HomeMy WebLinkAboutBefore the FERC Application for Transfer of FERC License No. 2743 Terror Lake Hydroelectric Project 1982Application for Transfer
of PERC License No. 2743
(Terror Lake Hydroelectric
Project, Alaska)
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BEFORE THE FEDERAL ENERGY REGULATORYCOMMIS'SION
In the matter of the application
for approval of transfer of
license for the Terror Lake
Hydroelectric Power Project.
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Alaska ResoUrces Lihrary--& InfonnatiOQ Servlce&
library lluHdiG1)j>Suite 111
3211 Providence Drive
Anchoraga, AK 995()8.4614
Kodiak' Electric Association, Inc., licensee (the "Transferor")
under the license for Project No. 2743, issued by the Federal Energy
Regulatory Commission (the "Commission") on October 5, 1981, and the
Alaska Power Authority (hereinafter the "Transferee"), hereby jointly
and severally apply for the written approval by the Commission of the
transfer of the aforesaid license from the Transferor to the Transferee
and request that the instrument of such approval by the Commission be
made effective as of the date of conveyance of the project properties of
the Terror Lake Hydroelectric Power Project (the "Projectlt ); and in
support thereof show the Commission as follows:
(1) The Transferee is a public corporation of the 'state of Alaska
organized under the laws of the State of Alaska and within the Alaska
Department of Commerce and Economic Development but with separate
and independent legal existence. The Transferee is authorized to
acquire, construct, operate and maintain hydroelectric power projects
including the Project pursuant to the provisions contained at AS 44.83.
Certified copies of the authorizing statutes, regulations, and bylaws
with all amendments to each to date, are submitted herewith as Exhibits
A-1, A-2, and A-3, said Exhibits being hereby incorporated herein and
made a part hereof.
(2) As required by Section geb) of the Federal Power Act, the
Transferee submits as partial .evidence of its compliance with all appli-
cable State laws concerning beds and banks, appropriation, diversion,
and use of water for power purposes and concerning the right to en-
gage in the business of developing, transmitting, and distributing
power, and in any business necessary to affect the purpose of a license
governed by the Federal Power Act, the following;
ea) a letter to the Alaska Department of Natural Resources
requesting transfer of such water rights to the Transferee as are
associated with the Project;
(b) a letter to the Alaska Departments of Environmental
Conservation and Fish and Game requesting affirmation that the
transfer of the Project complies with all applicable State laws and
regulations concerning use of river beds and banks, appropria-
tions I diversion and use of water for power purposes; and
(c) A statement from the Alaska Attorney General that
approval by the Board' of. the Alaska Power Authority of the
':H]reement effecting .th~.jrJ.risfe( pf the Project to the Transferee,
contingent uP9!l: .ap'provf:l1 by 'the' Commi,ssion, constitutes a per-
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missible exercise by the Transferee of its statutory authority to
engage in the business of developing I transmitting I and distributing
power to wholesale power customers as intended under Alaska State
Law.
The items in (a) I (b) I and (c) of this paragraph are submitted
herewith as Exhibits B-1, B-2 (a) and (b) and B-3; Transferee pro-
poses to definitively demonstrate its compliance with the applicable State
laws specified in Section 9 (b) of the Federal Power Act I by submitting
a water rights transfer notification from the Alaska Department of
Natural Resources as Exhibit B-4; approvals from the Departments of
Environmental Conservation and Fish & Game as Exhibit 5 (a) and (b);
and as Exhibit B-6, a final conclusion by the Alaska Attorney General
that the Board of the Alaska Power Authority has taken those steps
necessary to carry out its statutory authorities to acquire the Project.
(3) The Transferee will submit certified copies of all instruments
of conveyance whereby title to the Project and project properties is
conveyed to it upon the completion of such conveyance, if and when the
Commission shall have given its approval to the proposed transfer.
(4) If and when the Commission shall have given its approval to
the proposed transfer I and upon completion of conveyance of the Pro-
ject and project properties to the Transferee, the Transferor will de-
liver to the Transferee and the Transferee will accept and permanently
retain all license instruments and all maps I plans I specifications I
contracts I reports of engineers I accounts I books, records I and all
other papers and documents relating to the original project and to all
additions thereto and betterments thereof.
(5) The Transferor and Transferee have reviewed the documents
attached to the original license application and certify that, to the best
of their respective beliefs I all documents required to be attached to
that application have been so attached.
(6) The Transferor certifies that it has fully complied with the
terms and conditions of its license and that it has fully satisfied and
discharged all of its liabilities and obligations thereunder to the date
hereof, and obligates itself to pay all annual charges accrued under the
license to the date of transfer.
(7) Contingent upon the final written approval by the Commission
of the transfer of the license I (including full compliance with the settle-
ment agreement entered into among the Transferor and the intervening
parties addressing environmental concerns of the parties including
establishment and maintenance of a trust fund for bear studies) the
Transferee accepts all the terms and conditions of the said license and
the Act, and agrees to be bound thereby to the same extent as though
it were the original licensee thereunder.
(8) The Transferee intends pursuant to its enabling legislation to
contract with the Transferor whereby the Transferor as agent for the
Transferee will oper<lte and maintain the Project. The provisions for
these contractual obligations will be set forth in the acquisition and
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operation and maintenance agreements between the Transferee and the
Transferor, copies of which will be submitted to the Commission on the
date of transfer as Exhibits C-l. The execution of said contracts
further assures that the Transferee accepts all the terms and conditions
of the license applied herefore.
(9) The Transferee represents that transfer of the license will
serve the public interest of the State of Alaska through the inclusion of
the Project, the license to which is being applied hereunder, in the
Energy Program for Alaska, a legislative enactment designed to insure
low cost power for Alaska customers.
(10) The transfer of the project properties to the Transferee
shall be made within sixty days from the submission of this application.
However said transfer shall be contingent upon approval by the
Commission of the application for a transfer of license, and provisions
are therefore included in the acquistion agreement entered into by and
between the Transferee and Transferor that said transfer shall be null
and void if the Commission declines to approve the transfer of license
requested hereinafter.
(11) The Transferor submits herewith Exhibits D-l a certificated
copy of Resolution 158-81 adopted by its Board of Directors approving
this application, and the Transferee submits herewith as Exhibit D-2 a
certificated copy of a resolution adopted by its Board of Directors
approving this application.
(12) The name, title, and post-office address of the person or
persons to whom correspondence in regard to this application shall be
addressed are as follows:
A. for the Transferee:
Eric P. Yould, Executive Director
Alaska Power Authority
334 W. 5th Avenue, Second Floor
Anchorage, Alaska 99501
B. for the Transferor:
David Nease
Kodiak Electric Association, Inc.
P.O. Box 787
Kodiak, Alaska 99615
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STATE OF ALASKA
THIRD DISTRICT
and says:
VERIFICA TION
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being duly sworn I deposes
That he is the President
r----.~~~--~.---~--~--------------(Title of person signing the application) of the Kodiak Elect ric Assoc iat ion, Inc.
(Name of one of the applicants) ,one of the applicants for approval of
transfer of license; that he has read the foregoing application and
knows the contents thereof; and that the same are true to the best of
his knowledge and belief.
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VERIFICATION
STATE OF ALASKA )
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THIRD JUDICIAL DISTRICT )
ERIC P. YOULD being duly sworn, deposes
and says: That he is the Executive Director of
Alaska Power Authority , one of the applicants
for approval. of transfer of license; that he has read the
foregoing application and knows the contents thereof; and
that the same are true to the best of his knowledge and
belief.
(Signaturf)
SUBSCRIBED AND SWORN to before me, a Notary Public
of the State of Alaska this k ta day of rWVVCfh'Y
1982.
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CERTIFICATE OF AUTHENTICITY --STATUTES
STATE OF ALASKA
ss.
THIRD JUDICIAL DISTRICT
I, ERIC P. YOULD, Executive Director of the Alaska
Power Authority (the "Authority") HEHEBY CERTIFY as follows:
That the document attached hereto is a true and
correct copy of the authorizing statutes of the Alaska Power
Authority (AS 44.83) including any and all amendments thereto
to date.
IN WITNESS WHEREOF, I have set my hand and caused
the seal of the Authority to be impressed hereon this ~,
day of February, 1982.
(S E A L)
ERIC P: YOU~D \
Executlve Dlrector
SUBSCRIBED AND m'JORN to before me this 2, day
of February, 1982.
§ 44.83.010 ALASKA STATUTES § 44.83.010
(3) "entire transmission system" means the gas transmission
pipeline (together with all related facilities) to extend from the
Prudhoe Bay area on the North Slope of Alaska into the contiguous
United States, substantially as described in the President's report
entitled "Decision and Report to Congress on the Alaska Natural Gas
Transportation System", issued by the President on September 22,
1977, under provisions of the Alaska Natural Gas Transportation Act
of 1976, and includes planning, design and construction of the pipeline
and facilities;
(4) "project" means the gas transmission pipeline (together with all
related property and facilities) to extend from the Prudhoe Bay area on
the North Slope of Alaska to a connection with the Trans-Canada
Pipeline on the Alaska-Canada border, substantially as described in
the President's report entitled "Decision and Report to Congress on the
Alaska Natural Gas Transportation System", issued by the President
on September 22, 1977, under provisions of the Alaska Natural Gas
Transportation Act of 1976, and includes planning, design, and
construction of the pipeline and facilities;
(5) "project sponsor" means any partner of the Alaskan Northwest
Natural Gas Transportation Company or its successors;
(6) "Prudhoe Bay natural gas" means natural gas produced from the
Prudhoe Bay reservoir;
(7) "~rudhoe Bay oil" means oil produced from the Pru~hoe Bay
reserVOIr;
(8) "Prudhoe Bay reservoir" means those areas defined in Article 5.1
of the "Prudhoe Bay Unit Agreement" of April 1, 1977. (§ 2 ch 90 SLA
1978)
Chapter 83. Alaska Power Authority.
Article
1. Creation and Organization (§~ 44.83.010 -44.83.050)
2. Purpose and Powers (§§ 44.83.070 -44.83.090)
3. Financial Provisions (§§ 44.83.100 -44.83.160)
4. Power Production Cost Assistance (§§ 44.83.162 -44.83.164)
5. Power Project Fund (§ 44.8:3.170)
6. General Provisions (*§ 44.83.177 -44.83.240>
7. Susitna River Hydroelectric Project (§§ 44.83.300 -44.83.360)
Article 1. Creation and Organization.
Section
10. Legislative finding and policy
20. Creation of authority
30. Membership of the ~uthority
40. Officers and quorum
Section
45. Qualifications. powers. and duties of
oflicers and directors.
50. [Repealed I
Sec. 44.83.010. Legislative finding and policy. (a) The
legislature finds. determines and declares that
250
-§ 44.83.020 STATE GOVERNMENT § 44.83.030
(1) there exist numerous potential hydroelectric and fossil fuel
gathering sites in the state;
(2) the establishment of power projects at these sites is necessary to
supply power at the lowest reasonable cost to the state's municipal
electric, rural electric, cooperative electric, and private electric
utilities, and regional electric authorities, and thereby to the
consumers of the state, as well as to supply existing or future industrial
needs;
(3) the achievement of the goals of lowest reasonable consumer
power costs and beneficial long-term economic growth and of
establishing, operating and developing power projects in the state will
be accelerated and facilitated by the creation of an instrumentality of
the state with powers to construct, acquire, finance, and operate power.
projects.
(b) It is declared to be the policy of the state, in the interests of
promoting the general welfare of all the people of the state, and public
purposes, to reduce consumer power costs and otherwise to encourage
the long-term economic growth of the state, including the development
of its natural resources, through the establishment of power projects by
creating the public corporation with powers, duties and functions as
provided in this chapter. (§ 1 ch 278 SLA 1976; am § 1 ch 156 SLA
1978)
Effect of amendment. -The 1978
amendment in subsection (a), substituted
"power at the lowest reasonable cost" for
"lower cost power" in paragraph (2) and
"lowest reason~ble consumer power costs
and beneficial" for "lower consumer power
costs and" and "construct, acquire,
finance, and" for "incur debt for
constructing. and with powers to" in para-
graph (3,.
Sec. 44.83.020. Creation of authority. There is created the Alaska
Power Authority. The authority is a public corporation of the state in
the Department of Commerce and Economic Development but with
separate and independent legal existence. (§ 1 ch 278 SLA 1976)'
Sec. 44.83.030. Membership of the authority. (a) The authority
shall consist of the following directors:
(1) four directors at large to be appointed by the governor and
confirmed by the legislature;
(2) the commissioner of commerce and economic development.
(b) The commissioners of community and regional afTairs, natural
resources, transportation and public facilities, and revenue shall have
the rights and privileges of directors except for the right to vote and
may not be considered for purposes of quorum or voting. (§ 1 ch 278
SLA 1976; am § 2 ch 156 SLA 1978)
Effect of amendment. The 1978
amendment rewrote thiS sectIOn.
251
§ 44.83.040 ALASKA STATUTES § 44.83.070
Sec. 44.83.040. Officers and quorum. The director shall elect one
of the directors at large as chairman and other officers they determine
desirable. The powers of the authority are vested in the directors, and
three directors of the authority constitute a quorum. Action may be
taken and motions and resolutions adopted by the authority at a
meeting by the affirmative vote of at least three directors. The directors
of the authority serve without compensation, but they shall receive the
same travel pay and per diem as provided by law for board memb(:rs.
(§ 1 ch 278 SLA 1976; am § 3 ch 156 SLA 1978)
Effect of amendment. -The 1978 large" for "public members" in th' first
amendment substituted "directors at sentence.
Sec. 44.83.045. Qualifications, powers, and duties of officers
and directors. (a) The directors at large must be residents and
qualified voters of Alaska and shall comply with the requirements of
AS 39.50 (conflict of interests). The directors at large shall serve
four-year terms. The four original directors at large have terms of one,
two, three, and four years, respectively.
(b) A vacancy in a directorship occurring other than by expiration of
a term shall be filled in the same manner as the original appointment,
but for the unexpired portion of the term only.
(c) The authority shall employ an executive director who may, with
the approval of the authority, employ additional staff as necessary. In
addition to its staff of regular employees, the authority may contract
for and engage the services of legal and bond counsel, consultants,
experts, and financial and technical advisors the authority considers
necessary for the purpose of conducting studies, investigations,
hearings, or other proceedings. The board of directors shall establish
the compensation of the executive director. The executive director of
the authority is subject to the provisions of AS 39.25. (§ 4 ch 156 SLA
1978)
Sec. 44.83.050. Staff.
Repealed by § 23 ch 156 SLA 1978.
Editor's note. -The repealed section
derived from § 1, ch. 278, SLA 1976.
Article 2. Purpose and Powers.
Section
70. Purpose of the authority
80. Powers of the authority
Section
90 Power contracts and the Alaska Public
Utilities Commission
Sec. 44.83.070. Purpose of the authority. The purpose of the
authority is to promote, develop and advance the general prosperity
and economic welfare of the people of Alaska by providing a means of
252
§ 44.83.080 STATE GOVERNMENT § 44.83.080
constructing, acquiring, financing and operating power production
facilities limited to fossil fuel, wind power, tidal, geothermal,
hydroelectric, or solar energy production and waste energy
conservation facilities. (§ 1 ch 278 SLA 1976; am § 5 ch 156 SLA 1978)
Effect of amendment. -The 1978 "hydroelectric and fossil fuel generating
amendment substituted the language projects" at the end of the section.
beginning "power production facilities" for
Sec. 44.83.080. Powers of the authority. In furtherance of its
corporate purposes, the authority has the following powers in addition
to its other powers:
(1) to sue and be sued;
(2) to have a seal and alter it at pleasure;
(3) to make and alter bylaws for its organization and internal
management;
(4) to make rules and regulations governing the exercise of its
corporate powers;
(5) to acquire, whether by construction, purchase, gift or lease, and
to improve, equip, operate, and maintain power projects;
(6) to issue bonds to carry out any of its corporate purposes and
powers, including the acquisition or construction of a project to be
owned or leased, as lessor or lessee, by the authority, or by another
person, or the acquisition of any interest in a project or any right to
capacity of a project, the establishment or increase of reserves to secure
or to pay the bonds or interest on them, and the payment of all other
costs or expenses of the authority incident to and necessary or
convenient to carry out its corporate purposes and powers;
(7) to sell, lease as lessor or lessee, exchange, .. donate, conveyor
encumber in any manner by mortgage or by creation of any other
security interest, real or personal property owned by it, or in which it
has an interest, when, in the judgment of the authority. the action is
in furtherance of its corporate purposes; .
(8) to accept gifts, grants or loans from, and enter into contracts or
other transactions regarding them, with any person;
(9) to deposit or invest its funds, subject to agreements with
bondholders;
(10) to enter into contracts with the United States or any person and,
subject to the laws of the United States and subject to concurrence of
the legislature, with a foreign country or its agencies, for the financing,
construction, acquisition, operation and maintenance of all or any part
of a power project, either inside or outside the state, and for the sale or
transmission of power from a project or any right to the capacity of it
or for the security of any bonds of the authority issued or to be issued
for the project;
(11) to enter into contracts with any person and with the United
States, and, subject to the laws of the United States and subject to the
253
§ 44.83.080 ALASKA STATUTES § 44.83.080
concurrence of the legislature, with a foreign country or its agencies for
the purchase, sale, exchange, transmission, or use of power from a
project, or any right to the capacity of it;
(12) to apply to the appropriate agencies of the state, the United
States and to a foreign country and any other proper agency for the
permits, licenses, or approvals as may be necessary, and to construct,
maintain and operate power projects in accordance with the licenses or
permits, and to obtain, hold and use the licenses and permits in the same
manner as any other person or operating unit;
(13) to perform reconnaissance studies, feasibility studies, and
engineering and design with respect to power projects;
(14) to enter into contracts or agreements with respect to the exer-
cise of any of its powers, and do all things necessary or convenient to
carry out its corporate purposes and exercise the powers granted in this
chapter;
(15) to exercise the power of eminent domain in accordance with AS
09.55.250 -09.55.410;
(16) to recommend to the legislature
(A) the issuance of general obligation bonds of the state to finance
the construction of a power project if the authority first determines that
the project cannot be financed by revenue bonds of the authority at
reasonable rates of interest;
(B) the pledge of the credit of the state to guarantee repayment of all
or any portion of revenue bonds issued to assist in construction of power
projects;
(e) an appropriation from the general fund
(i) for debt service on bonds or other project purposes; or
(m to reduce the amount of debt financing for the project;
(D) an appropriation to the power project fund for a power project;
(E) an appropriation of a part of the income of the renewable
resources investment fund for a power project;
(F) development of a project under financing arrangements with
other entities using leveraged leases or other financing methods. (* 1
ch 278 SLA 1976; am §§ 6 -11 ch 156 SLA 1978; am ** 16, 17 ch 83
SLA 1980)
Effect of amendments. -The 1978
amendment suhgtituLed "equip. operate,
and maintain" for "equip and operate" in
paragraph (5), inserted "or by another per·
son" in paragraph 161, sub~tituted "a
project" for "it" in two plaet's in paragraph
(61, subtitituted "any person" for "a federal
agency or an agency or instrumentality of
the state, mumcipality. private
organization or other source" in paragraph
(8i, inserted "financing'" near the middle of
paragraph IlOl, deleted "ti,r the purchase,
sale. f'xchanL('€. transmission. or use of
power generated by a project, or any right
to the capacity of it" following "enter into
contracts" near the beginning of para-
graph (lli. added the language beginmng
"for the purchase. sale. exchange" to the
end of paragraph 1111, and deleted
"hydroelectrieal and fossil fuel" following
"with respect to" and "generating" follow-
ing "power" in paragraph 1131.
The 1980 amendment lIlserted in the
middle of parat:raph Il31, "feasibility
studies, and en"lfleenng and design." and
ddd,]d paragraph I U,!,
254
§ 44.83.090 STATE GOVERNMENT § 44.83.090
Sec. 44.83.090. Power contracts and the Alaska Public
Utilities Commission. (a) The authority shall, in addition to the other
methods which it may find advantageous, provide a method by which
municipal electric, rural electric, cooperative electric, or private
electric utilities and regional electric authorities, or other persons
authorized by law to engage in the distribution of electricity may
secure a reasonable share of the power generated by a project, or any
. interest in a project, or for any right to the power and shall sell the
power or cause the power to be sold at the lowest reasonable prices
which cover the full cost of the electricity or services, including capital
and operating costs, debt coverage as considered appropriate by the
authority, and other charges that may be authorized by this chapter.
A contract for the sale, transmission and distribution of power
generated by a project or any right to the capacity of it shall provide:
(1) for payment of all operating and maintenance expenses of a
project and costs of renewals, replacements and improvements of it;
(2) for interest on and amortization charges sufficient to retire bonds
of the authority issued for the project and reserves for them, plus a debt
service coverage factor as may be determined by the authority to be
necessary for the marketability of its bonds;
(3) for monitoring of the project by the authority or its agents;
(4) for full and complete disclosure to the authority of all factors of
cost in the transmission and distribution of power, so that rates to any
persons may be fixed initially in the contract and may be adjusted from
time to time on the basis of true cost data;
(5) for periodic revisions of the service and rates to persons on the
basis of accurate cost data obtained by the accounting methods and
systems approved by the directors and in furtherance and effectuation
of the policy declared in this chapter;
(6) for the cancellation and termination of a contract upon violation
of its terms by any person;
(7) for security for performance as the authority may consider
practicable and advisable, including provisions assuring the
continuance of the distribution and transmission of power generated by
a project and the use of its facilities for these purposes; and
(8) other terms not inconsistent with the provisions and policy ofthis
chapter as the authority may consider advisable.
(b) The authority is not subject to the jurisdiction of the Alaska
Public Utilities Commission. Nothing in this chapter grants the
authority any jurisdiction over the services or rates of any public utility
or diminishes or otherwise alters the jurisdiction of the Alaska Public
Utilities Commission with respect to any public utility, including any
right the commission may have to review and approve or disapprove
contracts for the purchase of electricity by a public utility. 1* 1 ch 278
SLA 1976: am * 12 ch 156 SLA 1978)
255
§ 44.83.100 ALASKA STATUTES § 44.83.110
Effect of amendment. -The 1978
amendment so changed this section as to
make a detailed comparison im-
practicable. Among other things, however,
it designated the former provisions of this
section as subsection (a) and added
subsection (b).
Article 3. Financial Provisions.
Section
100. Bonds of the authority
110. Trust indentures and trust agree-
ments.
120. Validity of pledge
130. Nonliability on bonds
Section
140. Pledge of the state
150. Tax exemption
160. Bonds legal investments for fi·
duciaries
Sec. 44.83.100. Bonds of the authority. (a) The authority may
borrow money and may issue bonds, including but not limited to bonds
on which the principal and interest are payable (1) exclusively from the
income and receipts or other money derived from the project financed
with the proceeds of the bonds; (2) exclusively from the income and
receipts or other money derived from designated projects whether or
not they are financed in whole or in part with the proceeds of the bonds;
(3) from its income and receipts or other assets generally, or a
designated part or parts of them; or (4) from one or more
revenue-producing contracts including a contract providing for the
security of the bonds made by the authority with any person. The
authority may issue bonds to pay, fund or refund the principal of, or
interest or redemption premiums on, bonds issued by it, whether or not
the bonds or interest to be funded or refunded have become due.
(b) Bonus shall be authorized by resolution of the authority, and
shall be dated and shall mature as the resolution may provide, except
that no bond may mature more than 50 years from the date of its issue.
Bonds shall bear interest at the rates, be in the denominations, be in
the form, either coupon or registered, carry the registration privileges,
be executed in the manner, be payable in the medium of payment, at
the places, and be subject to the terms of redemption which the
resolution or a subsequent resolution may provide.
(c) All bonds, regardless of form or character, shall be negotiable
instruments for all the purposes of the Uniform Commercial Code.
(d) All bonds may be sold at public or private sale in the manner, for
the price or prices, and at the time or times which the authority may
determine. (§ 1 ch 278 SLA 1976)
Sec. 44.83.110. Trust indentures and trust agreements. (a) In
the discretion of the authority, an issue of bonds may be secured by a
trust indenture or trust agreement between the authority and a
corporate trustee (which may be a trust company, bank, or national
banking association, with corporate trust powers. located inside or
outside the state) or by a secured loan agreement or other instrument
or under a resolution giving powers to a corporate trustee by mean;; of
which the authority may
~ 44.83.110 STATE GOVERNMENT § 44.83.110
(1) make and enter into any and all the covenants and agreements
with the trustee or the holders of the bonds which the authority may
determine to be necessary or desirable, including, without limitation,
covenants, provisions, limitations and agreements as to
(A) the application, investment, deposit, use and disposition of the
proceeds of bonds of the authority or of money or other property of the
authority or in which it has an interest;
(B) the fixing and collection of rentals, charges, fees or other
consideration for, and the other terms to be incorporated in, contracts
with respect to a project or to generated power;
(C) the assignment by the authority of its rights in contracts with
respect to a project or to generated power or in a mortgage or other
security interest created with respect to a project or generated power
to a trustee for the benefit of bondholders;
(0) the terms and conditions upon which additional bonds of the
authority may be issued;
(E) the vesting in a trustee of rights, powers, duties, funds or prop-
erty in trust for the benefit of bondholders, including, without
limitation, the right to enforce payment, performance, and all other
rights of the authority or of the bondholders, under a lease, power of
contract, contract of sale, mortgage, security agreement, or trust
agreement with respect to a project by injunction or other proceeding
or by taking possession of by agent or otherwise and operating a project
and collecting rents or other consideration and applying the same in
accordance with the trust agreement;
(2) pledge, mortgage or assign money, leases, agreements, property
or other rights or assets of the authority either presently in hand or to
be received in the future, or both; and
(3) provide for any other matters of like or different character which
in any way affect the security or protection of the bonds.
(b) Notwithstanding any other provisions of this chapter, the trust
agreement shall contain a covenant by the authority that it will at all
times maintain rates, fees or charges sufficient to pay, and that a
contract entered into by the authority for the sale, transmission or
distribution of power shall contain rates, fees or charges sufficient to
pay the costs of operation and maintenance of the project, the principal
of and interest on bonds issued under the trust agreement as the same
severally become due and payable, to provide for debt service coverage
as considered necessary by the authority for the marketing of its bonds
and to provide for renewals, replacements and improvements of the
project, and to maintain reserves required by the terms of the trust
agreement.
(c) For the purpoge of securing anyone or more issues of its bonds,
the authority may establish one or more special funds, called "capital
reserve funds", and shall pay into those C:J.oital reserve funds the
proceeds of the sale ot' its bOllUS and any other money which may be
257
§ 44.83.110 ALASKA STATUTES § 44.83.110
made available to the authority for the purposes of those funds from
any other source. The funds shall be established only if the authority
determines that the establishment would enhance the marketability of
the bonds. All money held in a capital reserve fund, except as provided
in this section, shall be used as required, solely for (1) the payment of
the principal of, and interest on, bonds or of the sinking fund payments
with respect to those bonds, (2) the purchase or redemption of bonds,
or (3) the payment of a redemption premium required to be paid when
those bonds are redeemed before maturity; however, money in a fund
may not be withdrawn from it at any time in an amount which would
reduce the amount of that fund to less than the capital reserve
requirement set out in (2) of this subsection, except for the purpose of
. making, with respect to those bonds, payment, when due, of principal,
interest, redemption premiums and the sinking fund payments for the
payment of which other money of the authority is not available. Income
or interest earned by, or increment to, a capital reserve fund, due to the
investment of the fund or any other amounts in it, may be transferred
by the authority to other funds or accounts of the authority to the
extent that the transfer does not reduce the amount of the capital
reserve fund below the capital reserve fund requirement.
(d) If the authority decides to issue bonds secured by such a capital
reserve fund, the bonds may not be issued if the amount in the capital
reserve fund is less than such an amount as may be established by
resolution of the authority (called the "capital reserve fund
requirement"), unless the authority, at the time of issuance of the
obligations, deposits in the capital reserve fund from the proceeds of the
obligations to be issued or from other sources, an amount which,
together with the amount then in the fund, will not be less than the
capital reserve fund requirement.
(e) In computing the amount of a capital reserve fund for the purpose
of this section, securities in which all or a portion of the funds are
invested shall be valued by some reasonable method established by the
authority by resolution. Valuation on a particular date shall include
the amount of any interest earned or accrued to that date.
(f) The chairman of the authority shall annually, no later than Jan-
uary 2, make and deliver to the governor and the legislature his certif-
icate stating the sum, if any, required to restore any capital reserve
fund to the capital reserve fund requirement. The legislature may
appropriate such a sum, and all sums apprnpriated during the then
current fiscal year by the legislature for such restoration shall be
deposited by the authority in the proper capital reserve fund. Nothing
in this section creates a debt or liability of the state.
(g) When the authority has created and established a capital reserve
fund, the commissioner of revenue may lend surplus money in the
gpnerai fund to the authority fnr dcpnsit in n capital reserve fund in an
amount e4uai to the capital rC:icrve fund requll'l'rnent. The loan", shall
§ 44.83.120 STATE GOVERNMENT § 44.83.140
be made on such terms and conditions as may be agreed upon by the
commissioner of revenue and the authority, including without
limitation terms and conditions providing that the loans need not be
repaid until the obligations of the authority secured and to be secured
by the capital reserve fund are no longer outstanding. (§ 1 ch 278 SLA
1976; am §§ 13, 14 ch 156 SLA 1978)
Effect of amendment. -The 1978
amendment in paragraph (l) of subsection
(a), added "or to generated power" to the
end of subparagraph (B), inserted "or to
generated power" and "or generated
power" in subparagraph (C), and
substituted "by injunction" for "by manda-
mus" in subparagraph (E). In subsection
(d), the amendment substituted "an
amount" for "a per cent, not exceeding 10
per cent of the principal amount of all of
those bonds secured by that capital reserve
fund then to be . issued and then
outstanding in accordance with their
terms."
Sec. 44.83.120. Validity of pledge. It is the intention of the
legislature that a pledge made in respect of bonds shall be valid and
binding from the time the pledge is made; that the money or property
so pledged and thereafter received by the authority shall immediately
be subject to the lien of the pledge without physical delivery or further
act; and that the lien of the pledge shall be valid and binding as against
all parties having claims of any kind in tort, contract or otherwise
against the authority irrespective of whether the parties have notice.
Neither the resolution, trust agreement nor any other instrument by
which a pledge is created need be recorded or filed under the provisions
of the Uniform Commercial Code to be valid, binding or effective
against the parties. (§ 1 ch 278 SLA 1976)
Sec. 44.83.130. Nonliability on bonds. (a) Neither the members of
the authority nor a person executing the bonds is liable personally on
the bonds or is subject to personal liability or accountability by reason
of the issuance of the bonds.
(b) The bonds issued by the authority do not constitute an
indebtedness or other liability of the state or of a political subdivision
of the state, except the authority, but shall be payable solely from the
income and receipts or other funds or property of the authority. The
authority may not pledge the fai th or credit of the state or of a political
subdivision of the state, except the authority. to the payment of a bond
and the issuance of a bond by the authority does not directly or
indirectly or contingently obligate the state or a political subdivision
of the state to apply money from, or levy or pledge any form of taxation
whatever to the payment of the bond. (§ 1 ch 278 SLA 1976)
Sec. 44.83.140. Pledge of the state. The state pledges to and
agrees with the holders of bonds issued under this chapter and with the
federal agency which loans or contributes funds in respect to a project,
that the state will not limit or alter the rights and powers vested in the
authoritv by this chapter to iil1fill the terms of a contract made by the
259
§ 44.83.150 ALASKA STATUTES § 44.83.160
authority with the holders or federal agency, or in any way impair the
rights and remedies of the holders until the bonds, together with the
interest on them with interest on unpaid installments of interest, and
all costs and expenses in connection with an action or proceeding by or
on behalf of the holders, are fully met and discharged. The authority
is authorized to include this pledge and agreement of the state, insofar
as it refers to holders of bonds of the authority, in a contract with the
holders, and insofar as it relates to a federal agency, in a contract with
the federal agency. (§ 1 ch 278 SLA 1976)
Sec. 44.83.150. Tax exemption. All property of the authority is
public property devoted to an essential public and governmental func-
tion and purpose and is exempt from all taxes of the state or a political
subdivision of the state; however, the authority may make payments
in place of taxes in amounts equal to the real and personal property
taxes which would be assessed on its real and personal property by each
political subdivision in which its property is located to the same extent
as if that property were private property and the authority were a
non-public corporation. All bonds issued under this chapter are issued
by a body corporate and public of this state and for an essential public
and governmental purpose and the bonds and the interest and income
on and from the bonds and all income of the authority are exempt from
taxation except for transfer, inheritance and estate taxes. (§ 1 ch 278
SLA 1976; am § 15 ch 156 SLA 1978)
Effect of amendment. -The 1978 "however, the authority may make
amendment added the language beginning payments" to the end of the first sentence.
Sec. 44.83.160. Bonds legal investments for fiduciaries. The
bonds of the authority are securities in which all public officers and
bodies of the state and all municipalities and municipal subdivisions,
all insurance companies and associations and other persons carrying
on any insurance business, all banks, bankers, trust companies,
savings banks, savings associations, including savings and loan
associations and building and loan a,.ssociations, investment companies
and other persons carrying on a banking business, all administrators,
guardians, executors, trustees and other fiduciaries, and all other
persons whatsoever who are now or may hereafter be authorized to
invest in bonds or other obligations of the state, may properly and
legally invest funds including capital in their control or belonging to
them. Notwithstanding any other provisions of law, the bonds of the
authority are also securities which may be deposited with and may be
received by all public officers and bodies of this state and all
municipalities and municipal subdivisions for any purpose for which
the deposit of bonds or other obligations of the state is now or may
hereafter be authorized. (§ 1 ch 278 SLA 1976)
260
§ 44.83.162 STATE GOVERNMENT § 44.83.162
Article 4. Power Production Cost Assistance.
Section
162. Power production cost assistance
164. Assistance to utilities not regulated
by public utilities commission
Article repealed effective July I, 1980, repeals this article, efTective July 1,
1985. -Sections 51 and 54, ch. 83, SLA 1985.
Sec. 44.83.162. Power production cost assistance [Repealed
effective July I, 1985]. (a) There is established as a separate fund to
provide financial assistance to eligible electric utilities in the state, the
power production cost assistance fund which shall be administered by
the authority as a fund distinct from other funds of the authority and
which is composed of money appropriated for the purpose of providing
power production cost assistance to an eligible electric utility.
(b) Power production costs which may be paid from the power
production cost assistance fund include
(1) production expenses for generating electricity, consisting of the
costs of
(A) operation supervision and enginetring;
(B) fuel, oil, gas, coal, and other thermal fuels;
(C) generation expenses;
(D) miscellaneous other power generation expenses;
(E) rents;
(F) maintenance supervision and engineering;
(G) maintenance of structures;
(H) maintenance of generating and electric plant; and
(l) maintenance of miscellaneous other power generation;
(2) fixed costs relating to generating electricity, consisting of
(A) depreciation of a generating plant and equipment;
(B) taxes on a generating plant and equipment;
(C) insurance on or attributable to a generating plant and equip-
ment;
(D) interest on indebtedness incurred for a generating plant and
equipment;
(3) costs of purchased power, including but not limited to system
control and load dispatching expenses;
(4) transmission expenses, consisting of
(A) transmission operation supervision and engineering;
(B) transmission load dispatching;
(C) station expenses;
261
§ 44.83.162 ALASKA STATUTES
(D) overhead line expenses;
(E) underground line expenses;
(F) transmission of electricity by others;
(G) miscellaneous transmission expenses;
(H) rents; and
§ 44.83.162
(I) maintenance costs for facilities associated with (A) -(E) of this
paragraph; and
(5) fixed costs relating to transmission, consisting of
(A) depreciation of transmission lines and equipment;
(B) taxes on transmission lines and equipment;
(e) insurance on or attributable to transmission lines and equip-
ment; and
(0) interest on debt incurred for transmission lines and equipment.
(c) Power production cost assistance shall be paid to an eligible
electric utility if the actual power production costs of the utility exceed
its adjusted power production costs, as determined annually by the
commission. The adjusted power production costs of an electric utility
are
(1) 15 percent of the portion of the actual power production costs
which does not exceed 40 cents per kilowatt hour; plus
(2) the base power production cost escalator; the base power
production cost escalator is 7.65 cents per kilowatt hour adjusted annu-
ally by a percentage equal to the percentage of change in the
Anchorage consumer price index for the year.
(d) An eligible electric utility may include as part of its revenue
requirement for the purpose of setting rates charged for residential
service, local community facilities service, and service to charitable
organizations only the adjusted power production cost per
kilowatt-hour sold. However, the utility's approved tariff shall show
rates based on the actual cost of providing electric utility service and
the state assistance derived from the power production cost assistance
program under this section.
(e) The power production cost assistance program shall be
administered by the authority based on a determination by the
commission of adjusted power production cost of each electric utility
eligible for power production cost assistance. An electric utility is
eligible for power production cost assistance if
(1) the actual power production costs of the utility exceed the
adjusted power production costs, as determined by the commission
under (cl of this section;
(2) at least 15 percent of the total energy sold by an electric utility
during the calendar year preceding the year in which power production
cost assistance may be claimed was for residential use.
(fl The adjusted power production cost shall be calculated annually
in the manner prescribed by (c) of this section and shall be based on the
actual power production cost tiled with the commission by each eligible
262
§ 44.83.162 STATE GOVERKMENT § 44.83.162
electric utility, as verified by the commission. The power production
cost shall be derived from financial data supporting the most recently
approved permanent rate schedule with adjustments incorporating the
current cost of fuel. The determination of the cost of fuel by the
commission shall be in accordance with the procedure for approving
fuel cost rate adjustments in effect at the time of the determination.
The commission shall review filings and approve an adjusted power
production cost per kilowatt-hour and revised rates based on the
approved adjusted power production cost per kilowatt-hour, as
determined under (c) of this section. The commission may change the
adjusted power production costs if
(1) an increase or decrease in a utility's cost of fuel has resulted in
the approval of a fuel cost rate adjustment by the commission;
(2) a permanent or interim rate increase has been approved by the
commission, thereby establishing a higher or lower power production
cost;
(3) the authority has discovered discrepancies in its review of data
submitted, monthly, by the utilities; or
(4) the authority determines that appropriations are insufficient to
fund full payments to eligible utilities.
(g) Each electric utility with a rate schedule and adjusted power
production cost approved by the commission shall report monthly to the
authority within the time and in the form the authority designates (1)
the total a~tual power production costs of electric power including a
detailed breakdown of those costs as specified by the commission; (2)
the total kilowatt-hours sold during the preceding month; (3) the total
kilowatt-hours sold during the preceding month for service eligible for
power production cost assistance under this section; (4) the total
kilowatt-hours generated during the preceding month; (5) the total
power production cost per kilowatt-hour sold; (6) the total power
production cost per kilowatt-hour generated; and (7) any increase or
decrease in the current unit price of fuel from the base price used by
the commission in the determination of power production costs. The
authority shall review the report and may submit the report to the
commission for additional review before payment.
(h) After review and approval by the authority, the authority shall,
subject to appropriation, pay to each eligible electric utility an amount
equal to the difference between the actual power production costs for
the preceding month and the approved adjusted power production cost
per kilowatt-hour times the number of kilowatt-hours sold to
residential customers, local community facility customers, and
facilities owned by charitable organizations during the preceding
month. Payment shall be made by the authority within 30 days of
receipt from the utility of the report required under (g! of this section.
However. if there is a dispute between the authority and the utIhty
relating to the payment. the authority ~hall submit the report to the
26:1
§ 44.83.164 ALASKA STATUTES § 44.83.164
commission within 30 days of receipt of the report by the authority for
review before payment. When a report is submitted to the commission
for review under this section, payment shall be made by the authority
within 30 days after submission. If appropriations are insufficient for
payment in full, the amount paid to each electric utility is reduced on
a pro-rata basis.
(i) If an electric utility receives a payment under this section, the
utility shall furnish the following notice to its electric service
customers eligible under this program for each period for which the
payment is received:
NOTICE TO CUSTOMER
For the current billing period the utility has been paid under the
State of Alaska's power production cost assistance program (AS
44.83.162) to assist the utility and its customers in reducing the high
cost of generation of electric energy.
Your total electrical service cost $
Less state assistance $
Your charge $
(j) For the purpose of this section,
(1) the terms used in (b) (1) -(4) of this section are defined as those
items are defined in a recognized system of utility accounts designated
by the commission;
(2) actual power production costs are the expenses and costs
prescribed in this subsection less any other power production cost
assistance provided to the electric utility.
(k) In this section,
(1) "charitable organization" means an organization, not organized
for pecuniary profit, which is operated for the relief of poverty, distress,
or other condition of public concern in the state; the term includes, but
is not limited to, a church or religious organization;
(2) "commission" means the Alaska Public Utilities Commission;
(3) "local community facilities" means water and sewer facilities,
public outdoor lighting, and community buildings whose operations are
not paid for by the state, the federal government, or private commercial
interests. (§ 42 ch 83 SLA 1980l
Section repealed effective .July 1, repeals this section. effective July 1, 1985.
1985. -Section 51, eh. 83, SLA 1980.
Sec. 44.83.164. Assistance to utilities not regulated by Public
Utilities Commission [Repealed effective July 1,19851. (al A utility
which is exempt from regulation under AS 42.05.711 may receive
power production cost assistance under AS 44.83.162 without
becoming subject to the jurisdiction of the Alaska Public Utilities
Commission if the utility is otherwise el igible for assistance and if the
uti lity
264
§ 44.83.170 STATE GOVERNMENT § 44.83.170
(1) files with the commission the audited financial data necessary to
determine the adjusted power production cost in the form prescribed in
a recognized system of utility accounts;
(2) makes the reports required in AS 44.83.162(g) required of an
electric utility with a rate schedule approved by the commission within
the time and in the form the Alaska Power Authority designates;
(3) sets rates charged for residential services, local community
services, and for services to charitable organizations, by including as
part of its revenue requirements for these services only the adjusted
power production cost pe~ kilowatt-hour sold;
(4) allows audits which the commission determines are necessary to
insure compliance with this section; and
(5) furnishes its electric service customers eligible under this pro-
gram the "Notice to Customer" specified in AS 44.83.162(0.
(b) The provisions of AS 44.83.162 relating to determination of the
amount of power production cost assistance and payment of the
assistance apply to assistance under this section. (§ 42 ch 83 SLA 1980)
Section repealed effective July I, repeals this section. effective July 1, 1985.
1985. -Section 51, ch. 83, SLA 1980,
Article 5. Power Project Fund.
Section
170. Power project fund
Sec. 44.83.170. Power project fund. (a) There is established as a
separate fund the power project fund which shall be distinct from any
other money or funds of the authority, and which includes only money
appropriated by the legislature.
(b) The authority may make loans from the power project fund
(1) to electric utilities, regional electric authorities, municipalities,
cities, boroughs, regional and village corporations, village councils,
and nonprofit marketing cooperatives to pay the costs of
(A) reconnaissance studies, feasibility studies, license and permit
applications, preconstruction engineering, and design of power
projects;
(B) constructing, equipping, modifying, improving, and expanding
small-scale power production facilities, conservation facilities. bulk
fuel storage facilities, and transmission and distribution facilities,
including energy production, transmission and distribution, and waste
energy conservation facilities which depend on fossil fuel, wind power,
tidal, geothermal, biomass, hydroelectric, solar or other non-nuclear
energy sources; and
(C) reconnaissance studies. preconstruction engineering, design,
construction. equipping, modification. and expansion of potable water
suppiy inc!mling surface :;torage and groundwater sources and
265
§ 44.83.170 ALASKA STATUTES § 44.83.170
transmission of water from surface storage to existing distribution
systems;
(2) to a borrower for a power project if
(A) the loan is entered into under a leveraged lease financing
arrangement;
(B) the party which will be responsible for the power project is an
electric utility, regional electric authority, municipality, city, borough,
regional or village corporation, village council, or nonprofit marketing
cooperative; and
(C) the borrower seeking the loan demonstrates to the authority that
the financing arrangement for the power project will reduce project
financing costs below costs of comparable public power projects.
(c) Before making a loan from the power project fund, the authority
shall, by regulation, specify
(1) standards for the eligibility of borrowers and the types of projects
to be financed with loans;
(2) standards regarding the technical and economic viability and
revenue self-sufficiency of eligible projects;
(3) collateral or other security required for loans;
(4) the terms and conditions of loans;
(5) criteria to establish financial feasibility and to measure the
amount of state assistance necessary for particular projects to meet the
financial feasibility criteria; and
(6) other relevant criteria, standards or procedures.
(d) Any loan made by the authority must be made according to the
standards, criteria, and procedures established by regulation under
this section.
(e) Repayment of the loans shall be secured in any manner which the
authority determines is feasible to assure prompt repayment under a
loan agreement entered into with the borrower. The authority may
make an unsecured loan from the power project fund to a borrower
regulated by the Alaska Public Utilities Commission under AS 42.05
if the borrower has a substantial history of repaying long-term loans
and the capacity to repay the loan. Under a loan agreement, repayment
may be deferred for 10 years or until the project for which the loan is
made has achieved earnings from its operations sufficient to pay the
loan, whichever is earlier.
m Power projects are subject to the following limitations on interest
and specific restrictions:
(1) Power projects for which loans are outstanding from the water
resources revolving loan fund (AS 45.86) on July 13, 1978, may receive
additional financing from the power project fund; the additional
financing, if granted.
(A) shall be granted for a term not exceeding 50 years;
(HI shall be granted at an interest rate of not less than three or more
than iive percent u year on the unpaid baiunce:
260
§ 44.83.177 STATE GOVERNMENT § 44.83.177
(C) shall be conditioned on the repayment of loan principal and
interest to begin on the earlier of
CD the date of the start of commercial operation of the project; or
(ii) 10 years from the date the loan is granted.
(2) Loans for power projects
(A) shall be granted for a term not to exceed 50 years; and
(B) shall be granted at an interest rate which is not less than five
percent and which is the lesser of
(i) a rate equal to the percentage which is the average weekly yield
of municipal bonds for the 12 months preceding the date of the loan, as
determined by the authority from municipal bond yield rates reported
in the 30-year revenue index of the Weekly Bond Buyer; or
(ii) a rate determined by the authority which allows the project to
meet criteria of financial feasibility established under AS 44.83.1701c).
(g) Loan repayments and interest earned by loans from the power
project fund shall be deposited in the state general fund.
(h) The legislature may forgive the repayment of a loan made from
the power project fund for a reconnaissance study or a feasibility study
when the authority finds that the power project for which the loan was
made is not feasible. (§ 1 ch 278 SLA 1976; am § 16 ch 156 SLA 1978;
am §§ .19 23 ch 83 SLA 1980)
Effect of amendments. The 1978
amendment added the language beginning
"and which shall be composed" to the end
of subsection (a), rewrote subsections (b)
and (c), redesignated subsection (d) as
subsection (el, added present subsection
(d), added the present second sentence of
present subsection (el, and in the present
third sentence of subsection (el, inserted
"for 10 years or," substituted "for which
the loan is made" for "with respect to
which a loan is made," and added
"whichever is earlier" to the end. The
amendment also deleted former subsection
tel, which defined "eligible borrower," and
added subsection (I).
The 1980 amendment rewrote
subsections lal through (el, (el, and m, and
added subsections (gl and (hl.
Article 6. General Provisions.
Section
177. Reconnaissance study
179. Review of reconnaissance study by
division of budget and management
180. [Repealedl
181. Feasibility study and finance plan
183. Review of feasibility studies and
plans of finance by diyision of
budget and management
185. Submission to the legislature
187. Applicability of sections
189. Project construction
Section
190. Annual audit
191. Limitations on issuance of bonds by
the authority
195. Operation of projects
200. Annual report
210. Appropriations and reports
220. Public records; open meetings
224 Long-term energy plan
230. Definitions
240. Short title
Sec. 44.83.177. Reconnaissance study. (a) To identify power
project alternatives tor a community, the authority shall, after
consultation with other state agencies and after review of information
on alternative sources of power, l:ompiete a reconnai6sance ,;tuciy tor
each propused new power proJed.
267
§ 44.83.177 ALASKA STATUTES § 44.83.177
(b) A reconnaissance study shall
(1) survey all power sources available to the community and adja-
cent area and evaluate the relative economic merits of alternative
sources of power;
(2) include an assessment of the effect of the development of
alternative sources of power on the environment so as to assure that
there is no adverse effect to the environment which would make the
project inadvisable;
(3) include public comment from residents of the community and
adjacent area.
(c) The authority, in consultation with the division of budget and
management, shall adopt regulations defining
. (1) the methods which it shall apply to determine that the
information required by (b) of this section is obtained; and
(2) standard criteria and measures for comparative analysis of
alternative power sources. (§ 24 ch 83 SLA 1980)
Editor's note. -Section 47, ch. 83,
SLA 1980 provides: "TRANSITION:
CURRENT PROJECTS OF THE
ALASKA AUTHORITY. All projects
authorized in sec. 48 of this Act are exempt
from the provisions of AS 44.83.177 -
44.83.185. For all other projects, unless a
proposed project is exempt under AS
44.83.187 added by sec, 24 of this Act, "(1)
if the division of budget and management
in the Ofl1ce of the Governor determines
that the Alaska Power Authority has
completed a reconnaissance study as that
term was defined by AS 44.83.230(7)
before re·enactment of AS 44.83.230(7) by
sec. 26 of this Act, the project for which the
reconnaissance study was done is exempt
from the provisions of AS 44.83.177 and
44.83.179, added by sec. 24 of this Act; the
Alaska Power Authority shall proceed
with preparation of a feasibility study and
plan of finance under AS 44.83.181 added
by sec. 24 of this Act;
"(2) if the division of budget and
management determines that the Alaska
Power Authority has completed both a
reconnaissance study under AS
44.83.080(13) and a statement under AS
44.83.180(c),
"(Al and that statement or the project
for which it was prepared has been
approved by the legislature under AS
44.83.180(c), the Alaska Power Authoritv
may proceed with that project under AS
44,83.189 added by sec. 24 of this Act;
"\ B) and that statement or the project
for which it was prepared has not been
approved by the If'~islature under AS
·g,1:l3.11:l0!c). the diVISIOn ul bud14et anll
management shall review the statement
for compliance with the requirements of
AS 44.83.183 added by sec. 24 of this Act
before the statement is submitted under
AS 44.83.185, added by sec. 24 of this Act,
to the legislature; review by the division of
budget and management may not
unreasonably delay submission of the
statement to the legislature;
"(3) if a proposed new project has been
approved by the legislature, or if money
has been appropriated by the legislature
for a proposed new project, and the Alaska
Power Authority has not completed a
reconnaissance stud v under AS
44.83.080(13) or a statement under AS
44.83.180(c), the project is subject to the
provisions of AS 44.83.177 -44.83.185."
Section 48, ch. 83. SLA 1980 provides:
"APPROV AL OF PENDING PROJECTS
OF THE ALASKA POWER AU-
THORITY. (a) The Alaska Power
Authority has submitted to the governor
and the legislature a statement of its
recommendations for financing certain
power projects and a statement outlining
the general design, demonstration of
financial feasibility. and maximum
amounts of revenue bonds and
appropriations necessary for the projects,
together with a statement of the design,
acquisition, construction and financmg of
the projects by the authority or another
person which satisfy the conditions of AS
4483.180, The legislature has adopted
jomt resolutions approving the general
design and maximum amount of bonds to
be is~ued for several of the projects and
those actIOns are confirmed,
268
§ 44.83.179 STATE GOVERNMENT § 44.83.180
"(b) Actions taken by the legislature
before the effective date of this Act to
approve the general design and maximum
amount of bonds for power projects are
confirmed and the Alaska Power
Authority is authorized to issue its bonds
for the following power projects in the
maximum principal amount set out after
each:
"(1) Solomon Gulch, $20,000,000;
"(2) Terror Lake, $120,000,000.
"(c) The general design and maximum
amount of bonds for power projects are
approved and the Alaska Power Authority
is authorized to issue its bonds for the
following power projects in the maximum
principal amount set out after each:
"(1) Golden Valley Electric Association
waste heat, $110,000,000;
"(2) Tyee Lake, $70,000,000;
"(3) Swan Lake, $120,000,000;
"(4) Glacier Highway Electric Asso-
ciation, $800,000;
':(5) Cordova Electric Cooperative,
$6,500,000;
"(6) Matanuska Electric Association,
$2,500,000;
"(7) Homer Electric Association,
$3,360,000;
"(8) Naknek Electric Association,
$730.000;
"(9) Lake Elva, $15,000,000; and
"(10) Black Bear Lake. $30,000,000.
"(d) The Alaska Power Authority is
authorized to proceed with design and
acquisition of right-of-way of the
Anchorage-Fairbanks transmission inter-
tie. This project may be financed by reve-
nue bonds issued by the authority,
appropriations from the general fund, or
other funding sources approved by the
legislature."
Sec. 44.83.179. Review of reconnaissance study by division of
budget and management. (a) The division of budget and
management in the Office of the Governor shall review reconnaissance
studies for proposed projects of the authority.
(b) The review shall examine each reconnaissance study for
compliance with the requirements of AS 44.83.177(b) and (c). The
division of budget and management may approve or disapprove a
reconnaissance study. If the division of budget and management
disapproves of a reconnaissance study, it shall return the
reconnaissance study to the authority together with a comprehensive
statement of the reasons for its disapproval. The authority may amend
the portions of the reconnaissance study which the division of budget
and management identifies as deficient and resubmit the
reconnaissance study to the division of budget and management for
reconsideration.
(c) For purposes of this section, a power project is approved if the
reconnaissance study for the project has not been disapproved by the
division of budget and management within 30 days of submission of the
reconnaissance study for the project to it by the authority. (~ 24 ch 83
SLA 1980)
Cross reference. As to application of
this section to current projects of the
Alaska Power Authority, and exemption
from the provisions of this section of
pending projects of the Alaska Power
Authority, see editor's note to AS
44.83.177.
Sec. 44.83.180. Assessment, proposal, and construction of
projects.
Repealed by § 44 ch 83 SLA 1980.
269
§ 44.83.181 ALASKA STATUTES
Editor's note. -The repealed section
derived from § 1, ch. 278, SLA 1976;
§§ 17, 18, ch. 156, SLA 1978.
§ 44.83.181
Sec. 44.83.181. Feasibility study and finance plan. (a) Unless
the reconnaissance study has been disapproved by the division of
budget and management under AS 44.83.179, the authority shall com-
plete a feasibility study and plan of finance for each proposed project.
(b) A feasibility study shall include
(1) information about the proposed project, including but not limited
to estimates of total project construction costs, total project operating
costs, the timing and amount of anticipated returns from the completed
project, a benefit·to-cost ratio, the potential effect of the project on the
environment of the area which will be served by the project when
completed, and the availability of alternative government financing;
(2) a statement of all assumptions which affect the economic
feasibility of the project, including but not limited to the discount rate
and interest rate of amounts of money to be used for the project,
anticipated fuel prices, an escalation rate, state and local electric load
growth, and estimates of indirect costs and benefits;
(3) a comparative analysis of all reasonable alternatives to
construction of the proposed project; and
(4) information based on engineering and design work which meets
the requirements for submission of a license application for the project
to the Federal Energy Regulatory Commission.
(c) The plan of finance shall include recommendations of the most
appropriate means to finance a project, including, but not limited to,
(1) the issuance of revenue bonds of the authority;
(2) the issuance of
(A) general obligation bonds of the state; or
(B) revenue bonds of the authority which are guaranteed or partially
guaranteed by the state;
(3) an appropriation from the general fund
(A) to pay debt service on bonds or for other project purposes; or
(B) to reduce the amount of debt financing for the project;
(4) a loan from the general fund;
(5) financing arrangements with other entities using leveraged
leases or other financing methods;
(6) assistance from any federal agency, including, but not limited to,
the Rural Electrification Administration;
(7) a loan from the power project fund (AS 44.83,170(a», or from the
renewable resources investment fund (AS 37.11.050); or
(8) any combination of financing arrangements listed in this
subsection.
(d) When financial assistance from the state is necessary for a
pruject to meet finanCial feasibility criteria. the plan of finance shall
270
§ 44.83.1S3 STATE GOVERNMENT § 44.S3.1S3
include an estimate of the minimum amount of financial assistance
required from the state. The plan of finance shall include an estimate
of the present value of the financial assistance from the state,
computed as the difference between
(1) a market rate of interest, which is
(A) the rate determined under AS 44.S3.170(t)(2)(B)(i); or
(B) the estimated interest rate for revenue bonds to be issued by the
authority for the project; and
(2) the effective rate of interest because of state financial assistance
provided.
(e) The authority, in consultation with the division of budget and
management, shall adopt regulations defining
(1) the techniques which it shall apply to determine that the
information required by (b) -(d) of this section is obtained; and
(2) standard. criteria and measures for comparative analysis of
alternative financing arrangements. (§ 24 ch 83 SLA 1980)
Cross reference. As to application of
this section to current projects of the
Alaska Power Authority and exemption
from the provisions of this section of
pending projects of the Alaska Power
Authority, see editor's note to AS
44.83.177.
Sec. 44.83.183. Review of feasibility studies and plans of
finance by division of budget and management. (a) The division of
budget and management in the Office of the Governor shall review the
feasibility study and plan of finance for a project of the authority for
compliance with the provisions of AS 44.S3.1Sl(b) -(d).
(b) In its review under this section, the division of budget and
management may obtain an independent evaluation of a feasiblity
study and plan of finance to determine compliance with the provisions
of AS 44.83.181(b) (d).
(c) When the division of budget and management has completed a
review of the feasibility study and the plan of finance for a project
under this section, it shall submit a report to the governor. The report
shall examine the feasibility study and plan of finance for compliance
with the requirements of AS 44.83.181(b) -(d). The report of the
division of budget and management shall include a recommendation to
the governor and legislature for approval or disapproval of the project
based on the division's review of the feasibility study and plan of
finance for compliance with the requirements of AS 44.83.181(b) -(d).
(d) The report required by (c) of this section shall be prepared and
submitted not later than 60 days after the feasibHity study and plan of
finance for a proposed project have been received by the division of
budget and management. (* 24 ch 83 SLA 1980)
Cross reference. -As to application of Alaska Power Authority and exemption
this S~l'tiOn to current pr()I .... c(5 vr' lnt' from the pn)VlSllH1S uf thIS :,~"ctlon or'
271
§ 44.83.185 ALASKA STATUTES § 44.83.187
pending projects of the Alaska Power
Authority, see editor's note to AS
44.83.177.
Sec. 44.83.185. Submission to the legislature. (a) The authority
shall submit a feasibility study and plan of finance for a proposed new
project to the legislature. When the report of the division of budget and
management examining the feasibility study and plan of finance is
completed as required by AS 44.83.183, it shall be submitted to the
legislature.
(b) The authority may not proceed with work on the engineering or
design phase of a proposed new project for which legislative approval
is required until the legislature approves the proposed new project.
However, the authority may proceed with the engineering or design
work necessary to meet the requirements for submission of a license
application for the proposed new project to the Federal Energy
Regulatory Commission without obtaining legislative approval of the
proposed new project.
(c) The legislature shall consider and must approve all proposed new
projects except proposed new projects that are exempt under AS
44.83.187. The legislature may approve a proposed new project only by
enacting law authorizing that project. (§ 24 ch 83 SLA 1980)
Cross reference. -As to application of
this section to current projects of the
Alaska Power Authority and exemption
from the provisions of this section of
pending projects of the Alaska Power
Authority, see editor's note to AS
44.83.177.
Sec. 44.83.187. Applicability of sections. (a) The provisions of AS
44.83.177 44.83.185 and 44.83.189 apply only to a proposed new
project which will generate more than 1.5 megawatts of power and
(1) requires an appropriation from the state general fund, from the
power project fund, or from the renewable resources funds; or
(2) is based on a plan of finance which requires the issuance of
general obligation bonds or other pledge of the credit of the state.
(b) The provisions of AS 44.83.177 -44.83.185 and 44.83.189 apply
to a project which generates more than 25 megawatts of power for
which the authority will issue its revenue bonds for costs of
construction.
(c) The provisions of AS 44.83.177 44.83.183 do not apply when a
reconnaissance study and a feability study for a proposed new project
have been prepared by an agency of the federal government, if the
authority determines that the reconnaissance study and the feasibility
study prepared by the agency of the federal government provide
information sufficient to permit the authority to flnance and construct
the proposed new project in accordance wit h the requirements of this
chapter. When a reconnaissance study and feasibility' stud v are
prepared fur a proposed new proJect by all a~encv uf the federal govern·
~72
§ 44.83.189 STATE GOVERNMENT § 44.83.189
ment and the authority proposes to finance and construct the proposed
new project, the authority shall provide copies of the studies and a
proposed plan of finance to the division of budget and management in
the Office of the Governor. The division of budget and management
shall review the studies and plan of finance. Within 60 days after its
receipt of the studies and plan of finance, the division of budget and
management shall submit a report to the governor and legislature. The
report shall examine the feasibility study and plan of finance and
comment upon compliance of the feasibility study and plan of finance
with the requirements of AS 44.83.181. Approval of the legislature
under AS 44.83.185 is required for a proposed new project which is
exempt from the requirements of AS 44.83.177 44.83.183 under this
subsection. The authority may not proceed with engineering or design
work for a project until legislative approval of the project has been
given under AS 44.83-185(cJ, except that the authority may undertake
engineering or design work necessary to submit a license application
for the project to the Federal Energy Regulatory Commission without
first obtaining legislative approval of the project.
(d) The provisions of AS 44.83.177 -44.83.185 do not apply to
(1) an addition, modification, repair, reconstruction, design.
acquisition or construction for the purpose of completing a project;
(2) the construction of an electrical transmission or distribution
facility which is estimated to cost less than $3,000,000. (§ 24 ch 83 SLA
1980; am ~ 1 ch 169 SLA 1980}
Effect of amendment. -The 1980
amendment added "will generate more
than 1.5 megawatts of power and" at the
end of the introductory paragraph of
subsection 'a), and >;ubstituted "funds" for
"investment fund and the appropriation
exceeds (A) $3,000,000, for projects for
which legislati ve approval is sought
during 1981; iBI $3,000,000 multiplied by
a factor equal to a ratio determined by
dividing the construction cost index of the
engineering news rewrd determined for
January of the year during which a project
is submitted for legisluti ve approval. by
the construction cost index of the
engineering news re-cord for March. 19110.
for projects for which legislative-approval
is sought after December 31, 1981" at the
end of paragraph (11 of subsection (al.
Editor's note. -Section 3, ch. 169,
SLA 1980 provides: "The projects
authorized in sec. 48 of House CS for CS for
Senate-Bill No. 438 iFinancel am H,
Eleventh Legislature, Second Session, are
exempt from the amendments made in sec.
t of this Ad."
Section 4, eh. 169, SLA 1980 provides:
"Section 1 of this Act takes effect on the
day after House CS for CS for Senate Bill
No, 438 Ir'inance! am Ii, Ele\'enth
Legislature. Second SessIOn, becomes
law."
Sec. 44.83.189. Project construction. If a new project is to be
designed, acquired and constructed by the authority, it shall be
designed, acquired and constructed as a public work of the state. For
the purpose of this section and AS 4·183.187 u new project does not
include
Il) an additiotl or modification to an exi;,;ting project unless the total
co;,;t of the addition or modilication exceeds $1,000,000;
§ 44.83.190 ALASKA STATUTES § 44.83.220
(2) repair or reconstruction of a project; or
(3) design, acquisition or construction necessary to complete a
project for which bonds have been issued. (§ 24 ch 83 SLA 1980)
Sec. 44.83.190. Annual audit. The authority shall have its finan-
cial records audited annually by a certified public accountant. The
legislative auditor may prescribe the form and content of the financial
records of the authority and shall have access to these records at any
time. (§ 1 ch 278 SLA 1976)
Sec. 44.83.191. Limitations on issuance of bonds by the
authority. The authority may not issue bonds except after 60 days
notification of its intent to issue bonds is given to the governor and to
the legislature, if the legislature is in session, or to the Legislative
Budget and Audit Committee, if the legislature is not in session. (§ 24
ch 83 SLA 1980)
Sec. 44.83.195. Operation of projects. (a) When a project is
operated by the authority, the authority shall enter into one or more
contracts for the sale of electrical power from the project. A contract
entered into under this section shall meet all requirements of AS
44.83.090.
(b) If, at the expiration of a contract entered into by the authority
under (a) of this section, revenues earned by the authority under the
contract exceed expenses of the authority for the project, an amount
equal to the excess shall be used by the authority to reduce rates or
improve services to consumers served by the power project. (§ 24 ch 83
SLA 1980)
Sec. 44.83.200. Annual report. Before March 1 of each year, the
authority shall submit to the governor and the legislature a
comprehensive report describing operations, income and expenditures
for the preceding 12-month period. (§ 1 ch 278 SLA 1976)
Sec. 44.83.210. Appropriations and reports. (a) Notwith-
standing any other provision in this chapter, the authority is subject to
the provisions of the Executive Budget Act (AS 37.07).
(b) The authority shall, by the 15th day of each regular legislative
session, present to the legislature a report detailing project status,
original costs and projected costs, particularly highlighting any costs
in excess of the original cost estimates submitted for each project when
that project was originally approved by the legislature. (§ 1 ch 278 SLA
1976; am § 19 ch 156 SLA 1978)
Effect of amendment. The 1978
amendment rewrote this section.
Sec. 44.83.220. Public records; open meetings. The provisions of
AS 09.2.5.110 -U9.~5. UO and AS H.ti2.:J 10 --1:4.02.31:2 apply to the
274
§ 44.83.224 STATE GOVERNMENT § 44.83.230
authority. The authority shall publish a proposed agenda of its
meetings and afford the public an opportunity to be heard in accord-
ance with AS 44.62.312. (§ 1 ch 278 SLA 1976)
Sec. 44.83.224. Long-term energy plan. The Department of
Commerce and Economic Development, assisted by the authority,
shall, after public hearings, prepare and annually revise a long-term
energy plan. The plan, and its annual revisions, shall be submitted to
the commissioners of the departments of the executive branch of the
government for review and to the governor for his approval. After
approval, the plan shall be submitted to the legislature not later than
February 1 of each year. The plan, and its annual revisions, shall
include
(1) an "end-use" study examining and reporting on the nature and
amount of energy used and the purpose of its use; and
(2) an energy development component for meeting projected
thermal, electrical and transportation energy needs in the state at the
lowest reasonable cost, including environmental and social costs,
consistent with acceptable standards of reliability, giving an equal
consideration as practicable to all types of energy sources (except those
based on nuclear fuels) which are technologically feasible, and which
promote the efficient use of facilities and fuels consistent with energy
conservation goals, and the considerations specified in AS 44.83.180(e);
(3) an energy conservation component, including but not limited to,
(A) conservation goals for reducing consumption of energy,
identifying the region for which applicable, and the source or type of
energy to which the goals are applicable; and
(B) specific methods and means of achieving the goals of (A) of this
paragraph;
(4) a component for emergency energy conservation measures
applicable during times of emergency; and
(5) a report on areas or subjects of research and development and
demonstration projects involving alternative energy systems, local
energy sources, and energy conservation. (§ 20 ch 156 SLA 1978; am
§ 25 ch 83 SLA 1980)
Effect of amendment. -The 1980 to in paragraph 12), was repealed by * 44,
amendment rewrote the section. rh. 83, SLA 1980.
Editor's note. As 44.83.180, referred
Sec. 44.83.230. Definitions. In this chapter, unless the context
requires otherwise,
(1) "authority" means the Alaska Power Authority established by
this chapter;
(2) "bonds" means bonds. notes. or other oblig-abons of the authority
issued under thi::; chapter;
§ 44.83.240 ALASKA STATUTES § 44.83.240
(3) "power" includes any and all electrical energy generated,
distributed, bought or sold for purposes of lighting, heating, power and
every other useful purpose;
(4) "power project" or "project" means a plant, works, system, facil-
ity, water rights, fuel deposits or sources, and real estate and personal
property of any nature whatsoever, together with all facilities and
appurtenances related to them or necessary for the purposes of them
used or useful in power production limited to fossil fuel, wind power,
tidal, geothermal, hydroelectric, or solar energy production and waste
energy conservation and the transmission, purchase, sale, exchange
and interchange of power, and shall include any interest in them,
whether divided or undivided, or any right to the capacity of them;
(5) "public agency" means any city or other municipal corporation,
politica1 subdivision, governmental unit, or public corporation created
by or under the laws of this state or of another state of the United
States, and any state or the United States, and any person, board or
. other body declared by the laws of any state or the United States to be
a department, agency, or instrumentality of them;
(6) "person" includes a public agency in addition to the entities set
out in AS 01.10.060(7);
(7) "reconnaissance study" means a study conducted for the purpose
of assessing the present and future power needs of an area under AS
44.83.177;
(8) "feasibility study"
(A) means a study conducted for the purpose of establishing the
economic and environmental practicality of completing a proposed
power project under AS 44.83.181;
(B) includes engineering and design work to meet the requirements
for submission of a license application for a proposed new project to the
Federal Energy Regulatory Commission;
(9) "small-scale power production facility" means a facility which,
by design, is to produce less than 25 megawatts of power. (~ 1 ch 278
SLA 1976; am ~§ 21, 22 ch 156 SLA 1978; am §§ 26,27 ch 83 SLA
1980)
Effect of amendments. -The 1978
amendment in paragraph 14 I. substituted
the language beginning "power production
limited" and ending "and waste energy
conservation" for "the generat ion by
means of water or fossil fuel of electric
power" and deleted "production" preceding
"trarsmission, purchase" and "electric"
preceding "pow!"r. and shall include" The
amendment also added paragraphs 161 and
!71.
The [980 amendment rewrote para-
graph (71, and added paragraphs 181 and
191.
Sec. 44.83.2-10. Short title. This chapter may be cited as the Alaska
Power Authority Act. (§ 1 ch 278 SLA 1976)
~76
§ 44.83.300 STATE GOVERNMENT § 44.83.320
Article 7. Susitna River Hydroelectric Project.
Section
300. Description of project
310. Purpose of project
320. Preliminary reports
325. Restrictions on contracting
330. Construction, maintenance and oper-
ation of project
Section
340. Annual report
350. Legislative and executive oversight
360. Project financing
Sec. 44.83.300. Description of project. The Susitna River
hydroelectric project consists of dams and related reservoirs, and power
plants located in the Upper Susitna River Basin, and related
transmission lines, facilities, and load centers, as described in the
Alaska Power Authority's report required by AS 44.83.320(b). (§ 2 ch
169 SLA 1980)
Sec. 44.83.310. Purpose of project. The primary purpose of the
Susitna River hydroelectric project is to generate, transmit and distrib-
ute electric power in a manner which will
(1) minimize market area electrical power costs;
(2) minimize adverse environmental and social impacts while
enhancing environmental values to the extent possible; and
(3) safeguard both life and property. (§ 2 ch 169 SLA 1980)
Sec. 44.83.320. Preliminary reports. (a) By March 30, 1981, the
authority shall prepare and submit to the governor and to the
legislature a preliminary report recommending whether work should
continue on the Susitna River hydroelectric project, and, if the
recommendation is to continue on the project, the report shall explain
in detail
(1) economic evaluations and preliminary environmental impact
assessments for the Susitna River hydroelectric project and all viable
alternatives; ,
(2) the federal and state permits required to be obtained before
construction can begin and the expected construction start date; and
(3) any other information the authority considers appropriate or
necessary to adequately inform the governor and the legislature of tile
status of the Susitna River hydroelectric project.
(b) By April 30, 1982, the authority shall prepare and submit to the
governor and to the legislature a preliminary report recommending
whether work should continue on the Susitna River hydroelectric
project, and other viable alternatives. If the recommendation is to
continue on the Susitna River hydroelectric project, the report shall
explain in detail
(1) the proposed conceptual design and phases of construction of the
Susitna River hydroelectric project:
(2) the expected comuietion d:Jte of each pnu=.;e of construction;
§ 44.83.325 ALASKA STATUTES § 44.83.340
(3) the expected cost of each phase of construction;
(4) the costs to the state and consumers of the project under
alternative methods of project financing, including revenue bonds, gen-
eral obligation bonds, and general fund appropriations; and
(5) any other information the authority considers appropriate or
necessary to adequately inform the governor and the legislature of the
status of the Susitna River hydroelectric project.
(c) The preliminary reports required under tal and (b) of this section
are in addition to any reports required under AS 44.83.180 -
44.83.224. (§ 2 ch 169 SLA 1980)
Sec. 44.83.325. Restrictions on contracting. The authority may
not enter into contracts under AS 44.83.300 -44.83.360 other than
those contracts necessary to complete (I) feasibility studies, (2) the
preliminary reports required by AS 44.83.320, or (3) construction of the
Anchorage-Fairbanks intertie, until the legislature approves by law
the preliminary report required under AS 44.83.320(b). (§ 2 ch 169
SLA 1980)
Sec. 44.83.330. Construction, maintenance and operation of
project. Within one year after approval of its preliminary report
submitted under AS 44.83.320(b), the authority may enter into a
contract for the construction of the Susitna River hydroelectric project
in a manner consistent with the purpose of the project as described in
AS 44.83.310. (§ 2 ch 169 SLA 1980)
Sec. 44.83.340. Aimual report. (a) If the Susitna Riyer
hydroelectric project is approved by the legislature under AS
44.83.320(d), beginning in 1983 the authority shall prepare an annual
report which explains in detail
(1) the status of construction on the Susitna River hydroelectric
project;
(2) the completion date of any phase of the Susitna River
hydroelectric project which has been completed and the reasons for any
deviation between the completion date and the expected completion
date stated in the preliminary report required under AS 44.83.320(b);
(3) the actual cost of any phase of the Susitna River hydroelectric
project which has been completed and the reasons for any deviation
between the actual cost and the expected cost stated in the preliminary
report required under AS 44.83.320(b);
(4) the federal and state permits necessary to begin or continue
construction of the Susitna River hydroelectric project. the actual dates
on which the federal and state permits necessary to begin or continue
construction were obtained. and the reasons for any deviation between
the actual dates and the expected dates stated in the preliminary
report required under AS 44.83.:l::!Ola) or in the earlier annual reports
reqUJred under thi . ..; sectlUn;
278
§ 44.83.350 STATE GOVERN:\1ENT § 44.83.360
(5) any other information the authority considers appropriate or
necessary to adequately inform the governor and the legislature of the
status of the Susitna River hydroelectric project.
(b) The annual report required under (a) of this section is in addition
to any reports required under AS 44.83.180 -44.83.224 and shall be
submitted, by March 30 of each year, to the governor and to each
member of the legislature. (§ 2 ch 169 SLA 1980)
Sec. 44.83.350. Legislative and executive oversight. The
legislature or the governor may provide for ongoing oversight, review
and selected in·depth analysis of the Susitna River hydroelectric
project plan of study. The authority shall provide all data, analyses,
reports, and other information to whomever conducts the oversight,
review, or analysis activities. Selected in·depth analyses shall include
assessments of the power alternatives, financing, and power marketing
sections of the Susitna River hydroelectric project plan of study. (§ 2 ch
169 SLA 1980)
Sec. 44.83.360. Project financing. The Susitna River
hydroelectric project shall be financed by general fund appropriations,
general obligativn bonds, revenue bonds, or other plans of finance as
approved by the legislature. (§ 2 ch 169 SLA 1980)
Chapter 85. Alaska Municipal Bond Bank
Authority.
Section
05. Legislative findings
10. Legislative policy
20. Municipal Bond Bank Authority
30. Membership and vacancies
40. Officers and quorum
50. Bonding of members
60. Compensation and expenses
70. Staff
80. Powers of bond bank authority
90. Limitations.
95. Regulations
100. Annual report and audit
110. Annual budget
120. Care and custody of bonds
130. Effect of obligations
140. Negotiability of bonds or notes
150. I30nds or notes as legal investments
160. Tax exemption
170. Loans 10 polilical subdivisions
180. Issuance of bonds and notes
190. Form of i~suance
200. Sale price
210. Payment or refunding of notes
220. Terms of agreement with the
bondholder or note holder
Section
230. Purchase and disposition of own
obligations
240. Bond anticipation notes
250. Documentation
260. Presumption of validity
270. Reserve fund
280. Additional funds and accounts
290. Application of funds .
300. Rights of holders pal'amount
310. Default in payment
320. Powers and duties of trustee on
default
330. P"rsonal liability
340. Exemption from execution ana sale
350. Lien of pledge
360. Insurance or guaranty
370 Surety for depoSits by bank
380. Expenses of admimstration
390 CooperatIOn by government agencies
400. Pubhc records; open rneetwgs
410. Definitions
420. Short title
§ 44.83.030 ALASKA STATUTES SUPPLEMENT § 44.83.040
Chapter 83. Alaska Power Authority.
Article
1. Creation and Organization (§§ 44.83.030 -44.83.045)
2. Purpose and Powers (§§ 44.83.080, 44.83.090)
3. Financial Provisions (§ 44.83.105)
4. Power Production Cost Assistance (§§ 44.83.162 -44.83.164)
6. General Provisions (§ 44.83.177)
8. Rural Electrification Revolving Loan Fund (§§ 44.83.361,44.83.363)
9. Energy Program for Alaska (§§ 44.83.380 -44.83.425)
Article 1. Creation and Organization.
Section
30. Membership of the authority
40. Officers and quorum
Section
45. Qualifications, powers, and duties of
officers and directors
Sec. 44.83.030. Membership of the authority. The authority
shall consist of the following directors:
(1) three public directors to be appointed by the governor and con-
firmed by the legislature; only one director may be appointed from each
judicial district described in AS 22.10.010;
(2) the director of the division of budget and management and three
commissioners of principal executive departments appointed by the
governor. (§ 1 ch 278· SLA 1976; am § 2 ch 156 SLA 1978; am § 2 ch
118 SLA 1981)
Effect of amendments. The 1981
amendment, effective August 4, 1981,
deleted the subsection designation (al and
repealed subsection (b) which read "The
commissioners of community and regional
affairs, natural resources. transportation
and public facilities, and revenue shall
have the rights and privileges of directors
except for the right to vote and may not be
considered for purposes of quorum or
voting." The amendment also substituted
"three public" for "four" preceding
"directors," deleted "at large" preceding
"to be appointed" and added "only one
director may be appointed from each judi-
cial district described in AS 22.10.010" in
pnrah'Taph (U and substituted "the
director of the division of budget and man-
agement and three commissioners of prin-
cipal executive departments appointed by
the governor" for "the commissioner of
commerce and economic development" in
paragraph (2).
Editor's notes. -Section 15, ch. lIS,
SLA 1981, provides: "APPLICABILITY
OF ACT TO DIRECTORS. (a) The terms of
office of all members of the Board of
Directors of the Alaska Power Authority
serving on the effective date ofthis section
terminate on the effective date of this sec-
tion [July I, 19811.
"(b) The governor shall appoint three
public directors of the Aluoka Power
Authority. When making his appoint-
ments under this subsection, the governor
shall appoint persons to serve in accor-
dance with AS 4483,030(1) and shall spec-
ify the length of the term of office of each
member he appoints. Of the public mem-
bers first appointed by the governor under
th is su bscctlon,
"0) one member shall serve a two-year
term;
"(2) one member shall serve a
three-year term;
"(3) one member shall serve a four-year
term,"
Sec. 44.83.040. Officers and quorum. The directors shall elect
one of their number as chairman and may elect other officers they
determine desirable. The powers of the authority are vested in the
362
§ 44.83.045 STATE GOVERNMENT § 44.83.080
directors, and four directors of the authority constitute a quorum.
Action may be taken and motions and resolutions adopted by the
authority at a meeting by the affirmative vote of at least three
directors. The directors of the authority serve without compensation,
but they shall receive the same travel pay and per diem as provided by
law for board members. (§ 1 ch 278 SLA 1976; am § 3 ch 156 SLA 1978;
am § 3 ch 118 SLA 1981)
Effect of amendments. -The 1981
amendment, effective August 4, 1981, sub-
stituted "directors" for "director," substi·
tuted "their number" for "the directors at
large" and added "may elect" preceding
"other officers" in the first sentence and
substituted "four" for "three" preceding
"directors" in the second sentence.
Sec. 44.83.045. Qualifications, powers, and duties of officers
and directors. (a) The public directors shall be residents and qualified
voters of Alaska and shall comply with the requirements of AS
39.50.010 -39.50.200 (conflict of interests). The public directors shall
serve overlapping four-year terms.
(b) A vacancy in a directorship occurring other than by expiration of
a term shall be filled in the same manner as the original appointment,'
but for the unexpired portion of the term only.
(c) The authority shall employ an executive director who may, with
the approval of the authority, employ additional staff as necessary. In
addition to its staff of regular employees, the authority may contract
for and engage the services of legal and bond counsel, consultants,
experts, and financial and technical advisors the authority considers
necessary for the purpose of conducting studies, investigations,
hearings, or other proceedings. The board of directors shall establish
the compensation of the executive director. The executive director of
the authority is subject to the provisions of AS 39.25.010 -39.25.220.
(§ 4 ch 156 SLA 1978; am § 4 ch 118 SLA 1981)
Effect of amendments. -The 1981
amendment. effective August 4. 1981.
added "public" preceding "directors" and
substituted "shall" for "at large must"
preceding "be residents" in the first sen·
tence, added "public" preceding
"directors," deleted "at large" following
"directors" and added "overlapping"
preceding "four-year terms" in the second
sentence and deleted the former third sen·
tence which read "The four original
directors at large have terms of one, two,
three, and four years, respectively."
Article 2. Purpose and Powers.
Section
80. Powers of the authority
90. Power contracts and the Alaska Public
Utilities Commission
St:c. 44.83.030. Powers of the authority. In furtherance of its cor-
porate purpo:ses, the authonty has the followm~ powprs in addition to
its other powers:
:J63
§ 44.83.080 ALASKA STATUTES SUPPLEMENT § 44.83.080
(1) to sue and be sued;
(2) to have a seal and alter it at pleasure;
(3) to make and alter bylaws for its organization and internal man-
agement;
(4) to make rules and regulations governing the exercise of its corpo-
rate powers;
(5) to acquire, whether by construction, purchase, gift or lease, and
to improve, equip, operate, and maintain power projects;
(6) to issue bonds to carry out any of its corporate purposes and
powers, including the acquisition or construction of a project to be
owned or leased, as lessor or lessee, by the authority, or by another
person, or the acquisition of any interest in a project or any right to
capacity of a project, the establishment or increase of reserves to secure
or to pay the bonds or interest on them, and the payment of all other
costs or expenses of the authority incident to and necessary or
convenient to carry out its corporate purposes and powers;
(7) to sell, lease as lessor or lessee, exchange, donate, conveyor
encumber in any manner by mortgage or by creation of any other
security interest, real or personal property owned by it, or in which it
has an interest, when, in the judgment of the authority; the action is
in furtherance of its corporate purposes;
(8) to accept gifts, grants or loans from, and enter into contracts or
other transactions regarding them, with any person;
(9) to deposit or invest its funds, subject to agreements with
bondholders;
(10) to enter into contracts with the United States or any person and,
subject to the laws of the United States and subject to concurrence of
the legislature, with a foreign country or its agencies, for the financing,
construction, acquisition, operation and maintenance of all or any part
of a power project, either inside or outside the state, and for the sale or
transmission of power from a project or any right to the capacity of it
or for the security of any bonds of the authority issued or to be issued
for the project;
(11) to enter into contracts with any person and with the United
States, and, subject to the laws of the United States and subject to the
concurrence of the legislature, with a foreign country or its agencies for
the purchase, sale, exchange, transmission, or use of power from a
project, or any right to the capacity of it;
(12) to apply to the appropriate agencies of the state, the United
States and to a foreign country and any other proper agency for the
permits, licenses, or approvals as may be necessary, and to construct,
maintain and operate power projects in accordance with the licenses or
permits, and to obtain, hold and use the licenses and permits in the
same manner as any other person or operating-unit;
(13) to perform reconnaissance studie~, feasibility studies. and engi·
neennt; and desi(,'11 wIth respect to power proiects:
§ 44.83.090 STATE GOVERNMENT § 44.83.090
(14) to enter into contracts or agreements with respect to the exer-
cise of any of its powers, and do all things necessary or convenient to
carry out its corporate purposes and exercise the powers granted in AS
44.83.010 44.83.510;
(15) to exercise the power of eminent domain in accordance with AS
09.55.250 -09.55.410;
(16) to recommend to the legislature
(A) the issuance of general obligation bonds of the state to finance
the construction of a power project if the authority first determines that
the project cannot be financed by revenue bonds of the authority at
reasonable rates of interest;
(B) the pledge of the credit of the state to guarantee repayment of all
or any portion of revenue bonds issued to assist in construction of power
projects;
(e) an appropriation from the general fund
(i) for debt service on bonds or other project purposes; or
Oi) to reduce the amount of debt financing for the project;
(D) an appropriation to the power project fund for a power project;
(E) an appropriation of a part of the income of the renewable
resources investment fund for a power project;
(F) development of a project under financing arrangements with
other entities using leveraged leases or other financing methods.
(G) an appropriation for a power project acquired or constructed
under the energy program for Alaska (AS 44.83.380 -44.83.425). (§ 1
ch 278 SLA 1976; am §§ 6 -11 ch 156 SLA 1978; am §§ 16, 17 ch 83
SLA 1980; am § 5 ch 118 SLA 1981)
Revisor's notes. -In paragraph (16)
(GJ, a reference to AS 44.83.400 -
44.83.510 was changed to AS 44.83.380
44.83.425 to reflect numbering changes
made by the revisor of statutes pursuant to
AS 01.05.031 (b).
Effect of amendments. The 1981
amendment. effective August 4, 1981.
added subparagraph (GJ of paragraph (16).
Sec. 44.83.090. Power contracts and the Alaska Public
Utilities Commission. (a) The authority shall, in addition to the other
methods which it may find advantageous, provide a method by which
municipal electric, rural electric, cooperative electric, or private elec-
tric utilities and regional electric authorities, or other persons autho-
rized by law to engage in the distribution of electricity may secure a
reasonable share of the power generated by a project, or any interest
in a project, or for any right to the power and shall sell the power or
cause the power to be sold at the lowest reasonable prices which cover
the full cost of the electricity or services. including capital and
operating costs, debt coverage as considered appropriate by the author-
ity, and other charges that may be authorized by AS 44.83.010 -
44.83.510. Except for a contract or lease entered into under AS
44.83.380 -44.83.425. a contract or lease for the sale. transmission
§ 44.83.090 ALASKA STATUTES SUPPLEMENT § 44.83.090
and distribution of power generated by a project or any right to the
capacity of it shall provide:
(1) for payment of all operating and maintenance expenses of a
project and costs of renewals, replacements and improvements of it;
(2) for interest on and amortization charges sufficient to retire bonds
of the authority issued for the project and reserves for them, plus a debt
service coverage factor as may be determined by the authority to be
necessary for the marketability of its bonds;
(3) for monitoring of the project by the authority or its agents;
(4) for full and complete disclosure to the authority of all factors of
costs in the transmission and distribution of power, so that rates to any
persons may be fixed initially in the contract or lease and may be
adjusted from time to time on the basis of true cost data;
(5) for periodic revisions of the service and rates to persons on the
basis of accurate cost data obtained by the accounting methods and
systems approved by the directors and in furtherance and effectuation
of the policy declared in AS 44.83.010 -44.83.510;
(6) for the cancellation and termination of a contract or lease upon
violation of its terms by any person;
(7) for security for performance as the authority may consider prac-
ticable and advisable, including provisions assuring the continuance of
the distribution and transmission of power generated by a project and
the use of its facilities for these purposes; and
(8) other terms not inconsistent with the provisions and policy of this
chapter as the authority may consider advisable.
(b) The authority is not subject to the jurisdiction of the Alaska
Public Utilities Commission. Nothing in AS 44.83.010 -44.83.510
grants the authority any jurisdiction over the services or rates of any
public utility or diminishes or otherwise alters the jurisdiction of the
Alaska Public Utilities Commission with respect to any public utility,
including any right the commission may have to review and approve
or disapprove contracts for the purchase of electricity by a public util-
ity. (§ 1 ch 278 SLA 1976; am § 12 ch 156 SLA 1978; am § 6 ch 118
SLA 1981)
Revisor's notes. -In the second sen-
tence of subsection (a), a reference to AS
44.83.400 44.83.510 was changed to AS
44.83.380 -44.83.425 to reflect num·
bering changes made by the revisor of stat-
utes under AS 01.05.03Hb).
Effect of amendments. -The 1981
amendment. effective August 4,1981, sub·
stituled "except for a contract or lease
entered into under AS 44.83.380 -
44.83.425, a" for "a" preceding "contract"
and added "or lease" preceding "for the
sale" in the second sentence of subsection
(a) and added "or lease" following
"contract" in paragraphs (4) and (6) of sub·
section (a).
:366
§ 44.83.105 STATE GOVERNMENT § 44.83.162
Article 3. Financial Provisions.
Section
105. Bonds for power projects under the
energy program for Alaska
Sec. 44.83.105. Bonds for power projects under the energy
program for Alaska. The authority shall borrow money and shall
issue its bonds on which the principal and interest are payable from
money derived from the sale of wholesale power from power projects
financed under AS 44.83.380 -44.83.425 from the power development
fund if
(1) appropriations to the power development fund for the power
project are insufficient to cover the cost of acquiring or constructing the
power project; and
(2) the amount of interest the authority will pay on its bonds is not
more than alternative costs of securing money to pay for the acqui-
sition or construction of the power project. (§ 7 ch 118 SLA 1981)
Revisor's notes. -A reference to AS
44.83.400 -44.83.510 was changed to AS
44.83.380 -44.83.425 to reflect num·
bering changes made by the revisor of stat·
utes pursuant to AS 01.05.031.
Effecti ve dates. Section 17, ch. 118,
SLA 1981, provides that this section take
effect July 1. 1981. However, ch. 118
became law without approval by the
governor. and since there is no provision in
ch. 118 for the retroactive application of
the effective date (see AS 01.10.090), this
section is effective August 4, 1981.
Article 4. Power Production Cost ~ssistance.
Section
162. Power cost assistance
163. Adjustments to power cost assistance
Editor's notes. -Sections 51 and 54.
ch. 83, SLA 1980, purporting to repeal this
Section
164. Assistance to utilities not regulated
by Public Utilities Commission
article effective July 1. 1985. were
repealed by § 13. ch. 118. SLA 1981.
Sec. 44.83.162. Power cost assistance. (a) The power cost assis-
tance fund is established as a separate fund to provide financial assis-
tance to eligible electric utilities in the state. The fund shall be
administered by the authority as a fund distinct from other funds of the
authority, The fund is composed of money appropriated for the purpose
of providing power cost assistance to an eligible electric utility.
(b) The costs used to calculate the amount of power cost assistance
for all electric utilities eligible under this section include all allowable
costs. except return on equity, used by the commission to determine the
revenue requirement for eicctric utilities subject to rate regulation
:367
§ 44.83.162 ALASKA STATUTES SUPPLEMENT § 44.83.162
under AS 42.05.010 -42.05.721. The costs used in determining the
power cost assistance per kilowat-hour shall exclude any other type of
assistance that reduces the customer's costs of power on a kilo-
watt-hour basis and that is provided to the electric utility within 60
days before the commission determines the power cost assistance per
kilowatt-hour of the electric utility.
(c) An eligible electric utility is entitled to receive power cost assis-
tance
(1) for sales of power to local community facilities, calculated in the
aggregate for each community served by the electric utility, for actual
consumption of not more than 55 kilowatt-hours per month for each
resident of the community; and
(2) for actual consumption of not more than 600 kilowatt-hours per
month sold to each customer in all classes served by the electric utility
except to customers of the utility under (1) of this subsection.
(d) The amount of power cost assistance provided per kilowatt-hour
under (c) of this section may not exceed 95 percent of the power costs,
or the average rate per eligible kilowatt-hour sold, whichever is less,
as determined by the commission. However,
(1) during the fiscal year ending June 30, 1982, the power costs for
which power cost assistance may be paid to an electric utility are
limited to minimum power costs of more than 12 cents per kilo-
watt-hour and less than 45 cents per kilowatt-hour;
(2) d uri ng each following fiscal year, the power costs for which power
cost assistance may be paid to an electric utility are limited to
(A) power costs that are greater than the minimum power costs
specified in (1) of this subsection plus one cent per kilowatt-hour for the
fiscal year ending June 30, 1983, plus one .cent per kilowatt-hour for
each fiscal year thereafter; and
(B) power costs of less than 45 cents per kilowatt-hour; and
(3) the power cost assistance per kilowatt-hour may be determined
using kilowatt-hours generated for utilities with no historical kilo-
watt-hour sales data.
(e) An electric utility whose customers receive assistance under this
section shall set out in its tariff the rates without the power cost assis-
tance provided in this section and the amount of power cost assistance
per kilowatt-hour sold. The rate charged to the customer shall be the
difference between the two amounts. Power cost assistance paid under
this section shall be used to reduce the cost of all power sold to local
community facilities, in the aggregate, to the extent 55 kilowatt-
hours per month per resident ofthe community, and to reduce the cost of
the first 600 kilowatt-hours per customer per month fbr all other classes
served by the electric utility.
(f) The power cost assistance program shall be administered by the
authority based on a determination by the commiSSIOn under !bl and
{dJ of this sectIOn of power cost assistance per kIlowatt-hour tor each
eligible electric utility.
368
§ 44.83.162 STATE GOVERNMENT § 44.83.162
(g) An eligible electric utility may not be denied power cost assis-
tance because complete cost information is not available. An eligible
electric utility that is exempt from rate regulation under AS 42.05.010
-42.05.721 shall be assisted by the commission to provide the cost
information the commission considers necessary to comply with the
requirements of this section. Only power costs that are supportable
may be considered in calculating power cost assistance. Each electric
utility is responsible for keeping records that provide the information
necessary to comply with the requirements of this section including,
but not limited to, records of monthly kilowatt-hour sales or genera-
tion, monthly fuel balances, fuel purchases, and monthly utility fuel
consumption.
(h) For each eligible electric utility, the determination of the cost of
fuel by the commission shall be in accordance with the procedure for
approving fuel cost rate adjustments of electric utilities subject to rate
regulation under AS 42.05.010 -42.05.721.
(i) Each electric utility receiving power cost assistance approved by
the commission shall
(1) report monthly to the authority within the time and in the form
the authority requires; and
(2) use operational equipment designed to meter individual utility
customer power consumption and to determine and record the utility's
overall fuel consumption.
G) The authority shall review the report required under (i)(1) of this
section and may submit the report to the commission for additional
review before payment. After review and approval of the report by the
authority, the authority shall, subject to appropriation, pay to each
eligible electric utility an amount equal to the power cost assistance
per kilowatt-hour determined by the commission under (b) and (d) of
this section, multiplied by the number of kilowatt-hours eligible for
power cost assistance that were sold during the preceding month to all
customers of the utility in accordance with (c) of this section. Payment
shall be made by the authority within 30 days after receipt from the
utility of the report required under (i) of this section. However, ifthere
is a dispute between the authority and the utility relating to the
payment, the authority shall submit the report to the commission for
review within 30 days after its receipt by the authority. When a report
is submitted to the commission for review under this section, payment
shall be made by the authority within 30 days after submission, based
on a commission determination. If appropriations are insufficient for
payment in full, the amount paid to each electric utility is reduced on
a pro rata basis.
(k) If an electric utility receives power cost assistance under this
section, the utility shall either
(1) give the foliowmg notIce to its electric service customers eligible
under this program for each period for which the payment is received:
:369
§ 44.83.162 ALASKA STATUTES SUPPLEMENT § 44.83.162
NOTICE TO CUSTOMER
For the current billing period the utility will be paid under the State
of Alaska's power cost assistance program (AS 44.83.162) to assist
the utility and its customers in reducing the high cost of generation
of electric energy.
Your total electrical service cost $ ...... .
Less state assistance $ ...... .
Your charge $ ....... ; or
(2) give to its electric service customers a notice approved by the
authority, which notice provides electric service customers the same
information provided by the notice in (1) of this subsection.
(1) In order to qualify for power cost assistance, each electric utility
must make every reasonable effort to minimize administrative,
operating, and overhead costs, including using the best available
technology consistent with sound utility management practices. In
reviewing applications for power cost assistance, the commission has
the authority to require the elimination of duplicative or otherwise
unnecessary operating expenses. Each eligible electric utility shall
cooperate with appropriate state agencies, including but not limited to
the Alaska Public Utilities Commission, the Alaska Power Authority,
the Alaska Energy Center, and the division of energy and power
development in the Department of Commerce and Economic
Development, to implement cost-effective energy conservation mea-
sures, and to plan for and implement feasible alternatives to diesel
generation.
(m) For purposes of (c) of this section, the number of residents of the
community equals the number of residents of the community deter-
mined by the Department of Community and Regional Affairs in accor-
dance with AS 29.88.015.
(n) In this section.
(1) "commission" means the Alaska Public Utilities Commission;
(2) "community facility" means a water and sewer facility, public
outdoor lighting, charitable educationol facility, or community build-
ing whose operations are not paid for by the state, the federal govern-
ment, or private commercial interests;
(3) "eligible electric utility" or "electric utility" means each corpora-
tion (whether public. cooperative, or otherwise), company, individual,
or association of individuals, their lessees, trustees, or receivers
appointed by a court, that owns, operates, manages, or controls a plant
or system for the furnishing, by generation, transmission or distribu-
tion, of electric service to the public for compensation;
(4) "energy conservation measures" include weatherization and
other insulating methods, utilization of waste heat, appropriate sizing
of new generatino; equipment. and other programs of the state or
federal government intended and avatlable for the purpose of energy
conservation:
370
§ 44.83.163 STATE GOVERNMENT § 44.83.163
(5) "feasible energy projects" include projects that are selected after
a field reconnaissance study under AS 44.33.090 and after completion
of a feasibility study according to the criteria in AS 44.83.181 to deter-
mine cost benefit in comparison to existing power generating methods
and other alternatives considered in reconnaissance studies;
(6) "fund" means the power cost assistance fund established under
(a) of this section;
(7) "power costs" means costs used in determining the power cost
assistance in accordance with (b) and (d) of this section. (§ 42 ch 83
SLA 1980; am § 8 ch 118 SLA 1981)
Effect of amendments. -The 1981
amendment, effective August 4, 1981,
rewrote this section.
Editor's notes. -Section 16, ch. 118,
SLA 1981, provides: "TRANSITIONAL
PROVISIONS, POWER COST ASSIS·
TANCE. The Alaska Power Authority
shall make payments to eligible electric
utilities in accordance with AS 44.83.162
as that section read before its repeal and
reenactment by sec. 8 ofthis Act, until the
earlier of
"(1) January I, 1982; or
"(2) the date on which the Alaska Power
Authority determines, with respect to the
electric utility, that
"(A) the electric utility has had suffi-
cient time to apply for power cost assis-
tance under AS 44.83.162 as that section is
reenacted in sec. 8 of this Act, and the
Alaska Public Utilities Commission has
had sufficient time to review the applica-
tion; or
"(8) the Alaska Power Authority or the
Alaska Public Utilities Commission deter-
mines that the electric utility is not eligi-
ble for power cost assistance under AS
44.83.162 as that section is reenacted in
sec. 8 of this Act."
Sec. 44.83.163. Adjustments to power cost assistance. (a) The
power cost assistance per kilowatt-hour determined under AS
44.83.162 payable to an electric utility that is subject to rate regulation
under AS 42.05.010 -42.05.721 may be adjusted by the commission
if
(1) an increase or decrease in the electric utility's cost of fuel has
resulted in the approval of a fuel cost rate adjustment by the commis-
sion;
(2) a permanent or interim rate increase or decrease has been
approved by the commission, thereby establishing a higher or lower
power cost;
(3) an adjustment is required after the authority has discovered
discrepancies in its review of monthly data submitted by the electric
utility; or
(4) the authority determines that appropriations are insufficient to
finance full payments to eligible electric utilities.
(b) An electric utility that is eligible to receive power cost assistance
under this section and that receives power cost assistance per kilo-
watt-hour approved by the commission shall report monthly to the
authority within the time and in the form the authority requires. An
electric utility shaH report
371
§ 44.83.164 ALASKA STATUTES SUPPLEMENT § 44.83.164
(1) the power cost assistance per kilowatt-hour approved by the com-
mission;
(2) the total kilowatt-hours sold to each class of customer during the
preceding month;
(3) the total kilowatt-hours eligible for power cost assistance under
this section sold to each class of customer during the preceding month;
(4) the total kilowatt-hours generated during the preceding month,
if available;
(5) any commission-approved amendments to the schedule of rates
in effect during the preceding month; and
(6) an increase or decrease in the current unit price of fuel from the
base price used by the commission in the determination of power costs
which may be expected to result in a subsequent power cost assistance
adjustment.
(c) The provisions of AS 44.83.162 relating to the determination of
the amount of power cost assistance and payment of the assistance
apply to assistance under this section. (§ 9 ch 118 SLA 1981)
Effective dates. -Section 17, ch 118,
SLA 1981, provides that this section take
effect July 1, 1981. However, ch. 118
became law without approval by the
governor, and since there is no provision in
ch. 118 for the retroactive application of
the effective date (see AS 01.10.090), this
section is effective August 4, 1981.
Sec. 44.83.164. Assistance to utilities not regulated by Public
Utilities Commission. (a) An electric utility that is not subject to rate
regulation by the commission may receive power cost assistance if the
utility is otherwise eligible for assistance under AS 44.83.162 and if the
utility
(1) files with the commission financial data necessary to determine
the power cost assistance per kilowatt-hour as prescribed by the com-
mission and which is in compliance with AS 44.83.162;
(2) reports monthly to the authority, within the time and in the form
the authority requires, the information required in (b) of this section;
(3) sets rates
(A) that consider the power cost assistance provided under AS
44.83.162 by subtracting from its revenue requirements for electric
services the power cost assistance per kilowatt-hour that it is eligible
to receive; and
(B) under which the power cost assistance provided in AS 44.83.162
is applied as a credit only against the cost of kilowatt-hours eligible for
assistance under AS 44.83.162 that are consumed by each customer in
any month;
(4) allows audits that the commission determines are necessary to
insure compliance with this section; and
(5) furnishes its electric service customers eligible under this pro-
gram a notice as speclIied in AS 44.o3.162f k).
§ 44.83.164 STATE GOVERNMENT § 44.83.164
(b) An electric utility that is eligible to receive power cost assistance
under this section shall report in accordance with (a)(2) of this section
(1) the power cost assistance per kilowatt-hour approved by the com-
mission;
(2) the total kilowatt-hours sold to each class of customer during the
preceding month;
(3) the total kilowatt-hours eligible for power cost assistance under
this section sold to each class of customer during the preceding month;
(4) the total kilowatt-hours generated during the preceding month,
if available;
(5) any amendments to the schedule of rates in effect during the
preceding month; and
(6) an increase or decrease in the current unit price of fuel from the
base price used by the commission in the determinat~on of power costs
which may be expected to result in a subsequent assistance level
adjustment.
(c) An electric utility that is eligible to receive power cost assistance
under this section may have its power cost assistance per kilowatt-hour
determination changed by the commission if
(1) an increase or decrease in the electric utility's cost of fuel has
been verified by the commission;
(2) an increase in rates has occurred based on an increase in costs
and has been verified by the commission;
(3) an adjustment is required after the authority has discovered
discrepancies in its review of monthly data submitted by the electric
utility; or
(4) the authority determines that appropriations are insufficient to
finance full payments to eligible electric utilities.
(d) The provisions of AS 44.83.162 relating to the determination of
the amount of power cost assistance and payment of the assistance
apply to assistance under this section.
(e) An application for power cost assistance by an electric utility that
is eligible to receive power cost assistance under this section does not
extend the jurisdiction of the commission beyond that established by
AS 42.05.010 -42.05.721. (§ 42 ch 83 SLA 1980; am § 10 ch 118 SLA
1981)
Effect of amendments. -This 1981
amendment, effective August 4, 1981.
rewrote this section.
373
§ 44.83.177 ALASKA STATUTES SUPPLEMENT § 44.83.177
Article 6. General Provisions.
Section
177. Reconnaissance study
Sec. 44.83.177. Reconnaissance study. (a) To identify power
project alternatives for a community, the authority shall, after con-
sultation with other state agencies and after review of information on
alternative sources of power, complete a reconnaissance study for each
proposed new power project.
(b) A reconnaissance study shall
(1) survey all power sources available to the community and adja-
cent area and evaluate the relative economic merits of alternative
sources of power;
(2) include an assessment of the effect of the development of alterna-
tive sources of power on the environment so as to assure that there is
no adverse effect to the environment which would make the project
inadvisable;
(3) include public comment from residents of the community and
adjacent area.
(c) The authority, in consultation with the division of budget and
management, shall adopt regulations defining
(1) the methods which it shall apply to determine that the informa-
tion required by (b) of this section is obtained; and
(2) standard criteria and measures for comparative analysis of alter-
native power sources.
(d) In completing a reconnaissance study, the authority shall consult
with the division of energy and power development in the Department
of Commerce and Economic Development to determine the information
that each may require for energy planning and the development of
technology. (§ 24 ch 83 SLA 1980; am § 11 ch 118 SLA 1981)
Effect of amendments. -The 19B1
amendment. effeclive August 4. 19B1.
added subsection (d).
Article 8. Rural Electrification Revolving Loan Fund.
Section
361. Rural electrification revolving loan
fund
363. Loan advisory committee
Efrective date of article. -Section 17.
ch. ltB. SLA 198 t. provide;; that this
arncle t.1.Ke ~[fect July 1. 1981. However.
eh. 118 b'!carne law wl~hout approvai by
th~ governor. and since there lti no prov!-
sion in ch. 118 for the retroactive applica-
tion uf lhe effective date (~ee AS
01.10.0901. this artlcie IS erfect\ve August
4. 1981.
374
§ 44.83.361 STATE GOVERNMENT § 44.83.361
Sec. 44.83.361. Rural electrification revolving loan fund. (a)
The rural electrification revolving loan fund is established in the
Alaska Power Authority. The fund consists of
(1) appropriations made to the fund; and
(2) principal and interest payments on loans made under this sec-
tion.
(b) The authority may make loans from the rural electrification
revolving loan fund to electric utilities certified by the Alaska Public
Utilities Commission. A loan from the fund may be made only for the
purpose of extending new electric service into an area of the state that
an electric utility may serve under a certificate of public convenience
and necessity issued by the Alaska Public Utilities Commission. A loan
may be made from the fund to an electric utility if the utility invests
the money necessary to provide one pole, one span of line, one
transformer, and one service drop for each consumer for whom immedi-
ate service would be provided by the extension of electric service. How,,"
ever, a loan may not be made from the fund unless
(1) the loan is recommended by a loan advisory committee appointed
under AS 44.83.363; and
(2) the extension of electric service would provide immediate service
to at least three consumers.
(c) A loan from the rural electrification revolving loan fund shall
bear an annual rate of interest of two percent of the unpaid balance of
the loan.
(d) When a loan is made by the authority under this section, the
electric utility receiving the loan
(1) shall, in addition to the rates that it is authorized to charge,
charge the consumers served by the electric service extended with the
loan proceeds an amount sufficient to pay the interest costs of the loan;
(2) shall pay to the authority annually an amount equal to
(A) interest of two percent on the unpaid balance of the loan; and
(B) payments on the unpaid balance of the principal of the loan for
each new consumer served by the electric service during the preceding
year for which the loan was made; payments on the unpaid balance of
the principal of the loan shall be made at a rate equal to the diITerence
between the actual cost of making the service connection to the con-
sumers and the minimum investment per consumer required of the
utility before a loan is made under (b) of this section.
(e) The authority shall
(1) adopt regulations necessary to carry out the provisions of this
section;
(2) administer the rural electrification revolving loan fund; and
(3) submit to the legislature within the first 10 days of each regular
legislative session a report of ad ions taken by the authority under this
section and an accountIng' of the rural electrification revolving loan
fund. IS 1 ch ll8 SLA 1981)
375
§ 44.83.363 ALASKA STATUTES SUPPLEMENT § 44.83.380
Sec. 44.83.363. Loan advisory committee. When an application
for a rural electrification loan is submitted to the authority under AS
44.83.361, the authority shall appoint a local advisory committee from
persons residing in the area that the applicant utility is certified to
serve. The loan advisory committee shall consider the loan application,
and shall recommend whether the loan application is to be approved or
disapproved. A favorable recommendation from the loan advisory com-
mittee shall be based on a determination that development in the area
of the proposed extension of electric service is likely to provide for full
repayment of the loan under AS 44.83.361(d) within 10 years. In
making that determination the committee shall consider
(1) permanence of the premises to be served by the extension;
(2) land use patterns in the area;
(3) access for the line that would be installed with loan proceeds;
(4) availability of other utility service in the area; and
(5) the economic feasibility of the extension of electric service with
the proceeds of the loan. (§ 1 ch 118 SLA 1981)
Article 9. Energy Program for Alaska.
Section
380. Program established
382. Power development fund established
384. Use of fund balance
386. Investment of fund
388. Allotment to projects
390. Reappropriation of fund balance
Effective date of article. -Section 17,
ch. 118, SLA 1981, provides that this
article take elTect July 1, 1981. However,
ch. 118 became law without approval by
Section
392. Lapse of excess appropriations
394. Revenue requirements
396. Operation of power project
398. Sale of power from power project
400. Energy conservation
425. Definitions
the governor, and since there is no provi.
sion in ch. 118 for the retroactive applica-
tion of the elTective (see AS 01.10.090), this
article is elTective August 4, 1981.
Sec. 44.83.380. Program established. (a) The energy program for
Alaska is established. The program shall be administered by the
Alaska Power Authority.
(b) The energy program for Alaska is a program by which the
authority may acquire or construct power projects with money appro-
priated by the legislature to the power development fund established
in AS 44.83.382. A power project may be acquired or constructed as
part of the energy program for Alaska only if the project is submitted
to and approved by the legislature in accordance with procedures set
out in AS ,1-4.8:1.177 44.I'lJ.1S7.
I.e) The provisions of AS :36.10.010 -:36.10.125 apply to power
projects constructed by the authOrity under AS ,*4.8:3.380-H.83A~5.
lAS 44.33.4:00; ~ L ch 118 SLA 1981)
376
§ 44.83.382 STATE GOVERNMENT § 44.83.384
Revisor's notes. A reference to AS
44.83.400 44.83.510 was changed to AS
44.83.380 -44.83.425 by the revisor of
statutes pursuant to AS 01.05.031 to con-
fonn to the renumbering of this article.
Editor's notes. -As enacted, this sec-
tion was designated AS 44.83.400 and was
renumbered by the revisor of statutes
under AS 01.05.031.
Sec. 44.83.382. Power development fund established. (a) A
power development fund is established in the Alaska Power Authority
to carry out the purposes of the energy program for Alaska (AS
44.83.380 -44.83.425).
(b) The fund includes
(1) money appropriated to it by the legislature; and
(2) revenues collected from the sale of power that are not required
by law to be deposited into the general fund. (AS 44.83.410; § 1 ch 118
SLA 1981)
Revisor's notes. - A reference to AS
44.83.400 44.83.510, in subsection (al,
was changed to AS 44.83.380 -44.83.425
by the revisor of statutes pursuant to AS
01.05.031 to conform to the renumbering
of this article.
Editor's notes. -As enacted, this sec-
tion was designated AS 44.83.410 and was
renumbered by the revisor of statutes
under AS 01.05.031.
Sec. 44.83.384. Use of fund balance. (a) The fund may be used by
the authority to provide money for
(1) reconnaissance and feasibility studies and power project finance
plans prepared under AS 44.83.177 -44.83.181;
(2) the cost of a power project, including but not limited to costs of
acquiring necessary licenses, preparing engineering designs, obtaining
land, and constructing the power project;
(3) the defeasance of bonds, or the payment of debt service on loans
for or on an issue of bonds sold in connection with a power project;
(4) the cost of operating and maintaining power projects; and
(5) debt service on power projects.
(b) Money in the fund may be used under (a) of this section only for
a power project that
(1) meets the revenue requirements of AS 44.83.394; and
(2) provides the lowest reasonable power cost to utility customers in
the market area for the estimated life of the power project, whether
operated by itself or in conjunction with other power projects in the
market area, and that operates or will operate on one or more of the
following:
(A) renewable energy resources, including but not limited to
hydroelectric power, wind, biomass, geothermal, tidal or solar energy,
or a method that uses temperature differentials or other physical
propertie:> of the ocean;
(B) coal or peat;
(el eneq,ry derived from wa::;te heat; or
377
§ 44.83.386 ALASKA STATUTES SUPPLEMENT § 44.83.392
(0) fossil fuel, including oil or natural gas. (AS 44.83.420; § 1 ch 118
SLA 1981)
Revisor's notes. A reference to AS
44.83.470 was changed to AS 44.83.394 in
subsection (bH 1) by the revisor of statutes
under AS 01.05.031 to reflect the
renumbering of this article.
Editor's notes. -As enacted, this sec-
tion was designated AS 44.83.420 and was
renumbered by the revisor of statutes
under AS 01.05.031.
Sec. 44.83.386. Investment of fund. The Department of Revenue
shall invest the money in the fund in accordance with AS 37.10.070 and
37.10.075. The Department of Revenue shall provide money in the fund
to the authority only after a cost for a project is incurred. (AS 44.83.430;
§ 1 ch 118 SLA 1981)
Editor's notes. -As enacted, this sec-renumbered by the revisor of statutes
tion was designated AS 44.83.430 and was under AS 01.05.031.
Sec. 44.83.388. Allotment to projects. (a) The authority shall
maintain records of power project allocations from the fund for each
power project
(1) approved in accordance with AS 44.83.185; and
(2) for which an allocation is made from an appropriation made by
the legislature without specifying an appropriation to a project.
(b) Income earned from investment of money appropriated to the
fund shall be deposited in the general fund and may be appropriated
to the fund by the legislature. (AS 44.83.440; § 1 ch 118 SLA 1981)
Editor's notes. -As enacted, this sec-renumbered by the revisor of statutes
tion was designated AS 44.83.440 and was under AS 01.05.031.
Sec. 44.83.390. Reappropriation of fund balance. (a) If a power
project designated by the legislature by law is not constructed, the
amount appropriated to it may be reappropriated to other power
projects by the legislature.
(b) The legislature may reappropriate money under (a) of this sec-
tion only for a power project that is economically feasible under AS
44.83.181(b) and only if the project will serve the market area that
would have been served by the power project designated by the legisla-
ture and not constructed. (AS 44.83.450; § 1 ch 118 SLA 1981)
Editor's notes. -As enacted, this sec-renumbered by the revisor of statutes
tion was designated AS 44.83.450 and was under AS 01.05.031.
Sec. 44.83.392. Lapse of excess appropriations. If at the end of
construction of a power project appropriations for the power project
exceed the amount required for COIll-;tructlOn of it. the excess lapses mto
the general fund. \AS14.8:~.460; ~ 1 ch 118 SLA 1981)
378
§ 44.83.394 STATE GOVERNMENT § 44.83.398
Editor's notes. -As enacted, this sec-renumbered by the revisor of statutes
tion was designated AS 44.83.460 and was under AS 01.05.031.
Sec. 44.83.394. Revenue requirements. The authority may not
use money in the fund for a power project except in compliance with AS
44.83.177 -44.83.187, and unless the authority determines that the
power project is economically feasible and that, after construction,
operation of the power project will be able to provide revenue sufficient
to return annually to the state five percent of the amount that the
authority has spent from the fund for the power project. (AS 44.83.4 70;
§ 1 ch 118 SLA 1981)
Editor's notes. -As enacted, this sec-renumbered by the revisor of statutes
tion was designated AS 44.83.470 and was under AS 01.05.031.
Sec. 44.83.396. Operation of power project. (a) A power project
that is acquired or constructed as part of the energy program for Alaska
is owned by the state and shall be administered by the authority.
(b) When a power project has been acquired or constructed by the
authority, the project may be operated for the authority under a
contract or lease entered into by a qualified utility and the authority.
(c) The authority shall enter into a contract or lease under reason-
able terms and conditions to permit the applicant utility to operate the
power project when the applicant utility is the only wholesale power
customer to be served directly by the power project unless the authority
determines a utility making application for a contract or lease to
operate a power project is not capable of operating that power project.
(d) The authority shall adopt regulations to determine the manner
of selecting a qualified utility to operate a power project under a
contract or lease when there is more than one wholesale power
customer to be served directly by the power project.
(e) When the authority permits a power project to be operated by a
qualified utility under a contract or lease, the authority shall
(1) review and approve the annual budget for the operation and
maintenance of the power project;
(2) assure that the project is being operated efficiently and in a
manner that is consistent with national standards for the industry. (AS
44.83.480; § 1 ch 118 SLA 1981)
Editor's notes. As enacted, this sec-renumbered by the revisor of statutes
tion was designated AS 44.83.480 and was under AS 01.05.031.
Sec. 44.83.398. Sale of power from power project. (a) The
authority shall sell power produced from power projects acquired or
constructed under the enen;y pro!.,'Tum for Alaska. A utility that pur-
chases power produced by a power project of the authority shall agree
with the authority
379
§ 44.83.398 ALASKA STATUTES SUPPLEMENT § 44.83.398
(1) to give preference in the sale of power at retail to all classes of
consumers of power except industrial consumers;
(2) to charge industrial consumers of power a rate determined by the
authority in accordance with (d) of this section.
(b) The authority shall establish a wholesale power rate structure
applicable to sales of power to its customers at the busbar of the power
project as follows: -
(1) The authority shall establish and maintain a single wholesale
power rate applicable to all power projects that it has acquired or
constructed under the energy program for Alaska. The wholesale
power rate shall be computed by the authority annually, and shall
equal the rate that the authority estimates is necessary to produce
revenue that is sufficient to pay
(A) operation, maintenance, and equipment replacement costs of the
power projects;
(B) debt service of the power projects;
(C) safety inspections and investigations of the power projects by the
authority_
(2) If, by July 1, 1986, the legislature has not appropriated at least
$5,000,000,000 to the fund, in addition to appropriations to the fund of
interest earned on money in the fund, the authority shall, beginning
on that date, establish and maintain a single wholesale power rate
applicable to all power projects that it has acquired or constructed
under the energy program for Alaska. The wholesale power rate shall
be computed by the authority annually, and shall be the greater of
(A) 10 percent of the amount the authority has invested in the power
projects, including loans and grants made by the state; or
(B) the rate that the authority estimates is necessary to produce
revenue sufficient to pay
(i) oper~~maintenance, and equipment replacement costs of the
powerproJ~
(ii) debt service of power projects by the authority; and
(iii) safety inspections and investigations of the power projects by
the authority.
(c) The authority shall transmit all the money that it receives under
(b) of this section to the commissioner of revenue for deposit in the state
general fund except for the money it receives under (b)(l)(A) and (B)
and (b)(2)(B)(i) and (iil, or the money it would have received under
(b)(l)(A) and (B) and (b)(2)(B)(i) and (ij) of this section if those items
had been used in part to establish the wholesale power rate in effect at
the time the money is received by the authority.
(d) A rate for an industrial consumer under (a)(2) of this section
(1) may exceed the wholesale power rate determined under I bl of this
sectIOn;
(2) may not be less than the rate charged residential consumers.
380
§ 44.83.400 STATE GOVERNMENT § 44.83.425
(e) The legislature may, by law, annul or change the wholesale
power rate for sales of power that the authority adopts under (b) of this
section. (AS 44.83.490; § 1 ch 118 SLA 1981)
Editor's notes. -As enacted this sec-renumbered by the revisor of statutes
tion was designated AS 44.83.490 and was under AS 01.05.031.
Sec. 44.83.400. Energy conservation. The authority shall ensure
(1) that communities that benefit from the energy program for
Alaska implement cost-effective energy conservation measures for
residences, commercial and public buildings, and industries; and
(2) that communities shall fulfill their responsibilities under (1) of
this section by cooperating with state agencies concerned with
development and conservation of energy, including but not limited to
(A) the Alaska Public Utilities Commission;
(B) the division of energy and power development, Department of
Commerce and Economic Development; and
(C) the division of business loans, Department of Commerce and
Economic Development. (AS 44.83.500; § 1 ch 118 SLA 1981)
Editor's notes. -As enacted, this sec-renumbered by the revisor of statutes
tion was designated AS 44.83.500 and was under AS 01.05.031.
Sec. 44.83.425. Definitions. In AS 44.83.380 -44.83.425,
(1) "busbar" means the substation that serves as the delivery point
from the generation and transmission system of the authority to the
transmission and distribution system of the utility;
(2) "debt service" means the cash flow necessary to secure bonds;
(3) "fund" means the power development fund established by AS
44.83.382;
(4) "industrial consumer" means a customer of a utility which
customer has a peak power demand in excess of 500 kilowatts and uses
the power principally for
(A) manufacturing;
(B) pipeline transportation;
(C) the' recovery or processing of minerals;
(D) the processing of timber, agricultural, or seafood products or
their by-products; or
(E) the operation of facilities owned by the federal government;
(5) "qualified utility" means an electric utility that is certified by the
Alaska Public Utilities Commission to serve all or part of a market
area that is served or will be served by the power project, and that the
authority determines is capable of operating and maintaining the
power project. (AS 44.83.510; § 1 ch 118 SLA 1981)
381
§ 44.88.010 ALASKA STATUTES SUPPLEMENT § 44.88.010
Revisor's notes. - A reference to AS
44.83.400 -44.83.510 was changed to AS
44.83.380 44.83.425 and a reference to
AS 44.83.410 was changed to AS 44.83.382
by the revisor of statutes pursuant to AS
01.05.031 to reflect the renumbering of
this article.
Editor's notes. -As enacted this sec-
tion was designated AS 44.83.510 and was
renumbered by the revisor of statutes
under AS 01.05.031.
. ,~~~~ ... ~~-.-c: "~,~-,,, __ ~,;..o,t..cl_*~~"''''''''''''''~Jf.
__ --Chapter,,88;~Ala:§Karndustrial Development . '
Authority.
Article
1. Creation and Organization (§§ 44.88.010, 44.88.050)
2. Purpose and Powers (§§ 44.88.070, 44.88.080l
3. Financial Provisions (§§ 44.88.090,44.88.105,44.88.155 44.88.159)
4. General Provisions (§§ 44.88.165,44.88.212,44.88.220)
Article 1. Creation and Organization.
Section
10. Legislative finding and policy.
50. Meetings, compensation, officers and
employees
~ ,/
I t If
1/
J
/
/'
I
I
Sec. 44.88.010. Legislative finding and policy;~a) The legisla-
ture finds, determines and declares that /
(1) there exist areas of the state in which seasonal and nonseasonal
unemployment exist; /
(2) this unemployment is a serious menace to the health, safety and
general welfare, not only to the people in those areas, but also to the
people of the entire state; /
(3) the state lacks the basic manufacturing, industrial, and business
enterprises and the other facilities t;eterred to in (5) of this subsection
necessary to permit adequate development of its natural resources and
the balanced growth of its econ9my;
(4) the establishment and expansion of industrial, manufacturing,
j
and business enterprises in,Alaska and the other facilities referred to
in (5) of this subsection are'~ssential to the development of the natural ..
resources and the long~.term economic growth of the state. and will
directly and indirect>r.lalleviate unemployment in the state; ,
(5) the achievement of the goal of full employment, and of estab-
lishment and continuing operation and development of industrial,
manufacturing;/and business enterprises in the state, including
facilities for ,air and water transportation, facilities for pollution
control anq.·waste disposal, facilities for the local furnishing of gas,
facilities Jor water, and facilities for industrial parks. will be
acceleaJ~ted and facilitated by the creation of an instrumentality of the
state ,·With powers to incur debt and to make and insure loans to
finance, and to assist orivate lenders to make loans to finance, the est~bli.:ihment, oper~tion, and development of industrial,_
~l.a**ut~~nJ btt:3iftcc.u ~t!:l~-rinclntiihgraciTiTle';'t'or air
382
./
il'
, )
! ,
!,,-, ,
. ,
, ) "
A-2
CERTIFICATE OF AUTHENTICITY --REGULATIONS
STATE OF ALASKA
ss.
THIRD JUDICIAL DISTRICT
I, ERIC P. YOULD, Executive Director of the Alaska
Power Authority (the "Authority") HEREBY CERTIFY as follows:
That the document attached hereto is a true and
correct copy of the Authority's Regulations (3 AAC 94)
including any and all amendments thereto to date.
IN WITNESS WHEREOF, I have set my hand and caused
the seal of the Authority to be impressed hereon this ~
day of February, 1982.
ERIC P: YOU~D ~
Executlve Dlrector
, , (S E A L)
SUBSCRIBED AND SWORN to before me this U day
of February, 1982.
Registcr 79, October 1981 COMMERCE 3 AAC 91.110
3 AAC 91.150
cultural facility, for which financial assistance is
requ~sted. (Efr. 5/21/80, Reg. 74)
Authority: AS 43.18.500
AS 44.33.410
3 AAC 91.]20. COMPLETION OF GRANT.
The grant is complete when
(l) the structure is finished and the letter of
agreement is fully complied with;
(2) a final account of expenditures is filed
with the department; and
(3) the applicant returns any unused funds to
the department. (Efr. 5/21/80, Reg. 74)
Authority: AS 43.18.500
3 AAC 91.1 SO. DEFINITIONS. Unless the
context indicates otherwise, in this chapter
(l) "advisory council" means the Advisory
Council on Cultural Facilities established by
AS 44.33.400;
(2) "commissioner" means the commissioner
of commerce and economic development;
(3) "department" means the Department of
Commerce and Economic Development. (Eff.
5/21/80, Reg. 74)
Authority: AS 43.18.500
AS 44.33.410
CHAPTER 92.
ALASKA HOUSING FINANCE
CORPORATION
Editor's Note: As of Register 78, the Alaska Housing Finance
Corporation regulations have been transferred to 15 AAC 118
in recognition of the relocation made by Ch. 106 SLA 1980.
3-182.1
Register 79, October 1981 COMMERCE 3 AAC 94.010
3 AAC 94.055
CHAPTER 94.
ALASKA POWER AUTHORITY
Article
1. Notice to Public
(3 AAC 94.010-3 AAC 94.020)
2. Actions Other Than Loans
(3 AAC 94.050-3 AAC 94.067)
3. Loans from Appropriated Funds
(3 AAC 94.070-3 AAC 94.120)
4. General Provisions (3 AAC 94.900)
ARTICLE 1.
NOTICE TO PUBLIC
Section
10. Scope of regulations
20. Public notice of meetings
3 AAC 94.010. SCOPE OF REGULATIONS.
This chapter applies to actions undertaken by
the Alaska Power Authority concerning a power
project, as defined in AS 44.83.230(4), and to
applications for loans from the power project
fund or from amounts appropriated for a loan.
(Eff. 4/13/79, Reg. 70; am 9/13/81, Reg. 79)
Authority: AS 44.83.080
AS 44.83.170
3 AAC 94.020. PUBLIC NOTICE OF MEET-
INGS. Public notice of all authority meetings
must be given by publication in a newspaper of
general circulation not more than two weeks and
not less than five days before the meeting. The
notice must be designed to give the public notice
of the meeting and of the general topics to be
discussed and considered at the meeting, and
must include a proposed agenda of the meeting.
(Efr. 4/13/79, Reg. 70)
Authority: AS 44.56.080
AS 44.56.220
ARTICLE 2.
ACTIONS OTHER THAN LOANS
Section
SO. Steps preceding certain actions
55. Reconnaissance studies
60. Feasibility studies
65. Plans of finance
67. Applicability of sections
3 AAC 94.050. STEPS PRECEDING CER-
TAIN ACiIONS. (a) This section appiies to
3-182.2
authority action other than actions considered
under 3 AAC 94.070 3 AAC 94.110 au-
thorizing an agreement with any person to con-
struct, acquire or operate a power project or
approving a resolution authorizing the issue of
bonds in connection with a power project.
(b) Before taking action covered by this sec-
tion, the authority will consider whether
(I) the project is an eligible project as de-
fined in AS 44.56.230(3) and (4);
(2) the project conforms with the long-term
energy plan;
(3) the project meets the needs of the area to
be served by the project and will benefit the area
by providing power to the consumer at the
lowest reasonable cost;
(4) the project is feasible from an engineer-
ing and an economic standpoint; and
(5) an alternative to the project exists which,
would result in development of power at a
different site, by a different method or by an
entity other than the authority which could
reasonably be expected to provide, within a time
schedule comparable to the project, comparable
volumes of power at a lower cost to the con-
sumer and which meets the criteria set forth in
( I) -(4) of this SUbsection.
(c) Before taking action covered by this sec-
tion, the authority will adopt a written resolu-
tion which
(1) states that. in the opinion of the au-
thority, the general prosperity and econom ic
welfare of the people of Alaska will be enhanced
by the power project; and
(2) sets out the findings of the authority with
respect to each factor in (b) of this section. (Eff.
4/13/79, Reg. 70; am 9/13/81, Reg. 79)
Authority: AS 44.83.070
AS 44.83.080
AS 44.83.100
3 AAC 94.055. RECONNAISSANCE
STUDIES. (a) The purpose of a reconnaissance
study is to iJclltir\, and assess the present and
future power needs or a l;ommunity or re!?ion
C""':""" , ... ~ ., . .......
(
Register 79, October 1981 COMMERCE 3 AAC 94.055
and to assess the power project alternatives
available to that community or region. It serves
as the basis for recommending more detailed
data-collection activities, resource assessments,
or detailed feasibility studies of one or more
specific power project alternatives. The recon-
naissance study must
(1) survey all power sources available to the
community or region and adjacent area and
evaluate the social and economic merits of using
alternative sources of power;
(2) include an assessment of the effect of the
development of alternative sources on the en-
vironment to assure that there is no adverse
effect to the environment that makes the project
inadvisable; and
(3) include public comment from residents of
the community or region and adjacent area.
(b) In conducting a reconnaissance study, the
authority will use various techniques and
methods, including e
(1) an assessment of existing and future con-
ditions and available power sources which in-
cludes
(A) an energy balance which will be as
detailed as existing data allows, for each com-
munity or region, which characterizes total
energy use in terms of energy forms entering
the area, end uses, and waste heat;
(B) an estimate of eJectric energy and
peak load requirements after considering
population and economic activity consistent
with recognized state estimates, if available,
and uses, appliance saturation levels, and
existing generation facilities; and
(C) in light of available energy resources,
technology profiles, where applicable, will
address performance characteristics, current
and future availabi lity, costs, resource re-
quirements, and environmental impacts for all
reasonable power source alternatives induuing
conservation, increased. energy conversion
efficiency, waste-heat use, and power genera-
tion technologies;
t2) public :mu agency comment as pan of
which
3-] 82.3
(A) the options available to the com-
munity or region will be presented to the
residents of the area at a public meeting or
through other appropriate means, and local
preferences, if any, will be recorded and in-
cluded in the reconnaissance study report; and
(B) draft reports will be distributed for
comment to affected local governments,
utilities, public land managers, and federal
and state agencies; which must comment on
the draft report within 30 days after receipt;
(3) evaluation and comparison of available
options using economic, emironmental, and
technical indicators;
(4) distribution of copies of the completed
report to affected local governments, utilities.
libraries, public land managers, and federal and
state agencies; and
(5) delivery of the completed reconnaissance
study report to the division of budget and
management Office of the Governor. with a
statement of tlndings. recommendations, and
estimated costs for any recommended data
collection programs, resource assessments, or
feasibility studies, for that division's review.
(c) To allow comparative analysis of alterna-
tive power sources the authority will, to the
extent applicable, use the following standard
criteria and measures while it conducts a recon-
naissance study:
(l) a base case plan will be developed that
would meet the forecasted electric power re-
quirements of the community or region which
would result from a continuation of present
practices in the community or region or from a
reliance on liquid fossil fuel generation modes;
the base case plan will be used when comparing
alternative plans;
(2) other alternatives or a combination of
alternatlves will be incorporated into pl.ms each
of which will satisfy the estimated requirements:
if possible, each plan will be formulated to pro-
vide an equally reliable source of power;
(3) a reference year :lnd planning period will
be estabJi:)hed ror economic evat;Jation: th.:
plannmg periou is :0 yc:lfS unless the set or
Register 79, October 1981 COMMERCE 3 AAC 94.055
3 AAC 94.060
alternatives under consideration requires a
shorter or longer period;
(4) the costs to engineer, design, construct,
maintain, and operate the power project will be
estimated for each plan by using reference-year
dollars after considering relative price trends, if
any; the relative price trends will be established
each year by the authority not later than July I
after consulting with federal and state energy
and budget agencies, but may be changed from
time to time as economic and financial condi-
tions change or as the authority considers
prudent;
(5) using a discount rate which represents the
estimated long-term real cost of money, the
present worth of the cost of each plan over the
planning period will be calculated as of the refer-
ence date, with adjustment for the economic
life of each project; the discount rate or a range
of discount rates will be established each year by
the authority not later than July 1 after consult-
ing with federal and state energy and budget
agencies but may be changed from time to time
as economic and financial conditions change or
as the authority considers prudent;
(6) various combinations of alternatives and
timing will be evaluated to formulate plans
which cost the least; and
(7) the following indicators will be used to
evaluate plans:
(A) economic, including cost of de-
veloping the plan;
(B) environmental
0) community preferences;
(ii) impact on community infrastructure;
(iii) timing in relation to other capital
projects;
(iv) air quality;
(v) water quality;
(vi) fish and wildlife impact;
(vii) land use impact and ownership
status:
(viii) terrestrial impact;
Ox) recreation resource value;
(x) visual impact;
(C) technical
(i) safety;
(ij) reliability;
(iii) availability.
(Eff. 9/13/81, Reg. 79)
Authority: AS 44.83.080
AS 44.83.177
3 AAC 94.060. FEASIBILITY STUDIES.
(a) A feasibility study will be used to assess the
technical, economic, and environmental aspects
of a power project or program identified in a
reconnaissance study so that the authority may
decide whether to apply for licenses or permits,
or invest in detailed engineering and design. A
feasibility study will include information about
the project, a statement of all assumptions
which affect the economic feasibility of the
project and a comparative analysis of all reason-
able alternatives to the project under study.
(b) In conducting a feasibility study the
authority will use various techniques and
methods to assure that
(I) local, state and federal agencies are con-
sulted to assist in defining the scope of work for
the feasibility study;
(2) information about the proposed project
will include all project construction costs, all
project operating costs, the timing and amount
of estimated power output from the completed
project, :1 benefit-ta-cost ratio, the estimated
cost of power based on hypothetical financing
conditions, the possible effect of the project
on the environment of the area which will be
served by the project, the availability of other
financing, and c$timatcs of major indirect costs
and benefits;
(3) the feasibility study includes a statement
which
182.4
(A) Jt:~cribL's the assumptions which
alfect the eCOIlOnlu: leaslbility of the prog!ct:
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Register 79, October 1981 COMMERCE 3 AAC 94.060
(B) includes the discount rate, relative
price trends, the electric load growth assump-
tions, and the planning period;
(C) addresses the hypothetical financing
. conditions upon which the cost-of-power esti-
mate is based, including debt-equity ratio,
tenn of financing, interest rate or rates, and
inflation rate;
(4) a comparative analysis of alternatives is
included which addresses the preferred plan, the
base case plan, and, in the discretion of the au-
thority, the second most preferred plan as
identified in a reconnaissance study; the
preferred plan may be the same as the base case
plan; if a feasibility study is undertaken in the
absence of a previous reconnaissance study com-
pleted in accordance with 3 AAC 94.055, the
alternative plans to be addressed will be deter-
mined by the authority based on available infor-
mation;
(5) draft feasibility reports are distributed for
comment to affected local governments,
utilities, public land managers, and federal and
state agencies; these recipients must comment
on the draft report within 30 days;
(6) the completed feasibility report is trans-
mitted to the division of budget and manage-
ment, Office of the Governor, with a state-
ment of findings and recommendations;
(7) copies of the completed report are distri-
buted to affected local governments, utilities,
libraries, public land managers, and federal and
state agencies.
(c) In order to allow comparative analysis of
alternative power sources the authority, to the
extent applicable, will use the following
standard criteria and measures in conducting a
feasibility study:
(I) a base case plan will be developed that
would meet the estimated electric power require-
ments of the community or region that would
result from a continuation of present practices
in the community or region or a reliance on
liquid fossil fuel generation modes; the base case
plan will be used when comparin~ alternative
pinns;
(2) other alternatives, either singly or in
combination, will be incorporated into the
plans, each of which will satisfy the estimated
requirements; to the extent possible each plan
will be fonnulated to provide an equally reliable
source of power;
(3) a reference year and planning period will
be established for economic evaluation; the plan-
ning period is 20 years unless the set of alterna-
tives under consideration requires a shorter or
longer period;
(4) the costs to engineer, design, construct,
maintain, and operate the power project will be
estimated for each plan in tenns of reference-
year dollars, taking into account relative price
trends; the relative price trends will be estab-
lished each year by the authority not later than
July 1 after consulting with federal and state
energy and budget agencies, but may be changed
from time to time as economic and financial
conditions change or as the authority considers
prudent;
(5) using a discount rate representing the esti-
mated long-term real cost of money, the present
worth of the cost of each plan over the planning
period will be calculated as of the reference
date, with adjustment for varying economic
lives; the discount rate or a range of discount
rates will be established each year by the au-
thority not later than July 1 after consulting
with federal and state energy and budget
agencies but may be changed from time to time
as economic and financial conditions change or
as the authority considers prudent;
(6) various combinations of alternatives and
timing will be evaluated to fonnulate plans
which cost the least;
(7) the following indicators will be used to
evaluate each plan:
(A) economic
(i) present worth of plan cost as com-
pared to the base case plan cost; and
(ii) cost of power;
(B) environmental
3-18~.5
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Register 79, October 1981 COMMERCE 3 AAC 94.060
3 AAC 94.065
0) community preferences;
Oi) impact on community infrastruc-
ture;
(iii) timing in relation to other capital
projects;
(iv) air quality;
(v) water quality;
(vi) fish and wildlife impact;
(vii) land use impact and ownership
status;
(viii) terrestrial im pact;
(ix) recreation resource value; and
(x) visual impact; and
(C) technical
(i) safety;
Oi) reliability; and
(iii) availability; and
(8) the hypothetical financing conditions
upon which the cost of power estimate is based
will be established each year by the authority
not later than July I after consulting with
federal and state energy and budget agencies,
but may be changed from time to time as
economic and financial conditions change or as
the authority considers prudent. (Eff. 9/13/81,
Reg. 79)
Authority: AS 44.83.080
AS 44.83.181
3 AAC 94.065. PLANS OF FINANCE. (a) A
plan of finance is prepared for any new power
project identified in a feasibility study as the
most feasible alternative for development. The
purpose of a plan of finance is to present variolls
alternatives available to finance the power
project and to identify the most appropriate
means to achieve the lowest cost electric power
for consumers while minimizin!! the amount of
starc assisrance required.
(b) In preparing a plan of finance the au-
thority will
(1) use the cost and energy consumption esti-
mates derived from the feasibility study,
adjusted if necessary to reflect new informa-
tion;
(2) consider all appropriate means available
to finance a project;
(3) if state assistance is necessary to finance
a project and meet financial feasibility criteria,
analyze the cost of power for the following:
(A) project development of the base case
plan and the most feasible alternatives identi-
fied in the feasibility study, using hypotheti-
cal financing conditions;
(B) project development using authority
revenue bonds or other available financing
that would result in power without state
assistance for the lowest cost;
(C) project development using available
financing means and state assistance to
achieve financial feasibility;
(4) for projects which require state assist-
ance, estimate the present value of financial
assistance from the state based on the difference
between the effective rate of interest for the
financing sources in (b)(3)(B) of this section, or,
if the financing sources in (b)(3)(B) of this sec-
tion are not available, the difference between
the rate of interest determined under AS
44.83.170(f)(2)(B)(i) and the effective rate of
interest in (b)(3)(C) of this section;
(5) if state assistance is not necessary to
finance a project and meet financial feasibility
criteria, analyze the cost of power for the
following:
(A) projt;:ct development of the base case
plan and tht;: most feasible alternative identi-
fied in the feasibility study, using hypotheti-
cal financing conditions;
(B) project development using available
financing me:ms th:.lt result in lowest-cost
pow('r wirhout swtc assIstance:
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Register 79, October 1981 COMMERCE 3 AAC 94.065
3 AAC 94.070
(6) recommend the method of financing a
power project based upon project feasibility, the
cost of power from the project, and the amount
of state assistance, if any, necessary to finance
the project; and
(7) based on the recommended finance plan
in (b)(6) of this section, recommend a power
marketing plan which considers the market for
project power, project ownership, and project
operation.
(c) The authority will analyze alternative
financing arrangements by using the following
criteria and measures:
(I) the cost of power will be calculated in
(b)(3)(A) and (b)(5)(A) of this section based
upon hypothetical financing conditions for
inflation, fuel cost escalation rates, discount
rates, and interest rates;
(2) the cost of power calculations in
(b)(3)(B), (b)(3)(C), and (b)(5)(B) of this
section will be based upon tenns and interest
rates for the alternative means of financing for
the project in effect on the reference date;
(3) the criteria for financial feasibility are
contained in 3 AAC 94.900(10). (Eff. 9/13/81,
Reg. 79)
Authority: AS 44.83.080
AS 44.83.181
3 AAC 94.067. APPLICABILITY OF SEC-
TIONS. The provisions of 3 AAC 94.055 3
AAC 94.065 apply only to reconnaissance
studies, feasibility studies, and plans of finance
which the authority begins after the effective
date of 3 AAC 94.055 -3 AAC 94.065. (EfT.
9/13/81, Reg. 79)
Authority: AS 44.83.080
ARTICLE 3.
LOANS FROM APPROPRIATED FUNDS
Section
70. Power project fund loan application
80. Review by executive director
90. Action by authority
100. Terms of loans
110. Inspection of records and facilities
120. Loans from other apprupriarcd funds
3 AAC 94.070. POWER PROJECT FUND
LOAN APPLICATION. (a) An application for a
loan from the power project fund must at the
time of filing
(1) state the legal name of the applicant and
the legal authority under which it was created
and other infonnation that will demonstrate
that the applicant is an eligible borrower under
AS 44.83.170;
(2) include a certified copy of the resolution
or other official action by the governing bod'y of
the applicant authorizing the application for a
loan;
(3) state the name, title, and address of the
official correspondent or representative of the
applicant for purposes of the application;
(4) state the names and titles of the principal
officers, including the chief executive officer or
general manager, of the applicant;
(5) state the name and address of the
engineer, legal counsel, financial advisor or con-
sultant, and any management, engineering,
design, economic, or other advisors or con-
sultants which the applicant may have for the
project;
(6) state the total amount of loan requested;
(7) provide a general description of the use to
which the loan funds will be applied, including
but not limited to
(A) locarion;
(B) a comprehensive statement clearly
demonstrating public need for the project and
the project's eligibility under AS 44.83.170;
(C) the proposed allocation of loan funds
to each purpose or to each phase of a project;
(8) plOvidL: informarion from which the
authority may uetermine
(A) in the case of a loan to construct,
equip, modify or expand a project, that the
project is technicallv and economic::llly
tcastbl(; basco on a feaSibility study which
genenlh complies with 3 AAe 94.060 :md
3-182.7
Register 79, October 1981 COMMERCE 3 AAC 94.070
3 AAC 94.080
(B) that the applicant has the financial
ability, including, where necessary, the au-
thority to charge and collect rates, fees or
rentals or, in the case of a municipality, to
levy taxes to generate sufficient revenue to
repay the loan;
(9) state the status of any proceedings
undertaken by the applicant to obtain permits,
certificates or other authorizations from any
federal, state or legal agency necessary to begin,
complete, and operate the project;
(10) provide financial statements of the
applicant and any other party or parties acting
as guarantor of the loan, unless otherwise
required by resolution of the authority; these
financial statements must include, where
possible, balance sheets and profit-and-loss sta te-
ments and must be certified by an independent
certified public accountant;
(II) in the case of an investor-owned electric
utility, provide a business history of any person
or entity owning or controlling 10 percent or
more of the applicant's stock or business; and
(12) for a leveraged lease financing arrange-
ment, enough information from which the au-
thority may determine that the provisions of
AS 44.83.170(b)(2) have been met.
(b) An applicant must, in addition to the
application, provide in timely fashion other
information which may be requested by the
executive director of the authority.
(c) Applications must be submitted to the
Executive Director, Alaska Power Authority,
333 West Fourth Avenue, Suite 31, Anchorage,
Alaska 99501. (Eff. 4/l3/79, Reg. 70; am
9/13/81, Reg. 79)
Authority: AS 44.83.080
AS 44.83.170
3 AAC 94.080. REVIEW BY EXECUTIVE
DIRECTOR. (a) Upon receipt of a complete
application and other information which hJS
been requested or required, the executive
director shall review the application.
(b) The executive director. Jfter reviewing til.;:
applic:.ltlOn. shall make a recommendation which
includes
3-182.8
(I) written comments analyzing whether
(A) in the case of a power project, the
project will conform with the long-term
energy plan;
(B) the project will meet the needs of the
area to be served by the project and will
benefit the area;
(C) in the case of a loan to construct,
equip, modify, or expand a project, the
project is technically and economically
feasible based on a feasibility study which
generally complies with 3 AAC 94.060;
(D) in the case of a construction project,
any alternatives to the project exist which
would result in development of power or
potable water at a different site, by a differ-
ent method, or by an entity other than the
authority which could reasonably be expected
to provide, within a time schedule comparable
to the project, comparable volumes of power
or potable water at a lower cost to the con-
sumer and which meet the criteria set out in
(A) -(C) of this paragraph;
(E) the applicant has applied for or has
been awarded necessary permits or certifi-
cates;
(F) for a construction project, the
project is financially feasible as defined in 3
AAC 94.900;
(G) for a construction project, a loan
from the power project fund. if available, will
make the project financially feasible and, if
so, the amount of money which must be
loaned and the rate of interest necessary for
the project to be financially feasible as
defined ill 3 AAC 94.900; and
(H) for a construction project. if enough
money is not available in the power project
fund to make a loan for the project, of if a
loan may not be made at a rate of interest
low enough £0 allow the project to be finan-
cia lIy feasib Ie as defined in 3 AAC 94.900,
the loan should be approved if assistance is
mude Jvailable £0 rl1(' applicant from some
other sourc.: or sources idcnrifit:J by the
executive director:
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Register 79, Octobcr 1981 COMMERCE 3 AAC 94.080
3 AAC 94.090
(2) a list of subjects to be analyzed in any
studies to be made by the applicant;
(3) a statement setting out proposed loan
terms and conditions; and
(4) other comments which the executive
director, in his discretion, considers appropriate.
(c) The recommendation of the executive
director must be transmitted to the authority
for action within 90 days after a complete appli-
cation has been filed. (Eff. 4/13/79, Reg. 70; am
9/13/81, Reg. 79)
Authority: AS 44.83.080
AS 44.83.170
3 AAC 94.090. ACTION BY AUTHORITY. (a)
The authority will, in its discretion, request
additional information during its consideration
of an application and postpone action pending
• receipt of that information.
I
(b) The authority will, in its discretion, retain
a completed application under advisement for a
reasonable period of time.
(c) The authority will consider each applica-
tion which has been transmitted to it for action
other than applications for loans for reconnais-
sance . studies, feasibility studies, license and
permit applications, engineering and design, and
must determine whether
(1) the money will be used to pay the costs
of activities which are eligible under AS
44.83.170 and the borrower is an eligible
borrower under AS 44.83.170;
(2) in the case of a power project, the project
conforms with the long-term energy plan;
(3) the project is technically and economi-
cally feasible based on a feasibility study which
generally complies with 3 AAC 94.060;
(4) alternatives to the project exist which
would result in development of power or
potable water at a different site, by a different
method or by an entity other than the applicant
which could reasonably be expected to provide.
within J time ~chcJulc comparable to [he
projcCE. ..:ompJrable volumes of powt:r or
p()[abi~ '.Ya[er at J lower cost to the consuma
J-18~.9
and which meet the criteria set out in (1) -
(3) of this subsection;
(5) if there are power project funds which
the authority may loan for more than one
project, the needs of and benefits to the area to
be served by the project are greater than the
needs of and benefits offered to other areas of
the state by a project for which sponsors may
also seek loan funds from the authority if this
determination can be made based on informa-
tion then existing;
(6) the applicant has or will have sufficient
revenue from all sources to repay the loan; and
(7) the project is financially feasible as
defined in 3 AAC 94.900;
(8) a loan from the power project fund, if
made available, will make the project financially
feasible and, if so, the amount of money which
must be loaned and the rate of interest neces-
sary to allow the project to be financially
feasible as defined in 3 AAC 94.900; and
(9) if enough money is not available in the
power project fund to make a loan for the pro-
ject, or if a loan may not be made at a rate of
interest low enough to allow the project to be
financially feasible as defined in 3 AAC 94.900,
the loan should be approved if assistance is made
available to the applicant from some other
source or sources; if so, the authority shall make
a recommendation to the governor and the
legislature concerning that state assistance,
which may include a grant or appropriation
from the general fund.
(d) The authority will consider each applica-
tion for a loan for reconnaissance studies, feasi-
bility studies, license and permit applications,
engineering and design which has been trans-
mitted to it for action and will determine
whether the applicant is an eligible borrower
under AS 44.83. 170, whether the loan will he
used to pay the costs of activities which are
eligible under AS 44.83.170, amI whether the
applicant can reasonably be expected to have
sufficient revenue from all sources to repay the
loan in a timely fashion.
(e) The finJI decision of the authority to
approve or disapprove an application for a ioan
Register 79, October 1981 COMMERCE 3 AAC 94.090
3 AAC 94.100
will be in the form of a written resolution which
contains the findings required by this section
and which the executive director shall transmit
to the applicant.
(f) If the authority approves an application, it
will instruct the executive director to enter into
a loan agreement with the applicant under con-
ditions complying with 3 AAC 94.100 and provi-
sions specified in the resolution and upon
receipt by the executive director of a certified
copy of the resolution or other official action by
the governing body of the applicant agreeing to
the terms of the loan. (Efr. 9/13/81, Reg. 79)
Authority: AS 44.83.080
AS 44.83.170
3 AAC 94.100. TERMS OF LOANS. (a) The
terms of loans made by the authority from the
power project fund will be contained in the au-
thority resolution approving the application and
will comply with the following conditions:
(I) The Joan must bear an int'erest rate or
rates as determined by the authority which meet
the criteria established in AS 44.83.170(f), but
the rate may not be less than five percent, how-
ever, power projects for which loans were out-
standing from the water resources revolving loan
fund (former AS 45.86) on July 13, 1978, may
receive additional financing from the power
project fund at an interest rate of not less than
three or more than five percent a year on the
unpaid balance;
(2) the loan must mature on the date and pay
interest on the dates and in the amounts deter-
mined by the authority, but the final maturity
date may not extend beyond 50 years or the ex-
pected and specified productive life of the
project being financed, whichever is less; the
authority will use the following guidelines to
determine the expected productive life of a
project unless the authority determines that a
different expected productive life is indicated:
(A) Tht! term of loans for reconnaissance
studies and for feasibility studies, precon-
struction engineering and project design, con-
structing, equipping, modifying, improving
and expanding of diesel generation facilities;
wind. geothermal, heating and conservation
f~1\.:ilities: wood g:lSIflcation: wood-nrct!
stcc:m-gcneration f:1dlities; buLl.;, fuel storage
facilities; groundwater source development
and transmission of potable water; and re-
habilitation of existing facilities will be 20
years;
(B) the term of loans for feasibility
studies, preconstruction engineering and
project design, constructing, equipping, modi-
fying, improving and expanding of coal-fired
steam-generation facilities, surface storage of
potable water, and hydroelectric generation
facilities designed to produce one megawatts
or less of power will be 35 years;
(C) the term of loans for feasibility
studies, preconstruction engineering and
project design, constructing, equipping,
modifying, improving and expanding of
hydroelectric generation facilities designed to
produce more than one megawatts of power
will be 50 years; and
(3) the loan must be supported by appro-
priate documentation which may include, with-
out limitation, a loan agreement, bonds, notes or
other documentation, evidencing to the satis-
faction of the authority that the loan is secured
by one or more of the following:
(A) a pledge of the revenues of the
borrower or the project which may be sub-
ordinate to operating and maintenance ex-
penses and certain other expenses of the
borrower or the project as specified by the
authority;
(B) a lien, mortgage, security interest,
collateral agreement or other encumbrance on
the project or other assets, rights or interests
of the borrower; or
(C) a pledge of the taxing power of the
borrower.
(b) The requirements of (a)(3) of this section
do not apply to a loan to an applicant regulated
by the Alaska Public Utilitks Commission under
AS 42.05 if the :lppJicant h3S a history of re-
paying long-term loans and has the capacity to
repay the loan. (Eff. 4/13/79, Reg. 70; am
9/13/81, Reg. 79)
Authority: AS 44.83.080
AS 44.83.170
3-182.10
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Register 79, October 1981 COMMERCE 3 AAC 94.110
3 AAC 94.900
3 AAC 94.110. INSPECTION OF RECORDS
AND F AOLITIES. (a) An applicant shall make
its books and records, facilities, and its real and
personal property of any kind, available for
inspection at any reasonable time by the au-
thority, its executive director, or its agents,
upon receipt by the applicant of a written re-
quest to inspect.
(b) The authority, its executive director, or its
agents, will, in the discretion of the authority or
iti executive director, inspect upon reasonable
notice the construction of any project which is
being financed, in whole or in part, with funds
obtained by a loan from the authority. The
inspection does not subject the authority, its
executive director, or its agents to any action for
damages.
(c) An applicant which has obtained a loan
from the authority shall pennit the authority, its
executive director, or its agents to inspect its
books, records, facilities, and real and personal
property as long as any portion of the loan, in-
cluding interest, remains outstanding.
(d) The authority will, in its discretion, by
written request require an applicant which has
obtained a loan from the authority to
(1) submit at reasonable times to audits or
examinations of its books and records by an
independent firm of certified public accountants
selected by the authority to detennine whether
the provisions of the loan agreement have been
complied with and to pay the cost of this audit
or examination;
(2) submit a sworn statement by a respon-
sible officer of the applicant as to the purposes
to which the proceeds of the loan have been
applied. (Eff. 4/13/79, Reg. 70)
Authority: AS 44.56.080
AS 44.56.170
3 AAC 94.120. LOANS FROM OTHER
APPROPRIATED FUNDS. The provisions of 3
AAC 94.070 -3 AAC 94.110 relating to loans
from the power project fund apply also to all
other loans made by the authority from funds
appropriated for that purpose by the legislature.
(Eff. 9/13/81. Reg. 79)
Authority: AS 44.83.080
ARTICLE 4.
GENERAL PROVISIONS
Section
900. Definitions
3 AAC 94.900. DEFINITIONS. In this chapter
and in AS 44.83, unless the context requires
otherwise
(1) the definitions in AS 44.83.230 apply to
words used in this chapter;
(2) repealed 9/13/81 ;
(3) "executive director" means the executive
director of the Alaska Power Authority;
(4) "Iong-tenn energy plan" means the plan
prepared by the Department of Commerce and
Economic Development under AS 44.83.224;
(5) "nonprofit marketing cooperative"
means a cooperative organized under AS 10.15,
the Alaska Cooperative Corporation Act, which
is operated on a nonprofit basis for the mutual
benefit of its members and which has bylaws
containing provisions relating to the disposition
of revenues and receipts as may be necessary and
appropriate to establish and maintain its non-
profit and cooperative character, or a coopera-
tive organized under AS 10.25, the Electric and
Telephone Act, which exercises the powers
granted to an electric cooperative by AS
10.25.020;
(6) "regional corporation" means an Alaska
Native Regional Corporation established under
the laws of the State of Alaska in accordance
with the provisions of the Alaska Native Claims
Settlement Act (PL 92-203);
(7) repealed 9/13/81 ;
(8) "village corporation" means an Alaska
Native Villagl! Corporation organized under the
laws of the State of Alaska as a business for
profit or nonprofit corporation to hold, invest,
manage, and distribute land, property, funds,
and other rights and assets for and on behalf of
a native village in accordance with the terms of
the Alaska Native Claims Settlement Act (PL
92-203);
3-182.11
Register 79, October 1981 COMMERCE
(9) "village council" means the duly elected
governing body of an unincorporated commu-
nity which has between 25 and 600 people
residing within a two-mile radius;
(10) "financially feasible project" means a
project for which the authority has determined
that enough money is available from all sources
to complete the project, and that enough money
is estimated to be available in the future to
repay any debt incurred in connection with the
project; taking into consideration the relation-
ship between the estimated user fees or charges
upon completion of the project and the
estimated user fees or charges if consumers of
services provided by the project would have con-
tinued to receive services from existing sources,
the relationship between the estimated user fees
or charges upon completion of the project and
the present or estimated user fees or charges for
similar services in the state, and whether the
loan is secured by a means other than by a
pledge of revenues of the project. (Eff. 4/13/79,
Reg. 70; am 9/13/81, Reg. 79)
Authority: AS 44.83.045
AS 44.83.080
AS 44.83.170
AS 44.83.224
AS 44.83.230
3-182.12
3 AAe 94.900
c'
('I
Register COMMERCE
CHAPTER 94.
ALASKA POWER AUTHORITY
Article
1. Notice to Public (3 AAC 94.010 --3 AAC 94.020)
2. Actions Other Than Loans (3 AAC 94.050 --3 AAC 94.067)
3. Loans from Appropriated Funds (3 AAC 94.070 --3 AAC
94.120)
4. Energy Program for Alaska (open)
5. Rural Electrification (3 AAC 94.200 --3 AAC 94.260)
6. General Provisions (3 AAC 94.900)
Sec. 3. 3 AAC 94 is amended by adding new sections desig-
nated as Article 4, Energy Program for Alaska, to read:
ARTICLE 4. ENERGY PROGRru1 FOR ALASKA
Section
150. Power Development Fund
160. Operation of Power Projects
170. Wholesale Power Rate
175. Extraordinary Maintenance and Equipment Replacement Costs
Register
3 AAC 94.150
COMMERCE
POWER DEVELOPMENT FUND.
3 AAC 94.150
3 AAC 94.160
(a) "The power development fund consists of appropriations
from the legislature to the fund.
(b) The authority's budget request for appropriations from
the legislature will consist of amounts for operation, main-
tenance, and equipment replacement costs for all power projects
acquired or constructed under the energy program for Alaska
(AS 44.83.380-44.83.425) based upon:
(1) reviewed and approved cost estimates by the
operators of power projects; and
(2) the authority's own estimates of extraordinary
maintenance and equipment replacement costs.
(c) Cost estimates by the operators of power projects
shall consist of reasonably anticipated ordinary operating,
maintenance, and equipment-replacement costs which will occur
through a fiscal year, and which generally occur on an annual
basis.
(d) Cost estimates by the operators of power projects
shall be provided to the Authority for the next fiscal year
within sixty (60) days of request by the Authority for pur-
poses of the Authority's initial budget submissions under
the Executive Budget Act (AS 37.07). (Eff. / /82, Reg. )
Authority: AS 44.83.080
AS 44.83.382
AS 44.83.384
3 AAC 94.160. OPERATION OF POWER PROJECTS.
(a) A power project which has been acquired or con-
structed by the authority under the energy program for
Alaska (AS 44.83.380-AS 44.83.425) will be operated by the
authority using employees of the authority or, under a con-
tract or lease with the authority, by a qualified utility.
(b) A "qualified utility" is an electric utility which
(1) holds a certificate of public convenience and necessity
issued by the Alaska Public Utilities Commission to serve
all or a part of the market area that is, or is intended to
be, served by the power project, and (2) is deemed capable
of operating the power project by the authority pursuant to
this section.
(c) A proposal or application by an electric utility to
operate a power project must contain the following informacion:
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Register COMMERCE 3 AAC 94.160
(1) proof that the utility is the holder of a
certificate of public convenience and necessity issued by
the Alaska Public utilities Commission to serve all or part
of the area that is or is intended to be served by the power
project;
(2) the legal name of the utility and the legal
authority under which it was created and other information
that will demonstrate that the applicant is eligible to do
business in the state of Alaska;
(3) a record of the official action taken by the
governing body of the applicant authorizing the application;
(4) the name, title and address of the official
correspondent or representative of the applicant for purposes
of the application;
(5) the names and titles of the principal officers,
including the chief executive officer and the general manager
of the applicant;
(6) the names and addresses of the engineers, legal
counsel, financial advisers or consultants and any management,
engineering, design, economic or other advisers or consultants
which the applicant may have;
(7) a general description of the operations of the
electric utility, including a recent history of the costs of
operating, maintaining and replacing equipment on those
operations;
(8) an estimate of the annual costs to operate,
maintain and replace equipment on the power project.
(d) If the power project serves only one electric utility,
the authority may request proposals or accept applications
from that electric utility for the operation and maintenance
of the power project. If the authority, after reviewing
the proposal or application from the electric utility,
finds that the electric utility is a qualified utility,
the authority will enter into a contract or lease with that
qualified utility for the operation and maintenance of the
power project.
(e) If the power project serves more than one electric
utility, the authority will, in its discretion, operate the
power project itself or enter into a contract or lease with a
qualified utility to operate the power project. The authority
will, in its discretion, request proposals or accept applica-
tions from each electric utility and will either:
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..
Register COMMERCE 3 MC 94.160
3 Me 94.170
(1) reject all proposals and applications and
operate the project itself; or
(2) select that electric utility which is a
qualified utility and which is deemed by the authority to
be most capable of operating the project based upon the following
criter
(A) the financial history and stability
of the electric utility;
(8) the ability of the electric utility
to attract qualified power project managers and
operators;
(e) the location of the project in relation
to the service area of the electric utility;
(D) the likelihood of as sting in the lowering
of rates to all classes of consumers over the longest
period of time;
(E) the ability of the electric utility to
satisfy the legislative goals of the energy program
for Alaska under AS 44.83.380-AS 44.83.425.
(f) Prior to entering into a lease or contract with an
electric utility to operate and maintain a power project,
the authority will, in its discretion, (1) request additional
information from the applicant(s) deemed appropriate, (2)
conduct its own investigation, (3) receive any written
comments from interested persons and organizations, and (4)
consider any information received at one or more public
meetings at least one of which will be held in the area to
be served by the power project.
(g) the authority's decision to enter into a contract
or lease with a qualified utility will be in writing. (Eff.
/ /82, Reg. )
Authority: AS 44.83.080
AS 44.83.396
3 AAe 94.170. WHOLESALE POWER RATE.
(a) The authority will set a single wholesale power rate
annually to cover a single fiscal The fiscal year will
be the state's fiscal year under the Executive Budget Act
(AS 37.07).
(b) The wholesale power rate set by the authority will
equal the authority's cost est s under (c) of this
section divided by the authority's est of the kilowatt
hours of electrical energy that will be sold or contracted for
Register COMMERCE 3 MC 94.170
sale in the fiscal year from all power projects acquired or
constructed under the energy program for Alaska (AS 44.83.380-
44.83.425). The wholesale power rate will be expressed as a
charge per kilowatt hour of electrical energy.
(c) Except as provided in (d) of this section, the
wholesale power rate will be equal to that rate estimated
to produce revenue sufficient to pay the estimated costs
for all power projects acquired or constructed under the
energy program for Alaska (AS 44.83.380-44.83.425). The
costs will be:
(1) ordinary and anticipated operation, maintenance,
and equipment replacement costs of all power projects within
the energy program for Alaska for that fiscal year;
(2) extraordinary maintenance and equipment replace-
ment costs as described in 3 AAC 94.175 for all power projects
within the energy program for Alaska for that fiscal year;
(3) debt service as defined in AS 44.83.425(2) of the
power projects within the energy program for Alaska for that
fiscal year;
(4) costs of safety inspections and investigations
of the power projects within the energy program for Alaska
for that fiscal year; and
(5) the amount of any deviation between the estimated
costs under this section and actual costs incurred by the
operators of the power projects in the previous fiscal years.
(d) If by July 1, 1986, the legislature does not
appropriate to the power development fund at least $5,000,000,000,
in addition to the appropriations to the fund of interest
earned on money in the fund, the wholesale power rate will
be computed annually as the greater of:
(1) a rate determined by dividing (A) ten percent
(10%) of the amount the authority has invested in all power
projects acquired or constructed under the energy program
for Alaska (AS 44.83.380-44.83.425), including loans or
grants made by the state, by (B) the sum of the authority's
estimates of the kilowatt hours of electrical energy that
will be sold or contracted for sale in the fiscal year from
all power projects acquired or constructed under the energy
program for Alaska, or
(2) the wholesale power rate estimated under (b)
of this section.
Register COMMERCE 3 MC 94.170
(e) The wholesale power rate will change from year to
year, for reasons which include:
(I) changes in the costs described in (c) of this
section;
(2) changes in the amount of electrical energy
estimated to be sold and contracted for sale;
(3) changes in the number of power projects producing
electrical energy in a fiscal year;
(4) deviations between estimated and actual costs.
(f) The wholesale power rate is the rate charged to a
wholesale power customer purchasing electrical energy from
a project under an agreement or contract with the Authority.
(g) The wholesale power rate charged will not vary for
electrical power, whether firm or non-firm power, during a
fiscal year for ectrical energy sold or contracted for
sale in that fiscal year.
(h) (1) Except as provided in (h) (2) this section,
a wholesale power customer purchasing electrical energy from
a power project must pay at the wholesale power rate either
for all of the electrical energy delivered or for the electrical
energy estimated to be sold to that customer, whichever is
greater.
(2) If the authority is unable for a period of
extending beyond the end of a fiscal year to supply all
the electrical energy from a project which has been estimated
to be sold or contracted for sale, then the wholesale power
customer contracting to purchase that electrical energy need
only, during the period of inability in the succeeding
fiscal year to supply that electrical energy, pay at the
wholesale power rate for that electrical energy which is
actually delivered or deliverable, provided that:
(A) a periodic payment by a wholesale power
customer may never under any circumstances be less than a
periodic payment which is the lower of either the customer's
porportionate share of the program debt service as defined
in (i) of this section or the amount which the customer
would have been obligated to pay the authority if the amount
contracted to be sold for that period of time were delivered,
and
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Register COMMERCE 3 MC 94.170
3 MC 94.175
(B) the cost borne by the wholesale power
customer to furnish alternative energy to its own customers
to replace the electrical energy not delivered may be offset
against the minimum obligation under (h) (2) (A) of this
section when that minimum obligation exceeds the costs of
the delivered electrical energy, unless the authority is
unable to purchase business interruption insurance to cover
debt service on the largest two projects within the energy
program for Alaska.
(i) For purposes of this section,
(I) the "customer's proportionate share of the
program debt service" shall be calculated by multiplying (A)
the total of all debt service (as defined in AS 44.83.425)
incurred for all power projects within the energy program
for Alaska by (B) a fraction in which the numerator is the
firm annual energy of the power project supplying electrical
energy to the customer and the denominator is the firm
annual energy of all power projects within the energy program
for Alaska,
(2) the "firm annual energy" means the best data
available indicating the lowest amount of firm electrical
energy which a power project has produced in one fiscal
year, or, such data are not available, an amount reasonably
estimated by the authority to be capable of being produced
in one fiscal year. (Eff. / /82, Reg. )
Authority: AS 44.83.080
AS 44.83.398
3 MC 94.175. EXTRAORDINARY MAINTENANCE AND EQUIPMENT
REPLACEMENT COSTS.
Extraordinary maintenance and equipment replacement costs
are those costs which do not occur on an annual basis or which
in the ordinary course of events and in the absence of
negligent operation are neither reasonably foreseeable nor
anticipated. An extraordinary maintenance or equipment
replacement cost occurs in the event of the failure of or to
prevent the lure of a single system or component of a
power project critical to (I) the continued delivery of
electrical energy under the terms of the contract entered
into between the Authority and another party or (2) the
protection of public safety, and which is in excess of an
amount speci in the operation and maintenance agreement.
(Eff. / /82, Reg. )
Authority: AS 44.83.080
AS 44.83.398
(' (
Register I 1981 ALASKA POI'lER AUTHORITY
CHAPTER 94.
ALASKA POWER AUTHORITY
Article
1. Notice to Public (3 AAC 94.010 --3 AAC 94.020)
2. Actions Other Than Loans (3 AAC 94.050 --3 AAC 94.067)
3. Loans from Appropriated Funds (3 AAC 94.070 --3 AAC
94.120)
4. Energy Program for Alaska (open)
5. Rural Electrification (3 AAC 94.200 --3 AAC 94.260)
6. General Provisions (3 AAC 94.900)
Sec. 1. 3 AAC 94.120 is amended to read:
3 AAC 94.120. LOANS FROM OTHER APPROPRIATED FUNDS.
The provisions of 3 AAC 94.070 --3 !\P.C 94.110 relating to loans
from the power project fund apply also to all other loans made
by the authority from funds appropriated for that purpose by the
legislature, except loans from the rurul electrification re-
volving loan fund which are subject to the provisions of 3 AAC
94.200 --3 AAC 94.260 (Eff. 9/13/81, Reg. 79 am / 7 , Reg.
Authority: AS 44.83.080
AS 44.83.361
AS 44.83.363
Sec. 2. Article 4. GENEML pnOVISIONS of this chapter is
redesignated as Article 6.
( (
FINDING OF EMERGENCY
The Alaska Power Authority finds that an emergency exists and
that the attached new regulations and amendments to existing
regulations are necessary for the immediate preservation of the
public peace, health, safety, or general welfare. A statement
of the facts constituting the emergency is:
IMPLEMENTATION OF
RURAL ELECTRIFICATION REVOLVING LOAN FUND
1. Passage of Chapter 118 SLA 1981 required the
Authority to adopt regulations for the administration of the
Rural Electrification Revolving Loan Fund, including the speci-
fication of numerous actions to take place before loans from the
fund can be approved.
2. Loans from the fund will permit utilities to use
the proceeds to provide extensions of electric service to new
customers and service areas. Availability of loan proceeds
following enactment of these emergency regulations will allow
those utilities to plan or initiate construction of service line
extensions. Delay in the implementation of the emergency regu-
lations, especially when linked to the time necessary to process
loans, will prevent applicants from initiating construction at
the beginning of the next construction season. Adoption of
these emergency regulations and formulation of the loan pro-
cedures will enable utilities to start construction at the
beginning of that season.
3. Regulations are needed in order to clarify the
contents of what an application for a loan must contain as well
as provide the method for selection of a citizens advisory panel
and describe the makeup of and standards of review for the
reviewing bodies. These regulations must precede execution of
any loan agreements.
4. Unless emergency regulations are adopted .substan-
tial delays in effectuation of the rural electrification program
will occur to the detriment of the welfare of the citizens of
Alaska.
( (
Sec. 3. 3 AAC 94 is
na ted as Art ic Ie 5 I Loans
Loan Fundi to read:
amended by add ing new sections desig-
from Rural Electrification Revolving
ARTICLE 5. LOANS FROM RURAL ELECTRIFICATION
REVOLVING LOAN FUND
Section
200.
210.
220.
230.
240.
250.
260.
Use of loan proceeds
Rural electrification revolving loan fund application
Review by executive director
Review by loan advisory committee
Action by authority
Te rm s 0 flo a n s
Inspection of records and facilities
3 AAC 94.200. USE OF LOAN PROCEEDS.
(a) Honey loaned to an electric utility from the
rural electrification revolving loan fund may only be used
to pay for capital improvements which extend the electric util-
ity's transmission and distribution system to customers not pre-
viously receiving service from a public utility and may not be
used to prov ide e lec tri c powe r gene ra tion, fue 1 storage fac i 1-
ities, or for reconstruction or upgrade of existing transmission
and distribution lines.
(bl A utility receiving a loan fran the rural electrifica-
tion revolving loan fund must provide from other moneys available
to it for construction of the project an amount equal to that re-
quired for acquisition and installation of one transformer, one
span of 1 i ne ,one pole I and one se rv i ce drop for each cus tomer
for: whom immediate service is provided. Any additional cost of
pLoviding service to customers receiving immediate service not
paid by the customer may be paic'l Eae with proceeds of the
loan. (Eff. / / I Ref]. )
Author-ity: AS 44.83.080
AS 44.~3.361
3 AAC 94.210. RURAL ELECTRIFICNrION REVOLVING LOAN FUND
r\PPLICNl'ION. (a) An application fOl: a loan from the rural elec-
trification revolving loan fund must at the time of filing:
(1 I sta te the legal name of the appl ican t and the leg-
al authority undet-which it \o/as creCltr:cl and other infor-nation
that will demonstrate that the applicant is .an eligible borr-ower
under AS 44.83.361 including evidence that it holds a certificate
of pub1 ic convenience and necess i ty issued by the Alaska Publ ic
Utilities Commi!;;sion allowinfJ it to provide electric service to
the area within which the proceeds of the loan will be used;
-2-
, .
( (
(2) include a cet"tified copy of the
other official action by the govet"ning body of
authorizing the application for a loanj
t"esolution or
the applicant
(3) state the name, title, and address of the official
cot"t"espondent or representative of the applicant fot" put"poses of
the application;
(4) state the names and titles of the principal offic-
ers, including the chief executive officer or general manager, of
the applicantj
( 5 ) s tat e the n am e and add res s 0 f the eng i nee r I leg a 1
counse 1, f i na nc i al adv isor or consu 1 tan t, and any managemen t,
eng ineer ing, des ign I econom ic or other adv isors or consu 1 tan ts
which the applicant may have for the project;
(6) state the total amount of loan requested;
(7) provide a description of the use to which the loan
funds will be applied, including but not limited to: "
(A) location;
(B) a narrative describing the physical compo-
nents and the electrical characteristics of the pt"oject;
(e) a comprehensive statement clearly demonstrat-
ing public need for the project and the project's eligibil-
ity under AS 44.83.361;
(D) the proposed allocation of loan funds to each
purpose or to each phase of a project and the expected date
of completion of each;
(E) information necessat"y in order that the loan
advisory committee may considet-the matters required by A.S
44.83.363 and by 3 AAC 94.230 incluuing:
(i) a description of each structure to be
served and whether it is temporary or permanent for
each customer identified in (12) of this subsection and
a 11 0 the r c u s tom e r s t 11 e a p p 1 i can t ex pee t s will be
served by the extension of electci.c service \.,.ithin the
10-yeat" period following completion of the project;
-3-
(
( i i )
ted fu tu re use
extension of
population and
if any;
(
a description of the present and expec-
of land in the area to be served by the
electric service including residential
commercial facility density and zoning,
(iii) a description of the terrain 't/hich
will be crossed by the extension of electric service
and information as to the ownership status of each par-
cel to be crossed, including information as to any
easemen ts and r igh ts ·of way g ran ted or expec ted to be
granted;
(iv) a description of all other utility ser-
vice available or expected to be available in the area
to be served by the extension of electric service;
(v) a projection of the number of new custo-
mers wh ich the appl ican t expects to be served by the
extension of electric service for each of the 10 years
following completion of the project and arr estimate of
the cost to provide a service connection to each of
those cus tomers;
( 8 )
de term ine:
prov ide informa t ion from wh ich the au thori ty may
(A) tha t the proj ect is techn ica lly and econom-
ically feasible; and
(8) that the applicant has the ability to gen-
erate sufficient revenue to repay the loan;
(9) state the status of any proceedinCJs necessary for
the applicant to obtain permits, certificCltes or other authoriza-
tions fran any federal, state or local agency necessary to begin,
complete, and operQte the project;
(10) provide financial statements of the applicant and
any other party or parties acting as Cjut\rantor of the loan, un-
less otherwise reguired by resolution of the authority; these fi-
nancial statements must include, where possible, balance sheets
and profit and loss statements and must be certified by an inde-
pendent certified public accountant;
(11) in the case of an investor owned electric utility,
p~ovide a business Ilistory of any person or entity owning or con-
trOlling 10 percent or more of the applicant's stock or business;
-'-1-
c (
(12) identify and state the location of each customer
who has applied for service and for whom immediate service is ex-
pected to be provided and state whether those customers are re-
ceiving electric service from a public utility at the time of the
loan application; and
(13) provide information from which the authority may
determine that the applicant has the financial ability to provide
from other money available to it an amount equal to that required
for acquisition and installation of one transformer, one span of
line, one pole, and one service drop as required for each custom-
er to whom immediate service will be provided.
(b) An applicant must, in addition to the application, pro-
vide in timely fashion other information which may be requested
by the executive director of the authority.
(c) Applications must be submitted to the Executive Direc-
tor, Alaska Power Authority, 334 West Fifth Avenue, Anchorage,
Alaska 99501. (Eff. / / , Reg. l
Authority: A.S 4 4 • 0 3 • 0 8 0
AS 44.83.361
AS 44.83.363
3 l\AC 94.220. REVIE~'l BY EXECUTIVE DIRECTOR. (al Upon re-
ceipt of a complete application and other information which has
been reques ted or requ ired, the e xecu t i ve d i rec tor sha 11 rev i ew
the application.
(b) The executive director, after reviewing the application
shall make a recommendation which includes:
(1) written comments analyzing whether:
(Al the project will meet the needs of the area
to be served by the project and will beneEit the area;
( B) the proj ec t is techn ica lly and econom ica lly
feasible;
(C) alternatives to the project exist which would
result in extension of electric service by a different meth-
od I or by an en t i ty other than the appl ica n t wh ich cou Id
reasonably be expectec'l to provide, within i1 time schedule
comparable to the project, electric service at a lower cost
to the consLLllcci
-s-
( (
(D) the applicant has ilpplied for or has been
awarded necessary permits or certificates;
(E) the project is financially feasible; and
(F) the applicant has the ability to provide from
funds other than'the proceeds of the loan an amount equal to
that required for acquisition and installation of one trans
former, one span of line, one pole, and one service drop as
required for each customer for whrnl immediate service is ex-
pected to be provided.
(2) a statement setting out proposed loan terms and
cond it ions; and
(3) other comments which the executive director, in
his discretion considers appropriate.
( c 1 Th ere c omm end a t ion 0 f the e x e cut i ve d ire c tor m u s t be
t ran 5m itt edt 0 the aut h 0 r i t Y f 0 t:" act ion wit h in 6 0 day s aft era
complete application has been received. (Eff. / /1 Reg.
)
l\uthol:"ity: l\S 44.83.080
AS 44.83.361
l\S 44.03.363
3 AAC 94.230. REVIEI-/ lW LOAN ADVISOHY COr'l~lITTEE. (al
ylithin 15 days after a complete application has been received,
the executive directol:" acting for the authol:"ity \vi11 appoint a
loan advisOl:"y committee composed of three individuals each of
\v h am I:" e sid e s wit h i nth e c e r t i f i cat e cl are a s e r v e d by the a p p 1 i -
cant l but none of whom may be a person identified in 3 AAC
94.210(a)(12).
(b) ~Iembers of the committee may be selected by the execu-
tive director from lists of nominees provided by the applicant
and by commun i ty groups and in te res ted pe rsons, bu t whe re pos-
sible the committee will include no more than one individual who
repl:"csents directly any 'of the follO\vint]:
{ll State of Alaska
{2l bOl:"ough or city
(ll villJge council
( (
( 4 ) IRA co un c i 1
( 5 ) co n s LUll e r s
(6) utilities
(7) business or labor organizations
(8) finance & real estate professions
(9) regional corporation
(10) village corporation
(11) non-profit organization
(12) federal government
(c) The committee shall choose a chairman from among its
members and within 30 days of appointment by the executive direc-
tor mu 5 t I follow ing reasona bl e no t ice to the publ ic I hold at
least one public meeting in the area served by the applicant.
(d) The committee's recommendation concerning the loan must
bet ran 8m itt e d by the c h a i rm ant 0 the aut h 0 r i t Y wit h i n 4 5 day s 0 f
appointment. In making its recommenc3ation the committee shall
consider
(1) permanence of the premises to be served by the ex-
tension;
(2) land use patterns in the area;
(3) access for the line that would be installed with
loan proceeds;
(4) availability of other utility service in the area;
and
(5) the economic feasibility of the extension of elec-
tric service with the proceeds of the loan.
A favoruble cecommendation from the loan advisory committee shall
be bused on a determination that development in the area of the
proposed extension of electric service is likely to provide for-
(ull rep.:lYlnent of the 10Lln undet' r\s 44.f33.J6l(J) \vithin 10
-7-
.... !'
(
years. {Ef E. / / , l"{e 9 .
(
\
Authority: AS 44.83.080
AS 44.83.361
AS 44.83.363
3 Al\C 94.240. ACTION BY l\UTliOHITY. (a) The authority will,
in its discretion, request additional information during its con-
sideration of an application and postpone action pending receipt
of that information.
(b) The authority will, in its (liscretion, retain a com-
pleted application under advisement Eor a reasonable period of
tim e.
(c) The authority will consider each application which has
been transmitted to it for action and will determine whether:
(1) the money will be used to pay the costs of activi-
ties vJhich are eligible under AS 44.83.361 and the applicant is
an eligible borrower under AS 44.83.361;
. ( 2 ) the pro j e c tis t e c h n i c Ll 11 y and e co n om i c a 11 y f e a s -
iblei
(3) alternatives to the project exist which would re-
sult in extension of electric ser-vice by a different method or by
an entity other than the applicant which could reasonably be ex-
pected to provide, within a time schedule comparable to the pro-
ject, electric service at a lower cost to the consumer;
(4) the needs of and benefits to the area to be served
by the project ace greater than the needs of and benefits offered
to other areas of the state by a project for which sponsors may
also seek loan funds from the author-ity if there is not suffic-
ient money in the rural electrification revolving loan fund for
both projects, provided that this determination can be made based
o fl i n f 0 nn a t ion the n e xis tin 9 con sid e r i n (J S U c h f. act 0 r s as the n wn -
ber of customers to be served by the project, the cost to serve
each customer and the availability of altct-native sources of cap-
ital to the respectivc utilities;
(5) the applicant has or will h~ve sufficient ~evenue
frQn all sources to repay the loan;
(6) the project is finCincic11ly ft::~Clsibh~;
.' ( (
(7) the appl ican t has thc abi 1 i ty to prov ide from
other than the proceeds of the loan an amount equal to that re-
quired for acquisition and installation of one transformer, one
span of line, one pole, and one service drop for each customer
for whom immediate service is expected to be providedi and
(8) approval of the loan has been recommended by the
loan advisory committee.
(d) The authority will consider the recommendation of the
loan adv isory COmm i t tee and the factors cons idered by the 'comm i t-
tee in reaching its determination, but is not required to follow
the recommendation of the committee.
(e) The final decision of the authority to approve or dis-
approve an application for a loan will be in the form of a writ-
ten resolution which contains the findings required by this sec-
tion and which the executive director shall transmit to the ap-
plicant.
(f) I f the au thor i ty approves an appl ica t ion; it wi 11 in-
struct the executive director to enter into a loan agreement with
the applicant under conditions complying with 3 AAC 94.250 and
provisions specified in the resolution and upon receipt by the
executive director of a certified copy of the resolution or other
official action by the governing body of the applicant agreeing
to the terms of the loan. (Ef f . / / I Reg. )
Authority: AS 44.83.080
AS 44.83.361
AS 44.83.363
3 AAC 94.250. TERMS OF LOANS. (Cl) The terms of loans
mnde by the authority from the rur~l electrification revolv-
ing loan fund will be contained in the authority's resolu-
t i on a p pro v i n g the a p p 1 i cat i on and w ill com ply wit h the co n d i -
tions of this section.
(b) Loans must beat:' an interest rate equal to tlVO per-
cent per annum on the unpaid balance. Interest paid to the
<:luthority shall be recovered by the electdc utility receiving
the loan th rough a su rcha rge to the regu In l:" e lec t r ic l:"a tes pa id
by the cus tomers se rved by the elect ric se rv ice ex tended \>, i th the
loan proceeds. Intcl:"est pa~nents to the authority are due on the
first day of the calendar year following the, extension of elect-
ric service and on the fil:"st day in eact) year thereafter until
paid in full.
-lj-
" ( (
(c) Loans from the fund will have a maturity date not
to exceed 20 years following the first day of the calendar year
following the extension of service but will be made only in con-
nection with projects where full repayment of the loan is likely
to be made wi th in ten yea rs. Paymen ts on the unpa id ba lance of
the principal of the .loan arc deferred until the first day of the
calendar year following the extension oE electric service. At
. that time and annually thereafter excert as provided in (d) of
this section, the annual principal repayment amount due vlill be
calculated as provided in paragraphs (1) (4) of this subsec-
tion.
(1) The average cost to the electric utility
to acquire and install one transformer, one span of
line, one pole, and one service drop during the initial
30 day period following the extension of electric service
shall be calculated by the electric utility and verified by
the authority. Subsequent to the first year following the
extension of electric service, and on the first day of each
year until the loan is fully repaid, a recogniz~d construc-
tion cost index for the area will be used to adjust the
amount specified for the first year under this paragraph.
( 2 ) Til e a ve rag e cos t tot h eel e c t ric u t il i t Y
to provide a service connection to customers first
served during the one year period following completion
of the extension of electric service shall be calculat-
ed by the electric utility and verified by the autho-
rity. Subsequent to the first yeur following the extension
of electric service, and on the first day of each year until
the loan is fully repaid, the amount specified in this para-
graph will be recalculated for each new one year period.
(3) If the amount calculated in (2) of this sub-
section exceeds the amount calculated in (l) of th is sub-
section, no principal payment i~) clue.
(4) If the amount calculated in (1) oE this sub-
section exceec1s that calculated in (2) of this subsection,
the difference will be multiplied by the number of new cus-
tom Q r s fir s t s e r v e cl d uri n (J the [> r e c e din g
year by the electric service finunccd by the loan. The pro-
duct is the principal rep.1ymcnt clue .1S an .:1nnua1 principill
re[>a}'lncnt.
(d) 1(, within 10 years il[tcr tile Cirst cJily ot the
c ill end a r yea r follow i n g the ex ten s i I) n of 5 e r vic c s, at 1 e as t 50'!
of the principal. on I:he 10.1n is rcr,lid to the authority, the!", the
-10-
.,..,
,."
(
(
\
method of calculating the annual amount of principal due under
(c) of th is sect ion sha 11 apply for the rema 1n 1 ng term of the
loan. The full amount of the principal shall be paid by the end
of the tenn of the loan. If, within 10 years after the first day
of the ca lenda r yea r follow ing the ex tens ion of serv ices, less
than 50 % of the pr inc ipal on the loan has been repa id to the
au thor i ty , then equal annua 1 ins tallmen ts in the amoun t of the
principal remaining due shall be paid fot' the remaining term of
loan such that the principal is fully repaid by the end of the
term of the loan.
(e) The loan must be supported by appropriate documen-
tation which may include, without limitation, a loan agreement,
bonds, notes or other documentation, in a form which is satisfac-
tot'y to the authority evidencing that the loan is secured by one
or more of the following:
(1) a pledge of the revenues of the borrower
or the project which may be subordinate to operating
and maintenance expenses and certain other expenses of
the borrower or the project as specified by the autho-
rity;
(2) a lien, mortgage, security interest, collat-
eral agreement or other encumbrance on the project or other
assets, rights or interests of the borrower which, in the
disc~etion of the authority, may be subordinate to other en-
cumbrances; or
rower.
( 3 )
(Ef f.
a pledge of
/ / , Reg.
the taxing
)
Authority:
power of the
AS 44.83.080
AS 44.83.361
AS 44.83.363
bor-
3 AAC 94.260. INSPECT ION OF RECORDS AND FACI LITI ES. The
provisions of 3 AAC 94.110 concerning inspection of records and
fae i 1 i ties of appl ican ts for loans from the power proj ec t fund
apply also to applicants for loans frOID the rural electrification
revolving loan fund. (Eff. / / , Reg. )
* Se c . iJ.
to read:
Authority:
- L 1.-
AS 44.83.080
AS 44.83.361
( (
(11) "certified" as used in AS 44.83.36l{b) and Article 5 of
this chapter refers to a public utility providing electric ser-
vice which holds a certificate of public convenience and neces-
sity issued by the Alaska Public Utilities Commission pursuant to
AS 42.05.
(12) "extension of electric service" as used in AS
44.83.36l(b) and Article 5 of this chapter means the point when
at least three nelv customers begin receiving electric service
through an extens ion made in connect ion wi th a loan frorn the
rural electrification revolving loan fund.
(13) "immediate service" as used in AS 44.83.361{b) and
Article 5 of this chapter means electric service provided within
30 days of completion of the extension of electric service made
in connection with a loan fron the rural electrification revolv-
ing loan fund. (Eff,4/13/79, Reg. 70; am 9/13/81, Reg. 79;
a'll / / , Re g . )
Authority:
1 ')
1-
AS 44.83.080
AS .4 4 • 8 3 • 3 6 1
,
,
) ,
, )
I
, \
) )
\ ,
A-3
CERTIFICATE OF AUTHENTICITY --BY-LAlvS
STATE OF ALASKA
ss.
THIRD JUDICIAL DISTRICT
I, ERIC P. YOULD, Executive Director of the Alaska
Power Authority (the "Authority") HEREBY CERTIFY as follows:
That the document attached hereto is a true and
correct copy of the Authority1s By-Laws including any and
all amendments thereto to date.
IN WITNESS WHEREOF, I have set my hand and caused
the seal of the Authority to be impressed hereon this ~~
day of February, 1982.
II / .
" )
I I
ERIC P. YOULD \
Executive Director
(S E A L)
SUBSCRIBED AND SWORN to before me this
of February, 1982.
day
,.-,
ALASKA POWER IWTHORITY
Resolution 1981-......;;.---
Resolution of the Alaska Power Authority
amending the By-laws of the Authority to
conform to slative alterations.
WHEREAS, the statutes regulating the Alaska Power
Authority (the "Authority") were amended by the First Session
of the Twelfth Alaska Legislature, specifically, AS 44.83.030
and 44.83.040; and
l<JHEREAS, the statutory revisions require amendment
of the By-laws of the Authority;
NOH, THEREFORE, BE IT RESOLVED by the Authority:
That Article III, Section 2 and Section 3 of the
By-laws shall be amended to read as follows:
Section 2. Number of Directors, Tenure, and
Qualifications. The Board of Directors shall consist
of the following seven directors: the Director of the
Division of Budget and ~lanagement, three Commissioners
of principal executive departments appointed by
Governor, and three public members appointed by the
Governor. Each Director fore entering upon his
duties shall take and subscribe to an oath to perform
the dut s of his office faithfully, impartially and
justly to the best of his ability. A record of the
oath shall be filed in the office of the Governor.
Section 3. Officers and Quorum. During the
annual meeting the Director~ shalf sele~t one of their
number as Chairman, and may elect other officers as
desirable, including anyone of the members as Vice-
Chairman. The Directors shall also elect a Secretary
and a Treasurer who need not be Directors, and the
same person may be elected to serve both as Secretary
and Treasurer. The Secretary or Treasurer may also
serve as the Executive Director and shall, in any
event, perform at least the duties set forth in
Article VI. Other offices may be established by
resolution of the Board. The terms of office shall
extend until the next annual meeting of the Authority
or until successors have been elected and qualified
unless otherwise specif by resolution of the Board,
except that those off ers incumbent on the date of
adoption of these By-laws shall serve until the second
annual meeting following adoption of the By-laws. The
powers of the Authority are vested in the Directors,
and four Directors of the Author constitute a quo-
rum. Action may be taken and motions and resolutions
adopted by the Authority at any meeting by the affirm-
ative vote of at least four Directors. A vacancy in
the directorship of the Authority does not impa the
right of a quorum to exercise all the powers and
perform all the duties of the Authority.
This resolution having been submitted to a vote, the
vote thereon was as follows:
Yeas: t~ss)'s. Conway, Lehr, r~ueller & Webber
Nays: None ~~~--------------------------------
Absent: Mssrs. Weeden & Ward
And the resolution was declared adopted on this, the
18th day of --~~~~--------------, 1981.
ALASKA POWER AUTHORITY
By:
"'.~
~~~--
By:
Secretary \
-2-
ALASKA POWER AUTHORITY
BY-LAWS
ARTICLE I
Definitions
"Authority" means the l\laska Power Authority.
"Board" means the Board of Directors of the Alaska
Power Authority.
"Chairman" means the Chairman of the Board of
Directors of the Alaska Power Authority.
"Executive Director" means the Executive Director of
the Alaska Power huthority.
ARTIC:r:..E II
Identification and Offices
Section 1. Name. The name of the Authority is The
"Alaska Power Authority" (hereinafter called the "Authority")
Section 2. Seal. The seal of the Authority shall
be circular in form and mounted upon a metal disc suitable for
impressing the same upon paper. About the upper periphery of
the seal shall be the name of the Authority, in the center of
the seal shall be an outline of the State of Alaska, on the
lO'der iphery shall be the words (date formed) and imme-
diately above the date shall be the words "corporate seal".
Section 3. Fiscal Year. The fiscal year of the
Author y shall be the same as the fiscal year of the State of
Alaski1.
Section 4. Offices. The principal office of the
Authority shall be located in the Municipali of Anchorage,
Alaska. The Authority may have such other offices as the
Board may designate or as the business of the Authority may
require from time to time.
ARTICLE III
Board of Directors
Section 1. l1anagement of Authority. The Board of
Directors shall manage the business affairs of the Authority.
The Board shall se a person to act as Executive Director.
Section 2. Number of Directors Tenure and li-
fications. The Board shall consist of the following seven
Directors: the Director of the Division of Budget and Manage-
ment, three Commissioners of principal executive departments
appointed by the Governor, and three public members appointed
by the Governor. Each Director fore entering upon his
dut s shall take and subscribe to an oath to perform the
dut s of his office faithfully, impartially and justly to the
best of his ability. A record of the oath shall be filed in
the office of the Governor.
Section 3. Officers and Quorum. During the annual
meeting the Directors shall select one of their number as
Chuirman and muy elect other officers as desirable, including
anyone of the members as Vice-Chairman. The Directors shall
also elect a Secretary and a Treasurer who need not Direc-
tors, und the same person may elected to serve both as
-2-
secretary and Treasurer. The Secretary or Treasurer may also
serve as the Executive Director and shall, in any event,
perform at least the duties set forth in Article VI. Other
offices may be established by resolution of the Board. The
terms of office shall extend until the next annual meeting of
the Authority or until successors have been elected and
qualified unless otherwise specif by resolution of the
Board, except that those officers incumbent on the date of
adoption of these By-laws shall serve until the second annual
meeting following adoption of the By-laws. The powers of the
Authority are vested in the Directors, and four tors of
the Authority constitute a quorum. Action may taken and
motions and resolutions adopted by the Authority at any
meeting by the affirmative vote of at least four Directors. A
vacancy in the directorship of the Authority does not impa
the r ht of a quorum to exercise all the powers and perform
all the dut s of the Authority.
Section 4. Vot Each member of the Board in
------~
attendance shall have the right to cast one vote on any ques-
on voted upon during the course of a meeting. Only those
members present may vote. All votes shall be taken and re-
corded in a manner which reflects how each Director has voted.
ARTICLE IV
Meet
section 1. Annual Meeti The annual meeting of
the Board sllall be held in the month of April of each year at
-3-
the place and on the date in the month of April, as fixed by
the Chairman by telegraphed or written notice to the members
transmitted at least five days prior to the date of such
annual meeting.
Section 2. Regular Meetings. The Board shall hold
regular meetings at such times and places as may be estab-
lished by resolution of the Board, but in the absence of such
designation then at a place and on a date as fixed by the
Chairman. The members of the Board shall have at least five
days pr notice of regular meetings; designation of date,
time, and place of meeting at the previous regular meeting
constitutes suffic t notice to members of the Authority. If
a Waiver of Notice and Consent of the absent member is pro-
vided, then any and all business may be transacted even though
notice of the meeting is not provided to Authority members.
Section 3. Sial Meet s. Special meetings may
be called upon request of the Chairman or upon the request of
any two members of the Board for the purpose of transacting
any business designated in the call. The call for a special
meeting may be wired or mailed to the business or home address
of the members of the Board at least 48 hours prior to the
date of such special meeting. At such special meeting no
business shall be cons red other than as designated in the
call, but if the members not sent have signed a Wa of
Notice and Consent to Meeting, a quorum otherwise being
-4-
present, any and all business may be transacted at such
special meeting. Public notice for a special meeting shall be
accomplished pursuant to Section 4.
Section 4. Public Notice. Public notice of all
Board meetings shall be given by publication in a newspaper of
general circulation not more than two weeks prior to the
meeting and not less than five days prior to the meeting; sa
notice shall be designed to give the public notice of the
meeting and of the general topics to be discussed and con-
sidered at the meeting, and shall include a proposed agenda
the meeting.
Section 5. Executive Sessions. Executive sessions
may be held in .accordance with the procedures and with respect
to the expected subjects as set forth in, and in accordance
with, AS 44.62.310.
ARTICLE V
Order of Business
The order of business at a meeting of the Board
shall be determined by the Chairman.
ARTICLE VI
Executive Director
The Executive Director shall be the principal
operating officer of the Authority and, subject to the control
of the Board of Directors, shall in general supervise and
control all of the business and affairs of the corporation.
-5-
The Executive Director may also be elected Secretary-Trea-
surer. The Secretary of the Board shall keep the minutes of
the meetings of the Board of Directors and retain custody of
such other records as Authority shall obtain. The Trea-
surer shall have charge of the custody and be responsible for
all funds and securities of the corporation.
ARTICLE VII
, Contracts Checks and sits
Section 1. Contracts. The Board may authorize the
Executive Director to enter into any contract or execute and
deliver any instrument in the name and on behalf of the
Authority, and his authority to do so may be general or
confined to specific instances.
Section 2. Loans. No loans shall be contracted on
behalf of the Authority and no evidence of the indebtedness
shall issued in its name un 5S authorized by a resolution
of the Board. Such author may be general or confined to
specific instances.
Section 3. Checks, Drafts, etc. All checks,
drafts, or other orders for the payment of money, notes or
other evidences of indebtedness issued in the name of the
Authority shall be signed by the Executive Director or other
agents of the Authority and in such a manner as provided by
the resolution of the Board of Directors.
-6-
Section 4. Depos s. All funds of the Authority
not otherwise employed shall be deposited from time to time to
the credit of the corporation in such financial institutions
as the Board may select or invested as the Board may direct.
ARTICLE VIII
Amendments
These By-laws may be altered, or repealed and new
By-laws adopted by the Board at any regular or special meeting
of the Board.
APPROVED by the Board of Directors of the Alaska
Power Authority, by unanimous vote, the 17th day of March,
.",
1978, at Juneau, Alaska.
ALASKA pm'lER AUTHORITY
By:
By: c-,\? \JJl
Secretary \
-7-
ALASKA POWER,AUTliORITY
....,04 :NEST 5th AVENUE -ANCHORAGE, ALASKA 99501
Theodore G. Smith
Director
Div. of Forest, Land ~nd Water Management
Alaska Department of Natural Resources
323 E. 4th Ave.
Anchorage. AK 99501
Dea r r~r. Smith:
Phone: (907) 277-7641
(907) 277-0851
(907) 276-0001
September 22, 1981 forest, Land &. water Mgmt.
, .. ,
Director's Office
I hereby request the transfer of the water rights associated with the
Terror Lake Hydroelectric Project (Project No. 2743) from the Kodiak
Electric Association (KEA) to the Alaska Power Authority. The effective date of
this transfer should be coincident with the transfer of the Federal Energy
Regulatory COf11mission (FERC) License for the Terror Lake Project from
KEA to the Alaska Power Authority. The application of FERC
for license transfer will be submitted jointly by KEA and the Alaska
Power Authority within the next month. A copy of this letter is being
attached to that application.
Questions regarding this request should be directed to Mr. John
Longacre at the Alaska Power Authority ~il 97~) or Mr. Paul Carrier
at FERC (202-376-9815). 1 ~t.f/
cc: l\~anager,
Kodiak Electric Association
(" C:"'O J Sincerely.
E~ ~~~d~--U
Executive Director
m~"~~~9~~[DJ
Wohlforth & Flint
ALASKA POWER AUTHORITY
334 WEST 5th AVENUE· ANCHORAGE, ALASKA 99501
The Hon. Ernst W. Mueller
Commissioner
Department of Environmental
Conservation
Pouch a
Juneau, Alaska 99811
February 12, 1982
Phone: (907) 277·7641
(907) 276·0001
Re: Transfer of FERC Construction and Operation
License
Dear Commissioner Mueller:
The Alaska Power Authority pursuant to its enabling
legislation at AS 44.83 is applying, along with Kodiak
Electric Association, Inc., for the transfer to the Authority
of License No. 2743 issued by the Federal Energy Regulatory
Commission (FERC) to Kodiak Electric Association, Inc. on
October 5, 1981 for the construction and operation of the
Terror Lake Hydroelectric Project near Kodiak, Alaska. The
Application for Transfer of an FERC license requires a
showing of compliance with Section 9(b) of the Federal Power
Act. That Section of Federal law in turn requires a showing
of compliance with applicable State laws concerning beds and
banks, appropriations, diversions, and use of water for
power purposes. Consequently, the Authority would request a
statement from your Department that transfer of the FERC
license from Kodiak Electric Association, Inc. to the
Authority would not violate and is in compliance with such
applicable State laws mentioned above over which your Department
has jurisdiction.
Very truly yours,
C~.':\~
Eric P. Yould
Executive Director
ALASKA POWER AUTHORITY
334 WEST 5th AVENUE -ANCHORAGE, ALASKA 99501
The Hon. Ronald O. Skoog
Commissioner
Department of Fish &
Game
Subport Building
Juneau, Alaska 99801
February 12, 1982
Phone: (907) 277-7641
(907) 276-0001
Re: Transfer of FERC Construction and Operation
License
Dear Commissioner Skoog:
The Alaska Power Authority pursuant to its enabling
legislation at AS 44.83 is applying, along with Kodiak
Electric Association, Inc., for the transfer to the Authority
of License No. 2743 issued by the Federal Energy Regulatory
Commission (FERC) to Kodiak Electric Association, Inc. on
October 5, 1981 for the construction and operation of the
Terror Lake Hydroelectric Project near Kodiak, Alaska. The
Application for Transfer of an FERC license requires a
showing of compliance with Section 9(b) of the Federal Power
Act. That Section of Federal law in turn requires a showing
of compliance with applicable State laws concerning beds and
banks, appropriations, diversions, and use of water for
power purposes. Consequently, the Authority would request a
statement from your Department that transfer of the FERC
license from Kodiak Electric Association, Inc. to the
Authority would not violate and is in compliance with such
applicable State laws mentioned above over which your Department
has jurisdiction.
~y .tr~~.Y~s~
Eric P. Yould
Executive Director
... ALASKA POWER AUTHORITY
334 WEST 5th AVENUE· ANCHORAGE, ALASKA 99501
The Hon. Wilson L. Condon
Attorney General
State of Alaska
Pouch K
Juneau, Alaska 99811
February 12, 1982
Phone: (907) 277·7641
(907) 276·0001
Re: Transfer of FERC Construction and Operation
License
Dear Sir:
The Alaska Power Authority, in conjunction with
Kodiak Electric Association, Inc., is applying for the
transfer to it of Construction and Operation License No.
2743 issued by the Federal Energy Regulatory Commission
(FERC) to Kodiak Electric Association, Inc. on October 5,
1981 for the Terror Lake Hydroelectric Project. FERC approval
of the transfer of that license requires, among other things,
a demonstration that the transfer of the Project to the
transferee --the Authority --would constitute a permissible
exercise by the Authority of its statutory power to engage
in the business of developing, transmitting, and distributing
power. Such a demonstration is in partial fulfillment of
the FERC requirement that Section 9(b} of the Federal Power
Act be met. Consequently, the Authority requests that you
or your designee sign a statement in substantially the form
which is attached in order that this statement may accompany
the application by the Authority to PERC as soon as possible.
Attachment
Thank you for your attention.
Sincerely,
C· _y.:\~
Eric P. Yould
Executive Director
STATEMENT BY THE ATTORNEY GENERAL
I, Kenneth E. Vassar ,am an Assistant Attorney
General duly designated by the Attorney General to make the
following statements for the purpose of assisting the Alaska
Power Authority apply for the transfer of FERC License No.
2743 issued to Kodiak Electric Association, Inc. on October 5,
1981 concerning the Terror Lake Hydroelectric Project:
1. The Alaska Power Authority is statutorily
authorized pursuant to AS 44.83 to engage in the business of
constructing and operating hydroelectric power projects in
the State of Alaska for, the purpose, among other things,. of
developing, transmitting, and distributing power to wholesale
power customers as provided by State law.
2. Approval by the Board of the Alaska Power
Authority following due public notice and pursuant to the
statutory provisions, regulations and by-laws of the Authority
constitutes a proper exercise of its authority to conduct
business of the nature described in paragraph 1 above.
3. The Alaska Power Authority is a public corporation
of the State of Alaska in the Department of Commerce and
Economic Development but with separate and independent
existence charged with powers and duties including those
enumerated in paragraph 1 above.
Dated: February 26, 1982 WILSON L. CONDON
Attorney General
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KODIAK ElEORIC ASSOCIATION, INC.
KODIAK, ALASKA
RESOLUTION
160-81
WHEREAS, the Board of Directors of Kodiak Electric Association, Inc. adopted
resolutions to request the Federal Energy Regulatory Commission to
transfer the license to construct and operate the Terror Lake Hydro-
electric Project to the Alaska Power Authority in order for them
to use the funds appropriated to proceed with the construction pro-
ject without delay, and also requested the Alaska Power Authority
to accept the license when transfer is approved by FERC,
NOW THEREFORE BE IT RESOLVED, that the Kodiak Electric Association, Inc.
Board of Directors does hereby direct the KEA Manager to take the
necessary actions to effect the transfer of License, PeDDits, Rights
of Ways Permits, Corps of Engineer Permits and any ~her necessary
documents held or owned by KEA.
CERTIFICATION
Marion Soule
IN WiTNESS WHElll:OF'. 1 have hereunto .ubscr~ my na.me and aUlxed the seAl of tnLJ cor?o:raUon thl! 27th day ot
, .. "NQYJ<,~ QQI: 0._,,,,,,,, u/, S3.J
(SEAL)
T.'. FORM 77"()IU
KODIAK ELECTRIC ASSOCIATION, INC.
KODIAK, ALASr-A
RESOLUTION
159-81
WHEREAS, the Board of Directors of Kodiak Electric Association, Inc. filed
application with the Federal Energy Regulatory Commission for
lLcense to construct and operate the Terror Lake Hydroelectric Pro.
ject, and
WHEREAS, the Federal Energy Regulatory Commission has revie"'ed the various
engineering and environmental studie~ and FERC has completed the
environmental impact statement and issued the license to construct
and operate, and
WHEREAS, the Board of Directors of Kodiak Electric Association, Inc. have
accepted the license to construct the Terror Lake Hydroelectric
Project with the stipulations attached thereto, and
WHEREAS, the Alaska Legislature passed Senate Bill 26 which established
appropriations to various state agencies for energy-related pro-
grams and projects. The sum of $81,500,000 for the Terror Lake
Project and various others was appropriated to the power develop-
ment fund of the Alaska Power Authority for those projects, and
i-lHEREAS, in order to use these funds for the above projects and to proceed
with construction, it is necessary that the FERC License to con-
struct and operate the Terror Lake Hydroelectric Project be trans-
ferred to the Alaska Power Authority without delay, and
WHEREAS, the Kodiak Electric Association, Inc. Board of Directors have
requested the Federal Energy Regulatory Commission to transfer
the license to the Alaska Power Authority to construct and operate
the Terror Lake Hydroelectric Project,
NOW THEREFORE BE IT RESOLVED, that the Kodiak Electric Association, Inc.
Board of Directors does hereby request the Alaska Power Authority
to accept the transfer of license to construct and operate the
Terror Lake Hydroelectric Pro~ct fron. Kodiak Electric Association,
Inc. when authorized by the federal Energy Regulatory Commission.
CERTIFICATION
1 .. Hq.rt.9.IL.S..Q.\.!l!~._ ... ___ .. _____ do hert'b,. «rill)' ~t 1 am _. ___ ............ _._ ................... S~cr., .. ry ot
Kod;ak"il';;;·tM·~··~Uon. Inc., aQ eloctrtcal non·protlt <>C>OPttatlve mcmbe.....n.tp oorpon.Uon orp.n.lzed t.nel ex1sUoi under the lawo 01 the
SlAte ot AWLka; that th .. to"'1lolni: II a romplew and correct coPT adopted At a m~ of. the Boe.rd 01 D!re<otofl ot this corporaUon. duty
and pr,,:>en'" called and. held OQ the •. __ 25._ ..... _ ... dA:r ot l:I~rnb5'.r. 1~ .. 8.l; that a qyorurn w"" pren.nl &1 1..',. me<>Ut\i: ~t tho ruolu·
t\c;n II .~, forth 1n the mlnu_ of the mHtinJI and h .. not boa> ~ed "" nlOd1!!ed.
IN ,\\,,'f"l','l:SS Wl{!:'R!;Or, I hue hereunto .ubscrlbed my n.a.me and athxed Ihe .... 1 of thlo "<",,oratlon tl11s ..... 2,} t.h..... day of
..... .i'l.o.vc.:llhe.r ..... _.-... lL.81
T. r. ~QRIII 71·QU,f.
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KODiAK ELECTRiC ASSCX:::IATION, INC.
KODIAK, ALASr'-..A
RESOLUTION
158-81
WHEREAS, the Board of Directors of Kodiak Electric Association, Inc. filed
application 1,.lith the Federal Energy Regulatory Commission for
license to construct and operate the Terror Lake Hydroelectric
Project, and
HHEREAS, the Federal Eneq;y Regulatory COIX'Jission has revieived the various
enGineering and envirof'..mental studies and FERC has completed the
environcental impact statement and irsued the license to construct
and operate, and
WHEREAS, the Board of Directors of Kodiak Electric Association, Inc. have
accepted the license to construct and operate the Terror Lake
Hydroelectric Project with the stipulations, attached thereto, and
WHEREAS, the Alaska Legislature passed Senate Bill 26 which established
appropriations to various state agencies for energy-related programs
and projects. The sum of $81,500,000 for Terror Lake and various
others was appropriated to the power development fund of Alaska
Power Authority for those projects, and
WHEREAS, in order to use these funds for the above projects, and to proceed
with construction it is necessary that the FERC license to construct
and operate the Terror Lake Project be transferred to the Alaska
Power Authority without delay,'
NOll THEREFORE BE IT RESOLVED, that the Board of Directors of Kodiak Electric
Association, Inc. do hereby request the Federal Energy Regulatory
COTI'.mission transfer the license to construct and operate the T(::rror
Lake Hydroelectric P ect to the Alaska PmJer Authority a::; soon as
possible to enable continuation of the project ivithout any delays
of schedules.
CERTIFICATION
Harion Soule
1 ,_,_ .............. , .... " ....... ~ ...... , .. ' . ., ...... ' .... ___ .. , .... , ....... " ....... _ .... __ ,. __________ uo t_.ec~by «':rt1ty that I am ... _ ...... _____ ._._._._., __ ._~. ___ ... "'_ ... Secreta.ry of
Kodiak EIKtnc .A.Poctatlon. Inc .• A.D. eloc1.rlc.d non-profit eo<>pen.t.!\·s me::mlH:nh...ip C'Ort>OraUcn ouranuN and ~xtst1n, under the law. o~ the
Slate of ALuk,,; thAt tho tou~oln& 1.s It.. pomplcte a.n.d CQcrK\ COpy ad ovt.ed a" I. m.ceL!na' Of tho .Board of Dl.rec:ton of th.1s corporaUon. dulY'
LJ Nover:Jber (51
and property CJlU~ and t .. eLd On the d...a,y of , .. -. 1IL .. __ : t.h..&t a quorum wa.s prC!:ent at the rneoetin.l: that tho resolu-
tion 1.0 .et toMh ;a th. min"""," ot m....unll and bu n.ot been re.ocln<!ed or modW<d, 27 t h
l:i "..vITh"'ES9 wuxru::Ol". I have hereunto .ubscnbcd my n.ame and atttxM the seal ot this corporation ilil$ ................. , d .• )" of
.. }3gY.'~,\Il_'t>.~,.r.,,_,_...... 1£.91.
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CERTIFICATE OF AUTHENTICITY --RESOLUTIONS
STATE OF ALASKA )
) s s.
THIRD JUDICIAL DISTRICT )
I, ERIC P. YOULD, Executive Director of the Alaska
Power Authority (the "Authority") HEREBY CERTIFY as follows:
That the document attached hereto is a true and
correct copy of the Authority's resolutions approving the
application to the F.E.R.C. for transfer of license and
approving the acquisition of the Project subject to F~E.R.C.
approval of the transfer including any and all amendments
thereto to date.
IN WITNESS WHEREOF, I have set my hand and caused
the seal of the Authority to be impressed hereon this ~
day of February, 1982 •
ERIC P: YOU~D\
Executlve Dlrector
" ",' (S E A L) , '
SUBSCRIBED AND SWORN to before me this .~ day
of February, 1982.
-for Alaska
es: __ L: hJ"-".--Ft
RESOLUTION NO. 81-9
RESOLUTION OF THE ALASKA POWER AUTHORITY
CONCERNING APPLICATIONS FOR THE TRANSFER
OF CERTAIN F.E.R.C. LICENSES AND PERMITS
WHEREAS, Chapter 118 SLA 1981 established the Energy
Program for Alaska;
WHEREAS, the Alaska Power Authority, pursuant to Chap-
ter 118 SLA 1981, is or may be taking steps to acquire and/or
operate hydroelectric power projects at Green Lake, Swan Lake,
Solomon Gulch, and Terror Lake in the State of Alaska:
WHEREAS, in order to acquire and/or operate a hydro-
electric power project, federal law requires the Alaska Power
Authority to obtain necessary licenses or permits from the
Federal Energy Regulatory Commission (FERC) relating to that
hydroelectric power project;
WHEREAS, FERC has issued the following licenses:
(1) Green Lake Hydroelectric Project, Project
#2813, originally issued AprilS, 1979 to the City and Borough
of Sitka,
(2) Swan Lake, Project #2911, originally issued
July 17, 1980 to the City of Ketchikan d/b/a Ketchikan Public
Utilities,
(3) Solomon Gulch Hydroelectric Project, Project
#2742, originally issued June 21, 1978, to Copper Valley Elec-
tric Association, Inc., and
· . ..
(4) Terror Lake Hydroelectric Project, Project
#2743, originally issued September 30, 1981 to Kodiak Electric
Association, Inc.;
WHEREAS, it is anticipated that each of the license
holders described above will need to obtain further FERC permits
or licenses to operate the hydroelectric power project for which
it holds a license;
WHEREAS, each of the respective governing bodies of
the City and Borough of Sitka, the City of Ketchikan, the Copper
Valley Electric Association, Inc. and the Kodiak Electric
Association, Inc. needs to take certain actions and comply with
pertinent law, ordinances, regulations and bylaws in order to
.. effect the transfer of tit to property relating to the rele-
vant hydroelectric power project described above, and those
actions have not yet been taken;
NOW, THEREFORE, BE IT RESOLVED by the aska Power
Authority that:
1. The Executive Director of the Alaska Power
Authority is authorized to take a steps necessary for the
Alaska Power Authority to acquire and/or operate the hydroelec-
tric power projects described above.
2. The steps authorized to be taken under (1) above
with respect to each of the hydroelectric power projects are in
addition to those steps authorized to be taken in e ting the
transfer of any FERC permits or licenses and are further con-
tingent upon each of the respective governing bodies of the City
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and Borough of Sitka, the City of Ketchikan, Copper Valley
Elec Association, Inc. " and Kodiak Electric Association,
Inc., taking all actions necessary to initiate the transfer
title to the Alaska Power Authority of the relevant ject
described above, including equipment and component s,
appurtenant land, necessary easements, and all other property or
interests in prope necessary and relating to the acquisition
and/or operation of that hydroelectric power project.
THEREFORE, this resolution having been submitted to a
vote, the vote thereon was as follows:
Yeas: ~1ssrs. Conway, Weeden, Webber, Lehr, Mueller
Nays:
Absent: t1ssrs. Ward and Schaeffer
And the resolution is declared adopted on this, the
2nd of October, 1981.
ALASKA POWER AUTHORITY
By:
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RESOLUTION NO. 1982-6
RESOLUTION OF THE ALASKA POWER AUTHORITY
AUTHORIZING ACQUISITION OF THE TERROR LAKE
HYDROELECTRIC PROJECT PURSUANT TO THE ATTACHED
ACQUISITION AGREE!1F,i:~T, AND AUTHORIZING THE
EXECUTIVE DIRECTOR TO H1PLEHENT SAID ACQUISITION
WHEREAS, Chapter 118, SLA 1981 established the
Energy Program for Alaska;
WHEREAS, the Energy Program for Alaska authorizes
the acquisition, construction, operation and maintenance of,
and sale of power from a project acquired under the Energy
Program for Alaska and pursuant to the provisions thereof;
WHEREAS, Chapter 90, SLA 1981 as amended by Chapter
92, SLA 1981, appropriated certain funds to finance the
Terror Lake Hydroelectric Project (the "Project");
WHEREAS, representatives of the Authority and
Kodiak Electric Association, Inc. have negotiated or will
negotiate agreements for the acquisition of, operation and
maintenance of, and sale of power from the Project;
NOW, THEREFORE BE IT RESOLVED BY THE BOARD OF THE
ALASKA POWER AUTHORITY THAT:
(1) The acquisition agreement is approved in a
form substantially the same as that presented to the Board
on this date.
(2) The acquisition of the Project pursuant to
the acquisition agreement is approved; provided, however, that
the acquisition agreement and the acquisition of the Project
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will be nullified, but with costs incurred by the Authority
recovered as specified in the acquisition agreement, if the
following actions occur:
(a) the Federal Energy Regulatory Commission
or other third-party entities and agencies having
jurisdiction therefor refuse to approve the transfer of
permits and licenses necessary for the acquisition,
construction, operation and maintenance of, and sale of
power from the Projecti
(b) the acquisition agreement in a form
substantially as presented to the Board on this date is
rejected by the governing body or through such other
means permitted under the ordinances and by-laws of
Kodiak Electric Association, Inc.
(3) Such audits as are necessary to determine the
costs of the Project will be completed.
(4) The Executive Director of the Alaska Power
Authority is hereby authorized to take all steps necessary
to implement this resolution, including but not limited to
making all applications, reviewing all documents, and finalizing
the agreement attached hereto.
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••
THEREFORE, this resolution, having been submitted
to a vote, the vote thereon was as follows:
YEAS:
NAYS:
ABSENT:
Mssrs. Lehr, Ward, Weeden, Eakins, Conway &
Mrs. Lois Cook
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And the resolution was declared adopted on this,
the 17th day of February, 1982.
A T T EST:
Executive Director
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