Loading...
HomeMy WebLinkAboutAlaska Intertie Management Committee August 18, 2017ALASKA INTERTIE MANAGEMENT COMMITTEE Friday,August 18,2017 9:00 A.M. Alaska Energy Authority,Board Room 813 W.Northern Lights Boulevard,Anchorage,Alaska To participate VIA TELECONFERENCE-1-888-585-9008 -Conference room code 467-050-126 10. 11, AGENDA CALL TO ORDER ROLL CALL FOR COMMITTEE MEMBERS PUBLIC ROLL CALL AGENDA APPROVAL PUBLIC COMMENTS APPROVAL OF PRIOR MINUTES -JUNE 28,2017 NEW BUSINESS A.ANNUAL ELECTION OF OFFICERS B.DOUGLAS SUBSTATION MEMORANDUM OF AGREEMENT e FIRST AMENDMENT TO MOA e RESOLUTION 17-02 -Approval to Amend MOA e FY18 BUDGET AMENDMENT C.INTERTIE BUDGET PROCESS PRESENTATION D.RELIABILITY STANDARDS DISCUSSION IOC /OPERATOR'S REPORT --ML&P/GVEA COMMITTEE ASSIGNMENTS NEXT MEETING DATE -TBD ADJOURNMENT AEA AEA Ioc Alaska Intertie Management Committee Regular Meeting MEETING MINUTES Wednesday,June 28,2017 Anchorage,Alaska 1.CALL TO ORDER Vice Chairman Brian Hickey called the meeting of the Intertie Management Committee to order on June 28,2017 at 9:00 a.m. 2.ROLL CALL FOR COMMITTEE MEMBERS Brian Hickey Chugach Electric Association (CEA); Cory Borgeson Golden Valley Electric Association (GVEA) Tony Izzo Matanuska Electric Association (MEA)Kirk Warren Alaska Energy Authority (AEA)|«xJeffWarnerAnchorageMunicipalLight&Power (ML&P) 3.PUBLIC ROLL CALL uv / Burke Wick,Mark Johnson,Lee Thibert (CEA);Gary Kuhn (MEA);Larry Jorgensen (HEA);TeriWebster,Jocelyn Garner,Brandi White (AEA);Dan Bishop (GVEA);Kirk Gibson (McDowell Rackner & Gibson PC);Mary Lynn Macsalka (Dept.of Law);James Layne,Seth Campbell-intern (RCA);TW Patch,Bernie Smith,Henry Dale (Public);Eric Meyers (ATC). 4.AGENDA APPROVAL MOTION:Mr.Warren made a motion to approve tthe agenda.Motion seconded by Mr.Warner.The motion passed unanimously.:é a 5.PUBLIC COMMENTS None a 7 NN;wo ma 7 N ee Ne 6.APPROVAL OF PRIOR MEETING MINUTES -May 16 and May 26,2017 MOTION:Mr.Izzo made a motion to approve the minutes as amended.Motion seconded byMr.Warten.The motion passed unanimously. 7.NEW BUSINESS . A,FY 18 BUDGET APPROVAL Mr.Warren stated at the last IMC meeting changes were made to the proposed FY18 Alaska Intertie budget.This included adding $437,000 for the GVEA tower 748 repair and $171,000 for Northern Maintenance of overhead lines. Mr.Hickey wanted to note that under FERC 566 for SLMS Support and Intertie Ground Patrol of $60K includes monitoring for tower 195. Mr.Borgeson asked why the budget is not a zero based budget.Mr.Warren noted the balance is the difference between the projected mwh revenue given by each utility and the expenses based upona three- year average.Mr.Borgeson would like to see the budget be as close to zero in future years. June 28,2017 IMC Meeting Minutes Page 2 of 2 Mr.Izzo inquired about the high administrative cost of $415,000.Mr.Warren stated the costs for the spinning reserve studies of $325K was included in the $415K and the AEA administrative fee is minimal. The proposed budget was posted for 30 days for public comments and none were received. MOTION:Mr.Warner made a motion to approve the FY 18 budget as presented.Motion seconded by Mr.Borgeson.The motion passed unanimously. 8.IOC /OPERATOR'S REPOT -ML&P/GVEA Mr.Warner gave an update on the recent three line trips;two were due to0 lightening.Mr.Borgeson statedHealy1beingdowncontributedtothetriponJune5.y, Mr.Kuhn gave a Douglas Substation update.Meyers Power Products were selected to provide the control enclosure andis expected to be deliveredin the fall._&7 * 9.COMMITTEE ASSIGNMENTS e Relay &Reliability Subcommittee to investigatee the fault that occurred on June 5.e Budget subcommittee to explain thebudget formula." Mr.Gibson gave an update on the Standards Compliance subcommittee.The Committee's recommendations for the Railbelt Interconnected Transmission Counsel were sent to the six Railbelt utilities along with a draft MOA yesterday.A summary of the recommendations are:1)Have all six utilitiesworkonstandards;2)Have each utility assign a representative with authority to voice their utility'sinterests;3)Have each utility volunteer to follow the standards and accept consequences ofnoncompliance;4)Utilities are to work out the enforcement arm between the Reliability Standards and theRCA;5)Utilities are to determine the voting parameters for noncomplianceissues. Mr.Izzo stated the utility managers have been working on this and expect to reply in the next few weeks. 10.NEXT MEETING DATE. The next meeting will be scheduled for August.11.ADJOURNMENT Mr.Borgeson made a motion to adjourn.Motion seconded by Mr.Izzo.There being no further business of the IMC,the meeting adjourned at 9:33 a.m. Mark Johnston,Chairman Kirk Warren,Secretary FIRST AMENDMENT TO UTILITY MEMORANDUM OF AGREEMENT FOR 2016 DOUGLAS SUBSTATION IMPROVEMENTS This First Amendment to the Utility Memorandum of Agreement for 2016 Douglas Substation Improvements dated February 17,2017 ("Douglas Substation MOA”)is entered by and between the ALASKA ENERGY AUTHORITY ("AEA”),MATANUSKA ELECTRIC ASSOCIATION,INC. ('MEA'),and the Intertie Management Committee ("IMC”)on behalf of the Participating Railbelt Utilities. RECITALS WHEREAS,the Douglas Substation MOA provides for the Alaska Energy Authority (AEA)to procure and deliver a Control Enclosure,and MEA to provide project management and construction at the Douglas Substation necessary for installation of the Control Enclosure. WHEREAS,Appendix C to the Douglas Substation MOA provides for the allocation of costs associated with the Douglas Substation Improvements,but does not clarify the mechanism for collection and payment to MEA for its expenses incurred under the Douglas Substation MOA. WHEREAS,the IMC Participants desire that MEA invoice individual IMC Participants for MEA's expenses incurred under the Douglas Substation MOA through AEA and under normal IMC budgeting processes,which desire requires amending the Douglas Substation MOA. AGREEMENT NOW,THEREFORE,it is agreed that the following Subsection C be added to Article II, Section 3."Project Cost Responsibility”of the Douglas Substation MOA: C.Project Costs allocated to IMC Participants under Appendix C to the Douglas Substation MOA (including MEA as an IMC Participant for amounts allocated for transmission purposes of the Improvements,but excluding MEA for amounts allocated to MEA for distribution purposes of the Improvements)shall be invoiced and paid under normal IMC budgeting processes.Those IMC Participant Project Costs will be included in the IMC approved budget.MEA will invoice AEA for the IMC Participants allocation of expenses incurred by MEA.AEA will review,approve,and pay MEA's invoices.AEA will collect amounts owed by individual IMC Participants through the normal IMC monthly 7B First Amendment to Douglas Substation MOA August 18,2017 Page 2 of 3 invoicing process based on the budget.After year end the IMC Participants will be refunded (or billed)for their share of the costs that are over (under)budget under the normal IMC true up process. Except as expressly amended by this First Amendment,the Douglas Substation MOA remains in full force and effect. IN WITNESS WHEREOF,the undersigned representatives have caused this First Amendment to the Utility Memorandum of Agreement for 2016 Douglas Substation Improvements dated February 17,2017 to be executed by their duly authorized officers or representatives as of the date first above written.This MOA may be executed in counterparts each of which shall be an original,and all of which shall be merged into this Agreement. DATED this 18"day of August,2017,at Anchorage,Alaska. ALASKA ENERGY AUTHORITY By: Its: STATE OF ALASKA THIRD JUDICIAL DISTRICT The foregoing Agreement was acknowledged before me this 18"day of August,2017, by ,the of the Alaska Energy Authority,a public corporation of the State of Alaska,on behalf of the corporation. Notary Public in and for Alaska My commission expires: First Amendment to Douglas Substation MOA August 18,2017 Page 3 of 3 DATED this 18"day of August,2017,at Palmer,Alaska. MATANUSKA ELECTRIC ASSOCIATION,INC. By: Its: STATE OF ALASKA THIRD JUDICIAL DISTRICT The foregoing Agreement was acknowledged before me this 18"day of August,2017, by ,the of Matanuska Electric Association,Inc.,an Alaskan corporation,on behalf of the corporation. Notary Public in and for Alaska My commission expires: DATED this 18"day of August,2017,at Anchorage,Alaska. INTERTIE MANAGEMENT COMMITTEE By: Its: STATE OF ALASKA THIRD JUDICIAL DISTRICT The foregoing Agreement was acknowledged before me this 18"day of August,2017, by ,the of the Intertie Management Committee,on behalf of the committee. Notary Public in and for Alaska My commission expires: Intertie Management Committee Resolution No.17-2 Approval of Amendment to the Utility Memorandum of Agreement for 2016 Douglas Substation Improvements (MOA)and Amendment to IMC Budget WHEREAS,the Intertie Management Committee (MC)approved the Utility Memorandum of Agreement for 2016 Douglas Substation Improvements dated February 17,2017 ("Douglas Substation MOA”)to implement Improvements necessary to provide for the continued safe,reliable,and economical operation of the Alaska Intertie. WHEREAS,the Douglas Substation MOA provides for the Alaska Energy Authority (AEA)to procure and deliver the Control Enclosure,and MEA to provide construction at Douglas Substation necessary for installation of the Control Enclosure. WHEREAS,Appendix C to the Douglas Substation MOA provides for the allocation costs of associated with the Douglas Substation Improvements,but the Douglas Substation MOA does not clarify the mechanism for collection and payment to MEA for its expenses incurred under the Douglas Substation MOA. WHEREAS,the IMC Participants desire that MEA invoice individual IMC Participants for MEA's expenses incurred under the Douglas Substation MOA through AEA and under normal IMC budgeting processes,which desire requires amending both the Douglas Substation MOA and the IMC budget. NOW,THEREFORE,IT IS RESOLVED THAT: SECTION 1.The IMC approve the attached amendment to the Douglas Substation MOA to add to Article II,Section 3,and new subsection C to clarify that Project Costs allocated and assigned to IMC Participants under Appendix C to the Douglas Substation MOA be invoiced and paid through AEA using normal IMC budgeting processes. Dated at Anchorage,Alaska,this 18 day of August,2017. Chair Secretary UTILITY MEMORANDUM OF AGREEMENT FOR 2016 DOUGLAS SUBSTATION IMPROVEMENTS THIS UTILITY MEMORANDUM OF AGREEMENT ("MOA'),dated February 17,2017,is entered by and between the ALASKA ENERGY AUTHORITY ("AEA”)and MATANUSKA ELECTRIC ASSOCIATION,INC.("MEA”),and the Intertie Management Committee ("IMC”)on behalf of the Railbelt Utilities for a required upgrade of components at the Douglas Substation in Willow,AK.The upgrades consist of the procurement and installation of a relay control enclosure ("Control Enclosure”)and related work as set forth in Appendix A of this MOA ("Project”)to be completed under this Agreement. RECITALS WHEREAS,in the 1984 Douglas Substation Agreement,MEA allowed AEA to design and construct certain additions and modifications to the Douglas Substation in order to implement the Anchorage-Fairbanks Intertie Project ("Alaska Intertie”),and some of those components now need replacement at the Douglas Substation;and WHEREAS,the additions and modifications to the Douglas Substation contemplated as part of the "Project”addressed in these documents are contemplated to provide continuous operations for the benefit of the Alaska Intertie;and WHEREAS,the Alaska Intertie Agreement was amended and restated in April 2014 ("Second Amended Alaska Intertie Agreement”),and provides the IMC with certain management duties and authorities over the Alaska Intertie;and WHEREAS,Section 6.4 of the Second Amended Alaska Intertie Agreement provides for the IMC to approve certain modifications,additions,deletions,and changes to the Alaska Intertie ('Improvements');and WHEREAS,the IMC has determined that the Douglas Substation must have certain upgrades and modifications made to it to ensure continued safe,reliable,and economical operation of the Alaska Intertie;and WHEREAS,MEA's engineer for the Project,Engineered Power Systems,Inc.("EPS”), has determined that there are significant technical and safety concerns with the existing Control Enclosure to warrant its replacement;and WHEREAS,AEA agrees that replacement of the Control Enclosure and related project costs are required for the Alaska Intertie and therefore,on behalf of the IMC,AEA agrees to contribute funds for the replacement of the Control Enclosure;and Utility MOA -Douglas Substation Upgrades February,2017 Page 2 of 7 WHEREAS,this Project is an upgrade of existing facilities only,and the construction and installation of the Control Enclosure do not in any way alter the ownership,operation,or maintenance responsibilities as they existed prior to the Project;and WHEREAS,coincident with the Parties entering this MOA,MEA is entering the lease set forth in Appendix B of this MOA to lease to AEA a portion of the Douglas Substation the size of the footprint of the Control Enclosure;and WHEREAS,in the event the 1984 Douglas Substation Agreement expires prior to being amended,or is otherwise terminated,MEA shall provide reasonable access to AEA and the IMC to the equipment which AEA retains ownership of following expiration of the 1984 Douglas Substation Agreement;and WHEREAS,based on EPS'cost estimate for the Douglas Substation Control Enclosure replacement and the Intertie Operating Committee ("IOC”-a subcommittee of the IMC) discussions regarding the benefits of the Project,the |OC has proposed and MEA and the IMC have accepted that the costs of the Project will be paid by AEA,MEA,and the IMC in accordance with Appendix C of this MOA;and WHEREAS,AEA has authorized funding for its portion of the costs of the Project as an Intertie Cost from an appropriation made in sec.78(c),ch.1,SSSLA 2002 as re-appropriated in sec.69,ch.29,SLA 2008,with additional funding,if any,limited to additional amounts allocated by AEA from an appropriation or approved by the IMC and assessed to the Alaska Intertie users. AGREEMENT NOW,THEREFORE,it is agreed as follows: ARTICLE | Section 1.The construction contracts and all other maps,drawings,plans and specifications,contract forms,addenda,estimates,studies and other documents to be prepared for the Project shall conform to applicable standard specifications and all applicable IMC utility practices and industry standards. ARTICLE Il Section 1.Subject to funding limitations,AEA shall procure the Control Enclosure and components as identified in Appendix A.This is the sole financial obligation of AEA under the terms of this agreement. Section 2.MEA shall perform the following: A.MEA shall design,install,provide project management,and commission the Control Enclosure,including participating in scheduled outages and testing,as listed in Appendix A. Utility MOA -Douglas Substation Upgrades February ,2017 Page 3 of 7 B.MEA,as project manager ("PM”),shall periodically provide the IMC and AEA with an opportunity to review the project design.These reviews shall,at a minimum, include: e Communication Design Concept e Protection Design Concept e 80%relay enclosure design The IMC and AEA will have approval authority of the final designs for the Project. See Appendix C for the Project layout design. MEA will provide off-site inspection of the Control Enclosure,prior to shipping the equipment from the manufacturer to assure that all components are included and that factory tests have been completed.Offsite inspections shall be paid for by the IMC.MEA will also inspect all materials and the workmanship incorporated into commissioning the Project for compliance with the specifications and for project completeness. MEA will take custody of the Control Enclosure from the manufacturer after the Control Enclosure arrives at the Douglas Substation,is placed on its foundation and has been unpackaged and assembled by the manufacturer's representative. MEA shall provide AEA and the IMC with written documentation of the transfer of custody from the manufacturer. MEA will obtain all necessary permits which are required for the Project and for MEA's operation and maintenance of the Douglas Substation. MEA will provide final as-built drawings to AEA and IMC. MEA will provide representatives of AEA and other IMC members with reasonable notice of the date,time,and place of all acceptance tests or inspections. MEA shall cause the construction contracts and all other maps,drawings,plans and specifications,contract forms,addenda,estimates,studies and other documents to be prepared for the Project to conform to the applicable standard specifications and all applicable IMC utility practices and industry standards, including but not limited to the applicable Railbelt Reliability Standards. Section 3.Project Cost Responsibility. A."Project Costs”shall be allocated and generally assigned as provided by the [OC and set forth in the Appendix C to this MOA. B.Subject to funding limitations,AEA shall pay from appropriated funds the cost of procuring the Control Enclosure up to $713,120.If Control Enclosure costs exceed $713,120 or exceed the amount of funding available from appropriated funds,the excess costs shall be paid by MEA (to the extent such costs are allocable to distribution)and by the IMC (to Utility MOA -Douglas Substation Upgrades February _,2017 Page 4 of 7 the extent such costs are allocable to transmission)as generally set forth in Appendix C to this MOA.Any cost greater than twenty-five percent (25%)("Cost Overruns”)shall be immediately brought to the IMC for review and allocation. Section 4.Throughout the term of this Agreement,AEA,payable solely as an operating cost under Sections 7 and 8 of the Second Amended and Restated Alaska Intertie Agreement,shall be liable to MEA for incremental costs incurred by MEA solely because of unscheduled outages or damages resulting from the negligence of AEA's contractors or personnel as related to activities under this Agreement.Such costs shall include overtime pay,contractor fees,and foregone income (cash revenue less cash expenditures)solely and directly related to such negligence,if any.In no event,shall AEA be liable for any claims from third parties or MEA consumers for damages resulting from such unscheduled outages.However,nothing in this section shall relieve AEA from its obligation to indemnify MEA from the negligence of AEA,the IMC,or their contractor related to the Project as defined in Article II,Section 3. Section 5.As PM,MEA will assign personnel to act as the project manager.The MEA project manager will ensure work by MEA or its contractor is being performed in a safe and cost- effective manner and as prescribed by applicable utility practices and regulations.The PM shall have dual authority to act on behalf of MEA and the IMC for matters relating to construction activities within the substation site,and shall become the sole MEA point-of-contact for such matters.The MEA project manager will control the manner or scheduling of the work which relies on the complete cooperation of AEA's Control Enclosure contractor(s). Section 6,As PM,MEA shall oversee the design of all relaying,communications and metering equipment.The installed equipment shall be compatible with MEA and IMC operations and the other utility users of the facility. Section 7.MEA shall provide a lease to AEA for the Control Enclosure within the footprint of the existing Douglas Substation and on MEA owned property.See Appendix B.In the event the 1984 Douglas Substation Agreement expires prior to being amended,or is otherwise terminated,MEA shall also provide reasonable access to AEA and the IMC to the equipment which AEA retains ownership of following expiration of the 1984 Douglas Substation Agreement for purposes of operating and maintaining the equipment consisting of Items Nos.3,5,7 and 20 (if necessary)listed on Attachment C,Douglas Substation Improvements,to the1984 Douglas Substation Agreement. ARTICLE III Section 1.As PM,MEA may inspect all materials and the workmanship incorporated into the Project.Any such inspection by MEA does not in any way subject MEAto liability for final design of the Project as approved by the IMC and AEA in Resolution No.17-1.MEA will hire EPS to design and commission the control equipment on behalf of AEA and the IMC.EPS commissioning charges are a Project cost to be paid by MEA and the IMC in accordance with the methodology set forth in Appendix C to this MOA.above.IMC and AEA have the right to review Utility MOA -Douglas Substation Upgrades February ,2017 Page 5 of 7 and comment on the design and determine the final design for the transmission components of the Control Enclosure. Section 2.During the Project,AEA and the IMC reserve the right to perform necessary operations and maintenance of the Intertie by reasonable methods in cooperation with the requirements in Article 10 of the Second Amended Alaska Intertie Agreement. Section 3.AEA,payable solely as an operating cost under Sections 7 and 8 of the Amended and Restated Alaska Intertie Agreement,shall indemnify,defend,and hold harmless MEA,its officers and employees,from and against all suits,actions,or claims of any type brought by a third party against MEA because of any injuries or damage received or sustained by any person,persons,or property because of the negligent,reckless,or intentional action or omission of AEA,the IMC,or their contractor,related to the Project. MEA shall indemnify,defend,and hold harmless AEA,the IMC,the IMC Participants,and their officers and employees,from and against all suits,actions,or claims of any type brought by a third-party because of any injuries or damage received or sustained by any person,persons,or property because of the negligent,reckless,or intentional action or omission of MEA or its contractors related to the Project. Section 4.Representatives of MEA and other IMC members will be provided with reasonable notice of the date,time and place of all acceptance tests or inspections,and a representative of MEA shall attend all such test and/or inspections.All parties will be provided reasonable notice of scheduled outages related to the Project. ARTICLE IV Section 1.It is specifically agreed between the parties executing this Agreement that it is not intended by any of the provisions of any part of the Agreement to create in the public or any member thereof a third-party beneficiary relationship hereunder,or to authorize anyone not a party to this Agreement to maintain a suit for personal injuries or property damage pursuant to the terms or provisions of this Agreement. Section 2.This Agreement represents the entire agreement between the parties concerning the Project.The parties agree that all other agreements,written or oral,concerning this portion of the Project are merged into this Agreement. Section 3.This Agreement may be modified only in writing which must be signed by the appropriate officers of each party to this Agreement. Section 4.Nothing in this Agreement shall be interpreted to make AEA the agent of MEA or MEA the agent of the AEA. Utility MOA -Douglas Substation Upgrades February I,2017 Page 6 of 7 IN WITNESS WHEREOF,the undersigned representatives have caused this MOA to be executed by their duly authorized officers or representatives as of the date first above written. This MOA may be executed in counterparts each of which shall be an original,and all of which shall be merged into this Agreement. DATED this wl day of February ,20.)7,at Anchorage,Alaska. ALASKA ENERGY AUTHORITY STATE OF ALASKA THIRD JUDICIAL DISTRICT The foregoing Agreement was acknowledged before me this (I day of FebrUary_, 20.17,by Mie Wafrers ,the Chief Opartung,OA cer of theAlaskaEnergyAuthority,an Alaskan corporation,on behalf of the corporation.SwWnatin Notary Public in and for Alaska EBS”D My commission expires:_W.ith off;2. f i 'ewe 4}$ci,PUBLIC gigi4 "eS 2%7,reo 2%,2,%yt Roe aMagenOSMay(lon expire?Svaave sesh Utility MOA -Douglas Substation Upgrades February (7,2017 Page 7 of 7 7 day of Febprucsry ,2017,at Palmer,Alaska.DATED this MATANUSKA ELECTRIC ASSOCIATION,INC. By:ts (C1 "Genera AAWYAGER. STATE OF ALASKA THIRD JUDICIAL DISTRICT The foregoing Agreement was acknowledged before me this {7 day of ebrobal(oe of20(7,by Teng L225 the , MalanrrtyZCR Notary Public in and for Alaska My commission expires:_Ut th oc CNWkn™Zz93YY"e,WB.eenes®oSa==weety0,rod140?expiresBAevaanandh® DATED this n day of _February _,2047,at Anchorage,Alaska. INTERTIE MANAGEMENT COMMITTEE - Amc Chaiwe03Car->SS",.40r)By: Its: STATE OF ALASKA THIRD JUDICIAL DISTRICT The foregoing Agreement was acknowledged before me this l l day of i of the20.17,by Mack.Daoloeton .the _Chaic Intertie Management Committee,on behalf of the committee.Phyg \oa PAM WEG,*:>"ig and for MAGhe ,>ewwMycommissionexpires:\A)an oft ce 4 fo)4,3 4%<44g SOF ISOS f "uy.expires #Varasasest™ Appendix A to Utility MOA Douglas Substation Upgrades February sss 2017 Page 1 of 4 APPENDIX A ute) UTILITY MEMORANDUM OF AGREEMENT FOR 2016 DOUGLAS SUBSTATION IMPROVEMENTS Scope of Supply-Responsibilities By Alaska Energy Authority: e Relay Enclosure F.O.B.the foundation. ° [e) ° ° Structure including but not limited to: ®HVAC «Lighting »DC Plant Delivery,setting on the foundation and unpacking of the control enclosure is by the contro!enclosure vendor,per the contract specifications. Protective relaying equipment acceptable to all users. Communication equipment acceptable to all users. Recording and metering devices/equipment. By Matanuska Electric Association: e Pre-shipping inspection of the Control Enclosure. e Cable Trench e Reassembly of the control enclosure e Labor to install the above identified equipment. e Relay and communications settings. e Testing. e Commissioning with all users. e Geotechnical investigations. e Inspections. e Written Acceptance of Relay Module. e Custody Transfer of Relay Module. e Engineering. e Construction Management. e Fencing. e Cabling. e Foundation. APPENDIX B TO UTILITY MEMORANDUM OF AGREEMENT FOR 2016 DOUGLAS SUBSTATION IMPROVEMENTS DOUGLAS SUBSTATION CONTROL ENCLOSURE LEASE AGREEMENT Appendix B to Utility MOA -Douglas Substation Upgrades February ,2017 Page 1 of 4 DOUGLAS SUBSTATION CONTROL ENCLOSURE LEASE AGREEMENT THIS AGREEMENT is made this 17th day of February,2017,between Matanuska Electric Association,Inc.whose address is:P.O.Box 2929,Palmer,AK 99645 (hereinafter referred to as "Lessor')and the Alaska Energy Authority whose address is:813 W.Northern Lights Blvd., Anchorage,AK 99503 (hereinafter referred to as "Lessee'”). 1.LEASED PREMISES Lessor does hereby lease to Lessee the surface of the following described land located in the Palmer Recording District,State of Alaska (the "Leased Premises'): Within the W1/2 NW 1/4 SW1/4,and that portion of the W1/2 SW1/4 NW 1/4 lying south of Willow Fishhook Road R/W as follows:a parcel of land the size of the footprint (30'x 70') of the Control Enclosure referenced in the Utility Memorandum of Agreement For 2016 Douglas Substation Improvements dated February 17,2017 ("MOA”),and as further depicted on the attached drawing.(the "Leased Premises'): 2.ACCESS Lessee,IMC,and its contractors and employees may have adequate ingress and egress to Lessor's property so as to gain access to the Leased Premises and other relevant equipment,including use of the constructed driveway within Lessor's property,provided that Lessee shall not have access to Lessor's substation facilities except that in the event the 1984 Douglas Substation Agreement expires prior to being amended,or is otherwise terminated,MEA shall also provide reasonable access to AEA and the IMC to the equipment which AEA retains ownership of following expiration of the 1984 Douglas Substation Agreement for purposes of operating and maintaining the equipment consisting of Items Nos.3,5,7 and 20 (if necessary)listed on Attachment C,Douglas Substation Improvements,to the1984 Douglas Substation Agreement. 3.TERM OF LEASE This Lease is for a period of 45 years.The Lease may be terminated in advance of its expiration date by mutual consent of Lessor and Lessee. 4.RENTAL PAYMENT Lessee shall pay Lessor annual rent of $1.00 per year. 5.TAXES Lessee is not responsible for real property tax,but is responsible for any personal property taxes levied against Lessee's facilities kept on the Leased Premises. 6.UTILITIES AND MAINTENANCE Lessee shall pay for electricity and any other utilities it may require.Lessee shall be responsible for its own trash removal and maintenance of the premises including snow removal within the Leased Premises and access routes. Appendix B to Utility MOA -Douglas Substation Upgrades February ,2017 Page 2 of 4 7.USE OF PREMISES AND SITE PLAN Lessee covenants that the use of the Leased Premises is solely for installation,operation and maintenance of the Control Enclosure and other uses authorized under Section 2 of this Agreement.Prior to commencing any site preparation,Lessee or its contractor shall obtain Lessor's approval of Lessee's plan for vegetative clearing,disposition of cut trees and brush,and other site preparation.No excavation shall be done on the Leased Premises without Lessor's prior approval.All disturbed areas shall be recontoured and revegetated so as to prevent soil erosion. 8.LESSEE COMPLIANCE WITH ALL LAWS Lessee,payable solely as an operating cost under Sections 7 and 8 of the Second Amended and Restated Alaska Intertie Agreement,shall comply with all laws,regulations, orders and ordinances of federal,state and municipal authorities,and with any direction of any public officer,pursuant to law which shall impose any duty upon Lessor or Lessee with respect to the Leased Premises.Other than the licenses and permits for the Control Enclosure that MEA is required to obtain under the MOA,Lessee,payable solely as an operating cost under Sections 7 and 8 of the Second Amended and Restated Alaska Intertie Agreement,shall obtain all licenses or permits which may be required for its activities on the Leased Premises,and is solely responsible for determining which licenses,permits or authorizations are applicable to its activities.Lessor will cooperate with Lessee in Lessee's acquisition of needed permits or licenses and will,if and where necessary,join with Lessee in applying for such licenses or permits. 9.SURRENDER OF PROPERTY IN GOOD CONDITION At the expiration of the lease term,Lessee shall remove its facilities and surrender the Leased Premises to Lessor in as good condition as it was at the beginning of the term, free from contaminants,waste or contaminated soils.The Leased Premises does not need to be restored to original contours,but must be left in a condition that will not contribute to soil erosion within the Leased Premises or adjacent land. 10.RIGHT OF ENTRY Lessor and its representatives may enter the Leased Premises,at any reasonable time, for the purpose of protecting the property from loss or damage,inspecting the property, performing any work which Lessor elects to undertake made necessary by reason of Lessee's default of any of the terms of this Agreement,or any other lawful purpose. 11.LESSOR'S RIGHTS IN DEFAULTS Lessor shall give Lessee thirty (30)days written notice of termination of this Lease if Lessee shall be in default in the performance of any covenant of this Lease Agreement and if such default is not cured within fifteen (15)days after written notice thereof given by Lessor,or,if such default shall be of such nature that it cannot be cured within such 15- day period,Lessee shall continuously proceed with diligence and in good faith to remedy such default. 12.INDEMNIFICATION BY LESSEE Lessee,payable solely as an operating cost under Sections 7 and 8 of the Second Amended and Restated Alaska Intertie Agreement,agrees to forever indemnify,defend, and hold harmless Lessor from all liability for damage to property or injury or death to persons,including all costs and expenses incident thereto,resulting from,or in any way Appendix B to Utility MOA -Douglas Substation Upgrades February _,2017 Page 3 of 4 related to,the negligent,reckless,or intentional actions or omissions of Lessee in connection with this Lease Agreement. 13.LIABILITY FOR NEGLIGENCE If Lessor pays a sum of money for property damage,personal injury,or any fee or penalty imposed by any governmental agency,resulting from the failure of Lessee to observe or perform any covenant of this Lease Agreement required to be performed by Lessee,then the sum so paid by Lessor,together with all costs,damages,and reasonable attorney's fees,shall be considered additional rent,due in the month succeeding such payment and collectable at such time,payable by Lessee solely as an operating cost under Sections 7 and 8 of the Second Amended and Restated Alaska Intertie Agreement,. 14.EXPIRATION OF LEASE At the expiration date of this Lease Agreement,if Lessee carries over,said Lease Agreement shall continue on a day-to-day basis until a new Lease Agreement or a renewal of the existing Lease Agreement is signed. 15.SUBLEASING Lessee may not sublease or assign any portion of the Leased Premises. 16.NOTICES Any notice given under this Lease Agreement must be in writing and sent by registered mail to the last address of the party to whom the notice is to be given,as designated by such party in writing.Lessor hereby designates its address as:PO Box 2929,Palmer,AK 99645.Lessee hereby designates its address as:813 W.Northern Lights Blvd., Anchorage,AK 99503. IN WITNESS WHEREOPF,the parties have executed this Lease Agreement on the day and year first above written. LESSOR: By: Title: LESSEE: By: Title: Appendix B to Utility MOA -Douglas Substation Upgrades February ,2017 Page 4 of 4 LEASED PREMISES ,2017 Appendix B to Utility MOA -Douglas Substation Upgrades February Page 5 of 4 VT. vorns XXISTING138%¥ RQUIPMENTTRANSMISSION EXISTING24.9kV EQUIPMENTDISTRIBLTION EXISTINGPOYERTRASPORDO Lea(6x00ene&paremaser boomed, = Bestiy Amoainn C3L_r*. 5== Aare eerere DOUGLAS SUBSTATIONCUMCEFTUAL BITE PLAN |enn Atedmmndd APPENDIX C TO UTILITY MEMORANDUM OF AGREEMENT FOR 2016 DOUGLAS SUBSTATION IMPROVEMENTS INTERTIE OPERATIONS COMMITTEE ENGINEER'S BUDGETARY ESTIMATE SUMMARY Appendix C to Utility MOA -Douglas Substation Upgrades February ,2017 Page 1 of 3 Client:Matanuska Electric Association,inc. Project Code:MEA W.O.EN16-3.2Desc:Douglas Substation Control Endosure Replacement Engineer's Budgetary Estimate Summary Type:Budgetary Base Currency:US Dollars Estimate Summary Extended Total Control Enclosure:|$713,120 Transmission:S 575,748 Distribution:S 292,361 Total Estimate:S 1,581,229 Cover Sheet 11/21/2015 Appendix C to Utility MOA -Douglas Substation Upgrades ,2017February Page 2 of 3 POTat6ce SS} MWASSWO] ZEeSeh @ou BUDO}8 zee295& [mIOINS ott id 40A0qnD 00°0% sOumeg Atod or'eh #89KAj 087005iS|KOamnig1000'S GUpesuus VOR BU04 1000'S§ wewedeury LORNA sUuC> B6L26 (%04) Aouebuguod 00'0s DupoSS0D|BUST zvO'bos Bupess Bug C96T (%C) wimweteury Peas +6r'S 1%S'0)eBes0g queudinbs pewey [000s 00)8z FQOUSGAORezG0W laoreet -Toorere are - earet TROGKE verses releen Oot oorse ROBSASNVEL bizOE 2EBCLZ 00g oogol [Casteneme OLWSL Othe 0005 ooo SHNSODNS WORLD id afer big car' gZiy SAS bbb coe ay NOLLGeibSi Tete isey ad Od ary. rk: NOSSIASNVEL ce C192 NOUN G1529 ihe Bz SIO aL dKouD Ceetel or DTIL NOSSASNVUL voeis PrF woey NOUN Bel Ls58'sOF Soosif DBYSONYLINONOS(4dNCerDJ Ca6 wet NOSS-ASNVEL fo96 OBZ} NOet5009 ozast 65e T=Ce TELES) Oss§ ong' Osk oce NO S:ASIsVaL 0656 ore Ost 009 WOLLI Git$+ Osler ee Oo OOFIT aisRe ZSBb veo6 19991 tx ai) NOUNS: (47) wirLe wen SHOU VONNOd -d dius wea, "20 Pune ort -) popuena peers a) won oonunxg ® 3 Anuwurg nena Anetore eseeuhug€91N2OMVAN aes3 Lmetong umaangef\6r0g 'tg Vopncobey O40m)9 Ouseyy ,2017 [sz eked eeSC at ve BMWS HAUT)Ha20)HACaVV[alVES ieSttons rakes) [SugsboudiugSuapryoin) 901 Beton kemw12eqfet{et 1654Ard>ya) Sinmoudug prsyWilsTLDTTS [ed SEP2)2602) Suppo: WIN yt SSS$ TSETies Of1Fg Seu5g Supsoupug $59|) jotST MUSDyetdv WRTESTS [ezeves {SzAbdaA) fear) ees Duet [pecbots Se0e) Dy ergsvarfeT(i)REDDWepu; Poa]ZTtT eerie.ManeFa)(2140.51 jow's5$ (wSzArdwai) tO)30RNSDewOT iGOSTTS ined30emus vENl6{e {ESV2¥-30)YSyFySEREO)PERO- OPlstha)808K00faf9 OzTES meusyay}-asnwpualsIv Tarwpss Sa) Bapeow Ii)80)of50g-3809HaONG|ez pee van vv {7 NOLO) 3599HaagLORESqNSsq Fnog!Ton id30%Ez Ammury "Ar puny Appendix C to Utility MOA -Douglas Substation Upgrades February Page 3 of 3 Alaska Intertie FY18 Amended Budget Draft (IMC meeting 8/18/17) Proposed FY18 Amended Budget REVENUES GVEA 1,688,537 ML&P 285,075 CEA 298,554 MEA 353,191 INTEREST TOTAL REVENUES:2,625,356EXPENSES FERC 562 -Station Operation Expenses GVEA-Substation Electricity Usage 7,000 7,000 FERC S66 -Miscell Tr Exp Private Line Telephone Service for AKI SCADA (GVEA)55,000 Cell Phone Comm.Svc for Weather Monitoring (Verizon)16,000 SLMS Support and Intertie Ground Patrol 60,000 Misc Studies as needed (Cyber Security Study)- 131,000 FERC 567 -Transmission Expenses -Rents Rents -Alaska Railroad 700 MEA-Talkeetna Storage 7,200 7,900 FERC 569 Maintenance of Structures MEA -Maintenance of Structures : FERC 570-Mai e of Station Equip GVEA -Healy,Cantwell,Goldhilt 63,380 GVEA -SCADA Maintenance Healy,Cantwell,Gold Hill 10,000 GVEA -Cantwell 482 Switch Repair 70,000 GVEA -Replace Battery Healy SVC 25,000 GVEA -Replace Battery Goldhill SVC 25,000 GVEA -Perform Maintenance,repaint Reactors Healy SVC Yard 15,000 CEA -Teeland Substation 93,000 MEA -Douglas Substation $4,300 CEA -Douglas Substation Communications 39,000 394,680 FERC 571 -Maintenance of Overhead Lines GVEA -Northern Maintenance 171,298 GVEA -Northern ROW Clearing 20,000 GVEA -Re-level Structures &Adjust Guys 26,000 GVEA -Repair Tower 748 437,000 GVEA -Repair Tower 692 20,000 MEA-Special Patrols [Incl Helicopter Inspections]102,000 MEA -Southern Maint (Incl Ground and Climbing inspect)74,700 MEA-Southern ROW Clearing 50,000 MEA -Equipment Repair and Replacement 50,000 950,998 FERC 924 -Property Insurance AK intertie -Insurance 37,600 37,600 Intertie Operating Costs Total 1,529,178 FERC 570-e of Station Equip MEA-Replace Protective Relay Schemes Douglas 566,476 566,476 Intertie Cost of impr ts Total 566,476 FERC 920 -AEA Administrative Costs Personal Services,Travel and Other Costs 50,000 50,000 FERC 920 -IMC Administrative Costs IMC Administrative Costs (Audit,meetings,legal)40,000 40,000 FERC 566 -Miscellaneous Transmission Expense Misc Studies:UFLS,PSS/E maint,PSS/E Update 325,000 325,000 Intertie Administration Costs Total 415,000 TOTAL EXPENSE 2,510,654 SURPLUS (SHORTAGE),114,702 Per GVEA Per GVEA Per AEA Per AEA Fixed Fixed Per MEA Per GVEA Per GVEA Per GVEA Per GVEA Per GVEA Per GVEA Per CEA Per MEA Per CEA Per GVEA Per GVEA Per GVEA Per GVEA Per GVEA Per MEA Per MEA Per MEA Per MEA Per MEA (includes Aviation) Per MEA Per AEA Per IMC Chair MEA ALASKA INTERTIE FISCAL YEAR 2018 ENERGY PROJECTION GVEA MEA CEA |ML&P TOTAL USAGE CAPACITY IMPROVEMENTS ADMIN CASH FLOW MONTH MWH MWH MWH |MWH MWH GVEA _|CEA MEA GVEA {|MEA jML&P [CEA TOTALS Jul 36,591 2120 0 0 38,711 $110,505 $0 $6,402 $126,360 $33,469 $39,706 $53,185 $415,000 $784,627 Aug 34,309 2170 0 0 36,479 $103,613 $0 $6,553 $566,476 $676,643 Sep 30,943 2000 0 0 32,943 $93,448 $0 $6,040 $99,488 Oct 39,465 1860 0 0 41,325 $119,184 $0 $5,617 $124,802 Nov 37,806 1910 0 0 39,716 $114,174 $0 $5,768 $119,942 Dec 43,171 2200 0 oO}45,371 $130,376 $0 $6,644 $137,020 Jan 41,009 2260 0 0]|43,269 $123,847 $0 $6,825 $130,672 Feb 35,131 1920 0 0 37,051 $106,096 $0 $5,798 $111,894 Mar 34,634 1960 0 0 36,594 $104,595 $0 $5,919 $110,514 Apr 30,515 1830 0 0 32,345 $92,155 $0 $5,527 $97,682 May 33,342 2210 0 0 35,552 $100,693 $0 $6,674 $107,367 Jun 39,113 2180 0 o}|41,293 $118,121 $0 $6,584 $124,705 TOTAL 436,029 24,620 0 0 460,649 $1,316,808 $o $74,352 $126,360 $33,469 $39,706 $53,185 $566,476 -$415,000 $2,625,356 T.Energy:$1,391,160 T.Cap:$252,720 $2,625,356 TOTAL INTERTIE PROJECTED ENERGY USAGE 460,649 MWH TOTAL MWH REVENUE $2,625,356 Usage estimate reduced by 1/12 of Total for rate calculations 422,262 MWH O&M BUDGET -Operating 1,529,178 Section 7.2.2 MINIMUM USEAGE CONTRACT VALUE 204,984 MWH O&M BUDGET -Improvements 566,476 O&M BUDGET -Administrative 415,000 TOTAL O&M BUDGET 2,510,654 UTILITY FY 18 SURPLUS (SHORTAGE)$114,702meee MEA 26.49%20.66 MW ML&P 31.42%24.51 MW Annual Participant Costs of Improvements 141,619 CEA 42.09%32.83 MW Monthly Contribution per Particpant (Sept 2017-June 2018)14,161.90 GVEA 100.00%78.00 MW 156.0 Annual Participant Administrative Contribution 103,750 Usage Rate per KWH $0.00302 Monthly Contribution per Particpant 8,645.83 Capacity Rate -$1.62 MINIMUM INTERTIE TRANSFER CAPABILITY RIGHTS (MITCR)DETERMINATION FOR FISCAL YEAR 2018 Annual System Demand 1415 15 16 16 17 3 YR AVG. SOUTHERN UTILITY PARTICIPANTS (MW) ML&P 161.0 164.0 166.0 163.7 MW APPROVED APPROVED APPROVED APPROVED REVISED APPROVED CEA 217.3 212.8 227.9 219.3 MW 6/30/2018 6/30/2017 6/30/2016 6/30/2015 3/17/2014 4/10/2013 MEA 136.0 137.0 141.0 138.0 MW UNITS FY18 FY17 FY16 FY15 FY14 FY14 USAGE KWH 422,262,000 357,388,000 167,958,000 515,900,000 501,508,000 515,900,000 BUDGET $1,529,178 1,089,145 1,255,900 2,017,780 1,677,800 1,906,800 MITCR KW 156,000 156,000 156,000 156,000 156,000 156,000 TOTAL 521.0 MW ENERGY (A)$.000/KWH $0.00302 $0.00254 $0.00624 $0.00327 $0.00279 $0.00309 NORTHERN UTILITY PARTICIPANTS (MW) CAPACITY (B)$/KW $1.62 $1.15 $1.33 $2.13 $1.77 $2.02 GVEA 201.8 200 205 202.3 MW TOTAL 202.3 MW MITCR DETERMINATION FY 18 KWH CAPRATE CAP CHARGES- MEA 26.49%20.66 MW 20,660 $1.62 33,469.20 ML&P 31.42%24.51 MW 24,510 $1.62 39,706.20 CEA 42.09%32.83 MW 32,830 $1.62 53,184.60 GVEA 100.00%78.00 MW 78,000 $1.62 126,360.00 156.00 MW 156,000 (A)See Section 7.2.5 AK Intertie Agreement (B)See Section 7.2.6 AK Intertie Agreement 252,720.00 SSS enedowe:nilee|Intertie Budget Process Jocelyn Garner,Assistant Controller Alaska Energy Authority SAMOSGhTORFrpor=Intertie Management Committee Meeting August 18,2017 guySRFsTwjaEDENERGYAUTHORITY mums Www.akenergyauthority.org 7C Budget approval process ite Sefioclilelefiliwselt ; WEagG a a J \JAK JI\J\TAS JK Dp. IELDSOA www.akenergyauthority.org IMC d 'Budget Inputs ee, Operating Costs ¢Operation and Maintenance Extraordinary Maintenance Annual Debt Service Reserve Fund Station Service Improvements Annual Usage Estimate ry, Administrative Costs ¢AEA Administrative expenses ¢Legal ¢«Regulatory ¢Developing,engineering,monitoring,and administering operating and reliability standards for the Intertie and the IMC. Annual System Demands ¢3 most recent annual system demands for calculation of MITCR www.akenergyauthority.org Revenues Usage Revenue Usage Projection x Energy Rate eAEA ;prepares;{budgetdoc Capacity Revenue Capacity Rate <<MITCR Admin Revenue Administrative Costs www.akenergyauthority.org Usage Revenues MEA prepares C budget doc . ;GVEA MEA |CEA]ML&P]|TOTALMONTHMWHwwH|MWH |MWH ||MwH Jut 36,591 2120}=O 0}|38,711Aug34,309 21701 oO ||36,479 Sep 30,943 2000]0 0}|32943) Ot.39,465 1860]0 oO}|41,325) Nov 37,806 1910]0 oO}|39,716 Dec 43,171 2200 | Ss Of |45,371] Jan.41,009 2260]0 0}|43,269 Feo =|-_sd:«35,131 |t920]of Ss of |37,081]Mar 34634 |1960]of,Sof |36,894]Apr |30,515 |1830]oo]|32.345] May |33,342 2210}0 ||35,552 Jun 39,113 2180,Oo]So 1289) TOTAL 436,029 24.620 0 0 460,649 TOTAL INTERTIE PROJECTED ENERGY USAGE "460,649 MH Usage esaenase reduced by 1/12 of Tous for rete calculations '422,262 MWH Section 7.2.2 MINIMUM USEAGE CONTRACT VALUE ”*"204.984 MWH FELINASISA Usage Projection USAGE BUDGET MITCR ENERGY (A) CAPACITY (B) APPROVED 6/30/2018 UNITS FY18 KWH 422,262,000 $1,529,178KW156,000 S/KWH $0.00302 SiKW $1.62 www.akenergyauthority.org Capacity Revenue USAGE BUDGET MITCR ENERGY (A) CAPACITY (B) APPROVED 6/30/2018 UNITS FY18 KWH 422,262,000 $1,529,178KW156,000 $/KWH $0.00302 SIKW $1.62 es / www.akenergyauthority.org mee ENERGY AUTHORITY "AEAfpreparesjibudgetdoc Capacity Rate MITCR KWH CAP RATE CAP CHARGES 20,660 $1.62 33,469.20 24,510 $1.62 39,706.20 32,830 $1.62 53,184.60 78 000 $1.62 126,360.00 156,000 252,720.00 6 I2AASKAesWmENERGYAUTHORITY akenergyauthority.org Why does the IMC budget a surplus? Budget approval process Why has there been an actual Surplus? Actual surplus FY17 Estimated Usage vs.FY17 Actual Usage |Estimated Usage «Z t _Actual Usage _ __GVEA_MWHMONTH:fe)SML&P"MONTH 38,199 |Tj|iii1{||ifii|28114|1inN°=PopQoooDoeGoOCOoOCOOo0 |Apr |31,652_1675 0 May _|20,819 2025}0 0 Mar ae APE po May a -|42,563 | |36818 | 43,783 |45,90132,459 40,834 26,696 "22.539 | 33,298 | "38937 | 40,370 |"46,641 | 51,648 |tiHj'1210100190'0'0'0'0'0'0'0i34,624 44,563 _.42,691 38,719 ______28,895 __....,24,797 35,212 __40,815 42,148 48,737 53,677 {TOTAL |.366,508°22,570 __389,878 i 5 TOTAL INTERTIE PROJECTEDENERGYUSAGE st 7 389,878, Usage estimate reduced by 1/12ofTotalfor rate calculations 357,388 __480,779 "TOTAL INTERTIE ACTUAL ENERGY USAGE 480,779 /ED ENERGY AUTHORITY 10 www.akenergyauthority.org Actual surplus Budgeted Costs vs.Actual Costs Budgeted Energy Rate vs.Actual Energy Rate |TOTALINTERTIEPROJECTEDENERGYUSAGE |}389,878 |TOTALINTERTIEACTUALENERGYUSAGE 480,779 _|Usage estmate reduced by 1/12 of Total for rate calculatons |357,288.|)3 ot i |i!me !::it |i "Budgeted Operating Gosts'1,088,445.||| Aetual Operating Gosts 596.862:mt _:|i: |Budgeted Energy Rate perMWH S$25a |:|"Actual Energy Rate perMWH $1.04 po "Budgeted Usage Revenue 992,113 :|!:|Actual Usage Revenue 498.488 eee [ALASKA : www.akenergyauthority.org Possible options to minimize the surplus 1)More accurate usage projection estimates 2)More accurate operating and admin costs 12 =»f=ENERGY AUTHORITY mums WWW.akenergyauthority.org ALASKA ENERGY AUTHORITY 813 West Northern Lights Blvd. Anchorage,Alaska 99503 Phone:(907)771-3000 Fax:(907)771-3044 Toll Free (Alaska Only)888-300-8534 AEA's mission:Reduce the cost of energy in Alaska. Intertie Budget Process Jocelyn Garner,Assistant Controller Alaska Energy Authority Intertie Management Committee Meeting August 18,2017 (=AASKAENERGYAUTHORITY umm www.akenergyauthority.org Budget approval process (-™sihvle determines COStSedNd)alitavell Usagezy\y, SALASny5 www.akenergyauthority.org Budget Inputs [i= Operating Costs Operation and Maintenance Extraordinary Maintenance Annual Debt Service Reserve Fund Station Service Improvements Annual Usage Estimate Administrative Costs ¢AEAAdministrative expenses ¢Legal ¢Regulatory ¢Developing,engineering,monitoring,and administering operating and reliability standards for the Intertie and the IMC. Annual System Demands *3 most recent annual system demands for calculation of MITCR www.akenergyauthority.org Revenues Usage Revenue Usage Projection x Energy Rate AEA prepares;£budget doc ,,ne| Capacity Revenue Capacity Rate <<MITCR Admin Revenue Administrative Costs www.akenergyauthority.org Usage Revenues fg rotAEA preparesFae GVEA |MEA |CEA]ML&P]|TOTAL]MONTH MWH MWH |MWH |MWH {|MWH Jul 36,591 2120}sO |38,714]Aug 34,309 2170]0}sO}|36,470) Sep 30,943 2000;of,=Of |32,943)Oct |39,465 1860]Of =OF |41,325]Nov __|37,806 |19101 of,Ss]39,716] Dec 43171 |2200}Oo}=f]45,371) Jan 41,009 2260]OO}Ss]43.269) Fed |35,131]tg20o]o|oO}|37,051] Mar |34.634 |i960]of,Sof |36594]Apr |30,515 |1830]of Of |32,345]May _33,342 |2210]of |35,552] Jun _|39,193 |2tgop oh 0 128 __ TOTAL |«86,029 24.620 0s 480,649 TOTALINTERTIEPROJECTEDENERGYUSAGE 460,649 MWWHUsageestmenereducedby1/12 of Tou for re calcuiat '|422,262 MWHSection7.2.2 MINIMUM USEAGE CONTRACT VALUE 204,984 MWH /Gm ENERGY AUTHORITY «Dudget doc| Usage Projection APPROVED 6/30/2018 UNITS FY18 USAGE KWH 422,262,000BUDGET$1,529,178 MITCR KW 456,000 ENERGY (A)$/KWH $0.00302 CAPACITY (B) $/KW $1.62 5 www.akenergyauthority.org Capacity Revenue USAGE BUDGET MITCR ENERGY (A) CAPACITY (8) APPROVED 6/30/2018 UNITS FY18 KWH 422,262,000 $1,529,178KW156,000 S/KWH $0.00302 KW $1.62 GED ENERGY AUTHORITY www.akenergyauthority.org Capacity Rate Se eit MITCR KWH CAP RATE CAP CHARGES 20,660 $1.62 33,469.20 24,510 $1.62 39,706.20 32,830 $1.62 53,184.60 78,000 $1.62 126,360.00 156,000 252,720.00 6 wees /=ALASIA akenergyauthority.org Why does the IMC budget a surplus? Budget approval process Why has there been an actual Surplus? Actual surplus FY17 Estimated Usage vs.FY17 Actual Usage jEstimated Usage i |Actual Usage . |_[...__]_GVEA|MEA [CEA[MLaP|T TOTAL [GVEA |MEA |CEATML&P]|TOTALMONTHMWHMWH|MWH |MWH MWH MONTH MWH MWH |MWH]MWH MWH igus 88,199 2000 0 0 40,199]|'Jul _43,783 |2118]of o}| -s«45,9011 iAug 25,757 |2000]of,-S io 27,757|]Aug :32,459 |2165]oO]oO 34,624 Sep |21,888 |1750]oo]So 23,638||Sep _42,563 |2000}oo} -Ssio 44,563 Ot |43,374 |1770]o]=o 45,1441]Oct |-__-'|40,834 |1857}=o}So 42,694 No =o]-ss«éd«Ci6 15]4830]200]=o 28,184|]Nov _36,818 1901]oo]SiO 38,719 Dec ||32,452 |1920)200)0 34572||Dec ||26696 |21991 of off _28,895 Jan _|40,160 |1920)200)0 42,280]|'Jan _22,539 |2258]o|oO 24,797\Feb |28.114 |1880]200]oo 30,194|]Feb_|.|33,298 |1944)oo]35,212 Mar 29,055 |1800/of oO 30,855|]Mar ||38,937 |1878]oO;oO _40,815 ||Apr._31,652 |1675}oo 0 33,327]|Apr 40,370 |1778)oO]O)]42,148 May |sf 20,819 2025 0 0 22,844|]May ||46,641 2096 0 0 48,737 jun |28,884 2000 0 0 30,884]|'Jun 51,648 |2029 0 0 53,677 TOTAL _|366,508 22570 800 0}_389878 |TOTAL.|456586 24193 O O°:480,779 He oe nae ee eeeen ne net es eS Se en ere [TOTAL INTERTIE PROJECTED ENERGYUSAGE __389,878 |TOTALINTERTIEACTUALENERGYUSAGE =«BITUsageestimatereducedby1/12 of Total for rate calculations 357,388 |- /SD ENERGY AUTHORITY 10 www.akenergyauthority.org Actual surplus Budgeted Costs vs.Actual Costs Budgeted Energy Rate vs.Actual Energy Rate |TOTAL INTERTIE PROJECTED ENERGY USAGE ee a 389,878 7 TOTAL INTERTIE ACTUAL ENERGY USAGE , :__480,779 _}|Usage estimate reducedby1/12 of Totalforratecaiulafons |357,388 |_.a ee J pdgeted Operating Costs”apenas |Adual Operating Costs --_-596,902 3 pudgetedEnergyRateperwivi 28a)|7 adtial energy Rate perwiwHS104 :"pudgetedUsageRevenue.902.4137 |3 Thetial Usage Revenue'498.408 ;:i ba oo i i !:io AAS - www.akenergyauthority.org Possible options to minimize the surplus 1)More accurate usage projection estimates 2)More accurate operating and admin costs 12 ALASKA ENERGY AUTHORITY 813 West Northern Lights Blvd. Anchorage,Alaska 99503 Phone:(907)771-3000 Fax:(907)771-3044 Toll Free (Alaska Only)888-300-8534 AEA's mission:Reduce the cost of energy in Alaska. f=Gums ENERGY AUTHORITY oem www.akenergyauthority.org August 18,2017 Intertie Management Committee Meeting Handout-Intertie Budget Process Presentation SLIDE 2 -Budget approval process Section 7.1.4 Annual Budget and Fiscal Year.The IMC will estimate and budget Intertie Costs annually for the ensuing fiscal year,July 1 to June 30,subject to AEA's review and approval.The IMC shall develop annually a preliminary operating budget from:the Intertie Operating budget;the Annual Debt Service costs;the Intertie Administration Costs budget,and any allocation for Improvements.Unless otherwise agreed in writing by the Participants,the preliminary budget shall be provided to the Participants and made available to the public for their review at least thirty (30)days before the IMC meeting where the budget will be approved.Written comments shall be submitted to AEA and the IMC by the date established by the IMC.The Participants shall be provided no less than thirty (30)days to comment. Based on the preliminary Intertie budget and the comments from the Participants,the IMC shall annually establish the Intertie operating budget and submit it to the AEA for review and approval. SLIDE 3 -Budget Inputs Section 7.1 Intertie Costs Section 7.1.2 Intertie Operating Costs.At a minimum,the following costs shall be included in Intertie Operating Costs budget: ¢Operation and Maintenance Costs *Extraordinary Maintenance Costs *Annual Debt Service Cost *Reserve Fund *Station Service costs *Cost of Improvements Section 7.1.3 Intertie Administration Costs,At a minimum,the following costs shall be included in Intertie Administration Costs budget: *AEA's Administrative expenses associated with the Intertie *Legal expense associated with IMC activities *Regulatory costs associated with IMC activities *Costs associated with developing,engineering,monitoring,and administering operating and Reliability Standards for the Intertie and the IMC Section 7.2 Calculation of Intertie Operating Costs and Rates Section 7.2.2 IMC Estimates.The IMC shall prepare a preliminary Intertie annual usage estimate in kilowatt hours and provide the same to the Participants and Users no later than the date the preliminary Intertie budget is submitted to the Participants for comment.The preliminary Intertie annual usage estimate provided under this Section with the use of projected or other relevant information shall in no event be less than the amount equal to 30 percent of the kWhs that could be transferred by continuous operation of the Intertie at the maximum rated fiscal-year transfer Capacity (as currently established under Section 6.3,Maximum Intertie Transfer Capability).The projected usage shall not exceed the total projected usage of the Participants and Users so long as their combined usage is in excess of the 30 percent as provided in this Section 7.2.2 Section 7.2.4 IMC Determination of Estimated Intertie Usage.Based upon the Participants'and Users' preliminary Intertie annual usage estimates and comments received,the IMC shall establish the estimated annual Intertie usage in kWhs for the following fiscal year. SLIDE 4 -Revenues Section 7.2.5 Energy Rate The "Intertie Energy Rate”for the following fiscal year,expressed in dollars per kWh,shall be calculated by dividing 83.5 percent of the total budgeted Intertie Operating Costs as determined in the Intertie budget under Section 7.1,Intertie Costs,by the annual Intertie usage as established under Section 7.2.4,IMC Determination of Estimated Intertie Usage. Section 7.2.6 Capacity Rate The "Intertie Capacity Rate”for the following fiscal year.expressed in dollars per kW,shall be calculated by dividing 16.5 percent of the total budgeted Intertie Operating Costs as determined in the Intertie budget established under Section 7.1,Intertie Costs,by the sum of the Participant's or User's Intertie Capacity rights allocations. Section 7.3 Calculation of Intertie Administration Costs The IMC shall estimate the total annual Intertie Administrative Costs and divide that amount in equal annual shares each of the Participants and Users. 1. 1OC /Operator Report August 18,2017 Alaska Intertie Usage Report a.2017 MWh quarterly usage -Douglas Substation GVEA i.1%t quarter:94,775 ii.2°4 quarter:138,661 iii.3°?quarter to date:55,739 iv.Grand Total 2017:289,175 2.No outages to report 3.Intertie Operating Committee a. MEA 6,050 5,903 3,232 15,185 Total 100,825 144,564 58,971 304,369 The Teeland 230 kV ring bus outage is limiting transfers on the Alaska Intertie. The work is scheduled to be completed August 18. With the 230kV line open between Teeland and Pt Mac,all power transfers between the south central grid and GVEA go through the MEA system.A Remedial Action Scheme (RAS)is activated during this condition which will trip Douglas 138-B1 breaker if transfers north out of Teeland exceed 5OMVa.A study is very near complete to determine if the 50MVa RAS limit can be increased to accommodate higher transfers when the 230 kV line between Teeland and Pt. Mac is open. b.Tower 748 repair C. PAW a- i.Bid has been awarded and work is scheduled to begin end of August early September 2017.GVEA is in the process of determining outage requirements. Douglas substation upgrade i.Tentative completion date mid-November 2017. ii.MEA will utilize the Mobile sub to serve their Douglas distribution load during part of the construction. d.Committee assignments i.The Reliability and Protection Subcommittee is looking at ways to mitigate high voltage conditions when the Intertie is open at either Douglas or Healy. ii.The Systems Study Subcommittee is finalizing the scope of work for the quality of spin study.