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HomeMy WebLinkAbout2022.06.24 BPMC.ExecutedMinutesBRADLEY LAKE PROJECT MANAGEMENT COMMITTEE (BPMC) REGULAR MEETING AGENDA June 24, 2022 1. CALL TO ORDER Chair Izzo called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 9:53 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]); Arthur Miller (Chugach Electric Association [CEA]); Brad Janorschke (Homer Electric Association [HEA]); Bryan Carey (Alaska Energy Authority [AEA]); and Rob Montgomery (City of Seward). 3. PUBLIC ROLL CALL (for all others present) Betty Caudle (phone) (Accu-Type Depositions); Audrey Alstrom, Jennifer Bertolini, David Lockard, Beazit Redzepi, Curtis Thayer (phone) (AEA); Crystal Enkvist (phone), Don Maynor (phone) (Alaska Power Association and ARECA Insurance Exchange); Joel Paisner (Ascent Law Partners); Brian Hickey (BPMC); Matt Clarkson (phone), Sherri Highers, Andrew Laughlin, Russell Thornton (CEA); Sarah Lambe (phone), Pete Sarauer (GVEA); Larry Jorgenson, Martin Law, Andrew Patrick (HEA); David Pease, Tony Zellers (MEA); Bernie Smith (Public). 4. AGENDA APPROVAL Chair Izzo recommended changes to the agenda. He indicated that there are financial matters to discuss that require an executive session, the immediate knowledge of the matters would clearly create an adverse impact upon the finances of the Authority or the Project. Chair Izzo requested to add Item 8C. Budget Amendments to the agenda. MOTION: A motion was made by Mr. Montgomery to approve the agenda with the amendments to add Item 7. Executive Session, and to add Item 8C. Budget Amendments. Motion seconded by Vice -Chair Janorschke. Mr. Burns asked if the intent is to conduct the Executive Session in order as Item 7. or to move the Executive Session to the end of the meeting for efficiency. Chair Izzo noted his preference today is to conduct Executive Session in order as Item 7., based on the matters that need to be discussed. He agreed that conducting the Executive Session at the end of the meeting is typically more efficient. There were no other questions. The motion to approve the agenda with the amendments to add Item 7. Executive Session and to add Item 8C. Budget Amendments passed unanimously. 5. PUBLIC COMMENTS Bernie Smith commented that he was running late. He wanted to inform the Committee that he BPMC Minutes 6/24/22 Page 1 of 10 is listening to the meeting. There were no other public comments. 6. APPROVAL OF MEETING MINUTES — May 20, 2022 MOTION: A motion was made by Mr. Burns to approve the Minutes of May 20, 2022. Motion seconded by Vice -Chair Janorschke. Mr. Burns expressed appreciation to Jennifer Bertolini, AEA, for providing the Minutes in advance of the meeting. The motion to approve the Minutes of May 20, 2022 passed unanimously. MOTION: A motion was made by Vice -Chair Janorschke to enter into Executive Session, due to the financial nature of the discussion that might have a financial impact on the organization. Motion seconded by Mr. Montgomery. The motion to enter into Executive Session passed unanimously. 7. EXECUTIVE SESSION: 10:02 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 11:26 a.m. Chair Izzo advised that no decisions were made on any matters discussed during Executive Session. 8. NEW BUSINESS A. IIJA Electric Vehicle - Presentation Chair Izzo requested Audrey Alstrom, AEA, proceed with the Infrastructure Investment and Jobs Act (IIJA) Electric Vehicle presentation. Ms. Alstrom noted that she is the Director of the Alternative Energy and Energy Efficiency group. AEA's mission is to reduce the cost of energy in Alaska. AEA is leading Alaska's effort to minimize barriers to electric vehicle (EV) adoption. Ms. Alstrom discussed AEA's EV Program and how the Committee can assist in those efforts. There are three types of EVs. The Hybrid Electric Vehicles include the Toyota Prius that utilizes an electric engine in conjunction with the internal combustion engine. The batteries are recharged by braking or through the internal combustion engine. The Plug -In Hybrid Electric Vehicles utilize a separate battery and a separate combustion engine. The batteries have to be externally charged. The Battery Electric Vehicles include the Tesla and Chevy Bolt and only operate with electric motors. Their range is up to approximately 300 miles. Ms. Alstrom discussed that Level 2 Chargers give approximately 12 kW of charging capacity. It takes about six hours to charge the battery from low to high. Each charging hour gives approximately 20 to 30 miles. The Level 3 Chargers are called fast chargers. The capacity is about 50 kW and will fully charge a vehicle from low to high in about 30 minutes to an hour. Ms. Alstrom informed that the EV Working Group is open for anyone to join and participate. Technical sessions are hosted to discuss EV information, such as maintenance, design, policy, and funding sources. The Volkswagen Beneficiary Mitigation funds have been utilized to install BPMC Minutes 6/24/22 Page 2 of 10 EV infrastructure, including nine fast -charging stations between Homer and Healy. The stations are single Level 3, 50 kW fast -chargers. There have been delays due to supply chain issues, but most should be commissioned and installed this summer. Ms. Alstrom reviewed the barriers to EV adoption in Alaska as identified by the EV Working Group. These include range anxiety due to the lack of charging infrastructure, high demand charges in areas that are not regulated, cold climate performance, and the market availability of EVs for consumers to buy at reasonable costs. Ms. Alstrom noted that two Level 2 charging stations were completed at State facilities using State Energy Planning (SEP) funds. All of the charging stations AEA has installed can be found on the PlugShare application. Ms. Bertolini indicated that she is receiving messages that participants on the phone were unable to hear the presentation. A brief at -ease was taken as the technical difficulties were resolved. Chair Izzo called the meeting back to order and requested that Ms. Alstrom proceed with the presentation. Ms. Alstrom discussed the IIJA National Electric Vehicle Infrastructure (NEVI) Formula Program. The Program will fund a network of EV infrastructure and charging stations across the nation, including Alaska. Alaska is to receive more than $50 million over the next five years. The Federal Highways has released guidance regarding the submittal of a State implementation plan by August 1st for the use of the funds. Included in the plan must be the design build -out of alternative fuel corridors before funds can be used elsewhere. The alternative fuel corridor in Alaska is between Anchorage and Fairbanks. The guidance requires that any stations installed along the corridor must be less than 50 miles apart, must be less than one mile from a highway, and have at least four charging ports capable of charging at 150 kW simultaneously. The use of federal funds can be up to 80% of the cost of the charging infrastructure. The remaining match funds could be a combination of State and private entities, including service area utilities. Ms. Alstrom showed a graphic illustrating Alaska's alternative fuel corridor. The highlighted area between Trapper Creek and Cantwell is a section of the corridor with no transmission and will not meet the NEVI requirements of the 50-mile rule. Either a request for an exception will have to be submitted or a creative solution will have to be established. Ms. Alstrom reviewed the timeline for the NEVI funds. A request for information (RFI) for public feedback and site locations was issued and closes on June 27th. The implementation plan that is due August 1st is currently being drafted by staff, Alaska Department of Transportation (DOT), and a professional consultant. Baseline data is being collected and the plan is anticipated to be available for public comment soon. Stakeholder outreach is occurring, as well as continued interagency coordination and data compilation. Federal Highways has until September 30th to approve the plan. Ms. Alstrom provided her contact information for members to share with their team regarding the EV plan. Mr. Burns expressed appreciation to Ms. Alstrom for the presentation. He requested additional information regarding the yellow highlighted area between Trapper Creek and Cantwell and asked if it is potentially problematic for AEA in qualifying for the funds. Ms. Alstrom indicated that is a potential problem, but there is the option to request exceptions to the 50-mile rule. She noted that at this point, it is likely that AEA will request an exception to the 50-mile rule for that section of approximately 90 miles. Mr. Burns asked for clarification regarding the RFI and when it was sent out. Ms. Alstrom explained that the RFI was sent out in May. There were no additional questions. BPMC Minutes 6/24/22 Page 3 of 10 B. Retaining Consultants —Vision Foresight Strategy Chair Izzo discussed that members have a copy of a Vision Foresight Strategy document. He requested the approval of Vision Foresight Strategy as a consultant to the BPMC to provide strategic consulting services. The budget regarding the services will be discussed under Item 8C. MOTION: A motion was made by Mr. Burns to approve Vision Foresight Strategy as a consultant to the BPMC to provide strategic consulting services. Motion seconded by Mr. Montgomery. The motion to approve Vision Foresight Strategy as a consultant passed unanimously. C. Budget Amendments - FY22 Budget Amendment and FY23 Budget Amendment Chair Izzo explained the proposed budget amendments include the current fiscal year and the next fiscal year. MOTION: A motion was made by Vice -Chair Janorschke to amend the Fiscal Year 2021- 2022 Budget to include items listed in Figure Two of the document provided to members in the amount of $111,818. Motion seconded by Mr. Miller. The motion to amend the Fiscal Year 2021-2022 Budget to include items listed in Figure Two of the document provided to members in the amount of $111,818 passed unanimously. MOTION: A motion was made by Vice -Chair Janorschke to amend the Fiscal Year 2022- 2023 Budget to add $790,580 to enable the EDRRC to fill his responsibilities. Motion seconded by Mr. Miller. A member requested the confirmation of the additional budgeted amount of $790,580. The amount of $790,580 was confirmed. The motion to amend the Fiscal Year 2022-2023 Budget to add $790,580 to enable the EDRRC to fill his responsibilities passed unanimously. 9. OLD BUSINESS A. Required Project Work i. Special Committee on Required Project Work Chair Izzo requested Vice -Chair Janorschke provide the update. Vice -Chair Janorschke indicated that the Special Committee of Required Project Work met two weeks ago. The meeting was Chaired by Dan Bishop, who is also the Engineering Subcommittee Chair. Also in attendance were representatives from across the Railbelt, including a CEA contractor Justin Merkel (sp). Vice -Chair Janorschke indicated that Mr. Merkel provided an overview of the process currently focused on the SQ Line. The design work is scheduled to occur this fall. Construction will begin in multiple phases beginning in the 2023/2024 construction period. Vice- BPMC Minutes 6/24/22 Page 4 of 10 Chair Janorschke noted the possibility that discussions will occur with AEA, Mr. Merkel, Andrew, and the Refuge. Vice -Chair Janorschke provided the current project budget amount. The project is delineated in three phases: Sterling to the western edge of the Refuge, across the Refuge, and east of the Refuge to the Quartz Creek Substations. HDR has been selected as the consultant. The Engineering Subcommittee will receive a monthly report from Mr. Merkel and quarterly update meetings will occur. Vice -Chair Janorschke commented on the possibility of a discussion on transitioning to a different Chair at the next meeting, depending on the outcome of the elections. Mr. Carey added that he and Mr. Merkel met with the Refuge on Wednesday for an informal meeting. Vice -Chair Janorschke requested that Mr. Merkel provide his contact information to the BPMC and the Engineering Subcommittee. There were no additional comments or questions. ii. Bond Financing Update Chair Izzo requested Sherri Highers, CEA, to present on the item. Ms. Highers informed that the Railbelt CFOs will meet July 6 to review the term sheet resolution. The financing resolution will be released to the participating utilities the first week of July to present to their Boards and Councils. The CFO group will then bring a term sheet before the BPMC for approval in July. It will then go to AEA and their financial advisor and bond counsel to move forward. Chair Izzo expressed appreciation to Ms. Highers for her efforts. There were no questions. iii. Railbelt Regional Coordination Update Chair Izzo requested Brian Hickey, Executive Director BPMC, to present on the item. Mr. Hickey informed that included in the packet is the Regional Railbelt Reliability Coordination Monthly Report. He noted that his primary focus has been on IIJA activities, and his secondary focus has been with Andrew Laughlin regarding required project work. Mr. Burns expressed appreciation to Mr. Hickey for the informative updates that provide a basis to share appropriate information with Boards. There were no questions. 10. OPERATORS REPORT Chair Izzo invited Martin Law, HEA, to provide the Operator's Report. Mr. Law discussed that the lake level has raised 1.2 feet per day in the last week. The level is rising more quickly now that the warm weather is here. The lake level today was 1,120.2 feet. Satisfactory work continues on the Bradley Lake duplex new building. The project bidding has not been released and the construction has been pushed into next year. Mr. Law informed that the Battle Creek Diversion road is still snowed -in, and access is expected at the end of June. Washout has occurred on both the Dam Access road and the Battle Creek Diversion road. The crews are currently repairing those areas. Substantial progress has been made on the fire system punch list and is approximately 80% complete. The fire pump will be retested when Chinook Fire personnel returns. Mr. Law noted that RESPEC is ready to start submitting documents for review on the project -wide fire system. Preparations have begun to take that out to bid. BPMC Minutes 6/24/22 Page 5 of 10 Mr. Law advised that there has been no lost time or reportable accidents for the months of April, May, and into June. He noted that Paul Parsons has announced his retirement and his last day with Bradley Lake will be June 27th. The interview selection process for his replacement has been completed and an offer is being made to the candidate. Mr. Law discussed that the annual maintenance outage list is still in development. The GSI inspection and gas analysis on the transformer and brakers will be conducted during the outage scheduled for April 17, 2023 through May 5, 2023. Mr. Law informed that Mr. Carey will be coordinating an AEA tour of Bradley Lake on June 28th. Mr. Law discussed the pictures included in the report. Chair Izzo expressed appreciation for the concise report. He commented that it is good to see the lake level rising. There were no questions. 11. COMMITTEE REPORTS A. Budget to Actual Chair Izzo welcomed Beazit Redzepi, AEA, to discuss the Budget to Actual Expense Report dated July 1, 2021 through May 31, 2022. The capital purchases shown on Schedule A total $205,479. The summary by expense type is shown on Schedule B. The total is approximately $4.7 million. This amount is under budget at this point by $1.3 million. The capital purchases funded by the R&C Fund shown on Schedule D total about $820,000. The Battle Creek capital purchases shown on Schedule E total approximately $58,000. The Battle Creek operations and maintenance (O&M) expenses shown on Schedule F total about $163,000. The SSQ Line capital purchases shown on Schedule H total approximately $60,000. The SSQ Line O&M expenses shown on Schedule I total about $101,000. Mr. Burns asked if the current $1.3 million under -budget total amount is due to timing. Mr. Redzepi advised that the amount could be affected by timing because work ramps up during the summertime and the final amounts will be determined after the last invoices are received. Mr. Burns expressed concern about the under -budget amount and the reconciliation that occurs at the end of the year. Mr. Redzepi explained that work occurs in June and the utilities have not invoiced for that work yet. He noted that a refund amount of $1 million is not uncommon. Mr. Redzepi discussed that the refund amount could be reduced through a quarterly budget review and a final amendment by March 315t to provide three months of reduced payments. This would reduce the refund amount that has to be approved and paid out in January. Mr. Burns commented that he assumes that the BPMC Finance Committee is discussing the budget options. He noted that if the Finance Committee has no recommendations, then he is supportive of continuing the budget as it is presented. Mr. Burns expressed his concern regarding the IMC budget that also looked like there was going to be a big refund, but further explanation revealed that the total amount was yet to be determined. Bryan Carey discussed that he believes one item that has yet to be actualized is the Construct Additional Residence. The item was included in the budget because HEA was attempting to go out to bid during the spring. It has not gone to bid yet and the invoices will not come in until FY23, rather than FY22. The amount is almost $1 million. Mr. Burns asked if that means there will be an immediate amendment in FY23. Bryan Carey explained that the amount is in the R&C Fund and the money is paid over four years. BPMC Minutes 6/24/22 Page 6 of 10 Bryan Carey gave an insurance update regarding the Bradley Project. He received the quote for the Bradley Lake property insurance this morning. For FY22, the property insurance had increased from about $650,000 to $1.3 million. Changes have been made for this year to use the State broker for a fee of about $10,000. Bryan Carey formed that he will send the quoted information to the Budget Subcommittee to review the options quickly in order to confirm the placement by the end of next week. The anticipated amount is approximately $1 million. This is a savings of about $300,000 from this year. The property insurance limit of the probable maximum loss will be $100 million compared to the previous policy of about $60 million. Mr. Burns asked if the BPMC is expected to approve the new insurance contract. Bryan Carey explained that there will need to be a budget adjustment during the next budget amendment in July or August because the budget amount for FY23 for insurance was placed at $650,000. The new insurance is more than the FY23 budgeted amount and less than the actual cost in FY22. He will provide the information to the Budget Subcommittee to review the options and to make a final decision. Vice -Chair Janorschke asked if Bryan recalls why the Budget Subcommittee did not include the same amount of $1.3 million insurance cost from the FY22 budget in the FY23 budget calculations. Mr. Carey noted that the amount budgeted for FY23 was either $650,000 or $700,000, which is closer to historic insurance amounts. He explained that rather than include a larger number in the budget that the Budget Subcommittee was confident was going to be higher than this year's actual insurance cost, the decision was made to use a number that was closer to the historical amount. There were no additional questions. B. O&D Report Chair Izzo invited Russ Thornton, CEA, to present the O&D Report. Mr. Thornton noted that the O&D meeting was held on June 17. The report has been provided and linked to the agenda. He made a correction on Item 4a., which should read 14,429 MWh of energy. Mr. Thornton discussed the water level has begun to increase and the forecast was met for the second time in the last water year. Substantial inflows are occurring, and the system average lake levels are now tracking slightly above the norms over the last month. Mr. Thornton informed that the water tracking sheet has been modified to reflect the redistribution of Battle Creek to include GVEA. The percentages are shown in the report. Several action item assignments have been completed. The SCADA department continues to investigate options and improvements regarding modifications to BIDS allowing HEA wheeling of power to Bradley Lake participants. The assignment regarding the work on the flow meter will begin once the snow melts and access is available. Work has begun to develop options for the automation of Battle Creek measurements and ICCP reporting. Mr. Burns commented that the Battle Creek shares reflected in the report does not match Resolution 22-06 passed last month. Mr. Thornton indicated that he would confirm the information. i. Utility capacity usage report follow up Chair Izzo discussed the Utility Capacity Usage Report and followed up on observations. He acknowledged and expressed appreciation that procedures have been changed. Chair Izzo commented that Bradley should be move to its own schedule and could be captured in SCADA. BPMC Minutes 6/24/22 Page 7 of 10 Mr. Thornton asked if the report concerns HEA's sale of energy to the north participants. Chair Izzo disagreed and explained that SCADA controls do not allow exceeding capacity for regulation. He believes it should be more than just an alarm. Mr. Thornton stated that he does not have the documents that Chair Izzo is referencing and requested additional information. Chair Izzo requested Tony Zellers, MEA, to provide further explanation. Mr. Zellers indicated that the discussion regards the potential for SCADA controls to not allow a utility to exceed their capacity. Mr. Thornton expressed his understanding that BIDS performs that control. Mr. Zellers noted that his understanding from the O&D is that SCADA allows for the exceedance and alarms the dispatcher. He noted that the report indicates that MEA exceeded their capacity 11 times. The question asked is how the exceedances occur if SCADA does not allow exceedances and MEA does not regulate with Bradley Lake. The BIDS system and software controls are expected to be reviewed. Chair Izzo requested that the O&D take the alarm issue as an assignment and provide an update at the next meeting. Mr. Burns recommended that confirmation is given regarding whether or not SCADA allows for exceedances and under what conditions the alarm is sounded. Chair Izzo requested the O&D to confirm that CEA is the only utility that can regulate with Bradley Lake. Mr. Thornton expressed his understanding that BIDS will allow all utilities can regulate directly with their share of Bradley Lake. He noted that only a few utilities have added that capability to their SCADA system. Mr. Thornton explained that the response is dependent upon the input from each participant's SCADA system. Participant regulation is limited by the participant's system set up. The BIDS system will respond and allow participants to make modifications and regulations to their share of Bradley Lake. Mr. Thornton informed that ML&P's system was set up to regulate their share, and he understands that MEA's system is set up to regulate their share as well. Mr. Thornton advised that MEA's SCADA department can work with other utilities' SCADA departments to set up and test their systems. He discussed that each system has to be set up to allow for regulation. Mr. Burns requested that the O&D report back and inform which utilities are set up to regulate their share, which utilities have exceeded their share, and which utilities have sounded the alarm. Mr. Thornton indicated that he would include that information in his next report. He discussed that regulation and exceedance of capacity are two different issues. CEA has the ability to exceed capacity because they are controlling the Bradley Lake units, including the additional loads of station service and the transmission line losses. Vice -Chair Janorschke discussed the current factor of the line and the possibility of changing the 10 MW limit based on the specific needs. A comment was made that emphasized the importance of knowing where and when events in the system occur. Mr. Burns asked if there is a group that reviews how resource optimization is used and how it can be used. Mr. Zellers indicated that he is unaware of specific optimization studies. He believes a good start would be to determine the scope of such an optimization study. Mr. Burns commented that he does not have a clear idea of what questions to ask. He explained that there are times on the Railbelt where utilities have asked for increased energy and that is not possible because there are issues relative to the specific line. Mr. Burns asked which group reviews those sorts of issues. Mr. Zellers noted that the Railbelt studies are traditionally BPMC Minutes 6/24/22 Page 8 of 10 conducted by the IMC System Studies Subcommittee. Mr. Burns requested that study is added to Mr. Thornton's assignment. Vice -Chair Janorschke suggested the possibility that a highly technical group review ways to maximize the benefits and values of the investments as upgrades occur to the transmission line and across the system from sources such as the IIJA and excess bond payments. He commented on the prospect of utilizing a format where assets or resources are combined into a pool and the utilities each schedule different amounts of Bradley Lake. The format is similar to a unified system operator while maintaining independent status. Vice -chair Janorschke commented that this type of review could be one step towards maximizing the benefits of the investments and is probably beyond the expertise of at least several of the participants. There were no additional questions or comments. 12. COMMITTEE ASSIGNMENTS Chair Izzo reviewed the assignments. The O&D Committee is assigned to work with Mr. Zellers to help outline the follow-up assignment regarding exceeding capacity and regulation of the project. Counsel is assigned to review SB 123, as previously discussed. There were no questions. 13. MEMBERS COMMENTS Mr. Carey informed that AEA held a successful joint agency public meeting in Homer for the Dixon Diversion. He was impressed to see four different directors of HEA at the meeting. The site tour went well. Questions regarding the costs and potential impacts were discussed. No disparaging comments were received. Mr. Burns expressed his continued appreciation to staff for all the reports and the focus on the required project work. He noted the importance of maintaining the momentum on the required project work as expeditiously as possible. Mr. Montgomery echoed the comments of appreciation to staff and the detailed reports presented. He thanked Ms. Bertolini for her flexibility and adjustments during today's meeting. Mr. Miller echoed the previous comments of appreciation and highlighted the importance of continued momentum on the IIJA, including the significant opportunity of the EV charging infrastructure efforts. Vice -Chair Janorschke commented that he has received positive feedback regarding the operation of Bradley Lake. He thanked Mr. Jorgenson and Mr. Law for the great job of operating the plant. Vice -Chair Janorschke expressed appreciation to the Required Project Work Committee, Subcommittees, and Ms. Highers for the efforts. He noted that he provides weekly informational lake level data to members. He noted that the peninsula is very dry and that wildfires are a concern. Chair Izzo echoed the previous comments of appreciation and looks forward to July. 14. NEXT MEETING DATE - July 29, 2022 BPMC Minutes 6/24/22 Page 9 of 10 15. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 12:31 p.m. Z Curtis Thayer, Secretary BPMC Minutes 6/24/22 Page 10 of 10