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HomeMy WebLinkAboutAEA Board Meeting Minutes Jan 24 2024Alaska Energy Authority BOARD MEETING MINUTES Wednesday, January 24, 2024 Anchorage, Alaska 1. CALL TO ORDER 9#4 ALASKA ENERGY AAUTHORITY Chair Pruhs called the meeting of the Alaska Energy Authority to order on January 24, 2024, at 8:30 am. A quorum was established. 2. ROLL CALL BOARD MEMBERS Members present: Chair Dana Pruhs (Public Member); Vice -Chair Bill Kendig (Public Member); Albert Fogle (Public Member); Julie Sande (Commissioner DCCED); Adam Crum (Commissioner DOR (joined late)); Bill Vivlamore (Public Member); and Randy Eledge (Public Member). 3. AGENDA APPROVAL MOTION: A motion was made by Vice -Chair Kendig to approve the agenda. Motion seconded by Mr. Fogle. The motion to approve the agenda passed without objection. 4. PRIOR MINUTES — December 6, 2023 MOTION: A motion was made by Vice -Chair Kendig to approve the prior minutes of December 6, 2023. Motion seconded by Mr. Fogle. The motion to approve the minutes of December 6, 2023 passed without objection. S. PUBLIC COMMENTS (2 minutes per person) There were no members of the public online or in -person who requested to comment. MOTION: A motion was made by Vice -Chair Kendig to enter into executive session to discuss confidential financial matters related to FY25 Budget, required project work and legislation, the immediate disclosure of which would have an adverse impact on the Authority. This is supported by the Open Meetings Act, AS 44.62.310, which allows a board to consider confidential matters in executive session. In this case, the board believes that these are subjects which would have an adverse effect upon the finances of AEA and are protected by law, due to the rules protecting personal privacy and certain business information. Motion seconded by Mr. Fogle. A roll call was taken, and the motion passed unanimously, with Commissioner Crum absent. • • �� 813 W Northern Lights Blvd, Anchorage, AK 99503 • Phone: (907) 771-3000 • Fax: (907) 771-3044 • Email: info@akenergyauthority.org 6. EXECUTIVE SESSION: 8:40 a.m. — To discuss confidential matters related to the FY2S Budget. The Board reconvened its regular meeting at 11:13 am. Chair Pruhs advised that the Board did not take any formal action on matters discussed while in Executive Session. 7. NEW BUSINESS A. Resolution No. 2024-02 Providing for Amendments to Resolution 2022-07 Executive Director and Secretary -Treasurer Curtis Thayer requested to hold Phis item for a future meeting, as a memorandum from the Department of Law regarding this issue is still pending. There was no objection. B. Resolution No. 2024-01 FY2S Operating and Capital Budget Submissions Ratification Mr. Thayer requested to postpone this item until the March 6th meeting, as the Governor is expected to amend the budget by February 15th. There was no objection. C. Rural Emergencies Update Mr. Thayer asked Tim Sandstrom, AEA, to present the Rural Emergencies Update. Mr. Sandstrom reviewed the AEA Rural Programs and Project Highlights memo. Stabilization is occurring in four communities: Circle, Napaskiak, Manokotak, and Nelson Lagoon. He noted the ongoing problem of continuing build-up of unmet need in the state, which is reflected in the number of emergencies and interventions. Mr. Sandstrom believes that the unmet need will continue to worsen. Plans are being made to increase training and to find additional funding sources to mitigate those problems. Chair Pruhs believes the fundamental issue is that the communities are not getting the useful life out of the assets. Discussion occurred that most rural power systems are grant -funded and do not have monetary reserves to address issues. Mr. Sandstrom explained that AEA asks the Legislature for State funding and Denali Commission to match federal funding. The current Infrastructure Investment and Jobs Act (IIJA) does not have any funding available for bulk fuel rural power systems or rural powerhouses. The latest outage is Manokotak has the potential to completely drain AEA's funding. Staff is seeking reimbursement from the State and emergency response companies. Mr. Sandstrom emphasized that AEA cannot respond to emergencies if there is no funding. Chair Pruhs asked Mr. Thayer if that information will be transmitted to the Legislature this session. Mr. Thayer agreed. He noted that staff is in contact with the Governor's Office and the legislators whose districts are affected by the reduction in the powerhouse budget, especially the districts Alaska Energy Authority Page 2 of 6 that are on the watch list. Chair Pruhs asked if the funding for training money is well -spent. Mr. Sandstrom agreed, and believes the training is extending the life of the systems. Chair Pruhs asked if there has ever been a situation when AEA could not respond due to lack of funding. Mr. Sandstrom is not aware of such a situation. Chair Pruhs asked for the total amount of funding that is currently in reserves. Mr. Sandstrom informed that there is currently no reserve funding. Mr. Thayer stated that within the budget before the Legislature there is $200,000 for emergency funding. He discussed that AEA also maintains an inventory at the warehouse of commonly needed parts for rural Alaska systems that can be installed by staff supervisors. Chair Pruhs asked if his understanding is correct that since there is no money in the budget, if a major system problem occurred tomorrow, AEA would be unable to assist, unless emergency funding was provided from another organization. Mr. Sandstrom agreed with the explanation that creativity is allowed in the regulation if the community has a project planned in the future. In that case, AEA could provide stabilization before the project begins. Chair Pruhs asked for the number of communities that are down to one working generator. Mr. Thayer noted that the members were emailed the watch list communities. Mr. Sandstrom believes that approximately eight or nine of the communities on the watch list have only one working generator. Mr. Fogle asked if the statutes allow AEA to charge communities for the parts and services. Mr. Thayer indicated that the wording within the status is "may," rather than "shall." He explained that the affected communities do not have a revenue base and depend on community assistance from the State. Mr. Sandstrom discussed that communities participate to the extent that they can. Chair Pruhs asked if Department of Commerce has any funding they could provide. Mr. Sandstrom is supportive and deferred to Commissioner Sande for a response. Chair Pruhs asked if money can be included in last year's supplemental budget. Mr. Thayer explained that deadline has passed and the supplemental budget is no longer a fast -track option. Chair Pruhs noted that 20% of the non-AVEC communities are on the watch list. To be proactive, he requested that staff submit a 9- 1-1 letter of emergency to the Governor's Office and the Legislature for funding to last year's true - up to the supplemental budget for the nine or 10 communities on the watch list that are down to one generator. Chair Pruhs emphasized the importance considering it is January and temperatures in the Interior are 40 below zero. Mr. Eledge asked if the lack of generator technicians in the job market is impacting the contractor options. Mr. Sandstrom agreed. He noted that AEA has tried to cast a wider net for contractors, but that there is only a limited pool of proven and trusted contractors available. Mr. Eledge asked if it is anticipated that additional contractors will be utilized to extend the optimal life of the generators. Mr. Sandstrom believes that the temporary mitigation for the problem is more contracting work and more supervisory personnel. He believes that the better answer will revolve around regionalization of the services for communities around a hub community with a locally based asset that can provide service work. Chair Pruhs commented that the entire industry is experiencing challenges due to the lack of technician personnel. Mr. Thayer gave an anecdote that highlighted the dedication and effort of AEA's personnel to stabilize rural communities during their times of need. Alaska Energy Authority Page 3 of 6 Chair Pruhs suggested that a Board resolution is drafted to bring the issue of the dire need of the 10 rural communities to the forefront of attention so that staff will be able to respond to an emergency. Mr. Thayer indicated that resolution could be ready at a special meeting. There was no objection. 8. OLD BUSINESS — None 9. DIRECTOR COMMENTS A. Denali Commission Update Mr. Thayer noted that the update on the active Denali Commission awards is included in the Board packet. B. Power Project Fund (PPF) Loan Update Mr. Thayer discussed the PPF Loan dashboard included in the Board packet. There are no delinquencies. The fund is fully extended with the current outstanding loans and pending obligations. A request is within the budget to capitalize the program. C. Power Cost Equalization (PCE) Update Mr. Thayer advised the new PCE Program Management Report is included in the Board packet for informational purposes, as well as the earnings and cash flow report that will be provided to the Board on a quarterly basis. The Permanent Fund manages the PCE endowment, and the reports are for informational purposes. All audits are up to date. The RCA has suspended five communities for not submitting their monthly reports. The reasons for noncompliance vary by community. D. Required Legislative Submittals: • Capital Reserve Fund shortfall • Susitna River Power Project Annual Report • Renewable Energy Grant Fund (REF) Round 16 • Revised estimate of need to withdraw from Capital Reserve Fund Mr. Thayer reviewed the required legislative submittals included in the packet. Mr. Fogle asked Mr. Thayer to discuss the typical questions that the Legislature asks regarding the Susitna River Power Project during Mr. Thayer's annual report and presentation. Mr. Thayer noted the conversations are generally positive and that the questions typically focus on the budget and the timeframe. No one has picked up the mantle to finish the FERC licensing. Mr. Thayer explained that the Governor's Task Force recommended that the State review the financial modeling and review the FERC licenses to understand what shifts have occurred over the last 10 years to get to the point in time soon to make the go/no-go decision. Alaska Energy Authority Page 4 of 6 Mr. Fogle asked Mr. Thayer if he will be testifying to the Legislature regarding the Governor's Task Force recommendations. Mr. Thayer indicated that he has not received notification to testify. The recommendations have been assigned to Senate Resources, Senate State Affairs, and the House Energy Committee. Mr. Thayer discussed that REF Round 16 recommended and ranked 24 statewide projects totaling $32 million. The listings are included in the Board packet. The Governor's budget line item totals $5 million. Last year, the Legislature provided additional funding. The information is currently being considered by the Legislature. Mr. Thayer reviewed that the last required submittal included in the packet is the draft letter of the revised estimates of the need to withdraw money from the capital reserve fund. There were no questions. E. IIJA • Climate Pollution Reduction Grant (CPRG) Proposals • GRIP 3, PHASE 2 — Concept Paper Mr. Thayer discussed that the Department of Environmental Conservation (DEC) is the lead agency for the CPRG proposals. AEA submitted white papers and proposals in five categories: Electric Vehicle Charging Infrastructure, Dixon Diversion, Renewable Energy Fund, Rural Energy and DERA Expansion, and Solar For All. Mr. Thayer considers Dixon Diversion as the most important because it has the most immediate impact on displacing natural gas, start -to -finish within the next six years. Chair Pruhs asked what efforts were focused on the pollution in Fairbanks. Mr. Thayer explained that separate grants are proposed and coordinated through DEC for Fairbanks. Mr. Thayer discussed that there is current funding available for the transmission line from Kenai to Beluga. The GRIP 3, Phase 2 Concept Paper included in the Board packet was requested by the Governor to extend the transmission line from Beluga up to Healy. If the Concept Paper is accepted, AEA will be invited to apply for the grant. Mr. Thayer explained that AEA was granted $200 million in GRIP funding last year and as a result, he believes this project is less likely to be successful. There were no questions. F. Legislation: • Prefiled • Governor's Mr. Thayer informed that there are currently no prefiled bills that affect AEA. As soon as the anticipated prefiled bills are released, they will be shared with the Board. Mr. Thayer explained that the Governor has submitted Executive Order 128 that separates the boards of AEA and AIDEA. The cover letter and EO is included in the Board packet. Alaska Energy Authority Page 5 of 6 G. Community Outreach Mr. Thayer highlighted that community outreach is quite extensive, as is shown in the provided listing. He expressed appreciation to Brady Dixon, AEA, and all those who participated in the multiple activities. H. Articles of Interest Mr. Thayer noted that the Articles of Interest are also included within the Board packet. I. Next Regularly Scheduled AEA Board Meeting Wednesday, March 6, 2024 Mr. Thayer requested that prior to the next regularly scheduled meeting, a special meeting is conducted to focus on rural emergencies and the definition of required project work. He noted that the meeting could be held via Teams and will be publicly posted. 10. BOARD COMMENTS Mr. Vivlamore expressed appreciation to Mr. Thayer and the team for the information provided today. Mr. Fogle echoed comments of appreciation to Mr. Thayer and staff for overseeing the huge and exciting influx of work that is occurring in Alaska that will help jumpstart Alaska's economy and will provide jobs. Vice -Chair Kendig echoed the comments of appreciation for the information and hard work. He does not want to add extra burden on staff. Vice -Chair Kendig emphasized the importance of being able to provide explanations to the public, especially during these fast-moving times. Mr. Eledge requested Mr. Thayer to notify the Board when he receives the memorandum from Department of Law. Mr. Thayer agreed. Chair Pruhs reminded Board members to complete the HR required forms for both AEA and AIDEA. He thanked the Board members and staff for the good meeting today and for working for the best and betterment of the community. 11. ADJOURNMENT There being no further business of the Board, the AEA meeting adjourned at 11:49 am. `�ti111111//1� Z- '' - ro Q - = EAL Curtis W. Thayer, Secretary 7978 Alaska Energy Authority Page 6 of 6