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BPMC June 28, 2017
BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING REGULAR MEETINGAlaskaEnergyAuthority,Anchorage,Alaska olJune28,2017 0Cc 1.CALL TO ORDER Chair Borgeson called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:48 a.m. 2.ROLL CALL FOR COMMITTEE MEMBERS Cory Borgeson (Golden Valley Electric Association [GVEA]);Michael Lamb (Alaska Energy Authority [AEA]);Lee Thibert (Chugach Electric Association [CEA]);Tony Izzo (Matanuska Electric Association [MEA]);Jeff Warner (Anchorage Municipal Light &Power [ML&P]);and Brad Janorschke (Homer Electric Association [HEA]). 3.PUBLIC ROLL CALL Bryan Carey,Jocelyn Garner,Teri Webster,Brandi White (AEA);Eric Myers (American Transmission Company);Crystal Enkvist,(ARECA Insurance Exchange and Alaska Power Association [APA]);Brian Hickey,Mark Johnson,Burke Wick,Sherri Highers (CEA);Ron Woolf (GVEA);Mary Lynn Macsalka (Department of Law);Bob Day,Emily Hutchinson,Larry Jorgensen,Alan Owens (HEA);Kirk Gibson (McDowell Rackner Gibson,PC);Gary Kuhn,David Pease (MEA);TW Patch;Bernie Smith;Sydney Hamilton (Accu-Type Depositions). 4,PUBLIC COMMENTS None. 5.AGENDA APPROVAL MOTION:Mr.Janorschke made a motion to approve the agenda.Motion seconded by Mr.Lamb. Mr.Thibert requested to add Item 8A.1.Confirming Resolution on Battle Creek Diversion Project to the agenda. The agenda was unanimously approved as amended,adding Item 8A.1.Confirming Resolution on Battle Creek Diversion Project. 6.APPROVAL OF PRIOR MINUTES-May 30,2017 MOTION:Mr.Thibert made a motion to approve the minutes of May 30,2017.Motion seconded by Mr.Izzo. The motion passed without objection. 7.OLD BUSINESS A.Insurance BPMC Minutes 6/28/17 Page 1 of 5 Mr.Gibson provided a review of the insurance requirements under the Power Sales Agreement and Bond Resolution,as previously assigned by Chair Borgeson.Mr.Woolf informed the Finance Committee analyzed the revised renewal for insurance.A premium increase was noted for additional general liability,crime and fiduciary coverage.Errors in pricing were found and are being reconciled to reflect current rates. Mr.Woolf reported a maximum and probable loss calculation has not been completed in nine years.The Finance Committee requested $10,000 to study and evaluate the maximum and probable loss calculation to determine the appropriate amount of coverage necessary. Mr.Carey stated a probable maximum loss study on the property was completed a year ago through CEA and came in at about $48 million.The big components of the insurance is the property and the equipment breakdowns.He noted there is no current study on the probable maximum loss of equipment breakdown.Within the last 10 years,the equipment breakdown insurance coverage amount has increased in line with the increase in property coverage. Mr.Janorschke informed he will abstain from voting because he is on the ARECA Insurance Exchange Board of Directors. MOTION:Mr.Lamb made a motion to approve the insurance proposal beginning 7/1/17, as presented.Motion seconded by Mr.Warner. Mr.Lamb expressed support of the maximum probable loss calculation analysis. A roll call vote was taken,and the motion passed,with Mr.Janorschke abstaining. B.Spillway Raise Mr.Warner,O&D Chair,informed the O&D Committee met earlier this month and discussed five different options for the spillway raise.By unanimous vote,the O&D Committee recommends the spillway raise project be deferred to a later time to evaluate all options. MOTION:Mr.Izzo made a motion to defer the spillway raise project to a later time. Motion seconded by Mr.Thibert. A roll call vote was taken,and the motion passed unanimously. 8.NEW BUSINESS A.Battle Creek Update Mr.Carey began the update and informed he completed the Chair's assignment to provide an expense detail of the $800,000.This was emailed to all members.The current request for $400,000 includes bid costs,partial construction funding for survey and brushing work,and completion of electrical and dam design changes based on feedback from Federal Energy Regulatory Commission (FERC).Mr.Carey reviewed the proposed three-year timeline. Department of Natural Resources (DNR)is expected to release their final decision regarding the land lease around July 20th,after which the flagging for the brush limit and surveying to clear a path for the route will occur.The Corps of Engineers is reviewing the wetlands permit and no delays are expected.The Request for Proposal (RFP)is expected to be released in late August.The contractor site visit is expected in mid-September.Proposals are currently due BPMC Minutes 6/28/17 Page 2 of 5 November 15th,but this date could be extended to ensure enough time to respond.Road construction would begin in 2018.Pipe installation would occur in 2019.The water diversion would begin at the end of 2019.The diversion dam could be completed in 2020. Mr.1zzo expressed concern over the additional $400,000 requested and asked that change orders be brought before the BPMC in a timely manner.Mr.Izzo noted he cannot authorize an increase without bringing it before the MEA Board. Mr.Thibert commented change orders are unavoidable at the beginning of a project and having a change of scope from FERC was not predictable.These changes will benefit the project but would like to see the BPMC receive more timely notice of change orders. Mr.Carey stated the delay was due to wanting to get the final brushing numbers before he presented the additional funding request.He was not able to get a contractor out in a timely manner so didn't want to delay the request further. Chair Borgeson commented over three million dollars has been spent thus far on Battle Creek and he has no confidence the additional $400,000 is an accurate amount.GVEA is not in favor of the additional funding and declines participation without assurances from AEA. Mr.Thibert presented Resolution 2017-01B to be given to the AEA Board,reaffirming commitment to the Battle Creek project.CEA offered to help manage the Battle Creek project and advised they will provide the backstop for additional funding. MOTION:Mr.Thibert made a motion to approve Resolution 2017-01.Motion seconded by Mr.Janorschke. Mr.Warner expressed his understanding the reference to participating utilities in the resolution does not include the participation of ML&P at this time,but does not preclude ML&P from opting to participate in the future.Mr.Gibson agreed. Mr.lzzo asked Mr.Gibson if an affirmative vote to adopt Resolution 2017-01 would,by default, commit MEA to a portion of the $400,000 overrun.Mr.Gibson offered a friendly amendment to be inserted which reads,"Now therefore,be it resolved,the BPMC authorizes and supports the efforts of purchasing utilities desiring to develop the Battle Creek Diversion Project to work with AEA to finance and bid the project in 2017."He believes this language adds comfort to everyone at the table and those that want to move forward can move forward and those who do not want to move forward are not committing to financing.Mr.Gibson offered a friendly amendment that the phrase participating utilities be changed to purchasing utilities throughout the resolution.The two friendly amendments were accepted by the Maker of the Motion and the Second. Mr.Gibson noted Chair Borgeson assigned him to review the methodology with Brian Bjorkquist for the Battle Creek project to go forward as optional work,with less than full member participation.Mr.Gibson gave members information containing a memo summarizing his draft resolution,the draft resolution he created,an attachment containing granular information and two assignments for the operator.Mr.Gibson gave a thorough explanation,outlining the intent to develop a fair and neutral framework for the Battle Creek project,which would have no adverse effect on the Bradley Lake project. Mr.Gibson believes his draft resolution is a good next step on how to move forward if Resolution 2017-01 is approved. BPMC Minutes 6/28/17 Page 3 of 5 Chair Borgeson expressed GVEA supports the Battle Creek project and will support the resolution.He noted concerns regarding meeting the aggressive timeline presented,because the participation agreements have to be created in order for the financing to be put in place,all before it goes to bid by the beginning of September. A roll call vote was taken,and the motion passed unanimously. Chair Borgeson informed he will call a work session the third week of July to specifically focus on moving the Battle Creek project forward. B.AEA Regulation Change Update Ms.Webster distributed the amended AEA regulation changes to all members regarding qualified operators for AEA owned power projects.She explained the State of Alaska regulation amendment process,which takes approximately five to seven months.If all goes according to the timeline,the proposed amendments should be effective in November 2017. Cc.Railbelt Cooperation Chair Borgeson discussed the diligent cooperation efforts of the six Railbelt managers.He showed a video that illustrates the talking points of Railbelt manager cooperation.The video will be shared with legislators,agencies,and the Governor. D.Report to AEA Board Mr.Thibert noted a draft of the report was sent to all members.Mr.Thibert gave an overview of the report and reviewed the few modifications he will make to the draft.Mr.Thibert stated he will lead off the presentation to AEA with the video shared by Chair Borgeson and then will present the report. 9.COMMITTEE REPORTS None. 10.OPERATOR REPORT Mr.Day submitted the Operator Report.He gave a detailed account of the Marker Ball Installation project.Bradley Lake has been running at a single unit due to the SVC construction. Full output will occur when the SVC comes back into service. 11.COMMITTEE ASSIGNMENTS Chair Borgeson assigned the Finance Committee provide the Committee with cost specifics of a maximum and probable loss calculation study and recommendations of who will complete the study. Chair Borgeson assigned Mr.Thibert coordinate the additional $400,000 of Battle Creek funding before the designated work can commence. Chair Borgeson asked Mr.Carey for a risk assessment of consequences for Battle Creek if the project does not meet its timeline and is delayed a year. BPMC Minutes 6/28/17 Page 4 of 5 Chair Borgeson assigned the Committee,as a whole,a Battle Creek working session during the third week of July. Chair Borgeson assigned the Operator to complete the two assignments,Exhibit B.and C.,fromMr.Gibson's Attachment 1.;methodology and procedures for cost allocation,and water management and allocation for Battle Creek. 12.MEMBERS COMMENTS Mr.Thibert expressed gratitude to members for their support of the Battle Creek project. Chair Borgeson expressed appreciation to staff. 13.NEXT MEETING DATE -TBD The next meeting will be scheduled for two months out due to the workshop next month. 14.ADJOURNMENT There being ng further business for the committee,the meeting adjourned at 11:35 a.m. orgeson,ChairconMY Michael Lamb 7 Alaska Energy Authority,Secretary BPMC Minutes 6/28/17 Page 5 of 5 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Wednesday,June 28,2017 9:45 a.m. Alaska Energy Authority's Board Room 813 West Northern Lights Boulevard,Anchorage,AK To participate by phone,dial 1-888-585-9008 and use code 467 050 126. 1.CALL TO ORDER 2.ROLL CALL FOR COMMITTEE MEMBERS 3.PUBLIC ROLL CALL 4.PUBLIC COMMENTS 5.AGENDA APPROVAL 6.APPROVAL OF PRIOR MINUTES -May20,2017 7.OLD BUSINESS A.INSURANCE Finance Committee B.SPILLWAY RAISE ML&P 8.NEW BUSINESS A.BATTLE CREEK UPDATE AEA B.AEA REGULATION CHANGE UPDATE AEA C.RAILBELT COOPERATION Chair D.REPORT TO AEA BOARD Chair 9.COMMITTEE REPORTS 10.OPERATOR REPORT 11.COMMITTEE ASSIGNMENTS 12.MEMBERS COMMENTS 13.NEXT MEETING DATE -TBD 14.ADJOURNMENT BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING REGULAR MEETING Alaska Energy Authority,Anchorage,Alaska May 30,2017 1.CALL TO ORDER Chair Borgeson called the regular meeting of the Bradley Lake Hydroelectric ProjectManagementCommitteetoorderat1:30 p.m. 2.ROLL CALL FOR COMMITTEE MEMBERS __- Cory Borgeson (Golden Valley Electric Association [GVEA]);Michael Lamb (Alaska Energy Authority [AEA]);Lee Thibert (Chugach Electric Association [CEA]);Tony Izzo (Matanuska Electric Association [MEA]);Mark Johnston (Anchorage Municipal Light &Power [ML&P]);Bob Day (Homer Electric Association [HEA]);and John Foutz (Seward -phone). 3.PUBLIC ROLL CALL Bryan Carey,Jocelyn Garner,Daniel Hertrich,Kirk Warren,Teri Webster,Brandi White (AEA); Brian Bjorkquist (Attorney General's Office);Crystal Enkvist,Mike Maddix,Michael Rovito (ARECA Insurance Exchange and Alaska Power Association (phone));Brian Hickey,Mark Johnson,Burke Wick (CEA);Brad Janorschke (phone),Alan Owens (HEA);Kirk Gibson (McDowell Rackner Gibson,PC);Gary Kuhn (MEA);Jeff Warner (MLP);Bernie Smith;and Sydney Hamilton (Accu-Type Depositions). 4.PUBLIC COMMENTS None. 5.AGENDA APPROVAL MOTION:Mr.Thibert made a motion to approve the agenda.Motion seconded by Mr. Warner. Mr.Thibert requested to add Item 8E.Discussion of Bradley Lake Power Sales Agreement Addendum or Change to Bylaws to the agenda. The agenda was unanimously approved as amended,adding Item 8E.Discussion of Bradley Lake Power Sales Agreement Addendum or Change to Bylaws. 6.APPROVAL OF PRIOR MINUTES-April 18,2017 MOTION:Mr.!zzo made a motion to approve the minutes of April 18,2017.Motion seconded by Mr.Thibert. Mr.Lamb commented on the Battle Creek Update portion of the minutes,and stated specifically for the record during today's meeting,he,as Executive Director of AEA,and AEA have absolute DRAFT BPMC Minutes 5/30/17 Page 1 of5 confidence in Mr.Carey's project management capability and the State's project management capabilities.Mr.Lamb apologized to Mr.Carey for not speaking up on his behalf at the previous meeting. The motion passed without objection. 7.OLD BUSINESS A.Spill Raise Decision Mr.Thibert requested the O&D Committee conduct an economic analysis on the spill raiseprojectbeforeadecisionismade. MOTION:Mr.Johnston made a motion to table the Spill Raise Decision and assign the O&D Committee conduct further analysis.Motion seconded by Mr.Lamb.Chair Borgeson asked AEA to delay any expenditures until the spill raise decision is made.Mr.Carey agreed. The motion passed without objection. 8.NEW BUSINESS A.Insurance Members asked questions regarding the provided 2017 insurance proposal.The Valuation report of $50M was done in 2009 this cost is for replacement of the powerhouse and electronics.The estimated probable maximum loss can be insured up to $50M if a large earthquake occurred.The premium increased seven percent due to changes in the policy from a property-casualty form to the All Risk Blanket policy.Addition increases are due to the policy not having been charged as much as it should have been in the last couple of years for the coverage.Mr.Borgeson noticed there was no General liability coverage and it should be at least $2M.Homer Electric will review their Commercial General Liability policy to see if the Generalliabilitycoverageisthere. Chair Borgeson will ask the finance committee to review the policy before the June 28 meeting. The 2017insurance proposal must be approved by June 30,2017 to stay in compliance forcontinuouscoverage. B.Motorized Land Access Permits Mr.Carey described the issue of requests from individuals to cross the Bradley land on snow machine mainly for access to landlocked property and traps.He advised Federal Energy Regulatory Commission (FERC)and agencies agree it is permissible for visitors to have a limited amount of motorized travel across Bradley property through a restricted permit process. This is not a general public use permit. MOTION:Mr.Johnston made a motion to approve the presented motorized land access permits.Motion seconded by Mr.Thibert. DRAFT BPMC Minutes 5/30/17 Page 2 of 5 Mr.Gibson recommended HEA be included in the authority to terminate the permit for any reason. Chair Borgeson inquired about existing policies regarding approval or disapproval of permits. Mr.Carey informed no policies exist,but the FERC letter references limited access and not general access.Chair Borgeson noted the five-page AEA permit does not specifically state motorized access.The two-page HEA permit does reference motorized travel.Some modifications will be done to both forms including adding traveler's names to the permit. The motion passed without objection. C.Allocation &Scheduling Procedures Mr.Wick discussed the Revised Allocation and Scheduling Procedures as of May 30,2017. The O&D Committee generated the updates and revisions based on the current methodologyanduse.The O&D Committee recommends its adoption. MOTION:Mr.Johnston made a motion to adopt the Revised Allocation and Scheduling Proceduresin substantial form as discussed during the meeting,with an effective date ofMay30,2017.Motion seconded by Mr.Day.Mr.Day commented Mr.Wick dedicated a considerable amount of effortin revising the procedures.He noted the dispatcher now declares impending spills or spill conditions,rather than AEA.Mr.Day believes thisis significant because the dispatcher |is aware of the currentstatusatBradleyLake.: Mr.Lamb informed AEA iis happy with the revisions. Mr.Gibson requested he provide non-substantive edits to the final document,which are important for clarity and consistency.Chair Borgeson informed he will assign Mr.Gibson to make the housekeeping edits to the document.The final document can be presented to the BPMC as information in the next Board packet. A roll call was taken,and the motion passed unanimously. D.«Dynamic Dispatch Update Mr.Wick advised there have been no changes between ML&P and CEA on dynamic scheduling.GVEA conducts dynamic scheduling manually.Installation of a new system is ongoing.MEA does not utilize their dynamic dispatch capability.HEA is experiencing delays in resolving issues and should be operational within a few weeks. Chair Borgeson expressed appreciation to CEA and staff for their flexibility during this process. E.Discussion of Bradley Lake Power Sales Agreement Addendum or Change to Bylaws Mr.Thibert led a discussion regarding a possible amendment to the Power Sales Agreement to address participation in the Battle Creek project.The second issue focussed on whether or not a modification to the Bylaws was appropriate to accommodate the additional Project work.Mr. Gibson believes all of the topics of concern can be addressed at the operator level.He DRAFT BPMC Minutes 5/30/17 Page 3 of5 suggested the operator track the specific costs for Battle Creek and the BPMC determine the annual allocation of benefits and costs.Mr.Gibson will continue his diligent review and provide further direction to the members. Mr.Johnston commented ML&P has discussed the possibility of proceeding with the Battle Creek diversion project under an agreement with one or more of the other partners to pay for and receive the benefit of ML&P's share. Chair Borgeson expressed his understanding that all six utility members are supportive of the Battle Creek project going forward,but all members may not participate in the Battle Creekpowerandmaywanttoseparateitout.: Mr.Janorschke requested Mr.Gibson create a draft resolution to be discussed at a future meeting allowing the optional project work to move forward.He requested Mr.Gibson review apossibleBylawprovisiontoensureBattleCreekparticipantshavetheopportunitytobeinvolvedinanychangestoBattleCreekwaterallocation.S, Chair Borgeson does not believe a resolution for optional project work can go forward without secured financing and additional accounting by members.Chair Borgeson will assign Mr. Gibson to work on modifications to go forward with Battle Creek as optional project work.Mr.Carey gave an update on the project timeline.FERC Dam Safetyis reviewing the Battle Creek design and comments are expected in July.The Department of Natural Resources (DNR)land lease amendment is anticipated to be completed by July 20th,after which the surveying and flagging for brush-cutters would begin.Additional work on bid specifications fortheRequestforProposal(RFP)will take approximately four to six weeks.Mr.Carey stated thedeterminationofmembercommitmentanddeliveryofadditionalfundsmustbemadebeforetheendofJunetoattaintheAugustRFPtimelinegoal.. 9.COMMITTEE REPORTS " None. 10.OPERATOR REPORTMr.Day submitted the Operator Report.'A full Bradley outageis scheduled and coordinated for three to five days next week to work on the transmission line.Mr.Day reported contact with the Homer Fire Department is ongoing to familiarize them with the facility in case of emergency. 11.COMMITTEE ASSIGNMENTS Chair Borgeson assigned the O&D Committee to review the spillway extension work completed by DOWL and report back to the members regarding the financial benefits. Chair Borgeson assigned the Finance Committee and Mr.Gibson to review the insurance proposal,including general liability coverage and bond requirements and report findings at the next meeting. Chair Borgeson gave Mr.Gibson two additional assignments,1)to review the methodology for Battle Creek project to go forward as optional project work,and 2)to provide the edits to the DRAFT BPMC Minutes 5/30/17 Page 4 of 5 Revised Allocation and Scheduling Procedures to the O&D Committee before their next meeting. 12.MEMBERS COMMENTS Mr.Johnston noted he will be absent the next meeting and Mr.Warner will attend in his stead. Chair Borgeson expressed appreciation to all for their efforts before and during the meeting. 13.|NEXT MEETING DATE -June 28 The next meeting date is June 28,2017. 14.ADJOURNMENT There being no further business for the committee,the meeting adjourned at 3:35 p.m. BY: Cory Borgeson,Chair Attest: Michael Lamb Alaska Energy Authority,Secretary DRAFT BPMC Minutes 5/30/17 Page 5 of5 INSURANCE PROPOSAL Alaska Energy Authority Bradley Lake Hydroelectric Project Anchorage,AK Prepared By:Crystal Enkvist Policy Period:7/1/2017 to 7/1/2018 INSURANCE EXCHANGE a ARECA Insurance Exchange (AIE)provides affordable insurance to Alaska utilities while building member equity and providing quality customer service to Exchange subscribers. 703 West Tudor Road,Suite 101 Anchorage,AK 99503-6650 Ml (907)771-5750 IJ wwwalaskapower.org Insurance Proposal Alaska Energy Authority Bradley Lake Hydroelectric Project 07/01/2017 to 07/01/2018 Anchorage,AK 99503-2495 General Liability Protection ca ccecensenenececcoecesesecaceceecesescesecenesoecessecscececsesnteseceesestecesseceeeesereee,P28C 7 Equipment Breakdown coerce eee cececeeenceneeeeeeeeesieeetetettecneteeeetpage 10 Directors,Officers and Managers Liability Protection 0page11 Proposal Signature Page page 22 This proposal is intendedfor general information purposes only.It is not intended to,and does not replace,modify,supersede or amend the actual language of any policy or the coverage available thereunder.This proposal is not a part of any policy.Any questions or disputes relating to claims,coverages or any other aspect whatsoever will be governed solely by the language of the applicable policy and any endorsements attached thereto. AARECA INSURANCE EXCHANGE Alaska Energy Authority Bradley Lake Hydroelectric Project 07/01/2017 to 07/01/2018 Anchorage,AK 99503-2495 Our staff consists of highly experienced,professional individuals who are committed to excellence.The following individuals are responsible for your insurance needs: SERVICE TEAM Executive Office Crystal Enkvist,Executive Vice President Insurance Coverage Questions, Adding Property,Updating Coverages,etc. Direct Line:(907)771-5703 Fax:(907)561-6206 E-Mail:cenkvist@alaskapower.org Brenda Mead,Chief Financial Officer Direct Line:(907)771-5704 Fax:(907)561-6206 E-Mail:bmead@alaskapower.org Safety &Loss Prevention Mel Hutchison,Director of Loss Control Loss Control and NRECA's Safety Achievement Program (RESAP) Direct Line:(907)771-5707 Fax:(907)561-6206 E-Mail:mhutchison@alaskapower.org Claims Susan Kosinski,Claims Manager Direct Line:(907)771-5705 Fax:(907)561-6206 E-Mail:skosinski@alaskapower.org Angie Moua,Claims Assistant Direct Line:(907)771-5702 Direct Fax:(907)561-6206 E-Mail:amoua@alaskapower.org Underwriting Support Lisa Heikes,Loss Control &Underwriting Assistant Direct Line:(907)771-5706 Direct Fax:(907)561-6206 E-Mail:lheikes@alaskapower.org If you have any questions or need assistance with any insurance matter,please contact us. 4 ARECAINSURANCE EXCHANGE AIE Subscriber BenefitsAlaskaEnergyAuthorityBradley Lake Hydroelectric Project 07/01/2017 to07/01/2018 Anchorage,AK 99503-2495 As owners of ARECA Insurance Exchange (AIE),subscribers are entitled to appoint a representative from their utility to the AIE Board of Trustees.The AIE Board of Trustees is composed of one appointed representative from each insurance subscriber.AIE Trustees serve four-year terms.Alaska Energy Authority's (AEA)current AIE Trustee is Kirk Warren. AIE is managed by an attorney-in-fact,ARECA Insurance Management,Inc.(AIM).AIM Board Members are appointed by anadvisoryvoteoftheAIEBoardofTrusteesattheAIEAnnualMeeting. AIE subscribers are also the owners of the policyholder surplus of over $20M that is held in reserve to maintain the financial stability of the organization.Subscribers also sharein AIE's annual underwriting andinvestment profits or losses.The sharingofprofitsorlossesiscalculatedannuallythroughanallocationprocess.Shares of profits are deposited into a Subscribers Savings Account (SSA),whichis established by each subscriber upon joining AIE. In addition to the annual profit allocation,AJE alsoissues cash distributions from the SSA.These distributions are determined bytheAIMBoardeachyear.The total amount allocated to AIE SSAs from 2007 to 2016 was more than $16 million and the total of cash distributions paid to subscribers during that same period was more than $8 million. Below is a table showing the profit allocations to AEA's SSA and cash distributions received over the past five years: Teonvea ss$113,620 $72,853 $rE) 20,689 |$25,865 |$24,596 |$10,892 |$167,594 Allocation to SSA Account $154633]/$157,3561$160,554 Cash Distribution $22,145 1 $ {ARECAINSURANCE EXCHANGE Property Protection Alaska Energy Authority Bradley Lake Hydroelectric Project 07/01/2017 to 07/01/2018Anchorage,AK 99503-2495 All-risk coverage for buildings,contents,inventory,tools,mobile equipment,radio towers and substations unless excluded. Deductible Value EI Buildings and Personal Property $2,000,000 $50,000,000 Coverage Extensions Deductible Limit Newly Acquired Property $1,000,000 Automatic coverage for newly acquired property. "|Property Of Others $250 $50,000 Personal property in the care custody and control of the system on the insured premises. Extra Expense $2,000,000 Necessary expenses incurred during period of restoration due to a covered loss. (Includes direct labor costs for work performed by policyholder's employees,plus 10%overhead.) |Accounts Receivable $1,000,000 Pays collection expense and the loss of revenue due to the destruction ofsupporting records. .Valuable Papers and Records $1,000,000 Pays to replace or restore information on lost or damaged valuable papers and records. -Sewer &Sump Pump Backup if maintained in good repair $25,000 Additional Coverage Limit |Fire Department Service Charge $50,000 Pays the fire department,when called to protect buildings or personal property ofthe insured. ARECA INSURANCE EXCHANGE Property Protection Alaska Energy Authority Bradley Lake Hydroelectric Project Anchorage,AK 99503-2495 EZ On Premises Pollutant Cleanup Covers expense to extract pollutantsfrom land or water at property of insured for a covered loss. EI Demolition /Increased Cost of Construction Insures the cost of removing the ruins of a building partially destroyed by an insured loss. Endorsements to Property #3 Earthquake and Flood Deductible is $10,000,000 flat per occurrence. Features Included: ¥All Risk of Direct Physical Loss with Minimal Exclusions 07/01/2017 to 07/01/2018 $50,000 $250,000 $50,000,000 Covered property is insured against all direct physical loss except wear and tear,decay,mechanical breakdown,earthquake,flood damage,unexplainedinventoryshortagesandsteamboilerexplosions. Ww Blanket Loss Limit All locations and coverages are under one blanket limitfor all property owned by the insured regardless of location,including property of others for whichyouareresponsible. Replacement Cost Coverage (except as noted) Maximum protection for assets.Buildings,contents and inventories are insured to replace or repair the property with like property of the same qualityandconstruction.No deduction for depreciation. wf No Coinsurance There is no provision that limits the amount payable on a covered insured's property loss commensurate with the amount reported. Full Coverage ofAll Property Away From Premises Full coverage of all insured property awayfrom your premises,with no sub limits. Extra Coverage for Debris Removal Provides for expenses incurred to remove debris caused by a covered loss -30 %of loss. Property Deductible Applies Per Occurrence Options to Consider: EI Data Restoration (ARB19} Loss or injury to electronic data stored in the insured's computer system.$5,000 ded. Hardware covered under blanket property limit. ARECA INSURANCE EXCHANGE General Liability Protection Alaska Energy Authority Bradley Lake Hydroelectric Project 07/01/2017 to 07/01/2018Anchorage,AK 99503-2495 Personal Injury and Property Damage liability coverage for third party claims due to your negligence. Personal Injury includes bodily injury,libel,slander,wrongful entry,false arrest and many other perils as described in the Policy. Deductible ,General Liability/Property Damage Deductible per occurrence $10,000 Limit General Liability Occurrence Limit $2,000,000 Medical Payments per person /per occurrence N/A Protection to pay medical care to an injured party regardless of whether the policyholder is liable. -Livestock Coverage per animal /per occurrence $0 $5,000/$20,000 No-fault coverage for Injury to,or death of,livestock,but loss must be due to an act of God. -Fire Legal Liability per occurrence $2,000,000 Provides liability coverage for damage to occupied property of others caused byfire or explosion. -Pollution Liability per occurrence /aggregate $1,000 $1,000,000/$1,000,000 Off premises,Immediate,suddenly accidental,and legally responsible for removal of above ground hazardous waste or clean up. Weatherization per claim /aggregate $100 $25,000/$100,000 Errors and omissions coverage for the administration of the insureds weatherization program. "|:.'Property Damage from Right-of-Way Spraying per occurrence $1,000 $1,000,000/$1,000,000 Coverage for loss due to unintentional spraying for weed control outside of the ROW. Fire Suppression Limit per occurrence $2,000,000 Coverage includes fire suppression obligations on federal lands for no additional charge. Features Included: Y No Aggregate Liability Limits for Bodily Injury or Property Damage Claims ¥Personal Injury Coverage (See Policyfor Details) Bodily Injury Coverage (including use of reasonable force to protect persons and property)&Property Damage Coverage Employee Benefit Administration Coverage (with no deductible) Providing incorrect advice concerning an employee's pension plan orfailure to enroll employees in a benefit program Blanket Contractual Liability Coverage Liability assumed through written contracts ¥Blanket Additional Insured for Mortgagees,Lessees And Loss Payees -No need for a separate endorsement JARECAINSURANCE EXCHANGE General Liability Protection Alaska Energy Authority Bradley Lake Hydroelectric Project 07/01/2017 to 07/01/2018Anchorage,AK 99503-2495 ¥Employees,Volunteers and Directors as Named Insureds Any Executive Officer,Director,Trustee,Employee,or Volunteer of the policyholder while acting within the scopeof their duties as such. Fellow Employee Coverage Coverage is available to protect an employee from a claim by a fellow employee. ¥Advertising Liability Coverage Oral and written publications ¥Host Liquor Liability Coverage Company parties where liquor is served ¥Incidental Medical Malpractice Liability protection for rendering or failure to render First Aid or CPR ¥Products /Completed Operations Coverage Liabilityfor damages as the result ofa defect in a product sold or manufactured. ¥Cross Suits Coverage Suits arising between insureds. Work Within 50ft of Railroad Not Excluded Trespass Liability Coverage Watercraft Under 25 Feet or under 120 hp 4444Failure to Supply Not Excluded Provides protection for losses due to failure to supply your product because ofnegligence. Options to Consider: i |Underground Storage Tank Pollution Liability HZ increased Pollution Liability EZ Electromagnetic Field Liability I Watercraft Liability (on watercraft over 25 feet) |Cyber Liability ARECAfAINSURANCESHEXCHANGE Crime Protection Alaska Energy Authority Bradley Lake Hydroelectric Project 07/01/2017 to 07/01 Anchorage,AK 99503-2495 /01//01/2018 Covers employee dishonesty,loss of monies and securities both on and off premises,counterfeit currency and money orders,and depositors forgery. Limit Blanket Limit $500,000 EE Loss Inside the Premises $500,000 Loss ofmoney and securities by the destruction,disappearance or wrongful abstraction within the premises or any banking premises or similar recognized places ofsafe deposit. EE Loss Outside the Premises $500,000 Loss ofmoney and securities by the destruction,disappearance or wrongful abstraction outside the premises while being conveyed by a messenger,messenger service or armored vehicle company,or in the living quarters of any messenger. |Money Order/Counterfeit Currency $500,000 Coverage for acceptance in good faith ofcounterfeit money order or currency. |Depositors Forgery :$500,000 Loss due to forgery or alteration offinancial instruments such as checks,drafts or promissory notes drawn against a policyholder's account. EI Employee Dishonesty per employee /per occurrence $500,000/$4,000,000 Fraudulent or dishonest act(s)committed by any employee acting alone or in collusion with others. (Includes unauthorized credit card use.) Features Included: No Deductible applies to this coverage. ¥Covers Employees or Premises Acquired Through Consolidations or Mergers < Loss Under Prior Bond or Policy (ARECA INSURANCE EXCHANGE Equipment Breakdown Alaska Energy Authority Bradley Lake Hydroelectric Project 07/01/2017 to 07/01/2018Anchorage,AK 99503-2495 Provides coverage for direct damage to covered property subject to terms,conditions,limitations,and exclusions of the policy. Equipment Breakdown Limit Coverage Enhancements @ Expediting Expense $2,000,000 @ Extra Expense $500,000 @ Newly Acquired Premises (90 days)$500,000 @ Ammonia Contamination $100,000 @ Consequential Loss $100,000 M@ Hazardous Substances $100,000 @ Water Damage $100,000 Deductibles Transformers over 100 MVA . $100,000 @ Hydro Turbine Generators $2.50 per KW @ All Other Objects $50,000 10 ARECA INSURANCE EXCHANGE Directors,Officers and Managers Liability Alaska Energy Authority Bradley Lake Hydroelectric Project 07/01/2017 Anchorage,AK 99503-2495 /01/2017 to 07/01/2018 Protection from suits alleging wrongful acts by the directors,officers,trustees,managers,staff members,volunteers,or employees,whether salaried or not.Protects the entity as well as the individuals.Limit of coverage includes defense costs, settlements,judgments and expenses,as described in the policy. Deductible Limit Directors,Officers &Managers Liability Occurrence Limit $10,000 $5,000,000 Aggregate Limit N/A $5,000,000 The total amount the policy will pay in any given policy year,regardless ofthe number oflosses incurred, including defense costs. "Fiduciary Liability Limit N/A N/A Legal responsibility to safeguard the assets of the beneficiaries (including ERISA). Features Included:(see policy for complete list) ¥Claims-Made Coverage (Retro Available) Prior acts covered on consecutive policies,including Employment Practices Liability ¥Entity Coverage Coverage is the same for the entity as it is for directors,managers,etc. Employment Practices Liability Claims alleging Sexual Harassment,Wrongful Discharge,or other EEOC violations Employees As Insureds Director,officer,trustee,employee,volunteer or staff member of entity,salaried or not. "Employee Retirement Income Security Act of 1974 (ERISA) Claims arising out of the Employee Retirement Income SecurityAct of 1974 (ERISA) Mergers and Acquisitions Coverage Does Not Include (see policy for complete list) Anti-Trust Outside Directorships Statewides,G&T's,CFC,NRECA,NRTC purchase their own coverage |Pollution Pollution coverage is found under the All Risk Blanket Policy. Contractual Obligations Breach of Contract (i.e.Failure to make debt payment) Options to Consider: Capital Credit Defense Covers defense costs for claims involving capital credits 11 J ARECAINSURANCE EXCHANGE Directors,Officers and Managers Liability Alaska Energy Authority Bradley Lake Hydroelectric Project 07/01/2017 to 07/01/2018Anchorage,AK 99503-2495 Hf Anti-Trust Defense Coverage Anti-competitive agreement to gain market dominance,price fixing or price discrimination EE Years Retroactive Any loss occurring prior to the retro date would not be covered (This is a one-time charge for acts prior to the policy effective date) EI charitable Entities Coverage Sub-limit for coverage of charitable entity directors 12 ARECA INSURANCE Alaska Energy Authority Bradley Lake Hydroelectric Project 07/01/2017 to 07/01/2018 Anchorage,AK 99503-2495 ALL RISK BLANKET POLICY SECTION 1 Deductible Limit Premium Building and Personal Property $75,000 $50,000,000 $360,006 Data Restoration N/A N/A Extra Expense Limit $2,000,000 $11,856 Accounts Receivable $1,000,000 $1,170 Valuable Papers Limit $1,000,000 $580 SECTION 2 Deductible Limit Premium General Liability -Personal Injury/Property Damage $10,000 $2,000,000 $5,876 Pollution $1,000,000 Included Employers'Liability/Stop Gap N/A N/A Medical Payments (per person /per accident)N/A N/A Auto Liability -Bodily Injury/Property Damage N/A N/A Personal Injury Protection /Other Personal Loss N/A N/A Comprehensive N/A N/A Collision N/A N/A Rental Reimbursement N/A SECTION 3 Deductible Limit Premium Blanket Crime N/A $500,000 $1,080 Total ARB Premium $380,568 13 ARECA INSURANCE EXCHANGE Alaska Energy Authority Bradley Lake Hydroelectric Project 07/01/2017 to 07/01/2018Anchorage,AK 99503-2495 DIRECTORS,OFFICERS AND MANAGERS Deductible Limit Premium Limit of Liability $10,000 $5,000,000 $18,649 Fiduciary Limit of Liability N/A $0 Anti-Trust Defense Limit N/A $0 Capital Credit Defense Limit N/A N/A $0 Years Retroactive Coverage N/A $0 Anti-Trust Retroactive Coverage N/A $0 Charitable Entities Coverage N/A $0 Choice of Defense N/A $0 Total DOM Premium $18,649 14 (ARECA INSURANCE EXCHANGE Policy Summary__ Ae eee aKeen Bradley Lake Hydroelectric Project 97/01/2017 to 07/01/20118 Protection Package Premium Propertyee oe _'$373,612 General Liability gs a6 Crime -gt 980 Equipment Breakdown eee$169,479 Directors,Officers and Managers Liability -_-gig 649 Fees and Assessments eee$0 Total Premium $568,696 15 JARECAINSURANCE EXCHANGE Options to Consider Alaska Energy Authority Bradley Lake Hydroelectric Project Anchorage,AK 99503-2495 07/01/2017 to 07/01/2018 Premium Adjustment ARB M@ General Liability to $1,000,000 EB 16 ARECAGaINSURANCENJEXCHANGE Summary Alaska Energy Authority Bradley Lake Hydroelectric Project 07/01/2017 to 07/01/2018 Anchorage,AK 99503-2495 DISCLOSURE NOTICE OF TERRORISM INSURANCE COVERAGE Coverage for acts of terrorism is included in the quoted policies.You are hereby notified that under the Terrorism Risk Insurance Act,as amended in 2015,the definition of act of terrorism has changed.As defined in Section 102(1)of the Act:The term "act of terrorism"means any act that is certified by the Secretary of the Treasury--in concurrence with the Secretary of State,and the Attorney General of the United States--to be an act of terrorism;to be a violent act or an act that is dangerous to human life,property,or infrastructure;to have resulted in damage within the United States,or outside the United States in the case of certain air carriers or vessels or the premises of a United States mission;and to have been committed by an individual or individuals as part of an effort to coerce the civilian population of the United States or to influence the policy or affect the conduct of the United States Government by coercion.Under the quoted coverages,any losses resulting from certified acts of terrorism may be partially reimbursed by the United States Government under a formula established by the Terrorism Risk Insurance Act,as amended. However,the quoted policies may contain other exclusions which might affect your coverage,such as an exclusion for nuclear events.Under the formula,the United States Government generally reimburses 85%through 2015;84%beginning on January 1,2016;83%beginning January 1,2017; 82%beginning on January 1,2018;81%beginning on January 1,2019 and 80%beginning on January 1,2020,of covered terrorism losses exceeding the statutorily established deductible paid by the insurance company providing the coverage.The Terrorism Risk Insurance Act,as amended, contains a $100 billion cap that limits U.S.Government reimbursement as well as insurers'liability for losses resulting from certified acts of terrorism when the amount of such losses exceeds $100 billion in any one calendar year.If the aggregate insured losses for all insurers exceed $100 billion, the coverage may be reduced. The portion of your annual premium for each policy,except Workers'Compensation coverage,that is attributable to coverage for acts of terrorism is $0,and does not include any charges for the portion of losses covered by the United States Government under the Act. If Workers'Compensation coverage is included as part of this proposal,please refer to the Workers' Compensation section of this proposal for the specific premium charge for terrorism coverage. 17 {|ARECAINSURANCE EXCHANGE Glossary of Terms Alaska Energy Authority Bradley Lake Hydroelectric Project Anchorage,AK 99503-2495 Actual Cash Value Actual cash value,or ACV,means replacement cost less depreciation.For example,mobile equipment,trailers,semi-trailers or any self propelled vehicles or machines are covered for actual cash value. Accounts Receivable Pays collection expense and the loss of revenue due to the destruction of supporting records. Additional Insured A person other than the named insured who has limited protection under the terms of the contract.Usually,additional insureds are added by endorsement. Advertising Injury Liability Includes oral or written publication of material that slanders or libels a person or organization or disparages persons or organizations,goods,products or services,and others as defined under Advertising Injury.Includes unintentional copyright infringement. Aggregate Maximum amount the policy will pay in any given year,regardless of the number of losses incurred. All-Risk Covered property is insured against all direct physical loss except wear and tear,decay,mechanical breakdown,earth movement, flood damage,unexplained inventory shortages and steam boiler explosions. Anti-Trust Defense Anti-competitive agreement to gain market dominance,price fixing or price discrimination. Auto Liability Pays for bodily injury and property damage which occurs in the course of the operation of your fleet where you are found negligent. Auto Physical Damage Insures against loss resulting from damage to an auto owned by the insured. Blanket Contractual Liability Liability assumed through written contracts. Blanket Crime Coverage Provides for employee dishonesty,loss of monies and securities both on or off premises,counterfeit currency and money orders, and depositors forgery.No deductible applies to this coverage. Blanket Property Limit One total limit for all covered property regardless of location, including property of others for which you are responsible. 07/01/2017 to 07/01/2018 Bodily Injury The responsibility that may arise from injury to another person'slifeorhealth. Boiler &Machinery (Equipment Breakdown) A particular kind of property insurance covering generators,boilers,pressure vessels (fired and unfired)or pressure related equipment and machinery. Capital Contribution The sum paid and contributed to surplus. Claims-Made Liability coverage only if a written claim is made during the policyperiodoranyapplicableextendedreportingperiod. Co-Insurance Arrangement the insurer and the insured share,that reduces the amount that will be paid when property is underinsured. Collision Covers physical damage to the insured's automobile (other than that covered under comprehensive insurance)resulting fromcontactwithanotherinanimateobject. Completed Operations Coverage pays when the insured is liable or bodily injury orpropertydamagecausedbyworkthattheinsuredhascompleted. Comprehensive Auto coverage providing protection in the event of physical damage(other than collision)or theft of the insured vehicle.For example,fire damage or a cracked windshield would be covered under the comprehensive section. Contractual Liability Personal injury,property damage and advertising liabilities that you assume through written contracts, Counterfeit Currency An imitation of currency or bank notes,money orders etc. Crime Covers employee dishonesty,loss of monies and securities both on and off premises,counterfeit currency and money orders,and depositors forgery. Cross Suits Suits arising between insureds. Debris Removal Coverage Provides for expenses incurred to remove debris caused by acoveredloss. 18 ARECA INSURANCE EXCHANGE Glossary of Terms Alaska Energy Authority Bradley Lake Hydroelectric Project Anchorage,AK 99503-2495 Deductible A portion of an insured loss that is not paid by insurance.Thedeductibleissubtractedfromtheamounttheinsurerwould otherwise be obligated to pay. Demolition and Increased Cost of Construction Costs to demolish the remaining portion of a damaged building,or the increased costs incurred to meet current building,zoning or land use ordinances or laws. Depositors Forgery Loss due to forgery or alteration of financial instruments i.e.checks, drafts or notes. Devaluation of Real Estate A reduction in the market value of real estate of others at the time it is actually sold. Electronic Data Processing Loss or injury to electronic data stored in the insured's computer system. EME -Electromagnetic Field Any electric field,magnetic field,electromagnetic field,electromagnetic radiation generated or emitted by the electric charge in electricity or electrical current. Employee Benefit Administration Providing incorrect advice concerning an employee's pension planorfailuretoenrollemployeesinabenefitprogram. Employee Dishonesty Fraudulent or dishonest act(s)committed by any employee acting alone or in collusion with others. Employment Practices Protection for an employer against suits made by the employees, former employees,or potential employees,i.e.discrimination,wrongful termination of employment,sexual harassment and other employment related allegations. Endorsements Written provisions used to amend the coverage in an otherwise complete policy. Entity The named corporation. Equity Account A member's financial interest in AIE. ERISA -Employee Retirement Income Security Act The Employee Retirement Income Security Act of 1974 (ERISA)isafederallawthatpertainstopensionandprofit-sharing plans. 07/01/2017 to 07/01/2018 Extra Expense Necessary expenses incurred during a period of restoration that theinsuredwouldnothaveincurrediftherehadbeennoloss. Failure to Supply Protection for losses due to failure to supply your product because of negligence. Fellow Employee Protects an employee from a claim by a fellow employee. Fiduciary Legal responsibility to safeguard the assets of the beneficiaries. Fire Department Service Charge vervice charge from a fire department that an insured may be liableor. Fire Legal Liability Liability coverage for damage to occupied property of others caused by fire or explosion due to insured's negligence. Fire suppression Coverage for federal lands,in case of fire caused by the insured. General Liability Coverage for an insured when negligent acts and/or omissions result in bodily injury,property damage and/or personal injury. Hired Auto Liability arising from the use of rented or borrowed auto on a short term basis.It replaces the liability coverage offered by auto rental agencies. Host Liquor Liability Covers Insured's liability for occasions where liquor is served. Hydraulic Equipment Truck-mounted hydraulic equipment (i.e.aerial devices and digger derrick units). Incidental Medical Malpractice Liability protection for rendering or failure to render First Aid or CPR. Insureds Insureds are the entity (corporation,organization or association, and any named subsidiary)and any individual who serves as a Director,Officer,Trustee,Employee or Volunteer of the entity, while acting in the scope of their employment. Livestock Any animals being raised for commercial purposes (including fish or birds). 19 ARECA INSURANCE EXCHANGE Glossary of Terms Alaska Energy Authority Bradley Lake Hydroelectric Project Anchorage,AK 99503-2495 Loss Inside Loss of money and securities by the destruction,disappearance or wrongful abstraction within the premises or any banking premises or similar recognized places of safe deposit,including secured payment drop boxes. Loss Outside Loss of money and securities by the destruction,disappearance or wrongful abstraction outside the premises while being conveyed by a messenger,messenger service or armored vehicle company,or in the living quarters of any messenger. Medical Payments Coverage For injuries to guests,customers or members of the public who are injured on the insured's premises regardless of fault or responsibility for the injury. Mobile Equipment Trailers,tractors,trenchers,forklifts,chippers etc.designed for off road use and any other equipment of a portable nature. Named Insured A person,business or organization specified by the policy. Newly Acquired Property Property acquired after the inception of the policy Non-Owned Automobile Protects the insured in the event that the insured is sued as a result of an auto accident in the employee's personal vehicle while on company business. Occurrence An accident,including continuous or repeated exposure to conditions,which results in personal injury,property damage or advertising injury which are neither expected nor intended by the insured. On Premises Pollutant Expense to extract pollutants from land or water at property of insured for a covered loss. Owners and Contractors Liability Coverage Injury or property damage arising out of operations of independent contractors where the insured might be held liable while the operations are in progress. Personal Injury Protection Pays basic expenses for an insured and his or her family in states with no-fault auto insurance.No fault laws generally require drivers to carry both liability insurance and personal injury protection coverage to pay for basic needs of the insured,such as medial expenses,in the event of an accident. 07/01/2017 to 07/01/2018 Pollution Clean Up and Removal Expenses to extract pollutants from land or water. Pollution Liability Immediate &suddenly accidental above ground pollution liabilityfordamagetoathirdparty's property. Products and Completed Operations Liability for damages as the result of a defect in a product sold or manufactured,or work that has been performed to completion. Property Buildings,contents,inventory,tools,mobile equipment,radio towers and substations (unless excluded). Property of Others Personal property in the care,custody and control of the insured. Punitive Damages Damages awarded by a court as a deterrent or punishment for a wrongful act. Railroad Liability Liability for construction or demolition operations within 50'of railroad property. Rental Reimbursement Coverage for renting a replacement vehicle when insured vehicle is out of service due to a covered loss. Replacement Cost Buildings,contents and inventory are insured for repair or replacement with like kind and quality,whichever is less. Retro-Coverage Covers a loss occurring prior to the effective date of the policy,butaftertheretroactivedate. Right-of-Way (ROW) Strip of land that utilities use to construct,operate,maintain and repair their transmission and distribution line facilities. Self-Insured Retention That portion of a loss retained by the insured,similar to a deductible. Spraying Damages Loss due to spraying for weed control outside a right-of-way. Substations The fence and all the equipment contained inside the fenced area, designated as a substation that results in voltage changes from transmission voltages to distribution voltages and/or transmission voltages to subtransmission voltages. Umbrella Catastrophic liability coverage for suits that exceed the ARB Liability limit. 20 ARECA INSURANCE EXCHANGE Glossary of Terms Alaska Energy Authority Bradley Lake Hydroelectric Project 07/01/2017 to 07 Anchorage,AK 99503-2495 /01/0 07/01/2018 Uninsured /Underinsured Motorist Covers an insured involved in a collision with an at-fault driver who does not have liability insurance,or does not have sufficient liability insurance. Valuable Papers and Records Coverage in the event that valuable papers or records of intrinsic value are damaged or destroyed. Watercraft Water going vessels Weatherization Insurance Errors or omissions in the administration of an Insured's Weatherization Program. Workers'Compensation Liability insurance requiring certain employers to pay benefits and furnish medical care to employees for on-the-job injuries,and to pay benefits to dependents of employees killed by occupational accidents. 21 ARECA INSURANCE EXCHANGE Alaska Energy Authority Bradley Lake Hydroelectric Project Anchorage,AK 99503-2495 Protection Package Expiring Premiums 07/01/2017 to 07/01/2018 Renewing Premiums Property $3413.969 $373,612 General Liability NiA $5,876 Crime Nia $1,080 Equipment Breakdown SLAF 373 $169,479 Directors,Officers and Managers Liability S17,7 37 $18,649 Total $50 $568,696 Please bind with the following optional coverages,limits or deductibles.(Check all that apply) ARB General Liability Limit to $1,000,000 O ($32) Crime Limit to N/A oO ($1,080) EB Equipment Breakdown Limit to $40,000,000 oO ($25,000) Equipment Breakdown Limit to $30,000,000 0 ($50,000) Please bind coverage for July 2017 as indicated above: Signature Printed Name Date Please return to: Crystal Enkvist ARECA Insurance Exchange cenkvist@alaskapower.org Fax (907)561-6206 22 TE SO LAW OFFICE OF Kenneth E.Vassar,LLC TAKES,FINANCES,AND CACITAL PROIECTS 2220 NORTH STAR STREET #24 ANCHORAGE,ALASKA 93503 ¢TELEPHONE 907.952.3207 kvassar@keviaw.org June 13,2017 Alaska Energy Authority 813 West Northern Lights Boulevard Anchorage,Alaska 99503 Attention:Michael Lamb Executive Director Dear Mr.Lamb: |have received from you,and have reviewed,a draft letter dated June 1,2017, (the "June 1 Letter')from Chugach Electric Association,Inc.("Chugach”),Golden Valley Electric Association,Inc.("GVEA”),Matanuska Electric Association,Inc.("MEA”and, together with GVEA,the "Protesting Utilities”),the Municipality of Anchorage d/b/a Municipal Light and Power ("ML&P),and the City of Seward d/b/a Seward Electric System ("SES”)(collectively the "Designated Utilities').In the June 1 Letter,the Designated Utilities state,among other things,their understanding that "they must continue to satisfy the terms and conditions of all of the Bradley Lake Agreements, including,but not limited to,the take-or-pay obligations described in the Power Sales Agreement.Accordingly,the Designated Utilities currently do not believe the take-or- pay obligations that secure the Bonds have been compromised or that the Bonds are at risk of non-payment.”(footnote deleted;underlining added) The June 1 Letter is the most recent in what has become a considerable string of communications between the Protesting Utilities and the Alaska Energy Authority ("AEA”),both verbal and written,regarding the Protesting Utilities'interpretation of,and commitment to,their obligations under the power purchase agreement (the "PSA”) LAW OFFICE OF KENNETH E.VASSAR,LLC Alaska Energy Authority -Bradley Lake June 13 2017 Page 2 relating to the purchase and sale of Bradley Lake power.You have asked for my thoughts,as bond counsel to AEA,regarding the June 1 Letter.My thoughts are in the numbered paragraphs below. 1.The most pressing issue that arose as a result of certain comments made by the Protesting Utilities was whether those comments rose to the level of requiring disclosure through EMMA to the bond market.My conclusion when this first arose was, and it continues to be,that no event has occurred that requires an EMMA disclosure. The June 1 letter is irrelevant to this decision.While the June 1 Letter is insufficient to eliminate all concern (particularly the use of the word "currently”in the language quoted in the first paragraph above),it also does not exacerbate the concern or constitute an action that requires such disclosure. In order to rise to the level of a disclosure event,!believe the Protesting Utilities (or any of the Designated Utilities,for that matter)would have to make statements that would amount to an anticipatory breach of their contract obligations.This is something that |believe the Protesting Utilities have been cautious to avoid so far. 2.The second issue that arose as a result of the comments made by the Protesting Utilities was whether a new bond issuance would require disclosure of the Protesting Utilities'comments to the purchasers of the new bonds.The test for answering this issue is different from the test for continuing disclosure under EMMA. The test for a new bond issuance would be whether those comments would be a material factor that a new bond purchaser should know before purchasing the new bonds.In the absence of a clear re-affirmation of both the Protesting Utilities' understanding of,and their commitment to,their obligations under the PSA,their prior comments create enough uncertainty that a disclosure would be necessary. The June 1 Letter (particularly the use of the word "currently”in the language quoted in the first paragraph above)does not sufficiently remove the uncertainty created by the prior comments.Tne June 1 Letter actually worsens the situation with respect to those Designated Utilities that did not make the prior comments that created the LAW OFFICE OF KENNETH E.VASSAR,LLC Alaska Energy Authority -Bradley Lake June 13 2017 Page 3 uncertainty in the first place,because those other utilities would be part of a letter that conditions their commitment by stating that this is only "currently”their commitment. 3.What would be required to avoid the need for disclosing the prior comments of the Protesting Utilities in the circumstance of a new bond financing?We would need a clear and unconditioned re-affirmation of the Protesting Utilities' commitment to the terms of the PSA. I think it is a mistake (a mistake in which |have taken part)to use the short-hand term "take-or-pay.”The Protesting Utilities need to clearly and unconditionally state: A.They understand and re-affirm,notwithstanding statements previously made,that they must satisfy the requirements of Section 7(b)of the PSA ("Each Purchaser shall make payments in the amounts and at the times required by this Agreement notwithstanding a suspension or reduction in the amount of power supplied by the Project.Such payments shail not be subject to any reduction,by offset or otherwise.The parties intend and interpret the foregoing two sentences to mean that the obligation to make such payments shall be absolute and unconditional and unaffected by any interruption,interference,or curtailment in whole or in part of the power supplied by the Project.” B.They understand and _re-affirm,notwithstanding statements previously made,that they must satisfy the requirements of Section 9(a)of the PSA ("Each Purchaser shall continue to make payments in the event of any dispute regarding performance of any obligation by any party under this Agreement or in the event of any dispute under the Bond Resolution,and this obligation of continued payment pending resolution of disputes shall be immediately enforceable by any party upon application to any court of competent jurisdiction.” 4.There has been some recent discussion about a new bond financing for an improvement to the Bradley Lake Project and perhaps an amendment to the PSA to allow that new financing to be secured by something other than the covenants contained in the provisions from the PSA quoted in paragraph 3.Assuming that the LAW OFFICE OF KENNETH E.VASSAR,LLC Alaska Energy Authority -Bradley Lake June 13 2017 Page 4 new financing does not rely at all upon those provisions of the PSA,then no such re- affirmation would be required.However,additional research will need to be done to determine whether and how such a new kind of financing can be done under the PSA and under the Power Revenue Bond Resolution and also whether the consent of existing bondholders wilt be required to permit it.We will need more detail about the proposed new financing to work through those issues. 5.Since the June 1 Letter is irrelevant to the issue described in paragraph 1 above and does not satisfy the requirements for the issues described in paragraphs 2 - 3 above,it makes no difference to me whether the Designated Utilities choose to sign and deliver the June 1 Letter,although,as |mentioned in paragraph 2 above,adding utilities to the June 1 Letter that have not made the comments that caused our concern in the first place seems to be a step backward for those utilities. These are my thoughts,and |hope they are helpful.Please let me know if you would like to discuss further. Sincerely, Law Office of Kenneth E.Vassar,LLC By:Kenneth E.Vassar Battle Creek Update BPMC 6/28/17 FERC dam safety is reviewing design.Few comments are expected as project is primarily road construction,pipe installation,and we met with FERC to go over design in February. e DNR land lease amendment has finished agency &public comment.Decision by end of June then 20 day appeal period. e ACOE wetland application in. e Fish Habitat Plan approval by FERC Licensing. e ADF&G Title 16 Fish Habitat Permit determined not needed by ADF&G. Expected funding needed through bid is: $200K -Complete Design bid documents (electrical),agency responses,Pre-bid meeting,bidder site visit,addendums,bid evaluations,and survey flagging for brushing contractor.Survey &flagging late July,Request for Proposals end of August,Bids due end of November. $140K -Brushing (estimated).This work is a construction activity and would reduce estimated construction bid. $25K -Contingency S35K -AEA staff time $400K Total by July 21 for NTPs RESOLUTION NO.2017-01 CONFIRMING RESOLUTION OF THE BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE BATTLE CREEK DIVERSION PROJECT WHEREAS,Utilities of the Bradley Lake Project Management Committee (BPMC)are currently discussing the financing and contractor procurement for the proposed West Fork Battle Creek Diversion Project (Project). WHEREAS,Utilities that are interested in paying a share of Project expenses and receiving their energy share in proportion to their expense are the Purchasing Utilities. WHEREAS,it is intended that the project,if financed by Purchasing Utilities and successfully constructed,will increase the Bradley Lake Hydropower Project annual energy for Purchasing Utilities. WHEREAS,the BPMC utilities will have until final financing is in place to make a decision on participating in the Battle Creek Project.WHEREAS,any Purchaser that chooses not to initially take their respective share of Battle Creek energy may buy their respective share back at some point in the future. WHEREAS,Chugach Electric has recently completed a like project (Stetson Creek)and the BPMC desires to leverage that expertise for the benefit of all BPMC members. NOW THEREFORE,BE IT RESOLVED the BPMC authorizes and supports the efforts of Purchasing Utilities desiring to develop the Battle Creek Diversion Project to work with Alaska Energy Authority to finance and bid the Project in 2017. ADOPTED the 28"day of June,2017. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE BY: Cory Borgeson,Chairman ATTEST: BY: Michael E.Lamb,Secretary The regulation adoption process is governed by the Alaska Administrative Procedure Act. Many steps to go through and the whole process takes 5-7 months. The major steps are Publish the public notice and proposed regulations.We must give at least a 30-day notice for written comments (July 21).We will also provide a meeting time for the public to give oral comments on July 10. o The notice and regulations were posted in the newspaper,on the state online public notice site,sent to all the legislators,the legislative affairs agency and any interested parties. The public comments are evaluated and determined if any changes should be made to the proposed regulations. At the next board meeting we present the proposed regulations to the AEA board for approval.(Aug 10) Once approved we submit the final regulation package for review and approval:(2 months) o Dept of Law o Governor's office o Administrative Regulation Review Committee o Regulations attorney If all approve,the regulations go to the Lt.Governor's office to sign and file. (Oct) Become effective after 30 days of filing (Nov) Bradley Lake Operator Report O&D Committee June 26,2017 Unit Statistics:06/26/2017 Generation Unit 1 (MWhrs)Unit 2 (MWhrs)Total (MWhrs) May 2017 19,090 12,468 31,558 Hydraulics Avg.Lake Level (ft)Usage (ac ft)Fishwater (ac ft) May 2017 1,137 31,932 136 AVG Lake Level -1,12.5' Capital Projects: 1}Marker Ball Installation -The installation of the marker balls is complete for now. We are one marker short as one of the older ones disintegrated when we tried to move it. 2)Reported Wire Damage -During the marker Ball installation we received reports of the wire strands being broken in a couple of places (7).An inspection was made on June 26 and it appears that the wire damage Is really just some left over tywraps from the previous marker balls. 3)Plant Reduced Output The plant has been on reduced output due to SVC installation and testing. 4)Fire Sprinkler Inspection -The sprinkler system had its annual inspection and a number of issues were discovered.Those repairs are being scheduled. 5)Materials Transport -With the transport of material for the marker ball job some empty barge runs were available to the plant and we used the opportunity to transport some much needed material for bench stock and future use. Operations,Maintenance,and Inspections: 1)Operations-Operations at the Plant were quite normal for the month. 2)Dam Maintenance -Operators cleaned the expansion joint at the dam to remove dirt,rocks and the growth of moss. 3)Training -Training on the Emerson DCS was attended by one operator and by the superintendent. Bradley Lake Operator Report Page 1 Bradley Lake Project Management Committee -Alaska Online Public Notices Page 1 of 1 w °e 4 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 onWednesday,June 28,2017 at 9:45 a.m.For additional information contact Teri Webster at 907-771-3074. 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 467-050-126#. The public is invited to attend.The State of Alaska (AEA)complies with Title ll 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 Agenda6-28-17.pdf Department:Economic Developmen and Revision History Category:Public Notices Created 6/21/2017 2:31:45 PM by Sub-Category: tawebster Location(s):Statewide Modified 6/21/2017 2:32:06 PM by [Details]Project/Regulation #: tawebster Modified 6/22/2017 2:35:43 PM by [Details]Publish Date:6/21/2017tawebsterArchiveDate:6/30/2017 Events/Deadlines: https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id=186268 6/22/2017 Bradley Lake Project Management Committee -Alaska Online Public Notices Page 1 of 1 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 onWednesday,June 28,2017 at 10:30 a.m.For additional information contact Teri Webster at 907-771-3074. 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 467-050-1 26#. The public is invited to attend.The State of Alaska (AEA)complies with Title I!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 6/21/2017 2:31:45 PM by eee statewidetawebster: Modified 6/21/2017 2:32:06 PM by [Details]Project/Regulation #: tawebster Publish Date:6/21/2017 Archive Date:6/30/2017 Events/Deadlines: https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id=186268 6/21/2017 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE Va REGULAR MEETING AGENDA Wednesday,June 28,2017 : 9:45 a.m. Alaska Energy Authority's Board Room 813 West Northern Lights Boulevard,Anchorage,AK To participate by phone,dial 1-888-585-9008 and use code 467 050 126. 1.CALL TO ORDER 2.ROLL CALL FOR COMMITTEE MEMBERS 3.PUBLIC ROLL CALL 4.PUBLIC COMMENTS 5.AGENDA APPROVAL 6.APPROVAL OF PRIOR MINUTES --May 30,2017 7.OLD BUSINESS A.INSURANCE Finance Committee B.SPILLWAY RAISE ML&P 8.NEW BUSINESS A.BATTLE CREEK UPDATE AEA B.AEA REGULATION CHANGE UPDATE AEA C.RAILBELT COOPERATION Chair D.REPORT TO AEA BOARD Chair 9.COMMITTEE REPORTS 10.OPERATOR REPORT 11.COMMITTEE ASSIGNMENTS 12.MEMBERS COMMENTS 13.NEXT MEETING DATE -TBD 14.ADJOURNMENT q BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE BPMC 6/28/17 Le First S Second First Second ral 5c First Secong ,a Wy 40%}NaI AC |wing Roll Call Agenda Minutes Insurance 5 \Ww aA4 iyRollcallfromtoptobottomendingwithChairpy Yes No f NE :\Ne Yes No Yes No Yes No Homer Electric Association "LB / Matanuska Electric Association uv"we \hy A City of Seward Rozen}/a Alaska Energy Authority "vw -a / Municipal Light &Power uu WA WW / Chugach Electric Association "4 /WH,/, Golden Valley Electric Association 4 W4 WA J / ea a First Second First Second First Second First Second First Second Wh laKor Roll call from top to bottom ending with Chair (es O}\ Yes No Yes No Yes No Yes No Yes No Homer Electric Association WA Matanuska Electric Association W, City of Seward if ; Alaska Energy Authority Y, Municipal Light &Power VF, Chugach Electric Association J) Golden Valley Electric Association J Next Meeting:TBD \Cyle @-ns poe FO relate ZoRt.Bond resdudkinn Overy 2 yrs Kon-Tia Com.revised rentwaY topEOoomnyWee@sSignMent-frees eque -Gen lLrasteBradonARECOiNBearkabstadaboermoseeGoeSowlwayTaareTet23-45 H 4-T &raine-Mote 8p 'BC uUpaade "DoOwL 260,OOD =Engeneer ings GD,UCD&50,000 EPSDomdeaignFéeRgeorders,Male,dy mely nobice .Wanting,brush ns A af sane HineBradklweotLoryFreer R 260 \uhon 2 Vers wn Rist Assesment sf delayeate 2018WorkSESSIEA™Zs Wie LY "FinancingnextdakeRuse Mork' Tony Poord mbyLtBrodHEAwork Mey Cost colo Woe 4AWaterMGutOhdecB on Kes SAV"a Suo 47s S0-30 Sor Asan Fort wor\\ ox You ox ; |Sune Weert) Vn TA wo |he »2 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Wednesday,June 28,2017 9:45 a.m. Alaska Energy Authority's Board Room813WestNorthernLightsBoulevard,Anchorage,AK To participate by phone,dial 1-888-585-9008 and use code 467 050 126.--rp13. 14 CALL TO ORDER ROLL CALL FOR COMMITTEE MEMBERS PUBLIC ROLL CALL PUBLIC COMMENTS AGENDA APPROVAL APPROVAL OF PRIOR MINUTES -May 30,2017 OLD BUSINESS A.INSURANCE B.SPILLWAY RAISE NEW BUSINESS A.BATTLE CREEK UPDATE Keseltnon B.AEA REGULATION CHANGE UPDATE C.RAILBELT COOPERATION D.REPORT TO AEA BOARD COMMITTEE REPORTS .OPERATOR REPORT COMMITTEE ASSIGNMENTS .MEMBERS COMMENTS NEXT MEETING DATE -TBD Menage ADJOURNMENT Finance Committee ML&P AEA AEA Chair Chair - Bradley Lake Project Management Committee Wednesday,June 28 @ 9:45 am. **PLEASE WRITE LEGIBLY** NAME ORGANIZATION Larry mlorgensen HEA Bewgeg.adic.VYUGACT enue Sw LEE SUBLIC.Why T0haibie CA!44gARadCHESACeginst{Jaudfcate PAPAMansLinnMowse[lea heft tans (a)Beax WiWieWay cep Crystal Entwist APA Man Cwens Bed Gary,Kul,MEA TW PakeK Publie Ericy MeyersSeocelyn&Arone'.c=Vans Whyde 3B Cyan Covey Vee Wiles ere ATTENDANCE -BPMC REGULAR MEETING,June 283 @ 9:45 am.'COMMITTEE MEMBERSv4CoryBorgeson,ChaireeThibert,Vice ChairBradJanorschke_Michael LeLamb,Secretary/T reasurer ony |zzo Public Members -; AntHickey (CEA Sf, "per Johnson (CEA)_Crystal Enkvist (APA)/|Mel Hutchinson (APA).:Rich Baldwin (HEA).|Anna Henderson (MLP)y AlanOwens (HEA)JBernieSmith(RCA)_ <A Gary Kuhn (MEA) _David Pease (MEA)/Molly:Morrison (MLP) jean J 4 Larry Jorgensen (HEA)/phoe Ron Wolfe (GVEA)©/Tw.;ZNne Meee /Crystal / Phorm Hutchinson (HEA)J vo yo :CEA 'HEA AEA MEA |MLP _SEW GVEA | i i ALTERNATE ee|Lynn Thompson_/Burke Wick JTyeDayJBryanCareyJSGaryKuhnSS |oY Jeff Warner COUNSEL :ZA kirk Gibson,McDowell Rackner &Gibson PCBrianBiorkquistDeptot-aw |Mery Lywn _/fee So /Meer Wigker ae.Joven _Gondner.anDrand.aiehe /