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HomeMy WebLinkAbout2024.08.08 BPMC Meeting Minutes - FINALBRADLEY LAKE PROJECT MANAGEMENT COMMITTEE (BPMC) REGULAR MEETING AGENDA August 8, 2024 1. CALL TO ORDER Chair Janorschke called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:01 a.m. A quorum was established. 2. ROLL CALL (for Committee members) Brad Janorschke (Homer Electric Association [HEA]); Travis Million (Golden Valley Electric Association [GVEA]); Tony Zellers (Matanuska Electric Association [MEA]); Arthur Miller (Chugach Electric Association [CEA]); Curtis Thayer (Alaska Energy Authority [AEA]); and Brian Hickey (City of Seward). 3. PUBLIC ROLL CALL (for all others present) Sunny Morrison (Accu-Type Depositions); Jennifer Bertolini, Bryan Carey, Patrick Domitrovich, Pam Ellis, Jim Mendenhall, William Price, Mark Zeismer, Unidentified Speaker (AEA); Joel Paisner (Ascent Law Partners); Matt Clarkson, Sherri Highers, Andrew Laughlin, Darvin Thornton (CEA); David Grossklaus (Dorsey & Whitney); Dan Bishop, Daniel Heckman, Sarah Villalon (GVEA); Larry Jorgenson, Sarah Lambe, Martin Law (HEA); Josh Crowell, Tony Izzo, David Pease, Matt Reisterer (MEA); and Julian Johnson (Public). 4. AGENDA APPROVAL MOTION: A motion was made by Mr. Thayer to approve the agenda as presented. Motion seconded by Mr. Miller. The motion to approve the agenda passed unanimously. S. PUBLIC COMMENTS - None. 6. APPROVAL OF MEETING MINUTES — June 21, 2024 MOTION: A motion was made by Mr. Thayer to approve the Minutes of June 21, 2024 as presented. Motion seconded by Mr. Hickey. The motion to approve the Minutes of June 21, 2024, passed unanimously. Chair Janorschke expressed his appreciation for the opportunity and support while serving as the BPMC Chair for the past two years. He noted that one of his goals was to begin and end the BPMC Minutes 8/8/24 Page 1 of 6 meeting on time, and hopes this important structure will continue. 7. NEW BUSINESS A. Annual Meeting and Election of Officers Chair Janorschke introduced Joel Paisner, BPMC Counsel, to conduct the election of officers. MOTION: A motion was made by Chair Janorschke to elect Mr. Million, GVEA, as Chair and Mr. Izzo, MEA, as Vice -Chair. Motion seconded by Mr. Thayer. The motion to elect Mr. Million as Chair and Mr. Izzo as Vice -Chair passed unanimously. Outgoing Chair Janorschke turned the meeting over to incoming Chair Million. Mr. Janorschke requested Mr. Thayer to explain AEA's role within the BPMC. Mr. Thayer noted that the bylaws delineate that AEA serves as the permanent Secretary/Treasurer as owner of the project. There were no comments or questions. 8. OLD BUSINESS A. Bradley O&D Committee Islanding Duration Resolution Chair Million requested the representative from the O&D Committee to present on the resolution. Josh Crowell discussed that the resolution included in the packet was passed by the O&D Committee and is recommended to the BPMC for approval action. MOTION: A motion was made by Mr. Zellers to approve the O&D Committee Islanding Resolution. Motion seconded by Mr. Hickey. The motion to approve the O&D Committee Islanding Resolution passed without objection. B. GRIP 3, Phase 1 Update Chair Million requested Jim Mendenhall, AEA, to present the update. Mr. Mendenhall reviewed the memorandum included in the Committee packet regarding the Grid Resilience and Innovation Partnerships (GRIP) Project, Round 1. Notice was received from Department of Energy (DOE) indicating that the contract has been reviewed and approved. An award has been issued and needs to be executed. The approved pre -award costs are approximately $1.5 million and the approved first budget period costs are approximately $14.7 million. The award date is effective September 1, 2024. Mr. Mendenhall explained that the award spending cap will increase as more funds are dedicated to the project. Mr. Mendenhall informed that AEA received an updated version of the contract terms and conditions, which were forwarded to outside counsel David Grossklaus. Mr. Mendenhall BPMC Minutes 8/8/24 Page 2 of 6 summarized that DOE is willing to clarify issues, but DOE is not willing to change the terms and conditions. Mr. Mendenhall requested Mr. Grossklaus to discuss his review. Mr. Grossklaus reported that comments were submitted to DOE seeking clarifications regarding the terms and conditions. There are no concerns that hinder the advice to move forward with the contract. There were no questions. Mr. Mendenhall outlined that the initial focus is on the system studies, design, and permitting. AEA has existing agreements with the contractor Stantec to perform preliminary studies in conjunction with the Railbelt Strategic Transmission Plan that will determine the loads and capacity needed for the subsea cable. Updates on those studies are expected this week. A Brian Hickey asked if AEA intends to engage an owner's engineer for the overall project. Mr. Mendenhall indicated that is within the plan, but no selection has been made. The intent of the Stantec study is to create baseline data for procurement and lead times. This information will be used to build a better schedule and budget. Mr. Hickey asked Mr. Mendenhall when he expects an overall timeline of the project to be released. Mr. Mendenhall commented that the finish date is slated for eight years, which is August 31, 2032. He noted that Stantec is working on a proposal to provide a preliminary schedule that will be provided to the technical working group. The preliminary engineering is expected to take a year, after which the National Environmental Policy Act (NEPA) studies will commence and may take three years. Ordering of the long lead time items will begin and construction is anticipated to take two to three years. Mr. Mendenhall noted that DOE recognizes that procurement could be a challenge on the timeline and work is underway to consider manufacturers that can be responsive to the timeline. Mr. Janorschke asked if the original budgeted amount for the project of $413 million has changed. Mr. Mendenhall noted that the budgeted amount has not changed. Chair Million asked if Stantec will provide updated pricing when they submit their preliminary engineering design in a year. Mr. Mendenhall agreed. Mr. Thayer commented that Mr. Mendenhall will be available at each meeting to provide updates throughout the stages of the project. There were no other comments or questions. C. Railbelt Reliability Coordination Update Chair Million requested Mr. Hickey to provide the Railbelt Reliability Coordination Update. Mr. Hickey noted that the written report is included in the packet. His current efforts include developing the workshop to qualitatively quantify the benefits and challenges of the transmission system. The workshop will be held on September 16, 2024. Mr. Hickey informed that the GRIP Round 2 Funding Cycle 2 grant was not selected. He noted that no first -round grant recipients received a second -round grant. Mr. Hickey is reviewing the constructive feedback that was provided and will utilize the information to improve the Funding Cycle 3 BPMC Minutes 8/8/24 Page 3 of 6 application, if pursued. Mr. Thayer commented that the $3.2 billion program received over $20 billion in requests. Only eight applicants were awarded grants for this round. He highlighted that initially, Alaska received the fifth highest award in the country overall. After this round, that number slipped to the eighth highest award in the country. There were no other comments or questions. 9. OPERATOR'S REPORT Chair Million requested Martin Law, HEA, to discuss the included Operator's Report. Mr. Law informed that the scheduled outage was completed on August 5th and the problem component that caused the trip in July was identified and replaced. Mr. Law is confident that the issue is resolved. He reviewed that the work on the 40-ton crane is complete, and it is now certified for service. Mr. Law discussed the significant weather event over the last 48 hours, which has increased the lake level by 10 feet. The flow has begun to decrease, but the pipe is still running at 600 cubic feet per second (cfs). Mr. Law noted that he will include pictures of the recent events in the next report. There were no questions. 10. COMMITTEE REPORTS A. Budget to Actuals Report Chair Million requested Mark Zeismer, AEA, to discuss the included Draft Budget to Actual Expense Report for the period of July 1, 2023, to June 30, 2024. Mr. Zeismer explained that the report is in draft form and final 2024 expenses are to be incorporated into the report by the end of the week. Mr. Zeismer discussed that the actuals for capital purchases not funded by R&C Funds shown on Schedule A amount to $508,497. The budget remaining to be expended is $439,503. Most of the expenditures are allocated toward equipment purchases and the upgrade of crew quarters. Schedule B shows the Operations and Maintenance (O&M) actual expenses are underbudget by $976,441. Eight of the budgeted O&M expense sections are underbudget within a range of $80,000 to $190,000. Year-end final billing is anticipated to reduce a portion of the underspent variances. Mr. Zeismer noted that Schedule D shows the actual R&C purchases at a total of $915,790. The Dixon Diversion project costs total $2,063,654, of which $1,379,294 was paid by Bradley Lake R&C Fund, and $684,360 was paid by the Renewable Energy Fund (REF) Grant. Ms. Zeismer discussed that Schedule E shows the Battle Creek Non-R&C Capital Purchases at a total of $88,651. The remaining budget is $76,349. The costs are associated with the Survey and Monument DNR Lease line item. Schedule F shows the Battle Creek O&M expenses were underbudget by $139,296, primarily due to the 4% allocation from Bradley Lake. There continues to be no fiscal year activity for Schedule H. Mr. Zeismer discussed Schedule I shows that the SSQ Line O&M expenses were underbudget by $247,500. Most of this underspent budget variance is from FERC 571 Maintenance of Overhead Lines. No expenditures have been made yet to this line item. Ms. Zeismer reviewed Appendix A, Capital Projects Funded by Bond Proceeds for Bond BPMC Minutes 8/8/24 Page 4 of 6 Series 10 and Bond Series 11. The total costs for Bond Series 10 is $2,801,209. As of June 30, 2024, all the funds have been expended and the balance of the construction fund is zero. The total costs for Bond Series 11 is $633,449. There were no questions. B. O&D Report Josh Crowell, MEA, and Vice -Chair of the O&D Committee noted that the O&D Report is included in the packet. There were no questions. MOTION: A motion was made by Mr. Miller to enter into Executive Session to discuss confidential matters, the immediate knowledge of which could have an adverse effect on the Authority or the Project. Motion seconded by Mr. Thayer. The motion to enter into Executive Session passed with no objection. 11. EXECUTIVE SESSION: 10:32 a.m. (Bylaws Section 5.11.4) — To discuss confidential financial matters, the immediate knowledge of which may have an adverse effect on the Authority or Project. The Committee reconvened its regular meeting at 11:25 a.m. 12. MEMBERS' COMMENTS Mr. Miller expressed appreciation for the good meeting. He recognized and thanked Mr. Janorschke for his outstanding service and efforts as Chair. Mr. Miller thanked Mr. Mendenhall for his continued work and update on GRIP 3. Mr. Thayer echoed the comments of appreciation to the team. He highlighted the geotechnical and environmental work that is occurring during this field season at Bradley Lake. He noted that the State helped fund approximately $6 million for the project this year. Mr. Thayer requested for the record that Bryan Carey, AEA, provide an update of these efforts. There was no objection. Mr. Carey discussed that three weeks in July was spent on geotechnical work drilling around Dixon Lake and at the outlook location at Bradley Lake. Work on the fisheries studies continues. Mr. Carey explained that there should be no impact on the fish population if there is enough water going up the Martin River for the fish to get into the clear water lakes. Discharge measurements of Martin River are being conducted today. Mr. Carey noted that State funding is currently being used for these efforts. However, at some point during this year, there will be a transition and utility funding will be used. Discussions are ongoing regarding an amendment to the BPMC budget this fall that will be necessary to obligate funding in the spring for work next summer. Mr. Carey highlighted that a workshop meeting with the utilities occurred last Friday to discuss dam raises. The size of the dam raise, if any, has not yet been agreed upon or decided. The final decision by the utilities is needed and will affect the design efforts and geotechnical activity next summer. BPMC Minutes 8/8/24 Page 5 of 6 Mr. Janorschke asked if the spillway will come up the same distance that the dam is raised. Mr. Carey agreed that is a possibility. He explained that another possibility is using gates, rather than raising the spillway the same distance. This design saves on the amount of concrete that is needed and the gates are utilized to control the lake level. Mr. Carey discussed the construction process and the challenges of getting the power that is required for construction. Mr. Miller commented again and recognized the subcommittee and Matt Reisterer, MEA, for their work efforts on the capacity agreement. Mr. Janorschke expressed appreciation for the comprehensive updates and for the comments during executive session. He acknowledged that he is not a legislative or regulatory expert and thanked members for their patience with his many questions. Mr. Hickey expressed appreciation for the in-depth discussions and reports, especially from Daniel Heckman, GVEA, Mr. Carey, and Mr. Mendenhall. He thanked Mark Clarkson, CEA, for working with Mr. Paisner on the capacity agreements. Mr. Hickey is looking forward to continued progress. Mr. Izzo thanked Mr. Janorschke for serving as Chair the last two years. He echoed the appreciation for the reports, updates, and executive session discussion. Chair Million echoed the previous comments of appreciation. He is happy to serve as Chair and looks forward to carrying the torch. 13. NEXT MEETING DATE — September 27, 2024 14. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 11:34 a.m. c Travis Million, Chair Curtis Thayer, Secretary BPMC Minutes 8/8/24 Page 6 of 6