Loading...
HomeMy WebLinkAbout2023.03.24 BPMC.ExecutedMinutesBRADLEY LAKE PROJECT MANAGEMENT COMMITTEE (BPMC) REGULAR MEETING AGENDA March 24, 2023 1. CALL TO ORDER Chair Janorschke called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:20 a.m. A quorum was established. 2. ROLL CALL (for Committee members) Brad Janorschke (Homer Electric Association [HEA]); 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) Jennifer Bertolini, Bryan Carey, Pamela Ellis, Bill Price, Michael Korniczky, Mark Ziesmer (AEA); Joel Paisner (Ascent Law Partners); Brian Hickey (BPMC); Sherri Highers, Andrew Laughlin, Russell Thornton, Matt Clarkson, Mike Miller, Justin Merkel, Dan Bishop, Pete Sarauer (GVEA); Larry Jorgenson, Sarah Lambe, Martin Law, Andrew Patrick (HEA); David Pease, Matt Reisterer, John Sinclair, Tony Zellers (MEA); and Bernie Smith (Public). 4. AGENDA APPROVAL MOTION: A motion was made by Mr. Thayer to approve the agenda. Motion seconded by Mr. Izzo. Chair Janorschke requested to amend the agenda, adding Item 9A. Sterling to Quartz Creek Transmission Line Update by Andrew Laughlin, CEA. There were no objections. The motion to approve the amended agenda, including Item 9A. Sterling to Quartz Creek Update passed without objection. 5. PUBLIC COMMENTS - None. 6. APPROVAL OF MEETING MINUTES — January 20, 2023 MOTION: A motion was made by Mr. Thayer to approve the Minutes of January 20, 2023. Motion seconded by Mr. Izzo. The motion to approve the Minutes of January 20, 2023, passed without objection. 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 immediate knowledge of which may have an adverse effect on the Authority or the Project. Motion seconded by Mr. Miller. BPMC Minutes 3/24/23 Page 1 of 6 The motion to enter into Executive Session passed without objection. 7. EXECUTIVE SESSION: 10:26 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 11:29 a.m. Chair Janorschke stated that no action was taken during executive session. 8. NEW BUSINESS A. FY24 BPMC Budget Chair Janorschke requested Mark Ziesmer, AEA, to present the information regarding the proposed FY24 BPMC Budget. Mr. Ziesmer gave a detailed review of the Proposed Budget Summary. For Bradley Lake, excluding Battle Creek and SSQ Line costs, the Operations & Maintenance expenses Schedule B are $7,290,435. This is an increase from FY23 of approximately $241,000, primarily driven by maintenance of the 40-ton crane, increased administration costs, and increased insurance costs. Mr. Ziesmer explained that R&C is funded by the two sources of Bradley Lake and Battle Creek. R&C Schedule D expenses total $3,273,646, of which $2,169,646 is funded by Bradley Lake and $1,104,000 is funded by Battle Creek. Mr. Ziesmer discussed that the Non R&C Purchased Schedule A expenses are $948,000. This is a reduction from FY23 of approximately $610,000, primarily due to moving the Needle Valve Rebuild Project from the Non R&C to the R&C expenses. The Transfer To Operating Reserve expense is $48,188. This is an adjustment to the operating reserve. The principal and interest amortization schedule amount for Bond Series XI is $12,011.790. The total expenses are $22,468,059. This is an increase from FY23 of approximately $86,000. Revenues equal expenses. Mr. Ziesmer discussed the Battle Creek Operations & Maintenance expenses Schedule F are $490,268. This is an increase from FY23 of approximately $73,000, primarily driven by the 4% allocation from Bradley Lake to Battle Creek. He reiterated that the R&C Schedule D expenses for Battle Creek is $1,104,000. Capital Purchases total $165,000 and is driven by the survey and monument placement project. The Transfer to Operating Reserve expense of $14,579. The Debt Service expense of $2,948,314 is principal and interest payments for Bond Series VII and VIII. The IRS Subsidy are funds received back from the Bond Series VII and VIII. The total expenses for Battle Creek are $3,707,875. Revenues equal expenses. Mr. Ziesmer discussed the SSQ Line Operations & Maintenance expenses Schedule I are $307,000. This is a reduction from FY23, primarily due to a reduction in contract and administrative costs. The Transfer From Operating Reserve is reduced by $6,000. The Debt Service expense of $442,555 is principal and interest payments for Bond Series X. The total expenses for SSQ Line are $743,555. Revenues equal expenses. Mr. Ziesmer reviewed Schedule C Monthly Utility Contributions based on percent share for Bradley Lake and Schedule G for Battle Creek, and Schedule. Both of which have increased slightly from FY23. The Monthly Utility Contributions based on percent share for SSQ Line Schedule J has decreased slightly from FY23. There were no questions. BPMC Minutes 3/24/23 Page 2 of 6 Chair Janorschke commented that he received notification that the Needle Valve Rebuild line item on Schedule D has increased by about $260,000 from the listed amount. He discussed that if the materials are ordered after July, the cost of the materials will increase by another $172,000. Chair Janorschke requested that the price escalation of $260,000 for the Needle Valve Rebuild is included in the budget for approval. There were no objections. MOTION: A motion was made by Mr. Thayer to approve the FY2024 BPMC Budget, as presented, including the price escalation of $260,000 for the Needle Valve Rebuild listed in Schedule D. Motion seconded by Mr. Izzo. Mr. Thayer inquired as to how soon the materials can be purchased for the needle valve rebuild before another price escalation occurs. Chair Janorschke anticipates the purchase to be within the next couple of weeks. There were no other questions. A roll call vote was taken, and the motion to accept the FY2024 BPMC Budget, as presented, passed without objection. Chair Janorschke expressed appreciation to Mr. Ziesmer and the Finance Committee for their efforts. 9. OLD BUSINESS A. Sterling to Quartz Creek (SSQ) Transmission Line Update Andrew Laughlin, CEA, began the presentation and introduced Justin Merkel, CEA Project Manager. Mr. Laughlin gave an overview of the project to rebuild the AEA -owned section of the transmission line between the Sterling Substation and the Quartz Creek Substation. CEA was assigned by the BPMC to manage the design and procurement for the project. The basis of design criteria was established in the recent replacement for segments of the line between Quartz Creek to University Substation, including 230 kV standard insulation, clearances, and specifications. The rebuild will utilized the existing alignment. The procurement and construction will be delineated into phases based on the land use requirements. Mr. Laughlin discussed that Phase 1 includes the first eight miles of line between the Sterling Substation and the boundary of the Kenai Wildlife Refuge (KNWR). Phase 2 includes the next 17 miles through the KNWR up to the U.S. Forest Service (USFS) land. Phase 3 includes the 14 miles from Russian River to Quartz Creek Substation. Mr. Laughlin reviewed the work that has been completed. All the landowners along the entire route have been identified. A database of cultural and historical resources has been established. Field assessments are underway. The wildlife resources and habitats have been identified. The wetlands delineations are included in the Corps of Engineers' scope. Establishing and permitting the access points is underway. Mr. Laughlin discussed that preliminary meetings have occurred with KNWR, USFS, and Kenai Peninsula Borough (KPB). Follow-up meetings have occurred with KNWR and their concerns include accessing the wilderness area north of the Sterling Highway between Jean Lake and the Russian River, mapping the access points, utilizing steel poles rather than treated wood poles due to surface water contamination, and coordinating with other agencies at the land change boundaries. Additionally, KNWR has expressed interest in the development of a corridor access maintenance and management plan, similar to the plan for the Quartz Creek Line north of the Quartz Substation. The plan would also eliminate the need for special use permitting and would provide documentation of access points and routes. BPMC Minutes 3/24/23 Page 3 of 6 Mr. Laughlin discussed that the aerial and ground reconnaissance is completed. The Phase 1 design is 65% complete. The basis of design has been established, including framing types, foundation, structure material, ruling span, and clearances. An evaluation between the communication cables of OPGW and ADSS was conducted. OPGW was selected due to the length of the span. The structures will be shorter and will provide a cost savings. The pole locations will be reviewed next month. Geotech work will be completed in early April to finalize the foundation design. Mr. Laughlin reviewed the SSQ project timeline schedule shown in the presentation. Phase 1 design should be completed this year. Procurement for Phase 1 should begin in October. Construction for Phase 1 should be completed in 2025. Construction for Phase 2 should be completed in 2027. Construction for Phase 3 should be completed in 2028. Mr. Laughlin noted that construction of Dave's Creek to Summit is scheduled for the 2026 timeframe. Staff will continue their efforts to compress the construction schedule each year, within the current annual constraint of a 60-day outage window. Mr. Laughlin informed that the total installed cost (TIC) estimate for all three phases of the project is approximately $60 million. The categories include labor, professional/contract services, materials, and filed contractual services. The actual costs are approximately $272,000 and committed costs for the design contract are approximately $1,475,000. Mr. Laughlin reiterated the project risks. The construction schedule competes with other Railbelt projects. The construction window is limited due to high demand for hydroelectric energy. The KNWR expressed concerns that were previously discussed, including wildlife and habitat issues. Mr. Laughlin highlighted the next steps will focus on continued permitting with the US Army Corps of Engineers for the Phase 1 construction, procurement of Phase 1 materials, establishment of the basis of design for Phase 2 and Phase 3, and continued meetings with agencies and stakeholders regarding Phase 2 and Phase 3 permitting. There were no questions. B. Railbelt Reliability Coordination Update i. Special Committee on Required Project Work Brian Hickey, BPMC, discussed that the Grid Resilience and Innovation Partnerships (GRIP) application for Topic 2 smart grid control proposal was filed on October 17, 2022. The outcome of the submittal is expected to be released this summer. Work is ongoing with the GRIP application for Topic 1 grid resiliency involving the first funding cycle of rebuilding the backbone transmission system from Bradley Lake north. Mr. Hickey informed that Lee Thibert is assisting in this effort. The draft technical write-up should be released for review by tomorrow. The tactical team and Engineering Subcommittee will review the information next week. The community benefits plan information will be enhanced before submittal. The proposal is expected to be completed and sent to the grant writer and merit review by March 30, 2023. The goal is to follow the recommendation for submittal of the application prior to the deadline by at least 48 hours. Mr. Hickey informed that a task order will be provided soon to EPS and Mr. Thibert to initiate work on the Topic 3 proposal. Additional efforts will be focused on Topic 3 and will include an improved community benefit plan. The Topic 3 proposal is due May 19, 2023. There were no questions. 10. OPERATORS REPORT BPMC Minutes 3/24/23 Page 4 of 6 Martin Law, HEA, discussed the included Operator's Report. The monthly safety inspection was completed on March 3, 2023. A magnitude 5.4 earthquake occurred close to Homer and Anchor Point on March 19, 2023. Damage to the hydraulic tank was repaired during reinspection. Mr. Law indicated that there has been no lost time accidents and no forced outages to -date. The facility is running well. Mr. Law reviewed the pictures shown in the report. Approximately 24 inches of snow has accumulated at the site within the last week. There were no questions. 11. COMMITTEE REPORTS A. Budget to Actuals Report Chair Janorschke requested Mr. Ziesmer to discuss the included Budget to Actual Expense Report for the period of July 1, 2022, to February 28, 2023. Mr. Ziesmer discussed that the actuals for capital purchases not funded by R&C Funds shown on page two came in at $490,656. Schedule B shows the Operations and Maintenance (O&M) actual expenses are under budget at $1,317,149, primarily due to the timing lag of expenses versus the budget. The FERC sections that are under budget include FERC 537 Hydraulic Expenses, FERC 539 Miscellaneous Hydraulic Power Generation Expenses, FERC 542 Maintenance of Structures, FERC 544 Maintenance of Electric Plant, and FERC 928 Regulatory Commission Expenses. Mr. Ziesmer noted that Schedule D shows the R&C Fund Disbursements and Repayments. Actual expenses were $509,859. Schedule E shows the Battle Creek Non-R&C Capital Purchases FY23 actual expenses of $40,430. Schedule F shows the Battle Creek O&M expenses, which were under, budget at $106,548. Schedule H shows the SSQ Line Capital Purchases at a total of $253,832. Mr. Ziesmer indicated that he will discuss with the Budget Subcommittee regarding the potential utilization of funds remaining from the SSQ Line purchase for the 69 kV remediation costs. Schedule I shows the SSQ Line O&M expenses which are under budget at $4,669. There were no questions. B. O&D Report Chair Janorschke requested Andrew Patrick, HEA and Chair of the O&D Committee, to provide the report. Mr. Patrick informed that the O&D Committee met twice since the last BPMC meeting. He highlighted that the operating budget was the biggest topic of discussion. The proposed budget that included the $3.6 million in residence remodeling costs and the needle valve project was unanimously supported by the O&D Committee. The residence remodeling line item did not move to the Budget Subcommittee. The O&D Committee continues to evaluate the residence needs and to discuss ways to meet those unique needs within the current approved budget. Mr. Patrick advised that lake levels are higher than they were last year at this time, but they are still below normal. The reservoir storage capacity is approximately 17% full. The O&D Committee has ongoing discussions to ensure they are aware of anticipated required project work efforts and plans in order to appropriately coordinate the sharing of information and reports. There were no comments or questions. 12. MEMBERS COMMENTS Mr. Montgomery expressed appreciation to staff for their reports. He apologized for his remote attendance. Mr. Izzo added his thanks to Mr. Ziesmer and staff for their diligent efforts. Vice -Chair Burns echoed the sentiment of appreciation for the outstanding reports and quality BPMC Minutes 3/24/23 Page 5 of 6 information provided. Mr. Thayer reiterated the expression of appreciation and specifically thanked Mr. Ziesmer and Pam Ellis, AEA Controller, for their efforts on the budget. He thanked staff for the update on the SSQ Line and noted it is of great interest in Juneau. Mr. Miller expressed appreciation to staff for the great presentations and updates of the current efforts and progress. Joel Paisner, Ascent Law Partners, expressed appreciation for working together and for the responsiveness of members. Mr. Thayer introduced Michael Korniczky as the new in-house general counsel for AEA and AIDEA. Mr. Thayer thanked Mr. Korniczky for his attendance. Chair Janorschke welcomed Mr. Korniczky and requested the BPMC counsel work with participants to develop a lease proposal on the three best projects, which are required project work. 13. NEXT MEETING DATE - May 5, 2023 14. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 12:06 p.m. Brad Janorsc , Chair Curtis Thayer, Secretary BPMC Minutes 3/24/23 Page 6 of 6