HomeMy WebLinkAboutAEA Board Meeting Minutes Jan 24 2024Alaska Energy Authority
BOARD MEETING MINUTES
Wednesday, January 24, 2024
Anchorage, Alaska
1. CALL TO ORDER
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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.
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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
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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.
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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.
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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.
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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.
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Curtis W. Thayer, Secretary
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Alaska Energy Authority
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