Loading...
HomeMy WebLinkAboutBradley Lake CEA Dispatch Agreement 1996 1. :a/>-4 ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY =>ALASKA Qa =ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE,ALASKA 99503 907 /269-3000 FAX 907 /269-3044 August 21,1996 Thomas R.Stahr General Manager Anchorage Municipal Light &Power P.O.Box 196094 Anchorage,Alaska 99519-6094 Subject:Bradiey SVS O&M Agreement Bradley Lake Dispatch Agreement Dear Tom: Enclosed are one fully executed original of each of the following documents: e Bradley Lake Hydroelectric Project Agreement for the Dispatch of Electric Power and For Related Services e Bradley Lake Hydroelectric Project Static Var Compensation System Operation and Maintenance Agreement One original of each of the agreements will be retained by AEA and one original each will be sent to Chugach Electric.Copies of these agreements will be distributed by copy of this letter to all PMC members (except Chugach Electric) and counsel. Once the remaining agreements are signed,the originals and copies will be distributed.. Very truly yours, Wc Ba - Dennis V.McCrohan Deputy Director,Energy Veo eoC _Po,Spe Thomas R.Stahr August 21,1996 Page 2 Enclosures CC:Eugene Bjornstad (w/o enclosure) Remaining BPMC Members (w/enclosure) Keith A.Laufer,Assistant Attorney General (w/enclosure) Ron Saxton,Esquire (w/enclosure) Rick Baldwin,Esquire (w/enclosure) Donald Edwards,Esquire (w/enclosure) Adam Gravely,Esquire (w/enclosure) o)* ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY -_ALASKAqmENERGYAUTHORITY 480 WEST TUDOR ANCHORAGE,ALASKA 99503 907 /269-3000 FAX 907 /269-3044 August 21,1996 Eugene N.Bjornstad General Manager Chugach Electric Association,Inc. P.O.Box 196300 Anchorage,Alaska 99519-6300 Subject:Bradley SVS O&M Agreement Bradley Lake Dispatch Agreement Dear Gene: Enclosed are one fully executed original of each of the following documents: e Bradley Lake Hydroelectric Project Agreement for the Dispatch of Electric Power and For Related Services e Bradley Lake Hydroelectric Project Static Var Compensation System Operation and Maintenance Agreement Very truly yours, DOM C ph Dennis V.McCrohan Deputy Director,Energy Enclosures cc:Thomas R.Stahr,BPMC Chairman (w/o enc.) Ron Saxton,Esquire (w/o enc.) Keith A.Laufer,Assistant Attorney General (w/o enc.) Donald Edwards,Esquire (w/o enc.) FO Dw <a ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY -_ALASKAQM=ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE,ALASKA 99503 907 /269-3000 FAX 907 /269-3044 August 7,1996 Eugene N.Bjornstad General Manager Chugach Electric Association,Inc. P.O.Box 196300 Anchorage,Alaska 99519-6300 Subject:Bradley Lake Dispatch & SVS O&M Agreements Dear Gene: Enclosed you will find triplicate originals for both of the following agreements as approved by the Bradley PMC on August 6,1996: e Bradley Lake Hydroelectric Project Agreement for the Dispatch of Electric Power and for Related Services e Bradley Lake Hydroeletric Project Static VAR Compensation System Operation and Maintenance Agreement Please sign and notarize each of the agreements and return them to AEA for Riley Snell's signature.Once all three originals of each document has been signed,one original will be returned to you,one will be sent to the BPMC Chairman and AEA will keep the third original.° Piease thank Don Edwards for his assistance in getting the Bradley Agreements completed. Very truly yours, Me Cole- Dennis V.McCrohan Deputy Director,Energy »4,.77> Eugene Bjornstad August 7,1996 Page 2 Enclosures cc:Thomas R.Stahr,BPMC Chairman (w/o enc.) Ron Saxton,Esquire (w/o enc.) Keith A.Laufer,Assistant Attorney General (w/o enc.) -.08/01/96 THU 16:14 FAX 503 228 no79 ATER WYNNE 006 L-7ATERWYNNE General Provisions and Incorporation of MO&M. The SVC Agreement is subject to the provisions of the MO&M.In the event of a conflict in terms,the Power Sales Agreement has first priority and the MO&M second priority.Both Parties promise to comply with the terms of the Power Sales Agreement in performing the SVC Agreement. Operational Requirements. Both Parties will operate their systems in accordance with Prudent Utility Practice as provided in Sec.10{c)of the Power Sales Agreement.Chugach is providing O&M of the facilities to provide additional transfer capability to the Purchasers. Operation and Maintenance Plan,Schedule and Budgets:Payment, Emergency Expenditures;Extraordinary Maintenance and Equipment Replacement;Dispute Resolution;Third Party Beneficiaries. Same as HEA Transmission Maintenance Agreement above. 4.Bradley Lake Project Dispatch Agreement.This Agreement replaces an earlier 1992 agreement and implements the obligation of Chugach under the AEA-Chugach Services Agreement to provide dispatch services for the Project. Recently,Chugach offered to zero out its budget under this Agreement if ML&P and GVEA agree to zero out their respective Alaska Intertie dispatch charges.At the last Intertie Budget subcommittee meeting,both ML&P and GVEA agreed to the proposal for at least this year.This action does not reduce the need for the Dispatch Agreement since the Agreement provides for a planning base and reimbursement for the cost of equipment installed by Chugach in support of its dispatch obligations for Bradley Lake.If an additional action is required to implement the budget agreement,the involved parties can work out the details either as a separate agreement,amendments to the effected agreements or an exchange of letters. -5-LGH\BEOigh.mem *,08/01/96 THU 16:14 FAX 503 278 1079 ATER WYNNE {007 ATER WYNNE Summary of Agreement. Nature of Agreement. Chugach will provide all of the Dispatch Services needed to dispatch Project output. Relationship to Other Agreements. The Agreement will be performed in compliance with the terms of the Power Sales Agreement.The MO&M is incorporated by reference and the terms of the Chugach Services Agreement specifically referenced are also made binding on AEA.The February 1992 Dispatch Agreement is terminated. Term of Agreement. The Agreement is effective on execution and approved by the BPMC. It will remain in effect for the term of the Chugach Services Agreement unless Chugach is replaced as Dispatcher under that agreement. Duties of the Dispatcher. The duties of Chugach are as provided and subject to the limitations in the Chugach Services Agreement.The Agreement does not require Chugach to add any equipment to its system which it would not otherwise have installed unless they are funded and approved in advance with BPMC approval and are not detrimental to Chugach's own operation. Annual Planning and Budget Chugach submits a proposed budget to AEA on a schedule provided by AEA.The budget itemizes labor costs {if any},training costs (if any), and the cost of computer equipment fairly allocable (in whole or in part)to the Project.(The budget for FY97 is tentatively set at zero.) -6-LGH\850igh.mem 2 08/01/96 THU 16:15 FAX 503 228 0079 ATER WYNNE ATER WYNNE Invoices,Payment &Dispute Resolution,Miscellaneous Provisions. cc: Similar to the provisions of the other Project agreements previously summarized, Dave Calvert,Seward Wayne Carmony,MEA Gene Bjornstad,CEA Don Stead,HEA Mike Kelly,GVEA Tom Stahr,ML&P Dennis McCrohan,AEA Dan Beardsley,AEA Don Edwards,CEA Adam Gravley,Preston,Gates &Ellis,ML&P Rick Baldwin,C.R.Baldwin Law Offices,HEA -7-LGH\850igh.mam 41008 -!08/01/96 THU 16:12 FAX 50°"96 0079 ATER WYNNE YL .Boor XC:DwR\ae leon Suite 1800ATERWYNNESsEes¥i/-Fo 222 S.W.Columbiz HEWITT Portland,Oregon 97201-6618(503)226-1191 DODSON Fax (503)226-0079 &SKERRITT FACSIMILE TRANSMITTAL NOTICE:This facsimile contains confidential information that is being transmitted to and is intended only for the use of the recipient named below.Reading,disclosure,discussion,dissemination,distribution,or copying ofthisinformationbyanyoneotherthanthenamedrecipientorhisorheremployeesoragentsisstrictlyprohibited.If you have received thisfacsimileinerror,please immediately destroy it and notify us by telephone, (503)226-1191. DATE:August 1,1996 TO:Bradley Project Management Committee CITY/STATE:SEE_BELOW FAX NUMBER: OFFICE NUMBER: FROM:Ron Saxton DOCUMENT :Memo re:Bradley Aqreements PAGES (INCL.COVER)8 USAGE TIME CLIENT NUMBER:_53844-0000 Fax No,office No. Dave Calvert, Seward,AK Wayne Carmony,MEA,Palmer,AK Gene Bjornstad,CEA,Anchorage,AK Don Stead,HEA,Homer,AK Mike Kelly,GVEA,Fairbanks,AK Tom Stahr,ML&P,Anchorage,AK Dennia MecCrohan,Dan Beardsley, AEA,Anchorage,AK Rick Baldwin,Kenai,AK Don Edwards,CEA,Anchorage,AK (CEA) Adam Gravley,Preston Gates &Ellis Seattle,WA (ML&P) City of Seward, 907/224-4085 907/745-9368 907/562-6994 907/245-3305 907/451-5633 907/263-5204 907/269-3044 907/283-8435 907/762-4688 206/623-7022 RLS\BPMC.fax 907/224-4049 907/745-3231 907/563-7494 907/235-8167 907/452-1151 907/263-5201 907/269-3000 907/283-7167 907/762-4531 206/623-7580 :08/01/96 THU 16:12 FAX 50%726 0079 ATER WYNNE -oo2 ATER WYNNE suite 1800 HEWIIT Portland,Oregon 97201-6618DoDpsONFax(509)226-0979 &SKERRITT,LLP ATTORNEYS AT LAW VIA FACSIMILE MEMORANDUM TO:Tom Stahr,Chairman Bradley Lake Project Management Committee FROM:Ron Saxton and Larry Hittle DATE:August 1,1996 RE:Summary of Proposed Bradley Lake Agreements The BPMC will be asked to approve four Agreements between AEA and the utilities providing services to the Project.These agreements either replace,clarify or amend existing agreements.All of the Agreements are the result of the arrangements agreed upon in the initial Bradley Lake Agreements (Power Sales,Chugach Services and HEA Transmission Services)and the ensuing actions taken by the BPMC. For example,the BPMC agreed that the AEA should be required to apply consistent operating and maintenance standards to all agreements between AEA and individual utilities providing services to the Project.The result was the execution of the Master Maintenance and Operating Agreement ("MO&M")between AEA and the BPMC in 1994.The Project agreements executed prior to the MO&M were not consistent with the MO&M and the parties agreed that the easiest approach was to replace the old agreements rather than amend them, The four agreements submitted for BPMC review and approval are summarized for your convenience belaw (Note the summary is only a summary and not a complete description of the Agreements): -1-LGH\850igh.mem Seattle,Washington (206)623-4711 Fax (206)467-8406 ©San Francisco,Califomia (415)421-4143 Fax (415)989-1263 :08/01/96 THU 16:13 FAX 50%726 0079 ATER WYNNE .oo3 ATER WYNNE , 1.Transmission Facilities Maintenance Agreement.This Agreement separates the maintenance of the Project transmission facilities from the operation and maintenance of the Project.Initially,the AEA-HEA Bradley Lake Project O&M Agreement included the O&M of the transmission facilities.There was general agreement that the removing the transmission facilities from the O&M Agreement would better reflect the services HEA was providing with respect to the transmission facilities.The proposed Agreement incorporates the MO&M provisions and provides for continued maintenance of the transmission facilities by HEA. Summary of Terms and Conditions. Effective Date and Termination. The Agreement will be effective when signed by HEA and AEA and terminate (i)on notice six months in advance of the beginning of a Fiscal Year by either Party,(ii)90 days after receipt of notice of a material breach by the other Party,or (iii)90 days after HEA determines the adopted budget for the facilities will not allow HEA to perform its obligations under the Agreement. Previous Contracts and Agreements,Incorporation of MO&M. The Agreement specifically recognizes the rights and obligations of the AEA and the Purchasers under the Power Sales Agreement and is subject to the terms of the MO&M. Maintenance of the Transmission Facilities. HEA will maintain the facilities consistent with manufacturers guidelines,Prudent Utility Practice,National Electric Code,etc.federal and state laws and regs,and comply with the terms of the Power Sales Agreement.HEA is obligated to coordinate all maintenance schedules;develop maintenance procedures,training and preventative maintenance programs;conduct inspections;make modifications to equipment only when AEA approves;keep maintenance records available for AEA or BPMC inspection and take all actions necessary to protect equipment and persons from hazards related to equipment failure.AEA is obligated to adopt a sufficient Annual Budget to satisfy the maintenance costs of the facilities budgeted and approved by the -2-LGH\8S0igh.mem -!08/01/96 THU 16:13 FAX 50%926 0079 ATER WYNNE ; ATER WYNNE BPMC and pay HEA's related costs.Except in emergencies,no unbudgeted alterations or repairs can be made without BPMC approval. Maintenance Plan,Schedule and Budgets. HEA annually adopts a plan and schedule for maintenance for each Fiscal Year and a three year plan and budget for proposed major maintenance improvements,revised annually.If the annual budget is not adequate to meet actual expenses,HEA can submit a revised budget to the BPMC for approval.The plan,schedule and budget are submitted by November 1 of each year. Invoices and Payment. HEA prepares and submits an invoice by the 15th of each month based upon its costs of providing services in the previous month.AEA pays within 30 days of receipt,with interest if payment is late.If any invoice item is disputed,AEA pays the amount of the invoice,subject to dispute resolution or final judicial action. Emergency Expenditures. HEA will take actions it reasonably believes are necessary in an emergency and notify AEA and BPMC within 72 hours of its discovery of the emergency of costs incurred. Extraordinary Maintenance and Equipment Replacement, HEA must promptly notify AEA of an equipment failure or other contingency which will require extraordinary maintenance or equipment replacement cost.Unless the maintenance or replacement is under emergency conditions,no cost will be incurred without approval of the AEA. Dispute Resolution. During the pendency of a dispute both Parties are obligated to continue performance of the Agreement.If the matter is not settled in a timely manner HEA proceeds with a determination to allow it to continue performance pending the settlement of the dispute. -3-LGH\a50igh.mom Moo -:08/01/96 THU 16:13 FAX 50?726 0079 ATER WYNNE Moos ATER WYNNE Third Party Beneficiaries. The BPMC is a third party beneficiary of the Agreement.If the BPMC brings an action against HEA,HEA has the right to assert any defence which it could have asserted against AEA.The rights of BPMC and the Purchasers under the Power Sales Agreement and the Master Operating Agreement are not affected by HEA raising its AEA related defense. 2.Amendment No._1 to AEA-HEA Bradley Lake Project O&M Agreement. This Amendment removes the O&M of the Project transmission facilities (two 115kV transmission lines from Bradley Lake Project to Bradley Junction)from HEA's duties under the Bradley Lake Project O&M Agreement,HEA will maintain the transmission facilities under the AEA-HEA Transmission Facilities Agreement described above. 3.Bradley Lake Project Static VAR Compensation System O&M Agreement(SVC Agreement).The SVC Agreement replaces two agreements between AEA and Chugach for the O&M of the Project SVC facilities installed at Chugach's Daves Creek Substation and HEA's Soldotna Substation (115kV portion leased by Chugach).The new agreement was proposed to include the provisions of the MO&M and to put the O&M of the SVC facilities under a single contract.During the discussions related to the draft Agreement,changes were included to link the O&M term for the Soldotna facilities to the term of the HEA-Chugach lease. Summary of Agreement. Effective Date,Term and Termination, Effective on execution and continuing in effect unless Chugach provides notice the approved budget is not adequate to meet its obligations or Chugach breaches the Agreement.The Agreement terminates automatically as to the Soldotna SVC facility when the HEA-Chugach lease for the Soldotna 115kV facilities terminates. -4-LGH\8S0igh.mem ISMunicipality of Anchorage Municipal Light &PowerRickMystrom,Mayor 1200 East First Avenue Anchorage,Alaska 99501-1685 Telephone:(907)279-7671,Telecopiers:(907)263-5804,277-9272 April 3,1996 Subject:Review and Comment on Proposed Bradley Lake Agréements Dear Mr.Beardsley: Thank you for your March 20,1996 letter to Tom Stahr enclosing copies of five proposed Bradley Lake Project agreements and notifying us of the April 4,1996 meeting to review those documents.The meeting is described as a "final review session"to prepare the documents for distribution.While we appreciate the fact that drafts were earlier circulated to the purchasers,ML&P believes that additional review can occur without delaying the timetable for approval of the documents by the BLPMC,which we understand is scheduled for July.(One exception is the proposed amendment of the Power Sales Agreement,which we consider to be unnecessary.)The relationship of the proposed agreements to other agreements (mainly the Power Sales Agreement)and the role of the BLPMC are two general areas that deserve attention,and our specific comments are set out below. ML&P has the following specific comments on the proposed agreements up for review at the April 4 meeting at your office in Anchorage: 1.Bradley Lake Hydroelectric Project Agreement for the Dispatch of Electric Power and for Related Services-3/20/96 Draft. e Page 8,para.(j),Chugach address missing. e Page 10,para.(o),The last two sentences are inconsistent with the first sentence in the paragraph as to third party beneficiaries. e Page 10,para.(q),The last sentence is vague and should more clearly state the relationship of this agreement to the Power Sales,and the Master O&M Agreements. 2.Agreement for the Sale and Purchase of Electric Power,Amendment Number 1-the 3/20/96 Draft. e ML&P sees no compelling reason to change Section 10(c),it provides "Prudent Utility Practice”as a defined and generally accepted standard. Putting Energy into Anchorage for Over 60 years Bradley Lake Agreements Review Page 2 e The intent and effect of the proposed change is unclear because of ambiguous language.The terms "minimize"and "disturbance"and "impairment"are not defined. e The change proposed would select one parameter to minimize as the performance to be required of the Parties. e As written it may also be interpreted as giving one utility grounds to object to another utility's operation even though it falls within recognized professional standards. e The change also deletes the need to maintain as well as to operate inaccordancewithPrudentUtilityPractice. 3.Bradley Lake Hydroelectric Project Static VAR Compensation System Operation and Maintenance Agreement-3/20/96. Title page,change "Variance”to "VAR” Page 3,Section2 A.The Agreement should become effective after execution by the parties and approval by the BLPMC. e Page 4,Section 4 A,Unless there is a need to include the Authority under Section 10 (c),this is not needed-assuming Section 10 (c)is not amended per paragraph 2.Above. e Page 4,Section 4 (b),Delete all after "Authority”and replace deletion with "and to ensure the increased transfer capacity resulting from operation of the SVS device is available to the Purchasers in proportion to their Project shares.” e Page 5,Section 5 B 2,Change to read,"The draft Annual SVS Facilities Budget shall be based upon prudent estimates and anticipated operation and maintenance expenditures,and shall reflect appropriate accounting and budgetary principles for utilities."The last sentence in the Draft version of this paragraph would fit better as the last sentence of Draft paragraph 5 B 1. e Page 6,Section 5 D,the last sentence is not acceptable as it appears to give authority to the Parties to override BPMC approvals or denials. e Page 8,Section 9,this paragraph should contain language indicating BPMC pre-approval for any modification.Also,the first sentence as written would restrict "Prudent Utility Practice”to one parameter only-reliability,and appears therefore not prudent. e Page 15,Section 28,The last two sentences are inconsistent with the first in the paragraph as to third party beneficiaries. e Exhibit A,Insurance.Paragraph 1 refers to a "final payment”and is not clear. Also a general question:What provision precludes the BPMC from paying for insurance that would be required by a utility as opposed to the incremental costdirectlyrelatedtothespecificdutiesforwhichautilityisaState's agent?(This applies generally to all agreements). 4.Bradley Lake Hydroelectric Project Transmission Facilities Maintenance Agreement-3/20/96. Bradley Lake Agreements Review Page 3 Sincerely, Toe In general,this agreement does not appropriately represent the oversight role of the BPMC in several important areas (For example see Page 7,Section 4 A, Section 4 D)Page 3,Section 1 C,does not provide for a successor agency as in thedefinitionofthe"Authority”in the O&M Agreement for Bradley Lakein Section 1(c). Page 5,Section 2 A.The Agreement should become effective after execution by the Parties and approval by the BLPMC Page 5,Section 2 B.The O&M Agreement for Bradley Lake was a 5 yearcontract-this contract is indefinitein length. Page 6,Section 2 B,termination notice has been shortened froma year to six months,and remedial action by authority has been diluted-need to discuss. Page 10,Section 5 B 2,Change to read,"The draft Annual Transmission Facilities Budget shall be based upon prudent estimates and anticipated operation and maintenance expenditures,and shall reflect appropriate accounting and budgetary principles for utilities."The last sentence in the Draft version of this paragraph would fit better as the last sentence of Draftparagraph5B1. Page 11,Section 5 D,the last sentence is not acceptable as it appears to give authority to the Parties to override BPMC approvals or denials. Page 23,Section 26,the last two sentences are inconsistent with the first sentence in the paragraph as to third party beneficiaries. Tim McConnell Manager,Power Manageme Thomas R.Stahr March 20,1996 Page 2 ENCLOSURES Agreements e Bradley Lake Hydroelectric Project Static Variance Compensation System Operation and Maintenance Agreement e Bradley Lake Hydroelectric Project Transmission Facilities Maintenance Agreement e Bradley Lake Hydroelectric Project Agreement for the Dispatch of Electric Power and for Related Services e Bradley Lake Hydroelectric Project Agreement for the Sale and Purchase of Electric Power, Amendment Number One e Operation &Maintenance Agreement for Bradley Lake Project,Amendment Number One Agenda for April 4,1996 h:\bradley\agremt20.doc BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE AGREEMENTS SUBCOMMITTEE MEETING APRIL 4,1996 9:30 A.M. AIDEA CONFERENCE ROOM 480 WEST TUDOR,ANCHORAGE ALASKA I.Overview Of Agreement Revision Process A.Incorporation of Master Operating Agreement Provisions B.Approach to Individual Agreements Il.Review and Comment on Individual Agreements A.Agreement for the Dispatch of Electric Power and for Related Services B.Static Variance Compensation System Operation and Maintenance Agreement C.Project Transmission Facilities Maintenance Agreement D.Operation &Maintenance Agreement,Amendment Number One E.Agreement for the Sale and Purchase of Electric Power,Amendment Number One HI.Committee Recommendations to BPMC -°=a *)_AY ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY [=ALASKAMKENERGYAUTHORITY 480 WEST TUDOR ANCHORAGE,ALASKA 99503 907 /269-3000 FAX 907 /269-3044 March 20,1996 Thomas R.Stahr Bradley PMC Chairman Anchorage Municipal Light &Power P.O.Box 196094 Anchorage,Alaska 99519-6094 Subject:Bradley Hydroelectric Project Agreements April 4 Final Review Session Dear Tom: Enclosed are the final draft copies of the various revised agreements for the Bradley Lake Hydroelectric Project and the agenda for a final review session scheduled for 9:30 A.M., Thursday,April 4,1996 at the AIDEA Conference Room,480 West Tudor.By copy of this letter and the enclosures,all Bradley Purchasers are notified of the meeting and requested to present their comments for final resolution of the Agreements.After the meeting,the final documents will be prepared for distribution.The final documents will be presented to the BPMC for approval prior to signature by the contract parties. Sincerely; Daniel W.Beardsley Contracts Manager,Energy Alaska Energy Authority Enclosures (See attached listing and documents) cc:Bradley Project Management Committee Rick Baldwin,Esquire Donald A.Edwards,Esquire Larry Hittle,Esquire Keith A.Laufer,Assistant Attorney General Adam Gravley,Esquire B-OofFCHUGACERELECTRIC ASSOCIATION,INC. EUGENE N.BJORNSTAD,P.E.Re CEI E ||General Manager cme TOADP522GoRerenes veoruary tees Alaska industrial Development and Export Authority Stan Sieczkowski Alaska Energy Authority 480 West Tudor Road Anchorage,Alaska 99503 Subject:Bradley Lake Dispatch Audit Report Dear Mr.Sieczkowski: I am sure you have seen a copy of the recent audit report in regards to Chugach's Bradley Lake Dispatch services for 1995.The results of the audit were presented and discussed at the January 18, 1996 Bradley Lake Operations &Dispatch Subcommittee meeting which was held jointly with the Bradley Lake Budget Subcommittee.Chugach did not concur with the findings of the audit and specifically objected to the concept of deriving resource allocation algorithms by capacity measures. The comntittee determined that the dispatch agreement did not have a resource.allocation methodology that could be utilized to determine billable costs for each dispatch function.As a resultofthisconsensus,the Bradley O&D committee was tasked with establishing a reasonable methodofallocation. Chugach believes it is in the best interest of all the interconnected utilities to resolve thisissue assoonaspossible.In addition,we believe the agreed upon resolution should eliminate sources offuturedisagreementbetweentheparticipants. Chugach wishes to resolve the on-going disputes regarding the appropriateness of both Intertie '+:controller-and operator charges,specifically those charges relating to Bradley Lake Dispatch,.Southern Alaska Intertie Controller,and Northern Alaska Intertie Controller.Chugach proposes the_following resolution: Chugach will perform all services presently being performed at no cost to the Bradley Lake participants.Chugach's provision of such service,at no cost,is contingent on the Northern and Southern Controllers performing the services they presently perform at no cost to the participants in the Alaska Intertie Agreement. 5601 Minnesota Drive *P.O.Box 496300 «Anchorage,Alaska 99519-6300 Phone 907-563-7494 *FAX 907-562-0027 Alaska Energy Authority 2 February 6,1996 The duties Chugach will continue to perform as Bradley Lake Dispatcher,at no cost,are broadly outlined in Exhibit C,Dispatch Duties,of the Bradley Lake Dispatch agreement and more specifically in the attached functional breakdown of these duties entitled "Bradley Dispatch and Scheduling Functions.”Chugach will expect the Northern and Southern Controller to provide a similar breakdown of their duties to be included in the agreement. Hopefully this arrangement will continue to provide the interconnected system with adequate controller and operator expertise,while eliminating the acrimonious debate which has surrounded the substantiation of charges relating to these functions. I would appreciate your support in adding this to the February 13,1996 PMC meeting agenda. Sincerely, CHUGACH ELECTRIC ASSOCIATION,INC. Eugene N.Bjornstad General Manager ENB/BJH:dlw c:\wpwin\docs\bradres.frm enclosure CC:Railbelt Utilities a ©© Bradley Dispatch and Scheduling Functions Bradley Dispatch Functions 1.Entering and coordinating Bradley Schedule Item 1.Dispatch Agreement Exhibit C 2.Loss accounting Item 6.Dispatch Agreement Exhibit C Section 8.Scheduling and Allocation Agreement Item 9.Dispatch Agreement Exhibit C 3.Operation of Daves Creek and Soldotna SVCs Item 3 Dispatch Agreement Exhibit C 4.Correlate Actual vs Schedule Data Item 1 Dispatch Agreement Exhibit C 5.Monitor Plant and System Item 4 Dispatch Agreement Exhibit c Bradley Power Scheduler 1.Review and Adjust Hydro Allocations Item 6.Dispatch Agreement Exhibit C Item 7.Dispatch Agreement Exhibit C 2.Monitor and Update Reservoir Level Rule Curve Item 6.Dispatch Agreement Exhibit A Item 7.Dispatch Agreement Exhibit A 3.Participate in Bradley O&D Item 5,Dispatch Agreement Exhibit C Item 6.Dispatch Agreement Exhibit C 4,Review and Confirm Schedule vs Actual Data Item 1.Dispatch Agreement Exhibit C 5.Maintain and Operate Long Term Hydro-Thermal Scheduling Program Item 5.Dispatch Agreement Exhibit C Item 10.Dispatch Agreement Exhibit C Sect.8.alV Transmission Services Agreement 6.Coordinates Wheeling Utility Maintenance Schedules Item 1.Dispatch Agreement Exhibit C 7.Auditing/Correcting Bad SCADA Data Item 1.Dispatch Agreement Exhibit C co Ss a7ALASKAINDUSTRIALDEVELOPMENT |7)AND EXPORT AUTHORITY a_A@@E-ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE,ALASKA 99503 907 /561-8050 'FAX 907 /561-8998 December 14,1994 Ron Saxton,Esquire Ater,Wynne,Hewitt,Dodson &Skerritt 222 S.W.Columbia,Suite 1800 Portland,Oregon 97230 Subject:Indemnity Language CEA Dispatch Agreement Master Operating Agreement Homer O&M Agreement Dear Ron: After further review of the indemnity clause of the Master Maintenance and Operation Agreement (MOA)and the Bradley Lake Hydroelectric Project Operations and Maintenance Agreement (O&M Agreement),the AEA concurs with your opinion that the indemnity provision should be changed.However, our position is that to the extent AEA has liability,it should be reduced or eliminated rather than increased as you suggest.Therefore AEA suggests focusing on this issue until such time as we are able to agree to an amendment to the MOA and O&M Agreement or go forward with the existing language. As you have frequently pointed out,AEA is acting on behalf of the BPMC when it is contracting for services or facilities relating to the project.In its exercise of its delegated duties,AEA should be indemnified by the BPMC. This should apply not only to the Dispatch Agreement,but also to the O&M Agreement and all other such agreements to provide services or facilities on behalf of the project.Only in one instance should AEA have any liability with respect to the project,and that is when AEA exercises its prerogatives as owner under Section 13(e)of the Power Sales Agreement.In those actions AEA undertakes in its owner capacity,AEA would be liable.Under the Power Sales Agreement,AEA is responsible for its actions as the owner, te)Ron Saxton co cO December 14,1994 Page 2 however that agreement does not require AEA to indemnify the BPMC or those parties AEA contracts with on behalf of the BPMC.The current provision is an expansion on AEA's liability under the Power Sales Agreement and,after further discussion with the Attorney General's Office,AEA would not agree to that provision if we were now negotiating the MOA.However, AEA will agree not to reopen this issue if changes to the clause are not pursued and the remaining project agreements are conformed in accordance with the MOA provision. As further support for our position,the procedures for dispatch and allocation are set by the BPMC on behalf of the purchasing utilities,and the Agreement for Wheeling of Electric and for Related Services and Transmission Sharing Agreement establish the liabilities and rights of the utilities vis a vis one another once the dispatcher takes delivery of the power.Once the power has been delivered to the dispatcher's control,the purchasing utilities' contractual agreements take over. With the utilities actually performing the maintenance,operation and dispatch,practically speaking,the only time AEA will exercise its rights as owner are when the utilities and/or the BPMC:1)are not acting in conformance with prudent utility practice,2)take actions that conflict with, or fail to take action to comply with,the Power Sales Agreement,bond requirements or licenses and permits,or 3)seek to adopt or implement procedures that conflict with numbers 1 and 2.AEA already has that right under the Power Sales Agreement without an obligation for indemnity. Please let me know if we need to submit a revised indemnity clause for your consideration or continue with the provision in the MOA. Sincerely, Dar Beware,Daniel W.Beardsley Contracts Manager cc:Dennis V.McCrohan,Deputy Director,Energy,AEA Keith A.Laufer,Assistant Attorney General Tom Lovas,Chugach Electric Association Don Edwards,Esq.,Chugach Electric Association \ow | 7 , .ALASKA INDUSTRIAL DEVELOPMENT 4ABAANDEXPORTAUTHORITY 480 WEST TUDOR *ANCHORAGE,ALASKA 99503-6690 «(907)561-8050 »FAX (907)561-8998 December 13,1994 Ron Saxton,Esquire Ater,Wynne,Hewitt,Dodson &Skerritt 222 S.W.Columbia,Suite 1800 Portland,Oregon 97230 Tom Lovas Chugach Electric Association,Inc. P.O.Box 196300 Anchorage,Alaska 99519-6300 Subject:Bradley Dispatch Agreement Dear Ron and Tom: Enclosed are pages with the revisions we made today,and a draft with those revisions incorporated. Sincerely yours, an BazetebeyDanielW.Beardsley Contracts Enclosures Cc:Keith Laufer,Assistant Attorney General © 62-7 ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY |=_A@@E-ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE,ALASKA 99503 907 /561-8050 FAX 907 /561-8998 August 10,1994 Mr.Tom Lovas Chugach Electric Association 5601 Minnesota Drive Anchorage,AK 99519-6300 Subject:Dispatch Agreement Bradley Lake Project Dear Tom: Attached is a marked up draft of the Dispatch Agreement,We have incorporated changes required by the Master Operating Agreement and several other changes which provide uniformity among other Bradley agreements.Please call me to discuss. Very truly yours, Gym leo Dennis V.McCrohan Deputy Director (Energy) DVM:ec ec:h\dvmlovas Attachment cc:William R.Snell,Executive Director w/o attach Norman L.Story,HEA w/o attach Ronald L.Saxton,AWHD&S w/attach Daniel W.Beardsley,Contracts Manager w/o attach Stan Sieczkowski,Manager,Maint.&Operations w/o attach :2-9 ray ALASKA INDUSTRIAL DEVELOPMENT"4 *AND EXPORT AUTHORITY /«=>ALASKA@@e-ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE,ALASKA 99503 907 /561-8050 FAX 907 {561-8998 June 2,1994 Norman L.Story General Manager Homer Electric Association 3977 Lake Street Homer,AK 99603 Subject:Bradley Lake Agreements Dear Norm: Mr.Ron Saxton has requested a planning schedule for updating Bradley agreements as required by the AEA reorganization and to incorporate the Master Operating Agreement.The schedule is: Agreement Status Schedule Dispatch Agreement Partially complete Late June 1994 between AEA/CEA meetings with CEA O&M Agreement Complete between AEA/HEA Transmission Facilities July 1994 Maintenance Agreement between HEA/CEA SVC Maintenance Agreement ,August 1994 between CEA/AEA Bradley Junction Maintenance July 1994 Agreement between HEA/AEA Norman L.Story June 2,1994 Page Two Master Operating Agreement Complete between AEA/Participating Utilities We believe these are the remaining agreements to be revised.Please let me know if you have any questions. Very truly yours, CMe Coho _Dennis V.McCrohan,P.E. Deputy Director (Energy) DVM:ec ec100doc cc:R.Snell,AIDEA R.Saxton,AWHD&S bcc:OD.Beardsley,AEA/AIDEA S.Sieczkowski,AEA