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HomeMy WebLinkAbout2022.05.20 BPMC.ExecutedMinutes ___________________________________________________________________________ BPMC Minutes 5/20/22 Page 1 of 7 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE (BPMC) REGULAR MEETING AGENDA May 20, 2022 1. CALL TO ORDER Chair Izzo called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:10 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]); Andrew Laughlin (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); Daniel Aicher, Jennifer Bertolini, Bryan Carey, Brandy Dixon, Dona Keppers, David Lockard, Beazit Redzepi (AEA); Crystal Enkvist (phone) (Alaska Power Association); Joel Paisner (Ascent Law Partners); Brian Hickey (BPMC); Sherri Highers (CEA); Stefan Saldanha (Department of Law); Dan Bishop, Sarah Lambe, Pete Sarauer (GVEA); Larry Jorgenson, Martin Law, Andrew Patrick (HEA); David Pease, Matt Reisterer, 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. Thibert. The motion to approve the agenda passed unanimously. 5. PUBLIC COMMENTS – None. 6. APPROVAL OF MEETING MINUTES – March 25, 2022 and April 28, 2022 MOTION: A motion was made by Vice-Chair Janorschke to approve the Minutes of March 25, 2022, and April 28, 2022. Motion seconded by Mr. Burns. The motion to approve the Minutes of March 25, 2022, and April 28, 2022 passed unanimously. MOTION: A motion was made by Mr. Thayer to enter into Executive Session to discuss confidential matters related to Bradley Lake, the immediate knowledge of which would clearly have an adverse effect on the finances of the Authority or the Project. Motion seconded by Mr. Montgomery. The motion to enter into Executive Session passed unanimously. ___________________________________________________________________________ BPMC Minutes 5/20/22 Page 2 of 7 7. EXECUTIVE SESSION: 10:17 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 the Project. The Committee reconvened its regular meeting at 11:42 a.m. Chair Izzo advised that no action was taken on the matters discussed during Executive Session. 8. NEW BUSINESS A. FY22 Budget Amendment Chair Izzo requested Dona Keppers, AEA, review the FY22 Budget Amendment. Ms. Keppers explained that Amendment 5 to FY2022 Budget reallocates the Battle Creek shares as a result of the GVEA buy-in. This generated revised monthly contributions for Battle Creek. Ms. Keppers discussed that Schedule G shows the impacts to FY22. She gave an overview of the methodology that determined the new contribution amounts, as shown in the last two pages of Resolution 22-06 under Item 9B, titled Battle Creek Monthly Participating Purchaser Contributions, Revised Exhibit A, Computation of Contribution Amounts. Ms. Keppers discussed that the approved Resolution 2017-02 allowed the sale of Battle Creek Diversion Project shares to a non-participating purchaser. Exhibit A of the original Resolution 2018-01 authorized the allocation process where GVEA paid $1,883,993 for a 16.90% share of Battle Creek. Ms. Keppers reviewed the specific participation refund amounts as of June 1, 2022. Ms. Keppers discussed Schedule G of Amendment 5 to FY2022 Budget shows the proposed annual participant contribution amount of $3,564,453 for Battle Creek. The month of June is the last month in the fiscal year and no payments will be due from utilities because of GVEA’s lump sum contribution buy-in. There were no questions. MOTION: A motion was made by Mr. Thayer to approve the fifth amendment of the Fiscal Year 2022 Bradley Lake Hydroelectric Project budget as presented making the following changes: acknowledge receipt of the GVEA Buy-in payment into Battle Creek and confirm the payment of $1,883,993 is consistent with Resolution No. 2017-02 (2nd Amendment) and received by May 1, 2022; and accept reallocation of the percentage shares is consistent with Resolution No. 2018-01 (methodology). This amendment will make the following changes: 1. Reallocates the Battle Creek Shares as a result of the GVEA Buy-in generating revised monthly contributions for Battle Creek only – Schedule G, page 17. Motion seconded by Mr. Montgomery. The motion to approve the fifth amendment of the Fiscal Year 2022 BPMC budget as presented passed unanimously. B. FY23 Budget Amendment Chair Izzo requested Ms. Keppers present the FY23 Budget Amendment. Ms. Keppers discussed the four components of the proposed Amendment 1 for FY23 Budget. The first component of the proposed amendment is shown on Schedule A and removes $2,000,000 from SSQ Design required project work. The second component is shown on the Summary on page three and reduces the Bradley Lake excess payment agreement by $443,390, and moves that amount to the SSQ Line expenses under the Debt Service line item. Ms. Keppers discussed that the third component is shown on Schedule G and reallocates the ___________________________________________________________________________ BPMC Minutes 5/20/22 Page 3 of 7 Battle Creek shares as a result of the GVEA buy-in, generating revised monthly contributions for Battle Creek for 2023. The change has a net-zero effect on revenues, as the total contributions remain the same at $3,569,672. The fourth component is shown on the Summary on page three and increases the SSQ Line debt service amount by $33,390. This is the result of the revised estimate of the principal and interest on the prepayment using the date of May 31, 2022. There were no questions. MOTION: A motion was made by Mr. Montgomery to approve the first amendment of the Fiscal Year 2023 Bradley Lake Hydroelectric Project budget as presented making the following changes: 1) The removal of $2 million in SSQ Design from designated as Required Project Work to be covered under future bond proceeds – Schedule A, page 4; 2) Reduction of the Bradley Lake Excess minimum payment by the amount of $443,390 in SSQ Line debt service considered part of minimum payment – Budget Summary, page 3; 3) Reallocation of Battle Creek Shares as a result of the GVEA Buy-in generating revised monthly contributions for Battle Creek only – Schedule G, page 19; 4) The SSQ Debt Service payment amount increase of $33,390 as a result of revised estimates from using a May 31, 2022 date to estimate interest and principal for the pre-payment noted on Budget Summary, page 3. Motion seconded by Mr. Laughlin. The motion to approve the first amendment of the Fiscal Year 2023 Bradley Lake Project budget as presented passed unanimously. 9. OLD BUSINESS A. Required Project Work i. Resolution 22-04 – Development of Required Work Projects MOTION: A motion was made by Vice-Chair Janorschke to approve Resolution 22-04, Development of Required Project Work as presented. Motion seconded by Thayer. The motion to approve Resolution 22-04 passed unanimously. ii. Special Committee on Required Project Work Vice-Chair Janorschke gave special thanks to Dan Bishop, GVEA, and AEA on developing the map attached to Resolution 22-04. Vice-Chair Janorschke expressed appreciation to Sherri Highers, CEA, and her team for their work on the financing options. There were no questions. MOTION: A motion was made by Vice-Chair Janorschke that the Finance Subcommittee of the Special Committee on Required Project Work pursue project debt capped at the existing excess payments with the term of 28 years. Motion seconded by Thayer. The motion passed unanimously. iii. Bond Financing Update Chair Izzo requested Ms. Highers to present on the item. Ms. Highers informed that updated proposals from the lenders have been received. Draft term sheets have been requested while awaiting the independent engineering studies. The proposal feedback will be brought to the Committee once it is completed. There were no questions. ___________________________________________________________________________ BPMC Minutes 5/20/22 Page 4 of 7 iv. Railbelt Regional Coordination Update Chair Izzo requested Brian Hickey, Executive Director BPMC, to present on the item. Mr. Hickey informed that he is working with Mr. Thayer on the comments due on June 2, regarding the Infrastructure Investment and Jobs Act (IIJA). AEA will be the commenter under the notice of intent. Mr. Hickey discussed the involvement in the coordination of the strategic planning session on June 1. The session will walk through four different future scenarios for the Railbelt. Mr. Hickey requested attendance from each entity include a CEO, a technical person, and a non-technical person. He asked for the names to be submitted to him in order to provide the individuals with their book and the required reading articles prior to the meeting. There were no questions. B. Resolution 22-06 – Battle Creek Diversion Project Callback Acceptance Chair Izzo noted that budget action has already been taken on this particular matter. There were no questions. MOTION: A motion was made by Mr. Burns to approve Resolution 22-06, Battle Creek Diversion Callback Acceptance as presented. Motion seconded by Mr. Montgomery. Mr. Burns expressed appreciation for the opportunity to participate, and commented that in hindsight, they should have participated a long time ago. He looks forward to being a good partner under the arrangement. A comment was made complimenting AEA staff on their work in coordinating these efforts. Chair Izzo echoed the compliments and appreciation. The motion to approve Resolution 22-06 passed unanimously. 10. OPERATORS REPORT Chair Izzo invited Martin Law, HEA, to provide the Operator’s Report. Mr. Law discussed the generation of megawatt hours in March was 11,742, in April was 13,631, and to May 15, was 6,979. The lake level has been steady at an average of 1,090 feet. The acre-feet usage in March was 1,843, in April was 1,787, and to May 15, was 454. The raise in fish water CFS to 106 was due to uncontrolled melting and thawing of the creek. Mr. Law informed that architect for the duplex new building issued a “for review” set of project drawings and specifications. The remodeling of the crew’s quarters, employee housing, and the new duplex project have been combined into one RFP package to maximize the use of time and resources of the project staff. The budgets will remain separated, but the efforts will be combined. The Bradley crew has completed the preliminary clearing and the rough grading of the new duplex site. Work is ongoing to establish and compact the gravel pad. Mr. Law informed that the crew accessed and inspected the Battle Creek Diversion site. It is still very much restricted with ice. It was able to be put into service with about 30% manipulation of the MIF valve. Mr. Law anticipates that it will be fully thawed within two weeks. He discussed that the fire system inspection was completed the week of November 15th. The PRV and the control pressure valve was found to be leaking. Chinook Fire has been contracted to complete the replacement of the two valves and some of the corroded piping. The work is scheduled for ___________________________________________________________________________ BPMC Minutes 5/20/22 Page 5 of 7 next week. Mr. Law noted that the winter potholes on the runway have been filled and the runway has been regraded. Mr. Law discussed calls that the Microwave Hut was over-temperature and causing trips of the internet function. The crew used snow machines to access the Microwave Hut. The building temperature was 74 degrees, and the levers and fans were operating normally. The equipment was returned to service. Mr. Law informed that the two new snow machines that were ordered last year and delayed due to supply chain issues are expected to be delivered on the next scheduled barge, perhaps in June or July. Mr. Law reported that Green Wing Outdoor Safety conducted the Wildlife Awareness/Spray and Shotgun Defense Training for the crew on May 2. All crew members are working on CPR/First Aid refresher training, certification or recertification and will be completed by July. Beacon HSS will conduct Fire Extinguisher and Fire Hose training at the next safety meeting. There have been no lost time or reportable accidents for the months of March, April and into May. Mr. Law noted that the new hire began as scheduled in April and has been active for a couple of weeks. Unit #2 was forced out for eight hours on April 21, due to oil leaks on the RTD temperature probe flanges. The leaks were fixed, and no other issues have occurred. Mr. Law informed that the scope of work is being developed for next year’s scheduled maintenance outage in March. Mr. Law discussed the three pictures in the report showing the amount of snow remaining at the site, with the drifts being several feet deep at the entrance to the power tunnel gate house. He expects that the road can be cleared and accessed by the middle of June in order to drive to the top of the dam. Chair Izzo expressed appreciation to Mr. Law for his report and for providing the descriptive photos. There were no questions. 11. COMMITTEE REPORTS A. Budget to Actual Chair Izzo welcomed Ms. Keppers back to the table to present the O&D Report. Ms. Keppers noted that the report is for the period of July 1, 2021, through March 31, 2022. The budgeted amount for the capital purchases not funded by the R&C Fund as shown on Schedule A is $909,000. The FY22 actuals at the end of the period are $187,045. The budgeted amount for expenses as shown on Schedule B is $4,665,268. The FY22 actuals are under budget at the end of the period, totaling $4,049,772. The R&C Fund Disbursements and Repayments are shown on Schedule D, with FY22 actuals at the end of the period totaling $712,577. The budgeted amount for Battle Creek Capital Purchases as shown on Schedule E is $115,000. The FY22 actuals at the end of the period total $56,199. Ms. Keppers reviewed the Battle Creek Operations and Maintenance Schedule F showing the budgeted amount of $299,708 and the actual spend for the period of $153,951. Schedule H shows the SSQ Line Capital Purchases were budgeted at $750,000. The spend for the period is very small, at $27,357. Schedule I shows the SSQ Line Operations and Maintenance budget at $33,392. The spend for the period totaled $85,003. The last page in the reports delineates the budget and actual costs to-date by FERC account. Mr. Burns asked if the reason for the small spend to-date for the SSQ Line Capital Purchases, as shown on Schedule H, was due to timing issues. Ms. Keppers agreed, and noted that this is the beginning of the season. There were no additional questions. ___________________________________________________________________________ BPMC Minutes 5/20/22 Page 6 of 7 B. O&D Report Chair Izzo invited Andrew Patrick, HEA, to present the O&D Report. Mr. Patrick advised that he is Vice-Chair of the O&D Committee. He informed that Russ Thornton, CEA, was unable to attend today’s meeting, but did provide the Report included in the packet. Mr. Patrick reiterated that 11,873 megawatts of energy were delivered to Bradley Lake participants during the month of April. This amount is approximately 1/3 less than normal production during April, and reflects the effects of the lake level on generation capabilities. Mr. Patrick informed that lake levels have increased about 7/10 of a foot since Tuesday. The National Weather Service forecast for the current water year is expected to be about 105% of normal. The utilities are making plans for generation use for the next 12 months. Mr. Patrick reviewed the included chart showing the lake levels from 1995 until 2022. The lowest lines indicate intentional maintenance draw-downs, and this year’s line is approaching the lowest lake levels for this time of year. Mr. Patrick discussed the chart indicating the current pond levels with water left for GVEA and CEA. He noted the most recent O&D Committee assignments. HEA followed up on the Oscillation Study and a Voltage Study was completed . It was agreed to table any further tuning changes or modifications at Bradley Lake until further direction is provided. Mr. Patrick discussed the ongoing work and the variety of operational topics that was discussed at the O&D meeting. There were no questions. 12. COMMITTEE ASSIGNMENTS Chair Izzo requested Mr. Burns to review the assignments. Mr. Burns noted that Mr. Hickey is assigned to undertake the process of coordinating with the BPMC System Study Subcommittee the O&D Committee, and the utility stakeholders to identify the operational issues, such as capacity transfer and voltage, and how they interact with the reliability standards. He noted that Mr. Hickey is then directed to report back to the BPMC regarding the issues, the potential implications related to the existing agreements, and the recommended next steps. There were no questions. 13. MEMBERS COMMENTS Vice-Chair Janorschke expressed caution regarding the extreme dry conditions and the potential for wildland fires affecting the system from Homer to Fairbanks. Mr. Burns extended sincere appreciation to staff and the Committees for their efforts in preparing for today’s meeting. He expressed gratitude for participation in Battle Creek. Mr. Burns thanked Mr. Thayer for AEA’s efforts regarding the BPMC, the IIJA, and the larger focus on the future of the Railbelt. Mr. Montgomery echoed the comments of appreciation to staff and Committees and looks forward to working with members. He welcomed Mr. Hickey. Mr. Laughlin thanked all of the Committees for their hard work, and especially to Ms. Keppers for the reports presented. He acknowledged Vice-Chair Janorschke’s comment regarding being aware of the dry season. Mr. Thayer informed that the Legislature approved the Round 14 Renewable Energy Project grants, which included $800,000 to GVEA for wind studies, about $800,000 for HEA for wind studies, and $1 million for the Dixon Diversion. Grant agreements will be compiled, and the