state agencies 345,985 145,614 Revenue from federal government agencies 314,903 Revenue from operating plants 25,631,586 12,925,826 Interest and investment income 5,862,587 2,499,155 Other revenues 604,501 ____.293,104 TOTAL REVENUES 66,606,211 42,166,537 EXPENSES General and administrative expense 779,290 995,149 Plant operating expenses 3,985,372 2,811,611 Contribution to Four Dam Pool Initial Project Renewal and Replacement Fund 3,000,000 Depreciation Expense 22,413,571 16,858,997 Project expenses 12,419,101 200,000 Grants 7,489,710 5,242,043 Interest expense 20,882,079 11,477,958 Power Cost Equalization progam 14,413,298 20,295,022 Other 162,486 47,606 TOTAL EXPENSES 85,544,907 57,928,386 DEFICIENCY OF REVENUES OVER EXPENSES $(18,938,696)$(15,761,849) ALASKA ENERGY AUTHORITY Combined Statement of Changes in Equity +Exhibit Ill Accumulated Contributed Total Deficit Capital Equity BALANCE AT JULY 1,1990 $(85,749,607)$612,082,857 $535,333,250 Deficiency of revenues over expenses (15,761,849)(15,761,849) Contributions/appropriations 8,546,881 8,546,881 BALANCE AT JUNE 30,1991 (101,511,456)629,629,738 $28,118,282 Deficiency of revenues over expenses (18,938,696)(18,938,696) Contributions/appropriations 2,076,481 2,076,481 BALANCE AT JUNE 30,1992 $(120,450,152)$631,706,219 $511,256,067 29 ALASKA ENERGY AUTHORITY Combined Statement of Cash Flows +Exhibit IV CASH FLOWS FROM OPERATING ACTIVITIES Receipts from State of Alaska Receipts from operations Other receipts General and administrative expenses Operating expense - Contribution to Initial Project Renewal and Replacement Fund Power Cost Equalization program Grants Disbursement on terminated projects Programs loans: Interest and principal collected from borrower New loans draws Loans service fees collected Interest and principal remitted to State of Alaska New loans disbursements Loans service fees paid to State of Alaska NET CASH PROVIDED BY OPERATING ACTIVITIES CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Loan from Power Development Revolving Loan Fund Repayment of Loan from Power Development Revolving Loan Fund NET CASH USED IN NONCAPITAL FINANCING ACTIVITIES CASH FLOWS FROM CAPITAL FINANCING ACTIVITIES: Proceeds from new bonds Bond issuance costs Bond redemption Contributed capital from State of Alaska Contributed capital from federal government Contributed capital from other Interest paid on borrowings Bond and Trust fees paid Power Development Revolving Loan Fund debt service Power Development Revolving Loan Fund interest from trust Construction of capital projects Deferred project costs NET CASH USED IN CAPITAL FINANCING ACTIVITIES: CASH FLOWS FROM INVESTMENT ACTIVITIES: Interest received from Bradley trust Interest received from other trust NET CASH PROVIDED BY INVESTMENT ACTIVITIES: Net decrease in cash and cash equivalents Cash and cash equivalents at beginning of year (41,965,355) 5,631,393 625,556 6,256,949 (16,344,520) 90,110,700 CASH AND CASH EQUIVALENTS AT END OF YEAR =$73,766,180 Year Ended June 30 1992 199] $24,836,999 $25,573,425 25,416,904 12,497,185 527,481 195,718 (747,576)(988,505) (3,914,816)(2,253,938) (3,000,000) (16,150,813)(19,358,222) (7,202,792)(5,348,084) (401,501) 3,229,951 4,764,356 597,926 1,811,411 10,644 9,371 (3,229,951)(4,764,266) (597,926)(1,811,411) (10,644)(9,371) 19,363,886 10,317,669 825,000 (6,361,212) (5,536,212) 60,101,556 (264,465) (190,900,000) 1,278,131 1,336,622 104,138 41,991 (11,102,037)(11,061,494) (826,302) (9,601,200)(1,543,492) (353,339)(397,195) (21,803,572)(68,096,367) (383,338)(671,545) (212,176,553) 9,581,259 928,802 10,510,061 (196,885,035) -286,995,735 $90,110,700 30 ALASKA ENERGY AUTHORITY Combined Statement of Cash Flows +Exhibit IV (Continued) Year Ended June 30 1992 1991 RECONCILIATION OF DEFICIENCY OF REVENUES OVER EXPENSES TO NET CASH PROVIDED BY OPERATING ACTIVITIES: DEFICIENCY OF REVENUES OVER EXPENSES $(18,938,696)$(15,761,849) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation 22,413,571 16,858,997 Amortization of deferred interest and bonds discount 596,059 Amortization of bonds issuance costs -3,581 Deferred projects expensed 12,017,600 200,000 Loss on disposal of assets 151,843 38,235 Bonds interest payments 9,262,469 Power Development Revolving Loan Fund interest payment 9,372,513 9,910,068 Investment income (4,211,549)(931,176) Change in assets and liabilities that provided (used)cash: Prepaid expenses 475,980 Due from State of Alaska 1,708,935 (529,414) Accounts and other receivable :(102,728)(520,195) Loans receivable 929,210 1,161,654 Accrued interest receivable 51,577 223,311 Accounts payable (1,351,907)919,096 Loans payable (929,210)(1,161,654) Accrued interest payable (51,577)(223,311) Contributed capital 100,426 Deferred revenue (11,658,231)(342,073) NET CASH PROVIDED BY OPERATING ACTIVITIES $19,363,886 $10,317,669 NON-CASH INVESTMENT AND CAPITAL FINANCING ACTIVITIES Bond issuance costs related to the Bradley Lake Variable Rate Demand Bonds of $357,914 were capitalized in 1991.Bond discounts related to the Bradley Lake Power Revenue Bond First and Second Series and Larsen Bay Fixed Rate Revenue Bonds of $35,292 and $211,022 were capitalized in 1992 and 1991,respectively. Amortization of deferred interest related to the Bradley Lake Power Revenue Bond First and Second Series of $83,919 and $379,841 were capitalized in 1992 and 1991, respectively.Deferred project costs of $12,017,600 and $200,000 were charged to expense and revenue in fiscal years 1992 and 1991,respectively.In 1991,State appropriations of $5,549,312 for Bradley Lake Hydroelectric Project were transferred to contributed capital from deferred revenue.A power project loan receivable from Cordova Electric Cooperative of $1,000,000 was redesignated to grant during fiscal year 1992,by an act of the State Legislature. 31 _NOTES OF COMBINED FINANCIAL STATEMENTS__Alaska Energy Authority +Year aoe ae 2 we|NOTE”A-SUMMARY OF SIGNIFICANT.ACCOUNTING POLICIES -The Energy 'Authority jis authorized to issueits own bondsand other obligations iin such principal amounts asSs :Will be necessary to provide for sufficient funds for carrying out its purpose...Obligations issued are not nas yBasis ofAccounting--Enterprise Fund Accounting:The aaccountssof the Authorityare'organized as an_Enterprise Fund.'Accordingly,the financial activities of the Energy Authority are recorded using the full:accrual basis of accounting whereby revenues are recorded when earned andd expenses,are recorded whenn goodsorservicesareTecelvedortherelatedlabilityisisincurred.""oe :State Appropriations:"Aaottiaions are»madeby the Leite to the Energy Authority iin the State generalfundand/or thewe following State statutoryfunds-; :(a).-tions for the Energy Program for Alaska to be expended by the Energy Authority for reconnaissance and__feasibility studies,power Project fifinance plans,Power Project.construction,debt stservice and'Powerproject _a Operating costs.Q ee : 2 (b):|:"Powerar Project FundHAS 444,$3.170);The Powerat Project FFund accounts for appropriations which'?ge"are to be expended by the Energy Authorityin the form of loans for power or potable water supply projects... -consistent with the Energy Authority's mandate.In the financial statements,the loans made under the fund are :the State. (©)'Power Cost Equalization Fund (AS 44.83.162)-The Power Cost Equalization Fund accounts for :7 ee'.appropriations to be expended by the Energy Authority for providing power ¢cost assistance to eligible electric Bg AN 32 Reporting Entity:The accompanying financial statements include all the activities of the 'Alaska Energy-Authority (Energy Authority).The Energy Authority was createdin 1976 by an act of the State of Alaska oo ooo_.Legislature (Legislature),Alaska Statute 44,83.020.,The Energy Authorityis a public corporation of the State .-»established to promote the general welfare of the people iin the state by reducing consumers power costs and|-.-encouraging the long-term economic growth of the state by promoting,financing,developing and operating©"power production facilitiesin Alaska.Such facilities may operate on fossil fuels,waste energy and renewable ::energy resources,including hydroelectric Power,wind,biomass,geothermal,tidal and solar.= deemed to constitute aa debt of the State of.Alaska unless authorizedoP the Legislature. :"Power Development Fund (As.44;83.382)-The Power Development Fund accounts for appropria- accounted for as notes receivable from borrowers,and corresponding amounts are recorded as notes payable to : utilities to reduce the cost of electric energy to the consumers. (d)Rural Electrification1 Revolving Loan Fund1(AS444.83.3.361)-The Rural Electrification Revolving e Loan Fund accounts for appropriations to be expended by the Energy Authority to make loans to electric utilities for extending new electric services into an area of the State that an electric utility may serve under a. certificate of public convenience and necessity issued by the Alaska Public Utilities Commission.In thefinancialstatements,the loans made under the fund are accounted for as notes receivable from borrowers,andcorrespondingamountsarerecordedasnotespayabletotheState.:en (e)Power Development Revolving Loan Fund (AS 44.83.500)-The Power Development Revolving .Loan Fund accounts for appropriations to be used by the Energy Authority for carrying out the Energy Program = for Alaska.The fund consists of,in addition to appropriations to the fund by the legislature,repayments of principal to the fund andincome from irinvestment of money in the fund and from loans made from the fund. (f)Bulk Fuel Revolving Loan Fund (AS.44.83.600)-The Bulk Fuel Revolving Loan Fund accounts for appropriations to be used by the Energy Authority to make loans to communities,with a population under -- -2,000 or to a private individual with a written endorsement of the governing body of such community,for purchasing bulk fuel.In the financial statements,the loans made under the fund are accounted for as notes receivable from borrowers,and corresponding amounts are recorded as notes payable to the State. =.(g):Electrical Service Extension Fund (AS 44,83.370)-The Electrical Service Extension Fund ; accounts for appropriations to be used by the Energy Authority to make grants to electrical utilities for cost of site preparation and construction for extending new electrical service,and for improvements of existing facilities.The amount of grant may not exceed 60 %of the total project cost.”°: Other Accounting Basis:In accordance with AS 44.83.950,the Energy Authority is subject to the provisions of the Executive Budget Act (AS 37.07).A proposed operating budget for the operations of the Authority for the following fiscal year as well as a capital improvements budget for the next fiscal year are prepared annually and subject to the State of Alaska's approval process.Appropriations for the operating budget lapse at the end of each fiscal year.Appropriations for capital projects,various grants and programs may carry over at year end. The Energy Authority is also subject to accounting requirements of the Federal Energy Regulatory Commission (FERC)for the construction costs of certain hydroelectric projects licensed by FERC.Such requirements do not differ materially from generally accepted accounting principles,the standards upon which the accompany- ing combined financial statements are presented. Property,Plant and Equipment:Property,plant and equipment are stated at cost and depreciated on the straight-line method over their estimated useful lives. For hydroelectric plants financed through restricted tax-exempt borrowings,interest costs on the borrowings, less any interest earned on the related interest-bearing investments acquired with proceeds of the borrowings are capitalized from the date of the borrowing until the assets are placed in service.Amortization of bond discounts during the construction is also capitalized.Ordinary repairs and maintenance are expensed as incurred. Depreciation on property,plant and equipment is reflected as an expense in the combined statement of revenues and expenses.Depreciation expense on property,plant and equipment acquired through capital contributions is also presented as operating expense.The estimated economic life of the assets are as follows: Non-utility plant:Utility plant: Camp buildings 5 years Intangible 30-50 years Machinery and equipment 5 years Production 30-50 years Furniture and equipment 7-10 years ;Transmission 20-40 years General 5-30 years Contributed Capital:Property,plant and equipment acquired with funds from federal,state or other sources are accounted for as contributed capital. Investments:Investments are recorded at cost or amortized cost. Income Taxes:The Internal Revenue Code provides that gross income for tax purposes does not include income accruing to a state or territory or any political subdivision thereof which is derived from the exercise of any essential governmental function or from any public utility.The Energy Authority is a political subdivision of the State of Alaska and is therefore exempt from state and federal taxes. Cash and Cash Equivalents:Cash equivalents for the purpose of presenting the statement of cash flows are defined as short-term,highly liquid investments.All of the Energy Authority's cash and cash equivalents are restricted. Deferred Project Costs and Deferred Revenues:Costs of feasibility studies performed in connection with potential construction projects which are expected to benefit future operations or result in construction of plant are recorded as deferred project costs and deferred revenue.Deferred costs related to feasible projects are reclassified to construction work in progress and to contributed capital at the onset of construction.Deferred costs related to terminated projects which are projects which will not become assets of the Energy Authority are recorded as project expenses and the funding source of such projects are recorded as project revenues. Debt Issuance Costs:Issuance costs relating to the refinancing of the Bradley Lake Hydroelectric Project Variable Rate Demand Bonds are reflected as project costs in the period of refinancing. 33 34 NOTE B-CASH AND INVESTMENTS Pursuant to various agreements relating to its operation,the Authority has established funds to account for assets restricted to construction,operation and financing activities.In the financial statements,these funds are classified as restricted cash and investments.The components of this classification are as follows: June 30 1992 199] Investments $73,681,851 $89,748,722 Demand and time deposits 84,329 ____361,978 $73,766,180 $90,110,700 The restricted cash and investments are held in trust accounts for the following activities: June 30 1992 199] Bradley Lake Hydroelectric Project $61,041,339 $74,463,538 Four Dam Pool self insurance 9,457,714 8,335,208 Four Dam Pool construction 1,958,771 5,873,617 Four Dam Pool renewal &replacement revolving loan fund 1,033,312 1,000,000 Larsen Bay Hydroelectric Project 171,886 395,441 Small Projects operation 103,158 42,896 $73,766,180 $90,110,700 The investments for Bradley Lake Hydroelectric projects are restricted to specific purpose and deposited in the following accounts: June 30 1992 1991 Construction Fund-Bond Proceeds $25,395,015 $41,170,545 Capital Reserve Fund '13,392,890 13,392,890 Debt Service Fund =7,601,000 7,012,434 Unallocated Construction Fund "6,408,652 6,064,848 Renewal and Contingency Fund 5,003,398 5,003,268 Excess Earnings Fund 1,266,531 1,178,794 Revenue Fund 865,573 15,759 Operating Reserve Fund 625,000 625,000 Operating Fund 483,280 $61,041,339 $74.463.538 Demand and Time Deposits:As of June 30,1992,the Energy Authority has $84,329 in time deposits held in accounts of the City of Ketchikan as agent for the Swan Lake Hydroelectric Project.The bank balances are covered by FDIC insurance or collateral held by the City of Ketchikan's agent in the name of the City. The Energy Authority's investments are categorized below to give an indication of risk assumed by the Authority at year end,Category 1 includes investments that are insured,registered or collateralized with securities held by the Authority or its agents in the Authority's name.Category 2 includes uninsured and unregistered investments or collateralized investments,with securities held by the pledging financial institution's trust department in the Energy Authority's name. Category l Category 2 Carrying Amount as of June 30,1992 Repurchase agreements $-$70,670,939 $70,670,939 U.S.Government securities 1,958,771 1,958,771 Other investments 1,136,470 1,136,470 $1,958,771 $71,807,409 $73,766,180 Pursuant to the Bradley Lake Variable Rate Demand Bonds Indenture,the State of Alaska deposited with the bond trustee $166,000,000 restricted to construction activities of the Bradley Lake Hydroelectric Project.The state funds were fully expended as of June 30,1991. Interest eamed on investment of the proceeds of the note payable to the State of Alaska,Power Development Revolving Loan Fund (PDRLF)held by the Energy Authority for the Four Dam Poo!Project,is paid to the PDRLF. Investments:Alaska Statutes authorize the Authority to establish trust funds for the investment and deposit of bond proceeds.Statutes and applicable trust agreements authorize the Authority to invest in federal obligations, obligations of States or political subdivisions,interest bearing accounts or certificates of deposit,agency obligations, repurchase agreements,public housing bonds,commercial paper and bankers acceptances. NOTE C-PROPERTY,PLANT AND EQUIPMENT A summary of property,plant and equipment and related accumulated depreciation are as follows: June 30 1992 1991 Non-utility plant: Camp buildings $296,448 $487,898 Machinery and equipment 2,767,415 2,501,909 Furniture and equipment 1,287,981 1,153,563 4,351,844 4,143,370 Utility plant: Intangible 2,975,070 2,970,602 Production 580,639,808 342,635,430 Transmission 326,655,823 278,383,305 General 7,149,367 2,545,529 917,420,068 626,534,866 921,771,912 630,678,236 Accumulated depreciation 130,873,586 108,797,624 790,898,326 521,880,612 Construction work in progress 271,489,888 Net Property,Plant and Equipment $790,898,326 $793,370,500 NOTE D-DEFERRED PROJECT COSTS AND PROJECTS EXPENSE The Energy Authority periodically reviews the status of various deferred projects and expenses those projects deemed to have no benefit to the Energy Authority's future operation or that would not result in construction of plant.The amount recorded as project expenses are $12,419,101 and $200,000 for fiscal year 1992 and 1991, respectively.Corresponding deferred revenues were also recorded as current years revenue. Deferred project costs are as follows:June 30 1992 1991 Allison Lake $84,967 $- Bethel Area Intertie 100,256 Bethel Region 1,253,602 Biomass Energy Program 585,917 Healy Coal Project 12,469 Kotzebue/Nome Coal Study 150,000 Power Statistics 180,729 Railbelt Energy Alternative Study 2,096,760 2,096,760 Regional Feasibility Program 504,967 Rural Community Feasibility Program 2,933,051 Rural Electrification 3,078,560 Rural Energy Reconnaissance Program 249,864 Snettisham Project Transfer 92,706 74,178 Southeast Intertie 797,297 794,306 Swan-Tyee Intertie Project 248,030 Waste Heat Program 6,611,925 Yakutat Waste Heat 34,336 3,319,760 18,660,920 Less: Machinery,furniture and equipment included as non-utility plant in service 520,926 520,926 Capitalized projects included in utility plant transfers 3,678,077 520,926 4,199,003 Net Deferred Project Costs $2,798,834 $14,461,917 35 36 NOTE E-LONG-TERM DEBT AND PROGRAM LOANS PAYABLE The following is a summary of long-term debt and program loans payable: June 30 1992 1991 Bradley Lake Power Revenue Bond First Series (a)$102,542,698 $102,132,617 Bradley Lake Power Revenue Bond Second Series (a)59,812,961 59,508,648 Larsen Bay Fixed Rate Revenue Bond (b)844,395 843,518 Arbitrage interest payable (c)1,503,172 1,221,353 Notes payable to State of Alaska: Power Development Revolving Loan Fund loan (d)184,571,726 184,571,726 Power Project Fund loans (e)24,240,414 26,072,947 Rural Electrification Revolving Loan Fund loans (e)4,524,438 4,608,641 Bulk Fuel Revolving Loan Fund loans (e)710,276 782,751 378,810,080 379,742,201 Less:Current Portion (3,502,298)(1,541,279) Total Long-Term Debt $375,307,782 $378.200.922 (a)The Energy Authority issued the Power Revenue Bonds,First and Second series in September 1989 and August 1990,respectively,for the long term financing of the construction costs of the Bradley Lake Hydroelectric Project and refunded the Energy Authority's Variable Rate Demand Bonds which were issued in November 1985 to provide interim financing of the project.The Bond Resolutions contain covenants which, among other things,require the Energy Authority to establish and maintain with the trustee a Capital Reserve Fund (an amount equal to the lesser of maximum annual aggregate debt service or ten percent of the proceeds of the Bonds).All of the revenues derived by the Energy Authority from the operation of the project and all moneys,securities and funds held or set aside are pledged and assigned to secure the payment of,redemption premium,if any,and interest on the Bonds.No other revenues of the Energy Authority are pledged as security for the payment of the Bonds.The Energy Authority has further committed that at all times after the date of commercial operation of the Project,it shall charge and collect from each power purchaser a percentage share of annual project costs.The Power Revenue bonds,First and Second series have maturity dates staggering from July 1,1992 to July 1,2021 with interest rates ranging from 6.2%to 7.25%a year. (b)Larsen Bay Fixed Rate Revenue Bonds were issued in May 1991 for the long-term financing of a portion of the construction costs of the Larsen Bay Hydroelectric Project.All of the revenues derived by the Energy Authority from the operation of the Project are pledged and assigned to secure the payment of the Bonds.The bonds have maturity dates staggering from April 1,1993 to April 1,2011 with interest rates ranging from 6.25%to 7.75%. (c)The arbitrage interest payable is due to Internal Revenue Service for the excess of investment income on the proceeds of the Energy Authority's tax exempt bonds over the related interest expense in accordance with Section 148 of Internal Revenue Code of 1986.Accumulated arbitrage interest payable amount is computed each year,and the final amount is due after the end of the fifth bond year.The Energy Authority maintains with the trust a separate account and each year sets aside a sufficient amount to satisfy the liability. (d)The note payable to the State of Alaska for the Power Development Revolving Loan Fund (the note) at June 30,1992 are subject to the terms and conditions of a loan agreement effective October 28,1985 as amended.Effective July 1,1989,the administration of this note was transferred to the Energy Authority from the Department of Commerce and Economic Development subject to Executive Order 75. The loan proceeds are restricted to financing initial hydroelectric projects under Energy Program for Alaska.Any interest earned on the unexpended proceeds of the note must be paid to the State.The note is due October 28,2030 and provides for accrual of interest and repayments thereof for the first 15 years in an amount not less than the debt service component of the proceeds from the sale of power generated from the Solomon Gulch,Terror Lake,Swan Lake and Lake Tyee hydroelectric facilities (Four Dam Pool Project).However, principal repayment may occur under specific circumstances.The principal balance as of October 28,2000 will be amortized in equal annual installments at an interest rate of 8 percent,but subject to the reopener of the debt service component of the wholesale power rate in the fifteenth and thirtieth anniversaries of the Power Sales Agreement between the Energy Authority and the Four Dam Pool project power purchasers. All of the assets of the Four Dam Pool Project and the rights under agreements and revenues derived from use of capacity and sale of output of the Four Dam Pool project have been pledged as security under the loan agreement. (e)The Energy Authority manages three loan programs through loan funds established by Alaska statutes:Power Project Fund,Rural Electrification Revolving Loan Fund and Bulk Fuel Revolving Loan Fund. As of June 30,1992,these loan funds have the following receivable from borrowers: Long-term Short-term Total Accrued Receivable Receivable Receivable Interest Power Project Fund loans $23,550,524 $689,890 $24,240,414 $640,132 Rural Electrification Revolving Loan Fund loans 4,462,306 62,132 4,524,438 60,534 Bulk Fuel Revolving Loan Fund loans 710,276 770,276 20,861 Total $28,012,830 $1,522,298 $29,535,128 $721,527 The Energy Authority records liabilities for notes payable and accrued interest payable to the state for corre- sponding notes receivable and accrued interest from borrowers.Any uncollectible loans from borrower,when written-off,also correspondingly reduces notes payable to the State,and in the case of revolving loan funds, reduces the amounts available for future borrowers. Power Project Fund loan receivable from the Cordova Electric Cooperative in the amount of $1,000,000 was redesignated to grant by the Alaska State Legislature,effective July 1,1991. Pursuant to AS 44.83.170,AS 44.83.361 and AS 44.83.610,the Authority is required to reimburse the State of Alaska general fund for interest and principal received for Power Project Fund loans and interest and fees received for Rural Electrification Revolving Loan Fund loans and Bulk Fuel Revolving Loan Fund loans. Components of repayments to the State of Alaska are as follows: June 30 1992 199] Power Project Fund loans Principal $832,534 $1,544,802 Interest 1,586,579 1,622,536 Rural Electrification Revolving Loan Fund loans 80,694 88,134 Bulk Fuel Revolving Loan Fund loans Interest 47,162 42,009 Fees 10,644 9,371 $2,557,613 $3,306,852 Scheduled maturities of long-term debt as of June 30,1992 are as follows (program loans are excluded since the payables are offset by receivables): Bradley Lake Power Total Larsen Bay Development Maturity Date Power Revenue Bonds Bradley Revenue Revolving Loan (Fiscal year)First Series Second Series Lake Bond Fund Loans Total 1993 $1,175,000 $780,000 $1,955,000 $25,000 $-$1,980,000 1994 1,485,000 985,000 2,470,000 25,000 2,495,000 1995 1,580,000 1,045,000 2,625,000 25,000 2,650,000 1996 1,680,000 1,115,000 2,795,000 25,000 2,820,000 1997 1,790,000 1,185,000 2,975,000 30,000 3,005,000 1998-2002 10,930,000 7,215,000 18,145,000 180,000 3,388,933 21,713,933 2003-2007 15,110,000 10,085,000 25,195,000 255,000 11,148,942 36,598,942 2008-2012 17,845,000 11,520,000 29,365,000 290,000 16,381,455 46,036,455 2013-2017 25,010,000 14,265,000 39,275,000 24,069,731 63,344,731 2018-2022 35,150,000 .20,250,000 55,400,000 35,366,331 90,766,331 2023-2027 51,964,744 51,964,744 2028-2032 42,251,590 42,251,590 111,755,000 68,445,000 180,200,000 850,000 184,571,726 365,626,726 Bond discount & deferred interest (9,212,302)(8,632,039)(17,844,341)(10,605)0 (17,854,946) Total $102,542,698 $59,812,961 $162,355,659 $844,395 $184,571,726 $347,771,780 37 Interest expenses on borrowings totaled $21,189,822 and $22,683,829 in 1992 and 1991,respectively.On the :ahs ,Bradley Lake Hydroelectric Project,interest expense of $1,958,782 and $12,795,278 for 1992 and 1991, "-respectively,and interest income of $804,208 and $9,961,785 for 1992 and 1991,respectively,related to tax."exempt borrowings have been capitalized.Also,on the Larsen Bay Hydroelectric Project,interest expense of © "$8,483 and interest income of $1,756 have been capitalized during the fiscal year 1991.In fiscal year 1991, .Other Debt:In 1982,the Energy Authority assumed4 $44,858,858 of 5%mortgage notes 'payable vwhich ae ae.provide for quarterly principal and interest payments to the Rural Electrification Administration (REA)in eeconnectionwiththeSolomonGulchHydroelectricProject.At June 30,1992,the unpaid principal balanceiis«$38,285,961.Concurrent with the assumption,the Energy Authority deposited with a trustee an investment in treasury notes with a 14%rate of return sufficient to satisfy and provide for timely repayment of all principal °.. $264,465 bondissuance cost relating tto Bradley PPower Revenue Bonds and Larsen\Bay Fixed Rate Revenue woes oS,bonds were capitalized. and interest due on the assumed REA loans.Accordingly,the loans and related trust assets are not included inthecombinedfinancialstatementssoftheEnergySuthority.As of June 30,1992,the.assets in1 this trustt have aacarryingvalueof$20,924,219. 7 CONTRIBUTED CAPITAL |:"PROPERTY.PLANT,AND EQUIPMENT: NOTEF -SEGMENT INFORMATION Administration-'and Power Cost"._Paualicdion..Bradley Lake;Pydroelectrie-Program : 38. Other revenue- EXCESS (DEFICIENCY)OF__REVENUES OVER EXPENSES -- Additions .Deletions State of Alaska appropriationOperatingrevenue*oe "Interest andiinvestment income . "Revenue from federal agencies Revenue from other state agencies. a TOTAL REVENUE. 'DEPRECIATIONEXPENSE -_NET ADDITIONS:= a TOTAL ASSETS |;ren DUBE poe "Power Development Revolving Loan Fund payable = »#..Bonds payable .Power Project Fund payable-Rural Electrification Revolving ILoan Fundpayable- Arbitrage interest payable TOTAL LONG-TERM DEBT TOTALEQUITY Ee ry i Oe s en,96)|$105,629 $(14,387,090)$3,401,600)a $6,640,333 --$175,057,545-_$318,765,315 $124,249,576=5 ae $17,290,111 $595,287, AROS eS $208,474.«$17,290,111 $595,287 $6,863,698 =$345,544,328.---$421,347,816 $102,184.49 $e $184,571,726 160,400,659 $1,503,172 cu $161,903,831 $184,571,726 $175,163,174 $227,273,923.---$102,071,966 12,747,866 3,616,351 11,181,678 584,756 "$16,364,217 "$11,766,434 $1,473,051. -$1,201,401 :NOTE F-SEGMENT INFORMATION.The Energy Authority 1maintains enterprise funds which account for the Four Dam Pool11 Hydroelectric Project, Anchorage Fairbanks Intertie,Larsen Bay Hydroelectric Project,Other Facilities,Loan Programs,Bradley Lake | Hydroelectric Project,and Alaska Energy Authority Administration which includes Power Cost Equalization, Grants,Electrical Service Extension grant program and Deferred Projects.Selected financial segment informa-|...es adtionasofJune30,1992 and the fiscal year then endedis as shown below.ae wes : NOTE G-INTERFUND ACTIVITIES AND BALANCES Interfund activities and balances as of June 30,1992 for the various funds are summarized as follows: Four Dam -Power Development - :Pool Fund Revolving Loan FundNotereceivable(payable)_ __.Power Development Revolving Loan Fund $(184,571,726)03s $184,571,726 Interest receivable (payable)-ug Se orn suse (9,372,513)oes 9,372,513- Interest (income)expense.©:lek ee oo.9,372,513 (9,372,513) pk OE joe ES : : <°Rural66 a ee ©Power.0.Electrification Bulk Fuel ©:<<Larsen Bay.oe ee Project.Revolving *Revolving - Hydroelectric'.Other Fund Loan Fund »Loan Fund Project Facilities Loans »Loans -,Loans...Total Cee $3,460.2,699 $54,867 $33,646,649Sy107,397 4 -ees eee oN ee a e "225,631,586 oa 7,798 1,513,679 90,197 0 47,162 ss §,862,587 10,644 604,501 © 514,903 345,985 neege92.806 a $112,673 oe $66,006,211$115,195 $1,517,139 $861,804 $35,280 $416,383 "22,413,571 8(60.875) $G16,794 (18,938,696) "$0,680 "$6,070,770 $61,706,219 $231,784 $1,278,132:20,093,238 A ee ae a ;(489,450) $331,784 $1,278,132 $19,603,788 $1,731,403 $4,683,909 $24,880,545 $4,584,972 $791,138 $912,612,758 $e $e $C $184,571,726 819,395 161,220,054 23,550,524 23,550,524 4,462,306 4,462,306 en on ne a 1,503,172 $819,395 $23,550,524 $4,462,306 $375,307,782 $4,683,799 "$511,256,067 39 40 NOTE H-UNEXPENDED APPROPRIATIONS The Energy Authority's unexpended appropriations are held by the State of Alaska as follows: June 30 1992 199] Grants $4,373,498 $4,760,857 Bulk Fuel Revolving Loan Fund 1,589,652 967,624 Power Cost Equalization 1,362,060 2,358,908 Power Project Fund |..>.: 839,847 843,403 Rural Electrification Revolving Loan Fund ""”388,862 307,433 Terminated Projects 97,487 0 Continuing Projects 64,911 328,625 $8,716,317 $9,566,850 NOTE I-PENSION PLAN All full-time employees of the Energy Authority participate in the State of Alaska Public Employees Retirement System (PERS),a multiple employer public retirement system.The Energy Authority is a part of the State of Alaska and detailed pension information is not generated for the Energy Authority.Total salaries for Authority employees covered by PERS for the years ended June 30,1992 and 1991 amounted to $3,945,246 and $3,542,967,respectively. The Energy Authority employees are required to contribute 6.75%of their annual salaries to PERS.The Authority contributes the remaining amounts necessary to fund the actuarially determined contribution for the year.For the fiscal year ended June 30,1992,the Authority's contribution was 15.84%of covered payroll. Benefits vest after five years of credited service.Employees hired prior to July 1,1986 with five or more years of credited service are entitled to annual pension benefits beginning at normal retirement age 55 or early retirement age 50.For employees hired after June 30,1986,the normal and early retirement ages are 60 and 55, respectively.The normal monthly pension benefit is equal to 2 -2-1/2 percent of the member's highest three- year average monthly compensation times the number of years the employee has participated in PERS. The pension benefit obligation was computed as part of an actuarial valuation as of June 30,1991.Significant actuarial assumptions used in the valuation include;a)a rate of return on the investment of present and future assets of 8.75 percent per year compounded annually,b)projected salary increases of 6.5 percent per year for the first five years of employment and 5.5 percent per year thereafter. Total unfunded pension benefit obligation,based on the pension assets at cost,applicable to the State of Alaska's employees was $334,498,000 and $116,546,000 at June 30,1991 and 1990,respectively,and is as follows (in thousands): 199]1990 Pension benefit obligation $1,924,251 $1,569,553 Net assets available "1,589,753 ,1,453,007 Unfunded pension benefit obligation $334,498 $-116,546 Assets as a percentage of pension benefit obligation 83%93% The net assets available for benefits,at market value,were $1,630,505 and $1,490,489,000 as of June 30,1991 and 1990,respectively. NOTE J-LITIGATION SETTLEMENTS During fiscal year 1991,the Energy Authority settled litigation with the Initial Project Management Committee (PMC)regarding Four Dam Pool Hydroelectric Project.According to the settlement,the Energy Authority established the Initial Project Revolving Loan Fund;the Fund is to make loans in an amount no less than $25,000 to the PMC for purposes related to the initial project.The Energy Authority received from the PMC $120,000 of disputed prior year debt service payment.During fiscal year 1992,upon finalization of the settlement documents,the Energy Authority disbursed $3,000,000 from the Tyee Lake Hydroelectric Project Construction fund to the PMC for deposit in the PMC Renewal and Replacement Fund for the uses identified in the Settlement Agreement. NOTE K-CONDUIT FINANCING Slana Energy Bonds:In March,1990,the Energy Authority issued approximately $34,000,000 Retainable Adjustable Duration/Adjustable Rate Revenue Bonds (Alaskan Air Command/Slana Energy Project)of which proceeds are maintained by bank trustees.These obligations are not included in these financial statements. These bonds are payable solely from payments made on and secured by a pledge of all revenues deriving to the Energy Authority under the Loan Agreement with Slana Energy,Inc.and Castle Mountain Mining Co.,Ltd. All moneys,securities,and funds held or set aside under the indenture are pledged and assigned to secure the payment of principal,redemption premium,if any,and interest on the bonds.The bonds are not payable from any other revenues or assets of the Energy Authority.Neither the faith and credit,nor the taxing powers of the State of Alaska,or any political corporation,subdivision or agency thereof is pledged to the principal and interest on the bonds. Galena Project -Fixed Rate Revenue Bonds,Series 1991:In May 1991,the Energy Authority issued $2,900,000 in revenue bonds to allow the City of Galena to refinance the construction of a new electric generation plant to serve the local community and United States Air Force Base.These obligations are not included in these financial statements. These bonds are secured solely by a loan agreement between the Energy Authority and the City of Galena,and a Letter of Credit issued by Seattle First National Bank (formerly Security Pacific Bank Washington,N.A.). The Bonds are special limited nonrecourse obligations of the Authority and do not constitute direct or general obligations of the Authority,and the full faith and credit of the Authority is not pledged to the payment of the principal of and interest on the Bonds.The Bonds do not constitute an indebtedness or liability of the State of Alaska,and the Bonds do not directly,indirectly or contingently obligate the State of Alaska or any political subdivision thereof to apply moneys from or levy or pledge any form of taxation whatever to the payment of the Bonds. City and Borough of Sitka -Utility Revenue Bonds Series 1992:In May 1992,the Energy Authority issued about $56,900,000 tax-exempt bonds that allowed the City and Borough of Sitka to refinance its 1979 munici- pal bonds,resulting in significant debt service savings to Sitka.This obligations are not included in these financial statements. The 1992 Bonds are special obligations of the Alaska Energy Authority secured under a Trust Indenture by and between the Authority and Security Pacific Bank Washington,N.A.,as Trustee.The 1992 Bonds are payable solely from the sources provided under the Trust Indenture.The 1992 Bonds are equally and ratably secured by a pledge and assignment of the Municipal Revenue Bonds of the City held by the Authority under the Trust Indenture,the obligation of the City to make payments under its Loan Agreement with the Authority and the moneys and securities held under the Trust Indenture,including the Capital Reserve Fund. The 1992 Bonds do not constitute an indebtedness or other liability of the State of Alaska,and do not directly, indirectly or contingently obligate the State or any political subdivision thereof to levy any form of taxation for the payment of the bonds.Neither the full faith and credit nor the taxing power of the State of Alaska or the City is pledged for the payment of the 1992 Bonds. NOTE L-RISK MANAGEMENT The Energy Authority is exposed to various risks of loss related to torts;theft of,damage to,and destruction of assets;errors and omissions;injuries to employees;and natural disasters.The Energy Authority obtains coverage for its risks through purchase of commercial insurance,participation in the State Risk Management Pool and the establishment of self-insurance plans. General Liability;Watercraft and Aviation:All risks are covered by the State insurance plan through an annual charge assessed by the State Division of Risk Management. -Property;Boiler and Machinery:The Authority covers these risks arising from its ownership of hydroelectric and transmission facilities through a combination of acquisition of commercial coverage and risk retention. 4l (a)Property Four Dam Pool Facilities: The Four Dam Pool (FDP)property risks are covered by commercial insurance purchased through the State Division of Risk Management for losses in excess of $10,000,000 up to $60,000,000...The risk of losses for the first $10,000,000 is retained.However,the Authority maintains a line of credit for $10,000,000,secured © by a capital reserve fund to cover the self-retained risks and other non-insurable risks. The Energy Authority's self insurance for the FDP is funded through:1)annual insurance premium payment from the Four Dam Pool Project Management Committee;2)initial borrowings from the Power Development Revolving Loan Fund totaling $6,500,000;3)investment revenue from investment in the self-insurance trust;: and 4)revenues received under the Interruptible Power Sales Agreements. Anchorage-Fairbanks Intertie: The utilities participating in the Anchorage-Fairbanks Intertie operating agreement retain the property risk associated with the Anchorage-Fairbanks Intertie.The Authority maintains a line of credit for $1,000,000 for costs of repairs that would ultimately be reimbursed by the utilities utilizing the facility.:. Bradley Lake and Larsen Bay Hydroelectric Projects: The risks are covered by commercial insurance purchased through the State Division of Risk Management,and the self-insured retentions are a responsibility of the respective projects from operating funds. (b)Boiler and Machinery These risks are covered by commercial insurance purchased through the State Division of Risk Management. Additionally,utilities benefiting from the use of the facilities owned by the Energy Authority participate in the responsibility for deductibles and self-insured retentions under the terms of the respective agreement. Workers Compensation Insurance:The Energy Authority participates in the State of Alaska Risk Manage- ment Pool.The risks are transferred to the Pool,and the premium is charged to the Energy Authority based onpayrollexpenditures.NOTE M-RELATED PARTIES - State of Alaska:Financing for portions of the Energy Authority's operations and programs is dependent upon annual appropriation of the Legislature.The State of Alaska appropriations are recorded as revenues whenexpensesareincurred,In the normal course of business,the Energy Authority receives administrative,treasury,” personnel,legal,risk management,data processing,and other services from the State of Alaska. Four Dam Pool Project Management Committee:Effective October 28,1985,the Energy Authority entered into a long-term power sales agreement with utilities purchasing electric power from the Four Dam Pool Project.Pursuant to the agreement,a Project Management Committee (PMC)was formed.The PMC is comprised of a representative from the Energy Authority and each of the utilities.The participating utilities make monthly payments to the PMC,net of each utility's operating costs associated with the respective Four Dam Pool facility,for the utilities'share of total estimated annual costs,including debt service,at a set price for kilowatt hours purchased each month,with an annual settlement to adjust the payments to actual costs.The PMC makes monthly payments to the Energy Authority for the Energy Authority's share of the estimated costs and annual payments for the debt service component of the wholesale power rate and for insurance. Anchorage-Fairbanks Intertie Operating Committee:Effective May 1,1986,the Energy Authority entered into an agreement with utilities using the Anchorage-Fairbanks Intertie for wheeling of electrical power. Pursuant to the agreement,the Intertie Operating Committee (IOC)was established to manage the system.The IOC is comprised of a representative from the Energy Authority and each of the utilities.The Energy Authority is to be reimbursed for operation and maintenance costs on monthly basis with an annual settlement to adjust the payments to actual costs.The agreement may be terminated by the Energy Authority if the Energy Authority determines that such action is required to improve power systems serving the Alaska railbelt utilities or may be terminated by mutual agreement of the participants. Bradley Lake Project Management Committee:Effective December 7,1987,the Energy Authority entered into a power sales agreement with utilities purchasing electric power produced by the Bradley Lake Hydroelec- tric Project.Pursuant to the agreement,a Project Management Committee (PMC)was formed.The PMC is comprised of a representative from the Energy Authority and each of the utilities.The participating utilities make monthly payments directly to bond trustee based on the respective percentage share of the estimated annual project costs for each fiscal year,including debt service,with an annual settlement to adjust the payments to actual costs. NOTE N-SUBSEQUENT EVENTS On September 3,1992,the Energy Authority resolved to borrow up to $500,000 from Seattle First National Bank and to lend a corresponding amount to the City of Galena for purchase of bulk fuel for the City's electrical plant.The two loan agreements are expected to be perfected sometime in November 1992, NOTE O-COMMITMENTS AND CONTINGENCIES Litigation:The Authority,in the normal course of the business of its activities,is involved in various claims and pending litigation.The State of Alaska Department of Law manages all pending litigation of the Authority, and any liability arising from the settlement of pending claims is a State of Alaska liability for which the Department of Law or the Authority requests an appropriation from the State of Alaska Legislature to satisfy judgment.In the opinion of management,the disposition of current claims and pending litigation is not presently expected to have a materially adverse effect on the Authority's combined financial statements. Loan Programs:The Energy Authority,in the normal course of providing loans through the Rural Electrifica- tion Revolving Loan Fund and the Power Project Fund,incurs commitments for future loans which are not reflected in the accompanying combined financial statements.As of June 30,1992 and 1991,the Energy Authority has commitments as follows: June 30 .1992 1991 Rural Electrification Revolving Loan Fund loans $337,790 $337,790 Power Project Fund loans 610,095 810,095 Bulk Fuel Revolving Loan Fund loans e 195,400 ee e -$947,885 $1,343,285 43 Printed on Recycled Paper This Annual Report was published by the Alaska Energy Authority,Department of Commerce and Economic Development,and printed in Anchorage,Alaska at a cost of $5.95 per copy.This publication is required as a report to the Alaska Legislature by AS 44.83.940 and is also used by the Authority to support financial and other activities taken to fulfill the Authority's statutory mission. State of Alaska/Alaska Energy Authority is an EEO/AA employer. Alaska Energy Authority _Board of Directors The Energy Authority is governed by a seven-member Board of Directors consisting of three commissioners of principal executive departments,three public directors,and the director of the state Office of Management and Budget: Robert Martin Jr.,Chairman Tlingit &Haida Regional Electrical Authority Commissioner Edgar Blatchford Department of Community &Regional Affairs J.Shelby Stastny Director,Office of Management &Budget Office of the Governor Robert L.Hufman Utilities Consulting Service Brent N.Petrie,Manager Planning and Project Development For information on: Reconnaissance and Feasibility Studies Wireless Power Transmission Alaska Systems Coordinating Council Power Statistics Snettisham Strategic Plan Financial Restructuring Biomass/Bioenergy Programs Federal Initiatives Absorption Freezer Hybrid Hydro/Battery/Diesel Revenue Bond Financing Fuel Cells Gloria Manni,Director Accounting &Administration For information on: Power Cost Equalization Program Rural Electrification Revolving Loan Fund Bulk Fuel Revolving Loan Fund Power Project Loan Fund Dr.Joyce Murphy,Vice Chairman Alpine Veterinary Clinic Commissioner Glenn Olds Department of Natural Resources Acting Commissioner Paul Fuhs Department of Commerce and Economic Development _____Main Contacts David Denig-Chakroff,Director Rural Programs For information on: Rural Grants Electrical Service Line Extensions Circuit Rider Maintenance Rural Power Systems Upgrades Life Health Safety Waste Heat Recovery Rural Technical Assistance Metering and Rural Data Acquisition Rural Construction Assistance David R.Eberle,Project Manager Bradley Lake Hydroelectric Project For information on: Bradley Lake Construction King Cove Hydro Unalaska Geothermal Stanley E.Sieczkowski,Director Facilities Operations &Engineering For information on: Four Dam Poo!Projects Bradley Lake Operations Larsen Bay Hydro ALASKA ENERGY AUTHORITY Mailing Address: P.O.Box 190869 Anchorage,AK 99519-0869 Street Address: 701 East Tudor Road,Second Floor Anchorage,AK 99503 Phone Number:(907)561-7877 Fax Number:(907)561-8584 Rural Communities Toll-Free Number:1-800-478-7877 (For Rural Communities'Use for PCE Concerns and Projects Assistance) Bg 4 Wen 1,