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' Ny ' eeeaee sere nore ne %Lys BeSeaflahebernn el spe ALASKA INDUSTRIAL DEVELOPMENT = AND EXPORT AUTHORITY =A @@K™ENERGY AUTHORITY 813 WEST NORTHERN LIGHTS BLVD.©ANCHORAGE,ALASKA 99503 *907/269-3000 °FAX 907 /269-3044 TOLL FREE (ALASKA ONLY)888 /300-8534 AGENDA ALASKA ENERGY AUTHORITY Board of Directors April 12,2001 1.CALL TO ORDER 2.BOARD OF DIRECTORS ROLL CALL 3.PUBLIC ROLL CALL 4.PUBLIC COMMENTS 5.PRIOR MINUTES _-February 8,2001 6.OLD BUSINESS 7.NEW BUSINESS A.AEA/AIDEA Lending Agreement,Resolution #2001-03 8.DIRECTOR COMMENTS A.Director's Status Report of AEA Programs and Projects B.Next Meeting Date 9.BOARD COMMENTS 10.ADJOURNMENT hi\all\bjfiboard\agendat ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY {=ALASKA@mE™=ENERGY AUTHORITY 813 WEST NORTHERN LIGHTS BLVD.®ANCHORAGE,ALASKA 99503 ©907/269-3000 ©FAX 907 /269-3044 TOLL FREE (ALASKA ONLY)888 /300-8534 ALASKA ENERGY AUTHORITY BOARD OF DIRECTORS April 12,2001 -1:20 p.m. Anchorage and Juneau,Alaska 1.CALL TO ORDER Chairman Hughes called the meeting of the Alaska Energy Authority to order on April 12,2001,at 1:20 p.m.A quorum was established. 2.BOARD OF DIRECTORS ROLL CALL Directors present in Anchorage:Mr.Wilson Hughes (Chairman/Public Member),Commissioner Deborah Sedwick (Department of Community and Economic Development),and Deputy Commissioner Larry Persily (Designee for Department of Revenue Commissioner). Directors present in Juneau:Commissioner Joe Perkins (Department of Transportation and Public Facilities),and Mr.Robert Loescher (Public Member). 3.PUBLIC ROLL CALL Staff present in Anchorage:Robert Poe,Jr.(Executive Director),Valorie F.Walker (Deputy Director-Finance),James A.McMillan (Deputy Director-Credit),David E.Germer (Deputy Director-Business Development &Rural Energy),and Brenda J.Fuglestad (Administrative Assistant). Others attending in Anchorage:Brian Bjorkquist (Department of Law). 4.PUBLIC COMMENTS There was no public comment. 5.PRIOR MINUTES -February 8,2001 The February 8,2001,minutes were approved as presented. 6.OLD BUSINESS There was no old business. AEA Board Meeting April 12,2001 Meeting Minutes Page 2 7.NEW BUSINESS 7A.Resolution No.2001-03,Resolution of the Alaska Energy Authority Authorizing Borrowing from the Alaska Industrial Development and Export Authority for the Payment of Certain Expenses,Repealing Resolution 1995-05,and Providing for Related Matters Mr.Bjorkquist reviewed Resolution No.2001-03 stating it authorizes AEA to borrow money from AIDEA.The loan proceeds may be used to pay project related expenses prior to the receipt of funds by AEA to pay for the expenditures.The resolution also authorizes AEA to make arrangements for the payment of overhead expenses and administrative support and services provided to AEA by AIDEA. He said 1999 legislation transferred the rural energy programs to AEA.AEA participates in the development and construction of power project and bulk fuel facilities that AEA does not own, operate,and maintain.The resolution authorizes AEA to borrow up to $2.5 million from AIDEA for its expenditures.The authorization continues to relate to the AEA owned,operated and maintained facilities and expands the authorization to include the power project and bulk fuel facilities that AEA helps develop and construct in conjunction with the Denali Commission and other funding sources.Resolution No.2001-03 also repeals Resolution No.1995-05. Staff recommended approval of Resolution No.2001-03. MOTION:Commissioner Sedwick moved to approve Resolution No.2001-03.Seconded by Commissioner Perkins.There being no discussion,the question was called.A roll call vote was taken and the motion passed unanimously. 8.DIRECTOR COMMENTS Executive Session Mr.Brian Bjorkquist stated that there are negotiations,strategy,and financial matters to discuss related to the Larsen Bay Hydroelectric Project.Under the Open Meetings Act a body,such as the AEA Board,can go into executive session to discuss negotiations,strategy,and financial issues.The appropriate procedure for doing that is to have a Board member make a motion to go into executive session for that purpose and to vote on that motion. MOTION:Commissioner Sedwick moved to go into executive session to discuss negotiations,strategy,and financial matters related to the Larsen Bay Hydroelectric Project.Seconded by Commissioner Perkins.There being no discussion,the question was Called.A roll call vote was taken and the motion passed unanimously. EXECUTIVE SESSION -1:23 p.m. The Board reconvened its regular meeting at 2:03 p.m. Roll call was taken and a quorum was established.Chairman Hughes advised that the Board had not taken any formal action on the matters discussed while in Executive Session. AEA Board Meeting April 12,2001 Meeting Minutes Page 3 Rural Energy Programs Mr.Germer updated the Board on the rural energy programs stating that the construction projects consist of bulk fuel consolidation projects,powerhouse upgrades,and electrical projects. There are currently eight design studies in progress with an additional 20 being initiated this summer.After the design work is complete AEA secures the necessary project funding, predominately through Denali Commission funding,however,there are other sources also used.After the funding is secured and the grant agreements are developed with the community,construction is initiated.AEA is scheduled to wrap-up seven bulk fuel projects and two powerhouse projects this summer.Three bulk fuel projects and three power projects should be completed by the end of the 2001 construction season.Staff will also be initiating six bulk fuel projects and two powerhouse projects that should be completed at the end of the 2002 construction season.The workload that is contemplated for this summer is a 50%increase from the prior year. Ideally,once a new power project or tank farm is constructed,the Denali Commission not only wants to be properly maintained and operated throughout its life,but also wants assurances that the owner has sufficient funding resources,without the of use of federal or state grant money,to replace the project at the end of its useful life.The label that the Denali Commission has given to this goal is "sustainability.”In an effort to reach this sustainability goal,the Denali Commission has set up a set of criteria that each facility owner would be required to meet.All prospective facility owners would have to meet these criteria before construction would actually be able to take place.Furthermore,AEA would have the responsibility for making the determinations for monitoring compliance with the criteria and then monitor the compliance with the criteria throughout the useful life of the asset.If an owner fell out of compliance with any of the sustainability criteria,actions would be taken,including possible repossession of the facility. Staff agrees with the Denali Commission's basic intent and believes that sustainability is a logical goal,however,staff differed with the Denali Commission in certain areas of the criteria. Staff believes that an incremental approach to reach sustainability targets would be more realistic compared to the approach that they require full compliance and a detail business model before the facility could be built. AEA does not have the authority,staff,nor the resources to make the determinations and to enforce these particular sustainability criteria,as well as the necessary penalties associated with noncompliance. Commissioner Perkins departed the meeting at this time. As a result,AEA and the Denali Commission have rewritten the criteria in a more practical manner.AEA's role would be limited to the preparation of a business plan in advance of construction.The intent of the plan would be to bring the owner into compliance over a three year period.The Denali Commission would be responsible for enforcing compliance with the sustainability criteria once the facility was built.The Denali Commission also has agreed to provide funding to the extent that it is available,for training and education to help new owners comply with the criteria. AEA Board Meeting April 12,2001 Meeting Minutes Page 4 Mr.Poe said that the Denali Commission's point of view is that any utility that receives a grant from them should have a depreciation sinking fund to replace the whole asset at the end of its economic life. Mr.Loescher said he appreciates the work that has been done on the policy by staff and agrees with the direction in which they are moving.He said AEA should not be responsible for education,training,and management funding;however AEA could help secure and manage the funding.He believes that the policy should have a fiscal note attached stating that there should be grant funds to implement it. 9.BOARD COMMENTS Mr.Loescher said he is unhappy with the lack of assistance and understanding from management and the Board regarding the submarine cable issue.He said that he would take this issue up with the Governor.He believes that public interest in the environment and the availability of this technology in Alaska needs to have government backing other than the parties who have a direct interest. Chairman Hughes stated the Board appreciates Mr.Loescher's position,however,every day a new technology arrives,the private investor can not expect a state agency to do their research for them.There is a concern with setting a precedent whereby it would become an AIDEA or AEA financial responsibility to continually review every changing technology that in turn enhances a private investor.This is a private cable issue that is being explored with the possibility that AP&T will put it in the water between two locations. Discussions ensued with regard to new technologies and who should be responsible for conducting the research. 10.ADJOURNMENT There being no objection and no further business of the Board,the meeting was adjourned at 2:27 p.m. ee,Robert Poe,Jr./Secretary ALASKA INDUSTRIAL DEVELOPMENT ,AND EXPORT AUTHORITY x A@m-=ENERGY AUTHORITY 813 WEST NORTHERN LIGHTS BLVD.©ANCHORAGE,ALASKA 99503.©907/269-3000 °FAX 907 /269-3044 TOLL FREE (ALASKA ONLY)888 /300-8534 ALASKA ENERGY AUTHORITY BOARD OF DIRECTORS February 8,2001 -12:46 p.m. Anchorage,and Juneau,Alaska 1.CALL TO ORDER Chairman Hughes called the meeting of the Alaska Energy Authority to order on February 8, 2001,at 12:46 p.m.A quorum was established. 2.BOARD OF DIRECTORS ROLL CALL Directors present in Anchorage:Mr.Wilson Hughes (Chairman/Public Member),Commissioner Deborah Sedwick (Department of Community and Economic Development),and Deputy Commissioner Larry Persily (Designee for Department of Revenue Commissioner). Directors present in Juneau:Commissioner Joe Perkins (Department of Transportation and Public Facilities),and Mr.Robert Loescher (Public Member). 3.PUBLIC ROLL CALL Staff present in Anchorage:Robert Poe,Jr.(Executive Director),Valorie F.Walker (Deputy Director-Finance),James A.McMillan (Deputy Director-Credit),Karl Reiche (Acting Deputy Director-Project Development &Operations),David E.Germer (Deputy Director-Business Development &Rural Energy),and Brenda J.Fuglestad (Administrative Assistant). Others attending in Anchorage:Linda Day and Pauline Henriques (Legislative Audit),and Brian Bjorkquist (Department of Law). 4.PUBLIC COMMENTS There was no public comment. 5.PRIOR MINUTES -December 15,2000 The December 15,2000,minutes were unanimously approved as presented. 6.OLD BUSINESS There was no old business. AEA Board Meeting February 8,2001 Meeting Minutes Page 2 7.NEW BUSINESS 7A.Resolution No.2001-02,Resolution of the Alaska Energy Authority relating to Amending,Revising and Restating the By-Laws of the Alaska Energy Authority,and Related Matters Mr.Bjorkquist stated the resolution authorizes changes to the By-Laws to bring them into conformance with management practice and to also bring consistency between the AEA By-Laws and the Alaska Industrial Development and Export Authority's By-Laws. Mr.Bjorkquist reviewed the major changes for the Board.He also said that a number of minor changes were made to make the By-Laws gender neutral. Article I],Section 4 and 12,have been deleted as the Chair and Vice-Chair of the Alaska Energy Authority are the Chair and Vice-Chair of the Alaska Industrial Development and Export Authority. Article |l,Section 5,clarifies the duties of the Executive Director.The language gives the Executive Director the general authority to supervise and control the business and affairs of the Authority subject to the review of the Board. Article ll,Section 5(e),clarifies that the Board may authorize the Executive Director to delegate all or part of his duties to another person or persons that the Board may appoint,such as a Deputy Director,an Assistant Secretary,and Assistant Secretary-Treasurer. Article Il,Sections 5 and 13,references to hiring or providing compensation for AEA personnel have been deleted because AEA does not have any personnel.The personnel services are provided for by AIDEA,therefore there is no need for those provisions. Article Il,Sections 6-9,have been deleted because they dealt with specific requirements for contract,loans,checks,and deposits.With the general authority given to the Executive Director to handle the business and affairs of AEA these more specific details are not necessary. Article 1],Section 15,has changed the conflict of interest provision to mirror what is in the AIDEA conflict of interest provision. Article lil,Section 2,language changes were made for clarification. Article Ill,Section 3,is changed to provide for a "reasonable"public notice of special board meetings.This change is consistent with applicable Alaska Law (AS 44.62.310)and will provide greater flexibility for calling special meetings. Section Ill,Section 5,deletes the specific provision for providing board packets to the public, some at no charge and some at a subscription rate based upon actual cost.Deleting the provision will not affect the public's ability to obtain board packets,and will not impair AEA's ability to change its policy regarding providing board packets at no charge if that became desirable. AEA Board Meeting February 8,2001 Meeting Minutes Page 3 Article ltl,Section 7,and Article V,Section 1,reduces the required quorum and affirmative vote requirements from four to three.The amendment will make the By-Laws consistent with the controlling AEA statute. Article Ill,Section 8 has been deleted. Article IV,Sections 1 and 2,inserts provisions relating to public records. Article V,Section 1,corrects an error by reducing from three days to 48 hours the amount of prior notice of a special meeting required to be provided to Board members. Staff recommended approval of Resolution No.2001-02. MOTION:Commissioner Sedwick moved for the adoption of Resolution No.2001-02. Seconded by Deputy Commissioner Persily.There being no discussion,the question was called.A roll call vote was taken and the motion passed unanimously. 7B.Resolution No.2001-01,Resolution of the Alaska Energy Authority Relating to the Appointment of Various Officers of the Authority;and Related Matters Mr.Bjorkquist stated that there have been changes in Authority staff that required this resolution be brought before the Board to recognize the changes that have been made.He said Keith A.Laufer and Dennis V.McCrohan are no longer employed by the Authority,and James A.McMillan has been appointed as Deputy Director-Credit and Assistant Secretary of the Authority.Appointing Mr.McMillan to AEA as an officer is necessary due to the merger as he now oversees programs associated with AEA. Mr.Bjorkquist briefly explained Resolution No.2001-02,stating that it reappoints the existing Executive Director and Deputy Directors,appoints James A.McMillan as Deputy Director-Credit and Assistant Secretary,and removes Keith A.Laufer as Financial &Legal Affairs Manager and Assistant Secretary,and Dennis V.McCrohan as Deputy Director-Project Development and Operations and Assistant Secretary. Mr.Bjorkquist said the resolution further provides the officers with the power and authority to exercise their duties and responsibilities under the statutes that govern the Authority.It authorizes the Executive Director to sign all contracts,deeds,and instruments on behalf of the Authority.It also authorizes the Executive Director to appoint any of the other officers as the Acting Executive Director when necessary. Staff recommended approval of Resolution No.2001-01. MOTION:Commissioner Sedwick moved for the adoption of Resolution No.2001-01. Seconded by Deputy Commissioner Persily.There being no discussion,the question was called.A roll call vote was taken and the motion passed unanimously. 8.DIRECTOR COMMENTS Mr.Poe briefed the Board with regard to the Energy Plan.He said there has been significant headway on the Rural Energy Plan.Staff has completed the screening analysis report,which has four basic conclusions.First,diesel and switching efficiencies offer a great deal of positive AEA Board Meeting February 8,2001 Meeting Minutes Page 4 opportunity.Second,heat recovery;diesel generation produces heat from the engines that could be recovered,which could reduce space heating costs and possibly other generation opportunities.Third,is weatherization and other efficiencies.There has been success in working with rural schools in changing the ballasts and providing weatherization to reduce their cost of energy generation.Fourth,specifically targeted alternative energy opportunities that could have an impact on reducing the cost of electricity.There are promising projects with regard to river hydrogeneration. Staff has been to every rural community this winter and has assessed the current electric generation capacity of each of the communities and the operation,maintenance,and management practices that are carried on.Staff has established a database that will allow us to prioritize the areas of highest need.The next step would be to take this information and begin to develop demonstration projects that can further the cost reduction of electric generation. ISER,in combination with the USDA,is studying strategies that Alaska might follow in operation,maintenance,and management practices in rural electricity.Staff is also working with the Denali Commission to find ways of maintaining electric generation in Rural Alaska. Mr.Germer said the information for the Alaskan communities is now being entered into the database and should be complete by mid-March. Four Dam Pool Sale:Brian Bjorkquist said he is leading the efforts on the legal work with the transfer.There is a draft purchase and sale agreement and we expect the final report on the land records by February 9,2001.Staff is working closely with the Department of Natural Resources. Mr.Bjorkquist said that Ketchikan Electric Company would like to develop the Mahoney Lake Plant,which is an 8.6-megawatt plant.Staff does not have any specific objection to the Mahoney Lake project,however,what Ketchikan Electric is trying to assert is PURPA (Public Utilities Regulatory Power Act).There is a provision under PURPA that basically says that qualified facilities can force a public utility to buy their power at an avoided cost rate.All four projects of the Four Dam Pool have been pooled.Ketchikan Electric is trying to assert that PURPA should allow them to sell power ahead of any other Four Dam Pool project in Ketchikan.This causes a question among the utilities and the valuation of the Four Dam Pool project,so AEA intervened and said that our understanding is that PURPA does not apply. Mr.Loescher said he would like to see AEA's legal opinion that affirms that position because he has seen other legal opinions to the contrary.He does not think that AEA should be able to assert this position,other than in an indirect interest. Mr.Poe said that the concern,and why AEA finds itself in this place,is that if that assertion is true in Ketchikan,it can also be true in Kodiak,and other places where the Four Dam Pool power could be put aside.Keeping in mind that AEA's highest goal is to complete the work that the sale is intended to accomplish,the funding of the Power Cost Equalization Endowment Fund,therefore we have to do what we reasonably can to ensure that the sale happens.We are concerned that it will affect the value of the sale and,therefore,affect the higher goal of fully endowing the Power Cost Equalization Endowment Fund. AEA Board Meeting February 8,2001 Meeting Minutes Page 5 Mr.Loescher said that he is concerned about AEA taking a legal position without having fully researched its position.Whatever the outcome with respect to the Mahoney Lake project, whether it went forward or not,would have a valuation impact on all of the utilities in the intertie project.Using the force and effect of State government to weigh in without having a substantial legal position is incorrect.On a public policy basis,AEA should be supporting PURPA as a matter of course.Anytime somebody can develop a power source whether it is small,medium, or large,AEA should be encouraging the investment of private sector financing in the energy development.Mr.Loescher said he objects to the position that AEA has taken in this regard. Chairman Hughes stated that the power plant is trying to compete with a cost that is not a true cost of power which is generated by the Four Dam Pool arrangement.Even though you may slight power at Kodiak,the other participants will have to make up the difference so the net cost to the users is not going to change.It is just someone taking advantage of a Four Dam Pool arrangement in this case.In essence,because of the Four Dam Pool arrangement and the State subsidy of power,it is no longer a market driven arrangement. Mr.Loescher said that AEA should support a market driven energy cost in all of Alaska.In Southeast Alaska that question should be decided by the utility customers. Discussions ensued as to the issue with the Four Dam Pool arrangement. Mr.Loescher said the decision to go forward with intertie investments and other investments within Southeastern Alaska will be on a market driven basis.There is a requirement for public vote in the local communities on these issues and the ratepayer should have some opportunity or right to say what is to occur in the future.If the State through AEA weighs in on this issue it can distort the public policy and the consumers'right to determine what are the best investments and how it will affect the future rate.AEA is on incorrect ground in this regard and should have legal counsel review the definitions and the issues. Mr.Bjorkquist said the Department of Law has looked at the legal issues relating to PURPA and how they would apply to the Four Dam Pool Power Sales Agreement and to the Four Dam Pool Divestiture.The conclusions of how PURPA would apply is that there is certainly adequate legal grounds for taking the position that AEA has taken,which is that PURPA does not permit any qualified facility to step in front of the Four Dam Pool and displace their power sales.It is not only in AEA's best interest that it occur,but it is also in each of the utilities'best interest that it occur.They share costs and risks,so it is in their best interests that all of the power that can be used and sold by the Four Dam Pool be purchased by each of the utilities.PURPA is a muddled,complicated law,but we are looking at it and taking a position that is supported under valid interpretations of PURPA.We are protective of AEA's position as the owner of the Four Dam Pool,of the interest of divesting the Four Dam Pool,and using the sale proceeds to fund the PCE Endowment so that PCE can have a long term reliable source of funding well into the future.There are very definite State interests at stake with these issues and it is my view that it is appropriate for the State to be participating in these matters to protect all of the public interest positions that are affected. Mr.Loescher said he disagrees with legal counsel and their statement about PURPA.He requested the opinion of legal counsel regarding PURPA and the State's position.He said PURPA law and energy laws are very sophisticated and there is a practice that surrounds it.He stated for the record that AEA and their counsel are incorrect in terms of what they are saying AEA Board Meeting February 8,2001 Meeting Minutes Page 6 about the law and are infringing on the public policy questions that need to be decided by the Board. Mr.Bjorkquist said he is the primary legal counsel working on this issue.He said he would send a copy of the letter that addresses many of the PURPA issues to Mr.Loescher.The letter is a response to the attorney for Ketchikan Electric Company who asked that we review the legal interpretation of the Power Sales Agreement as it applies to PURPA. Mr.Loescher said he would appreciate receiving a copy of the letter,however,he registered for the record his objection to the position AEA is taking. 9.BOARD COMMENTS Mr.Loescher said the Southeast Conference is holding a meeting on February 22,2001,in Juneau regarding establishment of a regional power authority to implement the intertie fund and other energy development in the Southeastern Alaska region.He asked if Mr.Poe and others were planning to attend the meeting.He also asked what AEA's position is in terms of supporting this effort.He said that since the Southeast energy plan has been deferred would there be an objection by AEA if the regional power authority group apply to the Denali Commission and other places to secure the funds necessary to do the Southeast energy plan. Mr.Poe said that he would be in Juneau for the ARECA conference and also for the Southeast Conference on the Four Dam Pool.He said that with respect to the authority for the interties,AEA has taken no position.AEA would welcome a joint planning effort with regard to the energy plan study for Southeast Juneau and Sitka as compared to the other rural areas in Southeast. Mr.Loescher said that this could provide some new opportunity for this region in terms of energy and economic development.He noted that AEA could not have it both ways,they are either in energy in Southeast Alaska or they are not.AEA needs to determine the level of involvement that it has because the State has a great role in energy and economic development.He encouraged AEA to be supportive. In response to Board questions,Mr.Poe said the Southeast intertie is the Tyee-Swan intertie, which is not specifically in the Four Dam Pool sale agreement,but it is viewed in those areas as an important link.The reason AEA has not taken a position is it is a complicated issue and there is no clear path.Staff has been very involved in following the issue and are definitely involved in Southeast energy issues. Mr.Bjorkquist said that within the sale agreement there is contemplation,at least on the utilities part,that there is going to be some movement forward towards the Southeast Intertie.It is not required,but the utilities are contemplating it.The only direct tie within the sales agreement is that there is a $5 million credit that continues to be a credit if the Southeast Intertie is built.If it is not built or there has not been substantial progress within a certain period of time then it becomes an obligation of the utilities to pay that back.The only direct link is a financial link.But as far as AEA, as the owner of the Four Dam Pool,is concerned there is no requirement that there be a Southeast tntertie at all,it is just something that was contemplated on the utilities part. 10.ADJOURNMENT AEA Board Meeting February 8,2001 Meeting Minutes Page 7 There being no objection and no further business of the Board,the meeting was adjourned at 1:33 p.m. Robert Poe,Jr.,Secretary ALASKA ENERGY AUTHORITY RESOLUTION NO.2001-03 RESOLUTION OF THE ALASKA ENERGY AUTHORITY AUTHORIZING BORROWING FROM THE ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY FOR THE PAYMENT OF CERTAIN EXPENSES,REPEALING RESOLUTION 1995-05,AND PROVIDING FOR RELATED MATTERS WHEREAS,the Alaska Energy Authority (the "Energy Authority”)adopted Resolution 1995-05 following changes made in 1993 to the Alaska Statutes relating to the Energy Authority that authorized the Energy Authority to continue to own,operate,and maintain certain power project facilities; WHEREAS,Resolution 1995-05 authorizes the Energy Authority to borrow and make arrangements to repay loans made to the Energy Authority by the Alaska Industrial Development and Export Authority (the "Authority”)relating to power projects owned,operated, or maintained by the Energy Authority,subject to certain restrictions;authorizes the Energy Authority make arrangements for the payment for overhead expenses and administrative support and services provided to the Energy Authority by the Authority;and provides for related matters; WHEREAS,changes made in 1999 to the Alaska Statutes relating to the Energy Authority authorize the Energy Authority to participate in the development and construction of power project and bulk fuel facilities that the Energy Authority does not own,operate,and maintain; WHEREAS,the Energy Authority incurs working capital expenses related to the development and construction of power project and bulk fuel facilities; WHEREAS,the Energy Authority continues to incur working capital expenses related to power project facilities that the Energy Authority owns,operates,and maintains; WHEREAS,the Authority has the statutory authority to make loans to the Energy Authority to finance the types of expenses described herein; WHEREAS,the Energy Authority has the power to accept loans pursuant to AS 44.83.080(8);and WHEREAS,the changes made in 1999 to Alaska Statutes related to the Energy Authority make it appropriate and necessary or desirable to modify and substitute the authorizations provided in Resolution 1995-05; NOW,THEREFORE,BE IT RESOLVED BY THE ALASKA ENERGY AUTHORITY AS FOLLOWS: Section 1.The Executive Director of the Energy Authority and any Deputy Director of the Energy Authority designated by the Executive Director are authorized to enter into commitments,agreements,and financial arrangements on behalf of the Energy Authority for the repayment of loans made to the Energy Authority for the purpose of paying working capital or other expenses of the Energy Authority relating to a power project that the Energy Authority owns,operates,or maintains,or relating to a power project or bulk fuel facility to which the Energy Authority participates in the development or construction;provided,however,that such borrowing is limited to,and shall comply with,the terms of Section 3 of this Resolution. Section 2.The Executive Director of the Energy Authority and any Deputy Director of the Energy Authority designated by the Executive Director are authorized to enter into appropriate financial arrangements on behalf of the Energy Authority to reimburse the Authority for overhead expenses paid by,and administrative support and services provided by,the Authority for the Energy Authority. Section 3.The unpaid balance of loans described in Section 1 of this Resolution shall not at any time exceed,in the aggregate,$2,500,000.A loan described in Section 1 of this Resolution shall not bear interest.Each loan described in Section 1 of this Resolution shall be repaid from amounts held by the Energy Authority or received by the Energy Authority from the State of Alaska or from other sources that,in the opinion of the Executive Director or designated Deputy Director,will provide adequate assurance of repayment of the loan.Each loan described in Section 1 of this Resolution shall mature and be payable in full no later than the earlier to occur of (a)twelve months after the date of disbursement of the amount loaned,or (b) the date on which amounts described in the preceding sentence are available to repay the loan. Section 4.All outstanding loans,commitments,agreements,and_financial arrangements between the Authority and the Energy Authority that comply with the terms of this Resolution are hereby ratified,affirmed,and approved,including all outstanding loans, commitments,agreements,and financial arrangements between the Authority and Energy Authority made under Resolution 1995-05. Section 5.Resolution 1995-05 is repealed effective when this Resolution 2001-03 becomes effective. Resolution No.2001-03 Page 2 H:\ALL\bfugiestad\BOARD\RESOLUTINAEA-AIDEA Lending Agreement #2001-03.doc Dated at Anchorage,Alaska this 12 day of April,2001. Chairman ATTEST [SEAL] Secretary Resolution No.2001-03 Page 3 H:\ALLibfugiestad\BOARD\RESOLUTIMEA-AIDEA Lending Agreement #2001-03.doc ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY {=ALASKAQM=ENERGY AUTHORITY 813 WEST NORTHERN LIGHTS BLVD.®ANCHORAGE,ALASKA 99503 ¢907/269-3000 ©FAX 907 /269-3044 TOLL FREE (ALASKA ONLY)888 /300-8534 MEMORANDUM TO:Board of Directors Alaska Industrial Development and Export Authority FROM:Robert Poe,Jr. Executive Director DATE:April 12,2001 SUBJECT:-Resolution No.2001-03 AEAJAIDEA Lending Agreement The attached Resolution No.2001-03 authorizes AEA to borrow money from AIDEA.The loan proceeds may to be used to pay project related expenses prior to the receipt of funds by AEA to pay for the expenditures.The resolution also authorizes AEA to make arrangements for the payment of overhead expenses and administrative support and services provided to AEA by AIDEA. Previously,the AEA board approved Resolution No.1995-05 which provides for loans of up to $2 million from AIDEA to be used for the payment of working capital expenses related to AEA's owned,operated and maintained facilities.Resolution No.1995-05 also authorized AEA to pay for overhead expenses and administrative support and services provided by AIDEA. Legislation in 1999 transferred the rural energy programs to AEA.AEA participates in the development and construction of power project and bulk fuel facilities that AEA does not own, operate and maintain.These facilities are largely funded by Denali Commission and other sources. Resolution No.2001-03 authorizes AEA to borrow up to $2.5 million from AIDEA for its expenditures.The authorization continues to relate to the AEA owned,operated and maintained facilities and expands the authorization to include the power project and bulk fuel facilities that AEA helps develop and construct in conjunction with the Denali Commission and other funding sources.The resolution continues to authorize AEA to make arrangements for the payment of overhead expenses and administrative support and services provided to AEA by AIDEA. Resolution No.2001-03 also repeals Resolution No.1995-05. Staff recommends approval of Resolution No.2001-03. wnREG Bulk Fuel StatusasofMarch 21,2001 Current Denali Proposed new ;Commission Old CM CM Itern #Community Funded?Ranking {Design Status Remarks Assignments {Assignments Projects to be closed out in 2001: 1|Tuntutuliak Yes 57.2 Project closeout,complete 2001.STG 2|Chefornak Yes 77.7 Project closeout,complete 2001.STG 3)Emmonak (AVEC)Yes 67.3 Project closeout,complete 2001.STG 4|Napaskiak Yes 71.7 Project closeout,complete 2001.AE&E Continued project,complete 2001,but §|Allakaket No 57.0 substantial effort required.CRW Project closeout,complete 2001,but 6}Kiana (AVEC)Yes 67.4 substantial effort required.AE&E Project closeout,complete 2001,but Additional design substantial effort required.Additional required to add truck |funds will be required for completion,to be 7 |Manokotak No 81.5/fill dispenser transferred from other project underruns.STG Project closeout,complete 2001.AVEC to install its tanks on REG furnished pad in 8|Noorvik (AVEC)Yes 107.4 future.AE&E Projects to be started in 2001,with possible completion in 2001,pending issues noted: 9/Port Graham Yes 100.0 Start 2001,substantially complete 2001.|CE2 Start 2001,substantially complete 2001. Project will be constructed on existing site, which requires clean up by DEC.Project schedule for 2001 is subject to impact by 10}Nikolski Yes 127.1 DEC progress.CE2 Design in progress. Scope and budget Start 2001,substantially complete 2001, issues are being pending transfer of Toksook funds to 11 Yes 121.7|worked out.Kotlik.STG Projects to be started in 2001 and completed in 2002: 12|Buckland Yes 79.6|Design in progress.|Start 2001,complete 2002.UIC 13|Chignik Lagoon Yes 93.9 Start 2001,complete 2002.ccl Start 2001,complete 2002.Low water in FAA runway design /Yukon River may prevent mining of gravel may impact current _|bar for tank farm pad.This may delay start 14|Tanana Yes 84.3 /site.of project until 2002.URS Village may request site change and Start 2001,complete 2002,but subject to 15|Beaver No 116.1 |redesign delays due to site change.CRW Start 2001,complete 2002,pending resolution of project labor agreement issues.Also,site was recently relocated at 16!Arctic Village Yes 122.9|Design in progress.[request of village.Houston Start 2001,complete 2002,pending 17 |Chignik Bay Yes 119.4|Design in progress.[resolution of local issues.Bristol Projects affected by Amendment 4 (could be started in 2001 and completed in 2002): Funds reallocated to Kotlik.Replacement funding pending Amendment 4.Denali Pending Commission mentioned transferring a 18|Toksook Bay (AVEC)|Amendment 4 101.1|Design in progress.|project to AVEC.STG Pending Start 2001,complete 2002,pending 19|Kongiganak Amendment 4 91.1|Design in progress.{execution of Amendment 4.STG Pending Start 2001,complete 2002,pending 20!Nikolai Amendment 4 127.5|Design in progress._|execution of Amendment 4.Bristol BFU forecast 21Mar01.xis Rural Power System Upgrades,Status as of March 28,2001 Current Denali Proposed new; Commission Old CM CM wane #Community funded?Design Status Remarks Assignments [Assignments Projects to be closed out in 2001: 1|Golovin Yes Project closeout,complete 2001.AEA 2|Nome Yes Project closeout,complete 2001.City of Nome 3/AVTEC Yes Project closeout,complete 2001.AEA Project complete,except for stability problems on the two larger generators, manufacture is working on the correction 4|Deering Yes the problem.AEA Project construction will be complete by 5|Tuntutuliak Yes June 2001.AEA Projects to be started in 2001,with possible completion in 2001,pending issues noted: Project construction is underway,expect completion in September 2001.Additional 6|Kotlik Yes funds will be required for completion ,STG Project construction is underway,expect 7|Stevens Village [Yes Design in progress.{completion in December 2001.AEA 8|Koyukuk Yes Design in progress.{Start 2001,substantially complete 2001 AEA Projects to be started in 2001 and com 002: 9|Hughes Yes Design in progress.|Start 2001,complete 2002.AEA 10|Arctic Village Yes Design in progress.{Start 2001,complete 2002.AEA/Houston Projects affected by Amendment 4 (could be started in 2001 and compieted in 2002): Pending Start 2001,complete 2002,pending 11|Tuluksak Amendment 4 Design in progress.execution of Amendment 4.CE2 RPSU forecast 28Mar01.xis Page 1