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HomeMy WebLinkAboutBPMC 3-4-16BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING REGULAR MEETING Alaska Energy Authority,Anchorage,Alaska March 25,2016 v\c? Chair Borgeson called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:04 a.m. 1.CALL TO ORDER 2.ROLL CALL (for Committee members) Cory Borgeson (Golden Valley Electric Association [GVEA]);Sara Fisher-Goad (Alaska Energy Authority [AEA]);Lee Thibert (Chugach Electric Association [CEA]);Tony Izzo (Matanuska Electric Association [MEA]);Mark Johnston (Anchorage Municipal Light &Power [MLP]);John Foutz (City of Seward);and Bob Day (Homer Electric Association [HEA)). 3.PUBLIC ROLL CALL (for all others present) Bryan Carey,Jocelyn Garner,Teri Webster (AEA);Crystal Enkvist (Alaska Power Association [APA]);Brian Bjorkquist (Attorney General's Office);Burke Wick (CEA);Ron Woolf (GVEA); Emily Hutchinson,Brad Janorschke,Alan Owens (HEA);Gary Kuhn (MEA);Mollie Morrison (MLP);and Sydney Hamilton (Accu-Type Depositions). 4.AGENDA COMMENTS/MOTION FOR APPROVAL MOTION:Mr.Johnston made a motion to approve the agenda as amended.Motion seconded by Mr.Izzo. Mr.Carey requested to add 7B.Cook Inlet Aquaculture Association to the agenda. Mr.Day requested to add 7C.HEA Fixed Wing Contract to the agenda. The agenda passed as amended. 5.PUBLIC COMMENTS None. 6.OLD BUSINESS A.Capital Project Financing Mr.Woolf reviewed the Financing SVC Project worksheet provided to the Committee.The financing calculation of $8,729,500 is projected for 19 years at 4 percent.The savings to the power purchasers is $5.4 million.Mr.Woolf explained the amortization table in the model has the financing date of 12/31/16.The financing method has not yet been determined. Mr.Johnston asked what funds have been spent on the SVC Project to date.Ms.Garner noted some funds have been spent,but does not have the specific amount.Mr.Johnston asked if the spin plan follows the provided estimate.Ms.Garner informed the estimate is from CEA's detailed payments.The R&C Fund has to be repaid within four years.Mr.Johnston asked if BPMC Minutes 3/25/16 Page 1 of 5 the prefunding of R&C Fund has begun.Ms.Garner agreed the FY16 Budget approved $3.6millionofexpensesandaquarterofthatamountisbeingpaidthisyearintotheR&C Fund. Mr.Johnston asked if the participants continued to prefund the project and the bonds wereissuedin2018,would there be a possibility the participants would be refunded any of theirprefunding.Ms.Garner believes that assessment is correct,but would have to verify with bondcounsel. Mr.Johnston requested clarification on the interest income line item in the budget showing$180,000 more when bonds were issued for the project as compared to utilizing the R&C Fund.Ms.Garner explained the projected difference is because the R&C Fund earns a contractuallyfixed7.38 percent interest on the investment balance,which would not be earned if the R&C Fund was utilized for SVC expenses. Mr.Johnston requested Ms.Fisher-Goad provide additional information regarding the terms ofthebonds,including insurance. Mr.Janorschke expressed his appreciation to the Budget Committee for their work on the model.He asked if both SVC projects have to be built on the same timeline.Mr.Thibert noted the bid has gone out for both projects.Mr.Janorschke asked if the excess payments go to theRailbeltEnergyFund.Ms.Fisher-Goad agreed and stated the intended purpose of the fund is for additional upgrades and projects in the Railbelt.Mr.Bjorkquist advised the Railbelt EnergyFundisnotalegallydedicatedfund,but is politically identified for Railbelt purposes. Mr.Day commented the current scope of the project is to replace in-kind and upgrade the controls to make the equipment viable for the future.Mr.Day stated there may be a possibilitytheSoldotnaSVChasbeenobviatedbythechangesinthesystem.Mr.Day requested a cost benefit analysis be performed by EPS to verify that the scope of the Soldotna SVC project is adequate and necessary. Mr.Thibert agreed the study should be thorough and include all the assets with and without the generation running. Mr.Wick informed the current bid proposal from ABB includes some study funds to review the system operations and determine if increased capacity is possible. Chair Borgeson assigned the O&D Committee to work with CEA and HEA to address these issues regarding a study and cost benefit analysis for the Soldotna SVC project. Chair Borgeson assigned the Budget Committee to continue working on the Capital Project Financing and to report back at the next BPMC meeting with a revised Capital Project Financing Plan.Chair Borgeson asked if there are funds in this year's budget for the study analysis.The O&M expenses are under-budget.Consent was given to hire the financial advisor Dan Walker as a Committee advisor and not to exceed $10,000 from funds the budget committee see fit. B.Timekeeping of Operator Services Mr.Woolf informed the Budget Committee reviewed the timekeeping of operator services and recommends any charges to the Project are billed by actual hours and at the agreed upon actual rate. Mr.Day stated all required documentation will be provided.He informed any deviation from normal procedures may result in additional costs. BPMC Minutes 3/25/16 Page 2 of 5 Chair Borgeson assigned the Budget Committee to coordinate with HEA regarding clear expectations and the development of a satisfactory tracking method.Mr.Janorschke requested the State be included in this process. 7.NEW BUSINESS A.FY 17 Budget Approval Mr.Woolf informed the budget details were reviewed at the last meeting and are provided in the member's packet.The only change in this budget from what was previously presented is a decrease of $150,000 for the outside contract services work on manuals. MOTION:Mr.Johnston made a motion that the Bradley Lake Project Management Committee approve the FY 2017 Operating and Capital Budget as presented as Scenario One,in which the SVC is paid for by the R&C Fund.Motion to seconded by Mr.Day. Mr.Thibert asked if the budget approved today can be modified accordingly before July 1 in the event financing for the SVC Project occurs.Chair Borgeson,Mr.Carey,and Ms.Garner all agreed the budget could be amended.Mr.Thibert stated he will vote in favor of the budget as presented today to move things forward,but he is in favor of the long-term debt option because it provides the least cost to the membership. Mr.lzzo concurred with Mr.Thibert's comments. Mr.Johnston noted he is not convinced the long-term debt option is the least cost method and could potentially cost more depending on decisions within the next six months.Going forward with the R&C Fund provides the greatest flexibility to research all options before a final decision is made. A roll call vote was taken and the motion passed unanimously. B.Cook Inlet Aquaculture Association (CIAA) Mr.Carey informed AEA was approached by CIAA for the use of the Martin River ponds at the west-end of the Project.The use would include putting caught salmon into net pens within the pond until they ripen.The salmon would be harvested and the eggs collected.The crew would stay in a large tent.Equipment would be flown in and the salmon would be brought in by barge. The CIAA requested longer-term use to release juveniles in the Martin River ponds so the salmon would return to the location for harvest. Mr.Carey reported the Regional Advisory Group and Fish &Game are reviewing CIAA's request and will provide a decision in May on the approval of a possible permit.Mr.Carey informed no FERC amendment is required for a permit,but consultation with Fish &Game,Fish &Wildlife,and National Marine Fisheries Service is necessary to proceed forward. Mr.Carey noted CIAA has $1 million in liability insurance.The CIAA requested future incidental usage of equipment,which could either be paid for directly or exchanged for fish survey work. Mr.Carey will bring updated information on the progress of this request to the next meeting. The ponds receive all their water from the Martin River and do not benefit from water that is released from Bradley. Mr.Owens commented the two bridges between the Project and the ponds will have to be addressed and may have to be rebuilt.A previous bid received to rebuild both bridges was BPMC Minutes 3/25/16 Page 3 of 5 $180,000.The road between the two bridges and after the bridges to the pond will have to be rebuilt.The road has been demolished and is underwater during high tide. Chair Borgeson asked if AEA has a recommendation or position on CIAA's request.Ms.Fisher- Goad stated information is still being gathered on the specifics of the requests and the challenges to overcome.Ms.Fisher-Goad recommended Mr.Carey continue gathering the most complete information,work with HEA and the O&D Committee,and present again to thefullCommittee.At some point,the Committee will have to make determinations regardingissuanceofapermitandensurebenefitsexceedcosts.Ms.Fisher-Goad believes this could be an opportunity to support a broader community effort. Chair Borgeson asked if there are any other known operator issues with CIAA's request at this point.Mr.Day believes the request as currently presented would have minimal impact to the operation. Cc.HEA Fixed Wing Contract Mr.Janorschke explained the current fixed wing contract expires on April 1,2016.Negotiationsforanewcontractareongoing.Mr.Janorschke indicated since July of 2015,HEA has paid for approximately $45,000 of fixed wing expenses that should have been allocated to the BradleyProject.Mr.Janorschke requested HEA be allowed to bill for that retainer amount.He noted the FY16 budget is currently $200,000 under budget in account 539. Chair Borgeson noted the $45,000 true-up of fixed wing expenses is within budget and will gointothenormalperiodbilling.There was no objection from the Committee. 8.COMMITTEE REPORTS None. 9.OPERATORS REPORT Mr.Owens presented the Operators Report.He requested feedback regarding the fishwater screen debris removal efforts.The lake drawdown forecast is on schedule to meet the lake level goal of 1,070 feet by April 15th.Mr.Owens reviewed the pictures of construction and debris shown in the presentation. Mr.Owens informed the Yukon Fire Company traveled to Bradley on March 21st and 22nd and completed fires system inspection.All of the alarm panels are functional and only two alarm horns and a couple device switches have to be replaced at this time.The alarm panels will need to be replaced over the next few years.The analysis of the best option for replacement will occur during the interim. Chair Borgeson complimented Mr.Owens on the execution on the fishwater screen debris removal project work. 10.COMMITTEE ASSIGNMENTS Chair Borgeson assigned the O&D Committee to work with CEA and HEA to address these issues regarding a study and cost benefit analysis for the Soldotna SVC project. Chair Borgeson assigned the Budget Committee to continue working on the Capital Project Financing,to hire financial advisor Dan Walker as Committee advisor not to exceed $10,000, and to report back at the June BPMC meeting with a revised Capital Project Financing Plan. BPMC Minutes 3/25/16 Page 4 of 5 Chair Borgeson assigned the Budget Committee to coordinate with HEA and AEA regarding clear expectations and the development of a satisfactory timekeeping tracking method of operator services. 11.MEMBERS COMMENTS Ms.Fisher-Goad announced she tendered her resignation to the State of Alaska and a transition time is being developed.She expressed her pleasure working with the BPMC on energy issues. Mr.Day expressed his understanding of the Committee's concern there is value for the payment to HEA as operator of Bradley.Mr.Day encouraged O&D committee members to visit Bradley operations. Mr.Thibert expressed his appreciation to the Finance Committee for their efforts on the proposal and for their anticipated work.Mr.Thibert congratulated Ms.Fisher-Goad and expressed appreciation for her contributions over the years. Mr.Foutz expressed his appreciation to Mr.Owens for his update,and wished good luck to Ms. Fisher-Goad. Mr.Johnston and Mr.Izzo echoed the previous member comments. Chair Borgeson expressed his appreciation for all the work presented,and particularly to the Budget Committee for their extra effort.Chair Borgeson congratulated Ms.Fisher-Goad. 12.NEXT MEETING DATE -TBD May 2016 13.ADJOURNMENT There being no further business for the committee,the meeting adjourned at 11:32 a.m. of)QV mronee--Cory Borgeson,Chair Attest: Sara Fisher-Goad Alaska Energy Authority,Secretary BPMC Minutes 3/25/16 Page 5 of 5 rTATPYBRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Friday,March 4,2016 Immediately following the BPMC budget meeting (ETA 12noon) Alaska Energy Authority's Board Room 813 West Northern Lights Boulevard,Anchorage,AK To participate by teleconference,dial 1-888-585-9008 and use code 467 050 126. CALL TO ORDER ROLL CALL FOR COMMITTEE MEMBERS PUBLIC ROLL CALL AGENDA COMMENTS /MOTION FOR APPROVAL PUBLIC COMMENTS APPROVAL OF MEETING MINUTES --January 29,2016 OLD BUSINESS A.Payments to HEA via AEA CEA B.Capital project financing Budget committee NEW BUSINESS A.Renewal process of operator contract Kirk Gibson B.Timekeeping of operator services COMMITTEE REPORTS OPERATORS REPORT COMMITTEE ASSIGNMENTS MEMBERS COMMENTS NEXT MEETING DATE -Friday,March 25,2016 ADJOURNMENT BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING REGULAR MEETING Alaska Energy Authority,Anchorage,Alaska January 29,2016 1.CALL TO ORDER Chair Borgeson called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:33 a.m. 2.ROLL CALL (for Committee members) Cory Borgeson (Golden Valley Electric Association [GVEA]);Sara Fisher-Goad (Alaska Energy Authority [AEA]);Lee Thibert (Chugach Electric Association [CEA]);Tony Izzo (Matanuska Electric Association [MEA]);Mark Johnston (Anchorage Municipal Light &Power [MLP]);John Foutz (City of Seward (phone));and Harvey Ambrose (Homer Electric Association [HEA]). 3.PUBLIC ROLL CALL (for all others present) Jocelyn Garner,Kirk Warren,Teri Webster (AEA);Dave Gillespie (ARCTEC);Brian Bjorkquist (Attorney General's Office [AGO]);Brian Hickey,Burke Wick (CEA);Allen Gray,Ron Woolf (GVEA);Bob Day,Emily Hutchinson,Alan Owens (HEA);Kirk Gibson (McDowell Rackner & Gibson);Gary Kuhn,David Pease (MEA);Mollie Morrison,Jeff Warner (MLP);Stan Hayes (MWH);Bernie Smith (Public);Gary Dixon (Swalling &Associates);and Sydney Hamilton (Accu-Type Depositions). 4,AGENDA COMMENTS/MOTION FOR APPROVAL MOTION:Mr.Thibert made a motion to add Item 7C.Capital Programs to the agenda. Motion seconded by Mr.Johnston. The motion passed to amend the agenda. 5.PUBLIC COMMENTS None. 6.APPROVAL OF PRIOR MEETING MINUTES -November 17,2015 Mr.Ambrose made a correction to Item 10 of the November 17,2015 minutes where it states Mr.Harvey and should read Mr.Ambrose. MOTION:Mr.Thibert made a motion to approve prior meeting minutes of November 17, 2015,as corrected.Motion seconded by Mr.Johnston. The motion passed unanimously to approve the prior meeting minutes of November 17, 2015,as corrected. 7.OLD BUSINESS A.Dynamic Scheduling DRAFT BPMC Minutes 1/29/16 Page 1 of 6 Mr.Wick informed a brief memo was provided to members in their packet.Dynamic scheduling has been implemented with ML&P since December.The intent is to bring on one utility a month,with GVEA being next in line. Chair Borgeson expressed his appreciation for the efforts by CEA and ML&P.This is important because of the new standard for avoided cost.Mr.Wick noted most of the effort is from the SCADA representatives of the utilities working very closely together.This is not a simple process. B.Fish Screen Cleaning Mr.Wick reported a chart was emailed to the members showing the draw-down of the lake water is on track with the timing of the project,with a minimal financial impact on lost water to the utilities. Mr.Owens directed the members to the Bradley Lake Fish Water Screen Debris Report included in their packet.He noted additional pictures of debris are contained within the report. The request for proposals (RFP)resulted in four written proposals.GMC Contracting has been awarded the bid.The projected mobilization date is April 5th.The expected finish date is May 5th,but could be extended to June 5th,if necessary.The estimated labor and equipment cost for a May 5th finish date is $241,000.If the project is extended,the additional cost of standby equipment rates will apply.The standby rates are 25%of normal rates,which would add approximately $50,000.Landing craft,fuel deliveries,and fabrication of a backup screen are examples of additional costs of the project.The total project cost is anticipated at $450,000 to $500,000. Mr.Day informed the O&D Committee is committed to this project and passed a resolution that included the lake level should be at 1,070 elevation as of April 15th.Mr.Day is pleased with the status of the project and noted initial cost estimates were above one million dollars. Mr.Owens gave a description of the process for removing the debris from the fish screens. Mr.Thibert asked for the project's biggest risk.Mr.Owens stated the biggest risk is the participants not being able to drain the lake,which leads to postponing the project and not meeting fish water flow requirements. C.Capital Project Mr.Thibert explained the SVC replacement project is approximately $7.2 million.He believes recovering this cost through the R&C Fund would impact rates greater than through financing. Mr.Thibert requested reconsideration of longer-term financing based on the May report from AEA regarding the financial considerations related to the replacement of the SVC. Chair Borgeson agreed it is a good idea to reconsider longer-term financing.Chair Borgeson gave an assignment to the Budget Committee to review options and report back at the next meeting.There were no objections from members.. Mr.Ambrose noted HEA would not support financing that involves an extension of the bonds for the Bradley Project but would be agreeable to an interim fund that is complete before the other matures. 8.NEW BUSINESS A.FY15 Financial Report DRAFT BPMC Minutes 1/29/16 Page 2 of 6 Chair Borgeson requested Mr.Dixon provide the FY15 Financial Report.Mr.Dixon explained the annual financial audit of the operating and revenue funds has been completed.Included in the member packets are the Auditor's Report and the Financial Statements.Mr.Dixon informed the audits include the review of bond indenture requirements and Committee requirements.No adjustments to any of the numbers in the AEA statements were requested.No difficulties were encountered in working with the AEA accountants and there were no exception findings.Mr. Dixon reviewed specific line items of the report. Mr.Thibert asked when and if there is an appropriate time to disclose the 2013-06 Change of Project Operator in a report.Mr.Dixon noted this is a discretionary item and would be appropriate to include in the next report to comply with the two-year notice.Mr.Thibert corrected the report to read static var compensation rather than static variance compensation. Chair Borgeson commented on the positive financial performance and noted most budgeted items came in below their budgeted amounts.He expressed his appreciation for the work in staying under budget.Chair Borgeson asked if there were any significant changes in the cost of project operation from year-to-year.Mr.Dixon noted the focus of this report is to validate the actual costs to the budgeted costs and not a year-to-year comparison. Mr.Johnston asked if it would make more sense to transfer the remaining balance refund due to the utilities to the R&C Fund to help fund the SVC project,rather than the utilities receiving a refund and then providing a contribution to the R&C Fund.Ms.Garner indicated after the motion is approved today,refunds will go out to the utilities next week.She informed the bond indenture provision would also have to be reviewed to ensure a transfer of funds would be in compliance.Mr.Gibson commented each utility accounts for power adjustments and SVC costs differently.Mr.Day informed this suggestion was reviewed previously and there were internal accounting issues for individual utilities regarding the separation of the operating funds and R&C funds.Chair Borgeson requested the Budget Committee review this suggestion for next year and see if the accounting issues can be resolved. MOTION:Mr.Ambrose made a motion to adopt the written motion in the packet associated with Item 8A.Motion seconded by Mr.Thibert. The motion passed unanimously. Chair Borgeson expressed his appreciation to Mr.Dixon and Ms.Garner for their efforts. B.Bradley Management Audit Report Chair Borgeson requested Mr.Hayes provide the Audit Report led by MWH.Mr.Hayes expressed his appreciation to AEA and the Committee for the opportunity to perform the audit and provide opinions.Mr.Hayes explained the scope of the audit,to include a condition assessment,review of agreements,staffing,O&M overview and budgets,capital projects and costs,and license compliance.Mr.Hayes provided an overview of the findings and recommendations.Overall the report found everything within reasonable perimeters. Chair Borgeson requested clarification of the description of an unmanned plant.Mr.Hayes stated unmanned means there is no permanent stationed employee at the plant,even if an employee visits daily. Chair Borgeson asked if this audit reviewed HEA's practice of billing a percentage of time to the project,rather than billing by actual hours.He noted the hours billed on each timesheet are DRAFT BPMC Minutes 1/29/16 Page 3 of 6 exactly the same and the specific hours are not being tracked.Mr.Hayes reported the audit information provided shows HEAis billing by hours.Mr.Ambrose stated hours are billed to the project.The time spent on the project is not recorded by minutes,and is based on the approximation of 24%of Mr.Ambrose's salary and 50%of Mr.Day's salary. Chair Borgeson noted the allocation and tracking of time is necessary so the project has the knowledge and a record of what time is required of management.Chair Borgeson hopes the Budget Committee will instill HEA track their management time comparable to other professionals who track and bill their time. Mr.Hayes suggested utilizing a similar system used by AEA to require timesheets and hours on a weekly basis and the production of a monthly report describing their project activities. Mr.Thibert inquired as to the percentage of third-party contractors conducting maintenance in the Lower 48.Mr.Hayes noted there is a wide variance by project as to what core staff is maintained in-house and what is contracted by a third-party. Chair Borgeson asked for examples of potential contractors for work at the Bradley Project.Mr. Hayes indicated firms like HCMS and AES provide operation and maintenance services.No quotes were received for comparison of the current O&M costs. Mr.!zzo asked what source was used for the benchmark data.Mr.Hayes noted the report contains the five benchmarks applied and consists largely of U.S.facilities,both public and private.Most of the data does not reflect that last two or three years'of operation. Mr.Ambrose asked in Mr.Hayes'experience,if third-party contractors conducting maintenance provide the service at cost or with a margin of profit.Mr.Hayes stated there is always a profit or fee on top of the cost.Mr.Ambrose asked if Mr.Hayes understands HEA provides the maintenance at the cost set by the Committee.Mr.Hayes agreed. Chair Borgeson asked what risks may be increased by changing an operator.Mr.Hayes explained the increase in risk is the lack of familiarity with the plant facility.One of the recommendations is to accelerate the 5-year process of making the plant O&M manuals current. Mr.Ambrose asked for clarification regarding who would be trained under the recommendation for fire brigade training.Mr.Hayes clarified the contract or arrangement for a fire brigade would be made with the City of Homer Fire Department. Chair Borgeson requested recommendations on the continuity of succession management as knowledgeable people retire or move on to other opportunities.Mr.Hayes believes having an apprentice as one of the FTEs is important. Ms.Fisher-Goad requested clarification be provided to AEA as soon as possible regarding the automatic renewal timeline and next steps for renewal or non-renewal of the operator.Chair Borgeson gave an assignment to Mr.Gibson to inform the Committee on making the decision regarding the operator after HEA's five-year contract expires.Mr.Gibson will report at the next meeting and recommends the Committee takes action before July 1st.Notice of termination by either party shall be given two years in advance. 9.COMMITTEE REPORTS A.Budget Committee -Budget to Actuals Update DRAFT BPMC Minutes 1/29/16 Page 4 of 6 Mr.Woolf informed Ms.Garner will present the update.He stated there was nothing unusual in the report.Legal costs were over budget forjustifiable reasons and the year-to-date number for audit expenses shows over budget because the whole year's work has been completed compared to the proportional number listed in the budget. Ms.Garner provided the budget to actuals report.The O&M is under budget by $600,000 to- date.The administration costs that are more than $20,000 over budget are explained in the report. Mr.lzzo requested clarification regarding where to locate the wheeling payments to HEA.Mr. Wick does not believe wheeling payments are in the Bradley budget.Ms.Fisher-Goad believes Chair Borgeson requested at the last meeting that AEA account for the payments to HEA resulting from the implementation of the resolution.Ms.Fisher-Goad stated she emailed members regarding the issue and has not received any responses.Ms.Fisher-Goad indicated the staff time to provide this information would be outside the current Bradley management fee and an additional fee to provide the service would be necessary. Chair Borgeson stated this item will be on the agenda at the next meeting.He asked Mr. Thibert if CEA is making the wheeling payments to HEA.Mr.Thibert indicated this is a good item for discussion at the next meeting. Chair Borgeson asked the Budget Committee to conduct a three-hour budget workshop for the Budget Committee,O&D Committee,and the BPMC Committee.The workshop will be combined with a BPMC meeting and was scheduled for March 4th,beginning at 8:30 a.m.Mr. Ambrose requested an agenda be provided in advance.Mr.Woolf agreed. 10.OPERATORS REPORT Mr.Owens provided the Committee with a written copy of the Operators Report.The unit two outage for the nozzle rebuild was postponed due to the upcoming fish water debris removal contract.The tentative reschedule date for the nozzle rebuild is May 23rd.Mr.Owens informed a comprehensive post-earthquake inspection was completed on the dam and on the facility.No notable damage was found. Mr.Owens advised a fairly comprehensive budget will be presented to the O&D Committee at their next meeting in February.He stated a foreman at Bradley has submitted his resignation due to retirement and the discussion regarding apprentices at Bradley will be considered. 11.COMMITTEE ASSIGNMENTS Chair Borgeson assigned the capital project financing to the Budget Committee.Chair Borgeson assigned Mr.Gibson the articulation of the process regarding the renewal of the operator contract.Chair Borgeson assigned CEA to report back on the payments to HEA under its agenda item at the next meeting. 12.MEMBERS COMMENTS Ms.Fisher-Goad noted AEA sent out a report of AEA/Bradley Lake activities on January 22nd, 2016.She stated the Cook Inlet Aquiculture Association requested the use of the Martin River borrow ponds for sockeye salmon broodstock.AEA is working with the Association to refine the request before it can be presented to the Committee. Mr.Ambrose expressed appreciation for the mitigation work conducted. DRAFT BPMC Minutes 1/29/16 Page 5 of 6 Chair Borgeson expressed appreciation to the presenters. Mr.Thibert expressed appreciation for the Audit Report and Operator Report. 13.NEXT MEETING DATE -TBD The next meeting date will occur March 4th after the budget workshop. 14.ADJOURNMENT There being no further business for the committee,the meeting adjourned at 12:03 p.m. BY: Cory Borgeson,Chair Attest: Sara Fisher-Goad Alaska Energy Authority,Secretary DRAFT BPMC Minutes 1/29/16 Page 6 of 6 \WORKSHOP © Documents YV rw bebe PoniitigOe"e's fae Sane:Se! 7 EE OSE ES aE SE |a fFaetaaliaFY2015 -2017 Summary station Activity Bae4 |ZETA,Labor &Benefits $269,688 «$251,852 $178,668 $130,414 Travel 2,476 26,000 3,262 6,000 Contractual a 2,145 =«6,500 2,000 4,000 Supplies &Materials 129,332 95,000 14,482 16,000 Other 1,085 0 8,194 4,000 Bradley Circuits 31,485 28,746 29,773 29,773 Risk Management Admin 30,000 |0 0 0 Le; PYweaA oS "ie e Fdaaywitsths.Maintenance Projects 2,414 0 0 6) TotalO&M $468,625 $408,098 $236,379 «$190,187 Capital 0 3,600,000 2,492,423 5,665,584 Total $468,625 $4,008,098 $2,728,802 $5,855,771 SPRLETNPP,altmaiee¢SeRAENBORaleS OF ae OBA, Labor &Benefits Travel Contractual Supplies &Materials Other Bradley Circuits Total O&M Capital Total oR Ey Sel Lae baBeretSSELSASAeoeS Le i ee Te ER |REtoyEY2016Bee|Bey, $251,852 _ 26,000 6,900 95,000 28,746 $408,098 _3,600,000 $4,008,098 RF FREESEPRESBDITaNSSalNE IONE,FRET TE $178,668 3,262 2,000 14,482 8,194 29,773 $236,379 2,492,423 $(73,184) (22,738) (4,500) (80,518) 8,194 1,027 $(171,719) (1,107,577) $2,728,802 SS LU es a ir aS ee (1,279,296) Bes CNS RCFeeee, wT8el, USES PERT SUS Aa Ean FESS RSCERACALORTLR Chee eR hit ATA GR SRS Peete es ES Siesta paiFY2016BudgetProjectionVariances eOperations &Maintenance«Labor &Benefits /Travel /Supplies &Materials-$(176,440) ¢The majority of the costs for the replacement of protective relaying devices at Daves CreekSubstationwerechargedagainstFY2015 ¢Contractual /Other -$3,694 ¢Weed control /lodging,fuel,meals ¢Bradley Circuits -$1,027 ¢Unbudgeted Regulatory Cost Charge (RCC) e Capital ¢SVC Replacements -$(1,107,577) «Lowest bid received Te DE ae TE RED re Pe att Mean ts ROE rane Be FE CE EE NOC ie Se GeoBnet Bare a Wt othe decent ae tate Ue eet eth esoeCecheosbawOabeactitaniteAe 68 |BAY 2017204 [SRNS|se Budget iui |ets Labor&Benefits _$251,852 ||$130,414 $(121,438) Travel 26,000 6,000 (20,000) Contractual 6500 |4,000 --(2,500) Supplies &Materials 95,000 |16,000 (79,000) Other - 0 4,000 4,000 Bradley Circuits :28,746 |29,773 1,027 Total O&M $408,098 $190,187 ©$(217,911)(53%) Capital 3,600,000 5,665,584 2,065,584 Total $4,008,098 =$5,855,771 $1,847,673 46% PE LELS SIRI EEE R Cee Me SN SE PET PNA OTE RE 2 ook EST ReEETaiLE,Sa a OT PE iP a | iy La IRE Set Oka cone Me a Se Ae CEE,OR BRS Ne se BEETS ee eS Te A MS et Maat PANS EN iret RY ES INR p ce os Seale eke Beth EW PrN RDWed FY2016 -2017 Budget Variances «Operations &Maintenance ¢Labor &Benefits /Travel /Supplies &Materials -$(220,438) ¢The completion of the replacement of protective relaying devices at Daves Creek Substation ¢Less expected maintenance due to the timing of the SVC Replacement Project ¢Contractual /Other -$1,500 «Weed control,meals ¢Bradley Circuits -$1,027 «Regulatory Cost Charge (RCC) e Capital ¢SVC Replacements -$2,065,584 «Lowest bid received EGET So FETEEGO EAL SFT PLPPSPAT MS Ree ae PR a IE ANE OTH SE ESI RRS Renn TRI tg aa aoa ood ON ae SF Pees WKSHP Tem ? ;"sons toes oe . errar.aa «8 ..,.wae al ; ot Se aA _fae ::ASEiaeeTOs NLeeehyfeatiSealnae7 7 :ay 7 he 5 _sae hes §i . ban 7%se .-oe lot a . * "ie, ae ra ws .=e **.*eee ea,eee " emerar 4Tohtif-_a, " om Bradley Lake Hydroelectric Project Alaska Energy Authority 2017 Budget | |/ «nn .yr.?wwe.oo SR me,ne.oo:el ee *-se 'ae a °rh ets.bd 7 -Oy." tee =-ALASKA Gammm ENERGY AUTHORITY FY2017 AEA Brad ley Hydro Budget 540 FERC Land Use Fees $137,230 $183,000 $279,876 $312,176 71% 556 Snow Measurement $10,000 $10,000 $10,000 $10,000 0% 556 Seismic Service $64,477 $62,000 $60,370 $60,370 0% 556 Stream gauging $296,409 $296,000 $296,000 $310,000 5% 920 Permits $350 $100 $100 $100 0% 920 AEA Admin Fee $200,000 $200,000 $200,000 $200,000 0% 920 Audit $15,500 $116,250 $100,000 $16,500 -85% 920 Legal $22,110 $25,000 $65,000 $25,000 0% /=Gap ENERGY AUTHORITY FY2017 AEA Bradley Hydro Budget 920 Arbitrage $3,630 $3,630 $3,630 $3,630 0% 920 Trust &Account Fees $11,918 $12,300 $12,000 $12,000 0% 924 Property Insurance $510,799 $510,000 $488,912 $500,000 -2% 928 FERC Admin $150,519 $210,000 $200,000 $180,000 -5% 928 Contractual Engineer -$105,747 $125,000 $75,000 $100,000 -20% FERC License Issues 928 Part 12 Inspection SO $55,000 $50,000 $25,000 -55% AEA Total $1,528,689 $1,808,280 $1,845,768 $1,754,770 -3% /=Game ENERGY AUTHORITY FY2017 AEA Bradley Hydro Capital Budget AEA has requested $250,000 to be included in capital projects replace/automate fish water valves &actuators.Valves could then automatically respond to tidewater compliance flows.: | Automation could increase Bradley energy by 5,000 to 10,000 MWh per year. /=Gap ENERGY AUTHORITY FY2017 AEA Bradley Hydro Budget AEA received notice in late February that FERC land fees for the Kenai Peninsula were increasing 71%for Federal FY16. AEA expects to receive the Battle Creek amendment to the Bradley license this summer.Utilities will have estimated annual energy and construction cost to decide if detailed design,environmental plans,and bid documents are to be prepared this year.Additional funding would be needed and is not in the R&C amounts. /GaD ENERGY AUTHORITY WKEHP Them Bradoy Lalo MEA RY ADIT Budget Eilybiisisan (META,ANS FY2015 -2017 Summary fActual Labor &Benefits Travel Contractual Supplies &Materials Equipment &Machinery Training Other Total O&M Capital Total $1,443,752 13,052 322,825 94,964 23,711 26,569 55,562 $1,980,435 786,381 $2,766,816 Avi | Budget | FY;2016 $1,891,370 72,600 1,136,426 184,760 11,500 38,731 30,000 $3,365,387 1,998,070 $5,363,457 Projection $1,786,370 13,000 544,896 134,560 11,500 38,731 30,000 $2,559,057 1,833,070 FY,2017, Budget $1,874,666 126,950 1,047,685 213,358 11,500 49,300 35,695 $4,392,127 $3,359,154 600,000 $3,959,154 FY2016 Budget to Projection Summary BY;2046) Labor &Benefits Travel Contractual Supplies &Materials Equipment &Machinery Training |Other Total O&M Capital Total $1,891,370 72,600 1,136,426 184,760 11,500 38,731 30,000 $3,365,387 1,998,071 -orws $5,363,457 BiY/201c um |sy | $1,786,370 $(105,000) 13,000 (59,600) 544,896 (591,530) 134,560 (50,200) 11,500 0 38,731 0 30,000 0 $2,559,057 -$(806,330) 1,833,071 (165,000) $4,392,127 _$(971,330) area (24%) (18%) FY 2016 Budget Projection O&M «General Maintenance of Overhead Lines -----budgeted each year,expended if needed «$(100,000)Labor &Benefits ¢$(90,000)Contractual ¢$(54,600)Travel ¢Marker Ball Replacement -----defer to FY2017 «$(200,000)Contractual ¢$(5,000)Labor &Benefits ¢$(5,000)Travel ¢Maintenance Projects ©$(21 ,630)Nuka Repair budgeted each year,expended if needed ¢$(20,000)Power Tunnel Maintenance -----budgeted each year,expended if needed «$(24,900)Middle Fork Equipment Shack &Fish Water Design -----defer to FY2017 FY 2016 Budget Projection O&M ¢Contractual ¢$(50,000)Fuel -----budgeted each year,expended if needed ¢$(185,000)Junction Switch Removal -----defer to FY2017 «Supplies &Materials -$(44,200)General Building Repairs -----budgeted each year,expended if needed ¢$(6,000)Fire system in duplex FY 2016 Budget Projection Capital «Reallocate $200,000 from Fish Water Screen Debris Removal to Turbine Nozzle Repair -$(150,000)Halon Fire System Replacement -----defer to FY2017 ¢$(15,000)Weather Stations FY2016 -2017 Summary Labor &Benefits Travel Contractual Supplies &Materials Equipment & Machinery Training Other Total O&M Capital Total $1,891,370 $1,874,666 --$(16,704)(1%) 72,600 126,950 54,350 75% 1,136,426 '1,047,685 (88,741)(8%) 184,760 213,358 28,598 15% 11,500 11,500 0 0% 38,731 49,300 10,569 27% 30,000 35,695 5,695 19% $3,365,387 $3,359,154 $(6,233)0% 1,998,070 600,000 (1,398,070)(70%) $5,363,457 $3,959,154 $(1,404,303)(26%) WKN?Lree Scenario 1 :SVC paid for by R&C Fund ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT 2017 BUDGET DRAFT Date last edited:03/01/16 on Se Mok ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT 2017 Budget Draft Contents Schedule Description Page # Overview of Budget Changes between FY16 Amended Budget and FY17 Proposed Budget 3 Schedule A Budget Summary 4 Schedule A-1 Capital Purchases not funded by R&C 5 Schedule B Operations &Maintenance Budget 6-13 Schedule C Monthly Utility Contributions 14 Schedule D R&C Fund Disbursements and Repayments : 15 2 of 15 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Overview of Budget Changes between FY16 Amended Budget and FY17 Proposed Budget FY16 Amended Budgeted Utility Contributions 19,849,423 Schedule A REVENUES Decrease in projected Interest Earnings 15,000 15,000 EXPENSES Decrease in O&M Operations (277,656) Increase in R&C Fund Repayments 20,919 Increase in Non R&C Capital Projects 235,000 Decrease in Operating Reserve Transfer (45,784) Decrease in Debt Service (68,400) Decrease in projected Arbitrage Transfer (5,131) (141,052) Net change in utility contributions (126,052) FY17 Proposed Budgeted Utility Contributions 19,723,371 3/1/20163:31 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1a-Scenario1-2017 BradleyBudget-DRAFT-030116.xlsxOveRaxye 3 of 15 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Budget Summary Schedule A FY2014 FY2015 FY2016 FY2017 INC(DEC)FRM ACTUALS ACTUALS Amended Proposed PY AMENDED REVENUES,EXPENSES &CHANGES IN SURPLUS Budget Budget BUDGET REVENUES UTILITY CONTRIBUTIONS 16,260,993 16,680,264 19,849,423 19,723,371 (126,052) INTEREST INCOME 1,879,404 1,856,550 1,770,000 1,755,000 (15,000) 18,140,397 18,536,814 21,619,423 21,478,371 (141,052) EXPENSES OPERATIONS 4,142,938 3,977,749 5,581,766 5,304,110 (277,656) RENEWALS/REPLACEMENTS (R&C FUND REPAYMENTS)1,362,236 1,370,494 3,241,864 3,262,783 20,919 NON R&C FUND CAPITAL PURCHASES-SEE A1 193,549 254,039 15,000 250,000 235,000 TRANSFER TO (FROM)OPERATING RESERVE 44,030 160,366 (9,747)(55,531)(45,784) DEBT SERVICE (net of Capital Reserve Reductions)12,104,950 12,475,850 12,494,600 12,426,200 (68,400) ARBITRAGE TRANSFER 292,694 298,316 295,940 290,809 (5,131) 18,140,397 18,536,814 21,619,423 21,478,371 |(141,052) CURRENT YEAR SURPLUS (DEFICIT)0 0 (°](] BEGINNING SURPLUS (DEFICIT)0 0 0 0 ENDING SURPLUS (DEFICIT)0 0 0 0 4 eee ...sei dl BALANCE SHEET ASSETS REVENUE FUND 678,142 431,911 0 0 OPERATING FUND 1,599,575 1,852,035 0 0 RECEIVABLE FROM R&C 279,247 20,212 0 0 OTHER RECEIVABLES 25,865 520,416 0 0 PREPAID EXPENSES 6,205 52,258 0 0 2,589,034 2,876,832 0 0 LIABILITIES &SURPLUS LIABILITIES 1,175,401 1,462,367 0 0 PAYABLE TO UTILITIES O&M 1,134,386 1,394,253 0 9] PAYABLE TO UTILITIES R&C 279,247 20,212 0 0 2,589,034 2,876,832 0 0 Pet eet eee cen Te P| OTHER INFORMATION OPERATING RESERVE *965,734 1,084,100 1,116,353 1,060,822 MONTHLY CONTRIBUTIONS 1,404,594 1,507,894 1,654,119 1,643,614 *Required to be 20%of budgeted operating expense 3/1/20163:31 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1a-Scenario1-2017 BradleyBudget-DRAFT-030116.xisxSch A Page 4 of 15 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Capital Purchases Not Funded by R&C Fund Schedule A-1 FY14 FY15 FY16 FY16 FY17 AMENDED PROJECTED |PROPOSED Capital Project Description ACTUALS ACTUALS BUDGET ACTUALS BUDGET |Comments Replace Office Furniture 7,327 ---- Telephone/Network Upgrade 13,457 ---- Accusonic Flow Meter Monitoring Unit Replacement 16,422 ---- Utility Vehicles §,500 ---- Replace JEM meters with ION meters 23,154 ---- Nuka Diversion Hut 5,636 ---- Weather Stations --15,000 -- Roof Ice Guards for Main Transfomer ----- DCS Security Interface for Data Access -141,703 --- Generator Partial Discharge Monitor 107,012 ---- Surveillance Cameras 15,040 ---- Lube Oil Purification System -47,723 --- Replace 1998 Chevrolet Crew Cab Vehicle -32,306 --- Replace 1990 Ford Single Cab Vehicle -32,306 --- Replace/Automate Fish Water Valves &Actuators ----250,000 [Could save 5,000 MWh per year Total Non R&C Capital Purchases 193,549 254,039 15,000 -250,000 3/1/20163:31 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1a-Scenario1-2017 BradleyBudget-DRAFT-030116.xisxSch A-1 Page 5 of 15 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Operations &Maintenance Budget Summary Budget by Participant Schedule B HEA 3,075,041 HEA 3,052,652 HEA 3,365,387 HEA 3,359,154 CEA 191,274 CEA 553,000 CEA 408,098 CEA 190,187 AEA 1,562,355 AEA 1,814,850 AEA 1,808,280 AEA 1,754,770 Fyi4 Fv1iS FY16 FY17 FY14 FY1S FY16 FY17 Increase Approved (Over)Under|Amended (Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 Budget to date Budget from PY s y by cost type 514,971 535,122 (20,151)--- Labor &Benefits 1,545,880 1,353,077 192,803 1,986,848 1,713,440 273,408 2,143,223 933,022 1,210,201 2,005,079 (138,143) Travel 11,000 13,838 (2,838)35,410 15,528 19,882 98,600 6,675 91,925 132,950 34,350 Training hd :°38,731 26,569 12,162 38,731 7,925 30,806 49,300 10,569 Contractual 797,343 $97,329 200,014 871,380 619,085 252,295 1,180,859 378,082 802,777 1,367,518 161,759 Supplies &Materials 248,919 115,617 133,302 435,919 224,296 211,623 275,760 53,726 222,034 229,358 (46,402) Other Costs 505,330 298,561 206,769 593,697 225,362 368,335 451,746 107,034 344,712 381,644 (70,102) Equipment &Machinery 8,500 3,192 §,308 30,4130 23,711 6,419 33,130 491 32,639 11,500 (21,630) Maintenance Projects 95,790 22,013 73,777 60,000 27,414 32,586 37,900 2,893 35,007 -(13,000) Administrative Costs 1,100,937 1,204,190 (103,253):1,368,387 1,102,344 266,043 1,321,817 §35,888 785,929 1,126,761 (195,056) 4,828,670 4,142,940 685,730 5,420,502 3,977,749 1,442,753 5,581,766 2,025,736 3,556,030 5,304,110 (277,655) FERC 535 -Operation Supervision &Engineering Operations Sup/Eng Bradley Lake Operating Labor &Benefits 268,052 266,237 1,815 291,632 282,780 8,852 304,235 153,586 150,649 299,649 (4,586) Travel 8,200 11,864 (3,661)8,610 12,894 (4,284)9,500 2,839 6,661 10,450 950 Training ---7,904 4,116 3,788 7,904 2,080 §,824 9,300 1,396 Contractual 9,349 10,339 (990)1,445 -1,445 1,445 -1,445 1,400 (45) Supplies &Materials 6,203 390 §,813 6,203 344 5,859 6,203 413 6,090 4,100 (2,103) Bradley Lake Operating Total 291,804 288,827 |2,977 315,794 300,134 15,660 329,287 158,617 170,670 324,899 (4,388) FERC 535 -Operation Supervision &Engineering Total 291,804 288,827 \2,977 315,794 300,134 15,660 329,287 158,617 170,670 324,899 [HEA (4,388) FERC 537 -Hydraulic Expenses | Hydraulic Expenses Bradley Lake Operating Labor &Benefits 91,400 74,298 |97,402 95,056 76,200 18,856 95,273 43,055 §2,218 92,746 (2,527) Contractual 19,504 11,475 8,029 19,504 8,000 11,504 17,180 :17,180 4,000 (13,180) Supplies &Materials 2,608 918 1,690 2,608 -2,608 2,608 1,193 1,415 2,900 292 Bradiey Lake Operating Total 413,512 86,691 26,821 117,168 84,200 32,968 115,064 44,248 70,813 99,646 (15,415) FERC 537 -Hydraulic Expenses Total 113,512 86,691 26,821 117,168 84,200 32,968 115,061 44,248 70,813 99,646 IHEA (15,415) 3/1/20163:31 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1a-Scenario1-2017 BradleyBudget-DRAFT-030116.xIsxSch B Page6of 15 FY14 FY1s FY16 FY17 FY14 FY15 FY16 FY17 Increase Approved (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 Budget to date Budget from PY FERC 538 -Electric Expenses Electric Expenses Bradley Lake Operating Labor &Benefits 197,000 215,557 (18,557)224,000 234,351 (10,351):257,107 116,452 140,654 242,940 (14,167) Travel ---------7,000 7,000 Training :--30,827 18,383 12,444 30,827 §,845 24,982 25,000 (5,827) Contractual 121,169 57,136 64,033 21,342 14,055 7,287 3,342 1,400 1,942 2,000 (1,342) Supplies &Materials 6,232 498 5,734 6,232 2,184 4,048 12,232 1,875 10,357 8,500 (3,732) Bradley Lake Operating Total 324,401 273,191 51,210 282,404 268,973 13,428 303,508 125,573 177,935 285,440 (18,068) FERC 538 -Electric Expenses Total 324,401 273,191 51,210 282,401 268,973 13,428 303,508 125,573 177,935 285,440 JHEA (18,068) FERC 539 -Misc.Hydraulic Power Generation Expenses Misc Hydro Power Exp Bradiey Lake Operating Labor &Benefits 192,168 75,569 116,599 192,000 114,373 77,627 189,473 83,878 105,595 178,991 (10,482) Training -:--4,070 (4,070)---15,000 15,000 Contractual 224,078 173,600 50,478 239,571 142,752 96,819 315,249 104,756 210,493 297,048 (18,201) Supplies &Materials 94,878 §3,658 41,220 94,878 18,473 76,405 22,000 12,263 9,737 17,900 (4,100) Bradley Lake Operating Total §11,124 302,826 208,298 526,449 279,668 246,781 526,722 200,897 325,825 508,939 JHEA (17,783) BRADLEY CIRCUITS/RADIO TO BERNICE LK Other Costs 90,000 90,000 -30,000 28,740 1,260 30,000 14,370 18,630 35,695 5,695 BRADLEY CIRCUITS/RADIO TO BERNICE LK Total 90,000 90,000 -30,000 28,740 1,260 30,000 14,370 15,630 35,695 [HEA 5,695 BRADLEY CIRCUITS BERNICE LK TO ANCH Other Costs 30,000 28,746 1,254 30,000 31,485 (1,485)28,746 14,886 13,860 29,773 1,027 BRADLEY CIRCUITS BERNICE LK TO ANCH Total 30,000 28,746 1,254 30,000 31,485 (1,485)28,746 14,886 13,860 29,773 [CEA 1,027 FERC 539 -Misc.Hydraulic Power Generation Expenses Total 631,124 421,572 209,552 $86,449 339,893 246,556 585,468 230,154 355,314 §74,407 (11,061) FERC S46 -Rents FERC Land Use Fee Bradley Lake Operating Other Costs 175,000 179,565 (4,565)180,000 137,230 42,770 183,000 45,743 137,257 312,176 129,176 Bradley Lake Operating Total 175,000 179,565 (4,565)180,000 137,230 42,770 183,000 45,743 137,257 312,176 129,176 FERC 540 -Rents Total 175,000 179,565 (4,565)180,000 137,230 42,770 183,000 45,743 137,257 312,176 IAEA 129,176 3/1/20163:31 PMH:\Accounting\AEA FY 17 FS Shared Files\Bradley Lake\Budget\1a-Scenario1-2017 BradleyBudget-DRAFT-0301 16.xlsxSch B Page 7 of 15 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Increase Approved (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 |Budget to date Budget from PY FERC 541 -Maintenance Supervision &Engineering Maint Supervision/Eng Bradley Lake Operating Labor&Benefits 171,510 206,626 (35,116)214,230 197,018 17,212 222,118 107,742 114,376 224,284 2,166 Bradley Lake Operating Total 171,510 206,626 (35,116)214.230 197,018 17,212 222,118 107,742 114,376 224,284 2,166 FERC 541 -Maintenance Supervision &Engineering Total 171,510 206,626 (35,116)214,230 197,018 17,212 222,118 107,742 114,376 224,284 JHEA 2,166 FERC 542 -Maintenance of Structures Maintenance of Structures Bradley Lake Operating Labor &Benefits 110,000 74,461 35,539 96,200 75,264 20,936 96,273 50,027 45,247 92,746 (2,527) Contractual :::::.---10,000 10,000 Supplies &Materials 64,273 23,138 41,135 64,273 410,009 54,264 61,273 5,508 55,765 53,713 (7,560) Equipment &Machinery 8,500 3,192 §,308 8,500 10,769 (2,269)11,500 491 11,009 11,500 : Maintenance Projects -:-6,000 -6,000 4,000 1,827 2,173 -(4,000) Bradley Lake Operating Total 182,773 100,792 81,981 174,973 96,042 78,931 172,046 57,852 114,194 167,959 (4,087) FERC 542 -Maintenance of Structures Total 182,773 100,792 81,981 174,973 96,042 78,931 172,046 57,852 114,194 167,959 JHEA (4,087) FERC 543 -Maintenance of Reservoirs,Dams &Waterways Maint Res,Dams,WWays Bradley Lake Operating Labor &Benefits 10,750 276 10,474 49,950 42,309 7,641 51,276 42,790 8,486 50,409 (866) Contractual 2,769 :2,769 28,769 630 28,139 §,200 -5,200 5,200 - Bradley Lake Operating Total 13,519 276 13,243 78,719 42,939 35,780 56,476 42,790 13,686 55,609 (866) BRADLEY NUKA REPAIR Contractual :ba --:----15,000 15,000 Supplies &Materials --::787 (787)----- Equipment &Machinery 21,630 463 21,167 21,630 12,942 8.688 21,630 -21,630 -(21,630) BRADLEY NUKA REPAIR Total 21,630 463 21,167 21,630 13,729 7,901 21,630 :21,630 415,000 (6,630) BRADLEY POWER TUNNEL MAINT (Dam) Contractual 43,260 21,550 21,710 56,000 43,131 12,869 20,000 -20,000 15,000 (5,000) BRADLEY POWER TUNNEL MAINT (Dam)Total 43,260 21,550 21,710 56,000 43,131 12,869 20,000 -20,000 15,000 (5,000) BRADLEY POWER TUNNEL DRAIN CLN/INSP (P/House) Maintenance Projects ---9,000 -9,000 9,000 1,067 --(9,000) BRADLEY POWER TUNNEL DRAIN CLN/INSP (P/House)Total ::-9,000 -9,000 9,000 1,067 --(9,000) FERC 543 -Maintenance of Reservoirs,Dams &Waterways Total 78,409 22,289 56,120 165,349 99,799 65,550 107,106 43,856 63,250 85,609 [HEA (21,496) 3/1/20163:31 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1a-Scenario1-2017 BradleyBudget-DRAFT-0301 16.xisxSch B Page 8 of 15 FY14 FYi5 FY16 FY17 FY14 FY15 FY16 FY17 Increase Approved (Over)Under Amended (Over)Under Amended Actual @ {Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 Budget to date Budget from PY FERC 544 -Maintenance of Electric Plant Maintenance of Elec Plant Bradley Lake Operating Labor &Benefits 365,000 317,817 47,183 379,600 323,757 55,843 381,093 178,949 202,144 370,983 (10,110) Travel 2,800 1,976 824 2,800 158 2,642 3,500 3,173 327 4,500 1,000 Contractual 31,849 7,905 23,944 61,849 33,765 28,084 91,443 66,459 24,984 79,000 (12,443) Supplies &Materials 27,245 14,961 12,284 27,245 20,650 6,595 27,245 7,895 19,350 27,245 - Maintenance Projects --:25,000 25,000 ------ Bradley Lake Operating Total 426,894 342,659 84,235 496,494 403,330 93,164 503,281 256,476 246,805 481,728 (21,553) FERC 544 -Maintenance of Electric Plant Total 426,894 342,659 84,235 496,494 403,330 93,164 503,281 256,476 246,805 481,728 JHEA (21,553) FERC 545 -Maintenance of Misc.Hydraulic Plant Maint of Mise Hydr Plant Bradley Lake Operating Labor &Benefits 92,000 113,365 (21,365)95,680 78,186 17,494 95,273 §3,186 42,088 92,746 (2,527) Contractual 3,900 -3,900 3,900 170 3,730 3,900 -3,900 3,900 - Supplies &Materials 41,281 21,231 20,050 71,281 40,220 31,064 43,000 20,171 22,829 43,000 - Bradley Lake Operating Total 137,181 134,596 2,585 170,861 118,576 52,285 142,173 73,356 68,817 139,646 (2,527) BRADLEY FISH WATER DSGN/MIDDLE FORK SHACK IMPR Contractual 30,900 :30,900 30,900 -30,900 24,900 -24,900 20,000 (4,900) BRADLEY FISH WATER DSGN/MIDDLE FORK SHACK IMPR Total 30,900 -30,900 30,900 -30,900 24,900 -24,900 20,000 (4,900) FERC 545 -Maintenance of Misc.Hydraulic Plant Total 168,081 134,596 33,488 201,761 118,576 83,185 167,073 73,356 93,717 159,646 JHEA (7,427) FERC 556 -System Control &Load Dispatching System Cntl &Load Disp Bradley Lake Operating ; Labor &Benefits 48,000 8,871 39,129 48,000 19,514 28,486 49,000 2,899 46,101 49,502 $02 Contractual 35,500 16,131 19,369 5,000 -5,000 8,500 37,275 (28,775)60,500 §2,000 Supplies &Materials 6,199 825 §,374 6,199 2,297 3,902 6,199 935 5,264 6,000 (199) Bradley Lake Operating Total 89,699 25,827 63,872 59,199 21,811 37,388 63,699 41,109 22,590 116,002 JHEA §2,303 BRADLEY POWERHOUSE PC'S Contractual ---30,500 3,201 27,299 50,000 :50,000 -(50,000) BRADLEY POWERHOUSE PC'S Total ---30,500 3,201 27,299 50,000 -50,000 -[HEA (50,000) BRADLEY DISPATCH REGULATIONS Maintenance Projects ::-20,000 .20,000 ----- BRADLEY DISPATCH REGULATIONS Total ---20,000 -20,000 ----THEA : 3/1/20163:31 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1a-Scenario1-2017 BradleyBudget-DRAFT-030116.xIsxSch B Page 9 of 15 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Increase Approved (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 |Budget to date Budget from PY Snow Measurement Bradley Lake Operating Contractual 10,130 10,000 130 11,000 10,000 1,000 10,000 10,000 -10,000 JAEA - Bradley Lake Operating Tota!10,130 10,000 130 11,000 10,000 1,000 10,000 10,000 -10,000 - Seismic Service Bradley Lake Operating Contractual 56,500 51,678 4,822 60,000 64,477 (4,477)62,000 7,192 54,808 60,370 [AEA (1,630) Bradley Lake Operating Total 56,500 51,678 4,822 60,000 64,477 (4,477)62,000 7,192 54,808 60,370 (1,630) Streamguaging Serv Bradley Lake Operating Contractual 282,725 259,065 23,660 295,000 296,409 (1,409)296,000 150,669 145,331 310,000 JAEA 14,000 Bradley Lake Operating Total 282,725 259,065 23,660 295,000 296,409 (1,409)296,000 150,669 145,331 310,000 14,000 Permits Bradley Lake Operating Contractual 200 250 (50)100 350 (250)100 100 -100 [AEA 5 Bradley Lake Operating Total 200 250 (50)100 350 (250)100 100 -100 - FERC 556 -System Control &Load Dispatching Total 439,254 346,820 92,434 475,799 396,248 79,551 481,799 209,069 272,730 496,472 14,673 FERC 562 -Station Expenses Station Expenses CEA SVC/Substation Maintenance Contract 161,274 344,042 (182,768) Labor &Benefits 300,500 269,688 30,812 251,852 100,366 151,486 130,414 (121,439) Travel 24,000 2,476 21,524 26,000 (31)26,031 6,000 (20,000) Contractual 6,500 2,145 4,355 6,500 230 6,270 4,000 (2,500) Supplies &Materials 157,000 129,332 27,668 95,000 2,519 92,484 16,000 (79,000) Other Costs -1,085 (1,085)-7,034 (7,034)4,000 4,000 Maintenance Projects -2,414 (2,414)----- CEA SVC/Sub ion Mai Contract Total 161,274 344,042 (182,768)488,000 407,140 80,860 -110,118 (110,118)-: FERC 562 -Station Expenses Total 161,274 344,042 (182,768)488,000 407,140 80,860 379,352 110,118 269,234 160,414 [CEA (218,939) 3/1/20163:31 PMH:\Accounting\AEA FY17 FS Shared Files\Bradiey Lake\Budget\1a-Scenario1-2017 BradleyBudget-DRAFT-0301 16.xIsxSch B Page 10 of 15 FY14 FYv15 FY16 FY17 FY14 FY15 FY16 FY17 Increase Approved (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 |Budget to date Budget from PY FERC 571 -Maintenance of Overhead Lines Maint of OH Lines Bradley Lake Operating 353,697 191,080 162,617 Labor &Benefits ::-146,320 94 146,226 179,671 33,351 Travel --:54,600 694 53,906 95,000 40,400 Contractual ---90,000 -90,000 50,000 (40,000) Supplies &Materials ----1,255 (1,255)50,000 50,000 Other Costs 353,697 26,822 326,875 ----- Bradley Lake Operating Total 353,697 191,080 162,617 353,697 26,822 326,875 290,920 2,043 288,877 374,671 83,751 BRADLEY JUNCTION SWITCH REMOVAL Travel .-:>-:--"5,000 5,000 Contractual :::-.----70,000 70,000 Other Costs 210,000 :210,000 ::-210,000 25,000 185,000 :(210,000) BRADLEY JUNCTION SWITCH REMOVAL Total 210,000 -210,000 :-:210,000 25,000 185,000 75,000 (135,000) MARKER BALL REPLACEMENT Labor &Benefits :--:-a 4,929 -4,929 -(4,929) Travel ---:--5,000 -§,000 5,000 : Contractual ---ba --200,000 -200,000 200,000 : MARKER BALL REPLACEMENT Total °----:209,929 -209,929 205,000 (4,929) FERC 571 -Maintenance of Overhead Lines Total 563,697 191,080 372,617 353,697 26,822 326,875 710,849 27,043 683,807 654,671 [HEA (56,178) FERC 920 -Administrative Expense AEA Bradley Fixed Admin Fees Bradley Lake Operating Administrative Costs 200,000 200,000 -200,000 200,000 -200,000 400,000 100,000 200,000 JAEA - Bradley Lake Operating Total 200,000 200,000 -200,000 200,000 -200,000 400,000 100,000 200,000 - Operating Committee Exp-Audit Bradley Lake Operating Administrative Costs 15,200 14,750 450 116,250 15,500 100,750 116,250 88,738 27,512 16,494 JAEA (99,756) Bradley Lake Operating Total 15,200 14,750 450 116,250 15,500 100,750 116,250 88,738 27,512 16,494 (99,756) Operating Committee Exp-Legal Bradley Lake Operating Administrative Costs 25,000 68,151 (43,151)25,000 22,110 2,890 25,000 44,168 (19,168)25,000 JAEA - Bradley Lake Operating Total 25,000 68,151 (43,151)25,000 22,110 2,890 25,000 44,168 (19,168)25,000 - 3/1/20163:31 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1a-Scenario1-2017 BradleyBudget-DRAFT-030116.xisxSch B Page 11 of 15 Fy14 FY15 FYv16 FY17 FY14 FY15 FY16 FY17 increase Approved (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 |Budget to date Budget from PY Operat Committee Exp-Arbitrage Bradley Lake Operating Administrative Costs 5,200 3,630 1,570 5,200 3,630 1,570 3,630 1,815 4,815 3,630 [AEA - Bradley Lake Operating Total 5,200 3,630 1,570 5,200 3,630 1,570 3,630 1,815 1,815 3,630 - Trust &Account Fees Bradley Lake Operating Administrative Costs 12,300 11,918 382 12,300 11,918 382 12,300 §,959 6,341 12,000 JAEA (300) Bradley Lake Operating Total 12,300 11,918 382 12,300 11,918 382 12,300 5,959 6,341 12,000 (300) FERC 920 -Administrative Expense Total 257,700 298,449 (40,749)358,750 253,158 105,592 357,180 240,680 116,500 257,124 (100,056) FERC 924 &925 -Insurance Premiums Insurance Premiums Bradley Lake Operating Administrative Costs 509,100 467,453 41,647 510,000 §10,799 (799)§10,000 240,675 269,325 500,000 [AEA (10,000) Administrative Costs 63,137 52,018 11,119 64,637 52,121 12,516 64,637 26,437 38,200 64,637 [HEA - Bradley Lake Operating Total §72,237 519,471 52,766 §74,637 562,920 11,717 574,637 267,112 307,525 564,637 (10,000) Risk Management Bradley Lake Operating Administrative Costs :-"35,000 30,000 5,000 ----CEA - Bradley Lake Operating Total ---35,000 30,000 5,000 ----- FERC 924 &925 -Insurance Premiums Total 572,237 519,471 52,766 609,637 592,920 16,717 574,637 267,112 307,525 564,637 (10,000) FERC 928 -Regulatory Commission Expenses FERC Admin Fees Administrative Costs 200,000 204,998 (4,998)250,000 150,519 99,481 210,000 -210,000 180,000 JAEA (30,000) Bradley Lake Operating Total 200,000 204,998 (4,998)250,000 150,519 99,481 210,000 -210,000 180,000 (30,000) FERC Related Prof Services FERC Part 12 Inspection Administrative Costs bd :-*--§5,000 -55,000 25,000 [AEA (30,000) Contractual Engineer-FERC license issues Administrative Costs 71,000 181,272 (110,272)150,000 105,747 44,253 125,000 28,096 96,904 100,000 JAEA (25,000) Bradley Lake Operating Total 71,000 181,272 (110,272)150,000 105,747 44,253 180,000 28,096 151,904 125,000 (55,000) FERC 928 -Regulatory Commission Expenses Total 271,000 386,270 (115,270)400,000 256,266 143,734 390,000 28,096 361,904 305,000 (85,000) 3/1/20163:31 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1a-Scenario1-2017 BradleyBudget-DRAFT-030116.xlsxSch B Page 12 of 15 FY14 FY15 FY16 FY17 FY14 FY1S FY16 FY17 Increase Approved (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 |Budget to date Budget from PY FERC 930.2 -Miscellaneous general expenses Training Program and Manual Updates Contractual ---------150,000 [HEA 150,000 Bradley Lake Operating Total ---------150,000 150,000 FERC 930.2 -Miscellaneous general expenses .--------150,000 150,000 Total Bradley Lake Budget 4,828,670 4,142,940 685,730 5,420,502 3,977,749 1,442,753 5,581,766 2,025,736 3,556,030 5,304,110 (277,655) 3/1/20163:31 PMH:\Accounting\AEA FY17 FS Shared Fites\Bradley Lake\Budget\1a-Scenario1-2017 BradleyBudget-DRAFT-030116.xIsxSch B Page13of15 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Monthly Utility Contributions Schedule C POWER PURCHASER CHUGACH ELECTRIC MUNICIPALITY OF ANCHORAGE HOMER ELECTRIC MATANUSKA ELECTRIC GOLDEN VALLEY ELECTRIC CITY OF SEWARD Rounding POWER PURCHASER CHUGACH ELECTRIC MUNICIPALITY OF ANCHORAGE HOMER ELECTRIC MATANUSKA ELECTRIC GOLDEN VALLEY ELECTRIC CITY OF SEWARD FY2015 FY2016 FY2017 FY2016 to PERCENT FY2014 Amended Amended Proposed FY2017 SHARE BUDGET BUDGET BUDGET BUDGET Change 30.4%5,373,084 5,500,800 6,034,236 5,995,896 (38,340) 25.9%4,577,724 4,686,540 5,141,004 5,108,352 (32,652) 12.0%2,120,952 2,171,364 2,381,928 2,366,808 (15,120) 13.8%2,439,096 2,497,068 2,739,216 2,721,828 (17,388) 16.9%2,987,016 3,058,008 3,354,552 3,333,252 (21,300) 1.0%176,748 180,948 198,492 197,232 (1,260) 8 (5)3 8 700.0%17,674,628 18,094,728 19,849,423 19,723,371 (126,052) PERCENT FY2014 FY2015 FY2016 FY2017 FY2017 SHARE MONTHLY MONTHLY MONTHLY MONTHLY Change 30.4%447,757 458,400 502,853 499,658 (3,195) 25.9%381,477 390,545 428,417 425,696 (2,721) 12.0%176,746 180,947 198,494 197,234 (1,260) 13.8%203,258 208,089 228,268 226,819 (1,449) 16.9%248,918 254,834 279,546 277,771 (1,775) 1.0%14,729 15,079 16,541 16,436 (105) 100.0%1,472,885 1,507,894 1,654,119 1,643,614 (10,505) 3/1/20163:31 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1a-Scenario1-2017 BradleyBudget-DRAFT-030116.xlsxSciPGge 14 of 15 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT R&C Fund Di and Schedule D 'Actual 'Actual Actual 'Actual PROJECTED PROJECTED |PROJECTED PROJECTEDActual@ TO REPAY TO REPAY +316"TO REPAY TO REPAYDesertDisburseat08/30/14 Disburse at 6/30/15 Disburse at 06/30/18 Disburse at 08/30/17 Rac FUND PROJECTSGovernor 586,125.63 3,424,331.34 627,738.80 4,052,070.14 0.00 4,052,070.14 0.00 4,052,070.14 Replace RFLS 0.00 251,092.69 0.00 251,092.69 0.00 251,092.69 0.00 251,092.69 Replace Runners 0.00 1,946,732.79 0.00 1,946,732.79 0.00 1,946,732.79 0,00 1,946,732.79 Replace cable from dam to power house 0.00 2,321,922.94 0.00 2,321,922.94 0.00 2,321,922.94 0.00 2,321,922.94 Replace power system stabitizer 0.00 619,205.10 0.00 619,205.10 0.00 619,205.10 0.00 619,205.10 Replace two RTUs 0.00 86,905.27 0.00 86,905.27 0.00 86,905.27 0.00 86,905.27 Culvert Repairs 0.00 675,966.79 0,00 675,966.79 0.00 675,966.79 0.00 675,966.79 Trang Towers Frost Jacking Repairs 0.00 887 596.62 0.00 887,596.62 0.00 887,596.62 0.00 887,596.62 Replace Plant and SCADA Controls 0.00 1,344,683.05 0.00 1,344,683.05 0.00 1,344,683.05 0.00 1,344,683.05 Vibration Monitoring System 0.00 490.00 0.00 490.00 0.00 490.00 0.00 490.00 Battle Creek Feasibility 0.00 0.00 0.00 0.00 0.00 0.00 6.00 0.00 Fire Alarm System Replacement 0.00 0.00 0.00 9.00 0.00 0.00 350,000.00 350,000.00 Battle Creek Diversion 471,070.61 950,728.48 43,605.35 994,333.83 74,722.89 1,066.056.72 0.00 1,066,056.72 Replace Electro-Mechanical Relays 777,303.68 1,277,197.06 0.00 41,277,197.06 0.00 1,277,197.06 0.00 41,277,197.06 Fishwater Screen Debris Removal 0,00 0.00 21,929.45 21,929.45 703,070.55 725,000.00 0.00 725,000.00 Turbine Nozzle Repair 0.00 0.00 96,423.49 96,423.49]1,130,000.00 1,226,423.49 0,00 1,226,423.49 sve Daves Creek|Sok 0.00 0,00 0.00 0.00]2.492,.423.44 2,492,423.44 |§,665,583.97 8,158,007.41 1,834,499.92 13,786 852.13 789,697.09 14,576,549.22 |_4,397,216.88 18,973,766.10 |6,015,583.97 24,989.350.07 Current Year R&C Repayment (1,328,076.00 (1,146,123.00)(4,058.618.35.(3,262,782.74) [Adjust bal to $5 mill (won't be corrected until year end)0,00 0.00 0,00 0.00 Less Interest in Fund Applied to Repayment (313,407.18 {244 582.41)0.00 0.00 Net Transfer from Revenue Fund (1,641,483.18 ___(1,390,705.44)](4,058,.618.35)3,262,782.74' Cumulative Prior Years R&C Repayments {9,884,350.26)(11,346,045.42,{12,716,539.32)(16,775,187.67DuebacktoUtilities179,788.03 20,211.51 0.00 0.00 R&C Cumulative interest (Retained)Applied As Part of Repayment 0.00 00 0.00 |9.00 INet R&C Repayments 9,704,562.23.11,325,833.91}}(12,716,539.32)(18,775,187.67)]INET DUE TO R&C FUND 2,440 806.72 1,860.009.90 2,198,508.4 4,951,40966 R&C FUND CASH FLOW PROJECTION Beginning investment Balance 4,627,751.16 3,015,716.76 3,212,607.68 2,801,391.57 Disbursements-current year (1,857,223.72)(766,797.23)(4,397,216.88)](6,015,583.97; Disbursements-prior year accrued (829,216.26 {177,276.20}(22,899.85)}0.00 R&C Repayment to utilities (767,077.60)(179,788.03){20,211.51 0.00 Due to R&C from revenue fund -debt service transfer 9.00 (69,953.03)(29,506.22)0.00 Current year interest earnings:313,407.18 244,582.41 0.00 0.00 Current year Participants Contributions to R&C 41,328,076.00 1,146,123,00 4,058,618.35 3,262,782.74 Ending investment Balance 3,015,716,76 3,212.607.68 2,801,391.57 43,590.34 Accrued R&C Payable at year end-Due to Utilities|(179,788.03.(20,211.51 0.00 0,00 Accrued due from Revenue fund (debt service transfer)69,953.03 R&C payable back to Revenue fund (99,459.25) Accrued R&C vendor Payable at year end (276,735.45)(22,899.85)0.00 0.005 PROJECTED NET DUE +ENDING INVESTMENT BALANCE §.000.000.00 5,000,000.00 5,000.000.00 §.000.000.00 REPAYMENT AMOUNT $756,665.11 25%all 4 years 4th yr 189,166,28 . '$1,455,830.05 X 25%all 4 years ard yr 363,957.51 [4th yr 363,957.51 : total repaid at 6/30/17 remaining to repay at 7/1/17 FY18 Fy19 FY20 1$1,401,948.53 X 25%all 4 years 2nd yt 350,487.13 [3rd yr 350,487.13 [4th yr 350,487.13 1,401,948.53 . $4,834,499.92 X 25%yr 1]25%yr 2|50%yr 3 fist yr 458,624.98 [2nd yr 458,624.98 [final yr 917,249.96 1,834,499.82 - $789,697.09 X 25%yr 1 |75%yr 2 1st yr 197,424.27 ffinal yr:592,272.82 789,697.09 - $4,397,216.88 X 50%yr 1 |40%yr 2 [10%yr 3 'ist yr 2,198,608.44 [2nd yr 1,758,886.75 3,957,495.19 (439,721.69)439,721.69 $6,015,583.97 x 25%all 4 years ist yr 1,503,895.99 1,503,895.99 (4,511,687,98)-1,503,895.99 1,503,895.99 1,503,895.99 1,362.235.90 1,370,493.90 4,058.618.35 3,262,782.74 (4,951,409.67)_1.943,617,68 1,503,895.99 1,503,895.99 'FY 16 projects reflect and actual for projects dep ig on which is higher (budgeted or actual),so the R&C repayment amount reflects a concervative amount 3/1/20163:31 PMH:\Accounting\AEA FY17 FS Shared F y Li ig 101-2017 BradleyBudget-DRAFT-030116.xisxSch D Page 15 of 15 Scenario 2 :SVC financed by long term debt ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT 2017 BUDGET DRAFT ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT 2017 Budget Draft Contents Schedule Description Page # Overview of Budget Changes between FY16 Amended Budget and FY17 Proposed Budget 3 Schedule A Budget Summary 4 Schedule A-1 Capital Purchases not funded by R&C 5 Schedule B Operations &Maintenance Budget 6-13 Schedule C Monthly Utility Contributions 14 Schedule D R&C Fund Disbursements and Repayments 15 2 of 15 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Overview of Budget Changes between FY16 Amended Budget and FY17 Proposed Budget FY16 Amended Budgeted Utility Contributions 19,849,423 Schedule A REVENUES Increase in projected Interest Earnings (160,000) (160,000) EXPENSES Decrease in O&M Operations (277,656) Decrease in R&C Fund Repayments (2,022,116) Increase in Non R&C Capital Projects 235,000 Decrease in Operating Reserve Transfer (45,784) Decrease in Debt Service (Bonds)(68,400) Increase in Debt Service (SVC Project Debt)548,198 Decrease in projected Arbitrage Transfer (5,131) (1,635,889) Net change in utility contributions (1,795,889) FY17 Proposed Budgeted Utility Contributions 18,053,534 3/1/20163:28 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1b-Scenario2-2017 BradleyBudget-DRAFT-030116.xlsxOveRage 3 of 15 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Budget Summary Schedule A FY2014 FY2015 FY2016 FY2017 INC(DEC)FRM ACTUALS ACTUALS Amended Proposed PY AMENDED REVENUES,EXPENSES &CHANGES IN SURPLUS Budget Budget BUDGET REVENUES UTILITY CONTRIBUTIONS 16,260,993 16,680,264 19,849,423 18,053,534 (1,795,889) INTEREST INCOME 1,879,404 1,856,550 1,770,000 1,930,000 160,000 18,140,397 18,536,814 21,619,423 19,983,534 (1,635,889) EXPENSES OPERATIONS 4,142,938 3,977,749 5,581,766 5,304,110 (277,656) RENEWALS/REPLACEMENTS (R&C FUND REPAYMENTS)1,362,236 1,370,494 3,241,864 1,219,748 (2,022,116) NON R&C FUND CAPITAL PURCHASES-SEE At 193,549 254,039 45,000 250,000 235,000 TRANSFER TO (FROM)OPERATING RESERVE 44,030 160,366 (9,747)(55,531)(45,784) DEBT SERVICE (net of Capital Reserve Reductions)12,104,950 12,475,850 12,494,600 12,426,200 (68,400) DEBT SERVICE (SVC Project Debt)0 0 0 548,198 548,198 ARBITRAGE TRANSFER 292,694 298,316 295,940 290,809 (5,131) 18,140,397 18,536,814 21,619,423 19,983,534 |(1,635,889) CURRENT YEAR SURPLUS (DEFICIT)(°)0 0 0 BEGINNING SURPLUS (DEFICIT)0 0 0 0 ENDING SURPLUS (DEFICIT)0 0 0 0 14 vaste ri BALANCE SHEET ASSETS REVENUE FUND 678,142 431,911 0 0 OPERATING FUND 1,599,575 1,852,035 (¢)0 RECEIVABLE FROM R&C 279,247 20,212 0 0 OTHER RECEIVABLES 25,865 520,416 0 0 PREPAID EXPENSES 6,205 52,258 0 0 2,589,034 2,876,832 y 0 LIABILITIES &SURPLUS LIABILITIES 1,175,401 1,462,367 0 0 PAYABLE TO UTILITIES O&M 1,134,386 1,394,253 0 (*] PAYABLE TO UTILITIES R&C 279,247 20,212 [}(] 2,589,034 2,876,832 0 0 yt eda AO te 4 OTHER INFORMATION OPERATING RESERVE *965,734 1,084,100 1,116,353 1,060,822 MONTHLY CONTRIBUTIONS 1,404,594 1,507,894 1,654,119 1,504,461 *Required to be 20%of budgeted operating expense 3/1/20163:28 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1b-Scenario2-2017 BradleyBudget-DRAFT-030116.xIsxSch A Page 4 of 15 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Capital Purchases Not Funded by R&C Fund Schedule A-1 FY14 FY15 FY16 FY16 FY17 AMENDED @ 12/31/15 |PROPOSED Capital Project Description ACTUALS ACTUALS BUDGET ACTUALS BUDGET [Comments Replace Office Furniture 7,327 ---|- Telephone/Network Upgrade 13,457 ---- Accusonic Flow Meter Monitoring Unit Replacement 16,422 ---- Utility Vehicles 5,500 ---- Replace JEM meters with ION meters 23,154 ---- Nuka Diversion Hut 5,636 ---- Weather Stations --15,000 -- Roof Ice Guards for Main Transfomer ----- DCS Security Interface for Data Access -141,703 --- Generator Partial Discharge Monitor 107,012 ---- Surveillance Cameras 15,040 ---. Lube Oil Purification System -47,723 --- Replace 1998 Chevrolet Crew Cab Vehicle -32,306 --- Replace 1990 Ford Single Cab Vehicle -32,306 --- Replace/Automate Fish Water Valves &Actuators ----250,000 [Could save 5,000 MWh per year Total Non R&C Capital Purchases 193,549 254,039 15,000 -250,000 3/1/20163:28 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1b-Scenario2-2017 BradleyBudget-DRAFT-030116.xlsxSch A-1 Page 5 of 15 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Operations &Maintenance Budget Summary Budget by Participant Schedule B HEA 3,075,041 HEA 3,052,652 HEA 3,365,387 HEA 3,359,154 CEA 191,274 CEA 553,000 CEA 408,098 CEA 190,187 AEA 1,562,355 AEA 1,814,850 AEA 1,808,280 AEA 1,754,770 FY14 FY15 FY16 FY17 FY14 FYiS FY16 FY17 Increase Approved (Over)Under|Amended (Over)Under Amended Actual @ {Over}Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 |Budget to date Budget from PY Summary by cost type 514,971 §35,122 (20,151)--- Labor &Benefits 1,545,880 4,353,077 192,803 1,986,848 1,713,440 273,408 2,143,223 933,022 1,210,201 2,005,079 (138,143) Travel 11,000 13,838 (2,838)35,410 15,528 19,882 98,600 6,675 91,925 132,950 34,350 Training ---38,731 26,569 12,162 38,731 7,925 30,806 49,300 10,569 Contractual 797,343 597,329 200,014 871,380 619,085 252,295 1,180,859 378,082 802,777 1,367,518 161,759 Supplies &Materials 248,919 115,617 133,302 435,919 224,296 211,623 275,760 §3,726 222,034 229,358 (46,402) Other Costs 505,330 298,561 206,769 593,697 225,362 368,335 451,746 107,034 344,712 381,644 (70,102) Equipment &Machinery 8,500 3,192 §,308 30,130 23,711 6419 33,130 491 32,639 11,500 (21,630) Maintenance Projects 95,790 22,013 73,777 60,000 27,414 32,586 37,900 2,893 35,007 -(13,000) Administrative Costs 1,100,937 1,204,190 (103,253)1,368,387 1,102,344 266,043 1,321,817 535,888 785,929 1,126,761 (195,056) 4,828,670 4,142,940 685,730 5,420,502 3,977,749 1,442,753 5,581,766 2,025,736 3,556,030 5,304,110 (277,655) FERC 535 -Operation Supervision &Engineering Operations Sup/Eng Bradley Lake Operating Labor &Benefits 268,052 266,237 1,815 291,632 282,780 8,852 304,235 153,586 150,649 299,649 (4,586) Travel 8,200 11,861 (3,661)8,610 12,894 (4,284)9,500 2,839 6,661 10,450 950 Training ---7,904 4,116 3,788 7,904 2,080 §,824 9,300 1,396 Contractual 9,349 10,339 (990)1,445 -1,445 1,445 -1,445 1,400 (45) Supplies &Materials 6,203 390 §,813 6,203 344 5,859 6,203 113 6,090 4,100 (2,103) Bradley Lake Operating Total 291,804 288,827 2,977 315,794 300,134 15,660 329,287 158,617 170,670 324,899 (4,388) FERC 535 -Operation Supervision &Engineering Total 291,804 288,827 2,977 315,794 300,134 15,660 329,287 158,617 170,670 324,899 |HEA (4,388) FERC 537 -Hydraulic Expenses Hydraulic Expenses Bradley Lake Operating Labor &Benefits 91,400 74,298 17,102 95,056 76,200 18,856 95,273 43,055 52,218 92,746 (2,527) Contractual 19,504 11,475 8,029 19,504 8,000 11,504 17,180 -17,180 4,000 (13,180) Supplies &Materials 2,608 918 1,690 2,608 -2,608 2,608 1,193 1,415 2,900 292 Bradley Lake Operating Total 113,512 86,691 26,821 117,168 84,200 32,968 115,061 44,248 70,813 99,646 (15,415) FERC 537 -Hydraulic Expenses Total 113,512 86,691 26,821 117,168 84,200 32,968 115,061 44,248 70,813 99,646 [HEA (15,415) 3/1/20163:28 PMH:\Accounting\AEA FY 17 FS Shared Files\Bradley Lake\Budget\1b-Scenario2-2017 BradleyBudget-DRAFT-030116.xIsxSch B Page 6 of 15 FY14 Fvi5 FY16 FY17 FY14 FY15 FY16 FY17 increase Approved (Over)Under Amended {Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 |Budget to date Budget from PY FERC 538 -Electric Expenses Electric Expenses Bradley take Operating Labor &Benefits 197,000 218,557 (18,557)224,000 234,351 (10,351)257,107 116,452 140,654 242,940 (14,167) Travel :::-:----7,000 7,000 Training --fd 30,827 18,383 12,444 30,827 5,845 24,982 25,000 (5,827) Contractual 121,169 57,136 64,033 21,342 14,055 7,287 3,342 1,400 1,942 2,000 (1,342) Supplies &Materials 6,232 498 5,734 6,232 2,184 4,048 12,232 1,875 10,357 8,500 (3,732) Bradley Lake Operating Totat 324,401 273,191 51,210 282,401 268,973 13,428 303,508 125,573 177,935 285,440 (18,068) FERC 538 -Electric Expenses Total 324,401 273,191 51,210 282,401 268,973 13,428 303,508 125,573 177,935 285,440 JHEA (18,068) FERC 539 -Misc.Hydraulic Power Generation Expenses Misc Hydro Power Exp Bradley Lake Operating Labor &Benefits 192,168 75,569 116,599 192,000 114,373 77,627 189,473 83,878 105,595 178,991 (10,482) Training -:--4,070 (4,070)---15,000 15,000 Contractual 224,078 173,600 80,478 239,571 142,752 96,819 315,249 104,756 210,493 297,048 (18,201) Supplies &Materials 94,878 53,658 41,220 94,878 18,473 76,405 22,000 12,263 9,737 17,900 (4,100) Bradley Lake Operating Total $11,124 302,826 208,298 526,449 279,668 246,781 §26,722 200,897 325,825 508,939 }HEA (17,783) BRADLEY CIRCUITS/RADIO TO BERNICE LK Other Costs $0,000 90,000 -30,000 28,740 1,260 30,000 14,370 15,630 35,695 5,695 BRADLEY CIRCUITS/RADIO TO BERNICE LK Total 90,000 90,000 -30,000 28,740 1,260 30,000 14,370 15,630 35,695 [HEA 5,695 BRADLEY CIRCUITS BERNICE LK TO ANCH Other Costs 30,000 28,746 1,254 30,000 31,485 (1,485)28,746 14,886 13,860 29,773 1,027 BRADLEY CIRCUITS BERNICE LK TO ANCH Total 30,000 28,746 1,254 30,000 31,485 (1,485)28,746 14,886 13,860 29,773 [CEA 1,027 [FERC 539 -Misc.Hydraulic Power Generation Expenses Total 631,124 421,572 209,552 586,449 339,893 246,556 585,468 230,154 355,314 574,407 (11,061) FERC S40 -Rents FERC Land Use Fee Bradley Lake Operating Other Costs 175,000 179,565 (4,565)180,000 137,230 42,770 483,000 45,743 137,257 312,176 129,176 Bradley Lake Operating Total 175,000 179,565 (4,565)180,000 137,230 42,770 183,000 45,743 137,257 312,176 129,176 FERC 540 -Rents Total 175,000 179,565 (4,565)180,000 137,230 42,770 183,000 45,743 137,257 312,176 JAEA 129,176 3/1/20163:28 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1b-Scenario2-2017 BradleyBudget-DRAFT-030116.xIsxSch B Page 7 of 15 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Increase Approved (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 Budget to date Budget from PY {FERC $41 -Maintenance Supervision &Engineering Maint Supervision/Eng Bradley Lake Operating Labor &Benefits 171,510 206,626 (35,116)214,230 197,018 17,212 222,118 107,742 114,376 224,284 2,166 Bradley Lake Operating Total 171,510 206,626 (35,116)214,230 197,018 17,212 222,118 107,742 114,376 224,284 2,166 FERC 541 -Maintenance Supervision &Engineering Total 171,510 206,626 (35,116)214,230 197,018 17,212 222,118 107,742 114,376 224,284 [HEA 2,166 FERC S42 -Maintenance of Structures Maintenance of Structures Bradley Lake Operating Labor &Benefits 110,000 74,461 35,539 96,200 75,264 20,936 95,273 50,027 45,247 92,746 (2,527) Contractual ---------10,000 10,000 Supplies &Materials 64,273 23,138 41,135 64,273 10,009 54,264 61,273 5,508 55,765 53,713 (7,560) Equipment &Machinery 8,500 3,192 5,308 8,500 10,769 (2,269)11,500 491 11,009 11,500 - Maintenance Projects -::6,000 -6,000 4,000 1,827 2,173 a (4,000) Bradley Lake Operating Total 182,773 100,792 81,981 174,973 96,042 78,931 172,046 §7,852 114,194 167,959 (4,087) FERC 542 -Maintenance of Structures Total 182,773 100,792 81,981 174,973 96,042 78,931 172,046 57,852 114,194 167,959 [HEA (4,087) FERC 543 -Maintenance of Reservoirs,Dams &Waterways Maint Res,Dams,WWays Bradley Lake Operating Labor &Benefits 10,750 276 10,474 49,950 42,309 7,641 51,276 42,790 8,486 50,409 (866) Contractual 2,769 :2,769 28,769 630 28,139 5,200 -§,200 5,200 - Bradley Lake Operating Total 13,519 276 13,243 78,719 42,939 35,780 56,476 42,790 13,686 55,609 (866) BRADLEY NUKA REPAIR Contractual ----*:-:-15,000 15,000 Supplies &Materials ---787 (787)----- Equipment &Machinery 21,630 463 21,167 21,630 12,942 8,688 21,630 -21,630 -(21,630) BRADLEY NUKA REPAIR Total 21,630 463 21,167 21,630 13,729 7,901 21,630 -21,630 15,000 (6,630) BRADLEY POWER TUNNEL MAINT (Dam) Contractual 43,260 21,550 21,710 56,000 43,131 12,869 20,000 -20,000 15,000 (5,000) BRADLEY POWER TUNNEL MAINT (Dam)Total 43,260 21,550 21,710 56,000 43,131 12,869 20,000 .20,000 15,000 (5,000) BRADLEY POWER TUNNEL DRAIN CLN/INSP (P/House) Maintenance Projects ---9,000 -9,000 9,000 1,067 --(9,000) BRADLEY POWER TUNNEL DRAIN CLN/INSP (P/House)Total -::9,000 -9,000 9,000 1,067 --(9,000) FERC 543 -Maintenance of Reservoirs,Dams &Waterways Total 78,409 22,289 56,120 165,349 99,799 65,550 107,106 43,856 63,250 85,609 |HEA (21,496) 3/1/20163:28 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1b-Scenario2-2017 BradleyBudget-DRAFT-030116.xIsxSch B Page8of15 FY14 FY15 FY16 FY17 FY14 FY1S FY16 FY17 Increase Approved (Over)Under|Amended (Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 |Budget to date Budget from PY FERC 544 -Maintenance of Electric Plant Maintenance of Elec Plant Bradley Lake Operating Labor &Benefits 365,000 317,817 47,183 379,600 323,757 §5,843 381,093 178,949 202,144 370,983 (10,110) Travel 2,800 1,976 824 2,800 158 2,642 3,500 3,173 327 4,500 1,000 Contractual 31,849 7,905 23,944 61,849 33,765 28,084 91,443 66,459 24,984 79,000 (12,443) Supplies &Materials 27,245 14,961 12,284 27,245 20,650 6,595 27,245 7,895 19,350 27,245 - Maintenance Projects ---25,000 25,000 ------ Bradley Lake Operating Total 426,894 342,659 84,235 496,494 403,330 93,164 503,281 256,476 246,805 484,728 (21,553) FERC 544 -Maintenance of Electric Plant Total 426,894 342,659 84,235 496,494 403,330 93,164 503,281 256,476 246,805 481,728 JHEA (21,553) FERC 545 -Maintenance of Misc.Hydraulic Plant Maint of Mise Hydr Plant Bradley Lake Operating Labor &Benefits 92,000 413,365 (21,365)95,680 78,186 17,494 95,273 53,186 42,088 92,746 (2,527) Contractual 3,900 -3,900 3,900 170 3,730 3,900 -3,900 3,900 : Supplies &Materials 41,281 21,231 20,050 71,281 40,220 31,061 43,000 20,171 22,829 43,000 - Bradley Lake Operating Total 137,181 134,596 2,585 170,861 118,576 §2,285 142,173 73,356 68,817 139,646 (2,527) BRADLEY FISH WATER DSGN/MIDDLE FORK SHACK IMPR Contractual 30,900 -30,900 30,900 -30,900 24,900 -24,900 20,000 (4,900) BRADLEY FISH WATER DSGN/MIDDLE FORK SHACK IMPR Total 30,900 -30,900 30,900 -30,900 24,900 -24,900 20,000 (4,900) FERC 545 -Maintenance of Misc.Hydraulle Plant Total 168,081 134,596 33,485 201,761 118,576 83,185 167,073 73,356 93,717 159,646 JHEA (7,427) FERC 556 -System Control &Load Dispatching System Cnt!&Load Disp Bradley Lake Operating Labor &Benefits 48,000 8,871 39,129 48,000 19,514 28,486 49,000 2,899 46,101 49,502 502 Contractual 35,500 16,131 19,369 5,000 -5,000 8,500 37,275 (28,775)60,500 52,000 Supplies &Materials 6,199 825 5,374 6,199 2,297 3,902 6,199 935 5,264 6,000 (199) Bradley Lake Operating Total 89,699 25,827 63,872 59,199 21,811 37,388 63,699 41,109 22,590 116,002 JHEA §2,303 BRADLEY POWERHOUSE PC'S Contractual :--30,500 3,201 27,299 50,000 -50,000 -(50,000) BRADLEY POWERHOUSE PC'S Total -:-30,500 3,201 27,299 50,000 :50,000 -HEA (50,000) BRADLEY DISPATCH REGULATIONS Maintenance Projects ---20,000 -20,000 ----- BRADLEY DISPATCH REGULATIONS Total ---20,000 -20,000 :--- |JHEA - 3/1/20163:28 PMH:\Accounting\AEA FY17 FS Shared Files\Bradiey Lake\Budget\1b-Scenario2-2017 BradleyBudget-DRAFT-0301 16.xisxSch B Page9of15 FY14 FyisS FY16 FY17 FY14 FY15 FY16 FY17 Increase Approved (Over)Under|Amended {Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 Budget to date Budget from PY Snow Measurement Bradley Lake Operating Contractual 10,130 10,000 130 11,000 10,000 1,000 10,000 10,000 -10,000 JAEA - Bradley Lake Operating Total 10,130 10,000 130 11,000 10,000 1,000 10,000 10,000 -10,000 - Seismic Service Bradley Lake Operating Contractual 56,500 51,678 4,822 60,000 64,477 (4,477)62,000 7,192 54,808 60,370 JAEA (1,630) Bradley Lake Operating Total 56,500 51,678 4,822 60,000 64,477 (4,477)62,000 7,192 54,808 60,370 (1,630) Streamguaging Serv Bradley Lake Operating Contractual 282,725 259,065 23,660 295,000 296,409 (1,409)296,000 150,669 145,331 310,000 JAEA 14,000 Bradley Lake Operating Total 282,725 259,065 23,660 295,000 296,409 (1,409)296,000 150,669 145,331 310,000 14,000 Permits Bradley Lake Operating Contractual 200 250 (50)100 350 (250)100 100 :100 JAEA - Bradley Lake Operating Total 200 250 (50)400 350 (250)100 100 -100 - FERC 556 -System Control &Load Dispatching Total 439,254 346,820 92,434 475,799 396,248 79,551 481,799 209,069 272,730 496,472 14,673 FERC S62 -Station Expenses Station Expenses CEA SVC/Substation Maintenance Contract 161,274 344,042 (182,768) Labor &Benefits 300,500 269,688 30,812 251,852 100,366 151,486 130,414 (121,439) Travel 24,000 2,476 21,524 26,000 (31)26,031 6,000 (20,000) Contractual 6,500 2,145 4,355 6,500 230 6,270 4,000 (2,500) Supplies &Materials 157,000 129,332 27,668 95,000 2,519 92,481 16,000 (79,000) Other Costs -1,085 (1,085)-7,034 (7,034)4,000 4,000 Maintenance Projects -2,414 (2,414)--”-- CEA SVC/Substation Maintenance Contract Total 161,274 344,042 (182,768)488,000 407,140 80,860 -110,118 (110,118)-- FERC 562 -Station Expenses Total 161,274 344,042 (182,768)488,000 407,140 80,860 379,352 110,118 269,234 160,414 |CEA (218,939) 3/1/20163:28 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1b-Scenario2-2017 BradleyBudget-DRAFT-030116.xIsxSch B Page 10 of 15 FY14 FY1S FY16 FY17 FY14 FY1S FY16 FY17 Increase Approved (Over)Under'Amended (Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 |Budget to date Budget from PY FERC 571 -Maintenance of Overhead Lines Maint of OH Lines Bradley Lake Operating 353,697 191,080 162,617 Labor &Benefits ---146,320 94 146,226 179,671 33,351 Travel :--54,600 694 53,906 95,000 40,400 Contractual ---90,000 -90,000 50,000 (40,000) Supplies &Materials ----1,255 (1,255)50,000 50,000 Other Costs 353,697 26,822 326,875 ----: Bradley Lake Operating Total 353,697 191,080 162,617 353,697 26,822 326,875 290,920 2,043 288,877 374,671 83,751 BRADLEY JUNCTION SWITCH REMOVAL Travel -:-------5,000 5,000 Contractual -:.---:--70,000 70,000 Other Costs 210,000 -210,000 ---210,000 25,000 185,000 :(210,000) BRADLEY JUNCTION SWITCH REMOVAL Total 210,000 -210,000 ---210,000 25,000 185,000 75,000 (135,000) MARKER BALL REPLACEMENT Labor &Benefits ------4,929 -4,929 -(4,929) Travel ------5,000 -5,000 5,000 - Contractual :--:--200,000 -200,000 200,000 - MARKER BALL REPLACEMENT Total ------209,929 -209,929 205,000 (4,929) FERC 571 -Maintenance of Overhead Lines Total 563,697 191,080 372,617 353,697 26,822 326,875 710,849 27,043 683,807 654,671 JHEA (56,178) FERC 920 -Administrative Expense AEA Bradley Fixed Admin Fees Bradley Lake Operating Administrative Costs 200,000 200,000 -200,000 200,000 -200,000 100,000 100,000 200,000 JAEA - Bradley Lake Operating Total 200,000 200,000 -200,000 200,000 -200,000 400,000 400,000 200,000 - Operating Committee Exp-Audit Bradley Lake Operating Administrative Costs 15,200 14,750 450 116,250 15,500 100,750 116,250 88,738 27,512 16,494 JAEA (99,756) Bradley Lake Operating Total 15,200 14,750 450 116,250 15,500 100,750 116,250 88,738 27,512 16,494 (99,756) Operating Committee Exp-Legal Bradiey Lake Operating Administrative Costs 25,000 68,151 (43,151)25,000 22,110 2,890 25,000 44,168 (19,168)25,000 JAEA - Bradley Lake Operating Total 25,000 68,151 (43,151)25,000 22,110 2,890 25,000 44,168 (19,168)25,000 - 3/1/20163:28 PMH:\Accounting\AEA FY17 FS Shared Files\Bradiey Lake\Budget\1b-Scenario2-2017 BradleyBudget-DRAFT-030116.xisxSch B Page11of15 FY14 FY15 FY16 FY17 FY14 FY15 FY16 FY17 Increase Approved (Over)Under Amended (Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 |Budget to date Budget from PY Operat Committee Exp-Arbitrage Bradley Lake Operating Administrative Costs 5,200 3,630 1,570 5,200 3,630 1,570 3,630 1,815 1,815 3,630 JAEA - Bradley Lake Operating Total §,200 3,630 1,570 5,200 3,630 1,570 3,630 1,815 1,815 3,630 - Trust &Account Fees Bradley Lake Operating Administrative Costs 12,300 11,918 382 12,300 14,918 382 12,300 5,959 6,341 12,000 JAEA (300) Bradley Lake Operating Total 12,300 11,918 382 12,300 11,918 382 12,300 5,959 6,341 12,000 (300) FERC 920 -Administrative Expense Total 257,700 298,449 (40,749)358,750 253,158 105,592 357,180 240,680 116,500 257,124 (100,056) FERC 924 &925 -insurance Premiums Insurance Premiums Bradley Lake Operating Administrative Costs 509,100 467,453 41,647 510,000 510,799 (799)510,000 240,675 269,325 500,000 [AEA (10,000) Administrative Costs 63,137 52,018 11,119 64,637 52,121 12,516 64,637 26,437 38,200 64,637 [HEA - Bradley Lake Operating Total 872,237 519,471 52,766 574,637 562,920 11,717 574,637 267,112 307,525 564,637 (10,000) Risk Management Bradiey Lake Operating Administrative Costs ---35,000 30,000 5,000 ----ICEA - Bradley Lake Operating Total ---35,000 30,000 §,000 ----- FERC 924 &925 -Insurance Premiums Total $72,237 519,471 52,766 609,637 592,920 16,717 574,637 267,112 307,525 564,637 (10,000) FERC928-Regul yc ission Exp FERC Admin Fees Administrative Costs 200,000 204,998 (4,998)250,000 150,519 99,481 210,000 -210,000 180,000 [AEA (30,000) Bradiey Lake Operating Total 200,000 204,998 (4,998)250,000 150,519 99,481 210,000 -210,000 180,000 (30,000) FERC Related Prof Services FERC Part 12 Inspection Administrative Costs :::-:.§5,000 -§5,000 25,000 JAEA (30,000) Contractual Engineer-FERC license issues Administrative Costs 71,000 181,272 (110,272)150,000 105,747 44,253 125,000 28,096 96,904 100,000 [AEA (25,000) Bradley Lake Operating Total 71,000 181,272 (110,272)150,000 105,747 44,253 180,000 28,096 151,904 125,000 (55,000) FERC 928 -Regul y Commission Exp Total 271,000 386,270 (115,270)400,000 256,266 143,734 390,000 28,096 361,904 305,000 (85,000) 3/1/20163:28 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1b-Scenario2-2017 BradleyBudget-DRAFT-030116.xisxSch B Page 12 of 15 FY14 Fv1i5 FY16 FY17 FY14 FY15 FYi6 FY17 Increase Approved {Over}Under|Amended (Over)Under Amended Actual @ (Over)Under Proposed (Decrease) Budget Actual Budget Budget Actual Budget to date Budget 12/31/15 |Budget to date Budget from PY FERC 930.2 -Miscellaneous general expenses Training Program and Manual Updates Contractual ---------150,000 JHEA 150,000 Bradley Lake Operating Total ---.-----150,000 150,000 FERC 930.2 -Miscell general exp:--.------150,000 150,000 Total Bradley Lake Budget 4,828,670 4,142,940 685,730 5,420,502 3,977,749 1,442,753 5,581,766 2,025,736 3,556,030 5,304,110 (277,655) 3/1/20163:28 PMH:\Accounting\AEA FY 17 FS Shared Files\Bradiey Lake\Budget\1b-Scenario2-2017 BradleyBudget-DRAFT-030116.xisxSch B Page 13 of 15 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT Monthly Utility Contributions Schedule C POWER PURCHASER CHUGACH ELECTRIC MUNICIPALITY OF ANCHORAGE HOMER ELECTRIC MATANUSKA ELECTRIC GOLDEN VALLEY ELECTRIC CITY OF SEWARD Rounding POWER PURCHASER CHUGACH ELECTRIC MUNICIPALITY OF ANCHORAGE HOMER ELECTRIC MATANUSKA ELECTRIC GOLDEN VALLEY ELECTRIC CITY OF SEWARD FY2015 FY2016 FY2017 FY2016 to PERCENT FY2014 Amended Amended Proposed FY2017 SHARE BUDGET BUDGET BUDGET BUDGET Change 30.4%5,373,084 5,500,800 6,034,236 §,488,272 (545,964) 25.9%4,577,724 4,686,540 5,141,004 4,675,860 (465,144) 12.0%2,120,952 2,171,364 2,381,928 2,166,420 (215,508) 13.8%2,439,096 2,497,068 2,739,216 2,491,392 (247,824) 16.9%2,987,016 3,058,008 3,354,552 3,051,048 (303,504) 1.0%176,748 180,948 198,492 180,540 (17,952) 8 (5)2 7 100.0%17,674,628 18,094,728 19,849,423 18,053,534 (1,795,889) PERCENT FY2014 FY2015 FY2016 FY2017 FY2017 SHARE MONTHLY MONTHLY MONTHLY MONTHLY Change 30.4%447,757 458,400 502,853 457,356 (45,497) 25.9%381,477 390,545 428,417 389,655 (38,762) 12.0%176,746 180,947 198,494 180,535 (17,959) 13.8%203,258 208,089 228,268 207,616 (20,652) 16.9%248,918 254,834 279,546 254,254 (25,292) 1.0%14,729 15,079 16,541 15,045 (1,496) 100.0%1,472,885 1,507,894 1,654,119 1,504,461 (149,658) 3/1/20163:28 PMH:\Accounting\AEA FY17 FS Shared Files\Bradley Lake\Budget\1b-Scenario2-2017 BradleyBudget-DRAFT-030116.xlsxSciP@ge 14 of 15 ALASKA ENERGY AUTHORITY BRADLEY LAKE HYDROELECTRIC PROJECT R&C Fund Di and Schedule D 'Actual 'Actual Ketual Actual PROJEGTED PROJECTED |PROJECTED PROJECTED |&Actual @ TO REPAY TO REPAY AMSNS*TO REPAY TO REPAY Description Disburse at 06/3014 Disburse at 08/3015 Disburse at 06/30/18 Disburse at 06/30/17 IR&C FUND PROJECTS Governor 586,125.63 3,424,331.34 627,738.80 4,052,070.14 0.00 4,052,070.14 0.00 4,052,070.14 Replace RFLS 0,00 251,092.69 0.00 251,092.69 0.00 251,092.68 0.00 251,092.69 Replace Runners 0.00 1,946 ,732.79 0.00 1,946,732.79 0.00 1,946,732.79 0.00 1,946,732.79 Replace cable from dam te power house 0.00 2,321,922.94 0.00 2,321,922.94 0.00 2,321,922.94 0.00 2,321,922.94 Replace power system stab#izer 0.00 619,205.10 0.00 619,205.10 9.00 619,205.10 0.00 619,205.10 Replace two RTUs 0.00 86,905.27 0,00 86,905.27 0.00 86,905.27 0.00 86,905.27 Culvert Repairs 0.00 675,966.79 0.00 675,966.79 0.00 675,966.79 0.00 675,966.79 Trane Towers Frost Jacking Repairs 0.00 887,596.62 0.00 887,596.62 0.00 887,596.62 0.00 887,596.62 Replace Plant and SCADA Controle 0.00 1,344,683.05 6.00 1,344,683.05 8.00 1,344,683.05.0.00 1,344,683.05 Vibration Monitoring System 0.00 430.00 0.00 490,00 0.00 430.00 0.00 490.00 Battle Creek Feasibility 0.00 0.00 6.00 0.00 0,00 0.00 0.00 0.00 Fire Alarm System Replacement 0.00 0.00 0.00 0.00 0.00 0.00 350,000.00 350,000.00 Battle Creek Diversion 471,070.61 950,728.48 43,605.35 994,333.83 71,722.89 1,066,056.72 0.00 1,066,056.72 Replace Electro-Mechanical Relays 777,3.68 1,277,197.06 0.00 1,277,197.06 0.00 1,277,197.06 0.00 41,277,197.06 Fishwater Screen Debris Removal 0.00 0.00 21,929.45 21,929.45 703,070.55 728,000.00 9.00 725,000.00 Turbine Nozzle Repair 0.00 0.00 96,423.49 96,423.49 |1,130,000.00 1,226,423.49 0.00 1,226,423.49 ISVC replacement Daves Creek |Soldotna 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 1,834,499.92 13,786,852.13 789,697.09 14.S76,549.22 1,904,793.44 16,481.342.66 350,000.00 16,831 342.66 Current Year R&C Repayment {1,328,076.00 (1,146,123.00)(1,482,734,75}]{1,219,747.61 Adjust bal to $5 mill (won't be corrected until year end)0.00 0.00 0.00 0.00 Less Interest in Fund Applied to Repayment 313,407.18 244 582.41 0.00 0.00 Net Transfer from Revenue Fund 1,641,483.18 1,390,705.41 ER ERENES 1,219,747.61) Cumulative Prior Years R&C Repayments {9,884,350.26)(11,346,045,42)(12,716,539.32 (14,199,274.06) Due back to Utilities 179,788.03 20,211.51 9.00 0.00 R&C Cumulative Interest (Retained)Applied As Part of Repayment 0.00 0.00 0.00 0.00 Net R&C Repayments 9,704,562,.23 11,325,833.91 12,716,539.32 14,199,274.06: NET DUE TO R&C FUND 2,440,806.72 1,860,009.90 2.282,068.50 4,412.320.99 IR&C FUND CASH FLOW PROJECTION Beginning Investment Balance 4,627,751.16 3,016,716.76 3.212,607.68 2,717,931.41 (Disbursements-current year (1,657,223.72 {766,797.23)|(1,904,793,44)}(350,000.00) Disbursements-prior year accrued (829,216.26 (177,276.20)(22,899.85)0.00 R&C Repaymentto utilities {767,077.60 {179,788.03 (20,211.51 Due to R&C from revenue fund -debt service transfer 0.00 (69,953.03)} Current year interest earnings 313,407.18 (244,582.41 Current year Participants Contributions to R&C 00 Ending investment Balance Accrued R&C Payable at year end-Due to Utilities;(179,788.03;(20,211.51) [Accrued due from Revenue fund (debt service transfer)69,953.03 R&C payable back to Revenue fund (99,459.25) Accrued R&C vendor Payable at year end (276,735.45:(22,899.85)]0.00 0,00 PROJECTED NET DUE +ENDING INVESTMENT BALANCE 5,000,000.00 §.000,000.00 §.000.000.00 5,000,000.00 REPAYMENT AMOUNT '$756,665.11 X 25%all 4 years lath yr 189,166.28 '$1,455,830.05 X 25%all 4 years Sed yt 363,957.51 [4th yr 363,957.51 total repaid at 6/30/17 remaining to repay at 7/1/17 Fr18 FY19 FY20 $1,401,948.53 X 25%all 4 years 2nc yr 350,487.13 [3rd yr 350,487.13 [4th yr 350,487.13 1,401,948.53 - 1$1,834,499.92 X 25%all 4 years Ast yr 456,624.98 [2nd yr 458,624.98 [3rd yr 458,624.98 [4th yr 458,624.98 1,834,499.92 - $789,697.09 X 25%all 4 years 'ist yr 197,424.27 [2nd yr 197,424.27 }3rd yr 197,424.27 $92,272.82 (197,424.27)197,424.27 '$1,904,793.44 X 25%all 4 years Ast yr 476,198.96 and yr 476,198.36 952,396.72 (952,396.72)476,198.36 476,198.36 $350,000 x 25%all 4 years tet yr 87,500.00 87,500.00 (262,500.00)87,500.00 87,500.00 67,500.00 1.362.235.90 4370,493.90}1,482,734.75 4,.218,747.61 (1,412,320.99)761 122.63 563,698.36 87,500.00 "FY 16 projects reflect ig and actual for projects gy on which Is higher (budgeted or actual),so the REC repayment smount reflects a concervative amount 3/1/20163:28 PMH:\Accounting\AEA FY17 FS Shared Fites\Bradley Lake\Budget\1 b-Scenario2-2017 BradleyBudget-DRAFT-030116.xisxSch D Page 15 of 15 Wih Ffemns De. Memorandum DATE:February 25,2016 TO:Bradley Power Management Committee FROM:Bradley Power Budget Subcommittee RE:SVC Financing The Bradley Lake Budget Subcommittee would like guidance from the BPMC as to whether we should further explore financing options for the SVC replacement project. Last year the Budget Subcommittee was tasked with reviewing SVC financing options prepared by Jocelyn Garner and to make a recommendation to the BPMC.We reviewed the options and recommended financing the SVC Replacement through the R&C Fund.This option requires the expenditure to be covered in a four-year period. The Utilities have already increased their contributions to the R&C fund for this purpose in FY 2016.Attached are Jocelyn's analysis and the AEA's May 15,2015 SVCs Replacement White Paper along with AEA's August 2014 Battle Creek White Paper. At the Budget Subcommittee's February 23,2016 meeting benefits of both long-term financing and R&C funding were discussed.Benefits of long-term financing include the matching of costs over the long-term period of benefits and the offset against excess payment requirements.Per the May 2015,White Paper,at page 2,"Because the SVCs replacement is Required Project Work,the issuance of debt to finance the SVCs will reduce the amount of the annual excess payments by the amount of the annual debt service on the debt issued.See §29(b)(ii)of the Power Sales Agreement”.Benefits of R&C funding include an overall lower cost for the project.|polled the Budget Subcommittee for authorization and agreement to hire the finance advisor who worked on the last bond issue,to review long-term financing options.It appears the Bradley Lake Power Users are not all in agreement about securing long-term financing for the SVC project. How to finance the SVC replacement project is a decision that needs to be made by the Bradley Power Management Committee.Please let us know if you want us to explore this issue further.We have identified the advisor who worked on the last bond issue and who is willing to review Jocelyn's analysis and help the BPMC secure long-term financing if that is decided.This advisor has quoted a fee of $10,000 to perform those services. We'd like to get direction at the March 4th Budget Workshop. I=AASKAGuamENERGYAUTHORITY Alaska Energy Authority Bradley Lake Hydroelectric Project Financial Considerations Relating to Replacement of Static Var Compensators May 2015 Purpose The Bradley Lake Project Management Committee ("BPMC'”)has approved the replacement of the Bradley Lake Hydroelectric Project ("Bradley Lake Project”)Static Var Compensators ("SVCs”or "SVC”)along the transmission line for an estimated $7,200,000.At the request of the BPMC,the Alaska Energy Authority (the "Authority”or "AEA”)is evaluating long term financing options related to replacement of the SVCs. In August 2014,the Authority prepared a White Paper titled "Financial Considerations Relating to Potential Battle Creek Diversion Project”("White Paper”);see the attached White Paper for definitions used but not defined in this paper.The White Paper identified possible long term financing options for the Battle Creek Diversion Project under the governing documents relating to the Bradley Lake Project.The conclusions and concepts discussed in the White Paper also apply to financing the SVCs replacement (and any future capital improvements relating to the Bradley Lake Project). SVCs Replacement Required Project Work Both the Bond Resolution and Power Sales Agreement allow parity debt to finance the costs of a capital improvement related to the Bradley Lake Project.More specifically,they allow paritydebttofinancethecostsofRequiredProjectWork!and Optional Project Work?.The White Paper concludes that the proposed Battle Creek Diversion Project meets the definition of Optional Project Work.In contrast,the SVCs replacement appears to fit the definition of Required Project Work. The SVCs at the Soldotna and Dave's Creek substations have been in operation for approximately 22 years.Maintenance issues have increased in the last couple of years.The SVC technology is obsolete and replacement parts are no longer produced or supported by the equipment manufacturer.Concern has been raised that one or both of the SVCs could fail with no warning.An outage could limit the transmission line transfer capability for an extended period of time.Under these circumstances,the SVCs replacement appears to meet the definition of Required Project Work because it is necessary to keep the Bradley Lake Project in good and efficient operating condition,consistent with national industry standards and sound economics. 'Required Project Work includes repairs,maintenance,renewals,replacements,improvements or betterments that are either: 1,Required by Fedcral or state law,a licensing or regulatory agency with jurisdiction over the Bradley Lake Project, or the Power Sales Agreement,or 2.Otherwise necessary to keep the Bradley Lake Project in good and efficient operating condition,consistent with national standards for the industry and sound economics for the Bradley Lake Project and Purchasers. ?Optional Project Work includes repairs,renewals and replacements,improvements,betterments,additions or expansions that do not constitute Required Project Work.Optional Project Work must be approved by the BPMC. jakeneroyaithorityrorot 813 West Northern Lights Boulevard Anchorage,Alaska 99503 T907.771.3000 Toll Free (Alaska Only)888.300.8534 F 907.771.3044 Conclusion The SVCs replacement can be financed with parity debt as Required Project Work under the Bond Resolution.Under the Power Sales Agreement,power purchasing utilities will be responsible for debt payments.Debt payments would presumably extend beyond July 1,2021, the final date all currently outstanding bonds are scheduled to be redeemed.The issuance of parity debt will extend the life of the Bond Resolution until all debt issued under it is retired. After current bonds are redeemed,the purchasing utilities become obligated to annually make "excess payments”to AEA for deposit in the State of Alaska Railbelt Energy Fund (AS 37.05.520).The issuance of additional debt will not postpone the obligation to make excess payments. Because the SVCs replacement is Required Project Work,the issuance of debt to finance the SVCs will reduce the amount of the annual excess payments by the amount of the annual debt service on the debt issued.See §29(b)(ii)of the Power Sales Agreement. Other Considerations For purposes of this paper,it is assumed that there will be no changes to current percentage participation in the Bradley Lake Project associated with the SVCs replacement. For more information contact Bryan Carey at the Alaska Energy Authority -907-771-3065. SVCs Replacement White Paper Page 2 of 2 fe ALASKA.===ENERGY AUTHORITY Alaska Energy Authority Bradley Lake Hydroelectric Project Financial Considerations Relating to Potential Battle Creek Diversion Project White Paper -August 2014 Purpose The Bradley Lake Project Management Committee (""BPMC”)is considering the Battle Creek Diversion Project ("Battle Creek Project”)as an enhancement to the Bradley Lake Hydroelectric Project ("Bradley Lake Project”).As part of that effort,the Alaska Energy Authority (the "Authority”or "AEA”)desires to identify potential financing options for the Battle Creek Project,and analyze potential impacts from those financing options. The Battle Creek Project would enhance the production of energy from the Authority owned Bradley Lake Project!by diverting water into Bradley Lake from the west fork of Upper Battle Creek.Among other things,the Battle Creek Project would include a concrete diversion dam, two miles of canals,four miles of roads,and other facilities as may be required to complete the intended diversion of water. The Bradley Lake Project provides electric energy to the Railbelt area of Alaska,including the Kenai Peninsula,the Municipality of Anchorage,the Matanuska-Susitna Borough and the Fairbanks area.In an average year,the Bradley Lake Project generates 380,000 megawatt hours ("MWh”)of energy,which represents approximately eight percent of the electric energy used in the Railbelt,although the percentage can range from five to ten percent,depending on system demand and actual Bradley Lake Project generation.The Battle Creek Project is anticipated to increase energy generation from the Bradley Lake Project by an average 37,000 MWh annually. Conclusion ,a -Loe ce 8 a The Battle Creek Project can most effectively be financed as parity debt.Under the Bond Resolution (described in Appendix A),the parity debt could arise from the issuance of bonds, notes or other indebtedness,with the power purchasing utilities responsible for debt payments.The debt payments would presumably extend beyond July 1,2021,the final date all currently outstanding bonds are scheduled to be redeemed.After current bonds are redeemed,the purchasing utilities become obligated to annually make "excess payments”of approximately$12.5 million?to AEA for deposit in the State of Alaska Railbelt Energy Fund (AS 37.05.520). The issuance of debt will not reduce nor postpone the obligation to make excess payments.The issuance of parity debt,however,would extend the effective life of the Bond Resolution until all debt issued under it is retired.Amending provisions of the Bond Resolution is currently difficult,as amendments would apply to outstanding debt and require bondholder approval. Amendments could be implemented with the issuance of new parity debt through "springing amendments”.These would be amendments that become effective only after all currently outstanding bonds have been retired.While the adoption of springing amendments would not require current bondholder approval,it would require approval by the purchasing utilities under the Bradley Lake Hydroelectric Project Agreement for the Sale and Purchase of Electric Power ("Power Sales Agreement”). 'More information regarding the Bradley Lake Hydroelectric Project,and its financing,is contained in Appendix A. 2?See Appendix B,calculation of excess payment. I '--at 'akenergyauthoritylorg} 813 West Northern Lights Baulevard Anchorage,Alaska 99503 T 907.771.3000 Toll Free (Alaska Only)888.300.8534 F 907.771.3044 Theoretically,but probably not practically,non-parity debt could finance the Battle Creek Project.Due to restrictions under the Bond Resolution,non-parity debt would provide the lender with no security (i.e.,no pledge or lien on assets or revenues)and no payment of principal or interest until after all currently outstanding debt is redeemed.Issuing non-parity debt with any security or debt repayment prior to the final redemption of outstanding debt would likely require a majority of bondholders to approve amendments to the Bond Resolution.Because bondholder approval would presumably be difficult to obtain,non-parity debt is probably not a practical financing option. Prior to issuing debt,the Authority must comply with statutory notice requirements described below. Parity Debt The Battle Creek Project could be financed on a parity basis with bonds currently outstanding (i.e.,as parity debt).Parity debt would be treated on an equal basis as currently outstanding bonds with respect to rights to obtain project revenues and collateral/security for the repayment of the debt.Parity debt is issued pursuant to the Bond Resolution. The Power Sales Agreement provides for project revenues sufficient to pay debt service on all debt issued under the Bond Resolution.Under the Power Sales Agreement,all amounts necessary to pay principal,interest,and premium,if any,are added to the annual project budget and become part of the "take or pay”obligation of the power purchasing utilities.The utilities must pay the amounts necessary to repay the debt,regardless of the amount of power they receive from the Bradley Lake Project.The expectation is that the Battle Creek Project will increase energy generation sufficiently to more than offset the additional debt service and operational costs that will be added to the Bradley Lake Project's annual budget. The Bond Resolution provides for security for parity debt.This security includes a pledge of all project revenues plus the State's moral obligation on outstanding bonds.These are described more fully in Appendix C. The Bond Resolution and Power Sales Agreement each provide for,or allow,parity debt to finance the costs of a capital improvement related to the Bradley Lake Project.More specifically, they allow parity debt to finance the costs of Optional Project Work.Optional Project Work includes repairs,renewals and replacements,improvements,betterments,additions or expansions that are not Required Project Work.The Battle Creek Project fits the definition of Optional Project Work,and does not fit the definition of Required Project Work. Under the Power Sales Agreement,the BPMC must approve any Optional Project Work.Prior to issuing parity debt,the bond Trustee must receive (i)evidence that the BPMC has approved the capital improvement and (ii)a written opinion of the Consulting Engineer that neither the 3 Required Project Work includes repairs,maintenance,renewals,replacements,improvements or betterments that are either: 1.Required by Federal or state law,a licensing or regulatory agency with jurisdiction over the Bradley Lake Project, or the Power Sales Agreement,or 2.Otherwise necessary to keep the Bradley Lake Project in good and efficicnt operating condition,consistent with national standards for the industry and sound economics for the Bradley Lake Project and Purchasers. Battle Creek Diversion White Paper Page 2 of 4 issuance Of the additional bonds nor the payment for the capital improvement will impair the Authority's ability to pay debt service through the collection of revenues under the Power Sales Agreement. Non-Parity Debt,Creation of Liens and Sale and Lease of Property While Bradley Lake bonds are outstanding,the Bond Resolution substantially limits the ability to effectively issue non-parity project debt.The Authority may issue non-parity debt but the debt cannot be repaid from Bradley Lake Project revenues until after all outstanding bonds are retired. The Authority also may not secure the non-parity debt by a pledge of or other lien or charge on Bradley Lake Project revenues or on any amounts held under the Bond Resolution. The Bond Resolution'allows the Authority to issue non-parity debt solely repayable from project revenues received after outstanding bonds are redeemed.Likewise,non-parity debt could be issued if made subordinate to provisions of the Bond Resolution;meaning,the non-parity debt would receive neither payments from project revenues nor collateral security until after outstanding bonds are discharged and satisfied. Based on the forgoing,non-parity debt could be used to finance the Battle Creek Project only if a lender would be willing to lend funds with no repayment on debt (either principal or interest)and no collateral or security until after all bonds issued under the Bond Resolution have been discharged and satisfied (i.e.,redeemed or defeased).Because this does not appear to be practical,it does not appear that financing the Battle Creek Project with non-parity debt is a viable option. Statutory Notice Requirements Before issuing any additional debt,AS 44.83.910 requires the Authority to give 60 days'notice of its intent to issue bonds.The notice goes to the governor and to the legislature,if the legislature is in session,or to the Legislative Budget and Audit Committee,if the legislature is not in session. Before issuing debt intended to be secured by the State's moral obligation on a capital reserve fund securing bonds,AS 44.83.110(h)further requires 10 days notification to the State Bond Committee and the Legislative Budget and Audit Committee. If parity debt were issued to finance the Battle Creek Project,both statutory notice provisions would apply.Because currently outstanding Bradley Lake bonds are secured by the State's moral obligation,any parity debt issued would necessarily also include the State's moral obligation. If non-parity debt were issued,notice under AS 44.83.910 would always apply.Notice under AS 44.83.110(h)would only apply if the Authority provided the State's moral obligation on debt issued. 4 Section 707(1). Battle Creek Diversion White Paper Page 3 of 4 Other Considerations If the BPMC and the Authority decide to move forward with the Battle Creek Project,the Authority plans to research financing alternatives beyond "traditional”municipal bond financing, including exploring federal and State of Alaska loan programs.If a loan program offering lower interest rates exists,determining if a financing could be structured under the Bond Resolution may result in a lower cost borrowing benefitting the purchasing utilities and each of their ratepayers.As part of researching the lowest cost financing alternatives,the Authority will also determine if the federal tax exemption applicable to currently outstanding Bradley Lake bonds would apply to bonds issued to finance the Battle Creek Project. The Bradley Lake Project's Federal Energy Regulatory Commission license currently expires on November 30,2035.Unless the license is extended prior to any financing,the final maturity date of debt issued may need to be prior to November,2035,resulting in a term of approximately 20 years. For purposes of this paper,it is assumed that all participating utilities will agree and approve the Battle Creek Project with no changes to current percentage participation in the Bradley Lake Project. For more information contact Bryan Carey at the Alaska Energy Authority -907-771-3065. Battle Creek Diversion White Paper Page 4 of4 APPENDIX A Bradley Lake Hydroelectric Project The Authority owns the Bradley Lake Project,which is located in south-central Alaska at the southern end of the Kenai Peninsula.The Bradley Lake Project includes a concrete-faced and rock-filled gravity dam,a power tunnel and steel-lined penstock;transmission lines connect the Project to a transmission system on the Kenai Peninsula.The Bradley Lake Project provides electric energy to the most populous areas of Alaska,including the Kenai Peninsula,the Municipality of Anchorage,the Matanuska-Susitna Borough and the Fairbanks area. Construction of the Bradley Lake Project was substantially completed in 1991,with the date of _commercial operation declared to be September 1,1991. The financing concept for the Bradley Lake Project was based on a 50/50 sharing of construction costs.The State of Alaska funded 50%via cash appropriations to AEA.The other 50%of construction costs were funded through the issuance of general obligation bonds issued by the Authority under a Bond Resolution (described below).The power purchasing utilities are providing funds to repay the bond debt through payments to AEA for Bradley Lake Project energy sold pursuant to the Power Sales Agreement.The Power Sales Agreement has an initial 50 (fifty)year term from the date of commercial operation;the initial term expires August 31, 2041.The Power Sales Agreement can be renewed for unlimited successive additional terms at each purchaser's option'.AEA is required to renew the Power Sales Agreement only if 100%of the power will be sold to qualified utility purchasers. If the term of the Power Sales Agreement (including renewals)requires,AEA will cause the Federal Energy Regulatory Commission ("FERC”)license to be renewed.The Bradley Lake Project's FERC license currently expires on November 30,2035. The Power Sales Agreement provides for certain payments to be made by the power purchasing utilities,including annual operating costs,debt service,and costs associated with maintaining the Bradley Lake Project.The utilities are also responsible for paying an "Excess Payment Amount” which begins when bonds issued to pay Bradley Lake Project construction costs have been retired. Bradley Lake Hydroelectric Project Financing Background The permanent financing of the Bradley Lake Project consisted of State of Alaska appropriations and Authority issued general obligation bonds,with the full faith and credit of the Authority pledged to the payments on the bonds.The initial permanent financing of the Bradley Lake Project consisted of two series of bonds,the $105,001,142 Alaska Energy Authority Power Revenue Bonds,First Series (issued on October 5,1989)and the $60,259,015.10 Alaska Energy Authority Power Revenue Bonds,Second Series (issued on August 28,1990),issued pursuant to the Authority's Power Revenue Bond Resolution originally adopted on September 7,1989,and subsequently amended and supplemented (as amended and supplemented,the "Bond Resolution”). Subsequently,bonds were issued under the Bond Resolution to refund portions of then outstanding bonds.In April,1999,the $59,485,000 Alaska Energy Authority Power Revenue 1 Each term equal to 40 (forty)years or,if shorter,the remaining useful life of the Bradley Lake Project. Battle Creek Diversion White paper -Appendix A Page |of 2 Refunding Bonds,Third Series were issued to refund $59,110,000 of First Series bonds and the $30,640,000 Alaska Energy Authority Power Revenue Refunding Bonds,Fifth Series were issued to refund $28,910,000 of First Series bonds;those First Series bonds were redeemed on July 1,1999.In April,2000,the $47,710,000 Alaska Energy Authority Power Revenue Refunding Bonds,Fourth Series were issued to refund $46,235,000 of Second Series bonds, which were redeemed on July 1,2000.On July 1,2010,the $28,800,000 Alaska Energy Authority Power Revenue Refunding Bonds,Sixth Series were issued to refund $30,640,000 of Fifth Series bonds,which were redeemed on August 2,2010. Bonds Currently Outstanding At July 1,2014,$71,155,000 of bonds were outstanding under the Bond Resolution,comprised of $100,000 First Series bonds,$16,235,000 Third Series bonds,$26,020,000 Fourth Series bonds and $28,800,000 Sixth Series bonds.The bonds mature through July 1,2021 at rates ranging from 2.5%to 6.25%.The First Series bonds (Term Bonds with sinking fund payments of $25,000 each July 1 from 2018 through 2021,the date of final maturity)are currently callable at par,although the Authority currently desires those bonds remain outstanding through their maturity date.On and after July 1,2020,at the option of the Authority,$6,450,000 of Sixth Series bonds will be subject to redemption at par prior to their July 1,2021 maturity.Neither the Third Series bonds (with a final maturity of July 1,2017)nor the Fourth Series bonds (with a final maturity of July 1,2021)are subject to optional redemption prior to their maturity. Battle Creek Diversion White paper -Appendix A Page 2 of 2 APPENDIX B Calculation of Excess Payment Amount After the retirement of all bonds (including refunding bonds)issued to pay "recoverable construction costs”!for constructing the Bradley Lake Project,the Power Sales Agreement requires the Excess Payment Amount be includedin annual project costs.The Excess Payment Amountis calculated as: »Average annual debt service on the retired bonds',less»Any debt service in annual project costs associated with bonds or other debt issued to fund Required Project Work »Limitation:No Excess Payment Amount will exceed $.04/kwh of delivered power to a purchaser The Excess Payment Amount will be approximately $12.5 million per year.(The cap limitation could result in a lesser amount if delivered power levels were to decline in any year.)The payment will begin when the last of currently outstanding bonds have been retired,resulting in no bond debt service component in annual project costs.The final maturity of currently outstanding bonds is July 1,2021;an earlier call or defeasance of the bonds may result in an earlier payment obligation. Effectively,the Excess Payment Amount should not significantly change the cost of Bradley Lake Project power.In determining power costs under the Power Sales Agreement,excess payments will replace the debt service that has been paid on outstanding bonds during the initial life of the Bradley Lake Project.The power purchasers will make payment to AEA for deposit into the Railbelt Energy Fund. Because the Battle Creek Project is Optional Project Work,the power purchasers will pay an amount equal to average annual debt service,with an annual cap of $.04/kwh for delivered power to each purchaser.The payment of debt service on any new debt issued for the Battle Creek Project would not reduce the amount of the Excess Payment and the power purchasing utilities would continue to be responsible for payment of the debt service on those bonds until their final maturity. Other Considerations The Excess Payment Amount currently only relates to the original construction cost of the Bradley Lake Project.If the State of Alaska provides appropriations or grants to AEA to fund a portion of the cost of the Battle Creek Project,consideration should be given to amending the Power Sales Agreement to reflect the Excess Payment Amount concept to those appropriations or grants. 'Recoverable Construction Cost is defined in the PSA as $175 million less one half the amount,if any,by which $350 million exceeds the Cost of Acquisition and Construction.Recoverable Construction Cost is approximately $354 million and is composed of: Construction Cost $314,500,000 Capitalized Interest 17,400,000 Required Reserves 14,900,000 Costs of Issuance 7,200,000 Total $ In a Settlement Agreement dated as of December 9,1997 between the Purchasers and AEA,the parties agreed not to challengethatthe$165,260,157 bond principal amount of the First and Second Seriesis within the maximum principal amount authorized in the Power Sales Agreement;the annual payment obligations of the Purchasers will be determined taking into account the debtserviceonthebonds;and the $165,260,157 is within Recoverable Construction Costs. 2 For purposes of the Excess Payment Amount computation,debt service includes amounts set aside for the payment of principal,premium,if any,sinking fund payments and interest on bonds,if not paid by reason of acceleration. Battle Creek Diversion White paper -Appendix B Page |of 1 APPENDIX C Security for the Bonds Under the Bond Resolution,all Series of bonds are secured (on a parity basis)by a pledge of all revenues from the operation of the Bradley Lake Project,including all payments made by the power purchasers under the Agreement for the Sale and Purchase of Electric Power (the "Power Sales Agreement”),dated as of December 8,1987,by and among the Authority (then known as the Alaska Power Authority)and five Purchasers and two Additional Parties (collectively,the "Power Purchasers”).AEA pledged,assigned and transferred its rights under the Power Sales Agreement to the bond trustee on behalf of bondholders. Also under the Bond Resolution,certain funds and accounts are required to be maintained.All moneys,securities and funds (except the Excess Investment Earnings Fund)held or set aside under the Bond Resolution are pledged and assigned to secure payments on the bonds,subject only to the Bond Resolution provision permitting the priority payment of Bradley Lake Project operating expenses or other purposes specified in the Bond Resolution.The First,Third and Fourth Series bonds are further secured by bond insurance.No other revenues or assets of the Authority are pledged as security for the payment of the bonds and there are no significant revenues,moneys or assets of the Authority available (or expected to be available)for payments on the bonds. Capital Reserve Fund and Moral Obligation of the State Pursuant to the Bond Resolution,the Authority is required to maintain a capital reserve fund in an amount at least equal to the "capital reserve requirement”(an amount equal to the lesser of maximum aggregate debt service on the bonds in any current or future bond year or ten percent of the proceeds of the bonds;or such lesser amount as is required in order to maintain the tax- exempt status on the bonds).The amount currently required to be maintained in the fund is $12,778,775,which was originally funded by bond proceeds.If parity debt is issued for the Battle Creek Project,the capital reserve requirement will increase accordingly;the increase will presumably be funded from proceeds of the financing. Alaska Statutes relating to the Authority require the Chair of the Authority's board at least annually,but no later than January 2 of each year,to certify in writing to the governor and the State legislature the sum,if any,required to restore the capital reserve fund to its required balance.The Bond Resolution requires the Chair to make such certification whenever amounts are transferred from the fund to pay principal of or interest on the bonds.If the State legislature appropriates any amounts to the Authority which are not vetoed by the governor,the Authority is required to deposit all amounts appropriated and received to the capital reserve fund. If non-parity debt is issued for the Battle Creek Project,any reserve requirement and any requirement for a capital reserve fund to have the moral obligation of the State of Alaska would be negotiated with the lender and must meet AS 44.83.110 requirements (among others,the Authority must determine that a capital reserve fund must enhance the marketability of the bonds and must provide for limitations on its use). Battle Creek Diversion White paper -Appendix C Page 1 of 1 Wkohp Fens Bradley Lake Budget Process INFORMATION FLOW FOR ORIGINAL AND AMENDED BUDGETS HEA CEA AEA PROJECT MANAGER Budget estimates for operating Budget estimates for dispatch Budget estimates for FERC plant and related and related major repair projects license issues major repair projects 0 &D SUBCOMMITTEE Review budget estimates from Drafts budget based onHEA,CEA,and AEA estimates received and Advise BUDGET and AEA Finance covinerontsofupcomingcosts Draft Budget Proposal /suvcet SUBCOMMITTEE Reviews proposal and recommend far approval by the BPMC Final Budget Proposal BPMC Asks O&D and BUDGET questions about proposed budget Approves proposed budget CoONDBRADLEY LAKE PROJECT BUDGET WORKSHOP REGULAR MEETING AGENDA Friday,March 4,2016 8:30 -11:30 AM To participate by teleconference,dial 1-888-585-9008 and use code 467 050 126. Safety Moment CEA Budget Component AEA Budget Component HEA Budget Component Total Budget Rollup a.With SVC funded through R&C Fund b.With SVC funded with long-term financing Operator Costs Operator Allocation of Time BPMC Oversight and Financing Battle Creek Division Project Financing 4/KsfropLiem3 a Bradley Lake Operations &Maintenance Budget Entry Page -Payroll FY 2017 Budget ST RateDeptFERCActivityJobTitle OT RateSTHours ne'OT Hours #DbIR_--*"ate ©Dbl Hours Total Cos' Payroll A HEA [535 -Operation Supervision &Eng.HEA O&M Contract Director of Power 177.10 302.00 $53,484.20 HEA [535 -Operation Supervision &Eng.HEA O&M Contract Power Production Manager 161.91 444.00 $71,888.04 HEA [535 -Operation Supervision &Eng.HEA O&M Contract Bradley Plant Superintendent 140.89 1,113.00 100.00 90.00 $165,810.57 HEA 4535 -Operation Supervision &Eng.HEA O&M Contract Engineering as needed 141.10 60.00 5 8,466.00 HEA [541 -Maint.Supervision &Engineering HEA O&M Contract Director of Power 177.10 151.00 5 26,742.10 HEA [541 -Maint.Supervision &Engineering HEA O&M Contract Power Production Manager 161.91 444.00 $71,888.04 HEA [541 -Maint.Supervision &Engineering HEA O&M Contract Bradley Plant Superintendent 140.89 668.00 100.00 60.00 s 100,114.52 HEA [541 -Maint.Supervision &Engineering HEA O&M Contract Engineering as needed 141.10 181.00 S 25,539.10 HEA 4537 -Hydraulic Expenses HEA O&M Contract Plant Foreman Crew 1 90.21 174.00 90.17 10.00 116.42 25.00 |$19,508.74 HEA [537 -Hydraulic Expenses HEA O&M Contract Plant Foreman Crew 2 90.21 174.00 90.17 10.00 116.42 25.00 |$19,508.74 HEA [537 -Hydraulic Expenses HEA O&M Contract Plant Rover Crew 1 83.12 174.00 81.73 10.00 105.17 25.00 |$17,909.43 HEA [537 -Hydraulic Expenses HEA O&M Contract Plant Rover Crew 2 83.12 174.00 81.73 10.00 105.17 25.00 |$17,909.43 HEA {537 -Hydraulic Expenses HEA O&M Contract Plant Rover Trainee 83.12 174.00 81.73 10.00 105.17 25.00 |$17,909.43 HEA {538 -Electric Expenses HEA O&M Contract Plant Foreman Crew 1 +on call 90.21 348.00 90.17 20.00 116.42 182.00 |$$4,384.92 HEA |538 -Electric Expenses HEA O&M Contract Plant Foreman Crew 2 +on call 90.21 348.00 90.17 20.00 116.42 182.00 |$54,384.92 HEA [538 -Electric Expenses HEA O&M Contract Plant Rover Crew 1 +on call 83.12 348.00 81.73 20.00 105.17 182.00 |$49,701.30 HEA |538 -Electric Expenses HEA O&M Contract Plant Rover Crew 2 +on call 83.12 348.00 81.73 20.00 105.17 182.00 |$49,701.30 HEA {538 -Electric Expenses HEA O&M Contract Plant Rover Trainee 83.12 348.00 81.73 20.00 105.17 40.00 |$34,767.16 HEA |539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Plant Foreman Crew 1 90.21 174.00 90.17 10.00 116.42 25.00 |$19,508.74 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Plant Foreman Crew 2 90.21 174.00 90.17 10.00 116.42 25.00 |$19,508.74 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Plant Rover Crew i 83.12 174.00 81.73 10.00 105.17 25.00}$17,909.43 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Plant Rover Crew 2 83.12 174.00 81.73 10.00 105.17 25.00 |$17,909.43 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Plant Rover Trainee 83.12 174.00 81.73 10.00 105.17 25.00 |$17,909.43 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Procurement &Accounting as needed 59.34 700.00 S 41,538.00 HEA |539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract Clerical,Env.,Safety as needed 99.35 450.00 S$44,707.50 HEA [542 -Maintenance of Structures HEA O&M Contract Plant Foreman Crew 1 90.21 174.00 90.17 10.00 116.42 25.00 |$19,508.74 HEA |542 -Maintenance of Structures HEA O&M Contract Plant Foreman Crew 2 90.21 174.00 90.17 10.00 116.42 25.00 |$19,508.74 HEA [542 -Maintenance of Structures HEA O&M Contract Plant Rover Crew 1 83.12 174.00 81.73 10.00 105.17 25.00 |$17,909.43 HEA [542 -Maintenance of Structures HEA O&M Contract Plant Rover Crew 2 83.12 174.00 81.73 10.00 105.17 25.00 |$17,909.43 HEA |542 -Maintenance of Structures HEA O&M Contract Plant Rover Trainee 83.12 174.00 81.73 10.00 105.17 25.00 |$17,909.43 HEA {543 -Maintenance of Res.,Dams HEA O&M Contract Plant Foreman Crew 1 +helicoptor 90.21 100.00 90.17 2.00 116.42 12.001 $10,598.38 HEA |543 -Maintenance of Res.,Dams HEA O&M Contract Plant Foreman Crew 2 +helicoptor 90.21 100.00 90.17 2.00 116.42 12.00}$10,598.38 HEA |543 -Maintenance of Res.,Dams HEA O&M Contract Plant Rover Crew 1 +helicoptor 83.12 100.00 81.73 2.00 105.17 12.00 |$9,737.50 HEA |543 -Maintenance of Res.,Dams HEA O&M Contract Plant Rover Crew 2 +helicoptor 83.12 100.00 81.73 2.00 105.17 12.00]$9,737.50 HEA |543 -Maintenance of Res.,Dams HEA O&M Contract Plant Rover Trainee +helicoptor 83.12 100.00 81.73 2.00 105.17 12.00 |$9,737.50 HEA {544 -Maint of Electric Plant HEA O&M Contract Plant Foreman Crew 1 90.21 696.00 90.17 40.00 116.42 100.00 |$78,034.96 HEA [544 -Maint of Electric Plant HEA O&M Contract Plant Foreman Crew 2 90.21 696.00 90.17 40.00 116.42 100.00 |$78,034.96 HEA [544 -Maint of Electric Plant HEA O&M Contract Plant Rover Crew 1 83.12 696.00 81.73 40.00 105.17 100.00 |$71,637.72 HEA [544 -Maint of Electric Plant HEA O&M Contract Plant Rover Crew 2 83.12 696.00 81.73 40.00 105.17 100.00 |$71,637.72 HEA {544 -Maint of Electric Plant HEA O&M Contract Plant Rover Trainee 83.12 696.00 81.73 40.00 105.17 100.00 |$71,637.72 HEA [545 -Maint.Of Misc.Hydraulic Plant HEA O&M Contract Plant Foreman Crew 1 90.21 174.00 90.17 10,00 116.42 25.00 |$19,508.74 HEA [545 -Maint,Of Misc.Hydraulic Plant HEA O&M Contract Plant Foreman Crew 2 90.21 174.00 90.17 10.00 116.42 25.00 |$19,508.74 HEA [545 -Maint.Of Misc.Hydraulic Plant HEA O&M Contract Plant Rover Crew 1 83.12 174,00 81.73 10.00 105.17 25.00 |$17,909.43 HEA Payroll Page 1 of 9 HEA [545 -Maint.Of Misc.Hydraulic Plant HEA O&M Contract Plant Rover Crew 2 83.12 174.00 81.73 10.00 105.17 25.00 |$17,909.43 HEA [545 -Maint.Of Misc.Hydraulic Plant HEA O&M Contract Plant Rover Trainee 83.12 174.00 81.73 10.00 105.17 25.00 |$17,909.43 HEA [556 -System Control &Load Dispatching HEA O&M Contract Engineering time as needed 91.50 541.00 $49,501.50 HEA |571-Maint.Of Overhead Lines HEA O&M Contract Line Crew (General Maintenance/Patrol 95.03 660.00 94.96 -121.28 100.00 |$74,847.80 HEA |571-Maint.Of Overhead Lines HEA O&M Contract Engineering (General Maintenance/Patrol)115.14 20.00 $2,302.80 HEA [571 -Maint.Of Overhead Lines HEA O&M Contract Line Crew (Row Clearing)95.03 94.96 121.28 $- HEA [571 -Maint.Of Overhead Lines HEA O&M Contract Engineering (Row Clearing)115.14 10.00 s 1,151.40 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract Line Crew (Marker Bail Replacement)95.03 30.00 94.96 121.28 $2,850.90 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract Engineering (Marker Ball Replacement)115.14 40.00 $4,605.60 HEA (571 -Maint.Of Overhead Lines HEA O&M Contract Line Crew (Bradley Junction Switch Removal}95.03 30.00 94.96 121.28 $2,850.90 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract Engineering (Bradley Junction Switch Removal)115.14 40.00 $4,605.60 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract Line Crew (Lower Bradley River Wood Poles)95.03 600.00 94.96 100.00 121.28 60.00 |$73,790.80 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract Engineering (Lower Bradley River Wood Poles)115.14 110.00 $12,665.40 HEA $- $-1,874,665.79 O&M (payroll)$1,694,994.59 transmission (payroll)$179,671.20 $-1,874,665.79 HEA Payroll Page 2 of 9 Bradley Lake Operations &Maintenance Budget Entry Page -AP &Other FY 2017 Budget Activity Cost Type iEEE AP Detail Description MN Ti4++.7 an:EE Total Cost mm HEA |535 -Operation Supervision &Eng.HEA O&M Contract 802010000 -Travel Commercial Travel $10,450.00 HEA {535 -Operation Supervision &Eng.HEA O&M Contract 802020000 -Training Technical Training $9,300.00 HEA [535 -Operation Supervision &Eng.HEA O&M Contract 803010000 -Contractual Office Equip.Maint.$1,400.00 HEA {535 -Operation Supervision &Eng.HEA O&M Contract 804020000 -Supplies &Materials Small Items &Consumables $3,100.00 HEA {535 -Operation Supervision &Eng.HEA O&M Contract 804020000 -Supplies &Materials Document Control $1,000.00 HEA {537 -Hydraulic Expenses HEA O&M Contract 803010000 -Contractual Env.&Fish Game Studies $4,000.00 HEA [537 -Hydraulic Expenses HEA O&M Contract 804020000 -Supplies &Materials Supplies &Materials $2,900.00 HEA {538 -Electric Expenses HEA O&M Contract 802010000 -Travel Travel and Per Diem S 7,000.00 HEA {538 -Electric Expenses HEA O&M Contract 802020000 -Training Technical Training $25,000.00 HEA {538 -Electric Expenses HEA O&M Contract 803010000 -Contractual Balancing &Vib Analysis $2,000.00 HEA |538 -Electric Expenses HEA O&M Contract 804020000 -Supplies &Materials Turbine Lube Oil S 2,000.00 HEA [538 -Electric Expenses HEA O&M Contract 804020000 -Supplies &Materials Consumables $6,500.00 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Housekeeping as needed $1,800.00 HEA 4539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Helicopter Transportation $60,763.00 HEA {539 -Misc,Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Fixed Wing Transportation $117,600.00 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Barge Shipping &Docking $35,000.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual UPS/FedEx Shipping $1,500.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Disposal Costs $2,000.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Telephone &Satellite $12,885.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual CMMS Software Support $3,000.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Legal Services S 2,500.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 803010000 -Contractual Fuel $60,000.00 HEA |539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 802020000 -Training Training Office and Safety $15,000.00 HEA {539 -Misc.Hydraulic Power Gen Exp.HEA O&M Contract 804020000 -Supplies &Materials Safety and Office Supplies $17,900.00 HEA [539 -Misc.Hydraulic Power Gen Exp.HEA Circuits &Radio -To Bernic{804030000 -Other Costs Bradley circuits to Bernice Lake Radio (HEA)$35,695.00 HEA {542 -Maintenance of Structures HEA O&M Contract 804020000 -Supplies &Materials Upgrade &Repair $10,713.00 HEA [542 -Maintenance of Structures HEA O&M Contract 803010000 -Contractual Fire Systems Certification S 10,000.00 HEA {542 -Maintenance of Structures HEA O&M Contract 804020000 -Supplies &Materials General Building Repairs S 39,000.00 HEA |542 -Maintenance of Structures HEA O&M Contract 806010000 -Equip &Machinery Power Tools S 11,500.00 HEA [542 -Maintenance of Structures HEA O&M Contract 804020000 -Supplies &Materials Overhead Door Repair Supplies $4,000.00 HEA [543 -Maintenance of Res.,Dams HEA O&M Contract 803010000 -Contractual Civil Engineering S 5,200.00 HEA |543 -Maintenance of Res.,Dams Nuka Repair 803010000 -Contractual Nuka Diversion Repair $15,000.00 HEA {543 -Maintenance of Res.,Dams Powerhouse Tunnel Maintenanq 803010000 -Contractual Power Tunnel and Diversion Tunnel Maintenance |$15,000.00 HEA {544 -Maint of Electric Plant HEA O&M Contract 802010000 -Travel Travel $4,500.00 HEA [544 -Maint of Electric Plant HEA O&M Contract 803010000 -Contractual Misc.Service Contracts S 60,000.00 HEA [544 -Maint of Electric Plant HEA O&M Contract 803010000 -Contractual Relay Maint.$19,000.00 HEA AP Page 3 of 9 HEA {544 -Maint of Electric Plant HEA O&M Contract 804020000 -Supplies &Materials Supplies &Materials $27,245.00 HEA [545 -Maint.Of Misc.Hydraulic Plant HEA O&M Contract 803010000 -Contractual Misc.Service Contracts $3,900.00 HEA |545 -Maint.Of Misc.Hydraulic Plant HEA O&M Contract 804020000 -Supplies &Materials Consumables S 43,000.00 HEA {545 -Maint.Of Misc.Hydraulic Plant Fish Water Control Design 803010000 -Contractual Preliminary Design Scope Development $20,000.00 HEA {556 -System Control &Load Dispatching HEA O&M Contract 803010000 -Contractual SCADA Maint $8,500.00 HEA [556 -System Control &Load Dispatching HEA O&M Contract 803010000 -Contractual DCS,PCs &Electronic Ops.$52,000.00 HEA |556 -System Control &Load Dispatching HEA O&M Contract 804020000 -Supplies &Materials Supplies &Materials 5 6,000.00 HEA [571 -Maint.Of Overhead Lines HEA O&M Contract 802010000 -Travel General Maintenance/Patrol $60,000.00 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract 802010000 -Travel ROW Clearing $5,000.00 HEA {571 -Maint.Of Overhead Lines Bradley Junction Removal 802010000 -Travel Bradley Junction Switch Removal S 5,000.00 HEA {571 -Maint.Of Overhead Lines Marker Ball Replacement 802010000 -Travel Marker Ball Replacement S 5,000.00 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract 802010000 -Travel Lower Bradley River Wood Poles S 30,000.00 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract 803010000 -Contractual ROW Clearing S 50,000.00 HEA {571 -Maint.Of Overhead Lines Marker Ball Replacement 803010000 -Contractual Marker Ball Replacement $200,000.00 HEA {571 -Maint.Of Overhead Lines Bradley Junction Removal 803010000 -Contractual Bradley Junction Switch Removal S 70,000.00 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract 804020000 -Supplies &Materials General Maintenance/Patrol $15,000.00 HEA {571 -Maint.Of Overhead Lines HEA O&M Contract 804020000 -Supplies &Materials Lower Bradley River Wood Poles $35,000.00 HEA {925 -Injury &Damages HEA O&M Contract 809010000 -Administrative expense [Insurance -General Liability $10,000.00 HEA {925 -Injury &Damages HEA O&M Contract 809010000 -Administrative expense [insurance -Aviation $54,637.00 HEA |930.2 -Miscellaneous General Expenses HEA O&M Contract 803010000 -Contractual Training program and manual update S 150,000.00 $ 1,484,488.00 O&M (non payroll)$ 1,009,488.00 transmission (non payroll)$475,000.00 $_1,484,488.00 Labor S$1,874,665.79 O&M S$_1,484,488.00 $3,359,153.79 HEA AP Page 4 of 9 Bradley Lake Capital Projects Draft Budget FY 2017 (DRAFT Rev 0) Account Account Description FY2016 FY2017 FY2018 Comments 335.00 Replace/Automate Fish Water Valves &Actuators $250,000 Phase 1 in 2016 moved to 2017 ($150,000),plus $200,000 to phase 2 in 335.06 _Fire Alarm System Replacement ($290,000 carried over in 2015)$150,000 $350,000 2017,to replace control room halon system due to leaking bottle on reserve system. 335.17 Weather Station (Airport)$15,000 $- 335.19 Surveillance Cameras (DAM)$- 332.03 Fishwater Screen Debris Removal,diving activities,sonar pre-.inspection prior to debris removal $703,071 Carry over $703,070.55 from 2015 (Current projection is $500,000) BPMC authorized an additional!($186,067.16)if needed to finish unit 2 333.05 Turbine Nozzle Repair noozles in June 2016.Not added to budget yet as 332.03 fishwater is $1,130,000 $-projected to be $200,000 under budget. Total $1,998,071 $600,000 $--233.01% HEA Cap Proj 50f9 Bradley Lake Operations &Maintenance Budget Entry Page -Payroll FY 2017 Budget CEA 562 -Station Expenses APN ON AvereActivityHoe CEA SVC/Substation Maint.Con Job Title Substation Lineman ST Rate 73.97 ST Hours 550.00 OT Rate OT Hours Dbi Rate !Dbl Hours 150.02 490.00 Payrolloe]ie _| 114,193.30 CEA S62 -Station Expenses CEA SVC/Substation Maint.Con Relay Technician 73.28 140.00 149.03 40.00 16,220.40 CEA CEA CEA CEA CEA CEA CEA Payroll 130,413.70 Page 6 of 9 Bradley Lake Operations &Maintenance Budget Entry Page -AP &Other FY 2017 Budget PXadW iia Cost Type ES AP Detail Description i!Total Cost Mil CEA {562 -Station Expenses CEA SVC/Substation Maint.Contract 804020000 -Supplies &Materials Relay /Substation Materials $16,000.00 CEA |562 -Station Expenses CEA SVC/Substation Maint.Contract 802010000 -Travel Relay /Substation Travel S 6,000.00 CEA {562 -Station Expenses CEA SVC/Substation Maint.Contract 803010000 -Contractual Substation Professional Services $4,000.00 CEA {562 -Station Expenses CEA SVC/Substation Maint.Contract 804030000 -Other Costs Substation Other Costs S 4,000.00 CEA {539 -Misc.Hydraulic Power Gen EJCEA Circuits -Bernice Lake to Anch 804030000 -Other Costs Bradley Circuits -Bernice Lake to Anchorage $29,773.00 CEA CEA CEA CEA $59,773.00 Payroll $130,413.70 AP S$59,773.00 Total $190,186.70 CEA AP Page 7 of 9 Bradley Lake Operations &Maintenance Budget Entry Page -Payroll FY 2017 Budget ees rel costlllDeptFERCSCLactivityJobTitleSTHoursMlOTRateMlOTHours@Db!Rate I DbI Hours Total Cost AEA AEA AEA AEA a None in FY2017 :AEA AEA AEA AEA AEA AEA PLMMMMMIMMIMIin'HEA $1,874,665.79 CEA $130,413.70 AEA $: Total Payroll $2,005,079.49 AEA Payroll Page 8 of 9 Bradley Lake Operations &Maintenance Budget Entry Page -AP &Other FY 2017 Budget Dep A O De AP Deta br:ate ota O AEA |540-Rents Bradley Lake FERC land use Fees 804030000 -Other Costs Bradley Lake FERC land use fees $312,176.00 AEA {556 -System Control &Load DispatchySCS Snow Measurement 803010000 -Contractual SCS Snow Measurement $10,000.00 AEA 556 -System Control &Load Dispatch UA Seismic monitoring/reporting 803010000 -Contractual UAF Seismic monitoring and reporting S 60,370.00 AEA {556 -System Control &Load Dispatch USGS Stream gauging 803010000 -Contractual USGS Streamgauging $310,000.00 AEA [556 -System Control &Load Dispatch State of Alaska Permits 803010000 -Contractual State of Alaska Permits S$100.00 AEA {920 -Administrative Expense AEA Admin Fee 809010000 -Administrative expense AEA Bradley Fixed Admin Fees $200,000.00 AEA |920 -Administrative Expense Bradley Lake Audit fees 809010000 -Administrative expense Audit fee $16,494.00 AEA [920 -Administrative Expense Bradley Lake PMC Legal 809010000 -Administrative expense Legal fees $25,000.00 AEA {920 -Administrative Expense Bradley Lake Arbitrage Report 809010000 -Administrative expense Arbitrage fee $3,630.00 AEA {920 -Administrative Expense Bradtey Lake Trustee fees 809010000 -Administrative expense Trust &Acccount fees S 12,000.00 AEA |924 -Property Insurance Project Insurance Premiums 809010000 -Administrative expense Insurance Premiums $500,000.00 AEA |928 -Regulatory Commission Expensq@FERC administrative fees 809010000 -Administrative expense FERC administrative fees S$*180,000.00 AEA |928 -Regulatory Commission ExpensdFERC administrative fees 809010000 -Administrative expense Contractual Engineer -FERC license issues S 100,000.00 AEA }928 -Regulatory Commission ExpensqFERC administrative fees 809010000 -Administrative expense FERC Part 12 Inspection (every 5 yrs,next 2021)$25,000.00 AEA $ 1,754,770.00 HEA $1,484,488.00 CEA $59,773.00 AEA $1,754,770.00 Total AP $3,299,031.00 HEA $=3,359,153.79 CEA $190,186.70 AEA $1,754,770.00 Total AP &Payroll $=5,304,110.49 AEA AP Page 9 of 9 Bradley Lake Operator Report BPMC March 4,2016 Unit Statistics:03/1/2016 Generation Unit 1 (MWhrs)Unit 2 (MWhrs)Total (MWhrs) February 2016 16,895 13,153 30,048 Hydraulics Avg.Lake Level (ft)Usage (ac ft)Fishwater (ac ft) February 2016 1,110.67 31,193 3,228 Lake Level -1,103.2 Projects:1)Fishwater screen debris removal -Lake level target is 1070'on April 15”, 2) 3) Lake level reduction -During the past 16 days,lake level has decreased 10 feet. This equates to 0.625 feet/day.If lake level reduction continues at the same rateforthenext45days,(March 1 -April 15)projected lake level on April 15"will be 1075'. Fire system annual inspections -Yukon Fire is scheduled to be on site for two days March 20-21.This preliminary inspection will set the stage to begin the process of replacing and upgrading the fire systems and alarm panels. a.System inspection and analysis -Yukon Fire b.Work scope for RFP to add fire suppressant system to Engineering Room and Replace Halon fire control system in the Control Room. c.Work scope and RFP to replace fire alarm panels throughout the plant. Unit #2 nozzle rebuild -NAES Power Contractors are scheduled for May 23%- June 25".Major parts and supplies are on site to complete this work.Minor items are being evaluated between HEA and NAES. Budget remaining -$380,148 plus $186,067 authorized =$566,215 Project estimate NAES Labor-$445,053 Supplies -§25,000 Shaft refurbishing-$60,000 Per-Diem &Meals-__$30,000 Total Estimate $560,053 Operations and Maintenance: 1)Bradley unit operation -No trips or notable alarms.Unit availability =100% Bradley Lake Operator Report Page 1 Bradley Lake Project Management Committee -Alaska Online Public Notices Page 1 of 1 STATUS:Active Bradley Lake Project Management Committee Notice is hereby given that the Bradley Lake Project Management Committee will hold a regular meeting on Friday,March 4,2016 at 12:Noon.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 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 3-4-16.pdf Commerce,Community andDepartment:E ;conomic Development Revision History Category:Public Notices Created 3/3/2016 1:46:53 PM by tawebster Sub-Category:Advisory Committee Meeting Location(s):Statewide Project/Regulation #: Publish Date:3/3/2016 Archive Date:3/5/2016 Events/Deadlines: https://aws.state.ak.us/OnlinePublicNotices/Notices/View.aspx?id=180486 3/3/2016 ieBRADLEY LAKE PROJECT MANAGEMENT COMMITTEE <)REGULAR MEETING .Friday,March 4,2016 Immediately following the BPMC budget meeting (ETA 12no0n) AGENDA Alaska Energy Authority's Board Room 813 West Northern Lights Boulevard,Anchorage,AK To participate by teleconference,dial 1-888-585-9008 and use code 467 050 126. CALL TO ORDER ROLL CALL FOR COMMITTEE MEMBERS PUBLIC ROLL CALL AGENDA COMMENTS /MOTION FOR APPROVAL PUBLIC COMMENTS APPROVAL OF MEETING MINUTES --January 29,2016 OLD BUSINESS A.Payments to HEA via AEA Cerove CEAB.Capital project financing Telole *O Shoe,1 NE ommittes NEW BUSINESS Ggalt pelo 5uly 4A.Renewal process of operator contract"OF a)Kirk Gibson B.Timekeeping of operator services COMMITTEE REPORTS .OPERATORS REPORT soe.CPS 5 we chee Woe wyCOMMITTEEASSIGNMENTS®Budgei COM -work om MEMBERS COMMENTS NEXT MEETING DATE -Friday,March 25,2016 ADJOURNMENTPemonefrDudekto updcte Venrals-jor rock MEY Yoee re uges ahep aniad) uehreVySvOIsIAG2OUBRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING REGULAR MEETING Alaska Energy Authority,Anchorage,Alaska March 4,2016 aNCraPaAra.+¥2SUe1.CALL TO ORDER Chair Borgeson called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 12:08 p.m. 2.ROLL CALL (for Committee members) Cory Borgeson (Golden Valley Electric Association [GVEA]);Sara Fisher-Goad (Alaska Energy Authority [AEA]);Lee Thibert (Chugach Electric Association [CEA]);Tony Izzo (Matanuska Electric Association [MEA]);Mark Johnston (Anchorage Municipal Light &Power [MLP]);John Foutz (City of Seward);and Harvey Ambrose (Homer Electric Association [HEA)). BLIC ROLLmy (forall others presen) General's Office [AGO));Burke Wick (CEA):Bob Day,Emily Hutchinson,Alan Owens (HEA);Kirk.Gibson (McDowell Rackner &Pyeng Jim Brooks,Gary Kuhn,David.Pease (MEA);MollieAGENDACOMMENTS!MOTION FOR.APPROVALMOTION:Mr.Foutz made a motion to approve the agenda and to add discussion oftrainingmanualsunderItem10.Operators Report...Motion.seconded by Mr.Izzo.:eS sty Chair Borgeson informed the discussion of the training manuals will also occur at the next meeting under Budget Committee. Mr.Ambrose stated HEA objects to Item 7A.Payments to HEA via AEA on the agenda,as it is outside the jurisdiction of the Committee. The agenda passed with the amendment to add discussion of training manuals under Item 10,with Mr.Ambrose opposing. 5,PUBLIC COMMENTS None. 6.APPROVAL OF PRIOR MEETING MINUTES-January 29,2016 MOTION:Mr.Thibert made a motion to approve the prior meeting minutes of January 29, 2016.Motion seconded by Mr.Johnston. The motion passed unanimously to approve the prior meeting minutes of January 29, 2016. DRAFT BPMC Minutes 3/4/16 Page |of 5 7.OLD BUSINESS A.Payments to HEA via AEA Chair Borgeson asked Ms.Fisher-Goad if it was possible for AEA to transmit payments from the Project to HEA.Ms.Fisher-Goad clarified the email she provided to members explained AEA would hold payments from utilities if HEA was not accepting payments,until the disputes were settled.Ms.Fisher-Goad suggested a budget group work out the details of a contract if this option is to be utilized. Mr.Johnston recommended the item be postponed.Chair Borgeson proposed the item be removed from the agenda.He noted the item may be put back on the agenda by the request of any member.There was no opposition to removing the item from the agenda. B.Capital Project Financing MOTION:Mr.Johnston made a motion to table Item 7B.Capital Project Financing until the next meeting before Apri!1,2016.Motion to table seconded by Mr.Ambrose. The motion to table passed unanimously. Mr.:Johnston asked if noticee of termination iisgiven in July,the termination will occur at the endofthetermagreementintwoyears.Mr.Gibson agreed and recommended the Committee state any separate purpose,including a request for quotation (RFQ),in the termination notice,unless it is a simple termination. MOTION:Mr.Johnston made a motion to postpone any action on Item 8A.Renewal Process of Operator Contract until a future date,to be determined,but prior to the date of required notice of July 1,2016.Motion seconded by Mr.Foutz. Mr.Foutz requested further discussion on the renewal process and the possible benefits going forward. Mr.Thibert asked if there is an avenue under the current contract to make modifications to the current contract.Mr.Gibson advised the Second Amended and Restated Operation and Maintenance Agreement does allow for amendment as follows;"Any amendment or modification to this agreement must be in writing and signed by the operator and the Authority and approved by the BPMC." Ms.Fisher-Goad recommended the BPMC discuss any specific amendments. Mr.Ambrose asked if amendments to the current contract would be under the same July 1, 2016 deadline.Mr.Gibson recommended following the July 1,2016 deadline.Mr.Foutz added DRAFT BPMC Minutes 3/4/16 Page 2 of 5 if all the parties agree,there is flexibility to extend the time to negotiate the amendments without the July 1,2016 deadline being triggered.Mr.Gibson agreed the BPMC has utilized that type of flexibility with other amendments.Chair Borgeson recommended staying on track with the July 1,2016 deadline. The motion passed unanimously. B.Timekeeping of Operator Contract Chair Borgeson noted the extensive discussion during the previous Budget Committee meeting regarding the possibility of operator services keeping track of their actual time. Mr.Gibson advised,for the good of the order,the previous Budget Committee's meeting is available in audio form for anyone interested in listening to the discussion on this issue. Mr.Thibert asked if HEA could bill on an hourly basis,rather than the current fixed allocation structure.Mr.Thibert asked for a description of HEA's concerns regarding the modification.Mr. Ambrose noted he stated previously HEA works for the Project under contract and would like to satisfy the client.Mr.Thibert requested a description of specific requirements in writing be Tee oped for oanty andeewees.to HEA for consideration. Chairir Borgeson requested moree details describing the work performed during the time'allocatedtotheProject.Chair Borgeson suggested the Budget Committee work with HEA to develop anappropriateand|fair system.The iissue would be brought back to the full Committee before July Ms.Fisher-Goad indicated more detailed information ¢can be provided tto the committee regarding the work Mr.Carey completes for the Project. Chair Borgeson indicated more detailed information can be provided by CEA for the work billed to the Project.Mr.Thibert agreed. Mr.Ambrose commented HEA expects to follow the billing practices the Project uses for other entities. 9.COMMITTEE REPORTS None. 10.OPERATORS REPORT Mr.Owens provided the Committee with a written copy of the Operators Report.The contracts are still in place for the fish water screen debris removal project and the O&D Committee addresses the lake level trends each month.The fish water screen debris removal project is expected to be under budget by approximately $200,000.There will be an annual fire systems inspection this month.Mr.Owens anticipates the updates on the fire system will be a two-year project,with the majority of the contracts and scope of works in place in the 2017 budget.The DRAFT BPMC Minutes 3/4/16 Page 3 of 5 nozzle rebuild project is expected to utilize the additional authorized $186,000 for labor costs. Mr.Owens informed the operation has provided 100%availability with no significant problems. A.Training Manuals Mr.Owens provided his opinion regarding the training manuals.He noted an engineering description,organized by approximately 20 systems,is given when a power plant is built.Large vendors like Fuji provide their own operating procedures and descriptions.From an operator's standpoint for training,it is ideal to have the operating procedures merged together.HEA has created such merged documents called the Operating Training Manual.Since the governor change-out and other modifications within the last five years,those documents need to be updated again.Mr.Owens believes the updates can be completed in-house,paying for the time and labor costs,rather than hiring an outside contractor. Mr.Thibert expressed support for having HEA complete the work internally. Mr.Day reassured the Committee there are operating,maintenance and training manuals,and it is the nuances of specific directions that need to be updated. Mr.Foutz agreed with thein--house option of updating the manuals and asked about the budget has funds available for temporary workers and this could be.utilized to bring ina:temporary engineering intern to begin the bulk of the work and starttranscribing.Mr.'Ambrose agreed an in--house production will bermore cost effective and produce a 'betterqualitymanual.He noted if it is decided HEA will no longer be the operator,the update shouldbeginasquicklyasspossibletogiveHEAenoughtimetocompletethemanualsbeforethecontractends.:a 3 Mr:Foutz asked Mr.Owens if he has teceived the specific direction 'needed to move forward with the training manuals.Mr.Owens stated a determination needs to be made by the Budget Subcommittee whether or not to include funding in the budget for the training manuals.Mr. Ambrose suggested including this item in the budget and the notice to proceed or not can be determined at a later date. Chair Borgeson asked for the status of replacing the recently retired operator.Mr.Owens believes the replacement of that position will depend on the renewal of the contract.He does not believe it is fair to bring someone in for a job ending in two years.Mr.Ambrose disagreed and believes the position should be filled with full knowledge of the situation.Mr.Ambrose suggested having replacements trained and ready. 11.COMMITTEE ASSIGNMENTS Chair Borgeson assigned the Budget Committee work with HEA to develop an appropriate and fair positive time-keeping system which follows the Project's current billing structure.The issue will be brought back to the full Committee before July 1,2016. 12.MEMBERS COMMENTS Mr.Thibert expressed his appreciation for the fantastic job of the operator and realizes the renewal issue needs to be resolved as soon as possible to ensure continuity of the project. DRAFT BPMC Minutes 3/4/16 Page 4 of 5 Mr.Ambrose commented the concept of hiring a project manager seems to create duplication of duties.He requested the job description be shared,if one has been developed. Chair Borgeson expressed his appreciation to Mr.Owens and Mr.Day for their hard work and diligent reports.He commented the Budget Committee meeting was very informative and expressed his appreciation for that effort.Chair Borgeson noted the uncertainty in the state of Alaska.He expressed his appreciation to AEA representatives and requested they continue their work. Chair Borgeson believes the consensus of the Committee is to direct HEA to proceed with updating the operators manuals and procedures internally.He requested the item of an outside contractor to perform the updates be removed from the budget. 13.|NEXT MEETING DATE-Friday,March 25,2016 The next meeting date will occur Friday,March 25,2016,at 10:00 a.m. Mr.Foutz informed he will appear telephonically on the 25th. The BY: y Borg Attest: Sara Fisher-Goad Alaska Energy Authority,Secretary DRAFT BPMC Minutes 3/4/16 Page 5 of 5 go Trawnt RS ManusLadeneetMeeeaNALASKAINDUSTRIALDEVELOPMENTANDEXPORTAUTHORITY\Q BOARD MEETING BPMC 3/4/16 First Second First Second First (Second |First Second |First Secondset[ort |[oe Roll Call Agenda Minutes Roll call from top to bottom ending with Chair No Yes No Yes No Yes No Yes No Homer Electric Association Matanuska Electric Association City of Seward Alaska Energy Authority Municipal Light &Power Chugach Electric Association \AINALNVS48Golden Valley Electric Association A a ec2 RO ile etreGe aa ett AD era Tt A i Ci eR Tita Bl iAPE et Be ite Na Be te Pah AE aD eM i EAE A Ni A Cthik a aE i RE ti Sansa OR te A lie BEE eae il ae hs Rate cee BPE oF SO ah Ea aaa ae aa a a a a Aa 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 Homer Electric Association Matanuska Electric Association City of Seward Alaska Energy Authority Municipal Light &Power Chugach Electric Association Golden Valley Electric Association Sa lg we Me i aki RB a won RE Ala ne AaB Ee SMe BE HRMS be ap oeNextMeeting:TBD ::vodplhemBaneidaeeeaWeeadLEabaeinee6Acementaierea TA WEA eQyecks outside yursididaben ATTENDANCE -BPMC REGULAR MEETING,March 4,2016 @ 12 noon COMMITTEE MEMBERS i ALTERNATE Lynn Thompson/Cory Borgeson,Chair GVEA /Lee Thibert,Vice Chair CEA /\Burke Wick Harvey Ambrose HEA Bob Day /Sara Fisher-Goad,Secretary/Treasurer |AEA VY Bryan Carey |Tony Izzo MEA _-Gary Kuhn Mark Johnston MLP Jeff Warner V/JohrFoutz 06 SEW JoffEstes- -Public Members COUNSEL |Salina Bearden 1 Kirk Gibson,McDowell Rackner &Gibson PC Kelli Veech |Brian Bjorkquist,Dept of Law Jocelyn Garner _Teri Webster Gerystal Enkvist (APA). MetHutchinson [APA Rich Baldwin (HEA) Afninaterndersom{MLeR) -"Alan Owens (HEA) Bemie-Srit Maly Shari _CtAéMottRQRoanLOAlree:) Emly bl. Dam WS ASQRQ Deh Smelat cep Teri Webster Subject:BPMC budget workshop Location:AEA board room Start:Fri 3/4/2016 8:30 AM End:Fri 3/4/2016 11:30 AM Recurrence:(none) Meeting Status:Meeting organizer Organizer:Teri Webster Required Attendees:Teri Webster;Brian Bjorkquist;Bryan Carey;Burke Wick;Connie Owens;Cory Borgeson; Dawn M.Baham;Day,Bob;Gary Kuhn;Harvey Ambrose;Heather Smith;Jeff Estes;Jeff Warner;Jocelyn Garner;John Foutz;Kirk Gibson;Lee Thibert (lee_thibert@chugachelectric.com);Linda Davidovics;Lynn Thompson (Inthompson@gvea.com);Mark Johnston -MLP;Sara Fisher-Goad;Susan Redlin;Tony Izzo;Allen Gray;Jim Brooks;Emily Hutchison;matt.reisterer@mea.coop;Mollie Morrison;Ron Woolf;Sherri McKay-Highers;Kelli L.Veech Optional Attendees:Matthew J.Reisterer;Allen J.Gray;Johnston,Mark A.;Morrison,Mollie C.;Warner,Jeff A.;Owens,Alan (Aowens@HomerElectric.com) The budget committee will be having a 3-hour budget workshop that includes O&D Committee members,the Budget Subcommittee,and Bradley Managers Committee members.This would give everyone the opportunity to meet and go over the budget before the BPMC is tasked with passing the Bradley Lake budget later in March (date TBD). A regular BPMC meeting will immediately follow the workshop. Danish for the morning and lunch will be provided. BMC --Loorfehep =--meethiog- WO_arequa platas__|Chaban.solad_Plot.\dz eeeames Vda.plo_tonlGes__25Des.Chepon tsAnnsloreaSoda18 dQuek soda, £10 -_____del wery mg (1 ESR Ceokeo Duy care gy watin "Sb ct -epsteo_reax¥Sood- TrukVaurvely oF danish-RPO sc,blog,Voleana,fg Bradley Lake Project Management Committee Friday,March 4,2016 @ 12:00 Noon. **PLEASE WRITE LEGIBLY** NAME ORGANIZATION /Mole Wot rise,MLae /EriWy YWuloh soc HoA JBranBroclayu ts}DOW J Bucke Wrele Cea /Dwid Peaaw MER "Ddoceyn Garner wZA VY Dexr¥Wiarnec MuaP /Bolb Day WEA "N\andw ens Hea JGasnxs Kuhn Me A Ban Cour ey Kee Ad yA Broots ME A Ter Wweostec Pra /Mack5 hnstmn MLAae Sethe hor Derpleo ke.four 06.CY A ZA 4 Tony 2220 Mew 7 Warvey Aworese.HEA 7 Cary Borgessn Ver 4 Dore Fisher-Goad A ok /Lee Thylperct ceh J Sdn,Foukt,Senet New Glos MDowd Fackner Win atig Bradley Lake Operator Report BPMC March 4,2016 Unit Statistics:03/1/2016 Generation Unit 1 (MWhrs)Unit 2 (MWhrs)Total (MWhrs) February 2016 16,895 13,153 30,048 Hydraulics Avg.Lake Level (ft)Usage (ac ft)l Fishwater (ac ft) February 2016 1,110.67 31,193 3,228 Lake Level -1,103.2 Projects:1)Fishwater screen debris removal -Lake level target is 1070'on April 15". Lake level reduction -During the past 16 days,lake level has decreased 10 feet. This equates to 0.625 feet/day.If lake level reduction continues at the same rateforthenext45days,(March 1 -April 15)projected lake level on April 15"will be 1075'. 2)Fire system annual inspections -Yukon Fire is scheduled to be on site for two days March 20-21.This preliminary inspection will set the stage to begin the process of replacing and upgrading the fire systems and alarm panels. a.System inspection and analysis -Yukon Fire b.Work scope for RFP to add fire suppressant system to Engineering Room and Replace Halon fire control system in the Control Room. c.Work scope and RFP to replace fire alarm panels throughout the plant. 3)Unit #2 nozzle rebuild -NAES Power Contractors are scheduled for May 237 -June 25".Major parts and supplies are on site to complete this work.Minor items are being evaluated between HEA and NAES. Budget remaining -$380,148 plus $186,067 authorized =$566,215Projectestimate=NAES Labor-$445,053 Supplies -$25,000 Shaft refurbishing-$60,000 Per-Diem &Meals-__$30,000 Total Estimate $560,053 Operations and Maintenance: 1)Bradley unit operation -No trips or notable alarms.Unit availability =100% Bradley Lake Operator Report Page 1 Fe luded wider mewn _Nnve Vad ol ow (ose oyDocs, fadWrpeebg*SE Bi eiby*asETE '4,fa;ré:Feeeeee Financing Goal =Find the lowest cost funding source,that aligns the repayment of the asset with its 20 year life Considerations =The BPMC and the AEA Board must approve new debt =The lender must be willing to accept that debt will be parity debt (not senior or subordinate to existing debt)under the bond resolution =The lender must be willing to accept the power sales agreement as security for repayment =The end of the debt amortization period cannot exceed the expiration of the current FERC license (12/31/2035) Cash Flow Needs =7/2015-7/2016 -$3.6 million to purchase SVC equipment =7/2016-10/2016 -$3.6 million for construction costs Funding Options Considered Short-Term Financing (equipment purchase and construction costs): 1.Renewal &Contingency Fund (R&C Fund) 2.CoBank Construction Draw Loan Long-Term Financing (take out): 1.CoBank Loan USDA Rural Utility Service (RUS) General Obligation Bonds tional Cooperative Service Corporation (NCSC)(higher interest rates) A Particip ility Long Term Loan omenanvwesdoesn't fit) ean Renewable Energy Bonds (CREB)(application deadline problem) (EASA Short-term financing R&C Fund s5io00,0n0 R&C Net Cash Balance Problem $4,000,000 FY15 $115,700 $3,000,000 }------------- FY17 FY17 . FY36 ,__$282,000 :12 equallli}a monthly paymentsco(MLE 5 1 1 au _$236,000ongeeewrRise_Reim Res aoe e a-a =a_a_HHP,[F".es($1,000,009 "Ss Ss mAs s °y ee Ss s KS x "gs "x As {$2,000,000)-voces _cae ee $2,000,000 $1,000,000 *soneone R&C Net Cash Balance Solution $4,000,000 fo -FY ag mr oe me BYG rrr i Pee BY ag cena eee $115,700 fl ;$282,000 $3,000,000 Jo =ant nf i ::.oo es ce cee ete toe ee penn FY17 $2,000,000 ||THI AT _accelerated WH HT monthly payments $2/000,000 WH WALT |I ||oe (July-Oct)$708,000 so |W dh hk he PLU I l la..------(Nov-June)$o gr $i?$?gi?og?se Pg gf Pg Rg rs)Ps)Roa(s3,000,008 J *cs ce x e *ea -*xcs ia =v *x f=SEED PRP ANY ALITHOBITY CoBank Construction Draw Loans $5,000,000 R&C Net Cash Balance with CoBank FY16 $217,600$4,000,000 |- ---FY15 $115,700 i Ld so o*($1,000 na Ras*=avalae $3,000,000 $2,000,000 $1,000,000 >oma &SS ghoHCad OaogSe CoBank Construction Draw Loan: =Monthly interest only payments with approx.interest rate of 1.75%-2.0% FY15 FY16 FY17 R&C repayment S 115,700 217,600 78,400 CoBank Interest Payment 0 29,250 28,500 Total Payment §115,700 246,850 106,900 l=ONGOTY AUTHORITY i 4 Long-Term Financing General USDA Rural Utility Service Obligation Funding conditions CoBank (RUS)Bonds Does the SVC work qualify for a loan/program?Yes Yes Yes Is AEA and/or BPMC eligible?Yes Yes Yes Are the Bond &PSA acceptable security?Yes Yes Yes Parity Debt acceptable Yes es Yes Electrical Infrastructure Name of loan or program?n/a Loan and Loan Guarantee |n/a Program Interest rate (%)US Treasury as of 5/1/15 is 2.57%(for 20 year term loan)(bp=basis points)4.35-4.60%gue +12.5 bp =13.75%-4.25% Finance Amount ($in million)$7,200,000 $3,600,000 (50%)IS7,200,000 Term (yrs)20 yrs 20 yrs 20 yrs Application Fee (other fees?)TBD TBD TBD Time from application to funding 2 months at least 6 months TBD Construction Funding No No No Long Term Loan Yes Yes Yes Prepay penalty 50 bp of balance TBD TBD Projected debt service annual repayments $539,600 to $551,300 $233,000 Rese 00 to Comments Long term option,also available for Battle Creek. Annual 1%rebate available w/membership of fee of $1,000 Better option if combined with CoBank or Bonds, also available for Battle Creek Best if combined with Battle Creek ee=ne ee os.bs ea AS SSa £3 Long-Term Financing:CoBank Loan Finance amount:$7,200,000 Term:20 years Interest rate:4,35-4.60% Projected debt service annual payment:$539,600-$551,300 Short term and long term option Could be combined with RUS Benefit:offer annual dividend payment of 1%of outstanding loan balance Long-Term Financing:USDA Rural Utility Service (RUS) =Finance amount:$3,600,000 (assume 50%of total project costs) «=Term:20 years Interest rate:US Treasury +12.5 bp =2.695% Projected debt service annual payment:$233,000 Remaining 50%of project could be funded by: =R&C Fund (assume 0%interest cost) =CoBank Loan (assume 4.35-4.60%interest rate) RUS +R&C: FY16 =R&C rate 0%annual payment $900,000 FY17-FY19 =R&C+RUS annual payment $1,133,000 FY20-FY35 =RUS rate 2.695%annual payment $233,000 RUS +CoBank approximate blended rate =3.52-3.65%blended payment =$502,000-S507,800 CEB fuROTY AlirHORITY ; .a:cI Long Term Financing:General Obligation Bonds with Battle Creek Finance amount:$7,200,000 Term:20 years Interest rate:3.75%-4.25% Projected debt service annual payment:$512,200 -$535,100 Recommendations If the SVCs is the only project-S7,200,000: #Short Term -CoBank and/or R&C Fund ="Long Term: =»50%RUS =»50%CoBank If the SVCs and Battle Creek are financed together-S57,200,000: =Short Term -CoBank and/or R&C Fund (SVC portion) =Long Term: =»50%RUS =50%CoBank or Bonds Questions/Discussion =Are there any other options that have not been included in this presentation that the BPMC would like us to pursue? *"Would the BPMC like AEA to pursue one of these funding options? (EASA ayspes5aeSCsSetNe nal apt at"gills :rot =-8