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Home My WebLink AboutBradley Operations & Maint. Agreement 1999 1AGREEMENT AMENDING AND EXTENDING THE TERM OF THE OPERATION AND MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT THIS AGREEMENT is entered into this an”day of fpmeee ,1999,between the HOMER ELECTRIC ASSOCIATION,INC.(the""Operator")and the ALASKA ENERGY AUTHORITY (the "Authority"). RECITAL: Effective February 11,1994,the parties entered into an agreement titled Operation and Maintenance Agreement for Bradley Lake Project (the "Agreement").The term of the Agreement was for an initial period of five years,automatically renewable annually thereafter.The parties have determined to extend the Agreement for an additional five-year period and to amend the Agreement to require the Operator to provide communication services in addition to the other services listed in the Agreement. TERMS OF AMENDMENTS NOW,THEREFORE,the parties agree as follows: 1.Section 2 is amended as follows: The term of the Agreement is extended until June 30, 2004,and shall continue from year to year thereafter,except upon written notice to terminate as provided in the Agreement. 2.Section 5 is amended by adding a subsection (u)which shall read as follows: (u)(1)Onor before October 30,1999,provide and maintain adequate and reliable communication service between the Project and the Bernice Lake generating facility of the Chugach Electric Page 1 -AGREEMENT AMENDING AND EXTENDING THE TERM OF THE OPERATION .AND MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT Association,Inc.("CEA")and enter into an agreement with CEA for interconnection with CEA's SONET microwave system and transport of Project signals to CEA's control facility in Anchorage. (2)The Operator shall arrange for continued use of the existing microwave interconnection and signal transport over the State of Alaska's Division of Communications microwave system (Div Com)until the interconnection with the CEA's SONET system is in operation. 3.Section 10 is amended by adding a subsection (e)which shall read as follows: (e)(1)The costs which the Operator shall charge and which the Authority shall pay for the communication service described in Section 5(u)shall equal $90,000 annually ($7,500 monthly). (2)In addition,The Operator shall be reimbursed monthly for the amounts charged to The Operator by CEA for transport of Project information to Anchorage. (3)Until the connection is completed to CEA's SONET System,The Operator shall be reimbursed for its costs of using the Div Com System. IN WITNESS WHEREOF,the Parties have caused this Agreement to be executed as of the date first written above. Page 2 -AGREEMENT AMENDING AND EXTENDING THE TERM OF THE OPERATION AND MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT HOMER ELECTRIC ASSOCIATION,INC. "thlsGeneralManager Date:b-/,6-9G ALASKA ENERGY AUTHORITY pile MlExecutiveDirgctor Date:efrzf q Page 3 -AGREEMENT AMENDING AND EXTENDING THE TERM OF THE OPERATION AND MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT OPERATION &MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT AMENDMENT NUMBER ONE THIS AMENDMENT NUMBER ONE to the Operation and Maintenance Agreement for Bradley Lake Project dated February 11,1994,(hereinafter O&M Agreement)is entered into by the HOMER ELECTRIC ASSOCIATION, INC.(HEA)("Operator")and the ALASKA ENERGY AUTHORITY ("Authority")on this 2é74day of August,1996.The O&M Agreement is hereby amended as follows: For the purpose of maintenance and operation of the 115 kV electric transmission line facilities identified in Exhibit A,Section 2.12,the maintenance duties and obligations of the Operator,pursuant to Sections 4 and 5 of the O&M Agreement,shall not include the operation and maintenance of the electric transmission line facilities.The electric transmission line facilities shall be operated and maintained under a separate Transmission Line Facilities Operation and Maintenance Agreement. All other terms and conditions of the O&M Agreement shall remain in full force and effect and are unchanged by this Amendment. HOMER ELEGIRIC ASSOCIATION,INC..AL fewTitleCouralWausger ALASKA ENERGY AUTHORITY a Wim 2 Sed) Title (octibia.Ghivden Z BRADLEY LAKE PROJECT OPERATION &MAINTENANCE AGREEMENT AMENDMENT NUMBER ONE OPERATION &MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT BETWEEN HOMER ELECTRIC ASSOCIATION,INC. AND ALASKA ENERGY AUTHORITY Section Section Section Section Section Section Section Section Section Section Section Section Section Section Section Designated Section Section Section ..Section. Section 12 13 14 15 16 17 18 19. 20 -.-Force.Majeure . TABLE OF CONTENTS Definitions ......ee ee eee eee ee eee 2 Term of Agreement ......cece ee cee wee eee eee 4 Qualified Utility Status ...2...ec ee ee ee 5 Operator's General Duties ....................5 Operator's Specific Duties ...................6 Accounting and Records ............-.2.-2202-00 8 1100he-)a 9 Extraordinary COStS .....cece ee ee eee ee eee eee 10 Emergency Expenditures ..........-.--.-ee--eee 10 -Disbursement of Funds ................200006.11 -Access to Operator's Facilities .............11 -Use of Project Living Quarters ..............11 INSULFANCE 2...ee ee ew we ww we te eee ee eens 12 -Dispute Resolution .....ee ee eee eee ee eee ee 16 -Notices,Time and Holidays Computation, Representatives .......-........6-.ewe cece eee 16 -Remedies Cumulative .................222-200-16 -Availability of Information .................17 -Termination ....ccc ee eee ee ee tee ee eens 17 er ee ee we ee ww -Third Party Beneficiaries ee Section 21 Section 22 Section 23 Section 24 Agreement.. Assignment of Contract ..............0002 eee 19 Exhibits .....beeen eeeee 19 Multiple CopieS .........ce ee ce eee eee ee eee 19 Entire Agreement;Priority of Power Sales OPERATION &MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT THIS AGREEMENT dated this _//day of February,1994,is entered into by the HOMER ELECTRIC ASSOCIATION,INC.(HEA)("Operator")and the ALASKA ENERGY AUTHORITY ("Authority"). WITNESSETH WHEREAS,the Authority is a public corporation of the State of Alaska duly created, organized,and existing pursuant to AS 44.83,and authorized by law to sell electric power generated by the Bradley Lake Project ("Project"); WHEREAS,the Authority is authorized under AS 44.83.396 to enter into agreements for the operation and maintenance of power projects owned by the Authority with a "qualified utility"; WHEREAS,the Bradley Lake Project Management Committee ("BPMC")is authorized under its Bylaws adopted pursuant to the terms of the Bradley Lake Project Power Sales Agreement,to approve agreements for the operation and maintenance of Project facilities; WHEREAS,the Operator has been identified in the "Bradley Lake Hydroelectric Project Agreement for the Wheeling of Electric Power and Related Services"(Services Agreement)dated June 29,1989 by the participating utilities as one of the two appropriate entities to operate and maintain the Project (the other being the Alaska Electric Generation and Transmission Cooperative,Inc.); 1-OPERATION &MAINTENANCE AGREEMENT WHEREAS,the Operator is both a qualified utility within the meaning of AS 44.83.425(5) and is authorized to operate and maintain a power project acquired or constructed by the Authority;and WHEREAS,the Operator has agreed to operate and maintain the Project in accordance with the terms and conditions of this Agreement; NOW,THEREFORE,THE PARTIES AGREE AS FOLLOWS: Section 1 -Definitions For purposes of this Agreement,the following definitions apply: (a) @) (d) (e) "Act"or references to AS 44.83,mean Title 44,Chapter 83 of the Alaska Statutes (1989),as amended. "Agreement"means this Agreement. "Authority"means the Alaska Energy Authority as established by the Act,and any successor agency thereto and,unless the context otherwise requires,such officers and agents of the Authority that may be delegated responsibilities and duties under this Agreement. "BPMC"means the Bradley Lake Project Management Committee as established under the December 8,1987 Power Sales Agreement and operating under the Bylaws adopted on October 19,1988. "Contract Year"means,except for the first and last Contract Years,the twelve month period starting July 1 of a calendar year through and including June 30 of the next succeeding calendar year.The first Contract Year shall be the period commencing with the effective date of this Agreement and extending through and including the - succeeding June 30.The last Contract Year shall be the period commencing after the 2-OPERATION &MAINTENANCE AGREEMENT (f) (g) (h) () ) (k) () last full (i.e.,twelve -month)Contract Year and ending on the expiration of this Agreement. "Dispatch"means to schedule daily and remotely monitor and control the voltage, frequency,and real and reactive power flow through the Project. "Dispatch Agreement"means the Agreement for the Dispatch of Electric Power and for Related Services between Chugach Electric Association,Inc.and the Alaska Energy Authority dated February 19,1992. "Division of Risk Management"means an office which is part of the State Department of Administration and which is established pursuant to AS 44.21.020. "FERC"means the Federal Energy Regulatory Commission,an agency of the United States Department of Energy,or its successor agency. "Master Operating Agreement"means the Master Operating Agreement between the Authority and the BPMC to be executed by the BPMC and the Authority after approval by the BPMC. "O&M"means operation and maintenance of the Project and includes the duties set forth in Section 4 of this Agreement. "Operation and Maintenance Standards"means the Plant Operation and Maintenance Manual,and equipment installation,operation,and maintenance manuals. "Operator"means Homer Electric Association,Inc.(HEA)or its assignee. "Party"or "Parties"means each or all the signatories to this Agreement. "Power"or "Electric Power"means electric energy or electric capacity,or both, except where the context requires a distinction,in which case electric energy is expressed in kilowatt hours,and electric capacity is expressed in kilowatts. 3-OPERATION &MAINTENANCE AGREEMENT (p)"Power Sales Agreement"means the Bradley Lake Power Sales Agreement,dated December 8,1987,among the Authority;the Municipality of Anchorage (d.b.a. Municipal Light and Power (ML&P));the City of Seward (d.b.a.Seward Electric System (SES));the Chugach Electric Association,Inc.(Chugach);the Golden Valley Electric Association,Inc.(GVEA);the Alaska Electric Generation and Transmission Cooperative,Inc.(AEG&T),the Matanuska Electric Association,Inc.(MEA);and the Homer Electric Association,Inc.(HEA). (q)"Project"means the Bradley Lake power generation facility and the associated transmission and substation facilities described in Exhibit A. (r)"Project O&M Budget"means the budget for the operation and maintenance of the Project as adopted and amended pursuant to this Agreement. (s)"Purchaser"shall have the meaning given to that term by the Power Sales Agreement. Section 2 -Term of Agreement . (a)This Agreement shall take effect upon execution by the authorized representatives of all Parties. (b)The term of this Agreement shall be five (5)years from the date on which it takes effect and shall continue from year to year thereafter,except upon written notice to terminate.Notice of termination by the Operator shall be given one (1)year in advance,effective on July 1 of the next Contract Year.Notice of termination by the Authority shall be given one (1)year in advance,effective on July 1 of the next Contract Year;provided,however,if the Authority reasonably determines that termination is necessary to avoid substantial damage to the Project or endangerment to public health or safety,this Agreement may be terminated in accordance with subsection (c). 4-OPERATION &MAINTENANCE AGREEMENT » (c)In the event the Authority reasonably determines that the Operator's performance of its obligations under this Agreement,without immediate remedial actions,could cause substantial damage to the Project or endanger public health or safety,the Authority shall promptly notify the Operator and shall identify the areas where performance must be remedied.The Operator shall submit to the Authority a plan for remedial action to correct its performance within twenty-four (24)hours of such notice.The Authority or its designee shall have the right to temporarily take over the duties of the Operator until a remedial action plan reasonably satisfactory to the Authority is agreed to by the Operator.If the Parties fail to agree to a remedial action plan within thirty (30)days of submission,the Authority may terminate this Agreement. Section 3 -Qualified Utility Status The Authority has determined that the Operator is a qualified utility within the meaning of AS 44.83.425(5)and has met all the requirements thereof. Section 4 -Operator's General Duties To the extent authorized by the Project O&M Budget or as otherwise funded in accordance with this Agreement and consistent with the provisions of Exhibit "D",the Operator shall: (a)Operate and maintain the Project so as to make power available to the Purchasers in an amount equal to the amount the Purchasers may schedule from the Project,within the limitations imposed by available Project capability,available water,and the scheduling procedures adopted by the BPMC; (b)Bring to the attention of the Authority Required Project Work (as defined in the Power Sales Agreement),and perform or cause to be performed such Required Project Work to the extent funds are made available for such purpose. 5-OPERATION &MAINTENANCE AGREEMENT The Operator shall not perform or cause to be performed Optional Project Work (as defined in the Power Sales Agreement)unless such Optional Project Work is approved and funded by the BPMC and assigned to the Operator by the Authority. Section 5 -Operator's Specific Duties To the extent authorized by the Project O&M Budget or as otherwise funded in accordance with this Agreement,the Operator shall: (a) (b) (c) (4) (e) Coordinate operation,maintenance,repair and other work schedules with the Purchasers in accordance with the Bradley Lake Allocation and Scheduling Procedures; Operate,maintain,and repair the Project in accordance with the Operation and Maintenance Standards.In addition the Operator shall use and update the Automated Maintenance Management System or such equivalent system as the Authority may direct. The Operation and Maintenance Standards shall be maintained at the Project site.Any _Tevisions to the Operation and Maintenance Standards shall be effective within a period of time after notice having due regard to the nature of the revisions requested and necessary project budget revisions. Provide all material,labor,engineering and other technical support,subcontract management,and training to operate,maintain,and repair the Project,and all tools, equipment,spare parts,materials,and supplies needed to perform work under this Agreement in accordance with the Operation and Maintenance Standards and written directives by the Authority.. Comply with all applicable federal,state,and local government laws,regulations and permits.If the Operator elects to contest an order issued by a local government,state or federal agency (other than the Authority),the Operator shall promptly notify the Authority and the BPMC. : Provide security and access in accordance with a mutually agreed plan; 6 -OPERATION &MAINTENANCE AGREEMENT (g) (h) @) Q) (k) (): Read,maintain,and operate all Project metering devices,record such readings,and maintain or forward data,forms,relevant graphs,and/or magnetic tapes as required by the Authority; Make annual recommendations to the Authority and BPMC for: (1)operation,maintenance,repair,replacement,and modification of Project facilities; (2)installation of additional protective relaying,instrumentation,control systems,or other apparatus as necessary to maintain or improve the Project and interconnected system reliability,integrity,efficiency,and safety; (3)a five (5)year schedule of estimated equipment modifications,replacements, additions,and disposals; Prepare monthly and year-end operating and financial statements,in a form acceptable to the Authority relating to the performance of this Agreement; Provide qualified personnel with the ability to perform the duties assigned to the Operator under this Agreement; Prepare and conduct an annual training program that meets the minimum training standards established by the BPMC.The Authority may require the Operator to undertake additional training which the Authority deems necessary,however,funding for such additional training is the responsibility of the Authority; Following a protective relay or alarm action,and upon observation or notification, interpret the cause,identify corrective measures,and take corrective action as the situation warrants.The Operator shall document any such actions within three (3)days of their accomplishment; Take prudent measures to protect equipment,personnel,and the general public from hazards arising from equipment failure such as electrical faults,vandalism,and mechanical 7-OPERATION &MAINTENANCE AGREEMENT (m) (n) (p) (q) (r) (t) failure and repair and report damaged facilities to the Authority,to the BPMC on behalf of the Authority and any appropriate law enforcement authority,as soon as possible following each occurrence; Record the operating characteristics of the power plant equipment and machinery as required; Maintain the Project living quarters,including expenses for utility services,as a cost of operation and maintenance; Update,keep and make available to the Authority or any Purchaser the required Project documents,as-built drawings,and other records,including records to meet FERC license requirements and records required by any project related insurance agreements; Perform water and power operation studies as required to integrate power from the Project into the Purchasers'systems with due regard for the capability limits of the Project, planned water reserves,and Purchasers'power needs; Arrange for and administer subcontracts or agency agreements related to the O&M of the Project; Conduct all technical,operation,and maintenance inspections of the Project in accordance with FERC and other permits or agency requirements,and submit inspection and other reports to the appropriate entities as directed by the Authority; Support the Project by coordinating related technical and operating activities with the Purchasers;and Perform such other additional duties related to the operation,maintenance and repair of the Project as may be included in the Project O&M Budget. 8-OPERATION &MAINTENANCE AGREEMENT Section 6 -Accounting and Records In keeping any books of account required by Section 5,the Operator shall,to the extent that different rules are not prescribed by this Agreement or federal and state laws,follow the system of accounts prescribed for public utilities and licensees by FERC.Upon reasonable notice,the Operator and its contractors or subcontractors shall allow the Authority,BPMC, or their authorized representatives to audit books of account for the Project O&M and the supporting documents of the Operator and its contractors or subcontractors related to the Project O&M for a period of three (3)years following the close of a Contract Year.The audit shall be performed in such a manner that will not unreasonably interfere with the Operator's duties under this Agreement. Section 7 -Budget (a) (b) (c) (d) After the effective date of this Agreement,and in accordance with schedules provided by the Authority,the Operator shall prepare and submit each year to the Authority and the BPMC a draft O&M budget for the Project for the following Contract Year. The draft O&M budget shall be based upon prudent estimates and anticipated O&M requirements and expenditures,and reflect appropriate accounting and budgetary principles for utilities.The draft budget shall be prepared in a format and schedule provided to the Authority by the BPMC.- Not less than 30 days prior to the beginning of a Contract Year the BPMC or the Authority acting pursuant to Section 13 (c)of the Power Sales Agreement shall adopt a Project O&M Budget for the Contract Year. The Operator shall perform its duties in a manner consistent with the Project O&M Budget except as provided in Sections 8 and 9 below.If the Operator makes a determination during any Contract Year that it cannot perform its obligations under this Agreement without an increase in the expenditures authorized under the Project O&M Budget,the Operator shall report such finding to the Authority and the BPMC and shall submit a revised budget for the Authority's and the BPMC's 9-OPERATION &MAINTENANCE AGREEMENT review and approval.In the event the revised budget is not adopted by the BPMC and the Authority,or the Authority,pursuant to Section 13(e)does not authorize and agree to fund such expenditures,and the Operator determines that it cannot perform its obligations under this Agreement,the Operator may terminate this Agreement upon 90 days notice to the Authority." Section 8 -Extraordinary Costs (a) (b) Extraordinary costs are costs for operations,maintenance,repair or equipment replacement which were not anticipated to materialize in the Contract Year,and not provided for in the Project O&M Budget. If the Operator learns of an event or other contingency which involves an extraordinary cost,the Operator shall promptly notify the Authority and the BPMC of the circumstances and request authorization to make such expenditures. If required by the Authority,the Operator shall develop a scope,schedule,budget and proposed plan of work and deliver the same with a request to proceed as soon as practicable.The Authority shall respond in writing to the Operator's request as soon as practicable after the receipt of the plan.Upon approval by the BPMC and the Authority,or by the Authority alone,pursuant to Section 13(e)of the Power Sales Agreement,the Operator shall perform such work consistent with the plan.The Operator shall not incur any extraordinary costs without the written approval of the BPMC and the Authority,or by the Authority,pursuant to Section 13(e)of the Power Sales Agreement except as provided in Section 9 below. Section 9 -Emergency Expenditures (a)An emergency is an unforeseen combination of circumstances or the resulting state that requires immediate action to protect or preserve the Project,Project personnel, or public health and safety. 10 -OPERATION &MAINTENANCE AGREEMENT (b)The Operator shall take such actions as it reasonably believes are necessary in an emergency.If,in the reasonable judgment of the Operator,the emergency requires the Operator to incur costs prior to obtaining written approval from the Authority, the Operator shall notify the Authority and the BPMC of the emergency as promptly as practicable with due regard to the emergency. Section 10 -Disbursement of Funds (a) (b) (c) @ The ordinary costs of performing under this Agreement shall be initially paid by the Operator. The Operator shall prepare an invoice identifying the actual costs incurred in a format mutually agreeable to the Authority and Operator.The invoice shall be furnished to the Authority by the fifteenth (15)of the month following the month in which the costs are incurred.All such invoices shall be subject to audit and approval by the - Authority,such approval shall not be unreasonably be withheld. Subject to the availability of funds,the Authority shall reimburse the Operator for all costs under this Agreement. Any amounts owed by the Authority to the Operator shall be paid by the Authority within thirty (30)days of receipt of a bill from the Operator.Any amounts not paid within thirty (30)days shall accrue simple interest at the legal rate of interest at the time payment was due,and shall continue until paid by the Authority. Section 11 -Access to Operator's Facilities Authority and BPMC personnel or agents shall be granted reasonable access to the Project and the Project owned equipment and facilities on the Operator's premises upon reasonable notice and subject to security measures,for the purpose of inspection and testing. 11-OPERATION &MAINTENANCE AGREEMENT Ls Section 12 -Use of Project Living Quarters (a)Use of living quarters is established by the Bradley Work Rules.Modification of the Work Rules requires the approval of the Authority and the BPMC. (b)The Operator shall schedule occupation of the Project living quarters in an efficient manner.The Operator shall include in such scheduling,quarters for visiting employees of the Operator,subcontractors,the Authority,and the BPMC as needed and available. (c)On-site operations and maintenance personnel shall have priority in the use of permanent residences at the Project. Section 13 -Insurance (a)General. (1) (2) (3) Each Party shall be liable for the negligent,willful and grossly negligent acts of its officers,employees,agents and contractors with respect to the ownership, construction,operation,maintenance or repair of the Project.Its is recognized that the project insurance does not cover the willful and grossly negligent acts of a party.Each Party shall be solely liable for the willful and grossly negligent acts of its officers,employees,agents and contractors. During the term of this Agreement,the Operator shall use its best efforts to maintain insurance satisfactory to the Authority and the BPMC covering injury to persons or property suffered by any Party or a third party,as a result of errors,omissions,or operations which arise both out of and during the course of this | contract by the Operator or by any of its contractors.Such "Operator insurance" may be obtained either by the Operator or be provided by the Authority or the BPMC under insurance policies covering the Project. Such Operator's insurance shall be the primary coverage for the exposures delineated in subsection (2)above with respect to the State of Alaska,its officers, agents,and employees,the BPMC,its officers,agents,and employees,and the insurance or self-insurance separately maintained by the State,except insurance 12 -OPERATION &MAINTENANCE AGREEMENT (4) (5) (6) (7) (8) (9) (10) purchased on behalf of the BPMC,shall be in excess of the Operator's insurance and shall not contribute to it. The Operator will bear the cost of the required insurance,which cost shall be included in the Project O&M Budget as an operating cost. If the Operator elects to individually obtain the insurance required by subsection (2)above,it may be maintained as part of any other policy or policies of the Operator so long as the coverage of such policy or policies is substantially the same as if such coverage were maintained under a separate policy.The policy must be acceptable to the Division of Risk Management. Policies maintained under this Agreement must provide that any cancellation,non- renewal or material change be upon thirty (30)days written notice to all named insureds.Insurance Companies shown on the certificate of insurance must be acceptable to the Authority.The Authority shall not unreasonably withhold approval of such Insurance Company. The Operator shall,at least thirty (30)days prior to cancellation,non-renewal,or material change,provide the Authority with written evidence of insurance which replaces or reinstates the required insurance coverage. A copy of the insurance policies required by this Section will be furnished to the Authority prior to beginning work under this Agreement.Prior to February 1 of each year thereafter,evidence of insurance shall be provided by the Operator. The obligation to obtain and maintain insurance coverage pursuant to this Section shall be subject to the general availability of such coverage under reasonable terms and conditions.If one or more of the required insurance coverages is not available under reasonable terms and conditions,the Operator shall,under the guidance and direction of the BPMC and Division of Risk Management,use its best efforts to obtain substantively equivalent insurance coverage acceptable to the BPMC,the Authority,and the Division of Risk Management. If,after utilizing its best efforts,the Operator is unable to obtain the required insurance coverage under reasonable terms and conditions,as reasonably determined by the Operator,the Operator shall request a waiver of the relevant insurance requirement.The request shall outline steps taken by the Operator to obtain such insurance and shall disclose quotations received for coverage.To the 13 -OPERATION &MAINTENANCE AGREEMENT (b) (c) (11) (12) extent the waiver will not materially affect the safe and prudent operation of the Project,the Authority,after consulting with the Division of Risk Management,will ,not unreasonably withhold approval of the requested waiver.Failure to furnish satisfactory evidence of insurance or failure to maintain the policy without complying with this subsection shall result in a material breach of this Agreement. Any Party,before the expiration date of the existing policy,may reopen the insurance requirements on sixty (60)days notice. The Authority shall annually,prior to February Ist each year,furnish evidence of insurance to the Operators and the BPMC. Workers'Compensation Insurance. (1) (2) @) The Operator shall maintain,for all employees of the Operator engaged in work under this Agreement,workers'compensation insurance as required by AS 23.30.045.The Operator is responsible for workers'compensation insurance for any of its subcontractors who directly or indirectly provide services under this Agreement. The insurer shall agree to waive all rights of subrogation against the State of Alaska,its officers agents,and employees for losses arising from operation of the Project. Workers'compensation insurance policy must include: (i)statutory coverage for states in which employees are engaging in work; (ii)Employer's Liability Protection of not less than $500,000 per occurrence; (iit)|Broad Form All States Endorsement;and (iv)coverage as required by all State and Federal Acts where applicable. Comprehensive General Liability Insurance. (1)The Operator shall maintain comprehensive general liability insurance.The Authority,acting on behalf of the BPMC,has as of the effective date of this Agreement acquired general liability insurance which satisfies part of this 14-OPERATION &MAINTENANCE AGREEMENT (d) (e) (2) requirement.The Operator shall secure any additional insurance as required to meet its obligations under this subsection to the extent the insurance so acquired by the Authority is not sufficient to meet the Operator's obligations.The BPMC and the Authority shall be included as additional insureds as respects insurance required in this Section and shall not by their inclusion be responsible to the insurance carrier for payment of premium therefor.These insurance policies must also contain a provision providing for cross liability or severability of interest. The comprehensive general liability insurance shall be subject to the following limits of liability: (i)Bodily Injury and Property Damage Liability of a minimum $5,000,000 Combined Single Limits each occurrence and affording insurance for Premises Operations,Owners and Contractors'Protective,Independent Contractors,Products/Completed Operations,Blanket Contractual Liability,Broad Form Property Damage,and personal Injury Liability; (ii)Automobile Liability Insurance covering all vehicles.Such insurance shall provide coverage of not less than $5,000,000 Combined Single Limit each occurrence for Bodily Injury and Property Damage Liability. Additional Liability Insurance. The Operator shall maintain the following additional insurance,where applicable,for (1) (2) aircraft and watercraft owned or contracted for by the Operator. Owned Aircraft and Non-Owned Aircraft with seating capacity of five seats or _less,except commercial,scheduled flights,with limits of liability not less than: $5,000,000 for Bodily Injury per occurrence;$1,000,000 for Passenger Liability per seat;and $5,000,000 for Property Damage Liability per occurrence.Coverage must include Slung Cargo exposures.If an aircraft with more than five seat capacity is used,special coverage and limits must be obtained and must be approved by the Authority;and Owned Watercraft and Non-Owned Watercraft with limits of liability not less than $5,000,000 per single occurrence as provided in the "in Rem Endorsement"under "Maritime Coverage B." Subcontractor's insurance. 15 -OPERATION &MAINTENANCE AGREEMENT Any contract entered into with a subcontractor,other than a Purchaser,by the Operator to perform part of its obligations hereunder shall include the indemnity and insurance provisions attached as Exhibit C.The Operator may request a waiver of part or all of such provisions where such waiver will not materially affect the Project and the Operator determines the waiver is necessary to its performance of this Agreement.The Authority will not unreasonably withhold approval of such waiver. Section 14 -Dispute Resolution Pending resolution of a disputed matter,the Parties will continue performance of their respective obligations pursuant to this Agreement.If the Parties cannot reach timely mutual agreement on any matter in the administration of this Agreement,the Operator shall,to the extent necessary for its continued performance,make a determination of such matter without prejudice to the rights of the other Parties.Such determination shall not constitute a waiver of any other remedy belonging to either Party. Section 15 -Notices,Time and Holidays Computation,Designated Representatives (a)Any notice required to be given to any Party by this Agreement shall be effective when it is received by such Party.In computing any period of time from such notice, the period shall commence at 12:01 p.m.on the date of receipt of such notice.Notice to Operator required by this Agreement shall be in writing directed to the General Manager of Homer Electric Association,Inc.,3977 Lake Street,Homer,Alaska 99603.Notice to the Authority required by this Agreement shall be in writing addressed to the Executive Director of the Alaska Energy Authority,480 West Tudor,Anchorage,Alaska 99503. (b)If the date for making any payment or performing any act is a day on which banking institutions are closed in the place where payment is to be made or a legal holiday, payment may be made or the act performed on the next succeeding day which is neither a legal holiday nor a day when banking institutions are closed. 16 -OPERATION &MAINTENANCE AGREEMENT (c)Each Party shall designate a representative to act for it in matters not requiring formal action by its governing bodies.Either Party may at any time change its designated representative by giving written notice to the other Party. Section 16 -Remedies Cumulative No remedy conferred upon or reserved to the Parties under this Agreement is intended to be exclusive of any other remedy or remedies existing at law or equity. Section 17 -Availability of Information The Parties shall make available to each other,for inspection and copying during business hours,all books,records,plans and other information relating to any calculation or determination to be made under this Agreement. Section 18 -Termination (a)Not less than 75 days prior to the date of any scheduled termination of this Agreement the parties shall meet for the purpose of discussing arrangements necessary for the orderly takeover of the duties of the Operator by the Authority.At or before the meeting the Operator shall submit to the Authority a takeover plan which sets forth the actions which in the opinion of the Operator are reasonably required to accomplish the takeover,and any budget amendments necessary to accomplish the plan.The Authority shall review and either approve or modify the plan and budget.The Operator shall perform in accordance with the approved plan, subject to any budgetary constraints. The Authority shall secure funding for and pay any extraordinary costs reasonably incurred by the Operator in performing its duties hereunder,including close-out and demobilization costs. 17 -OPERATION &MAINTENANCE AGREEMENT (b)Following termination of this Agreement for any cause,the Authority shall have the right and a reasonable amount of time,not to exceed six (6)months,to arrange disposition of Project-owned equipment on the Operator's premises. Section 19 -Force Majeure (a)No Party to the Agreement shall be liable to other Parties for,or be considered to be in breach of or default under this Agreement on account of,any delay in performance or any delay or failure to deliver,receive or accept delivery of energy due to any of the following events: (1)Any cause or condition beyond such Party's reasonable control which such Party is unable to overcome by the exercise of reasonable diligence (including but not limited to:fire,flood,earthquake,volcanic activity,wind,drought and other acts of the elements;court order and act of civil,military or govern- mental authority;strike,lockout and other labor dispute excluding those disputes wrongfully caused by the Operator;riot,insurrection,sabotage and war;breakdown of or damage to facilities or equipment;electrical disturbance originating in or transmitted through such Party's electric system or any electric system with which such Party's system is interconnected;and,any act or omission of any person or entity other than such Party,or Party's contractors or suppliers of any tier or anyone acting on behalf of such Party); or (2)Any action taken by such Party which is reasonably necessary or prudent to protect the operation,performance,integrity,reliability or stability of the Project or of such Party's electric system or any electric system with which such Party's electric system is interconnected,whether such actions occur automatically or manually. 18 -OPERATION &MAINTENANCE AGREEMENT (b)Inthe event of any delay excused under this section,the time for performance thereby delayed shall be extended by a period of time reasonably necessary to compensate for such delay.No cost adjustment will be allowed,only time extensions as appropriate. Nothing contained in this paragraph shall require any Party to settle any strike, lockout or other labor dispute.Each party shall give the other Parties prompt written notice of any delay which the Party giving notice considers to be an excusable delay of its performance. Section 20 -Third Party Beneficiaries This Agreement gives no rights or benefits to anyone other than the parties,the Operator and the Authority,and the BPMC as a third party beneficiary.The BPMC is the only third party beneficiary.In any action by the BPMC for damages the Operator shall have the right to assert against the BPMC any defense which it could have asserted against the Authority.The raising of any such defense by the Operator shall not affect any right of a purchaser or the BPMC under the Master Operating Agreement or Power Sales Agreement. Section 21 -Assignment of Contract HEA assignment of its rights and responsibilities under this agreement shall be subject to the approval of the Authority and BPMC.HEA expects to request approval to assign its nghts and responsibilities under this Agreement to AEG&T.Approval of such assignment request is subject to a finding by the Authority that AEG&T is a qualified operator.No such assignment shall operate to relieve HEA of its obligations under this Agreement. Section 22 -Exhibits The provisions of the following exhibits attached hereto are incorporated by reference herein: Exhibit A -Project Facility Description; -Exhibit B -Project Specific Federal and State Agency Requirements; Exhibit C -Insurance and Indemnification;and 19 -OPERATION &MAINTENANCE AGREEMENT Exhibit D -Exhibit A of the Master Operating Agreement Section 23 -Multiple Copies This Agreement shall be executed in several counterparts,each of which shall be an original, but all of which shall constitute one and the same instrument. Section 24 -Entire Agreement:Priority of Power Sales Agreement This Agreement in its entirety including the Exhibits and the Power Sales Agreement represent the entire Agreement of the Operator and the Authority.Nothing in this Agreement is intended to alter the rights and obligations of the Authority and the Purchaser(s)under the Power Sales Agreement.In the event the terms of this Agreement and the Power Sales Agreement are found to be in conflict,the terms of the Power Sales Agreement shall govern.In the event of a conflict between any provision in the body of this Agreement and any provision contained in an exhibit hereto,the former shall control.Any amendments to this Agreement shall be in writing. IN WITNESS WHEREOF,the Parties have caused this Agreement to be executed the day and year first above written. HOMER ELECTRIC ASSOCIATION,INC. te Z-/27 20 -OPERATION &MAINTENANCE AGREEMENT ALASKA ENERGY AUTHORITY »Wibbeen$25 LD Title__Executive Director Date February 11,1994 (SEAL) ATTEST: 21 -OPERATION &MAINTENANCE AGREEMENT EXHIBIT A PROJECT DESCRIPTION 1.PROJECT DESCRIPTION 1.1 1.2 General The Bradley Lake Hydroelectric Project is located on the Kenai Peninsula at the northeast end of Kachemak Bay about 27 miles from Homer.The project contributes to the electrical generating capacity of Alaska's Railbelt serving customers from the Kenai Peninsula to Fairbanks. Major elements of the project include a concrete faced,rockfill dam,to raise the level of Bradley Lake about 100 feet,an ungated spillway having discharge capacity of 23,800 cfs at pool elevation 1190.6,a diversiontunnelwhichalsoservesasalowleveloutlet,a submerged intake leading to the power tunnel which,including the vertical shaft,is 19,152 ft.long,a surface powerhouse located on the shore of Kachemak Bay and a tailrace channel into the bay.All elevations given in this report are referred to Bradley Lake Project Datum,at which zero is equal to 13.63 ft.above MLLW at Bear Cove.. The two unit plant has a nominal generating capacity of 90 MW at 917 ft. net head.Each generating unit consists of a six jet,vertical shaft Pelton turbine driving a 63 MVA generator at 0.95 power factor.The penstock for a future third unit was also constructed as part of the initial project development. Usable storage in Bradley Lake at full pool (El 1180)is about 280,000 acre ft.The project is connected to the existing Kenai Peninsula transmission line,consisting of two parallel 115 KV lines.The lines run through the Fox River Delta to connect with Homer Electric Association's Fritz Creek to Soldotna Transmission line.A summary of pertinent project data is given on Table 1. History of Development The power generation potential of Bradley Lake was first studied by the U.S.Corps of Engineers and presented in a report dated March 1955.TheprojectwasauthorizedbyCongressin1962,but despite its feasibility federal funds were not available for its construction.The Alaska Energy Authority (then Alaska Power Authority)assumed responsibility for the project in 1982.Preliminary plans were developed and field investigations started in 1982.In April 1984,the Authority submitted an application for license to the Federal Energy Regulatory Commission (FERC).The license to construct the project was issued on December 31,1985.. A-1 The first major contract,"Site Preparation"was let in 1986 and was completed in 1987.This contract included on-site access roads,barge dock,airstrip,permanent facilities,construction camp and diversion tunnel. Following a one year hold on project construction,the General Civil Construction and Transmission Line Clearing Contracts were awarded in June 1988.The Powerhouse Construction Contract was awarded in December 1988 and the Transmission Line Construction Contract was awarded in June 1989.The General Civil Construction and the Powerhouse contracts were completed in August 1991. The Alaska Energy Authority issued a contract for supply of the turbines and generators in 1987,and issued a contract for supply of the SCADA control systems in July 1989.Smaller contracts were also issued for transmission line surveying,geotechnical surveys,and construction of the Middle Fork and Nuka Diversion structures. The diversion tunnel was closed in October 1990,however all inflow to the reservoir was released through the fish water bypass lines.Actual storage in the lake started in Spring 1991 when enough water was available to meet downstream minimum flow requirements.A contract for Site Rehabilitation was issued in June 1991.Both units were released to dispatch in August 1991,and the Project was declared in commercial operation September 1,1991.Construction of the project was completed on November 21,1991,with the completion of the Site Rehabilitation work. 2.DESIGN 2.1 Geology Except for the transmission line,all major elements of the project are founded on or in the bedrock.The geology of the site is composed of Upper Mesozoic Age metamorphic rocks of the McHugh Complex.Most probably this melange is composed of turbidites which have been slightly to moderately metamorphosed.Rock types encountered are graywacke, argillite,chert,dacite,metatuff,and greenstone.The graywacke,argillite and mixtures of these rocks are dominant.Chert occurs as nodules and lenses in the argillite and metatuff with some massive beds up to 15 ft thick.The diabase occurs as intrusive dikes generally 10 to 20 ft.in width with some dikes about 40 ft.thick.The metatuff is metamorphosed,. volcanic pyroclastic debris.Frequently it is intermixed with the argilite but some layers up to 15 ft.thick were encountered.Over all it constitutes less than 5%of the rock mass.The greenstone is metamorphosed volcanics.It constitutes less than 3%of the rock mass. Except where severely weathered,the argillite is moderately hard to hard. The graywacke,chert,dacite and greenstone are hard to very hard. A-2 2.2 -Foliation (cleavage)is poorly developed in the argillite and bedding,when identifiable,is poorly preserved.The graywacke is massive and displays neither bedding nor foliation.The chert,dacite and metatuffs are generally massive and show no foliation. Jointing is well developed.It is widely spaced in the graywacke and moderately to widely spaced in the argillite.Generally three or more sets are observed resulting in blocky structures.There are some open joints in the abutment of the dam and spillway,especially in the rock know between these structures.Hydrosplitting tests made along the tunnel alignment showed low in situ horizontal stresses ranging from 0.9 to 0.5 of overburden pressure at the depth tested.Open vertical joints striking about parallel to the tunnel (N60 W)were observed during tunnel construction at depths of rock cover of as much as 1200 ft. Geologic Hazards The Pacific Plat is subducting under the North American Plate south of the coast of Alaska.The Aleutian Arc trench marks the surface juncture of the two plates.This trench trends northeast-southwest and is located about 185 miles southeast of the site at its nearest approach.The Pacific Plate is moving north relative to the North American plate.The subduction zone dips northwest and the upper contact of the subduction plate,the Benioff zone,lies at a depth of about 30 miles beneath the surface at the site. The Benioff zone is the locus of great earthquakes. Major faults in the general site area are the Border Ranges fault which lies under Kachemak Bay and the Eagle River Fault which crosses Bradley Lake near its head.Both faults trend NE-SW (about N45 E)parallel to regional structure.Three smaller faults lie within the site area crossing the power tunnel between the intake and the powerhouse.These are the Bull Moose Fault,the Bradley River Fault,and the Bear Cub Fault.These trend approximately north-south.The Bull Moose and Bradley River are the larger of these faults.Where crossed by the power tunnel they consisted of a series of gouge-filled anastamosing shears,a few feet to possibly 20 ft.wide,separated by sound rock and extending over a width of 300 to 400 ft.Lineations and minor shears parallel these faults. Seismicity of the site was investigated by Woodward-Clyde Consultants, "Report on Bradley Lake Hydroelectric Project Design Earthquake Study," 1981.They recommended an MCE earthquake spectrum normalized to zero period horizontal acceleration of 0.75g with a duration of 25 seconds for design of critical,water retaining structures.Vertical acceleration was taken at 2/3 horizontal.This spectrum has been the basis of investigation: and design of the dam,spillway and powerhouse.Dynamic analyses of .the dam and spillway were made using Finite Element analyses.The time- A-3 2.3 history used an accelerogram whose spectrum envelopes the Woodward- Clyde spectrum.This was constructed by combining two appropriate shorter earthquake records.This hybrid earthquake has a duration of 28 seconds. The nearest active volcanoes are Mt.St.Augustine and Mt.Redoubt which are more than 100 miles from the site across Cook Inlet.Renewed activity poses no direct threat to the project other than possible development of a tsunami due to large mud flows or slides from Mt.St.Augustine and ash 'falls from both. The cost of Alaska has been subjected to tsunami generated by uplift due to offshore earthquakes.This hazard was investigated by Stone & Webster Engineering Corporation in a report presented to this Board (September 1987).This report indicated an annual probability (combined earthquake and volcanic activity)of about 0.007 for a wave height at the powerhouse reaching E!25 BLP Datum (El 38.63 MLLW datum).The powerhouse is designed to withstand water to this level without damage.- The hazards 'of seiche in Bradley Lake due to earthquake and the> possibility of a wave generated in the lake by a liquefaction generated slide in the Bradley Glacier delta were investigated.It was concluded waves from these sources would not damage the dam or spillway.The mountain sides surrounding Bradley Lake are bare rock which has been scoured by late Pleistocene and recent glaciation.Minor rockfalls mayresultfromearthquakebutslideswhichcouldcauseovertoppingarenota hazard.The Kachemak and Nuka glaciers are sufficiently far from the lake that ice falls or slides which might result from earthquake would not reach 'the lake. -Main Dam The dam is a concrete faced,rockfill structure.Top of the embankment is El 1190.A parapet wall at the upstream face extends to El 1194.Normal full pool (crest of the spillway)is El]1180 and pool level under PMF is El 1190.6.The parapet wall is designed to provide wave protection during floods.The face slab is 12 inches thick,constant top to bottom.The toe plinth varies in width along its contact with the rock from 10.5 ft.to 13.3 ft. Minimum thickness varies from 3 ft.to 2.25 ft.depending on location and head.The face slab is underlain by a 12 ft.wide zone of crushed rock grading from fines (passing No.200 mesh)to 3 inch size. The toe plinth is founded on rock for its full length.General rock level in the river bottom is about E]1065 giving a nominal dam height to the top of 'the embankment of 125 ft.However,a narrow channel was found along the right side of the river bottom.This was excavated to bedrock,at its A-4 2.4 lowest point at El 1032,over a length of 28 ft.centered on the toe plinth and backfilled with concrete.Thus the dam is actually 158 ft.high above the lowest point in the bedrock.The rock surface drops slightly south of the left abutment under the gate shaft bench.In this area the rock is covered by overburden and some rock fill.A concrete wall was constructed across this bench.This extends down to rock for its full length of about 175 ft.A single line grout curtain is located along it. The single line ground curtain extends the full length of the toe plinth and into the abutments.Maximum hole depth is 110 ft.In general the rock was tight and takes were small.However several open joints were found in the abutments.These were grouted to refusal and check holes drilled and grouted. Alternative types of dams considered in selecting a concrete face rock fill included a thick arch structure,a concrete gravity dam or a central core embankment dam.The concrete face rockfill was selected because of its excellent resistance to earthquake,relative cost,lack of suitable earth core material,and topographic constraints,especially space for the upstream cofferdam.Slopes upstream and downstream were established at 1.6H to 1V to restrict deformation under the MCE 90.75 g horizontal)to acceptable limits. Spillway The spillway is an ungated concrete gravity section with side slopes of 3H to 10V upstream and 8H to 10V downstream. Crest length is 175 ft.at elevation 1180.00.Overall length of the spillway is 275 ft.Spillway discharge at PMF would be 23,800 cfs at a lake level of El 1190.6.A drainage and grouting gallery extends the full length of the spillway at or just above rock level.Access to this gallery is from the left abutment.A single line grout curtain having a depth of 30 to 50 ft.below rock surface inclined 20 upstream and fanning into both abutments was constructed.Drain holes are 3 inches diameter,five feet on centers,and 30 ft.deep except at the right abutment where a fan of holes 50 ft.to 60 ft. _long were drilled.All seepage from the spillway drainage system is collected and discharged over a vee notch weir to permit monitoring. Ice loading causes some tension in the upstream face at about El 1170. Accordingly reinforcing was placed in the upstream face.Dynamic analyses using the hybrid accelogram confirmed that stresses are within allowable and no lateral displacement of the spillway would occur under the MCE. 2.5 The spillway was model tested at Colorado State University.The model extended from well upstream of the power tunnel intake to well downstream of the main dam.Water velocities along the toe of the main dam were measured and riprap along the downstream tow sized to prevent erosion in the event of spillway operations. Power Tunnel &Intake The power tunnel system consists of an upper tunnel 738 ft.long extending from the intake through the upper elbow,a vertical shaft 647 ft. deep and a lower elbow and lower tunnel with a total length of 17,767 ft. The lower tunnel is on a 1.67%grade.The intake channel is about 350 ft. long,and the bottom at the intake is at El 1030.Dual high-pressure gates are installed in the upper tunnel about 520 ft.downstream of the tunnel portal in a vertical drywell.The gates are hydraulically actuated.An accumulator bank rides on the hydraulic system.This is sized to permit closing each gate without recharging even in the event of complete loss of power. Provision is made for stoplogs at the intake portal.The same stoplogs can also be used at the intake portal of the diversion tunnel.A rock trap is provided just upstream of the intake portal. The downstream 435 ft.of the lower tunnel is designated the manifold section.This section contains three wye-branch penstocks which extend to the powerhouse.Two are in service and one is closed by a hemispherical head to be used for a future third unit.The downstream end _of the manifold is closed with a hemispherical head which can be removed as necessary for access to the tunnel.The manifold-penstock section and downstream portion of the tunnel for 2725 ft.upstream of the manifold are steel liner encased in concrete.Inside diameter of this section is 11 ft. Four drain pipes are located outside of the steel liner in the concrete encasement.Drain holes extend from these drains into rock at intervals of 10 and 20 ft.Seepage from these drains is collected and passed through the powerhouse where it can be measured.The remainder of the lower tunnel is 13 ft.ID with a 12 inch thick concrete lining.The vertical shaft and upper tunnel are 11 ft.ID lined with concrete. The manifold-penstock section was pressure tested at 960 psi (1.9 times static head)for 1 hour before encasing it in concrete.There were no indications of distress,and distortions were very small and acceptable. In situ horizontal stresses in the rock are low.To protect against possible hydro-splitting of the rock by leakage from the tunnel,the steel lining was carried to Sta.31+58 where rock cover was equal to 0.8 of the static head. The concrete lining was reinforced to Sta.38+60.From Sta.31+60 to Sta. A-6 2.6 2.7 2.8 35+60 the rock was high pressure grouted (500 psi)using squeeze grouting procedures.Selected areas of the remainder of the lower tunnel were also reinforced.High pressure grouting (250 psi)was done from Sta. 35+60 to Sta.38+60 and at selected areas to Sta.64+00 to ensure that Open joints intersecting or close to the tunnel were filled with high strength grout.The tunnel was first filled to the then reservoir level,El 1076,in May 1991.A falling head test for a 12 hour duration was made in late May which showed an average leakage of only 58 gpm. Powerhouse The powerhouse has a concrete substructure with steel framed superstructure.It is founded entirely in rock,and the tailrace excavation is in rock for a modest distance away from the powerhouse.The powerhouse has been designed for safety against excessive structural stresses,sliding,overturning or flotation.Loading conditions include MCE, (0.75g)DBE (0.35g),high tides,storm high tide,tsunami,and various plant conditions such as in operation,servicing,and construction including appropriate factors of safety. Diversion Tunnel The diversion tunnel is approximately 407.5 ft.long and is located in the high rock spur between the spillway and the main dam.It has been converted to a low level outlet which is normally closed by a dual system of high pressure slide gates located in a deep dry well shaft.The tunnel is lined with concrete from the upstream portal to downstream of the gate shaft.Gate operation is by hydraulic actuators.There is a bank of accumulators which can open each gate completely in the event of loss of all power.The gates discharge through a steel penstock 10.5 ft.in diameter which extends past the downstream portal of the tunnel.Two 28 inch diameter steel pipes encased in concrete extend through the entire length of the tunnel.these discharge through a system of 7 motor operated valves of different sizes so arranged that fish water releases can be made from the reservoir as necessary to maintain a flow in the Lower _Bradley River of 100 cfs at Riffle Reach. Diversions into Bradley Lake As a part of the development of the Project,the Middle Fork of the Bradley River,a portion of the outflow from the Nuka Glacier,and a small tributary of Battle Creek were diverted into the reservoir. 2.8.1 Middle Fork Diversion 2.8.2 2.8.3 The Middle Fork Diversion is located approximately one mile north of Bradley Lake in an adjacent drainage at elevation 2160 on the Middle Fork Tributary of the Bradley River.The Diversion consists of a small intake basis and two reaches of open channel approximately 760 feet and 483 feet long,separated by a stilling basin which is located in a natural bog area,all of which were established by excavation.The Diversion conveys water from the Middle Fork of the Bradley River to Marmot Creek,a tributary to Bradley Lake,and operates in all seasons. Nuka Diversion Glacial melt forms a pond called Nuka Pool at the terminus of the Nuka Glacier.Nuka Pool lies on the divide between two drainage's, discharging water both into the Upper Bradley River and into the Nuka River.Water discharged into the Upper Bradley River flows to Bradley Lake and that which is discharged to the Nuka River flows to the Kenai Fijords National Park. The purpose of the Nuka Diversion is to cause the glacial melt water flowing through the Nuka Pool to flow in the upper Bradley River,except of an initial increment of flow which must be provided to the Nuka River in accordance with the June 1986 Contract between the Alaska Energy Authority and the U.S.Department of Interior.In compliance with this Contract,the design must assure that when flows are available in the Nuka Pool,5 cfs will be diverted to the Nuka River prior to any diversion of water to the Upper Bradley River. To accomplish this,flow from the Nuka Pool to the Upper Bradley River passes over a long,uniform weir constructed by modifying the naturally occurring rock weir at the pool outlet.At the Nuka River outlet of the pool,water is constrained to flow through a 12-inch steel pipe in a gabion dike.This pipe has been sized such that it will discharge 5 cfs when the Nuka Pool level is at the elevation of the Bradley-side weir crest and flow is about to commence to the Upper Bradley River.No flow is allowed to enter the Upper Bradley River from the Nuka Poo!until 5 cfs enters the Nuka River.A second,identical pipe is also provided.This second pipe ensures flows if the first pipe becomes inoperative and needs to be repaired. It may also be used to augment flows. Upper Battle Creek Diversion The Upper Battle Creek Diversion is located at elevation 1342 approximately 0.7 miles south-southeast of Bradley Lake Dam and A-8 2.9 2.10 2.11 2.12 diverts a small tributary of Battle Creek into the reservoir adding 0.9 square miles of drainage area to the Project. Diversion is accomplished by emplacement of a small,talus dike across the tributary at the base of a waterfall.An intake basin 25'x25'by 3 feet deep was constructed near the bottom of the falls and flow is directed through three interconnected ponds. Approximately 300 feet of ditch was excavated between the ponds to reverse the direction of the flow into the reservoir. Permanent Facilities To accommodate for the needs of on-site personnel,the project is provided with two 32'x82'duplex living quarters,a 43'x50'office/transient worker residence building,a 50'x160'shop-warehouse and a fenced storage yard which also contains an unheated storage/incinerator building. Project Airstrip The project airstrip is incorporated into the permanent project road system between the barge dock and permanent facilities. The strip is 2400 ft.long and 75 ft.wide and is equipped with plane lights, a taxi and parking apron,weather building and warning lights. The airstrip is designed for VFR use only and is not open to the public. Barge Dock Water access to the project is from a dock facility consisting of five (5)53 ft.diameter sheet pile cells placed out into the tidal flats of Kachemak Bay. A rockfill,gravel-surfaced causeway extending some 700 ft.from the shoreline connects the barge dock cells to the project access road at the bay shore.Use of this facility is available only during half tides and greater. _A-small,aluminum floating dock is attached to the sheet pile cells to provide mooring for skiffs belonging to the public.This small dock is | removed each winter to prevent it from being damaged by ice. Transmission Line Two parallel and separate single circuit 115 kV transmission lines,each about 20 miles long,connect to the substation at the powerhouse and carry the power generated to the Fritz Creek-Soldotna 115 kV A-9 Transmission Line owned by Homer Electric Association,Inc.The point of connection for these two lines is designated as the Bradley Junction. The Bradley Lake transmission line towers are guyed,X-configuration towers manufactured of Corten type steel.The conductor is 556 kemil, 42/19 Aluminum/Steel "Special Dove." 2.13 Roads -About 10.8 miles of gravel surface access roads have been constructed and connect the powerhouse,permanent facilities,airstrip,dam site and other project areas. 2.14 Instrumentation Settlement and deflection of the main dam are monitored by two rows of monuments set on the upstream face at approximately mid-height of the face and just below the parapet;and three monuments set in the rock fill along the upstream side of the El 1077 berm.Three monuments are set in the crest of the spillway.Instrument pedestals were established along these several lines of monuments.The instrument pedestals are referenced to four primary survey monuments set in rock. Seepage into the spillway drainage gallery is collected and discharged over a vee notch weir.Main dam leakage is estimated by deducting .fishwater releases and spillway seepage from the flow recorded at the USGS gaging station just downstream of the dam. .Four exploratory borings along the line of the tunnel have been converted to open standpipe piezometers to measure groundwater levels above the tunnel. A strong motion seismograph has been installed on rock at the dam.This is linked by telephone to the Geophysical Institute of the University of Alaska at Fairbanks.All monitoring of earthquake vibration is done by the Institute.Seepage flow from the drain system around the steel lining in the tunnel is monitored in the powerhouse. 3.INITIAL FILLING OF RESERVOIR Filling of the reservoir started October 30,1990,but was suspended shortly thereafter to meet the fisheries minimum flow requirements.As the hydrograph began to rise the following spring,filling was resumed.The initial rate of filling was slow but accelerated during the summer of 1991.Water level reached full pool during a severe storm in late September 1991.Spilling started on September 27 and continued for 8 days with about 0.5 ft.depth passing over the A-10 spillway.The winds during this storm were heavy.Waves splashed over the spillway and to some extend over the parapet wall of the dam.These caused no damage. Measured deflections and settlements of the main dam during filling were very small,maximum displacements being: crest settlement '0.02 ft. displacement 0.03 downstream upstream face settlement 0.04 displacement 0.02 downstream downstream bench settlement 0.07 displacement 0.01 The settlement and deflection of the crest are only about 0.03%of the dam height.There was no detectable seepage through the dam. .POWER HOUSE STARTUP The units were turned over for pre-operational testing in March 1991.Unit 2 was first rotated on May 15,1991,and Unit 1 on May 18,1991.The units were released to Chugach Electric Association in Anchorage,Alaska for dispatch onAugust1,1991,and the plant declared in Commercial Operation on September 1,1991. A-11 5.PROJECT LANDS On the basis of the project boundary shown in Exhibit G,the acreage of the lands belonging to the Unite States and State of Alaska are tabulated below. Asterisks (*)denote transmission line ROW acreage only. Description T.3S.,R.10W. Tract A* Total Per Tp T.3S.,R.17W. Section 23 Section 25 Section 26 Tract B* Total Per TP T.4S.,R.QW.- Section 30* Section 31* Tract A* U.S.Surv.2937 Total Per TP T.4S.,R.1O0W. Section 35 Section 36 Section 36* Tract A* Total Per TP T.5S.,R.BW. Section 19 Section 20 Section 29 Section 30 Section 31 Total Per TP T.5S.,RSW. Section 3 Section 6 Section 7 Section 8 Section 9 Section 10 BLM Area Acres 45.74 0.33 46.07 149.14 75.94 40.17 265.25 388.74 93.63 6.04 139.40 316.24 944.05 40.00 5.64 121.12 267.30 29.21 210.59 State Area Other Water Subtotal Acres Acres Acres Acres 263.62 263.62 263.62 26.15 42.48 20.78 129.34 218.75 218.75 2.79 182.13 12.73 182.13 12.73 2.79 240.93 4.00 14.36 14.36 4.00 279.61 944.05 100.71 166.96 170.10 A-12 Description Section 11 Section 14 Section 15 Section 16 Section 17 Section 18 Section 22 Section 23 Section 24 Section 25 Section 26 Section 36 Total Per TP T.5S.,R.AOW. Section 1 Section 2 Section 3 Section 9 Section 10 Section 11 Section 12 Section 13 Section 14 ATS 1418 Total Per TP T.6S.,RSW. Section 6 Total Per TP Total Proj.Area Including Transmission Line Transmission Line Area Only BLM Area Acres 5.67 168.73 32.28 69.46 31.37 3.97 66.32 513.20 558.08 372.53 15.07 15.46 2,425.17 26.81 128.83 384.89 127.87 398.57 222.79 64.41 41.59 1.56 1,397.32 320.00 320.00 5,498.69 86.24 State Area Other Acres Acres 23.21 84.35 208.39 139.39 139.39 925.81 12.73 407.32 A-13 Water Acres 0.94 232.80 548.73 145.42 16.63 67.64 35.77 1,485.70 1,492.49 Subtotal Acres__ 2,633.56 1,536.71 320.00 Dam: Spillway: Power Tunnel: Diversion Tunnel: Penstock:Steel,9-foot diameter with Middle Fork Diversion: Nuka Diversion: Battle Creek Diversion: Airstrip: Table A-1 Bradley Lake Hydroelectric Project Data Concrete-faced rockfill, 600 feet long,125 feet high,360,000 cubic yards rockfill,and 10,800 cubic yards concrete Average Annual Energy: Ungated concrete ogee section,175 feet long (11,000 cubic yards concrete) 13-foot nominal diameter, fully concrete lined, approximately 19,152 feet in length Transmission Line: 21-foot horseshoe concrete lines/penstock tunnel,407.5 feet long Barge Dock: Access Roads: 6 1/2 foot diameter branches 1517 foot diversion includes upper and lower channels with intake basin and stilling basin Powerhouse: 2 diversion and control dikes,Turbines: pilot channel and outlet weir 300 foot diversion channel with intake basin,talus diversion weir Generators: Gravel surface airstrip 2,400 ft.long by 75 feet wide incorporated into access road Governors: A-14 Annual Firm Energy:329 gigawatt hrs 376 gigawatt hrs 115 kilovolt,two Sheet pile cells granular fill 10.8 miles,gravel Surface,steel superstructure, 160 feet long,80 feet wide,92 feet high 2 each Pelton, vertical shaft, 90,170 horsepower max. 2 each Rated output at max. operating pool is 63 MVA. 2 each Woodward digital EXHIBIT "B"BRADLEY LAKE PROJECT SPECIFIC FEDERAL AND STATE AGENCY REQUIREMENTS Dept.of Environmental Conservation (DEC) Dept.of Environmental Conservation (DEC) Corps of Engineers (COE) Corps of Engineers (COE) Corps of Engineers (COE) Corps of Engineers (COE) Corps of Engineers (COE) Corps of Engineers (COE) Dept.of Fish &Game (DFG) Dept.of Fish &Game (DFG) Dept.of Fish &Game (DFG) Approval to Operate Class "C"Water System Permit date 11/4/88 Permit date 04/3/89 Waiver Approval 5/23/91 Certificate to Construct Class "C"Water System Land Use License DACW85-3-91-88 Land Use License DACW85-2-90-24 Dredge and Fill Permit #071-OYD-2-850502 Plus seven modifications Land Use License DACWS85-3-86-55 Land Use License DACWS85-3-86-73 Land Use License DACW85-3-86-101 Critical Habitat Area FG 88-IT-0077 Special Area Permit FG 86-II-0824 Anadromous Fish Stream, Critical Habitat Area FG 86-I-0416 Plus Amendment IV Exhibit "B"Bradley Lake Project Specific Approval to operate permanent facilities -- Public water system and wastewater disposal system. Approval to operate permanent facilities -- Powerhouse Creek Source. Waiver Approval,Class "C"Water Well. Certificate to construct potable water system at Bradley Lake Powerhouse. Approval to Operate was requested 2/4/92 -- No response as of yet. COE land use license to construct and operate the upper Battle Creek Diversion Dam. Land use license for gauging station electrical distribution line. Section 10 -Perform work in or affecting U.S.navigable waters.Section 404 - Discharge dredged or fill material into U.S.waters. Extension of land use license to allow for material extraction. Extension of land use license for area used as access road and construction landfill. Land use license to conduct studies and design project. Road Construction Kachemak Bay Critical Habitat Area Airstrip Construction and Operation Transmission Line Construction Dept. Dept. Dept. Dept. Dept. Dept. Dept. Dept. Dept. Dept. Dept. Dept. Dept. Dept. Dept. of Fish &Game (DFG) of Fish &Game (DFG) of Fish &Game (DFG) of Fish &Game (DFG) of Fish &Game (DFG) of Fish &Game (DFG) of Fish &Game (DFG) of Fish &Game (DFG) of Fish &Game (DFG) of Natural Resources(DNR) of Natural Resources(DNR) of Natural Resources(DNR) of Natural Resources(DNR) of Natural Resources(DNR) of Natural Resources(DNR) Critical Habitat Area FG 86-II-0115 Critical Habitat Area FG 86-IT-0114 Plus Amendment I Anadromous Fish Stream Critical Habitat Area FG 86-I-0113 Plus two amendments Critical Habitat Area FG 86-1-0112 Plus Amendment II Anadromous Fish Stream FG 86-11-0110 Plus Amendment II Critical Habitat Area FG 86-I-0108 Critical Habitat Area FG 86-II-0107 Plus Amendment I Anadromous Fish Stream FG 86-II-0106 Plus Amendment II Critical Habitat Area FG 85-I-0824 Plus one amendment Water Rights' LAS 13370 Permanent Water Rights LAS 6998 Water Rights Application LAS 14316 Permanent Water Rights LAS 2837 Public and Charitable Lease ADL 225142 Permanent Water Rights LAS 2836 Exhibit "B"Bradley Lake Project Specific Powerhouse to Lower Camp Access Road Airstrip to Powerhouse AccessRoad Martin River material site access road, Battle Creek. Spoil Disposal/Waterfowl Nesting Area Martin River material site,Martin Barge dock and staging area. Powerhouse and switchyard construction and operation. Bradley River Dam,Bradley. Airstrip construction and operation. Water rights for Upper Battle Creek Diversion Project. Permit to use permanent facilities Well No. 4 for 5 additional years. Bradley Lake Waterfowl Nesting Area Appropriate water for waterfowl nesting area. Lease of State Lands near Fritz Creek for Moose Mitigation. Appropriate water from Middle Fork and Nuka Glacier Pool Dept.of Natural Resources(DNR) Dept.of Natural Resources(DNR) Dept.of Natural Resources(DNR) Dept.of Interior (DOT) Federal Energy Regulatory Commission (FERC) Federal Energy Regulatory Commission (FERC) Federal Energy Regulatory Commission (FERC) Federal Energy Regulatory Commission (FERC) Federal Energy Regulatory Commission (FERC) Federal Energy Regulatory Commission (FERC) Right-of-Way ADL 223192 Uplands Lease ADL 222656 Tidelands Lease Contract FERC License Amendment FERC License Amendment FERC License Amendment FERC License Amendment FERC License FERC License Amendment Exhibit "B"Bradley Lake Project Specific Final documents issued. Final documents issued. Final documents issued. Provisions for water from Nuka Glacier Pool. To construct and operate Upper Battle Creek Diversion Project. To adopt modified flow regime during reservoir filling. For relocation of permanent landing strip To adopt modified operational flow regime to be consistent with ADF&G flow regime. FERC order issuing license Order granting extension until January 1, 1992 to complete project construction EXHIBIT "C" INSURANCE 1.Contractor to purchase/maintain insurance for duration of agreement,plus one year following final payment. 2.Specified limits are minimum levels.If the policy contains higher limits,contracting agency is entitled to coverage of higher limits. 3.Certificate of insurance must be furnished to contracting agency. e Must provide for 30-day prior notice to the contracting agency of cancellation, reduction in liability. e Failure to furnish constitutes material breach and grounds for termination. Types of Insurance Worker's Compensation:Contractor responsible for subcontractors.Coverage must include statutory coverage for states where employees are engaging in work and employer's liability protection not less than $100,000 per person,$100,000 per occurrence.Where applicable, coverage for all federal acts must also be included. Comprehensive of Commercial General Liability Insurance:Covers all operations of contractor providing insurance for bodily injury and property damage liability including coverage for: e Premises and Operations e Products and Completed Operations e Broad Form Damage;and e Personal Liability Comprehensive Policy:Minimum combined single limit of liability is $300,000 per occurrence,$300,000 aggregate for bodily injury,property damage and personal injury. Commercial Policy:Minimum limits of liability are $300,000 per occurrence (combined single limit)for bodily injury and property damage,$300,000 per occurrence for personal injury,$300,000 aggregate for products-completed operations,and $300,000 general aggregate. Comprehensive Automobile Liability Insurance:Covers all owned,hired,and non-owned vehicles with coverage limits not less than $100,000 per occurrence bodily injury and $50,000 property damage. Professional Liability Insurance:Covers all negligent errors,omissions which the contractor, subcontractor or their employees make in the performance of the agreement which results in financial loss to the contracting agency. Minimum Limits: Combined Single Limit Contract Amount Occurrence and Annual Ageregate Under $100,000 $100,000 $100,000 to $499,999 $250,000 $500,000 to $999,999 $500,000 $1,000,000 and up NEGOTIABLE Contracting agency reserves right to implement an Owner Controlled Insurance Program with option of obtaining Professional Liability Insurance,contractor isn't required to carry Professional Liability Insurance. EXHIBIT C Page 2 of 2 a @#t@ EXHIBIT "D" EXHIBIT A OF THE MASTER OPERATING AGREEMENT To be added after approval of the Master Operating Agreement by the BPMC and its execution by the BPMC and the Authority. >BRADLEY LAKE HYDROELECTRIC PROJECT STATIC VAR COMPENSATION SYSTEM OPERATION AND MAINTENANCE AGREEMENT Between CHUGACH ELECTRIC ASSOCIATION,INC., AND ALASKA ENERGY AUTHORITY August 1996 Section WON=TABLE OF CONTENTS Title Page DEFINITIONS .ooo.c cece cece nen e nen EEE enn eee Eee eRe EERE Ete 1 Effective Date,Term and Termination.............cccceecocseeecueeeeerneees 2 General Provisions and Incorporation of Exhibit A of the Master Operating Agreement ............:ccccescceneeeeeeeteeereneeeees 3 Operational REqUuireMeNnt ........cc cece cence eee een e nent et eeeneeeeeeenenens 4 Maintenance Plan,Schedule and Budget ............cceeeeneeeeteeneeeeees 4 PAYMEN1....ccc cece eee een nnn Ee EEE EEE E EEE SEES EE CEE EEE E EEE EES EEE EE 6 Emergency Expenditures ........ccccceeeeeeeeeeeeeeeeeeeeeeeneeneeentnnesenenens 7 Extraordinary Maintenance and Equipment Replacement..............7 Modifications and AddItiONnS .........ccceececeeecteeeeterseeeeeeeennneaees 7 Authorized Representative .........ccccceecececececeeeeneeenseeeeaeeeaneneenens 7 ACCESS tO FaGilitieS ........cccccceceeeceeeeeeeeeeeeeeseensennaeeennaaeeeteeeeaens 8 Force Majeure ..........ccc ces eee cece e cere ete seen ee eee e ee neeee nn nees ee neeeenee 8 Dispute RESOIUTION ........ccc ccc ceeee eee cere teen eee nent ee neeeeeteeeeeeeenetenes 9 No)0s =>9 Third Party BeneficiarieS ..........c ccc cceeeee cece eee erence e arene teeeeeeneneees 9 BRADLEY LAKE HYDROELECTRIC PROJECT STATIC VAR COMPENSATION SYSTEM OPERATION AND MAINTENANCE AGREEMENT This Agreement (hereinafter referred to as "Agreement"),is made and entered into this 20th day of August,1996,by and between ALASKA ENERGY AUTHORITY,a public corporation of the State of Alaska (hereinafter referred to as "Authority"),and CHUGACH ELECTRIC ASSOCIATION,INC.,(hereinafter referred to as "Chugach”),a non-profit electric cooperative membership corporation of the State of Alaska. WITNESSETH: WHEREAS,the Authority is the owner of the Bradley Lake Hydroelectric Project, including the Project Power Transmission Lines between the substation at the Bradley Lake Power House and Bradley Junction; WHEREAS,Chugach owns and operates electric transmission facilities and is engaged in the transmission,purchase,and sale of electric power and energy; WHEREAS,Chugach,as owner of the Daves Creek facilities and lessee of the 115 kV portion of the Soldotna Substation,agrees to operate and maintain the SVS facilities for the benefit of the Bradley Lake Project; WHEREAS,the Authority and Chugach desire to define the terms and conditions governing the operation and maintenance of the SVS facilities at the above described substations;and WHEREAS,pursuant to the Power Sales Agreement,the BPMC has approved the terms of this Agreement; NOW THEREFORE,IN CONSIDERATION of the mutual covenants herein contained the Parties hereto agree as follows: SECTION 1 DEFINITIONS The terms used in this Agreement shall be as defined in the Power Sales Agreement,except as specified below.For the purposes of this Agreement,the following definitions and abbreviations apply: SVS O&M AGREEMENT Page 1 "Agreement"means this Agreement. "BPMC"™means the Bradley Lake Project Management Committee. "Emergency”shall mean an unforeseen circumstance or the resulting state that requires immediate action to protect or preserve the SVS Facilities, personnel,public health and safety,or the operation of the interconnected system in accordance with Prudent Utility Practice. "Party"or "Parties"means the signatories to this Agreement. "Power Sales Agreement"means the Bradley Lake Power Sales Agreement,dated December 8,1987,among the Authority;the Municipality of Anchorage (d.b.a.Municipal Light and Power (ML&P));the City of Seward (d.b.a.Seward Electric System (SES));the Chugach Electric Association,Inc.(Chugach);the Golden Valley Electric Association,Inc.(GVEA);the Alaska Electric Generation and Transmission Cooperative,Inc.(AEG&T),the Matanuska Electric Association,Inc. (MEA);and the Homer Electric Association,Inc.(HEA). "Soldotna Substation”shall mean the 115 kV portion of HEA's substation at Soldotna,Alaska. "Substation Operator”means the Party operating and maintaining a 115 kV substation and the SVS equipment at that substation. "SVS”means a Static VAR Compensation System. SECTION 2 EFFECTIVE DATE,TERM AND TERMINATION A.Effective Date and Term of Agreement. This Agreement shall become effective on the date set forth above and shall continue in effect until terminated as provided in Section 2B. Termination of Agreement. 1.Unless otherwise extended in writing,as to the Soldotna Substation SVS,this Agreement shall automatically terminate upon the termination or expiration of the Agreement for Lease of SVS O&M AGREEMENT Page 2 Facilities between Chugach and Homer Electric Association,Inc. dated September 25,1985. 2.This Agreement may also be terminated under the following conditions: a.In the event of a material breach of this Agreement by a Party,the other Party shall give the breaching Party written notice of the breach and an opportunity to cure the breach within a reasonable time considering the circumstances of the breach.In the event the breach is not cured within a reasonable time,the non-breaching Party,except as provided in Section 2.B.3.,may terminate its obligations, duties and all rights it has under this Agreement.Any dispute as to a reasonable time to cure the breach shall be adjudicated by the BPMC. b.By delivering written notice to the Authority and BPMC as provided in Section 5.8.3.All liabilities accruing under this Agreement prior to its termination shall be and are hereby preserved until satisfied and the rights of the Authority under 2.B.3.shall continue. 3.In the event this Agreement is terminated,the Authority,or its contractors,shall have the right to enter upon the substation facilities to operate and maintain the SVS_facilities.Upon termination of this Agreement,the Substation Operator shall release all relevant records to the Authority. SECTION 3 GENERAL PROVISIONS AND INCORPORATION OF EXHIBIT A OF THE MASTER OPERATING AGREEMENT This Agreement is subject to the terms of the Master Operating Agreement between the Authority and the BPMC.Except for paragraphs (0)Notice and Communications and (t)Third Party Beneficiaries,the provisions of Exhibit A, Master Contract Provisions,of the Master Operating Agreement are expressly incorporated by reference in this Agreement.Paragraphs (o)and (t)are modified and included below as Sections 14 and 15. Nothing in this Agreement is intended to alter the rights and obligations of the Authority and the Purchaser(s)under the Power Sales Agreement.In the event the terms of this Agreement and the Power Sales Agreement or Master SVS O&M AGREEMENT Page 3 Operating Agreement are found to be in conflict,the terms of the Power Sales Agreement shall have first priority with the Master Operating Agreement having second priority.The provisions of this Agreement are not intended,nor shall they be construed,to alter or modify any previous contracts or agreements of any Party or preclude any Party from performing existing obligations. In their performance of this Agreement,the Parties will comply with the terms and provisions of the Power Sales Agreement. SECTION 4 OPERATIONAL REQUIREMENTS A.systems Operation. The Parties agree to operate their respective systems in accordance with the provisions of Section 10 (c)of the Power Sales Agreement. Substation and SVS Operation and Maintenance. In accordance with the provisions of this Agreement,the Substation Operator shall be responsible for the operation and maintenance of the SVS equipment on behalf of the Authority and for provision of increased transfer capacity resulting from operation of the SVS for the Purchasers in proportion to their Project shares. Chugach,as owner of the Daves Creek Substation and as lessee of the Soldotna Substation from HEA,shall be the Substation Operator for both the Daves Creek Substation and Soldotna Substation SVS equipment. SECTION 5 OPERATION AND MAINTENANCE PLAN,SCHEDULE AND BUDGETS A.Maintenance Plan and Schedule Requirements. 1.The Substation Operator shall develop annually a plan and schedule for operation and maintenance of the respective SVS facilities.This plan and schedule shall be used for planning and tracking maintenance activities and as the basis for budget submittals to the Authority and the BPMC. 2.The plan and schedule shall run from July first to June thirtieth of each Fiscal Year. SVS O&M AGREEMENT Page 4 B.Annual SVS Facilities Budget. 1.After the effective date of this Agreement,and in accordance with schedules provided by the Authority,the Substation Operator shall prepare and submit each year to the Authority and to the BPMC a draft Annual SVS Facilities Budget for the following Fiscal Year as provided in Section 5 D.The draft budget shall be prepared in a format and schedule provided to the Authority by the BPMC. 2.The draft Annual SVS Facilities Budget shall be based upon prudent estimates and anticipated operation and maintenance expenditures, and reflect appropriate accounting and budgetary principles for utilities. 3.The Substation Operator shall perform its duties in a manner consistent with the Annual SVS Facilities Budget except as provided in Sections 7 and 8 below.If the Substation Operator makes a determination during any Fiscal Year that it cannot perform its obligations under this Agreement without an increase in the expenditures authorized under Annual Project Budget,the Substation Operator shall report such finding to the Authority and the BPMC and shall submit a revised budget for the Authority's and the BPMC's review and approval.In the event the revised budget is not adopted by the BPMC and the Authority,or in the event the Authority,pursuant to Section 13(e)of the Power Sales Agreement does not authorize and agree to fund such expenditures,and the Substation Operator determines that it cannot perform its obligations under this Agreement,the Substation Operator may terminate this Agreement upon 90 days written notice to the Authority and the BPMC. Three Year Major Maintenance and Improvements Plan and Budget. Annually the Substation Operator shall prepare and submit a three year plan and budget for proposed major maintenance and improvements,(e.g., major equipment replacement)and other projects deemed by the Substation Operator to be required to insure continued safe and economical operation of the respective SVS facilities that are not included in that Fiscal Year's proposed annual maintenance plan or require more than one year to complete.The three year plan shall be revised annually and submitted together with the proposed annual maintenance plan. SVS O&M AGREEMENT Page 5 Budget and Plan Submittal. The Substation Operator shall submit the annual maintenance plan, schedule and budget,and the three year plan and budget to the Authority and the BPMC no later than November 1 for the next Fiscal Year.The plans,schedules and budgets may be modified through negotiations between the Substation Operator and the Authority,subject to approval by BPMC. SECTION 6 PAYMENT A.The ordinary costs of performing under this Agreement,including station service costs,shall be initially paid by the Substation Operator. The Substation Operator shall prepare an invoice each month identifying the actual and reasonable costs incurred in a format mutually agreeable to the Authority and the Substation Operator.The invoice shall be furnished to the Authority by the fifteenth (15)of the month following the month in which the costs are incurred.All such invoices shall be subject to audit and approval by the Authority,such approval shall not be unreasonably be withheld. Subject to the availability of funds,the Authority shall reimburse the Substation Operator for all costs reasonably incurred and properly invoiced and approved under this Agreement. Any amounts owed by the Authority to the Substation Operator shall be paid by the Authority within thirty (30)days of receipt of an appropriate invoice from the Substation Operator.Any amounts not paid within thirty (30)days shall accrue simple interest at the legal rate of interest beginning at the time payment was due. The Authority shall authorize payment for the full amount of the Substation Operator charges pending the resolution of any cost dispute, except for those costs expressly disapproved in writing.Within thirty (30) days after the Substation Operator submits a disputed invoice costs charge,the Authority shall notify the Substation Operator in writing of the amount in dispute and the basis for the dispute.If the Parties cannot settle the dispute informally,the dispute shall be submitted to the BPMC for resolution.In the event a resolution of the dispute through the BPMC fails,either Party may file an action in the Alaska Superior Court for the SVS O&M AGREEMENT Page 6 Third Judicial District to obtain a decision resolving such dispute and to obtain any other remedy permitted by law.Pending final resolution of any such dispute the Parties shall continue to perform under this Agreement. SECTION 7 EMERGENCY EXPENDITURES The Substation Operator shall take such actions as it reasonably believes are necessary in an emergency.If,in the reasonable judgment of the Substation Operator,the emergency requires the Substation Operator to incur costs prior to obtaining written approval from the Authority,the Substation Operator shall notify the Authority and the BPMC within 72 hours after discovery of the emergency. SECTION 8 EXTRAORDINARY MAINTENANCE AND EQUIPMENT REPLACEMENT When the Substation Operator learns of an equipment failure or other contingency which,in the Substation Operator's judgment,necessitates incurring an extraordinary maintenance and equipment replacement cost,the Substation Operator shall promptly notify the Authority and the BPMC of the circumstances. Except as provided in Section 7,the Substation Operator shall obtain the Authority's written approval prior to incurring an extraordinary maintenance and equipment replacement cost.Except in emergency circumstances the Substation Operator shall incur no extraordinary maintenance and equipment replacement cost for which the approval of the Authority has been requested and expressly denied in writing. SECTION 9 MODIFICATIONS AND ADDITIONS Except in emergencies,no modifications or additions shall be made to the SVS equipment without the prior written approval of the BPMC. SECTION 10 AUTHORIZED REPRESENTATIVE The Parties shall each designate one representative to carry out the provisions of this Agreement.Within 30 days after execution of this Agreement,each Party shall notify the other Party in writing of its designated representative.Any Party may change its representative at any time and shall promptly provide written notice of such change to the other Party. SVS O&M AGREEMENT Page 7 SECTION 11 ACCESS TO FACILITIES Authority and BPMC personnel or agents shall be granted reasonable access to the substations,SVS equipment and facilities upon reasonable notice and subject to security measures,for the purpose of inspection and testing. SECTION 12 FORCE MAJEURE A.No Party to the Agreement shall be liable to the other Party for,or be considered to be in breach of or default under this Agreement on account of,any delay in performance or any delay or failure to deliver,receive or accept delivery of energy due to any of the following events: 1.Any cause or condition beyond such Party's reasonable control which such Party is unable to overcome by the exercise of reasonable diligence,including but not limited to:fire,flood, earthquake,volcanic activity,wind,drought and other acts of the elements;court order and act of civil,military or governmental authority;riot,insurrection,sabotage and war;breakdown of or damage to facilities or equipment;electrical disturbance originating in or transmitted through such Party's electric system or any electric system with which such Party's system is interconnected;and,any act or omission of any person or entity other than such Party,or Party's contractors or suppliers of any type or anyone acting on behalf of such Party.Strikes,lockouts,and other labor disturbances shall be considered Force Majeure events and nothing in this Agreement shall require either Party to settle a labor dispute against its best judgment;provided,that during any labor dispute each Party shall make all reasonable efforts under the circumstances,including, to the extent permitted by law and collective bargaining agreements,the use of replacement personnel and or management personnel and/or other personnel under the provisions of a mutual aid agreement to ensure,if possible,the continued ability of the Parties to carry out their obligations under this Agreement,or Any action taken by such Party which is reasonably necessary or prudent to protect the operation,performance,integrity,reliability or stability of the Project or of such Party's electric system or any electric system with which such Party's electric system is interconnected,whether such actions occur automatically or manually. SVS O&M AGREEMENT Page 8 B.In the event of any delay excused under this section,the time for performance thereby delayed shall be extended by a period of time reasonably necessary to compensate for such delay.No cost adjustment shall be allowed,only time extensions as appropriate.Nothing contained in this paragraph shall require any Party to settle any strike,lockout or other labor dispute.Each Party shall give the other Party prompt written notice of any delay which the Party giving notice considers to be an excusable delay of its performance. SECTION 13.-DISPUTE RESOLUTION Pending resolution of a disputed matter,the Parties shall continue performance of their respective obligations pursuant to this Agreement.If the Parties cannot reach timely mutual agreement on any matter in the administration of this Agreement,the Substation Operator shall,to the extent necessary for its continued performance,make a determination of such matter without prejudice to the rights of the other Party.Such determination shall not constitute a waiver of any other remedy belonging to any Party. SECTION 14 _NOTICES Notices shall be addressed as follows:Executive Director,Alaska Energy Authority,480 West Tudor Road,Anchorage,Alaska 99503-6690.Notices to Chugach will be addressed to:General Manager,Chugach Electric Association, Inc.,P.O.Box 196300,Anchorage,Alaska 99519-6300.A Party may change the foregoing designations of its name or address to which notices or demands are to be directed at any time by written notice given to the other Party. Any notice or request not otherwise provided for in this Agreement shall be given in such manner as the Parties agree. SECTION 15 THIRD PARTY BENEFICIARIES This Agreement gives no rights or benefits to anyone other than the Parties, Chugach and the Authority,and the BPMC as a third party beneficiary.The BPMC is the only third party beneficiary.In any action by the BPMC for damages Chugach shall have the right to assert against the BPMC any defense which it could have asserted against the Authority.The raising of any such SVS O&M AGREEMENT Page 9 defense by Chugach shall not affect any right of a Purchaser or the BPMC under the Master Operating Agreement or Power Sales Agreement. IN WITNESS WHEREOF,the Parties hereto have caused this Agreement to be executed by their authorized officers or representatives and their corporate seals to be hereunto affixed as of the day and year first above written. Me 10=)|By:_ Its:Executive Director CHUGACH ELECTRIC ASSOCIATION,INC. By:SaUA tehiS\Its:General Manager SVS O&M AGREEMENT Page 10 STATE OF ALASKA ) )ss. THIRD JUDICIAL DISTRICT ) The foregoing Agreement was acknowledged before me this 20thday of August, 1996,by William R.Snell ,the Executive Director of the Alaska Energy Authority,an Alaska corporation,on behalf of the corporation.hosel.Dea Notary Public in and for Alaska My commission expires:__3 /%-FF _ STATE OF ALASKA ) )ss. THIRD JUDICIAL DISTRICT ) The foregoing Agreement was acknowledged before me this j9tp day of August, 1996,by _Eugene N.Bjornstad ,the General Manager of the Chugach Electric Association,Inc.,an Alaska corporation,on behalf of the corporation. bce Ld.LoddérgaeNotaryPublicinandforAlaska My commission expires:4/8/99 SVS O&M AGREEMENT Page 11 BLORSTOTE FOTO PRUM:SENGINEERING/POWER PROBUCT tp:198872353305 faTite Etats Pleo.A OPERATION &MAINTENANCE AGREEMENT -FOR BRADLEY LAKE PROJECT AMENDMENT NUMBER ONE THIS AMENDMENT NUMBER ONE to the Operation and Maintenance Agreement for Bradiey Lake Project dated February 11,1994,(hereinafter. O&M Agreement)is entered into by the HOMER ELECTRIC ASSOCIATION, ING.(HEA)('Operator')and the ALASKA ENERGY AUTHORITY("Authority”)on this 267A day of August,1996.The O&M Agreement is hereby amended as follows:; For the purpose of maintenance and operation of the 115 kV electrictransmissionlinefacilitiesidentifiedinExhibitA,Section 2.12,themaintenancedutiesandobligationsoftheOperator,pursuant to Sections 4 .and 5 of the O&M Agreement,shall 'not include the operation and'.maintenanceof .the electric transmission line facilities.The electric'transmission line facilities shall be operated and maintained under a separate Transmission Line Facilities Operation and Maintenance Agreement.; . All other terms and conditions of the O&M Agreement shall remain in full force and effect and are unchanged by this Amendment. HOMER ELECTRIC ASSOCIATION,INC. tte Goraphol Manaser mea ALASKA ENERGY AUTHORITY S o Ml im 2D 5 BRADLEY LAKE PROJECT OPERATION &MAINTENANCE AGREEMENT AMENDMENT NUMBER ONE 2/37 ee” 8 14:85 FRUM:ENGINEERING/POWER PRODUCT ID:19972353305 PAGE BRADLEY LAKE HYDROELECTRIC PROJECT AGREEMENTS Agreement Bradley Lake Communications Agreement Attachment Agreement for the Sale and Purchase of Electric Power © ("Power Sales Agreement”) Exhibits A-E- Agreement for the Dispatch of Electric Power and for Related Services ("Bradley Lake Dispatch Agreement") Agreement for the Dispatch - of Electric Power and for © Related Services ("Bradley Lake Dispatch Agreement”) Bradley Project Management Committee Bylaws Operation &Maintenance Agreement for Bradley 'Lake Project Exhibits A-C 'Exhibit D _Amendment #1 Operation &Maintenance -Agreement for Bradley Lake Project Master Maintenance andOperatingAgreement Exhibit A (Ex.DO&M Agree)2 Date 9/29/92 12/8/97 2/19/92 8/20/96 © 12/1/93 2/11/94 5/24/94 8/26/96. 5/24/94 Parties AEA,CEA,HEA AEA,AEG&T,CEA, GVEA,HEA,MEA, ML&P,SES AEA,CEA AEA,CEA BPMC AEA,HEA AEA,BPMC,HEA AEA,HEA AEA,BPMC 3/37 MAR”SO°8S 106:0o FRYVPr ENGINEERRING/POWER PRODUCT 168:159567°4553565 PAGE ww! ';Nae Bradiey Lake Project Agreements Page 2 Allocation and Scheduling Procedures Exhibit A Exhibit B-D Transmission Facilities Maintenance Agreement Exhibits A-B Agreement for the WheelingofElectricPowerandfor Related Services Appendices A-E Amendment to Agreement for Sale of Transmission Capability Soldotna Static Var Compensator Facilities Maintenance Agreement Construction Services Agreement Transmission Interconnect Agreement Exhibit A 3/3/93 -?- 3/3/93 8/26/96 12/8/87 3/7/89 8/20/96 Draft Not Required BPMC AEA,HEA CEA,AEG&T,GVEA,HEA,MEA,ML&P,SES HEA,AEG&T,CEA, GVEA,ML&P AEA,CEA AEA,HEA AEA,HEA 4/3% ALASKA INDUSTRIAL DEVELOPMENT :(2)AND EXPORT AUTHORITY {=A@@E™=ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE,ALASKA 99503 907 /269-3000 FAX 907 /269-3044 June 23,1999 Mr.Norm L.Story General Manager Homer Electric Association,Inc. 3977 Lake Street Homer,Alaska 99603 SUBJECT:Operation and Maintenance Agreement for Bradley Lake Homer Electric Association,Inc. Dear Norm: Enclosed is an original signed copy of the Agreement.We will maintain one original also. Please let me know if any additional information is needed. Sincerely,Cp Dennis V.McCrohan,P.E. Deputy Director -Project Development and Operations Enclosure Cc:Ron Saxton,Esq.,Ater Wynne LLP Stan Sieczkowski,AEA Elaine McCambridge,AEA - Curt Sullivan,AEA AGREEMENT AMENDING AND EXTENDING THE TERM OF THE OPERATION AND MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT THIS AGREEMENT is entered into this ant day of fore ,1999,between the HOMER ELECTRIC ASSOCIATION,INC.(thée/"Operator")and the ALASKA ENERGY AUTHORITY (the "Authority"). RECITAL: Effective February 11,1994,the parties entered into an agreement titled Operation and Maintenance Agreement for Bradley Lake Project (the "Agreement").The term of the Agreement was for an initial period of five years,automatically renewable annually thereafter.The parties have determined to extend the Agreement for an additional five-year period and to amend the Agreement to require the Operator to provide communication services in addition to the other services listed in the Agreement. TERMS OF AMENDMENTS NOW,THEREFORE,the parties agree as follows: 1.Section 2 is amended as follows: The term of the Agreement is extended until June 30, 2004,and shall continue from year to year thereafter,except upon written notice to terminate as provided in the Agreement. 2.Section 5 is amended by adding a subsection (u)which shall read as follows: (u)(1)Onor before October 30,1999,provide and maintain adequate and reliable communication service between the Project and the Bernice Lake generating facility of the Chugach Electric Page 1 -AGREEMENT AMENDING AND EXTENDING THE TERM OF THE OPERATION AND MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT Association,Inc.("CEA")and enter into an agreement with CEA for interconnection with CEA's SONET microwave system and transport of Project signals to CEA's control facility in Anchorage. (2)The Operator shall arrange for continued use of the existing microwave interconnection and signal transport over the State of Alaska's Division of Communications microwave system (Div Com)until the interconnection with the CEA's SONET system is in operation. 3.Section 10 is amended by adding a subsection (e)which shall read as follows: (e)(1)The costs which the Operator shall charge and which the Authority shall pay for the communication service described in Section 5(u)shall equal $90,000 annually ($7,500 monthly). (2)In addition,The Operator shall be reimbursed monthly for the amounts charged to The Operator by CEA for transport of Project information to . Anchorage. (3)Until the connection is completed to CEA's SONET System,The Operator shall be reimbursed for its costs of using the Div Com System. IN WITNESS WHEREOF,the Parties have caused this Agreement to be executed as of the date first written above. Page 2 -AGREEMENT AMENDING AND EXTENDING THE TERM OF THE OPERATION AND MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT HOMER ELECTRIC ASSOCIATION,INC. General Manager / Date:6-ly-P G ALASKA ENERGY AUTHORITY By:sh GhExecutiveDiyectorDate:re]q% Page 3 -AGREEMENT AMENDING AND EXTENDING THE TERM OF THE OPERATION AND MAINTENANCE AGREEMENT FOR BRADLEY LAKE PROJECT BRADLEY LAKE HYDROELECTRIC PROJECT TRANSMISSION FACILITIES MAINTENANCE AGREEMENT BETWEEN ALASKA ENERGY AUTHORITY AND HOMER ELECTRIC ASSOCIATION,INC. August 1996 Section WN-TABLE OF CONTENTS Title Page DePFINITIONS o.oo...eee ce eeec cece cee c ee eeeeeeeeee se seetessuseesccussucecceecuseseeseneaneecs 2 Effective Date and Termination................0.........cocecucceceueeeeeeueeeeetanes 3 Previous Contracts and Agreements,Incorporation of Exhibit A of the Master Operating Agreement ...................00ccceeceeeeeeeenes 3 Maintenance of Transmission Facilities ..........0..0.ccc cceeececcece ee eeeeee 4 Maintenance Plan,Schedule and Budget....................::cccccesssseeeeseeeeeees 5 Invoices and PayMent.............0..cccccecccceeecceecucceccuescueeeceeeueseceaeeseeuteeeseness 7 Emergency Expenditures ...........000.cccccceeeccceccccceceeeeeeeeeeeceeeceeeeeeeeseeasuanees 8 Extraordinary Maintenance and Equipment Replacement....................8 Authorized Representative...0...ccccceccceeeccceseeeeeeeseeeeeeeeeseeesenees 8 Force Majeure...cece ccccecccccccce ee eeeeeeeeee ss eeeeeeeaueeseeeeuaeeeseeessaaeeeeeeaaaees 8 Dispute RESOIUION .......cece cece ecceecueeecseeseteueseeueesecaaeceteueseteneesss 9 (0)(e,-h ee coneeeeseeaes cobececnecuaeeees cbeeeeeceves 10 Third Party Beneficiaries...cece ccc cee cece neces cee eeeeeeecetnseesseeeeeuies 10 EXHIBIT "A"ONE LINE DIAGRAM EXHIBIT "B"PROJECT TRANSMISSION FACILITIES DESCRIPTION BRADLEY LAKE HYDROELECTRIC PROJECT TRANSMISSION FACILITIES MAINTENANCE AGREEMENT BETWEEN ALASKA ENERGY AUTHORITY AND HOMER ELECTRIC ASSOCIATION,INC. This agreement (hereinafter referred to as Agreement),is made and entered into this 26th _-day of August,1996,by and between ALASKA ENERGY AUTHORITY,a public corporation of the State of Alaska,hereinafter "Authority”,and HOMER ELECTRIC ASSOCIATION,INC.,an electric cooperative corporation of the State of Alaska,hereinafter "HEA”. WITNESSETH WHEREAS,the Authority has constructed Project Transmission Facilities in order to interconnect the Bradley Lake Hydroelectric Project with railbelt utilities. WHEREAS,the Authority is the owner of the Bradley Lake Hydroelectric Project, including the Project Transmission Facilities between the substation at the Bradley Lake Power House and Bradley Junction; WHEREAS,the Authority,with the approval of the BPMC,contracts with qualified utilities (as defined by AS 44.83.425(3))for the operation and maintenance of the Bradley Lake Hydroelectric Project,the operation and maintenance of the Power Transmission Facilities between the substation at the Bradley Lake Power House and Bradley Junction and for the Dispatch of Power from the Project: WHEREAS,the Authority has presently contracted the Operation and Maintenance of the Bradley Lake Hydroelectric Project with HEA under the Bradley O&M Agreement: WHEREAS,the Authority desires to contract for the maintenance of the Project Transmission Facilities; WHEREAS,HEA is a qualified utility and a signatory to the Power Sales Agreement; Transmission Facilities Maintenance Agreement Page 1 WHEREAS,HEA owns,operates and maintains transmission facilities on the Kenai Peninsula and the HEA is willing to maintain a defined portion of the Project Transmission Facilities,and WHEREAS,pursuant to the Power Sales Agreement,the BPMC has approved the terms of this Agreement: NOW THEREFORE,IN CONSIDERATION of the mutual covenants herein contained the Parties hereto agree as follows: SECTION 1_DEFINITIONS The terms used in this Agreement shall be as defined in the Power Sales Agreement, except as specified below.For the purposes of this Agreement,the following definitions and abbreviations apply: A."Agreement"means this Agreement. B."Bradley O&M Agreement”means the Operation &Maintenance Agreement For Bradley Lake Hydroelectric Project by and between the Authority and HEA dated February 11,1994. C."BPMC'”means the Bradley Lake Project Management Committee. D."Master Operating Agreement”means the Bradley Lake Hydroelectric Project Master Maintenance and Operating Agreement dated May 24,1994,by and among the Authority and the BPMC. E."Party"or "Parties"means the signatories to this Agreement. F."Power"means electric energy or electric capacity,or both,except where the context requires a distinction,in which case electric energy is expressed in kilowatt hours,and electric capacity is expressed in kilowatts. G."Power Sales Agreement”means the Bradley Lake Power Sales Agreement, dated December 8,1987,among the Authority;the Municipality of Anchorage (d.b.a.Municipal Light and Power (ML&P));the City of Seward (d.b.a.Seward Electric System (SES));the Chugach Electric Association,Inc.(Chugach);the Golden Valley Electric Association,Inc.(GVEA);the Alaska Electric Generation and Transmission Cooperative,Inc.(AEG&T),the Matanuska Electric Association,Inc.(MEA);and the Homer Electric Association,Inc.(HEA). Transmission Facilities Maintenance Agreement Page 2 H."Project Transmission Facilities'mean the transmission facilities and equipment owned by the Authority interconnecting the Fritz Creek and Soldotna transmission lines owned by the HEA with the Bradley Lake Hydroelectric generation plant owned by the Authority.Project Transmission Facilities include the 115 kV switching station at Bradley Junction and approximately 20 miles of two parallel,single circuit,115 kV transmission lines from the overhead line attachment point on the dead end structure adjacent to the transformer at the Bradley Lake Power Plant and are described by Exhibits A and B. SECTION 2,EFFECTIVE DATE AND TERMINATION A.Effective Date. This Agreement will become effective on the date set forth above and will continue in effect until terminated as provided for in Section 2B of this Section. B.Termination. Either Party may terminate this Agreement by: 1.Delivering written notice to the other Party at least 6 months prior to the end of the Fiscal Year,or 2.Delivering written notice to the other Party of a material breach of the Agreement by the other party;and if the other Party fails to rectify the material breach within 90 days after receiving notice of the breach,by giving notice of termination to the other Party,or 3.Delivering written notice to the other Party as provided in Section 5.B.3.All liabilities accruing under this Agreement prior to its termination will be and are hereby preserved until satisfied. SECTION 3_PREVIOUS CONTRACTS AND AGREEMENTS,INCORPORATION OF EXHIBIT A OF THE MASTER OPERATING AGREEMENT Nothing in this Agreement is intended to alter the rights and obligations of the Authority and the Purchaser(s)under the Power Sales Agreement.This Agreement is subject to the terms of the Master Operating Agreement between the Authority and the BPMC.Except for paragraphs (0)Notice and Communications and (t)Third Party Transmission Facilities Maintenance Agreement Page 3 Beneficiaries,the provisions of Exhibit A,Master Contract Provisions,of the Master Operating Agreement are expressly incorporated by reference in this Agreement. Paragraphs (0)and (t)are modified and included below as Sections 12 and 13.In the event the terms of this Agreement and the Power Sales Agreement or Master Operating Agreement are found to be in conflict,the terms of the Power Sales Agreement will have first priority with the Master Operating Agreement having second priority. SECTION 4_MAINTENANCE OF TRANSMISSION FACILITIES A.General Responsibilities. HEA will maintain the Project Transmission Facilities consistent with the guidelines set by the manufacturer,unless otherwise directed by the Authority, and consistent with Prudent Utility Practice,National Electric Safety Code and other applicable codes,federal and state laws,regulations,requirements and standards.In their performance of this Agreement,the Parties will comply with the terms and provisions of the Power Sales Agreement. Specific Responsibility for Maintaining the Project Transmission Facilities. HEA will: 1.Coordinate all maintenance schedules and provide maintenance schedules,budgets and records in accordance with the provisions of this Agreement;as directed by the Authority; Develop written maintenance procedures,maintenance training,and preventive maintenance programs; Conduct scheduled inspections required by the annual maintenance plan agreed upon by the Parties under Section 5 of this Agreement and issue an inspection report of findings and recommendations to the Authority within 20 working days of completing all inspections; Except as provided in Section 7,modify Authority equipment only upon Authority approval prior to any changes being made,and provide notification and description of all changes HEA has made to Project Transmission Facilities.Within 45days after alteration or replacement,HEA will provide to the Authority "as built”mylar Transmission Facilities Maintenance Agreement Page 4 drawings showing all alterations or replacements to Project Transmission Facilities: 5.Make available for inspection by the Authority's or BPMC's representative,upon reasonable notice,all maintenance records maintained in conjunction with or related to this agreement; 6.Subject to the provisions of 4 B.4 above,upon discovery or notification and as soon as reasonably possible,take all actions reasonably necessary to protect equipment,personnel,and the general public from hazards,which arise from equipment failure (e.g., electrical faults,vandalism,and mechanical failure);repair and report damaged facilities,and notify the Authority as soon as reasonably possible after each equipment failure or repair; C.Responsibility of Project Transmission Facilities Owner. 1.In accordance with the provisions of 5.B,the Authority will coordinate and submit for adoption in accordance with the Power Sales Agreement, an Annual Project Budget sufficient to satisfy the Project Transmission Facilities maintenance costs budgeted and approved in advance by the BPMC. 2.The Authority will pay HEA for the costs of labor,materials,supplies, equipment,training and administration,incurred in performing its responsibilities hereunder,as provided in Sections 6,7 and 8 of this Agreement: D.Prior Authorization. Except in emergencies as provided in Section 7 or as approved under the annual maintenance plan and budget,HEA will secure written authorization from the BPMC to make alterations or replacements to Project Transmission Facilities. SECTION 5 MAINTENANCE PLAN,SCHEDULE AND BUDGETS A.Maintenance Plan and Schedule Requirements. 1.HEA will develop annually a plan and schedule for maintenance of the Project Transmission Facilities.This plan and schedule will be used Transmission Facilities Maintenance Agreement Page 5 2. for planning and tracking maintenance activities and as the basis for budget submittals to the Authority. The plan and schedule will run from July first to June thirtieth of each Fiscal Year. Annual Transmission Facilities Budget. 1.After the effective date of this Agreement,and in accordance with schedules provided by the Authority,HEA will prepare and submit each year to the Authority and the BPMC a draft Annual Transmission Facilities Budget for the following Fiscal Year as provided in Section 5 D.The draft budget will be prepared in a format and schedule provided to the Authority by the BPMC. The draft Annual Transmission Facilities Budget will be based upon prudent estimates and anticipated operation and maintenance requirements and expenditures,and reflect appropriate accounting and budgetary principles for utilities. HEA will perform its duties in a manner consistent with the Annual Transmission Facilities Budget except as provided in Sections 7 and 8 below.If HEA makes a determination during any Fiscal Year that it cannot perform its obligations under this Agreement without an increase in the expenditures authorized under Annual Project Budget,HEA will report such finding to the Authority and the BPMC and will submit a revised budget for the Authority's and the BPMC's review and approval. In the event the revised budget is not adopted by the BPMC and the Authority,or in the event the Authority,pursuant to Section 13(e)does not authorize and agree to fund such expenditures,and HEA determines that it cannot perform its obligations under this Agreement,HEA may terminate this Agreement upon 90 days written notice to the Authority. Three Year Major Maintenance and Improvements Plan and Budget. Annually HEA will prepare and submit a three year plan and budget for proposed major maintenance and improvements,(e.g.,major equipment replacement)and other projects deemed by HEA to be required to insure continued safe and economical operation of the Project Transmission Facilities that are not included in that Fiscal Year's proposed annual maintenance plan or require more than one year to complete.The three year plan will be revised annually and submitted together with the proposed annual maintenance plan. Transmission Facilities Maintenance Agreement Page 6 Budget and Plan Submittal. HEA will submit the annual maintenance plan,schedule and budget,and the three year plan and budget to the Authority no later than November 1 for the next Fiscal Year.The plans,schedules and budgets may be modified through negotiations between HEA and the Authority,subject to approval by BPMC. SECTION 6 INVOICES AND PAYMENT A.The ordinary costs of performing under this Agreement will be initially paid by HEA. HEA will prepare an invoice identifying the actual and reasonable costs incurred in a format mutually agreeable to the Authority and HEA.The invoice will be furnished to the Authority by the fifteenth (15)of the month following the month in which the costs are incurred.All such invoices will be subject to audit and approval by the Authority,such approval will not be unreasonably be withheld. Subject to the availability of funds,the Authority will reimburse HEA for all costs reasonably incurred and properly invoiced and approved under this Agreement. Any amounts owed by the Authority to HEA will be paid by the Authority within thirty (30)days of receipt of an appropriate invoice from HEA.Any amounts not paid within thirty (30)days will accrue simple interest at the legal rate of interest at the time payment was due,and will continue until paid by the Authority. The Authority will authorize payment for the full amount of HEA charges pending the resolution of any cost dispute,except for those costs expressly disapproved in writing.Within thirty (30)days after HEA submits a disputed invoice costs charge,the Authority will notify HEA in writing of the amount in dispute and the basis for the dispute.If the Parties cannot settle the dispute informally,or by agreement through the BPMC either Party may file an action in the Alaska Superior Court for the Third Judicial District to obtain a decision resolving such dispute and to obtain any other remedy permitted by law. Pending final resolution of any such dispute the Parties will continue to perform under this Agreement. Transmission Facilities Maintenance Agreement Page 7 SECTION 7 EMERGENCY EXPENDITURES A.An emergency is an unforeseen circumstance or the resulting state that requires immediate action to protect or preserve the Project Transmission Facilities,personnel,or public health and safety. B.HEA will take such actions as it reasonably believes are necessary in an emergency.If,in the reasonable judgment of HEA,the emergency requires HEA to incur costs prior to obtaining written approval from the Authority,HEA will notify the Authority and the BPMC within 72 hours after discovery of the emergency. SECTION 8 EXTRAORDINARY MAINTENANCE AND EQUIPMENT REPLACEMENT When HEA learns of an equipment failure or other contingency which,in HEA's judgment,necessitates incurring an extraordinary maintenance and equipment replacement cost,HEA will promptly notify the Authority of the circumstances.Except as provided in Section 7,HEA will obtain the Authority's written approval prior to incurring an extraordinary maintenance and equipment replacement cost.Except in emergency circumstances HEA will incur no extraordinary maintenance and equipment replacement cost for which the approval of the Authority has been requested and expressly denied in writing. SECTION 9 AUTHORIZED REPRESENTATIVE The Parties will each designate one representative to carry out the provisions of this Agreement.Within 30 days after execution of this Agreement,each Party will notify the other Party in writing of its designated representative.Either Party may change its representative at any time and will promptly provide written notice of such change to the other Party. SECTION 10 FORCE MAJEURE A.No Party to the Agreement shall be liable to the other Party for,or be considered to be in breach of or default under this Agreement on account of, any delay in performance or any delay or failure to deliver,receive or accept delivery of energy due to any of the following events: Transmission Facilities Maintenance Agreement Page 8 1.Any cause or condition beyond such Party's reasonable control which such Party is unable to overcome by the exercise of reasonable diligence,including but not limited to:fire,flood,earthquake,volcanic activity,wind,drought and other acts of the elements;court order and act of civil,military or governmental authority;riot,insurrection,sabotage and war;breakdown of or damage to facilities or equipment;electrical disturbance originating in or transmitted through such Party's electric system or any electric system with which such Party's system is inter- connected;and,any act or omission of any person or entity other than such Party,or Party's contractors or suppliers of any type or anyone acting on behalf of such Party.Strikes,lockouts,and other labor disturbances shall be considered Force Majeure events and nothing in this Agreement shall require either Party to settle a labor dispute against its best judgment;provided,that during any labor dispute each Party shall make all reasonable efforts under the circumstances,including,to the extent permitted by law and collective bargaining agreements,the use of replacement personnel and or management personnel and/or other personnel under the provisions of a mutual aid agreement to ensure,if possible,the continued ability of the Parties to carry out their obligations under this Agreement,or 2.Any action taken by such Party which is reasonably necessary or prudent to protect the operation,performance,integrity,reliability or stability of the Project or of such Party's electric system or any electric system with which such Party's electric system is interconnected, whether such actions occur automatically or manually. B.In the event of any delay excused under this section,the time for performance thereby delayed shall be extended by a period of time reasonably necessary to compensate for such delay.No cost adjustment shall be allowed,only time extensions as appropriate.Nothing contained in this paragraph shall require any Party to settle any strike,lockout or other labor dispute.Each Party shall give the other Party prompt written notice of any delay which the Party giving notice considers to be an excusable delay of its performance. SECTION 11 DISPUTE RESOLUTION Pending resolution of a disputed matter,the Parties will continue performance of their respective obligations pursuant to this Agreement.If the Parties cannot reach timely mutual agreement on any matter in the administration of this Agreement,HEA will,to the extent necessary for its continued performance,make a determination of such Transmission Facilities Maintenance Agreement Page 9 matter without prejudice to the rights of the other Parties.Such determination will not constitute a waiver of any other remedy belonging to either Party. SECTION 12 NOTICES Notice to the Authority will be addressed to:Executive Director,Alaska Energy Authority,480 West Tudor Road,Anchorage,Alaska 99503-6690.Notices to HEA will be addressed to:General Manager,Homer Electric Association,Inc., P.O.Box 169,Homer,Alaska 99603.The foregoing designations of the name or address to which notices or demands are to be directed may be changed at any time by written notice given by one Party to the other Party. Any notice or request not otherwise provided for in this Agreement will be given in such manner as the Parties agree. SECTION 13°THIRD PARTY BENEFICIARIES This Agreement gives no rights or benefits to anyone other than the Parties,HEA and the Authority,and the BPMC as a third party beneficiary.The BPMC is the only third party beneficiary.In any action by the BPMC for damages HEA shall have the right to assert against the BPMC any defense which it could have asserted against the Authority.The raising of any such defense by HEA shall not affect any right of a Purchaser or the BPMC under the Master Operating Agreement or Power Sales Agreement. IN WITNESS WHEREOF,the Parties hereto have caused this Agreement to be executed by their authorized officers or representatives and their corporate seals to be hereunto affixed as of the day and year first above written. ALASKA ENERGY AUTHORITY oy Sis,LAS Its:Colerhic.Dhechen Transmission Facilities Maintenance Agreement Page 10 HOMER ELECTRIC ASSOCIATION,INC. Its:Caen Ae.Wows per Transmission Facilities Maintenance Agreement Page 11 STATE OF ALASKA ) )ss. THIRD JUDICIAL DISTRICT ) The foregoing Agreement was acknowledged before me this 26th day of August, 1996,by William R.Snell ,the Executive Director of the Alaska Energy Authority,an Alaska corporation,on behalf of the corporation. Notary Public in and for AlaskaMycommissionexpires:2-/"S-7@ STATE OF ALASKA ) )ss. THIRD JUDICIAL DISTRICT ) The foregoing Agreement was acknowledged before me this 20thqay of August, 1996,by Norman L.Story ,the General Manager of the Homer Electric Association,Inc.,an Alaska corporation,on behalf of the corporation. Maras 2 Gayto-Notary Public in and forAlaskaMycommissionexpires:Qverce,13,IPGT Transmission Facilities Maintenance Agreement Page 12 Dea Maes |teeta tart tea eee s O4 -wiB mee a v WY, VO GRADLEY (aE BRADLEY JUNCTION <-- EF a aL x Lj cA etar2)eter revtione aes y BAADLEY LAKE HYDROELECTRIC PROJECT_ie Td .ALASKA ENERGY AUTHORITYWens2e0" MAIN ONE LINE DIAGRAM seen eet Te aon {EXHBIT F |PLATE 17 HO5-F-04-2018-R49 .8221-89 EXHIBIT B BRADLEY LAKE HYDROELECTRIC PROJECT PROJECT TRANSMISSION FACILITIES DESCRIPTION As described in Exhibit A of the Operation and Maintenance Agreement for Bradley Lake Project at page A-9: 2.12 Transmission Line Two parallel and separate single circuit 115 kV transmission lines,each about 20 miles long,connect to the substation at the powerhouse and carry the power generated to the Fritz Creek-Soldotna 115 kV Transmission Line owned by Homer Electric Association,Inc.The point of connection for these two lines is designated as the Bradley Junction. The Bradley Lake transmission line towers are guyed,X-configuration towers manufactured of Corten type steel.The conductor is 556 kcmil,42/19 Aluminum/Steel "Special Dove." CSBRADLEY LAKE HYDROELECTRIC PROJECT MASTER MAINTENANCE AND OPERATING AGREEMENT THIS AGREEMENT dated as of Lay 24.1994,is entered into by andamongtheALASKAENERGYAUTHORITY(the "Authority")and the BRADLEY PROJECT MANAGEMENT COMMITTEE ("BPMC"),(collectively the "Parties"). WITNESSETH: WHEREAS,the Authority is a public corporation of the State of Alaska duly created,organized and existing pursuant to AS 44.83; WHEREAS,the Authority has constructed the Bradley Lake Hydroelectric Project (the "Project"),together with Project Related Facilities needed to interconnect the Project with the Bradley Lake Purchasers,and certain related facilities and equipment; WHEREAS,the Authority is the owner of the Project,the Project Related Facilities,and the related facilities and equipment; WHEREAS,facilities and equipment owned,leased and/or operated by certain Bradley Lake Purchasers are needed to enable the Authority and the Bradley Lake Purchasers to fully utilize electric energy and capacity from the Project; WHEREAS,the Bradley Lake Purchasers are all signatories to the Bradley Lake Hydroelectric Project Agreement for the Sale and Purchase of Electric Power ("Power Sales Agreement"); WHEREAS,the BPMC was formed pursuant to the terms of the Power Sales Agreement and is made up of a representative of each of the Bradley Lake Purchasers and the Authority and is delegated certain obligations related to the administration of the Project; WHEREAS,the Power Sales Agreement provides that the BPMC shall arrange for the operation and maintenance of the Project and Project Related Facilities and adopt an annual budget of Project Costs;and 1 -MASTER MAINTENANCE AND OPERATING AGREEMENT WHEREAS,the Parties desire to establish a contract administration and budgeting procedure for contracting for the maintenance and operation of the Project,the Project Related Facilities,and the related services,facilities and equipment,and for the lease and/or use of other facilities and equipment in a manner consistent with the requirements of the Power Sales Agreement; NOW,THEREFORE,the parties agree as follows: Section 1.Definitions and Abbreviations.For the purposes of this Agreement,the following definitions and abbreviations apply: (a)Agreement means this Agreement governing the administration and budgeting for operation and maintenance of the Project. (b)Annual Project Budget means the budget for the Project and Project Related Facilities as adopted or in effect for a particular Fiscal Year, and as amended or supplemented from time to time pursuant to the applicable provisions of the Power Sales Agreement. (c)Authority or AEA means the Alaska Energy Authority,an agency of the State of Alaska. (d)Bradley Lake Hydroelectric Project or Project means the Project described in Exhibit C to the Power Sales Agreement. (e)Bradley Project Management Committee or BPMC means the committee composed of the Authority and the Parties established in Section 13 of the Power Sales Agreement. (f)Bradley Lake Purchasers means Chugach Electric Association, Inc.,Golden Valley Electric Association,Inc.,the Municipality of Anchorage d/b/a Municipal Light &Power,the City of Seward d/b/a Seward Electric System,Alaska Electric Generation &Transmission Cooperative,Inc.,Homer Electric Association,Inc.,and Matanuska Electric Association,Inc. (g)Contracts means those agreements entered into by the Authority with Contractors to perform services for,or operation or maintenance of,the Project or Project Related Facilities,including any amendments thereto. (h)Contractors means those entities retained pursuant to this Agreement to perform operation or maintenance of the Project or Project 2 -MASTER MAINTENANCE AND OPERATING AGREEMENT Related Facilities pursuant to this Agreement.Contractors may include Bradley Lake Purchasers. (i)Fiscal Year means that twelve (12)month period defined in the Power Sales Agreement. (j)Power Sales Agreement means the Agreement for the Sale and Purchase of Electric Power by and among the Authority and Chugach Electric Association,Inc.,Golden Valley Electric Association,Inc.,the Municipality of Anchorage d/b/a Municipal Light &Power,the City of Seward d/b/a Seward Electric System,Alaska Electric Generation &Transmission Cooperative,Inc., Homer Electric Association,Inc.,and Matanuska Electric Association,Inc., dated December 8,1987,as may be modified or amended by the parties thereto. (k)Project Related Facilities means the transmission and other facilities and equipment owned by AEA and used to interconnect Bradley Lake Purchasers with the Project,to deliver power from the Project to the Bradley Lake Purchasers,and any other facilities and equipment hereafter constructed or acquired and designed to enhance the stability or reliability of that power. (I)Prudent Utility Practices for the purposes of this Agreement,shall have the meaning provided in Section 1(x)of the Power Sales Agreement. Section 2.Term. (a)This Agreement shall become effective when it is executed by the Parties. (b)This Agreement will remain in effect until the termination of the Power Sales Agreement or until the Authority ceases its legal existence, unless the rights,powers and duties of the Authority are transferred to a successor entity with substantially the same expertise within the intendment of Prudent Utility Practices,powers and duties as the Authority. 3 -MASTER MAINTENANCE AND OPERATING AGREEMENT Section 3.Project Operation and Maintenance. (a)Subject to the provisions of this Agreement,the Authority shall enter into any Contracts necessary to perform services for,or operation and maintenance of,the Project or Project Related Facilities. (b)All Contracts shall be subject to the Master Contract Provisions set forth herein.Each Contract shall contain a specific clause providing that it is subject to the provisions of this Agreement. (c)Prior to executing any Contracts,the Authority shall present those Contracts to the BPMC for its review and approval. (d)When executed,all Contracts shall be included as exhibits to this Agreement. (e)All Contracts,other than those required by emergency conditions,shall be planned for,considered,and approved by the BPMC in the development of the Annual Project Budget or at regular meetings of the BPMC designated in advance by the BPMC Chairman. (f)The Authority and each Contractor shall be responsible for preparing plans and budgets for each Contract executed pursuant to this Agreement for submission to the BPMC for review and approval as part of the preparation of the Annual Project Budget. (g)Except as provided by Section 13(e)of the Power Sales Agreement,the Authority shall obtain BPMC approval of any work to be performed by a contractor either through a specific line item in the Annual Project Budget or separate BPMC approval in accordance with BPMC procedures. Section 4.Relationship to Power Sales Agreement. This Agreement implements the terms of the Power Sales Agreement, and in no way is intended to modify the terms of the Power Sales Agreement. 4 -MASTER MAINTENANCE AND OPERATING AGREEMENT Section 5.Third Party Beneficiaries. (a)The Parties intend that the BPMC is the representative of the Purchasers and is a third party beneficiary of all Contracts with the legal right to enforce any Contracts. (b)The BPMC,pursuant to BPMC procedures,may designate one or more of the Purchasers to represent the BPMC in any action to enforce its third party rights hereunder. Section 6.Dispute Resolution. In the event that the Authority and the BPMC cannot agree on the terms and conditions of a particular Contract,either Party may request mediation of the dispute,by providing written notice to the other Party within twenty (20)days of the BPMC meeting at which the dispute occurs. If a dispute is mediated,that mediation shall be conducted under the Commercial Mediation Rules of the American Arbitration Association.The BPMC shall be responsible for arranging the mediation and both the Authority and the BPMC shall be parties to the mediation.Mediation shall be completed within ninety (90)days of the date notice of the request for mediation is given. If mediation is unsuccessful,either Party may proceed to arbitration or litigation as provided for in the Power Sales Agreement. Section 7.Master Contract Provisions. All Contracts shall include the general provisions set forth in Exhibit A, together with specific provisions applicable to that Contract,and shall follow substantially the form set forth in Exhibit A. Section 8.General Provisions. (a)Amendments.Any amendments or modifications to this Agreement must be in writing and signed by the Parties. (b)Conduct in Accord with Applicable Law.The Parties agree that at all times during the term of this Agreement,they shall conduct themselves in accord with all applicable laws and permits,and they will undertake no action contrary to such codes,laws,or permits.The laws of the State of 5 -MASTER MAINTENANCE AND OPERATING AGREEMENT Alaska shall govern this interpretation and application of this Agreement and the actions of the parties hereunder. (c)Exclusivity of Contract.All terms and provisions of this Agreement will be incorporated in writing into this Agreement setting forth the full intent of the parties. (d)Notice and Communication.Any notice or demand involving this Agreement shall be sent to the appropriate Party by registered or certified mail.Notice to the Authority shall be addressed to the Executive Director. Notice to the BPMC shall be addressed to the Chairman of the Bradley PMC. (e)Prudent Utility Practices.All actions of the Parties under this Agreement shall conform to Prudent Utility Practices. (f)Successors and Assigns.This Agreement shall be binding upon and inure to the benefit of the successors,legal representatives or assigns of the Parties.However,this Agreement may not be assigned by any Party without the written consent of the other Party.If the Authority discontinues its current legal existence,this Agreement will be terminated and the obligations of the Authority hereunder will automatically be assigned to the BPMC,without the need for consent by the Contractor,unless the rights, powers and duties of the Authority are transferred to a successor entity with substantially the same expertise within the meaning of Prudent Utility Practices,powers and duties as the Authority. (g)Waiver Not Continuing.Any waiver at any time by any party to this Agreement of its rights with respect to any default of the other party hereto,or with respect to any other matter arising in connection with this Agreement,shall not be considered a waiver with respect to any subsequent default,right or matter.Any delay short of the statutory period of limitations in asserting or enforcing any right shall not be deemed a waiver of such right. (h)Section Headings.The section headings of this Agreement are for convenience only,and do not purport to,and shall not be deemed to, define,limit or extend the scope or intent of the section to which they pertain. (i)Severability.In the event that any provision of this Agreement shall be finally adjudicated by a court of competent jurisdiction to be invalid 6 -MASTER MAINTENANCE AND OPERATING AGREEMENT or unenforceable,the remainder of the Agreement shall be unaffected by such adjudication and all the remaining provisions of the Agreement shall remain in full force and effect as if such provision so adjudicated to be invalid had not been included herein. (j)Representations and Warranties.Each Party represents that it is duly authorized to execute this Agreement and to perform its obligations under this Agreement.Approval of this Agreement by the BPMC shall provide sufficient authority for the Chairman of the BPMC to execute the Agreement. IN WITNESS WHEREOF,the parties have caused this Agreement to be executed the day and year first above written. BRADLEY PROJECT MANAGEMENT COMMITTEE Date:5-/7 ,1994 Lh ena MeNormanL.Story Chairman ALASKA ENERGY AUTHORITY Date/a4 [;1994 By:\}||(inh Ay William R.Snell Executive Director 7 -MASTER MAINTENANCE AND OPERATING AGREEMENT EXHIBIT A MASTER CONTRACT PROVISIONS (a)Independent Contractor.Unless otherwise agreed to by the Parties,each Contractor entering into a Contract shall perform solely as an independent contractor. (b)Annual Planning and Budget.The Authority shall prepare,or cause the Contractor to prepare,the initial plans and budgets to be submitted to the BPMC for the operation or maintenance service in the Annual Project Budget. (c)Subcontracting.A Contractor may subcontract work on the operation or maintenance of the Project or Project Related Facilities to the extent authorized in the Annual Budget or with the written approval of the Authority and the BPMC,which shall not be unreasonably withheld. (d)Invoices.A Contractor shall submit complete written invoices to the Authority for payment with cost summaries and support documents as reasonably requested by the Authority and BPMC. (e)Payment and Dispute Resolution.The Authority shall expeditiously arrange for payment of all invoices,and shall work with the Contractor to promptly resolve any disputed billings. (f)Accounts,Records,and Audits.In keeping records for work performed under a Contract,the Contractor shall utilize the accounting system required of public utilities and licensees by the Federal Energy Regulatory Commission for electric plants.Contractors shall make their records available as required.The Contractor shall retain copies of all invoices,payroll records,and other supporting documents sufficient for an audit of all expenditures,for three (3)years following the close of each Fiscal Year. A Contractor will furnish the Authority with operating and financial statements related to work performed under a Contract as may be reasonably requested by the Authority.If receipt of those statements is unreasonably delayed,the Authority may,with its own staff or agents, perform all work necessary to collect the data reasonably necessary,but only -1- at such times and in such a manner as will not unreasonably interfere with Contractor's operations under a Contract. (g)Insurance. (1)During the term of the Contract,the Contractor shall purchase and maintain insurance covering injury to persons or property suffered by the Authority or a third party,as a result of errors or omissions or operations by a Contractor or by its subcontractor which arise both out of and during the course of the Contract.The Contractor shall require all subcontractors providing services directly or indirectly under a Contract to provide the same insurance as required of the Contractor.Coverage shall also provide protection against injuries to all employees of the Contractor and the employees of any subcontractor engaged in work under a Contract. Copies of all required insurance policies shall be furnished to the Authority prior to beginning work under a Contract.These policies will show evidence of coverage and provide for ninety (90)days notice of written cancellation, non-renewal for material change in the coverage. (2)The Contractor shall purchase insurance adequate to cover its operations performed in connection with the work under the Contract. Specifically,each Contractor shall maintain Worker's Compensation Insurance and Comprehensive General Liability Insurance,including Comprehensive General Liability Broad Form Insurance,Automobile Liability Insurance,Owned Aircraft Insurance (where applicable),and Owned Watercraft (where applicable),in amounts acceptable to the Authority and consistent with the Power Sales Agreement. (3)The obligation to obtain and maintain insurance coverage pursuant to this Section shall be subject to the general availability of such coverage under reasonable terms and conditions.If one or more of the required insurance coverages is not available under reasonable terms and conditions,the Contractor shall,under the guidance and direction of the BPMC and Division of Risk Management,use its best efforts to obtain substantively equivalent insurance coverage acceptable to the BPMC,the Authority,and the Division of Risk Management. (4)'If,after utilizing its best efforts,the Contractor is unable to obtain the required insurance coverage under reasonable terms and conditions,as reasonably determined by the Contractor,the Contractor shall request a waiver of the relevant insurance requirement.The request shall -2- outline steps taken by the Contractor to obtain such insurance and shall disclose quotations received for coverage.To the extent the waiver will not materially affect the safe and prudent operation of the Project,the Authority and BPMC,after consulting with the Division of Risk Management,will not unreasonably withhold approval of the requested waiver.Failure to furnish satisfactory evidence of insurance or failure to maintain the policy without complying with this subsection shall result in a material breach of this Agreement. (h)Indemnity.The Authority,to the extent permitted by applicable law and subject to the availability of funds,and each Contractor (as "Indemnitor")agrees to and shall indemnify and defend the other,its officers,employees,and agents (as "Indemnitee")for tort liability for all claims for damages and injuries of any character or nature whatsoever arising from the sole negligence of the Indemnitor,including its officers, employees or agents in relation to performance under this Agreement. Indemnitor agrees to assume the defense thereof and to pay all expenses (including attorney's fees)connected therewith.For purposes of this section,"sole negligence”shall include acts or omissions of the Indemnitor, its officers,employees,or agents,or any combination thereof,and situations where such acts or omissions,in combination with the negligence of third parties combines to cause injury or damage to persons or property.It shall not include situations where the acts or omissions of the Indemnitor,its officers,employees,or agents combines with the negligence of Indemnitee to cause such injury,which situations shall be governed by the provisions of the subsection below relating to concurrent negligence. Each party agrees that liability (including costs of defense and attorney's fees)for claims arising from the concurrent negligence of both Parties shall be apportioned according to the respective percentage of fault attributable to each Party as determined by agreement or by the trier of fact. (i)Amendments.Any amendment or modification to a Contract must be in writing and signed by the Contractor and the Authority and approved by the BPMC. (j)Conduct in Accord with Applicable Law.The Contractor and the Authority agree that at all times during the term of a Contract,they shall conduct themselves in accord with all applicable laws and permits,and they will undertake no action contrary to such laws or permits.The laws of the -3- State of Alaska shall govern this interpretation and application of the Contract and the actions of the parties thereunder. (k)Prudent Utility Practices.For the purposes of this Agreement, Prudent Utility Practices shall have the meaning provided in Section 1(x)of the Power Sales Agreement. (I)Contract Hours and Safety Standards.All Contracts are subject to all applicable provisions of state and federal law concerning work hours and safety standards. (m)Equal Employment Opportunity.All Contracts are subject to all applicable provisions of state and federal law concerning Equal Employment Opportunity. (n)Exclusivity of Contract.All terms and provisions agreed to between the Authority and any Contractor will be incorporated into a written Contract setting forth the full intent of the parties. (0)Notice and Communication.Any notice or demand involving a claim of default,breach of a Contract,or notice of a dispute shall be sent to the appropriate party by registered or certified mail.Notice to the Authority shall be addressed to:the Executive Director,Alaska Energy Authority,480 West Tudor,Anchorage,Alaska 99503. (p)Section Headings.The section headings of a Contract are for convenience only,and do not purport to,and shall not be deemed to,define, limit or extend the scope or intent of the section to which they pertain. (q)Severability.In the event that any provision of a Contract shall be finally adjudicated by a court of competent jurisdiction to be invalid or unenforceable,the remainder of the Contract shall be unaffected by such adjudication and all the remaining provisions of the Contract shall remain in full force and effect as if such provision so adjudicated to be invalid had not been included herein. (r)Successors and Assigns.A Contract shall be binding upon and inure to the benefit of the successors,legal representatives or assigns of the Contractor and the Authority.However,a Contractor may not assign a Contract or any part thereof without the written consent of the Authority and the BPMC.If the Authority discontinues its current legal existence,its -4- obligations under a Contract will automatically be assigned to the BPMC, without the need for consent by the Contractor,unless the rights,powers and duties of the Authority are transferred to a successor entity with substantially the same expertise within the meaning of Prudent Utility Practices,powers and duties as the Authority. (s)Waiver Not Continuing.Any waiver at any time by any party to a Contract of its rights with respect to any default of the other party hereto, or with respect to any other matter arising in connection with that Contract, shall not be considered a waiver with respect to any subsequent default, right or matter.Any delay short of the statutory period of limitations in asserting or enforcing any right shall not be deemed a waiver of such right. (t)Third Party Beneficiaries.The BPMC,as representative of the Purchasers,is a third party beneficiary of this Contract,with the legal right to enforce the provisions hereof.In any action by the BPMC for damages, the Contractor shall have the right to assert against the BPMC any defense which it could have asserted against the Authority.The raising of any such defense by the Contractor shall not affect any right of a purchaser or the BPMC under the Master Operating Agreement or Power Sales Agreement. RLS\BLM&O.k (3/14/94) 7.4 -e @ @eahspSesHomerElectricAssociation,Inc.He,CORPORATE OFFICE Central Peninsula Service Center '3977 Lake Street 280 Airport Way oy Homer,Alaska 99603-7680 Pouch 5280 -4 Phone (907)235-8167 Kenai,Alaska 99611-5280 BS!FAX (907)235-3313 Phone (907)283-5831 FAX (907)283-7122 ECELVE]] AUG 2 3 1339 Alaska Industric!DevelopmentVomandExportAuthority Denfiis V.McCrohan eputy Director,Energy Alaska Energy Authority 480 West Tudor Road Anchorage,Alaska 99503 August 21,1996 Dear Mr.McCrohan: Enclosed are executed triplicate originals for the following agreements: Bradley Lake Hydroelectric Project Transmission Maintenance Agreement Operation &Maintenance Agreement for Bradley Lake Project Amendment #1 Please return one original document to Homer Electric Association after it is has been executed. Sincerely, Marian L.Izzo Administrative Assistant ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY =_ALASKA@@E™ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE,ALASKA 99503 907 /269-3000 FAX 907 /269-3044 August 7,1996 Norman L.Story General Manager Homer Electric Association,Inc. 3977 Lake Street Homer,Alaska 99603 Subject:Bradley Lake Hydroelectric Project Transmission O&M Agreement O&M Agreement Amendment | Dear Norm: Enclosed you will find triplicate originals for both of the following agreements as approved by the Bradley PMC on August 6,1996: e Bradley Lake Hydroelectric Project Transmission Facilities Maintenance Agreement e Operation and Maintenance Agreement for Bradley Lake Project Amendment Number One Please sign and notarize each of the agreements and return them to AEA for Riley Snell's signature.AEA is preparing Exhibits A and B for attachmentafter HEA has reviewed and approved them.Once all three originals of each document has been signed and the approved exhibits attached,one original will be returned to you,one will be sent to the BPMC Chairman and AEA will keep the third original. Please thank Rick Baldwin for his assistance in getting the Bradley Agreements completed. Very truly yours, TM aohe- Dennis V.McCrohan Deputy Director,Energy Norman L.Story August 7,1996 Page 2 Enclosures CC:Thomas R.Stahr,BPMC Chairman (w/o enc.) Ron Saxton,Esquire (w/o enc.) Keith A.Laufer,Assistant Attorney General (w/o enc.) ri.ALASKA INDUSTRIAL DEVELOPMENT*AND EXPORT AUTHORITY =A =GQ =ENERGY AUTHORITY 480 WEST TUDOR ANCHORAGE,ALASKA 99503 907 /{269-3000 FAX 907 /269-3044 August 7,1996 C.R.Baldwin,Esquire 125 N.Willow Street,Suite 100 Kenai,Alaska 99611 Subject:Bradley Lake Hydroelectric Project Transmission O&M Agreement O&M Agreement Amendment 1 Dear Rick: Enclosed are copies of the above agreements (and the other agreements we worked on)for your final review.The BPMC approved them on August 6,1996. Triplicate originals have been sent to Norm Story for his execution.If anything is amiss,let me know. Thanks for all your help in getting these agreements completed. Sincerely, aw -. Daniel W.Beardsley Contracts Manager,Energy Enclosures cc:Norman L.Story