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HomeMy WebLinkAboutBPMC Oct 13, 2017BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING REGULAR MEETING Alaska Energy Authority,Anchorage,Alaska October 13,2017 oft 1.CALL TO ORDER Chair Janorschke called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 1:00 p.m. 2.ROLL CALL FOR COMMITTEE MEMBERS Brad Janorschke (Homer Electric Association [HEA]);Cory Borgeson (Golden Valley Electric Association [GVEA]);Bryan Carey (Alaska Energy Authority [AEA]);Lee Thibert (Chugach Electric Association [CEA]);Tony Izzo (Matanuska Electric Association [MEA]);Mark Johnston (Anchorage Municipal Light &Power [ML&P]);and John Foutz (City of Seward). 3.PUBLIC ROLL CALL Amy Adler,Brenda Applegate,Tom Erickson,Valerie Leavitt,Kirk Warren (AEA);Mark Johnson (CEA);Brian Bjorkquist (Department of Law);Leo Quiachon (phone)(GVEA);Rick Baldwin,Bob Day,Emily Hutchinson (phone),Larry Jorgensen (HEA);Kirk Gibson (McDowell Rackner Gibson,PC);David Pease,Tony Zellers (MEA);Jeff Warner (ML&P);Fred Eoff (phone)(PFM Group Consulting);TW Patch (Public);Bernie Smith (Public);and Ladonna Lindley (Accu-Type Depositions). 4,PUBLIC COMMENTS None. 5.AGENDA APPROVAL MOTION:Mr.Borgeson made a motion to amend the agenda adding Item 5.5.Executive Session to discuss confidential legal matters regarding Battle Creek.Motion seconded by Mr.Thibert. The motion to amend passed with no objection.A motion to approve the amended agenda was done by Mr.Johnston and seconded by Mr.Thibert. MOTION:Mr.Johnston made a motion to go into Executive Session to discuss confidential legal matters related to Battle Creek.Mr.Thibert seconded the motion. Motion passed unanimously. 5.5 EXECUTIVE SESSION:1:04 pm. The Committee reconvened its regular meeting at 1:53 pm. 6.NEW BUSINESS A.Battle Creek Project BPMC Minutes 10/13/17 Page 1 of 5 Resolution 2017-02 -Optional Project Work Approval MOTION:Mr.Johnston made a motion to approve Resolution 2017-02 and included Attachment 1.Motion seconded by Mr.Thibert. Mr.Carey provided an update on Battle Creek Project materials.The Bradley Lake operator has been utilizing gravel and sand from the original construction project.Low levels of gravel and sand remain.The line items of 1,500 yards of sand and 1,500 yards of gravel is expected to provide a 10 to 20-year supply for runway and roads for Bradley Lake.The supply could come at a savings from the materials being generated from blasting during the Battle Creek Project,or the supply could partially come from the existing materials currently on the pad,or the supply could come from a standalone project at a potentially higher cost.Mr.Carey noted the contractor may decide to use up to 500 yards of the existing materials to potentially make concrete for the Battle Creek Project. Mr.Johnston believes the gravel and sand is a sunk cost.He suggested the Project pay for crushing the rock while the equipment is already at the site.Mr.Johnston reiterated his concern that one project should not subsidize the other project. Mr.Borgeson emphasized the importance of keeping two separate and appropriate accounting allocations,one for the Bradley Lake Project and one for the Battle Creek Project. Chair Janorschke assigned the Finance Committee to determine the appropriate and fair cost allocation of the 3,000 yards of sand and gravel. Mr.lzzo expressed concern regarding the uncertainty of the engineering and construction.He emphasized the reimbursement of an equitable portion of costs should be based on transparent and verifiable accounting.Mr.Thibert explained the Finance Committee developed the current requirement language to include the cash calls and the interest during construction. MOTION:Mr.Johnston made a motion to amend Resolution 2017-02,changing the discount rate of 5%,under the second to the last Be It Resolved section,to read,"The time value of money using a discount rate equal to the long-term financing cost for the project,net the CREBs benefit."Motion seconded by Mr.Thibert. The motion to amend Resolution 2017-02 passed with MEA opposing. MOTION:Mr.Borgeson made a motion to amend Resolution 2017-02 inserting on page three after the sixth Be It Further Resolved,"Be it further resolved by the BPMC that a participating purchaser shall have the unfettered right to arrange for the sale or transfer of its respective BCD share to another participating purchaser and the BPMC shall honor such arrangement in the allocation process for BCD shares."Motion seconded by Mr. Izzo. The motion to amend Resolution 2017-02 passed unanimously. MOTION:Mr.Thibert made a motion to amend Resolution 2017-02 in several places;on page three by inserting the words,"In accordance with this Resolution No.2017-02," after "The ability to participate in the BCD project without restriction";on page four after the next "Be It Further Resolved,”by removing the semicolon after "Project"and inserting the language to read,"With such reasonable development costs including the non-participating purchasers”keeping the subsequent language after "Pro-rata share"; BPMC Minutes 10/13/17 Page 2 of 5 and on page three after the third "Be It Further Resolved",change the date from November 15th to November 8th. The motion to amend Resolution 2017-02 passed unanimously. Mr.!zzo inquired as to the 4%charge to BCD of the Bradley Lake O&M.He requested consideration to eliminate the 4%and the amount to be determined by a study.Mr.Johnston informed he authored this section.He explained allocation of O&M is generally between 2% and 4%,but could be as high as 10%.Mr.Johnston believes a specific number is important in the document to provide incentive for the study to be completed.Mr.Warner provided an overview of the discussion that occurred at O&M Committee on October 6th regarding this issue. Mr.Borgeson expressed his belief the Battle Creek share of 4%of the O&M cost is extremely low.He suggested Battle Creek should pay its proportionate share of the entire Bradley Lake $19 million cost.Mr.Borgeson noted he accepts the current language as written at 4%. MOTION:Mr.Izzo made a motion to amend Resolution 2017-02 by removing the words, "4%of the Bradley Lake annual O&M".Motion seconded by Mr.Foutz. Mr.Johnston expressed opposition to the motion. Mr.Borgeson expressed opposition to the motion. Mr.Thibert expressed opposition to the motion. Mr.Foutz requested clarification regarding who is obligated to pay for the study.Mr.Borgeson expressed his view the study should be included in the BPMC budget and the BPMC should oversee the study process,perhaps conducted by the O&D Committee.Chair Janorschke assigned the O&D Committee to work on the study of the Battle Creek share of the Bradley Lake O&M costs. Mr.Foutz asked if the numbers would be more accurate from a study of actuals after the project is completed rather than relying on numbers from a study before the project begins.Mr. Johnston agreed the numbers would probably be more accurate from a study after the project is completed,and stated he believes there is sufficient experience with other projects to be able to determine a reasonable facsimile before the project is complete that could be updated over time. WITHDRAWN MOTION:Mr.Izzo withdrew his motion to amend Resolution 2017-02.Mr. Izzo withdrew his second of the motion.Motion withdrawn. MOTION:Mr.Borgeson made a motion to amend Resolution 2017-02 in the section regarding the annual O&M charge to read,"The BCD Project will be charged four percent (4%)of the Bradley Lake annual Operation and Maintenance costs (the O&M charge), unless and until the BPMC conducts a study of the impacts of the BCD Project on the Bradley Lake Project,after which the O&M charge,if any,will be established by the BPMC based upon the study.Any change to the O&M charge must be approved by an affirmative vote,"with the continued resolution language remaining.Motion seconded by Mr.Foutz. The motion to amend Resolution 2017-02 passed unanimously. BPMC Minutes 10/13/17 Page 3 of 5 Chair Janorschke opened the floor to possible amendments to Attachment 1 to Resolution 2017-02. MOTION:Mr.Thibert made a motion to amend Resolution 2017-02 Attachment 1 in several places with technical changes.Motion seconded by Mr.Izzo. The motion to amend Resolution 2017-02 Attachment 1 passed unanimously. MOTION:Mr.Borgeson made a motion to amend Resolution 2017-02 Attachment 1 by replacing the language in C3 with the approved amended language.Motion seconded by Mr.Johnston. The motion to amend Resolution 2017-02 Attachment 1 passed with no objection. MOTION:Mr.Borgeson made a motion to amend Resolution 2017-02 Attachment 1 on Item B10 by replacing the discount rate to match that of the resolution.Motion seconded by Mr.Thibert. The motion to amend Resolution 2017-02 Attachment 1 passed with MEA opposing. MOTION:Mr.Carey made a motion to approve amended language Resolution 2017-02, page 2 paragraph 10,by deleting "for financing"and replacing with "of",to read, "Approval of the BCD Project as optional project work."Motion seconded by Mr.Thibert. The motion to amend Resolution 2017-02 passed with unanimously. A roll call was taken,and the motion to approve Resolution 2017-02 and included Attachment 1 as amended during the meeting passed unanimously. Chair Janorschke requested Mr.Carey to provide the update on financing.Mr.Carey clarified the option to utilize the materials at the site is currently not available to the contractors and is not included in the bids.Mr.Carey introduced Ms.Applegate and Mr.Eoff to continue the 'presentation on financing.Ms.Applegate advised the full $40 million of Clean Renewable Energy Bonds (CREBs)allocation subsidy was received.Financing loan details with RUS are being considered and include possible interim construction financing and long-term financing. RUS will be available at the November 3rd BPMC meeting.The financing construct and details need to be finalized before the CREBs expiration date of April 3rd,2018.Discussions are ongoing regarding the possible use of $7 million from the Qualified Energy Development Conservation Bonds (QECBs).Mr.Eoff continued the presentation and expressed his optimism.He discussed the next steps in the process and explained how the interest rate could potentially be at zero for the entire finance. 7.COMMITTEE ASSIGNMENTS Chair Janorschke assigned the Finance Committee to research a cost/cause or cost/payer methodology between Bradley Lake participants and Battle Creek to ensure costs are recovered equitably. Chair Janorschke assigned the O&D Committee to study the O&M impacts from Battle Creek on the Bradley Lake Project. 8.MEMBERS COMMENTS BPMC Minutes 10/13/17 Page 4 of 5 Mr.Carey commented he was happy to see the CREBs financing come to fruition. Mr.Borgeson specifically recognized Ms.Highers for bringing forward the phenomenal CREBs opportunity.He expressed additional appreciation to those involved in the process. Mr.Thibert expressed appreciation to the Finance Committee,Ms.Applegate,Mr.Eoff and all staff involved in moving the project forward. Mr.Foutz expressed gratitude to the Finance Committee and Mr.Gibson for their diligence in the process. Mr.lzzo and Mr.Johnston echoed the appreciation given by members. Chair Janorschke expressed appreciation to everyone for their efforts. 9.NEXT MEETING DATE-Friday,November 3,2017 The next meeting is tentatively scheduled for Friday,November 3,2017.Chair Janorschke will coordinate with members to reschedule the meeting date. 10.ADJOURNMENT There being no further business for the committee,the meeting adjourned at 3:10 p.m. 01,PEEEBradJanorschke,Chair Attest:Le vA leBryanC4fey Alaska Energy Authority,Seefetary BPMC Minutes 10/13/17 Page 5 of 5 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING Friday,October 13,2017 1:00 P.M. Alaska Energy Authority,Board Room 813 W.Northern Lights Boulevard,Anchorage,Alaska To participate VIA TELECONFERENCE-1-888-585-9008 -Conference room code 708 329 368 AGENDA CALL TO ORDER ROLL CALL FOR COMMITTEE MEMBERS PUBLIC ROLL CALL PUBLIC COMMENTS AGENDA APPROVAL NEW BUSINESS A.Battle Creek Project Resolution 2017-02 -Optional Project Work Approval CEA COMMITTEE ASSIGNMENTS MEMBERS COMMENTS NEXT MEETING DATE -Friday,Nov 3,2017 ADJOURNMENT "cA RESOLUTION OF BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE RESOLUTION NO.2017 -02;Battle Creek Diversion Project Introduction:The Bradley Lake Project Management Committee ("BPMC”)is considering the development of a project to divert the water flows of Battle Creek into Bradley Lake to increase the water for use by the Bradley Lake Hydroelectric Project ("Bradley Lake Project”).All Purchasers are supportive of the expansion of the capabilities of the Bradley Lake Project through the development of the Battle Creek Diversion Project ("BCD Project').While all Purchasers wish for the BCD Project to move forward,all Purchasers may not want to participate in the BCD Project.The activities of the BPMC regarding the BCD Project are authorized as Optional Project Work under the Power Sales Agreement. Purpose of Resolution No.2017-02:Resolution No.2017-02,and Attachment 1 to Resolution No.2017-02 Battle Creek Diversion Project Framework,set forth the terms and conditions under which participation in the costs and benefits of the BCD Project as Optional Project Work under the Power Sales Agreement will be managed by the BPMC. Definitions:{|n addition to the definitions contained in Power Sales Agreement,the following definitions are used as part of this Resolution 2017-02 and Attachment 1: "Non-Participating Purchaser”means a Purchaser that is not participating in the BCD Project. "Participating Purchaser”means a Purchaser participating in the development of the BCD Project. RESOLUTION NO.2017-02 WHEREAS,Chugach Electric Association,Inc.("Chugach”),Golden Valley Electric Association,Inc.("GVEA”),Homer Electric Association,Inc.("HEA”),the Municipality of Anchorage d/b/a Municipal Light and Power ("ML&P”),Matanuska Electric Association,Inc. ("MEA”),and the City of Seward ("Seward”),are the purchasers of the power generated by Bradley Lake Project under the Power Sales Agreement (hereinafter referred to jointly as the "Purchasers”and individually as a "Purchaser'); WHEREAS,the Purchasers along with the Alaska Energy Authority ("AEA”)constitute the BPMC; WHEREAS,the BPMC has authorized preliminary work comprised of completing design, environmental,and bid-related documents on the BCD Project as Optional Project Work under the Power Sales Agreement; WHEREAS,the BCD Project is designed to supplement the water available for the Bradley Lake Project and the BCD Project will be using the facilities of the Bradley Lake Project, the BPMC will oversee and manage all aspects of the use of facilities of the Bradley Lake Project under the BPMC's authority provided by the Power Sales Agreement; {00029626.1}Page 1 of 4-Resolution 2017-02;Battle Creek Diversion Project WHEREAS,all Purchasers support the development of the BCD Project; WHEREAS,AEA is now moving forward with obtaining financing of the BCD Project; WHEREAS,not all Purchasers may want to participate in the development and resulting benefits of the BCD Project at this time; WHEREAS,Purchasers desire an arrangement under which a Purchaser not wishing to participate in the BCD Project now can preserve the ability to participate in the BCD Project at a later date; WHEREAS,the Participating Purchasers wish to hold harmless the Non-Participating Purchasers from incurring any costs associated with the development of the BCD Project; WHEREAS,the Participating Purchasers shall reimburse the Non-Participating Purchasers for any amounts previously advanced by a Non-Participating Purchasers; WHEREAS,the Participating Purchasers wish to provide an opportunity for the Non- Participating Purchasers to participate in the BCD Project later so long as the Non-Participating Purchasers reimburse the Participating Purchasers for an equitable portion of the reasonable costs incurred to develop the BCD Project prior to the time their respective participation begins; WHEREAS,the development and financing of the BCD Project will be required to have no effect on the Bradley Lake Project Power Revenue Bond Resolution ("Bond”)and related bond covenants associated with the Bradley Lake Project; WHEREAS,this Resolution No.2017-02 along with the Power Sales Agreement and the BPMC Bylaws provide the authorization for the BPMC to manage the allocation of costs and benefits of the BCD Project including the determination of the equitable costs to be paid by a Non-Participating Purchaser to a Participating Purchaser should the Non-Participating Purchaser choose to participate in the BCD Project at a later date; WHEREAS,approval for financing the BCD Project as Optional Project Work under the Power Sales Agreement will require the affirmative vote of at least four (4)representatives of the Purchasers,whose percentage shares of the output from the Bradley Lake Project are greater than fifty-one percent (51%),plus the affirmative vote of the AEA;and, WHEREAS,approval for financing the BCD Project as Optional Project Work under the Power Sales Agreement will require the affirmative vote of members whose percentage shares of the output from the Bradley Lake Project are equal to or exceed eighty percent (80%)of project capacity and annual project costs;and, NOW,THEREFORE,IT IS HEREBY RESOLVED BY THE BPMC,that the costs and benefits of the BCD Project shall be managed and allocated in accordance with this Resolution No.2017-02 and Attachment 1 to this Resolution No.2017-02;Battle Creek Diversion Project Framework,as part of the BPMC process for determining Annual Project Costs for the Bradley Lake Project;and, BE IT FURTHER RESOLVED BY THE BPMC,that the BCD Project is approved as Optional Project Work under the Power Sales Agreement and this Resolution No.2017-02 and the terms and conditions set forth in Attachment 1 to this Resolution No.2017-02;and, {00029626.1}Page 2 of 4-Resolution 2017-02;Battle Creek Diversion Project BE IT FURTHER RESOLVED BY THE BPMC,that the above Recitals be incorporated and made part of to this Resolution No.2017-02;and, BE IT FURTHER RESOLVED BY THE BPMC,that the right to the capacity of the BCD Project shall initially be allocated to all Purchasers in accordance with their respective shares of Bradley Lake Project capacity (hereinafter referred to as their "BCD Share'). BE IT FURTHER RESOLVED BY THE BPMC,that Purchasers will have until financing terms and bid results are known (tentatively November 15,2017)before deciding whether to participate and obtain their respective right to the capacity in the BCD Project;and, BE IT FURTHER RESOLVED BY THE BPMC,that the costs and benefits of the BCD Project should not affect the rights,duties,and obligations of the Purchasers as set forth in the Power Sales Agreement and Bond;and, BE IT FURTHER RESOLVED BY THE BPMC,that the costs and benefits associated with the BCD Project shall be allocated by the BPMC to only those Purchasers choosing to participate in the BCD Project (i.e.,Participating Purchasers);and, BE IT FURTHER RESOLVED BY THE BPMC,that Purchasers wishing to participate in the BCD Project shall expressly notify the BPMC of their election to participate in the BCD Project,and the percentage level of their BCD Share at which it would like to participate in the BCD Project;and, BE IT FURTHER RESOLVED BY THE BPMC,that any Purchaser failing to expressly notify the BPMC (or notifying the BPMC that it does not wish to participate in the BCD Project) by November 30,2017shall be deemed to be choosing to not participate in the BCD Project and that Purchaser's share of the BCD Project (i.e.,its respective BCD Share)shall be reallocated by the BPMC between the Participating Purchasers;and, BE IT FURTHER RESOLVED BY THE BPMC,that a Non-Participating Purchaser having its BCD Share reallocated shall continue to have its ability to participate in the BCD Project without restriction.;and, BE IT FURTHER RESOLVED BY THE BPMC,that the Non-Participating Purchasers will not bear any costs or suffer any adverse effect due to the BCD Project;and, _BE IT FURTHER RESOLVED BY THE BPMC,the BCD Project will be charged four percent (4%)of the Bradley Lake annual O&M or an amount to be determined by a study of the impacts of the BCD Project to the Bradley Lake Project.The results of the study will be ratified by the affirmative vote of members whose percentage shares of the output from the Bradley Lake Project are equal to or exceed eighty percent (80%)of Bradley Lake Project capacity and Annual Project Costs;and, BE IT FURTHER RESOLVED BY THE BPMC,that the Non-Participating Purchasers have no restriction to participate at a later date but must provide notice of their intent to become a Participating Purchaser one year in advance of the start of the Project Water Year,June 1°. ate;and, BE IT FURTHER RESOLVED BY THE BPMC,that the Non-Participating Purchasers choosing to participate in the BCD Project at a later date shall contribute an equitable portion of the reasonable costs incurred to develop the BCD Project which amount shall be determined by {00029626.1}Page 3 of 4-Resolution 2017-02;Battle Creek Diversion Project the BPMC at the time the Non-Participating Purchaser chooses to participate in the BCD Project;Reasonable development costs will include the Non-Participating pro-rata share of AEA cash calls and Interest During Construction (IDC)paid up front by the Participating Purchasers and adjusted for the time value of money using a discount rate of five percent (5%);and, ae BE IT FURTHER RESOLVED BY THE BPMC,that any changes to the terms and conditions of this Resolution 2017-02 and Attachment 1 that directly affect the rights and obligations of the Participating Parties to receive their respective benefits from the BCD Project shall require the unanimous consent of the Participating Parties. Dated at Anchorage Alaska,this 13th day of October 2017. Chair Attest: Secretary {00029626.1}Page 4 of 4-Resolution 2017-02;Battle Creek Diversion Project ATTACHMENT 1 TO RESOLUTION NO.2017-02 OF BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE Battle Creek Diversion Project Framework The costs and benefits of the Battle Creek Diversion Project ("BCD Project”)shall be managed in accordance with Resolution No.2017-02 and this Attachment 1 to Resolution No.2017-02 Battle Creek Diversion Project Framework ("Attachment 1”),as follows: A.General Applicability of Bradley Lake Project Provisions: 1.The provisions of the Power Sales Agreement and any of the documents,agreements, and understanding generally referred to as the Bradley Lake Agreements,where applicable,will be used to manage the energy generated and delivered from the BCD Project. Subject to the rights held by the Alaska Energy Authority,the BPMC will be the final arbiter on any issue involving the BCD Project and the Bradley Lake Project and/or the Purchasers,and any such issues shall be resolved in accordance with the voting requirements set forth in Resolution No.2017-02 and the Dispute Resolution provisions of the BPMC Bylaws. For purposes of governance of any conflicts,the terms and conditions of Resolution No. 2017-02,will control over this Attachment 1,which will contro!over the BPMC Bylaws. B.BCD Project Capacity: 1.The original shares of Bradley Lake Project capacity,i.e.,Chugach (30.4%),GVEA (16.9%),HEA (12.0%),ML&P (25.9%),MEA (13.8%),and Seward (1.0%)will not change in any manner by Resolution 2017-02 and Attachment 1. Each Purchaser shall have the right to participate in the BCD Project at the same percentage that it holds capacity in the Bradley Lake Project subject to Resolution No. 2017-02 and this Attachment 1. The right to the capacity of the BCD Project shall initially be allocated to all Purchasers in accordance with their respective shares of Bradley Lake Project capacity (hereinafter referred to as their "BCD Share'). To participate in the BCD Project each Purchaser must expressly so notify the BPMC in writing by November 30,2017,indicating it wants to maintain its allocated BCD Share (or a specific percentage of its total allocated BCD Share)of BCD Project capacity. {00029622.1}Page 1 of 4 -Attachment 1 to Resolution 2017-02 naAny Purchaser that notifies the BPMC that it does not want to participate in the BCD Project,or a Purchaser that fails to provide any notice regarding participation,shall be deemed by the BPMC to have declined its initial opportunity to participate in the BCD Project and thereafter such Purchaser shall be a Non-Participating Purchaser.A Non- Participating Purchaser shall have the right to participate at their BCD Share without restriction. 6.The BCD Share for any Non-Participating Purchaser shall be placed into a share pool ('BCD Pool')reallocated by the BPMC in accordance with the respective percentage of original shares of Bradley Lake Project capacity held by the Participating Purchasers.The Participating Purchasers may allocate their BCD Share and/or the redistributed BCD Shares from the BCD Pool by agreement. 7.The Purchasers desiring to maintain their respective share (or a percentage of their respective shares)of BCD Project capacity but not immediately participate in the BCD Project (i.e.,Non-Participating Purchasers)shall have the right to call back their respective BCD Share by providing written notice to the BPMC ("Call Back Notice'). 8.A Call Back Notice must be provided to the BPMC by a Non-Participating Purchaser of their intent to become a Participating Purchaser one year in advance of the start of the Project Water Year,June 1'.to be effective for participation in the BCD Project to begin at the start of the next Project Water Year.A Call Back Notice provided with less than one year in advance of the start of the Project Water Year,June 1%shall be effective for participation in the BCD Project to begin one year from the start of the next Project Water Year.A Call Back Notice can be made without restriction. 9.The Non-Participating Purchaser providing a Call Back Notice and complying with all other obligations and responsibilities set forth in Resolution 2017-02 and this Attachment 1 shall be able to participate at the level equal to the capacity percentage it holds in the Bradley Lake Project (i.e.,their initial)BCD Share).The BPMC shall make the necessary adjustments to the BCD Shares held by the other Participating Purchasers to accommodate the return of the Non-Participating Purchaser providing a valid Call Back Notice. 10.Any Non-Participating Purchaser providing a Call Back Notice must reimburse the Participating Purchasers then participating in the BCD Project for the equitable portion of the reasonable costs incurred to develop the BCD Project as determined by the BPMC. Reasonable development costs will include the Non-Participating pro-rata share of AEA cash calls and Interest During Construction (IDC)paid up front by the Participating Purchasers and adjusted for the time value of money using a discount rate of five percent (5%).This reimbursement must be paid to the Participating Purchasers by the Non- Participating Purchaser providing a Call Back Notice on or before May 1*prior to the Project Water Year in which that Non-Participating Purchaser shall be eligible to participate in the BCD Project. {00029622.1}Page 2 of 4 -Attachment 1 to Resolution 2017-02 C.BCD Project Cost Responsibility: 1.The amounts contributed to date towards the development of the BCD Project by the Non- Participating Purchasers shall be reimbursed by the Participating Purchasers in amounts determined by the BPMC within forty-five (45)days following the financing for the BCD Project.The responsibility of payment of such costs associated with this reimbursement shall be allocated by the BPMC to the Participating Purchasers in accordance with their respective BCD Shares,adjusted by the amount of the BCD Share allocated from a Non- Participating Purchaser ("Adjusted BCD Share”). The Alaska Energy Authority will develop and propose for BPMC approval,the methodology and procedures for tracking all costs involved or associated with the BCD Project;such approval by the BPMC shall be in accordance with the voting requirements set forth in Resolution No.2017-02.The methodology and proceduresfor tracking all costs involved or associated with the BCD Project will be approved by the BPMC. The BCD Project will be charged four percent (4%)of the Bradley Lake annual O&M or an amount to be determined by a study of the impacts of the BCD Project to the Bradley Lake Project.The results of the study will be ratified by the affirmative vote of members whose percentage shares of the output from the Bradley Lake Project are equal to or exceed eighty percent (80%)of Bradley Lake Project capacity and Annual Project Costs. Participating Purchasers will hold harmless the Non-Participating Purchasers from all of the costs (including cost of financing)associated with the BCD Project as follows: a.The Participating Purchasers,in accordance with their Adjusted BCD Shares,will pay all of the costs (including cost of financing)associated with the BCD Project. b.The BPMC shall determine and allocate the BCD project costs to the Participating Purchasers during the determination of the Annual Project Costs for the Bradley Lake Project. c.The costs associated with the BCD Project will be invoiced to Participating Purchasers as a separate surcharge amount shown on a schedule similar in form to the Schedule C accompanying the Bradley Lake Project determinations of "Monthly Utility Contributions.” d.Any amounts received from Participating Purchasers for the costs associated with the BCD Project in excess of the actual costs associated with the BCD Project in a given fiscal year will be distributed to the Participating Purchasers in accordance with their respective Adjusted BCD Shares for that fiscal year. e.Any additional amounts required for more than the budgeted costs associated with the BCD Project in each fiscal year shall be the responsibility of the Participating Purchasers in accordance with their respective Adjusted BCD Shares for that fiscal year. {00029622.1}Page 3 of 4-Attachment 1 to Resolution 2017-02 D.BCD Project Water Tracking &Allocation: 1.The BPMC Operating Committee will be required to develop for BPMC approval the methodology and procedures for the tracking and allocation of water;such approval by the BPMC shall be in accordance with the voting requirements set forth in Resolution No. 2017-02. 2.A Participating Purchaser's water rights in each fiscal year from the BCD Project will be allocated based upon its Adjusted BCD Share. {00029622.1}Page 4 of 4 -Attachment 1 to Resolution 2017-02 Lv "Bradley Lake Project Management Committee -Alaska Online Public Notices Page 1 of 1 CorreA-£o STATUS:Active ee Bradley Lake Project Management Committee ALASKA ENERGY AUTHORITY (AEA) Bradley Lake Project Management Committee Notice is hereby given that the Bradley Lake Project Management Committee will hold a regular meeting on Friday,October 13,2017 at 2:00 p.m.For additional information contact Valerie Leavitt at 907-771-3093. This meeting will be conducted by electronic media pursuant to AS 44.62.310 at the following location: Alaska Energy Authority Board Conference Room,813 West Northern Lights Boulevard,Anchorage,Alaska; A teleconference line has been set up for those unable to attend in person.Dial 1-888-585-9008,Enter Code 708-329-3684. The public is invited to attend.The State of Alaska (AEA)complies with Title Il of the Americans with Disabilities Act of 1990.Disabled persons requiring special modifications to participate should contact AEA staff at 907- 771-3074 to make arrangements. Attachments,History,Details Attachments Details None .Commerce,Community andDepartment:Economic Development Revision History Category:Public Notices Created 10/5/2017 2:46:30 PM by pbc cale statewidevfleavitt: Modified 10/5/2017 2:47:07 PM by [Details]Project/Regulation #: vfleavitt Publish Date:10/5/2017 Archive Date:10/14/2017 Events/Deadlines: https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id=187285 10/5/2017 7%«Bradley Lake Project Management Committee -Alaska Online Public Notices Page 1 of 1 of Raenolte STATUS:Active Bradley Lake Project Management Committee ALASKA ENERGY AUTHORITY (AEA) Bradley Lake Project Management Committee Notice is hereby given that the Bradley Lake Project Management Committee will hold a regular meeting on Friday,October 13,2017 at 2:00 p.m.For additional information contact Valerie Leavitt at 907-771-3093. This meeting will be conducted by electronic media pursuant to AS 44.62.310 at the following location: Alaska Energy Authority Board Conference Room,813 West Northern Lights Boulevard,Anchorage,Alaska; A teleconference line has been set up for those unable to attend in person.Dial 1-888-585-9008,Enter Code 708-329-368#. The public is invited to attend.The State of Alaska (AEA)complies with Title Il of the Americans with Disabilities Act of 1990.Disabled persons requiring special modifications to participate should contact AEA staff at 907- 771-3074 to make arrangements. Attachments,History,Details Attachments Details BPMC Agenda 10-13-17.pdf Department:Economic Development and Revision History Category:Public Notices Created 10/5/2017 2:46:30 PM by Sub-Category: vfleavitt Location(s):Statewide Modified 10/5/2017 2:47:07 PM by [Details]Project/Regulation #: vileavitt Modified 10/10/2017 12:34:38 PM by [Details]Publish Date:10/5/2017vfleavittArchiveDate:10/14/2017 Events/Deadlines: https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id=1 87285 10/10/2017 .*+iradley Lake Project Management Committee -Alaska Online Public Notices Page 1 of 1 mab aN tial STATUS:Active Bradley Lake Project Management Committee ALASKA ENERGY AUTHORITY (AEA) Bradley Lake Project Management Committee Notice is hereby given that the Bradley Lake Project Management Committee will hold a regular meeting on Friday,October 13,2017 at 1:00 p.m.For additional information contact Valerie Leavitt at 907-771-3903. This meeting will be conducted by electronic media pursuant to AS 44.62.310 at the following location: Alaska Energy Authority Board Conference Room,813 West Northern Lights Boulevard,Anchorage,Alaska; A teleconference line has been set up for those unable to attend in person.Dial 1-888-585-9008,Enter Code 708-329-368#. The public is invited to attend.The State of Alaska (AEA)complies with Title Il of the Americans with Disabilities Act of 1990.Disabled persons requiring special modifications to participate should contact AEA staff at 907- 771-3903 to make arrangements. Attachments,History,Details Attachments Details ' BPMC Agenda 10-13-17.pdf Department:Economie Daveloemant and Revision History Category:Public Notices Created 10/5/2017 2:46:30 PM by Sub-Category: vfleavitt Location(s):Statewide Modified 10/5/2017 2:47:07 PM by [Details]Project/Regulation #: vfleavitt Modified 10/10/2017 12:34:38 PM by [Details]Publish Date:10/5/2017 vfleavitt Archive Date:10/14/2017 Modified 10/10/2017 12:35:06 PM by [Details]vfleavitt Events/Deadlines:Modified 10/10/2017 12:38:34 PM by [Details]vfleavitt Modified 10/10/2017 3:30:20 PM by . vfleavitt [Details] https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id=1 87285 10/10/2017 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING4Na)Friday,October 13,2017 1:00 P.M. Alaska Energy Authority,Board Room 813 W.Northern Lights Boulevard,Anchorage,Alaska To participate VIA TELECONFERENCE-1-888-585-9008 -Conference room code 708 329 368 AGENDA CALL TO ORDER ROLL CALL FOR COMMITTEE MEMBERS PUBLIC ROLL CALL PUBLIC COMMENTS AGENDA APPROVAL NEW BUSINESS A.Battle Creek Project Resolution 2017-02 -Optional Project Work Approval CEA COMMITTEE ASSIGNMENTS MEMBERS COMMENTS NEXT MEETING DATE -Friday,Nov 3,2017 ADJOURNMENT Bradley Lake Project Management Committee Friday,October 13,2017 @ 1:00 pm. **PLEASE WRITE LEGIBLY*™ NAME ORGANIZATION Ladanna lin Moy Accrtygee_Rian BpOreAUsyg AGOBeyanCAnyUptALivyDotyenseuHEA. 'Reb Da Vv HEA Riche Ralolwin HEA- MAig Fo Yasjou Z lw actTAOPadevtPub,hie, bet SHYLA Lely - KKK GReSA BENG ye Cr Warne ELLA ¢.Conny EVfie [(A4e Fuet pend [(7.34 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE C 0// First Second First Second First Second First Second BPMC 10/13/17 (ory |Lee |[More |Lee Nat |Le»v fed 5S _RQRollCallfAd|CER RAA =s0l S A ee Exe vtRollcallfromtoptobottomendingwithChairExectchty'111 w {Oo 5 re,tov Yes No Yes No Yes No "Yes No Yes No Matanuska Electric Association \ow "Tomy Chugach Electric Association Le e lee. City of Seward shin John Golden Valley Electric Association Cory Cory Alaska Energy Authority -Oryan Ors Municipal Light &Power or Matt. Homer Electric Association Brac ie 4 First Second First Second First Second First Second First Second Roll call from top to bottom ending with Chair Yes No Yes No Yes No Yes No Yes No Matanuska Electric Association Chugach Electric Association City of Seward Golden Valley Electric Association Alaska Energy Authority Municipal Light &Power Homer Electric Association Next Meeting:11/3 Cad oF CHECKLIST FOR BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETINGS Meeting Date/Time:|Ofte |i, ng a Pe o:/@ aise Bring Mrive-res mi =Sen -7 Preol if pase?_pat .Su la PPMe artreo. ")\pr Task CONFIRMED /DATE 1.|Identify possible dates -Call HEA first to get available dates of the Chairman,Brad Janorschke (call his Exec Assistant,Heather 907-283-2334).Meeting is usually 2 hours long./ 2.|Check dates for Bryan Carey and the board room before calling other utilities for dates.KirkGibsonisnotavailablethe4""Thursday of each month.Ideally the last two weeks of the month.Make sure it's not a state holiday.Need five for quorum.J 3.|Once date/time is set send calendar meeting request to all members,in Outlook Contacts<aivic MEMBERS”with meeting date/time/location (ask for documents to be emailed for packet inclusion -including action items. 4.|Secure meeting room for use (block out 60 minutes prior to meeting to allow for set-up time)Y 5.|One week prior to the meeting draft the agenda.Ask Homer Electric and Bryan for items.Draft Agenda and send to Bryan first then the final to Brad J to approve.Ahendn 4%docs6.|After agendais approved post it on the AEA website under Events. 7.|Post to the State of Alaska's Online Notice System 5 business days prior to the meeting.Attach agenda.Cprint agai nu /SY 8.|Gather documents from members.Due dateis two days prior to the meeting.Nik Gibsm -restein on -Va 9.|Email packet to members including all attachments (teleconference 'information/agenda/draft of previous meeting minutes/motions/general handouts)(SEND IN PDF FORMAT!) 10.|Print 10 full packetof information and bring to the meeting for the committee members,attorneys and your copy.Set out tent cards.Va 11.|For handouts print out 15 agendas and 10 copies of other items.No need to copy the prior UZminutesforthepublic.\\Ts(\\Coffee [I Z2)Wealer-[312.|MEETING DAY -Put sign in sheet on end of the board room tate and lay out the handoutsnexttotyDasiOnyxem€thee is a pres hecho,VA 13.|ALSO BRING TO THE MEETING:List of Reps and Minutes in final form from the last meeting for Chair's signature if they are approved._ Find14.|Sign in on the phone 5 minutes prior./¢'AL hee =a =elt sf PLC Op Gpuavor ag aa15.|Accutype will be present but also record from our system.4 cna Ceel 16.|Following the meeting:Make sure you disconnect the phone.Stop recording.Have Chair and Bryan sign approved minutes.SL 17.|Take the disc from the recording out of the system and download recording and place in VSO:drive and also in BPMC meeting folder Send a pdf of the signed minutes to the committee members. "ATTENDANCE -'BPMC MEETING,Oct 13 @1:|:00 pmCOMMITTEEMEMBERS--:Ce : |:|mVAGCory 3orgeson,(Chair oe -|GVEA watLeo QuiQuiachon _YYSV(lee rhibert,Vice Chairoe CEA |Burke Wick --|:Sf Brad Vanorschke _HEA WA |Bob Day / -|SY Brya Carey,Secretary/Trereasurer 'AEA SO Kirk Warren / ||(Tonyjlzzo MEA S Tony Zellers S/(Magksonnston MEP ett Warmer a, ||J,(ohn outz |SEW !| f |Public Members.COUNSEL | CEA :Brian HHickeyy (CEA)--|/SL aa Gibson,McDowell Rackner &Gibson ” /wa Mark Johnson (CEA)/ay a YS Brian Bjorkquist,Dept.ofLav YS Oo Sherri Higher (CEA)Be va ; _Paul Risse (CEA)AEA YY Brenda Applegate /HEA.Rich Baldwin(HEA)vant WA Amy Adler -_ Alan Owens (HEA)||Jocelyn Gardner |S Emily Hutchinson (HEA)/po |Brandi White : oS Larry Jorgensen (HEA)J -_Carmen Noble Z - MLP Anna Henderson (MLP)'Ter Webster -_-|Molly Morrison (MLP)Jo "|David Lockard a GVEA|_Ron Woolf (GVEA)ra Kirk Warren ys'Pete Sarauer (GVEA)_John Springsteen ' MEA Jim Brooks (MEA) :/'Valerie Leavitt J A David Pease (MEA)oe yf .:Jessica Houston Public AL:Bernie Smith .Va SY Wom Greta YoCrystalEnkvist(APA) -_Mel Hutchinson (APA)YY.Wed Jf TW Patch J.Fred Eoff (PFM) "|Cindy Cartledge (JDO)_: | EricMyers (American Transmission Co)|/-7 - a a RESOLUTION OF BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE RESOLUTION NO,2017 -02;Battle Creek Diversion Project Introduction:The Bradley Lake Project Management Committee ("BPMC')is considering the development of a project to divert the water flows of Battle Creek into Bradley Lake to increase the water for use by the Bradley Lake Hydroelectric Project ("Bradley Lake Project').All Purchasers are supportive of the expansion of the capabilities of the Bradley Lake Project through the development of the Battle Creek Diversion Project ('BCD Project').While all Purchasers wish for the BCD Project to move forward,all Purchasers may not want to participate in the BCD Project.The activities of the BPMC regarding the BCD Project are authorized as Optional Project Work under the Power Sales Agreement. Purpose of Resolution No.2017-02:Resolution No.2017-02,and Attachment 1 to Resolution No.2017-02 Battle Creek Diversion Project Framework,set forth the terms and conditions under which participation in the costs and benefits of the BCD Project as Optional Project Work under the Power Sales Agreement will be managed by the BPMC. Definitions:In addition to the definitions contained in Power Sales Agreement,the following definitions are used as part of this Resolution 2017-02 and Attachment 1: "Non-Participating Purchaser”means a Purchaser that is not participating in the BCD Project. "Participating Purchaser'means a Purchaser participating in the development of the BCD Project. RESOLUTION NO.2017-02 WHEREAS,Chugach Electric Association,Inc.("Chugach”),Golden Valley Electric Association,Inc.("GVEA”),Homer Electric Association,Inc.("HEA”),the Municipality of Anchorage d/b/a Municipal Light and Power ("ML&P”),Matanuska Electric Association,Inc. ("MEA”),and the City of Seward ("Seward”),are the purchasers of the power generated by Bradley Lake Project under the Power Sales Agreement (hereinafter referred to jointly as the "Purchasers”and individually as a "Purchaser'); WHEREAS,the Purchasers along with the Alaska Energy Authority ("AEA”)constitute the BPMC; WHEREAS,the BPMC has authorized preliminary work comprised of completing design, environmental,and bid-related documents on the BCD Project as Optional Project Work under the Power Sales Agreement; WHEREAS,the BCD Project is designed to supplement the water available for the Bradley Lake Project and the BCD Project will be using the facilities of the Bradley Lake Project, the BPMC will oversee and manage all aspects of the use of facilities of the Bradiey Lake Project under the BPMC's authority provided by the Power Sales Agreement; {00029626.1}Page 1 of 4 -Resolution 2017-02;Battle Creek Diversion Project WHEREAS,all Purchasers support the development of the BCD Project; WHEREAS,AEA is now moving forward with obtaining financing of the BCD Project: WHEREAS,not all Purchasers may want to participate in the development and resulting benefits of the BCD Project at this time; WHEREAS,Purchasers desire an arrangement under which a Purchaser not wishing to participate in the BCD Project now can preserve the ability to participate in the BCD Project at a later date; WHEREAS,the Participating Purchasers wish to hold harmless the Non-Participating Purchasers from incurring any costs associated with the development of the BCD Project; WHEREAS,the Participating Purchasers shall reimburse the Non-Participating Purchasers for any amounts previously advanced by a Non-Participating Purchasers; WHEREAS,the Participating Purchasers wish to provide an opportunity for the Non- Participating Purchasers to participate in the BCD Project later so long as the Non-Participating Purchasers reimburse the Participating Purchasers for an equitable portion of the reasonable costs incurred to develop the BCD Project prior to the time their respective participation begins; WHEREAS,the development and financing of the BCD Project will be required to have no effect on the Bradley Lake Project Power Revenue Bond Resolution ("Bond”)and related bond covenants associated with the Bradley Lake Project; WHEREAS,this Resolution No.2017-02 along with the Power Sales Agreement and the BPMC Bylaws provide the authorization for the BPMC to manage the allocation of costs and benefits of the BCD Project including the determination of the equitable costs to be paid by a Non-Participating Purchaser to a Participating Purchaser should the Non-Participating Purchaser choose to participate in the BCD Project at a later date; WHEREAS,approval for financing the BCD Project as Optional Project Work under the Power Sales Agreement will require the affirmative vote of at least four (4)representatives of the Purchasers,whose percentage shares of the output from the Bradley Lake Project are greater than fifty-one percent (51%),plus the affirmative vote of the AEA;and, WHEREAS,approval for financing the BCD Project as Optional Project Work under the Power Sales Agreement will require the affirmative vote of members whose percentage shares of the output from the Bradley Lake Project are equal to or exceed eighty percent (80%)of project capacity and annual project costs;and, NOW,THEREFORE,IT IS HEREBY RESOLVED BY THE BPMC,that the costs and benefits of the BCD Project shall be managed and allocated in accordance with this Resolution No.2017-02 and Attachment 1 to this Resolution No.2017-02;Battle Creek Diversion Project Framework,as part of the BPMC process for determining Annual Project Costs for the Bradley Lake Project;and, BE IT FURTHER RESOLVED BY THE BPMC,that the BCD Project is approved as Optional Project Work under the Power Sales Agreement and this Resolution No.2017-02 and the terms and conditions set forth in Attachment 1 to this Resolution No.2017-02;and, {00029626.1}Page 2 of 4 -Resolution 2017-02;Battle Creek Diversion Project BE IT FURTHER RESOLVED BY THE BPMC,that the above Recitals be incorporated and made part of to this Resolution No.2017-02;and, BE IT FURTHER RESOLVED BY THE BPWC,that the right to the capacity of the BCD Project shall initially be allocated to all Purchasers in accordance with their respective shares of Bradley Lake Project capacity (hereinafter referred to as their "BCD Share'). BE I(T FURTHER RESOLVED BY THE BPMC,that Purchasers will have until financing terms and bid results are known (tentatively November 15,2017)before deciding whether to participate and obtain their respective right to the capacity in the BCD Project;and, BE IT FURTHER RESOLVED BY THE BPMC,that the costs and benefits of the BCD Project should not affect the rights,duties,and obligations of the Purchasers as set forth in the Power Sales Agreement and Bond;and, BE IT FURTHER RESOLVED BY THE BPMC,that the costs and benefits associated with the BCD Project shall be allocated by the BPMC to only those Purchasers choosing to participate in the BCD Project (i.e.,Participating Purchasers);and, BE IT FURTHER RESOLVED BY THE BPMC,that Purchasers wishing to participate in the BCD Project shall expressly notify the BPMC of their election to participate in the BCD Project,and the percentage level of their BCD Share at which it would like to participate in the BCD Project;and, BE IT FURTHER RESOLVED BY THE BPMC,that any Purchaser failing to expressly notify the BPMC (or notifying the BPMC that it does not wish to participate in the BCD Project) by November 30,2017shall be deemed to be choosing to not participate in the BCD Project and that Purchaser's share of the BCD Project (i.e.,its respective BCD Share)shall be reallocated by the BPMC between the Participating Purchasers;and, BE IT FURTHER RESOLVED BY THE BPMC,that a Non-Participating Purchaser having its BCD Share reallocated shall continue to have its ability to participate in the BCD Project without restriction.;and, BE IT FURTHER RESOLVED BY THE BPMC,that the Non-Participating Purchasers will not bear any costs or suffer any adverse effect due to the BCD Project;and, BE IT FURTHER RESOLVED BY THE BPMC,the BCD Project will be charged four percent (4%)of the Bradley Lake annual O&M or an amount to be determined by a study of the impacts of the BCD Project to the Bradley Lake Project.The results of the study will be ratified by the affirmative vote of members whose percentage shares of the output from the Bradley Lake Project are equal to or exceed eighty percent (80%)of Bradley Lake Project capacity and Annual Project Costs;and, BE IT FURTHER RESOLVED BY THE BPWC,that the Non-Participating Purchasers have no restriction to participate at a later date but must provide notice of their intent to become a Participating Purchaser one year in advance of the start of the Project Water Year,June 184. ate;and, BE IT FURTHER RESOLVED BY THE BPMC,that the Non-Participating Purchasers choosing to participate in the BCD Project at a later date shall contribute an equitable portion of the reasonable costs incurred to develop the BCD Project which amount shall be determined by {00029626.1}Page 3 of 4 -Resolution 2017-02;Battle Creek Diversion Project the BPMC at the time the Non-Participating Purchaser chooses to participate in the BCD 'Project;Reasonable development costs will include the Non-Participating pro-rata share of AEA cash calls and Interest During Construction (IDC)paid up front by the Participating Purchasers and adjusted for the time value of money using a discount rate of five percent (5%);and, BE IT FURTHER RESOLVED BY THE BPMC,that any changes to the terms and conditions of this Resolution 2017-02 and Attachment 1 that directly affect the rights and obligations of the Participating Parties to receive their respective benefits from the BCD Project shall require the unanimous consent of the Participating Parties. Dated at Anchorage Alaska,this 13th day of October 2017. air Attest:La.x CLoaSecretary {00029626.1}Page 4 of 4-Resolution 2017-02;Battle Creek Diversion Project ATTACHMENT 1 TO RESOLUTION NO.2017-02 OF BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE Battle Creek Diversion Project Framework The costs and benefits of the Battle Creek Diversion Project ("BCD Project”)shall be managed in accordance with Resolution No.2017-02 and this Attachment 1 to Resolution No.2017-02 Battle Creek Diversion Project Framework ("Attachment 1”),as follows: A.General Applicability of Bradley Lake Project Provisions: 1.The provisions of the Power Sales Agreement and any of the documents,agreements, and understanding generally referred to as the Bradley Lake Agreements,where applicable,will be used to manage the energy generated and delivered from the BCD Project. Subject to the rights held by the Alaska Energy Authority,the BPMC will be the final arbiter on any issue involving the BCD Project and the Bradley Lake Project and/or the Purchasers,and any such issues shall be resolved in accordance with the voting requirements set forth in Resolution No.2017-02 and the Dispute Resolution provisions of the BPMC Bylaws. For purposes of governance of any conflicts,the terms and conditions of Resolution No. 2017-02,will control over this Attachment 1,which will control over the BPMC Bylaws. B.BCD Project Capacity: 1. 3. The original shares of Bradley Lake Project capacity,i.e.,Chugach (30.4%),GVEA (16.9%),HEA (12.0%),ML&P (25.9%),MEA (13.8%),and Seward (1.0%)will not change in any manner by Resolution 2017-02 and Attachment 1. Each Purchaser shall have the right to participate in the BCD Project at the same percentage that it holds capacity in the Bradley Lake Project subject to Resolution No. 2017-02 and this Attachment 1. The right to the capacity of the BCD Project shall initially be allocated to all Purchasers in accordance with their respective shares of Bradley Lake Project capacity (hereinafter referred to as their "BCD Share'). To participate in the BCD Project each Purchaser must expressly so notify the BPMC in writing by November 30,2017,indicating it wants to maintain its allocated BCD Share (or a specific percentage of its total allocated BCD Share)of BCD Project capacity. {00029622.1}Page 1 of 4 -Attachment 1 to Resolution 2017-02 5.Any Purchaser that notifies the BPMC that it does not want to participate in the BCD Project,or a Purchaser that fails to provide any notice regarding participation,shall be deemed by the BPMC to have declined its initial opportunity to participate in the BCD Project and thereafter such Purchaser shall be a Non-Participating Purchaser.A Non- Participating Purchaser shall have the right to participate at their BCD Share without restriction. 6.The BCD Share for any Non-Participating Purchaser shall be placed into a share pool ("BCD Poo!”)reallocated by the BPMC in accordance with the respective percentage of original shares of Bradley Lake Project capacity held by the Participating Purchasers.The Participating Purchasers may allocate their BCD Share and/or the redistributed BCD Shares from the BCD Pool by agreement. 7.The Purchasers desiring to maintain their respective share (or a percentage of their respective shares)of BCD Project capacity but not immediately participate in the BCD Project (i.e.,Non-Participating Purchasers)shall have the right to call back their respective BCD Share by providing written notice to the BPMC ("Call Back Notice'). 8.A Call Back Notice must be provided to the BPMC by a Non-Participating Purchaser of their intent to become a Participating Purchaser one year in advance of the start of the Project Water Year,June 1*.to be effective for participation in the BCD Project to begin at the start of the next Project Water Year.A Call Back Notice provided with less than one year in advance of the start of the Project Water Year,June 1%shall be effective for participation in the BCD Project to begin one year from the start of the next Project Water Year.A Call Back Notice can be made without restriction. 9.The Non-Participating Purchaser providing a Call Back Notice and complying with all other obligations and responsibilities set forth in Resolution 2017-02 and this Attachment 1 shall be able to participate at the level equal to the capacity percentage it holds in the Bradley Lake Project (i.e.,their initial BCD Share).The BPMC shall make the necessary adjustments to the BCD Shares held by the other Participating Purchasers to accommodate the return of the Non-Participating Purchaser providing a valid Call Back Notice. 10.Any Non-Participating Purchaser providing a Call Back Notice must reimburse the Participating Purchasers then participating in the BCD Project for the equitable portion of the reasonable costs incurred to develop the BCD Project as determined by the BPMC. Reasonable development costs will include the Non-Participating pro-rata share of AEA cash calls and Interest During Construction (IDC)paid up front by the Participating Purchasers and adjusted for the time value of money using a discount rate of five percent (5%).This reimbursement must be paid to the Participating Purchasers by the Non- Participating Purchaser providing a Call Back Notice on or before May 1*prior to the Project Water Year in which that Non-Participating Purchaser shall be eligible to participate in the BCD Project. {00029622.1}Page 2 of 4-Attachment 1 to Resolution 2017-02 C.BCD Project Cost Responsibility: 1.The amounts contributed to date towards the development of the BCD Project by the Non- Participating Purchasers shall be reimbursed by the Participating Purchasers in amounts determined by the BPMC within forty-five (45)days following the financing for the BCD Project.The responsibility of payment of such costs associated with this reimbursement shall be allocated by the BPMC to the Participating Purchasers in accordance with their respective BCD Shares,adjusted by the amount of the BCD Share allocated from a Non- Participating Purchaser ("Adjusted BCD Share'). 2.The Alaska Energy Authority will develop and propose for BPMC approval,the methodology and procedures for tracking all costs involved or associated with the BCD Project;such approval by the BPMC shall be in accordance with the voting requirements set forth in Resolution No.2017-02.The methodology and proceduresfortracking all costs involved or associated with the BCD Project will be approved by the BPMC. 3.The BCD Project will be charged four percent (4%)of the Bradley Lake annual O&M or an amount to be determined by a study of the impacts of the BCD Project to the Bradley Lake Project.The results of the study will be ratified by the affirmative vote of members whose percentage shares of the output from the Bradley Lake Project are equal to or exceed eighty percent (80%)of Bradley Lake Project capacity and Annual Project Costs. 4.Participating Purchasers will hold harmless the Non-Participating Purchasers from all of the costs (including cost of financing)associated with the BCD Project as follows: a.The Participating Purchasers,in accordance with their Adjusted BCD Shares,will pay all of the costs (including cost of financing)associated with the BCD Project. b.The BPMC shall determine and allocate the BCD project costs to the Participating Purchasers during the determination of the Annual Project Costs for the Bradley Lake Project. c.The costs associated with the BCD Project will be invoiced to Participating Purchasers as a separate surcharge amount shown on a schedule similar in form to the Schedule C accompanying the Bradley Lake Project determinations of "Monthly Utility Contributions.” d.Any amounts received from Participating Purchasers for the costs associated with the BCD Project in excess of the actual costs associated with the BCD Project in a given fiscal year will be distributed to the Participating Purchasers in accordance with their respective Adjusted BCD Shares for that fiscal year. e.Any additional amounts required for more than the budgeted costs associated with the BCD Project in each fiscal year shall be the responsibility of the Participating Purchasers in accordance with their respective Adjusted BCD Sharesfor that fiscal year. {00029622.1}Page 3 of 4 -Attachment 1 to Resolution 2017-02 D.BCD Project Water Tracking &Allocation: 1.The BPMC Operating Committee will be required to develop for BPMC approval the methodology and procedures for the tracking and allocation of water;such approval by the BPMC shall be in accordance with the voting requirements set forth in Resolution No. 2017-02. 2.A Participating Purchaser's water rights in each fiscal year from the BCD Project will be allocated based upon its Adjusted BCD Share. {00029622.1}Page 4 of 4 -Attachment 1 to Resolution 2017-02