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HomeMy WebLinkAbout2022.01.28 BPMC.ExecutedMinutesBRADLEY LAKE PROJECT MANAGEMENT COMMITTEE (BPMC) REGULAR MEETING AGENDA January 28, 2022 1.CALL TO ORDER Chair Izzo 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) Tony Izzo (Matanuska Electric Association [MEA]); John Burns (Golden Valley Electric Association [GVEA]); Lee Thibert (Chugach Electric Association [CEA]); Brad Janorschke (Homer Electric Association [HEA]); Curtis Thayer (Alaska Energy Authority [AEA]); and Rob Montgomery (City of Seward). 3.PUBLIC ROLL CALL (for all others present) Betty Caudle (phone) (Accu-Type Depositions); Jennifer Bertolini, Bryan Carey, Dona Keppers, Kirk Warren (AEA); Joel Paisner (Ascent Law Partners); Matt Clarkson (phone), Sherri Highers, Russell Thornton (CEA); Stefan Saldanha (phone) (Department of Law); Dan Bishop (phone), Pete Sarauer (phone) (GVEA); Bob Day, Larry Jorgenson (phone), Andy Patrick (phone) (HEA); Kirk Gibson (McDowell Rackner Gibson, PC) (phone); David Pease, Matt Reisterer (phone), Unidentified Speaker (phone), Tony Zellers (MEA); and Bernie Smith (Public). 4.AGENDA APPROVAL Chair Izzo reminded everyone to please place themselves on mute until it is their turn to speak to reduce the background noise. MOTION: A motion was made by Mr. Montgomery to approve the agenda. Motion seconded by Mr. Burns. The motion to approve the agenda passed unanimously. 5.PUBLIC COMMENTS - None 6.APPROVAL OF MEETING MINUTES – December 10, 2021 MOTION: A motion was made by Mr. Thayer to approve the Minutes of December 10, 2021. Motion seconded by Vice-Chair Janorschke. The motion to approve the Minutes of December 10, 2021 passed unanimously. MOTION: A motion was made by Mr. Thayer to enter into Executive Session to discuss confidential matters related to Bradley Lake Strategic Planning Session. Discussions will involve matters the immediate knowledge of which would clearly have an adverse effect on the finances of the Authority or the Project. Motion seconded by Mr. Thibert. ___________________________________________________________________________ BPMC Minutes 1/28/22 Page 1 of 6 The motion to enter into Executive Session passed without objection. 7.EXECUTIVE SESSION: 10:10 a.m. Strategic Planning Discussion (per Bylaws Section 5.11.4(1)) The Committee reconvened its regular meeting at 11:49 a.m. Chair Izzo advised that no formal action was taken on the matters discussed during Executive Session. 8.NEW BUSINESS A.FY2022 Budget Amendment Chair Izzo requested Dona Keppers, AEA CFO, present the FY2022 Budget Amendment. Ms. Keppers informed that included in the Committee’s packet is the FY2022 Proposed Budget- Amend 4, and the proposed motion with corresponding page numbers of the changes. She gave a synopsis of the proposed changes as follows: $300,000 increase in R&C for Spillway work, repayment of $75,000 in FY22 – Schedule D, page 13 $30,000 increase in O&M for Dave’s Creek – Schedule B, page 5 $150,000 increase non-R&C capital expenditures for Battle Creek bridge repair & Soldotna SVC Battery replacement – Schedule A, page 4 $903,000 revenue increase in interest income, Budget Summary, page 3 $6,000 transfer to the Operating Reserve Fund $12,454,346 excess payment reduction from the Bradley Lake to SQ Line, Budget Summary, page 3 and, $9,893,771 capital reserve transfer from Bradley Lake to SQ Line. Ms. Keppers advised that the overall impact of the budget amendment to Bradley Lake is a revised monthly payment of $130,478 for all utilities that begins on March 1, 2022. This calculation can be found on Schedule C, page 12. The budget amendment has no impact on Battle Creek. The impact to the SQ Line contribution can be found on the last page of the report. The revised monthly contribution for all utilities is $354,390 that begins on March 1, 2022. MOTION: A motion was made by Mr. Thayer to approve the fourth amendment of the Fiscal Year 2022 Bradley Lake Hydroelectric Project budget. This amendment will make the following changes: $300,000 increase in R&C for Spillway work, repayment of $75,000 in FY22 – Schedule D, $30,000 increase in O&M for Dave’s Creek – Schedule B, $150,000 increase non R&C capital expenditures for Battle Creek bridge repair & Soldotna SVC Battery replacement – Schedule A, $903,000 increase in Interest Income, $6,000 transfer to Operating Reserve fund, $12,454,346 excess payment transfer from Bradley Lake to SQ Line, $9,893,771 capital reserve transfer from Bradley Lake to SQ Line. Motion seconded by Mr. Burns. ___________________________________________________________________________ BPMC Minutes 1/28/22 Page 2 of 6 Mr. Burns asked Ms. Keppers if this amendment to the budget revises the monthly contribution for all utilities to approximately $360,000, as listed and allocated on the last page. Ms. Keppers agreed. The motion to approve the fourth amendment of the Fiscal Year 2022 Bradley Lake Hydroelectric Project budget passed unanimously. 9.OLD BUSINESS A.Required Project Work MOTION: A motion was made by Vice-Chair Janorschke to approve bonding for an amount not to exceed the annual debt service amount equal to the excess payment amount to finance for required project work. Motion seconded by Mr. Thibert. Mr. Burns asked if the motion is for the full duration of the future bonding. Vice-Chair Janorschke agreed. There were no other questions. The motion to approve bonding for an amount not to exceed the annual debt service amount equal to the excess payment amount to finance for required project work passed unanimously. 10. OPERATORS REPORT Chair Izzo requested that Mr. Day present the Operator Report. Mr. Day noted that he is pleased to be at the meeting today, as his retirement has been postponed. Mr. Day reviewed the unit statistics listed on the first page of the Operator Report dated January 28, 2022. The lake level was at 1,112 feet as of January 24th. Mr. Day stated that Bradley Lake has had a reasonably good water year, while running close to record low levels. The lake level has only been lower than it is now once during his tenure when fish water and dam work occurred. Mr. Day explained that the minimum level under normal operations is 1,080 feet and this is an arbitrary figure that the utilities can go below with impacts. Mr. Day discussed his decision to stay on until February 28, 2022, was due to many issues that needed attention at the beginning of the year, including the budget, the barge, fire inspections, and others. His priority is that Bradley moves ahead and is a success in the future. The new building activity is ongoing. The fire inspection report was recently received and noted that the fire pump does not meet specifications. Mr. Day explained how the fire system runs off the penstock and as long as the turbines are operating, the fire system has one of either penstock that it supplies water from. If both TSVs are shut down and the lake is shut off, then the fire pump is in a tertiary reserve system and is 92% effective at pumping water. Mr. Day allayed any fears that there is any kind of risk to Bradley, and efforts are underway to correct the problem of not meeting specifications. Mr. Day reported that a new operator began on December 27, 2022. The new Superintendent who will replace Mr. Day is expected to begin March 15, 2022. Mr. Day informed that one of the existing trainees took a better paying job on the Slope and left in January. Bradley has been operating short-staffed due to one operator retiring, one operator on light duty, and one operator who just returned from extensive medical leave. Mr. Day informed that the D. Hittle Report is complete and available. Please let him know if ___________________________________________________________________________ BPMC Minutes 1/28/22 Page 3 of 6 members need a copy. He commented that the weather conditions have been miserable. He showed a picture of the powerhouse area with an inch of water on top of clear ice. Mr. Day discussed that work on the 2023 Budget is anticipated to begin soon. A barge trip is being arranged to transfer staged items from Homer. The new grader was a two-year project that has finally arrived. Mr. Day announced that the annual maintenance outage is March 1st through March 20th and will include the opportunity to conduct major plant maintenance. The Budget Subcommittee will hold an impromptu meeting at Bradley Lake on February 17th and 18th. Mr. Day is looking forward to hosting new visitors and extended the invitation to the Committee and their organizations. Mr. Day expressed appreciation to Mr. Thayer for communicating with the Department of Motor Vehicles and solving a long-standing issue regarding the requirement that Bradley Lake operators maintain a CDL because they drive on a State road. The requirement posed difficulties for recruitment of operators. Mr. Thayer advised that Jennifer Bertolini, AEA, did the research that made the case. Mr. Day thanked Ms. Bertolini for her work to resolve this chronic issue. Vice-Chair Janorschke added that he forwarded a graph to members showing the average monthly lake levels since 2016. He noted that the graph clearly shows how much lower the lake levels are today. Mr. Burns thanked Mr. Day again for his efforts over the years. He asked if there is a standard safety compliance report that the Committee is provided on a regular basis. Mr. Day informed that monthly safety meetings are held, and any incidents get reported to the Safety Department. Mr. Day was pleased to note that Bradley has not had any safety reportable incidents in the last three years. The one minor injury occurred when someone stood up in the turbine pit and cut their head. Mr. Burns suggested that a line is included in the report about any happenings from a safety perspective. Mr. Day agreed to tell his successor to include a safety line item within the Operator Report. There were no additional questions. 11. O&D REPORT Russ Thornton, CEA, gave an overview of the three-hour O&D Committee meeting on January 14th. He apologized for not having a written report. Mr. Thornton noted that Mr. Day, in his Operator Report, covered many of the issues discussed at the January meeting. Other items of discussion included AEA agreeing to create a shared file in order to more easily access O&D meeting minutes, agendas, and supporting documents. A brief discussion occurred regarding next year’s budget and beginning that cycle. The O&D assignments from BPMC and within the Committee were reviewed. The Bradley capacity transfer analysis assignment is ongoing and has not progressed to its closure as the O&D had hoped. The other assignment regarding the flowmeter installation is ready to proceed in the springtime. Chair Izzo commented that the transfer analysis assignment is approaching a year timeframe. He requested clarity and a commitment on when that assignment will be completed. Mr. Thornton stated that he reviewed the analysis with MEA after the previous BPMC meeting and is writing the report to be distributed to the O&D Committee prior to the next BPMC meeting. It is unknown whether or not the O&D Committee will concur with the report and will be ready to pass the report forward to the BPMC before its next meeting. There were no other questions. 12. COMMITTEE REPORTS ___________________________________________________________________________ BPMC Minutes 1/28/22 Page 4 of 6 A.Budget to Actual Chair Izzo requested that Ms. Keppers present the Budget to Actual Expense Report for the 1st Quarter of the fiscal year. Ms. Keppers advised this report includes all the year-end completed work. This report is part of a compliance requirement to be submitted to U.S. Bank. This report contains Amendment 3. Ms. Keppers directed the Committee’s attention to page two listing the summary of the actual spend and the balances in the balance sheet accounts. Each of the expense lines on the summary are detailed in their respective schedules. The Bradley Lake Capital Purchases Not Funded by the R&C Fund is shown on Schedule A-1 at $100,883 and is under budget for the 1st Quarter. Ms. Keppers reviewed that the detailed pages by FERC cost category begin on Schedule B. The summary by expense type is at the top of page four. The total actuals for the 1st Quarter are $1,122,174. This is under budget by $493,917. Mr. Thayer commented that the first line on page four is listed as “AIDEA” Staff Professional Services Direct and the column to the right is listed as “AEA” Actual. He asked if this is a typographical error under the Summary by Expense Type heading. Ms. Keppers informed that she will review the titling. Mr. Thayer indicated that the methodology was changed a couple of years ago and he wanted to clarify, if needed. The same listing is on Schedules F and I. Ms. Keppers noted that the Battle Creek summary of revenues and expenses for the 1st Quarter is shown on page nine. The Battle Creek Capital Purchases in the amount of $11,217 is shown on page 10 and is under budget. The O&M Budget to Actuals by FERC category on page 11 indicates the 1st Quarter actuals at $21,017, which is under budget by $78,886. Ms. Keppers directed the Committee’s attention to the SQ Line summary 1st Quarter balances on page 15. She reviewed the capital purchases listed on page 16 totaled $139,914, which is under budget for the period. A member asked if the under-budget amounts were due to a matter of timing. Ms. Keppers agreed and anticipates that additional costs incurred during the summer construction season will be reflected next quarter. Ms. Keppers discussed page 17, which delineates the SSQ Line O&M. The spend is under budget for the period by $104,880. Ms. Keppers continued the review of the R&C Fund Disbursement and Repayments on Schedule D. The overall spend is under budget for the period ended September 30, 2021. She reiterated that this report includes Amendment 3 and does not include Amendment 4. There were no additional questions. B.Special Committee on Required Project Work Chair Izzo requested that Vice-Chair Janorschke provide the update on the Special Committee on Required Project Work. Vice-Chair Janorschke stated that he believes everything has been covered earlier in the meeting and he has no additions to the information. He expressed appreciation to the two Subcommittee Chairs, Dan Bishop, GVEA, and Sherri Highers, CEA, for their diligent efforts. 13. COMMITTEE ASSIGNMENTS Chair Izzo commented that it would be worthwhile for Legal to draft a letter regarding the costs associated with Project Required Work delays due to the length of time it takes to get a ___________________________________________________________________________ BPMC Minutes 1/28/22 Page 5 of 6