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HomeMy WebLinkAboutAEA Board Meeting Dec 2009 BM MinuteswantAa,segeALASKA ENERGY AUTHORITY December 9,2009 Board Meeting MINUTES os arve eeea gts bateRTigtr Ww xk Ww "AIDEN [ALASKAG@=._)ENERGY AUTHORITYax¢Dx¢Alaska Industrial DevelopmentandExportAuthority« AGENDA Alaska Energy Authority Board Meeting Wednesday,December 9,2009 immediately following the AIDEA Board Meeting Anchorage,Alaska 1.CALL TO ORDER 2.ROLL CALL:BOARD 3.AGENDA APPROVAL 4.ROLL CALL:STAFF,PUBLIC 5.PUBLIC COMMENTS 6.PRIOR MINUTES -November 9,2009 7.OLD BUSINESS 8.NEW BUSINESS 9.DIRECTOR COMMENTS A.Director's Status Report of AEA Programs and Projects e Renewable Energy Fund Round II!Update e Alaska Energy Plan Update B.Next meeting Wednesday,January 20,2010 at 12:30 p.m. 10.BOARD COMMENTS 11.ADJOURNMENT 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org e 907/771-3000 *FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 e www.akenergyauthority.org WK x aes PENX {=ALASKAaksca)ENERGY AUTHORITY+k WAAlaska Industrial DevelopmentindExportAuthority Alaska Energy Authority BOARD MEETING MINUTES December 9,2009 Anchorage,Alaska 1.CALL TO ORDER Chairman Pat Galvin called the meeting of the Alaska Energy Authority to order on December 9, 2009 at 2:34 p.m. 2.ROLL CALL:BOARD Members participating:Chairman Pat Galvin (Commissioner,Department of Revenue);Vice- Chair John Winther (Public Member);Mike Felix (Public Member); Absent:Emil Notti (Commissioner,Department of Commerce,Community &Economic Development);and Leo von Scheben (Commissioner,Department of Transportation &Public Facilities). 3.AGENDA APPROVAL The agenda was approved as presented. 4,ROLL CALL:STAFF,PUBLIC Staff present in Anchorage:Steve Haagenson (AEA Executive Director);Sara Fisher-Goad (Deputy Director-Operations);James Hemsath (Deputy Director-Development);Valorie Walker (Deputy Director-Finance);Shauna Howell (Administrative Assistant);and Sherrie Siverson (Administrative Assistant). Others present in Anchorage:Brian Bjorkquist (Department of Law);David Rohwer (Fairbanks, AK);Rich Wilson (Alaska Ratepayers);Tom Staudenmaier (Self). 5.PUBLIC COMMENTS Tom Staudenmaier (Self)stated that he has been in Alaska 40 consecutive years and was asked in 1982 to get involved with the electric utilities."This is my statement.”It says here Tom Staudenmaier's electric merger plan shall give the Alaskan people who reside in Southcentral, Interior and Southeast Alaska two separate power grids tied together that are in complete form and reliable.Tom Staudenmaier's electric merger plan shall provide the basic foundation for the industrialization and economic development of Southcentral,Interior and Southeast Alaska for the next 100 years.Remember Staudenmaier's electric plan means true Alaska local hire,the creation of tens of thousands of new jobs for present and future Alaskans.The abundance of cheap power is the best resource the State of Alaska and her residents can offer to themselves and any industrial enterprise.It says here that Staudenmaier's electric merger plan is the best and brightest idea to energize the State of Alaska.If you find a better plan go buy it.Remember, we Alaskans all benefit equally.How you vote on Tom Staudenmaier's electric merger plan is your business,making that vote possible is ours.The other option,sell them off. 813 West Northern Lights Boulevard *Anchorage,Alaska 99503-2495www.aidea.org *907/771-3000 *FAX 907/771-3044 ®Toll Free (Alaska Only)888/300-8534 ©www.akenergyauthority.org AEA Board Meeting December 9,2009 Meeting Minutes Page 2 Mr.Staudenmaier presented the group with a handout. Rich Wilson (Alaska Ratepayers)encouraged the AEA Board to embrace a policy that achieves our goals of affordable,long-term affordability and predictability of consumer rates.We are aware of statewide requirements for affordable energy and we want to support a statewide policy in that direction.Mr.Wilson noted the Railbelt our first priority but encouraged the AEA Board to keep Susitna not only on the table,but to move it to the front.In looking at the Integrated Resource Plan (IRP)report,we've read it and discussed it,it just came out so we haven't had that much time to review it,but since you're meeting today we thought we'd come forward and just get our thoughts on that.Our main message today is the Four Dam Pool worked.Petersburg,Wrangell,Ketchikan,Solomon,Valdez,Kodiak and Bradley Lake all work. That is where we ought to be going for the Railbelt,and Susitna is the only option that can provide base load that is studied enough to know that you can get there and that can be scalable to the demand.You don't have to build 1800 megawatts,you can build it in pieces.We are a consumer group that encourages the State of Alaska and its entities to embrace a policy of prioritizing Susitna as a feasible and long-term solution to base load and the Railbelt. 6.PRIOR MINUTES The minutes of November 9,2009 were approved as presented. 7.OLD BUSINESS There was no old business. 8.NEW BUSINESS There was no new business. 9.DIRECTOR COMMENTS 9A.Director's Status Report of AEA Programs and Projects Renewable Energy Fund Round Ill Update Mr.Haagenson noted that on November 10,2009 staff received 124 applications for Round Ill requesting over $224 million.AEA's goal is to have the applications reviewed,ranked and scored by the end of December,with a recommendation for up to $50 million to the Legislature by January 29,2009. Alaska Energy Plan Update (Handout) AEA is currently: »Developing the narrative and formatting the document. «Developing the database to provide data to support an immediate,short-term,mid-term, long-term and stretch goal for each community. =Continuing to meet with different regions to engage them and gain ownership in the final community and regional plans. «Finalizing the Integrated Resource Plan for the Railbelt. «=Working with the Governor's office on rollout strategy and timing. =Overview of the Energy Plan PowerPoint and the Integrated Resource Plan. AEA Board Meeting December 9,2009 Meeting Minutes Page 3 Mr.Haagenson added that staff is finalizing the IRP which looks at the entire Railbelt region. The non-Railbelt portions of the state are covered in a massive database.In the end,the two are added together will provide an overall picture for the state.Staff are working on a rollout strategy with the Governor's office for the Energy Plan including the whole energy report. Mr.Felix asked if the plan also looks at current structure and ways structure may be more efficient -the relationship between the entities. Mr.Haagenson responded that AEA is mainly looking at the Railbelt for that structure.Mr. Staudenmaier mentioned the 6 or 7 utilities in the Railbelt.The IRP is looking at a consolidated Railbelt with all the generation and transmission assets.The next action item is a bill (GRETC) which looks at a structure to place the Railbelt utilities in one entity for generation and transmission assets. Mr.Haagenson noted that basically the Rural Energy Study starts with the maps of the available resources. A key to the maps was discussed:W=wood;H=Hydro;T=tidal;Geo=geothermal.The numbers reflect Wind class.The higher the number,the better the wind class,7 is the best.AEA is looking at all available resources in each community. The wind-only scenario on page 12 basically replaces diesel use for electricity and heat.The question that we asked is,"What are you doing for me today?”What can you do immediately is typically conservation and efficiency increases.Each community in Alaska will look at using their resources and will receive a deployment strategy.AEA has shared this high level strategy with communities across Alaska,with Native Corporations,and with utilities and municipalities.We are asking them to "make this plan your own.” Chair Galvin asked what the zero dollars represent.Mr.Haagenson said these are placeholders.When the database is running,it will be populated with capital costs to get to that level.Another item that is not shown will be the actual resulting cost of energy for heat and electricity. Mr.Haagenson discussed the financing philosophy;replacing the cost of fuel with a fixed-price loan.So a $100,000/year into fuel cost is equivalent to a $1 million dollar debt with a $100/yr payment.Chair Galvin clarified that these are Energy Information Agency (EIA)prices and they do not correspond to Department of Revenue's projections.Mr.Haagenson said they do not. Mr.Strandberg provided an overview of the Integrated Resource Plan (IRP).Black &Veatch has provided an Executive Summary of the Railbelt IRP project.The study is included in an accompanying CD.Black &Veatch project manager Kevin Harper is present if board members would like more detailed information. The initiative seeks to restructure the generation and transmission portion of the Railbelt.The majority of the investment is in power generation and transmission lines.The Integrated Plan is one part of the larger process and it defines three different initiatives:1)the REGA study,2)the GRETC initiative,and 3)this Integrated Plan. The REGA study was pursued as a result of an appropriation from the Legislature to develop a new business structure for the future for generation and transmission.Black &Veatch produced that study.The REGA study was used as the basis to draft legislation to form a special private not-for-profit corporation configured to own,operate and control future major infrastructure.It is AEA Board Meeting December 9,2009 Meeting Minutes Page 4 expected that an investment of $8-$12 billion dollars in infrastructure will be required over the next 50 years. Because of the very large sums of money,we need a robust company that has significant financial capabilities.This entity will need to operate in a corporate private partnership mode where the network may be owned privately by the utilities,but the state,in some fashion,would serve as either a financial underwriter or a participant in the potential capitalization of the company.Basically GRETC forms the company,the Plan defines what projects the company is going to spend the money on,and the Plan considers power generation,generators, transmission lines,and fuel portfolio.The study includes development of the capitalization and the potential for capitalizing a company.We've come up with an approach which is expressed in the company which we're calling the Bradley Model.It involves a partnership between the State and the utilities to capitalize,i.e.come up with the money to build and own over the long run and it's designed to seek the lowest cost for the ratepayer.One of several important criteria is a transition period of ten years to be able to go from where we are now (six utilities in a lot of ways doing their own thing but informally cooperating through an interconnected network)to a tightly held generation and transmission network ten years from now that has the ability to offer equal reliability power at a single system wide rate to all of the Railbelt utilities to generate the power from an arrangement of generators where at least 50%of the energy that is provided or generated is from renewable energy. Mr.Strandberg publicly commended Black &Veatch for doing a very good job,for having a granular study,and for doing logical work in explaining each one of their recommendations.He personally thanked Mr.Harper and for his team for their hard work.Chair Galvin asked if this had occurred over the last year.Mr.Strandberg replied that it had. Outputs from the study:among them is the treatment of Chakachamna and the Susitna project, and an interesting treatment of the Fire Island project.There is a generalized treatment of fossil fired power generation,gas fired,coal fired. Chair Galvin asked,process-wise,was this generated by Black &Veatch for public comment? Right now there is a 30-day open public comment period,but what happens after that?Mr. Strandberg replied that he expects Black &Veatch to produce a final version of the report on January 13,20120.It will be available for use as a tool. Chair Galvin also asked if the final report is a Black &Veatch report or is it an AEA report?Mr. Strandberg replied that the report is a Black &Veatch report.AEA hired Black &Veatch as an independent contractor and asked them to give us their best estimate and advice.It is an unbiased study done by a hired contractor.An active advisory group has been meeting monthly as well as a considerable number of stakeholder meetings.Black &Veatch has attended these meetings regularly.The advisory group meetings were public,so there was a considerable amount of public input in the process.The Railbelt utilities have also invested significant amounts of manpower to provide detailed data for this study. Mr.Haagenson stated that this report will also be used as an aiming stake for the utilities when they get together,it gives them a consolidated picture so |think they will be using it heavily and so that's why they're heavily involved in developing it. Mr.Strandberg added that the final report will be published on January 13,2010,before the start of the legislative session.If significant comments are received and there is need for significant change,staff will reconsider that schedule.AEA's goal is to have the report completed before the legislature convenes. AEA Board Meeting December 9,2009 Meeting Minutes Page 5 Chair Galvin asked if the utilities have had a chance to weigh in.Mr.Strandberg said yes.Mr. Haagenson added that AEA gave the utilities several weeks to weigh in,wrestle with the information,and come back if they had issues.AEA asked them for the answer.The study is a look at the whole picture and AEA's goal is to get the least-cost option to the consumers.That is the recommendation level Black &Veatch put into this report.The utilities,even though they are not thrilled with it,realize that this is probably the good target to shoot for. Mr.Strandberg said he expects some utility comments.The Utility CEO's met and at present have elected not to provide any significant directional change comments to the study. Chair Galvin stated that the Healy Clean Coal issue raised concerns because it appeared that neither Golden Valley nor AIDEA were aware of the way it was going to be presented.AIDEA staff is looking at the way the analysis was done and the issues associated with how it is presented.He was concerned about how much buy-in there has actually been among the utilities. Mr.Strandberg responded by stating it's a complicated process and AEA is never going to make everybody happy.This is a state-sponsored study designed to be a neutral ground study.The recommendations made are based on economic modeling,a combination of the economic modeling results and the knowledge that there are significant uncertainties particularly with carbon text.AEA has attempted to put forth economic information with respect to the different technologies and different projects that would be useful to both the utilities and to AIDEA. Chair Galvin added that he understood and thinks the issue is going to have at least two aspects.One is going to be the technical review itself.|understand that with the Healy Clean Coal Project in particular,the impact of carbon legislation is a significant factor in the economic analysis of that.Exactly how that impact is measured is based upon assumptions not just of the type of legislation that might pass,but the actual operational and costs associated with the plant itself;and that's going to |believe be evaluated over the course when comments come in with regards to that.Secondly,how the language of the report conveys the desired message is also important and that the report not end up being seen as saying something that it doesn't and in something of the nature of the Healy Clean Coal Plant,it is very easy to create,through the use of language,a false impression;either by the language that you use,the context that it's put in, or the opportunity that others have to misappropriate the language for their own purposes.That sensitivity is probably something that will be evaluated as well. 9B.Next meeting date Wednesday,February 17,2010. 10.BOARD COMMENTS There were no board comments. 11.ADJOURNMENT There being no further business of the board,the meeting was adjourned at 3:25 p.m. Azz Steven Haagenson,Executive Director/Secretary Alaska Energy Authority Alaska Energy Authority BOARD MEETING MINUTES November 9,2009 Anchorage,Alaska 1.CALL TO ORDER Vice-Chair John Winther called the meeting of the Alaska Energy Authority to order on November9,2009 at 11:47 a.m.7: 2.ROLL CALL:BOARD A quorum was established."ye ' Members participating:Vice-Chair John Winther (Public Member);Mike Felix (Public Member); Commissioner Emil Notti (Department of Commerce,Community &Economic Development);and Commissioner Leo von Scheben (Department of Transportation &Public Facilities).Absent:Chairman Pat Galvin (Commissioner,Department of Revenue). 3.AGENDA APPROVAL :i Mr.Felix made a motion to approve the agenda as presented and Commissioner von Schebensecondedit.There being no discussion,the question was called.A roll call vote was taken and themotionpassedwithMessrs.Felix,Nott von Scheben,and Winther voting yea.aeabyTheagendawasapprovedaspresented,4.ROLL CALL:STAFF,PUBLICHeeStaffpresentinAnchorage:.Steve Haagenson'(Executive Director);Chris Anderson (DeputyDirector-Credit);Sara Fisher-Goad '(Deputy Director-Operations);James Hemsath (DeputyDirector-Development);Valorie Walker (Deputy Director-Finance);Brenda Applegate (AIDEAController);Linda:MacMillan (Accountant);Karsten Rodvik (Project Manager-External Affairs); Brenda Fuglestad (Administrative Manager);Shauna Howell (Administrative Assistant);and Sherrie Siverson (Administrative Assistant). Others present in Anchorage:Mike Mitchell (Department of Law);Tim Bradner (Alaska Journal of Commerce);Jan Sieberts (Washington Capital Management);and Corinne Fiedler (KPMG). 5:PUBLIC COMMENTS There were no public comments. 6.PRIOR MINUTES The minutes of August 13,2009 were approved as presented. AEA Board Meeting November 9,2009 Meeting Minutes :Page 2 7.OLD BUSINESS There was no old business. 8.NEW BUSINESS 8A.AEA Financial Statements Ms.Corinne Fiedler,Audit Manager,KPMG reviewed the Letter to the AEA Board. No new accounting policies were changed or adopted and the application of existing policies was not changed during 2009.We noted_no transactions entered into by the Authority during the year that were both significant and unusual.We noted no transactions entered into by the authority for which there is lack of authoritative guidance or consensus. In connection with our audit of the Authority's financial statements,we have not identified any significant financial misstatements that have not been corrected in the Authority's books and records as of and for the year ended June 30,2009,and have communicated that finding to management. There were no disagreements with management on financial accounting and reporting matters that,if not satisfactorily resolved,would have caused a modification of our auditors'report ontheAuthority's financial statements. Commissioner von Scheben asked for clarification as to what 'pending litigation'means. Mr.Mitchell stated he was not aware of any pending litigation in the courts,but there was one case in the courts awaiting final judgment (PowerCorp Alaska v.AEA -Ron Miller,former Executive Director,and current Project Manager,Kris Noonan,on litigation involving a switchgear system)of which no date has been set.Commissioner von Scheben stated the board should know about any pending litigation. Commissioner von Scheben also had a question about renewable energy loans and funding from the Denali Commission now that they are changing.Ms.MacMillan stated they are funding differently in that grants would be given out in smaller portions than before,pointing out that funding previously was in the $25 million range,but was now at $13 million.Mr.Haagenson commented that he was aware of staffing changes at the Denali Commission and whether there will be more or less funding remains to be seen. Commissioner von Scheben asked Ms.Fiedler to clarify whether there was a "deficiency” referencing the "deficiency”statement on page 34 of the document,or was that just a statement. Ms.Fiedler commented there was no deficiency and that was their standard wording to call attention to what a significant deficiency would be. AEA Board Meeting November 9,2009 Meeting Minutes Page 3 8B.AEA Resolution 2009-04 Authorization to Executive Director regarding final decisions and appeals Resolution 2009-04 is an authorization to the AEA Executive Director regarding final decisions on appeals.3AAC 108.920 (a)provides that the appeal of the decision of the Authority is made to the Board of Directors of the Authority unless the Board of Directors has authorized the Executive Director to make the final decision of the Authority. Mr.Winther asked if this was a housekeeping issue or was this resolution triggered by something else. Mr.Haagenson stated it was triggered by the renewable energy fund regulations.Ms.Fisher- Goad explained the regulations recently passed was primary renewable energy fund regulations | and a section dealing with appeals for grants and any grants based on projects we build.There was a section included on how the appeals would be handled and who would make the final decision.This resolution has the board delegate to the Executive Director the final decision with respects to any appeals and protests that would fall under this section. Mr.Winther asked if the AIDEA Executive Director has the same authority.Ms.Fisher-Goad stated it was her understating that he did.However,since there became two Executive Directors,the overall delegation given to Mr.Haagenson as AEA Executive Director didn't cover these types of appeals. MOTION:Mr.Felix moved to approve AEA Resolution 2009-04.Seconded by Commissioner von Scheben.There being no discussion,the question was called.A roll call vote was taken and the motion passed with Messrs.Felix,Notti,von Scheben,and Winther voting yea. 9.DIRECTOR COMMENTS 9A._Director's Status Report of AEA Programs and Projects Mr.Haagenson stated AEA &AIDEA are currently working on the classification study and HR policies and procedures.AEA is working with OMB to look at both the capital budget and the 10- year budget,including performance measures for submittals.AEA is also working on the energy plan as described below. ALASKA ENERGY PLAN AEA is currently: Developing the narrative and formatting the document. e Developing the database to provide data to support an immediate,short-term,mid-term, long-term and stretch goal for each community. e We continue meeting with different Alaska regions to engage them and gain ownership in the final community and regional plans. Finalizing the Integrated Resource Plan for the Railbelt. Working with the Governor's office on rollout strategy and timing. AEA Board Meeting November 9,2009 Meeting Minutes Page 4 e Our target completion date is November 30,2009. RENEWABLE ENERGY FUND ROUND III Applications for Round Ill are due November 10,2009.Staff will begin the evaluation and ranking process immediately to produce a recommendation for up to $50 million to the Legislature by January 29,2010. 9B.Next meeting date December 9,2009. 10.BOARD COMMENTS There were no board comments. 11.ADJOURNMENT There being no further business of the board,the meeting was adjourned at 12:12 p.m. Steven Haagenson,Executive Director/Secretary Alaska Energy Authority ALIN TINIE GNY TILA A pathway to energy independence. wis sanasaihecaremashiaes et ons:are ara os aieek deadtecinntinmea src ree ;'aoe seaareerathwaee'n aV.Pp 7 x 0.4 0.5 0.60.2 0.3 caberenencetbshot oveeg 27 0.80.1 Z . (8)$7.35.°.j Geothermal $0.88 [Eq Wind/Diesel $0.51 EJHydro ..i $0.66 [Jf Diesel ($110/bbl)Electricity $/kW (ncluding fixed cost of electricity) Green:Less than $50'bbi crude.Yellow:$50:/bbito $156/bbi crude.Red:Greater than $15C/bbt cude. 40 50 602030merheitontntstinem,70 80 $83.79 Ej Geothermal 10 :10(6)0$97.04 [ij Hydro $144.8 EQwind $33.27 [Wood $51.69 ff Fuel Oil ($110/bb!)Heat $/mmBTU ,.., Current Energy Status PCE Electric (Estimates based on PCE)Estimated Local Fuel cost @ $110/obl $4.74 foer-beCurrentficiency11.84 kW-hrigal Fuel COE $0.45 Akwehr Esti .om $10,206Consumptionin200748,313 gal Est OM $0.02 fkw-he Fuel .$98,502AverageLoad58KWNECOE:$0.19 Auehr Fuel Costs8230405Estimatedpeakload116.51 kW Total $0.66 Tota!Electric Average Sales $10,306 kW-hours $339,196 Space Heating (Estimated) 2000 Census Data 2008 Estimated Heating Fuel used:56,012 gat Fuel O8#:100%Estimated heatirg fuel cost/galion $5.74 Wood:0%S/MMBtu delivered to user $51.81 Total Heating Oit Electricity:0.0%Community heat needs in MMBtu 6,721 $31 9950 Transportation (Estimated) Estimated Diese!:22,154 gal Total Transportation Estimated cost $5.71 $126,547 Energy Total $785,693 Alternative Energy Resources Site Name Akutan-Shallow Project Capatcity 200 MW Shallow Resource 0 Feet Shallow Temp 39.00 Cc Geothermal Capital cost $38,500,000 per kW-he installed KW 5000 Annual Capital $2,587,805 $0.06 kW-hrtyear 41610000 Annual OM $1,155,000 $0.03 Fueicost $0 30.90 Total Annual Cost $3,742,805 $0.00 Non-Fuel Costs:$0.21 Alternative COE:$0.30 %Community energy 9154% New Commumty COE $7.55 mendes 7 cr-fet ang tesel 2055+ Site North Creek Study plan effort feasibilty Plant Factor 69 % Penetration 0.52 Hydro Capital cost $2,507,920 por kW-hr installed CW 297 Annual Capital $97,472 30.17 AWta/pean 566166 Annual OM $55,200 $0.10 Fiml ener $6 sana Total Annual Corat $452,672 $0 97 Nown-Fual Cast $n o1 Alternative COOF-$f 48 %Community enersy 111% New Community COE $0.51 TYAS 1CY-ALe aryl Te bet 505%} pepe nee.f,ane ted G i ostiieeatuets83 Savings ($3,403,609) eat CostWibeCus. $50.44 $28.57 $79.01 Savings $186,524 may 2.000 Gen 500 Load Build transmission lines to areas that need additional resources,--_______,150 Gen 400 Load Build transmission lines to areas for lower delivered cost. '900 Gen 600 Load o.éSLoad Factor Curse of Long Distance ==========> $400,000$/mite Miles 5 10 15 20 25 6.25%Interest aps $2,000,00q $4,000,009 $6,000,00d $8,000,00q $10,000,00q 30year feD+0K%Mem $276,667 $553,334 $830,00q $1,106,667 $1,383,339 kw kWh 3$8828888 The Aleut Corp Wy”ams ,3 7Mmeeyfy*Xf J oeoanda .,?2 Pika mom .aeémasta'NFSafAs = nal+North Siope Borough oy ft . foY rae -Arctic Slope Regional Corp i : , .of .ad ie i : at ce ; a aa ""a Bering Straits Native Corp caret 'Tew).CP siuleaaecaomMCwwenPury--oaAomelaho!'may NativeCorp "#Bristol Bay Borougn-hee4Lake &Peninsiita”! .Borough |wee,'.J -#is 4)ifLg.G'*|.Dnee.Ee Capechanegems>Chugach Alaska Corp NeamenecnnetneCity &Borough Of Yakutat faeeeeiemgrysaqueenrapeate:Ae:trentelly*.B COOK Inet Region i Bekgae:rome Oe e aeitaBorough, Patt Srks Nort:a meet Poe A coven epee ealwast a pon ®Northwest Artie Borough'a):ae be aa Doyon trd onNAKNEKveSoutNaknek,*K9idDUEH-B)Lake SP.Peninsula.;Bor ough Cw) y @Larcen B.*slandEOL)Tae ¢SEMID!ISLANDS ANA.Cea 11 AS __Goimiuriitiy Resins =Seriben rt :ea - gf”City &Borough a Of Juneau eetFe,eae \Sealaska Corp Gaya BodH why"Of Sika : 5 prsNNA ¢Ketch kan|Gateway Electric Load > Ice Production District Heat Loop Back-up Boiler 12 Wind Only Community uremia StoTem ee {OYear)_(eBYears)(AD Nears)45 Years)-__'(t5e Yeas Electric 100%Des st Cosere ;Ts Des 0h Diesel sDed =.Des (Hh WindDesel -0%Efcency 30%WinlDiese)Me WindDesel «50 Win/Storage 100%WinStorage Mid-Term Long-Term Stretch Goal -o©mg ''Heat 10°%Desel fh Comere +$s Diese)»Dese!«=Des!Deel oe 'tHEfcency 10%WidTemal 10%WindTema|50%WiThemal 50%WindTemd 7 Po |ePopre «=O WindStage 50%Wind Stage ee ee ee || peas pert roameenee HKG munity | Current Immediate |Short-Term |Mid-Term ,Long-Term |Stretch Goal ||| '(0-10 Year)|(1-3 Years)(210 Years)|(5-15Years);(15+Years)Electric'100%Desa |10%Conn|ts ise "Des!|hDesd |Diecetneeeeeete yetiWillowCom +"- _is Eicony.|=Won CHP,I Wend CHF 10 Won CHP eseeSeeeHeat100%Das 104 Onsene TODesel kes Oh Dsl =Ded !||||Wood-CHP 70%Wood:CHE 90%Wood-CHP. 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WindNWood Communit a Current Immediate Short-Term Meat Years)(2A ears)(415 Years)(15+Years)Electric 100%Diese |10%Consene 70%Diese Th Diese W%Ded ==Dis Mid-Term =--_Long-Term Stretch Goal OY Wind!Des 10%Efcienty 30%Wind/Diesel 0h Wind/Diesel «30%Wind Diesel |SOWinDiese 3%Wood CHP WoodCHP a |Heat,00h Des 0h Garsene TE Desh Diese (Desde |Oh Wood |AU Efcerey |3%Mood =I Wood Wood)Wd 10%Windtema;20%WindThamal|40%WindTemal O's Propane 5M WookCHP 50th Woot-CHPi oawo$140.00 =283+t 2 id N pe$130.00 yg 2h fF Sg &§§=2: 2 Pegs ete$120.00 3s ae . x £&S a$110.00 big Variable cost of oil $100.00 EY Fixed cost of debt after debt reimbursement$70.00 2wo $90.00 =Fixed cost of loans wo we $80.00 $60.00 $50.00 $40.00 2009 2010 2011 201220132014201520162017201820192020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030 14 eeea CaeSOTnaneaApenara ty a,ot is,areas he stan how anal AR Ea ee BEBs.i™ira7ee,xme,Steeeinen ergycoa 15 ALASKA ENERGY AUTHORITY Alternative Energy and Energy Efficiency Program Overview Alaska Energy Authority's (AEA's)Alternative Energy and Energy Efficiency (AEEE)program currently manages and funds projects and initiatives totaling $157 million in state and federal funding.Activity substantially increased after AEA launched the Renewable Energy Fund.An AEEE update is available on AEA's website at www.akenergyauthority.org Program Description The AEEE program promotes the use of renewable resources as alternatives to fossil fuel-based power and heat,and measures to improve energy production and end use efficiency.In rural areas the program may support developing local sources of coal and natural gas as diesel alternatives.The AEEE program is divided into eight separate program areas: Alaska Energy Inventory (cooperative project of AEA and Alaska DNR}is compiling renewable and fossil resource data, energy supply and usage,and other information useful for energy planning and development. Biomass Energy Program develops projects using wood,sawmill residue and municipal wastes for energy;tests air emissions and performance of fish oi!and diesel blends as fuel;assesses the viability of recovering fish oil from fish processing wastes. Diesel Generation Efficiency Program provides assistance in developing projects that use high efficiency generators and recover "waste heat”from diesel generators. End Use Efficiency (Conservation)Program has completed 60%of a project upgrading lighting and heating efficiency in over 150 schools and other facilities in 50 villages;is conducting energy audits;working with Alaska Housing Finance Corporation to develop statewide efficiency policy recommendations and demonstrate impact of aggressive,village-wide measures in Nightmute.Additionally,AEA has recently been awarded $7.5M of federal stimulus funds,60 percent of which will be distributed to Alaska communities for energy efficiency and conservation projects.AEA also anticipates receiving $3.7M of other stimulus funds to support its village efficiency projects. Geothermal Program supports projects such as the Chena Hot Springs power plant;organizes workshops and training sessions;coordinates state assistance in developing other potential projects such as Mt.Spurr on the Railbelt and Makushin in Unalaska. Hydroelectric Program provides technical assistance through staff and contractors for hydro feasibility assessment; manages public funding for project construction. Ocean and River Energy Program evaluates technology and feasibility of converting wave motion,tidal and river flow into power in partnership with Alaska utilities and Electric Power Research Institute. Wind Program assists utilities and communities in resource evaluation,training,environmental assessment,regional development,conceptual design and economic feasibility of rural wind-diesel systems;assists with Railbelt wind integration studies. Funding AEA's alternative energy program has received funding since the early 1980s from the US Department of Energy (USDOE}) and more recently from the Denali Commission and the EPA.Under the Renewable Energy Fund,AEA is providing $125 million in grants for 107 projects.AEA is currently reviewing 124 applications submitted during round three of the Renewable Energy Fund.In June 2008,AEA and the Denali Commission offered $7.5 million in grants for 37 projects.The Energy Cost Reduction RFP,an earlier program,has provided $8.4 million in grant funds to match $12.4 million in local funds for projects that are displacing or will displace 1.4 million gallons per year of diesel and equivalent natural gas.For more detail,see the AEA's Biennial AEEE Assistance Plan on the AEA website. Revised November 2009 ALASKA ENERGY AUTHORITY Bulk Fuel Program Current Status In 2008,AEA completed bulk fuel upgrades in Tyonek,Ruby and Pilot Point.A pipeline project in Newtok was completed in the spring of 2009.Nine bulk fuel projects are in the design process,and five are in construction in 2009. Program Description The goal of Alaska Energy Authority's (AEA)Bulk Fuel program is to upgrade non-compliant bulk fuel facilities in communities that meet program criteria.Upgrading bulk fuel facilities reduces the cost of energy by reducing or eliminating fuel loss from leaks and spills.In addition,by providing enough capacity for current and planned needs,communities may purchase fuel in larger quantities at a lower cost per gallon. Alaska's remote communities rely on diesel fuel storage for heating and power generation.Many of the bulk fuel storage facilities were constructed in the 1970's or earlier.Some of these facilities are at the end of their design life and do not comply with state and federal codes and regulations.Some have tanks,pipes and other equipment that leak fuel.Regulatory agencies may prohibit fuel deliveries to these facilities.Communities often do not have funds for replacing these storage facilities. Since 2000,the Denali Commission has provided funding to replace community bulk fuel facilities.Due diligence is carried out to ensure that project participants meet Denali Commission and AEA sustainability standards.Participants sign a Business Operating Plan.The Business Operating Plan lays out the existing fuel facility organizational structure,the qualifications of responsible people,AEA required training,and estimated operation and maintenance costs.The plan also includes the establishment of a repair and replacement fund so that when equipment fails,the community will have the resources and savings to repair or replace it. Program Progress The bulk fuel program receives most of its funding through the Denali Commission.Funding increased substantially in 2000 when the Denali Commission started to fund bulk fuel projects.A total of 21 tank farm projects were completed prior to 2000.As of December 2008,an additional 65 communities have been completed for a total of 86.Approximately 32 communities have not received upgrades. Depending on funding,three to six communities are receiving upgrades per year. Reviewed November 2009 ALASKA ENERGY AUTHORITY Circuit Rider Program Current Status This year the Circuit Rider program has helped Akiak,Chefornak,Chignik Bay,Chignik Lake,Chignik Lagoon,Kwigillingok,Koyukok and Manoktak. Program Description The purpose of the circuit rider maintenance program under 3 AAC 108.200 -3 AAC 108.220 is to assist eligible utilities to improve the efficiency,safety,and reliability of power systems and reduce the risk and severity of emergency conditions or emergency disruptions in the operation of community power systems,by providing training,consultation,on-site assistance with maintenance and minor repairs and other related technical assistance., The ability a community has and the methods it uses to maintain and operate its powerhouse have a significant impact on efficiency.Keeping diesel generation systems operational and maintained has a direct influence on the energy produced for each gallon of diesel fuel consumed.Operator training, spare parts availability,automatic system monitoring,data trending and data analysis along with prompt maintenance and repair are key factors in keeping reliability,efficiency and performance high. The Circuit Rider Program provides technical assistance to help rural utilities with the operation and maintenance of their electrical generation and distribution system.The Circuit Rider Program is administered by the Alaska Energy Authority (AEA)and is available to all eligible electric utilities.Electric utilities participating in this program will receive support services from AEA depending on the availability of funding. e AEA makes visits to eligible electric utilities based on need over the course of the year to provide training and provide recommendations concerning operations and routine maintenance activities.There is no charge to the utility for these services. e The Circuit Rider program does not provide funding for major repairs or reconstruction of electrical systems. e The participating utility's power plant operator and/or other utility staff must be available for training and consultation during the time of the Circuit Rider visit.Power plant operators will be required to maintain written performance logs in between Circuit Rider visits. e Services under the Circuit Rider program are limited to village electric utilities with a demonstrated need for assistance with preventative operations and maintenance activities, utility training and emergency prevention.The program is not intended to serve electric utilities that have sufficient financial and technical resources to perform routine operations and maintenance activities.: Program Progress The need for Circuit Rider service outstrips the available resources each year.A State Senate Resources and Energy Committee Draft Summary recommended an increase in funding for the Rural Power Systems Technical Assistance program to enable AEA to serve more communities. AEA has successfully filled the previously vacant maintenance position for the Circuit Rider Program.We welcome Shannon Allex to AEA. Reviewed October 2009 ALASKA ENERGY AUTHORITY Emergency Response Program Current Status AEA assisted several communities in 2009.Major responses include: e Stevens Village during Spring break-up; e Kipnuk's unexpected major equipment failures; e Kobuk to Shungnak tieline. Program Description The Emergency Response program provides on-call,as-needed emergency action response to mitigate extended power outages and electrical hazards that present imminent threat to life or property.This program is designed to respond to an emergency or potential emergency situation before disaster or major loss occurs.It provides funding for continuance of government activities.It allows for procurement of manpower,materials and equipment for emergency response to electrical generation and distribution system emergencies and disasters in Alaska. Program Progress Emergency response is provided on an as-needed basis only.Well-managed utilities with adequate technical and financial resources are not candidates for these services. Besides helping rural communities,AEA works with State and Federal agencies on an as-needed case by case basis to resolve electrical generation and distribution system emergencies throughout Alaska. AEA is currently in discussions with the Department of Homeland Security regarding storage of some of their emergency response generators intended for Alaska. Reviewed October 2009 ALASKA ENERGY AUTHORITY Loan Programs Power Project Fund (PPF) Number of loans:47 Outstanding portfolio balance:$26,774,560 Committed &un-disbursed funds:S 5,213,092 Uncommitted funds:S 5,201,611 As of October 31,2009,there was one loan past due 90 days or more in the amount of $215,000.This was .8 percent ofthe outstanding portfolio balance. Program Background:The PPF program provides loans to local utilities,local governments or independent power producers for the development or upgrade of electric power facilities,including conservation,bulk fuel storage and waste energy conservation.The loan term is related to the productive life of the project,but cannot exceed 50 years.Interest rates vary between tax-exempt rates at the high end and zero on the low end.This rate is equal to the percentage that is the average weekly yield of municipal bonds for the 12 months preceding the date of the loan commitment. Bulk Fuel Revolving Loan Fund (BFRLF) Number of loans:40 Outstanding portfolio balance:5 6,006,891 Committed &un-disbursed funds:S 2,192,416 Uncommitted funds:S 7,116,756 As of October 31,2009,there were no loans past due 90 days or more. Program Background:The purpose of the BFRLF program is to assist communities,utilities or fuel retailers in small rural communities in purchasing emergency,semi-annual or annual bulk fuel supplies. Loans are for the purchase of new fuel.Loans are not provided for fuel already purchased,in the process of being used or already consumed.The Alaska State Legislature appropriated an additional $5.5 million to this revolving loan fund in August 2008. Revised November 2009 ALASKA ENERGY AUTHORITY Power Cost Equalization Program Current Status The original FYO9 PCE appropriation was $28,160,000.During a special session in the summer of 2008, the Legislature guaranteed full funding of the program and appropriated up to an additional 523,000,000. Effective October 1,2008,the power cost for which PCE is paid (the "ceiling”)was raised from $.525 to $1.00 for the remainder of FY 2009.The enactment of SB 88 extended the sunset for the $1.00 cap indefinitely.Effective with the first billing period of the FY 2010,the base rate was also raised from $0.1283 to $0.1412.As of October 30,2009,the estimated program cost for FY 2010 is $36.16 million. Program Description The goal of Alaska Energy Authority's (AEA)Power Cost Equalization program is to provide economic assistance to customers in rural areas of Alaska where the kilowatt-hour charge for electricity can be three to five times higher than the charge in more urban areas of the state.PCE only pays a portion of approximately 30%of all kWh's sold by the participating utilities. PCE fundamentally improves Alaska's standard of living by helping small rural areas maintain the availability of communications and the operation of basic infrastructure and systems,including water and sewer,incinerators,heat and light.PCE is a core element underlying the financial viability of centralized power generation in rural communities. The Legislature established different functions for AEA and the Regulatory Commission of Alaska (RCA) under Alaska Statutes 42.45.100-170,which govern PCE program responsibilities. AEA determines eligibility of community facilities and residential customers and authorizes payment to the electric utility.Commercial customers are not eligible to receive PCE credit.Participating utilities are required to reduce each eligible customer's bill by the amount that the State pays for PCE. RCA determines if a utility is eligible to participate in the program and calculates the amount of PCE per kWh payable to the utility.More information about the RCA may be found at www.state.ak.us/rca PCE Endowment Fund The PCE Endowment Fund was created and capitalized in FY 2001 with Funds from the Constitutional Budget Reserve and the Four Dam Pool Project sale proceeds.The PCE Endowment Fund is an Alaska Energy Authority Fund managed by the Department of Revenue;it is invested to earn at least 7%over time.$182.7 million was appropriated to the fund in FY 2007.The deposit occurred in October 2006. Power Cost Equalization Program Page 2 AS 42.45.085 provides that 7%of the PCE Endowment Fund's 3 year monthly average market value may be appropriated to the PCE Rural Electric Capitalization Fund for annual PCE program costs.The total invested assets of the Fund on September 30,2009 were $331.8 million. PCE Utility Clerk Training In August 2009,the Alaska Energy Authority was approached by the Rural Utility Business Advisor (RUBA)Program and was asked to participate in a Utility Clerk Training Workshop on November 6,2009 in Anchorage,Alaska. The RUBA program has a 32-hour utility clerk class that is offered at various locations around the state. Although the focus is on sanitation utilities,the materials taught applies to other utilities as well.The curriculum included discussions and activities relating to public relations,meetings,office management, elections,financial management,and ordinances/resolutions. The idea was to extend the workshop to cover a total of 40 hours and include sessions dealing with the PCE Program's filing requirements of the Regulatory Commission of Alaska (RCA)and the AEA. With all expenses being paid by the RUBA Program and the participating communities,the list of possible attendees included representatives from the communities of Adak,Akutan,Alakanuk,Anchor Point,Atka,Naterkaq,Cold Bay,Newhalen,Nondalton,Port Heiden,St.George and Tanana. Revised November 2009 ALASKA ENERGY AUTHORITY Renewable Energy Fund Overview The Alaska State Legislature created the $250 million Renewable Energy Fund (REF)in 2008,with the intent to appropriate $50 million annually for five years.This legislation placed Alaska at or near the forefront of the 50 states in funding for renewable energy.The Legislature authorized Alaska Energy Authority (AEA)to manage the REF project application process,project evaluations,recommendations, completion of grant agreements and disbursement of funds to grantees. Program Progress To jumpstart the program,the Legislature appropriated $100 million in 2008.Facing declining revenues from falling crude oil prices during the 2009 session,the Legislature appropriated $25 million.In the fall of 2008,AEA solicited applications for Round |and Round II grants.The response was significant.AEA received more than 230 applications requesting more than $760 million.AEA worked with the Renewable Energy Advisory Committee and conducted rigorous evaluations of all applications. Following AEA's recommendations,the 26™Legislature in the 2009 session approved 107 renewable energy projects totaling $125 million. For these 107 approved projects,60 grant agreements have been prepared;13 grant agreements are in process;20 grantees need to provide additional information;and 14 projects require additional work by the grantee and AEA staff before a grant agreement can be prepared. Here is a sampling of Renewable Energy Fund projects around the state: e Falls Creek Hydroelectric,Gustavus.800 kW project expected to displace 117,000 gallons fuel per year.. e Pillar Mountain Wind,Kodiak.4.5 MW project expected to displace 1,203,000 gallons fuel per year. Juneau Airport Ground Source Heat Pump.Estimated to displace 29,500 gallons fuel per year. Unalakleet Wind.600 kW project estimated to displace 90,000 gallons fuel per year. North Pole Heat Recovery.Expected to displace 99,000 gallons fuel per year. Tok School Wood-Fired Boiler.Projected to displace 50,400 gallons fuel per year. In October 2009,AEA issued a request for Round II!REF Grant applications.This application period closed at 5:00 p.m.,November 10,2009.124 applications were received for Round Ill requesting over $224 million dollars.AEA's goal for Round Ill is to have the applications reviewed,ranked and scored by the end of December,with recommendations to the Legislature in January 2010. Revised November 2009 ALASKA ENERGY AUTHORITY Rural Power Systems Upgrade Program Current Status Forty-two communities have benefited from powerhouse and distribution upgrades between calendar years 2000 through 2009.Eleven additional communities are currently undergoing construction upgrades or are scheduled in 2009-2010.Nine additional communities are in conceptual design or final design stage. Program Description The Rural Power System Upgrade (RPSU)program concentrates on powerhouse and electrical distribution upgrades.Typical projects include powerhouse upgrades or replacements,distribution line assessments and upgrades,line extensions to new customers,demand-side improvements and repairs to generation and distribution systems.Energy efficiency,reliability,safety and sustainability are primary drivers during the conceptual design,final design and construction process.Identification of available renewable energy and interoperability is high priority. i 'Cc iti StateofAlaskaProgramexamplesinclude:|omni 4 ofAeRebuildingorreplacementofold,hazardous,worn out, inefficient and non-code compliant diesel generator and distribution systems; °Inclusion,integration and collaboration with heat recovery systems and viable renewable energy projects; e Force account labor and technical assistance to rural communities through AEA personnel and/or contractors with experience in rural construction. System upgrades to be funded are identified through a variety of ways, including technical assistance,advancement by the local community or direction from the Legislature.The Denali Commission provides the majority of funds.Other sources include Community Development Block Grant (CDBG),Indian Community Development Block Grant (ICDBG)and Rural Utility Service (RUS).The State Senate Resources and Energy Committee,in a draft summary,recommended a funding increase for the RPSU program to improve diesel power generation efficiency in rural Alaska. "e_.RPSU Funding 1999-2007,ieneHewesosProgram Progress Annual Fuet Savings from New Powerhouses Electricity provides for lighting,communications, SE SILOS teased A heat and power necessary to operate infrastructure omer :J nett send re that supports all other elements needed in any mon 7 community to permit safe and healthy living "mom °conditions.In rural communities throughout Alaska, 500,000F |"electricity is generated by a small local "system” (generation and distribution)using diesel fuel at a cost that is three to five times higher than in urban 200.000 4 parts of the state.Of the 200 rural communities, 400.000 I|[,TT tI rat approximately half are served by cooperatives ora:another form of utility that performs under a well-PPP PPEPS HPSS 'established organization.Others are served by very small entities,many which experience technical and administrative problems due to lack of economies of scale and/or lack of specialized skills in the community. 400,000 f=on eden eee ete = Reviewed October 2009 ALASKA ENERGY AUTHORITY Training Program Current Status The Alaska Energy Authority (AEA),along with the Denali Commission Training Fund,provides training Opportunities to local residents for their energy projects and infrastructure. Program Description The intent of this training is to ensure that community personnel have the best skills with which to sustain their energy infrastructure in a business-like manner.With proper training,utilities can keep their facilities code-compliant and sustainable. The training program currently offers the following courses: e Bulk Fuel Operator Training e =Itinerant Bulk Fuel Operator Training e Power Plant Operator Training e Advanced Power Plant Operator Training e §=PCE Utility Clerk Training Reviewed November 2009 W x "IDEN =ALASKAvrotkAlaskaindustrialDevelopmentandExportAuthority Revised October 2009 Project Fact Sheet:ALASKA-BC INTERTIE STUDY CURRENT STATUS:A portion of the AKBC funds have been re-appropriated for the designandpermittingofthePetersburgtoKakeIntertieproject.Some funds have been retained to monitor the situation in British Columbia,where the government is re-evaluating whether to build the backbone intertie from southern BC to 60 miles from the Alaska-BC border.In a recent announcement,the Canadian Government said that it would proceed with the funding for the transmission project.The AEA's most recent final feasibility report was published in Septemberof2008.It is available online at http:/Avww.akenergyauthority.org/AKBCProjectPage.html AEA is working with Southeast Conference to convene another meeting of the AKBC Advisory Work Group in Wrangell,in January of 2010,to review the new information on the northern Canadian grid that has been made public.At that meeting,the public will also be invited to discuss what is the highest and best use of the Alaskan hydro resources. PROJECT COST:$3.2 million. DESCRIPTION:To analyze and confirm the feasibility of a transmission line that would connect two parts of the Four Dam Pool service area and the two major Southeast hydroelectric power plants in the Ketchikan-Wrangell-Petersburg region through construction of a 67-mile electrical transmission intertie;and connect the Four Dam Pool transmission system into the Canadian grid,and thus gain access to power markets either in Canada or US Pacific Northwest.As a part of the study,examine the construction of a transmission backbone that that would entice private or local government entities to develop hydro power projects that could produce as much as 100 MW of power for use in southern SE Alaska or be exported. PURPOSE:Provide a transmission system to allow for exportation of power to the British Columbia grid.Additional intertie will allow delivery of excess power for Lake Tyee to Ketchikan. SOURCE OF FUNDS:During the FY09 legislative process,$2 million of the $3.2 million originally appropriated to the AK BC Intertie was re-appropriated to the Kake-Petersburg Intertie project.The AK-BC Intertie appropriation is now $1.2 million with $558,000 in expenditures as of August 5,2009. PARTICIPANTS:Hatch Energy (Contractor)and an Advisory Work Group made up of representatives from Southeast Alaska communities including:Auke Bay,Craig,Juneau, Ketchikan,Metlakatla,Petersburg,and Wrangell. BENEFITS:The draft final report supports the Swan-Tyee Intertie and the Kake Petersburg Interties as being economically feasible,and indicates the export intertie link shows economic promise,but cannot be definitively determined at this time. ADDITIONAL BACKGROUND:This study has an advisory committee and steering committee to assist AEA in proper administration of funds.The committees have participated actively in the formulation of the consultant scope of work,selection of the consultant.The feasibility study has been reviewed and approved by the work group. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org @ 907/771-3000 «FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 «www.akenergyauthority.org "<yIDEX =AuWyAlaskaindustrialDevelopmentandExportAuthority Revised October 2009 Project Fact Sheet:ALASKA INTERTIE CURRENT STATUS:The Intertie is currently in operation.Several repair and renovation projects have been authorized by the Intertie Operating Committee and AEA has started to pursue the projects.The projects are the STATIC VAR COMPENSATOR replacement project and the TOWER 195 RELOCATION project.There is $10M available to accomplish this work. The continued operation of the intertie is changing with an emerging gas shortage in Cook Inlet, which reduces the ability for Chugach Electric and Municipal Light and Power to generate economy energy for sale to GVEA.Operation is expected to continue,but with reduced power flows.The line is also being used for GVEA to transfer firm energy south under conditions with gas supplies to Chugach are curtailed,either during maintenance periods or during extreme cold weather conditions.The Alaska Intertie Contract between AEA and participating Railbelt Utilities,schedule to terminate in 2010,remains in a "being renegotiated”status.Completion of renegotiation is on hold, pending legislative action on the Greater Railbelt Energy and Transmission Company (GRETC)bill, which would transfer the ownership of the Intertie to the new GRETC Company. PROJECT COST:Initial capitals costs of $124 million.Warranty and repair and replacement fund is paid into by utilities to cover costs. DESCRIPTION:The Alaska Intertie transmission line is a 170-mile long,345kV transmission line between Willow and Healy that is owned by AEA.It is presently operated at 138 KV. PURPOSE:The purpose of the Alaska Intertie is to interconnect Golden Valley Electric Association, the regulated utility that serves areas north of the Alaska Range with south central Alaska Utilities. The intertie also allows resources north and south of the range to be shared to improve reliability. Notably,the GVEA storage battery,as well as GVEA generation resources,can and have been used to send emergency power southward to minimize catastrophic network wide outages.The operation of this intertie materially improves overall system reliability. SOURCE OF FUNDS:The Intertie was built in the mid-1980s with State of Alaska appropriations totaling $124 million.Currently,there is no debt associated with this asset. PARTICIPANTS:The operation of the Intertie is governed by the Alaska Intertie Agreement entered into in 1985 and amended in 1991.The parties to this agreement are AEA (formerly Alaska Power Authority),Anchorage Municipal Light &Power,Chugach Electric Association Inc.,Alaska Municipal Utilities System,Golden Valley Electric Association,Inc.,and the Alaska Electric Generation and Transmission Cooperative (AEG&T is comprised of Matanuska Electric Association and Homer Electric Association). BENEFITS:In 1981,a study demonstrated a positive feasibility of the line and recommended construction of an intertie to allow exchange of economy energy and the sharing of reserve generation capacity between the Anchorage and Fairbanks load centers.It was estimated that the benefits from the project would be approximately $17 million per year. 813 West Northern Lights Boulevard «Anchorage,Alaska 99503-2495 www.aidea.org ¢907/771-3000 ¢FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 e www.akenergyauthority.org Alaska Intertie Page 2 of 2 Project Fact Sheet ADDITIONAL BACKGROUND:Agreements have been developed over a span of 30 years to govern the cooperative management,operation of the connected network at large.AEA has agreements with participating utilities that assure the Alaska Intertie operates with prudent maintenance and operation by utilities.ML&P is the intertie operator,while MEA and GVEA provide maintenance and operations services. AEA serves as financial administrator,providing basic accounting services to establish a cost-based wheeling rate that is trued up each year.AEA collects payments from Intertie users and pays expenses,including reimbursement of costs incurred by the two operators of the line,ML&P and GVEA,and the three maintenance contractors,MEA,CEA,and GVEA. ""yIDEX SANswvAlaskaindustrialOevelopmentandExportAuthority Revised November 2009 Project Fact Sheet:BRADLEY LAKE HYDROELECTRIC PROJECT CURRENT STATUS:Lake level is normal to above normal for this time of year.Generators have been contributing a substantial amount of energy to the electrical grid to keep water being lost through spillage.Many small projects continue through this fall. PROJECT COST:$328 million (original cost plus major capital improvements through June 30, 2009). DESCRIPTION:The project has 126 MW of installed capacity hydroelectric project located 27 air miles southeast of Homer on the Kenai Peninsula.The project consists of Bradley Lake,a 125 foot high concrete faced,rock filled dam structure,three diversion structures,a 19,063 ft. long power tunnel and vertical shaft,generating plant,interior 'substation,20 miles of transmission line,and substation.Due to its remote location,the project has its own airstrip,boat dock,residential quarters,and utility system.The project is normally automatically operated by remote dispatch by Chugach Electric Association from Anchorage. PURPOSE:The Bradley project provides 5-10%of the annual railbelt electric power needs at the lowest generation cost.Bradley is most important to the railbelt electric system during the cold winter months.Demand for both electric power and gas for heat is at its highest.Utilities limited by available gas are able to use Bradley power to meet the high electric demand. SOURCE OF FUNDS:Legislative appropriations and AEA revenue bonds repaid by participating utilities. PARTICIPANTS:Under the Power Sales Agreement,100%of the project's capacity has been sold to the power purchasers:Chugach Electric Association,Inc.(30.4%);Municipality of Anchorage (25.9%);Alaska Electric Generation &Transmission Cooperative,Inc.(25.8%)acting on behalf of Homer Electric Association,Inc.(12.0%)and Matanuska Electric Association,Inc. (13.8%);Golden Valley Electric Association,Inc.(16.9%);and City of Seward (1.0%). BENEFITS:Authority ownership now assures the railbelt area of a long-term source of power at a stable cost and promotes economic development in the region. ADDITIONAL BACKGROUND:The power generation potential of Bradley Lake was first studied by the U.S.Corps of Engineers and presented in a report dated March 1955.The project was authorized by Congress in 1962,but,despite its feasibility,federal funds were not available for its construction.The Alaska Energy Authority (then Alaska Power Authority)assumed responsibility for the project in 1982.Preliminary plans and field investigations started in 1982.In April 1984,the Authority submitted an application for license to the Federal Energy Regulatory Commission (FERC).The license to construct the project was issued on December 31,1985.In December 1987,the Authority and the railbelt utilities entered into a Power Sales Agreement to delineate responsibilities.Project was declared in commercial operation September 1,1991. 813 West Northern Lights Boulevard Anchorage,Alaska 99503-2495 www.aidea.org «907/771-3000 ¢FAX 907/771-3044 @ Toll Free (Alaska Only)888/300-8534 #www.akenergyauthority.org Bradley Hydroelectric Project Page 2 of 2 Project Fact Sheet . Bradley has been producing power for 16 years.In 2008,Bradley produced 287,000 MWh of power at a cost of approximately $.054 per kWh. A Bradley Project Management Committee (BPMC)was formed in 1993 with representatives from each of the power purchasers and Alaska Energy Authority.The BPMC is responsible for the management,operation,maintenance,and improvement of the project,subject to the non- delegable duties of the Alaska Energy Authority. "YIDEX f=NAwWAlaskaIndustrialDevelopmentandExportAuthority Reviewed October 2009 Project Fact Sheet:EKLUTNA TRANSMISSION LINE UPGRADE CURRENT STATUS:Project construction is complete.The line presently awaits connection into the Railbelt network.As the available funds through the AEA grant are nearly exhausted,the Eklutna Operating Committee (ML&P,Chugach and MEA)have elected to complete the project using funds they will secure.The Operating Committee has designated ML&P as the project manager for completing terminations,commissioning and energizing the line.ML&P is securing professional services to accomplish this commissioning process. PROJECT COST:$19.3 million DESCRIPTION:The project consists of rebuilding the existing 115kV wood-pole electric transmission line from the Eklutna Hydroelectric Plant to the point where the Beluga 230kV electric transmission line intersects the line (near Briggs Tap/Fossil Creek),spanning a distance of 22.5 miles. PURPOSE:To upgrade the existing single circuit line to a double circuit line providing an overall capacity and reliability to the intertie.To improve system reliability and resolve fault issues,the generating utilities approached the legislature for funding to construct a dedicated transmission link between the two generation centers and to provide a second line.to serve the four existing MEA taps.The new transmission line will be constructed and insulated for 230KV,but will initially operated at 138KV. SOURCE OF FUNDS:Grant to the Municipality of Anchorage Municipal Light and Power through the Alaska Energy Authority for an Eklutna project transmission line upgrade.AEA is the grant administrator. PARTICIPANTS:Anchorage Municipal Light and Power,Chugach Electric Association,Inc., and Matanuska Electric Association.. BENEFITS:This intertie project will resolve concerns over the 50-year age of a wood structured primary intertie link between the hydroelectric power plant at Eklutna,and the ML&P plant no.2, which is one of the main generation centers for South Central Alaska.Completion of the intertie will increase operating and dispatch flexibility for South Central Alaska,and increase reliability of power supply. ADDITIONAL BACKGROUND:Concerns for system reliability and safety led South Central Utilities to approach the legislature for a $19.3 Million appropriation to replace a 50-year-old key transmission link between two South Central Generation facilities.The Eklutna hydropower generation facility,recently repowered to produce 40MW of storage hydropower,was connected to the rest of the Railbelt system through the wood structured fink. 813 WestNorthernLightsBoulevardeAnchorage,Alaska 99503-2495 www.aidea.org e 907/771-3000 «FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 «www.akenergyauthority.org "<yIDEX f=NOsbxAlaskaIndustrialDevelopmentandExportAuthority Reviewed October 2009 Project Fact Sheet:LARSEN BAY HYDROELECTRIC PROJECT CURRENT STATUS:Upgrades to the Larsen Bay Hydro Facility are in progress utilizing a Construction Management Contractor and AEA Rural Utility Workers.Project substantial completion is tentatively scheduled for December 2009.Once the project is substantially complete,the community and AEA will execute a Facility Conveyance Agreement to complete the turnover agreement to the community.The city utility supplies a portion of the cannery's energy needs to increase utility revenues and enable repayment of bond funds.The utility has agreed to allow the use PCE payments to aid in repayment of their PPF loan. PROJECT COST:$320,000 from CDBG grant DESCRIPTION:The Larsen Bay hydro facility has experienced numerous significant operating issues over the last several years which have resulted in delaying the ownership transfer from AEA to the community.The most significant issue is the reliability of the existing hydro switchgear and controls.Scheduled improvements include: e Replacement of the existing unreliable hydro switchgear and controls with new modern switchgear that includes data acquisition and remote monitoring capabilities.This task is still in progress with the new switch gear now in basic operation. e Repair ice damage to the water intake structure.This task was substantially completed in January 2009. e Supply a portion of the cannery domestic load to facilitate increased use of hydro power without negatively impacting the power to the community and increase revenue fo the city.This task was substantially completed spring of 2007. e Execute Facility Conveyance Agreement.Agreement drafted by attorney and sent to community for review and comment. PURPOSE:The project intent is to increase the reliability and use of the hydro electric system in order to facilitate the turnover of ownership of the system to the City of Larsen Bay. SOURCE OF FUNDS:In 2004,the City of Larsen Bay applied for and received a CDBG Grant to upgrade the hydro facility.In 2005,AEA negotiated a Grant Agreement with the City of Larsen Bay and CDBG to manage the hydro upgrade project.Subsequently,the project was awarded $320,000 from CDBG. PARTICIPANTS:Alaska Energy Authority and the City of Larsen Bay BENEFITS:Once operating reliably and efficiently,the hydro will displace the majority of the city's diesel fuel used for electrical generation.The utility can now provide a portion of the cannery's energy needs resulting in increased revenue to the utility.Sales to the cannery during the summer of 2007 allowed the City of Larsen Bay to pay its loan obligations for FY 2007 and 2008.The intent is to turn the hydro facility over to the City after the improvementshavebeencompletedandthefacilityhasprovenitsreliability. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org e 907/771-3000 «FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 ¢www.akenergyauthority.org Larsen Bay Hydroelectric Project Page 2 of 2 Project Fact Sheet ADDITIONAL BACKGROUND:This 475-kilowatt project went into.commercial operation in mid-1991 with construction costs of approximately $1.6 million.In addition to producing electricity for this isolated Kodiak Island community,the project replaced the City of Larsen Bay's old water supply system which provides a safe source of water with reduced maintenance and improved water quality.The original intent of the hydro project was to turn the facility over to the City of Larsen Bay once it had been demonstrated to be operationally viable over a few years.The hydro operated only intermittently and unreliably for many years; therefore the community would not agree to accept the facility or make bond payments until these problems were worked out.In 2004,the City of Larsen Bay agreed to seek CDBGfundingtomakeimprovementstothehydrofacility. "**yIDEX LEAakgAlaskaindustrialDevelopmentandExportAuthority Revised October 2009 Project Fact Sheet:RAILBELT ELECTRICAL GRID AUTHORITY STUDY CURRENT STATUS:This project is complete.The final report has been published and accepted by the Alaska Energy Authority.The results of the study are being used to form a new non-profit statutory corporation to own and operate future Railbelt Generation and Transmission (G&T)infrastructure. PROJECT COST:$800,000 DESCRIPTION:Black and Veatch (B&V)was hired as consultant to AEA to perform the analysis of the potential of a Railbelt Electrical Grid Authority in increasing cost effectiveness and reliability in the operation of the Railbelt transmission grid.B&V will analyze operation costs, look at current and future generation sources,look at current and future electrical demands and develop a series of future scenarios with recommendations for a grid authority.This work will be done in conjunction with the Railbelt utilities,through extensive interviews with affected stakeholders and subject matter experts and with the guidance and feedback of an advisory work group. PURPOSE:This Railbelt Electrical Grid Authority (REGA)study will identify a range of grid authority business structures to own,operate,contro!,maintain and operate the future Railbelt Electrical Generation and Transmission Grid.This business structure alternatives could range from a voluntary organization to dispatch power and manage the grid assets,or it could be more encompassing to include responsibility for planning and acquiring new generation and assuming ownership of existing Railbelt assets. SOURCE OF FUNDS:Legislative appropriation. PARTICIPANTS:Black and Veatch;Alaska Energy Authority;Homer Electric Association; Chugach Electric Association;Anchorage Municipal Light and Power;Matanuska Electric Association;Golden Valley Electric Association;and a variety of stakeholders as represented on the advisory group and through interviews. BENEFITS:The project will provide the range of effective business structures that the Railbelt can employ to manage the future generation and transmission assets,with comparative economic assessments,analysis of barriers to implementation,and an implementation plan. This will provide a basis for any decisions relating to the enhancement and growth of Railbelt Electric Infrastructure under a variety of possible future energy supplies. ADDITIONAL BACKGROUND:A recent petition by MEA to the Regulatory Commission of Alaska called for the creation of a regional Generation and Transmission Cooperative as a means to implement a collective process to secure new generation sources for the Railbelt.This matter is currently being considered by the RCA. 813 West Northern Lights Boulevard Anchorage,Alaska 99503-2495 www.aidea.org @ 907/771-3000 ¢FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 «www.akenergyauthority.org *yIDEX [E=NASIA Alaska Industrial DevelopmentWwasExportAuthority Revised October 2009 Project Fact Sheet:SWAN-TYEE INTERTIE CONSTRUCTION COMPLETION CURRENT STATUS:The project is complete and has been energized.Commission of the transmission lineis now in progress.The project was completed within the final budget and onemonthaheadofschedule. PROJECT COST:$46.2 million DESCRIPTION:This project will complete the construction of the 57-mile Swan-Tyee Intertie between the Swan Lake hydro-electric power plant and the Tyee Lake hydro-electric power plant,and when energized,will allow the communities of Petersburg,Wrangell,and Ketchikan to be electrically interconnected.The work will be completed in the 2008 and 2009 construction seasons.The intertie will be owned and operated by The Four Dam Pool Power Agency. PURPOSE:This project will allow power that is produced in the Four Dam Pool transmission network to be scheduled and economically dispatched.Initially,it is expected that excess water - energy available at Lake Tyee generation capacity and energy will be used to offset an energy shortage in the Ketchikan area.In a longer range capacity,the intertie can be used to convey power for export through an export intertie that is being considered into British Columbia. SOURCE OF FUNDS:Grant to the Four Dam Pool Power Agency. PARTICIPANTS:The Southeast Alaska Power Agency consisting of three purchasing utilities (municipal utilities of the Cities of Ketchikan,Wrangell and Petersburg). BENEFITS:Generation,avoiding a looming shortage in Ketchikan that could have required Ketchikan Public Utilities to operate expensive and polluting diesel generation. ADDITIONAL BACKGROUND:This project was partially funded in 2005.The Four Dam Pool Power Agency cleared the Right-of-Way and purchased and installed tower foundations, construction was stopped when these funds were expended.The region was able to secure an appropriation of $46.2 million for completion of the project. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org ¢907/771-3000 «FAX 907/771-3044 e Toll Free (Alaska Only)888/300-8534 @ www.akenergyauthority.org "**yIDEX |[=ALASKAakAlaskaIndustrialDevelopmentandExportAuthority Reviewed October 2009 Project Fact Sheet:TEELAND DOUGLAS TRANSMISSION LINE PROJECT CURRENT STATUS This project is presently under re-scoping:1)$10M of the original appropriation was re-appropriated to upgrade the Static VAR Compensation Equipment that allows the Alaska Intertie without damaging transients,and a repair of Tower 195,a transmission tower that is in danger from encroachment by the Talkeetna River,and 2)AEA is accomplishing a regional integrated resource plan for the Railbelt,that will establish an economic plan for transmission and generation to serve the Railbelt over the next 50 years. Under this plan,the segment upgrade will be viewed in the context of overall system improvement.It is expected that endpoints of the intertie completion project will be set under this planning effort,and the project may need to be re-scoped and funding level modified.Work has been halted to renegotiate the contract,and for possible re-scoping under the IRP. PROJECT COST:$20.3 million DESCRIPTION:Upgrade and extend the line from the Teeland Substation on Knik-Goose Bay Road to the Douglas substation in the Matanuska-Susitna Borough.The project is an integral part of the Alaska Intertie and will replace approximately 25 miles of an existing transmission line operated at 138kV,owned by MEA. PURPOSE:Construction of this bypass line will parallel the existing MEA owned line,and allow the present MEA owned intertie link,20 miles of which is insulated at 115kV and operated at 138kV,to return to MEA control and service.Continued use of this 20-mile portion of the 25-mile MEA asset by certain Railbelt utilities until January 1,2014 has been|Provided for through anRCAorder. SOURCE OF FUNDS:2002 Legislative appropriation to AEA. PARTICIPANTS:EA is contracting with Municipal Light and Power under a cooperative agreement to accomplish the transmission line project.AEA will own the new line and it will become part of the Alaska Intertie Project. BENEFITS:This new line will be an addition to the existing 170 mile Alaska Intertie.With AEA ownership and access,the existing agreements with MEA for use of MEA transmission lines, which are complex,will no longer be needed.It is expected that intertie operations will be simplified,and MEA will gain the full use of its assets it previously had devoted to intertie operation. ADDITIONAL BACKGROUND:It was determined that the most effective way to construct the line was to have ML&P manage all construction activities.This decision was the result of a collaborative effort between AEA and the Intertie participant utilities.The project has been approved by the Intertie Operating Committee. 813 West Northern Lights Boulevard e Anchorage,Alaska 99503-2495 www.aidea.org ¢907/771-3000 ¢FAX 907/771-3044 @ Toll Free (Alaska Only)888/300-8534 «www.akenergyauthority.org