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HomeMy WebLinkAbout2023.01.20 BPMC.ExecutedMinutesBRADLEY LAKE PROJECT MANAGEMENT COMMITTEE (BPMC) REGULAR MEETING AGENDA January 20, 2023 1. CALL TO ORDER Chair Janorschke called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:09 a.m. A quorum was established. 2. ROLL CALL (for Committee members) Brad Janorschke (Homer Electric Association [HEAD; John Burns (Golden Valley Electric Association [GVEA]); Tony Izzo (Matanuska Electric Association [MEA]); Arthur Miller (Chugach Electric Association [CEA]); Curtis Thayer (Alaska Energy Authority [AEA]); and Rob Montgomery (City of Seward). 3. PUBLIC ROLL CALL (for all others present) Ladonna Lindley (Accu-Type Depositions); Jennifer Bertolini, Bryan Carey, Pamela Ellis, Bill Price, Mark Ziesmer (AEA); Amy Fenerty (Aldrich CPAs); Joel Paisner (Ascent Law Partners); Brian Hickey (BPMC); Andrew Laughlin, Russell Thornton, Matt Clarkson, Mike Miller (CEA); Dan Bishop, Pete Sarauer, Sarah Villalon (GVEA); Larry Jorgenson, Sarah Lambe, Martin Law, Andrew Patrick (HEA); David Pease, Matt Reisterer (MEA); Bob Day, Bernie Smith (Public); and Unidentified Speaker. 4. AGENDA APPROVAL MOTION: A motion was made by Mr. Thayer to amend and approve the agenda, moving Item 7. Executive Session after Item 11. Committee Reports. Motion seconded by Mr. Miller. The motion to approve the agenda, as amended moving Item 7. Executive Session after Item 11. Committee Reports, passed without objection. 5. PUBLIC COMMENTS - None. 6. APPROVAL OF MEETING MINUTES — December 9, 2022 Chair Janorschke apologized for appearing virtually and indicated that Vice -Chair Burns could Chair the meeting in -person, if it became necessary. There were no comments. Chair Janorschke noted that the Minutes of October 24, 2022 and November 21, 2022 were previously provided to members. MOTION: A motion was made by Mr. Miller to approve the Minutes of December 9, 2022. Motion seconded by Mr. Montgomery. The motion to approve the Minutes of December 9, 2022, passed without objection. BPMC Minutes 1/20/23 Page 1 of 6 8. NEW BUSINESS A. FY22 BPMC Audited Financial Statements Chair Janorschke introduced Amy Fenerty, Aldrich CPAs, to present the FY22 BPMC Audited Financial Statements. Ms. Fenerty discussed that included in the members' packet is the required communication regarding the audit of the special-purpose financial statements, as well as an update on accounting policies. Ms. Fenerty reviewed the responsibilities of the auditors. She reported that a clean and unmodified opinion was issued. This is the highest form of assurance the audit can receive. The format of the Auditor's Report has changed from the prior year. It begins with the opinion. Ms. Fenerty discussed the balance sheet, assets and liabilities. Assets fluctuate year-to-year based on the timing of payments. She explained that revenues are primarily based on the requirements for the budget and expenses of capital activities. The decrease in the utility contributions in 2022 are based primarily on the retirement of the Bradley Lake Series 10 bonds. Ms. Fenerty compared the budget amount variance from 2021 to 2022. Operations and Maintenance, as well as Capital Activity, are under budget over the year due to project delays. The increase within the Operations and Maintenance expense account this year was related primarily to substation maintenance expense, interest premiums, increase in legal fees, as well as the SSQ activity. Additional detail is listed on page 11. Ms. Fenerty explained that the Statement of Cash Flows reflects the change in cash and cash equivalents at year-end. Ms. Fenerty provided an overview of each of the Notes to the financial statements. Vice -Chair Burns expressed appreciation for the clarity of the report and the extensive notes section. He commended the Finance Committee and AEA for their efforts in producing a clean report during the complicated year. There were no additional comments or questions. MOTION: A motion was made by Mr. Thayer to accept the FY22 BPMC Audited Financial Statements, as presented. Motion seconded by Mr. Montgomery. The motion to accept the FY22 BPMC Audited Financial Statements, as presented, passed without objection. B. FY22 BPMC Audit — Update FY22 Refund of Surplus Chair Janorschke requested Mark Ziesmer, AEA, to present the information regarding the FY22 Refund of Surplus. Mr. Ziesmer discussed that the summary section by activity and by fund correlates directly to Note 5 of the Audited Financial Statement. He reviewed the summary section of the refund of surplus by utility and by share allocation, as approved in the September BPMC meeting. The total refund amount is $2,052,208. The per utility refunds are, CEA at $1,101,626; HEA at $300,031; MEA at $283,204; GVEA at $346,823; and Seward at $20,522. There were no questions. MOTION: A motion was made by Mr. Miller to approve the $1,167,599.50 Bradley Lake utilities' refund, $207,692.23 Battle Creek utilities' refund, and $677,016.67 SSQ Line utilities' refund, as presented. Motion seconded by Mr. Thayer. BPMC Minutes 1/20/23 Page 2 of 6 The motion to approve the $1,167,599.50 Bradley Lake utilities' refund, $207,592.23 Battle Creek utilities' refund, and $677,016.67 SSQ Line utilities' refund, as presented, passed without objection. 9. OLD BUSINESS A. Railbelt Reliability Coordination Update i. GRIP Concept Paper 3 (Final Submitted) Chair Janorschke requested Brian Hickey, BPMC, to present the information. Mr. Hickey provided a brief update on the Infrastructure Investment and Jobs Act (IIJA) project, including the submittal of the three Grid Resilience and Innovation Partnerships (GRIP) proposals. He expressed appreciation to the staff at the utilities and AEA for writing and revising the GRIP proposals during the holiday time. Topic 1 and Topic 2 were filed on December 16, 2023. Topic 3 was filed ahead of schedule on January 9, 2023. Preparation is ongoing to receive questions and to complete background information that could be common to all three applications. Mr. Hickey explained that if Topic 1, Topic 2, and Topic 3 proposals receive Department of Energy (DOE) invitations to submit complete applications, the deadlines are as follows: Topic 2 due March 17, 2023; Topic 1 due April 6, 2023; and Topic 3 due May 19, 2023. Vice -Chair Burns expressed appreciation to Mr. Hickey and Mr. Thayer for their work towards these efforts which memorialize the positive and forward vision for the Railbelt. Mr. Hickey informed that he will, later, provide a budget amendment to initiate the Community Benefit Plan that is common and necessary for all three topic applications, if selected. Mr. Miller asked if any of the Community Benefit Plan funding is currently included in the budget. Mr. Hickey explained that the funding in the budget was for drafting the five -page synopsis of the Community Benefit Plan for the GRIP concept papers. The budget amendment will fund the development of the Community Benefit Plan. Mr. Hickey noted that he is developing a Gantt chart for the Engineering Subcommittee and the Tactical Subcommittee in order to better understand the scope of work that will be necessary by May 2023, if selected to apply. He discussed that the Funding Opportunity Announcement (FOA) clearly delineates the application format. Staff is completing as much prework as possible. Chair Janorschke asked if there are any budgeted funds for completing the applications, if selected. Mr. Hickey indicated there is no budgeted funding for completing the application, if selected. The budgeted funding was specifically for completing the concept papers. There were no additional questions. ii. Special Committee on Required Project Work Mr. Hickey requested Andrew Laughlin, CEA, to provide an update on the SSQ Line design work. Mr. Laughlin discussed that HDR is the contractor. HDR has completed their site reconnaissance of the entire line. HDR is working of the basis of design for the project, which will dictate clearance requirements, loading requirements, and other design engineering. Specific plan and profile drawings, bills of materials, and procurement documents are expected to be developed soon. Mr. Laughlin noted that the scope of the ongoing work is defined in the BPMC Minutes 1/20/23 Page 3 of 6 BPMC resolution for engineering services and procurement. Additional updates will be provided within the next few months. Mr. Laughlin indicated that right-of-way activities are ongoing with the land owners, State agencies, and federal agencies, who own the underlying land. The efforts are to develop the permitting requirements for the project. He noted that there are issues being addressed within the Kenai Wildlife Refuge that will dictate the construction schedule for the project. The preliminary construction schedule for the first phase is 2025, for the second phase is 2027, and the third phase is 2028. Mr. Thayer asked for the physical points of the SSQ Line. Mr. Laughlin indicated that the points are the Quartz Creek Substation and the junction for the Sterling Substation. He noted that he has maps of the project and will include them in a future presentation. Chair Janorschke asked if there has been any discussion regarding building a line between Soldotna and Sterling. Mr. Laughlin noted that is a separate project and outside the scope of this discussion. There were no additional comments or questions. 10. OPERATORS REPORT Martin Law, HEA, discussed the included Operator's Report. The lake level was 1,144.8 feet as of January 16, 2023, and has been steadily drawn down. The monthly safety inspections of the dam were completed and had no issues to report. The access road to the dam is by snow machine only. There has been over 12 inches in of snow at the Powerhouse Project in the last week and more is expected. The Battle Creek diversion is closed for the winter and is no longer accessible by snow machine. Mr. Law discussed that the bidding for the Bradley Lake new building and renovations closed in December, and only one bid was received. The bid is in the process of being evaluated. Mr. Law reported that for the needle valve rebuild, Voith Hydro Inc. has completed a redesign for both the seals, piston rod and needle body. The new design has been used at another hydro facility with comparable contaminate loading. The DHittle report has an estimated replacement cost of $5 million per unit. Mr. Law expects the quotation to come in substantially below that estimate. Mr. Law discussed that RESPEC continues to submit documents for review on the project -wide fire alarm system refresh and a bid package is expected with the next few months. Mr. Law informed that there has been no lost time or reportable accidents for the months of December through January, to -date. The next scheduled safety meeting is February 13, 2023. There is no barge trip scheduled at this time. There are adequate supplies of fuel onsite. The annual maintenance outage remains scheduled for April 17 through May 5, 2023, to complete the planned work. Mr. Law indicated there are no forced outages to report. The mini excavator and the enclosed equipment trailer have been delivered onsite. He discussed that contractor Randall Anderson visited the site and Apartment D should be ready for occupation within the next few weeks. Mr. Law reviewed the pictures shown in the report. There were no questions. Chair Janorschke commented that he was onsite on Monday and the project looks fantastic. 11. COMMITTEE REPORTS A. Budget to Actuals Report BPMC Minutes 1/20/23 Page 4 of 6 Chair Janorschke requested Mark Ziesmer, AEA, to discuss the included Budget to Actual Expense Report for the period of July 1, 2022, to December 31, 2022. He discussed that the actuals for capital purchases not funded by R&C Funds shown on page two came in at $359,414, which is approximately 23% of the capital budgeted amount. Schedule B shows the Operations and Maintenance (O&M) actual expenses are approximately $1.2 million less than budgeted, primarily due to the timing lag of expenses versus the budget. Schedule D shows the R&C Fund Disbursements and Repayments. Actual expenses were $433,244. Expenses are anticipated to increase in the next few months. Schedule E shows the Battle Creek Non-R&C Capital Purchases FY23 actual expenses of $39,832. Schedule F shows the Battle Creek O&M expenses which were under -budget by $101,034. Mr. Ziesmer discussed that approximately $93,000 has been transferred from Bradley Lake to Battle Creek for the line item of O&M Allocation to Battle Creek. Schedule H shows the SSQ Line Capital Purchase. There is no budget for FY23. However, there are hold -over expenses from FY22 that are listed. Schedule I shows the minimal expenses for the SSQ Line O&M as of December 31, 2022. There were no questions. B. O&D Report Chair Janorschke advised that Andrew Patrick, HEA, was elected yesterday as Chair of the O&D Committee. Mr. Patrick introduced himself and gave his professional background. He reported that the O&D Committee met yesterday and rotated the Chair position to HEA, with MEA as the Vice -Chair. Other items discussed during the meeting included preparations for the budget for the next fiscal year. Internal assignments were made to clarify budget items, such as roles of required project work and the SSQ rebuild. Mr. Patrick reviewed discussions regarding the needle valve rebuild and redesign options. He noted that the current equipment was installed in 2019. The equipment is showing signs of corrosion, which was the impetus for the review of redesign options and a new budgetary request. No requests are being made today. The review is for informational purposes. The current lead time for procurement is approximately a year, with a cost of about $1.6 million. This is much less than the DHittle projection of $10 million for a full redesign. Mr. Patrick reported that the O&D Committee discussed the residences at Bradley Lake. One bid for approximately $3.5 million was received for the refurbishment of existing staff housing facilities and for the addition of a new staff housing facility. No requests are being made today. Mr. Patrick reviewed that lake levels are near normal amounts, and utilities are preparing for the islanding events that will occur in September/October. He reported that the old 69 kV section from Sterling to Quartz is in the process of being removed. Chair Janorschke asked if the bid proposal received for the housing facilities will be reviewed by the Finance Committee after the review by the O&D Committee. Mr. Patrick believes that is the process and noted that the O&D Committee will work with the Finance Committee before a proposal is brought before the BPMC. Chair Janorschke congratulated Mr. Patrick on his new position and expressed appreciation to Russell Thornton, CEA, for his previous service as O&D Committee Chair. There were no other comments or questions. Chair Janorschke called a brief at -ease at 10:57 a.m. The Committee reconvened at 11:06 a.m. MOTION: A motion was made by Mr. Thayer to enter into Executive Session to discuss confidential financial matters regarding Required Project Work and financing, the BPMC Minutes 1/20/23 Page 5 of 6 The motion to enter into Executive Session passed without objection. 7. EXECUTIVE SESSION: 11:08 a.m. (Bylaws Section 5.11.4) — To discuss confidential financial matters regarding Required Project Work and financing, the immediate knowledge of which may have an adverse effect on the Authority or Project. The Committee reconvened its regular meeting at 12:05 p.m. Chair Janorschke stated that no action was taken during executive session. 12. MEMBERS COMMENTS — None. 13. NEXT MEETING DATE - March 24, 2023 14. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 12:05 p.m. Brad Janors hair Z_'4'�-, �Wl� Curtis Thayer, Secretary BPMC Minutes 1/20/23 Page 6 of 6