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Home My WebLink AboutThe Alaska Energy Corporation (A Restructuring Plan for the AEA Draft Jan 6 1991THE ALASKA ENERGY CORPORATION (A Restructuring Plan for the Alaska Energy Authority) RAFT January 6,1991 TABLE OF CONTENTS Executive SUMIMALTY .....ccccsssssssssesssessseeseeeentenssesseseensessssnseseees 4 I IntroductiOn .......ssscssssscscsecsesscesesesseseeeeseersssseeeeneneneseeeeees 9 1.0 The Mandate...ecsssssesssesssseceenessesessenenenees 9 2.0 The Need...ceecssscssssssssssscsesscsseresesscseseeenseees 10 3.0 The Objectives .......esccsssseseeceeeeseeeneseseseseesenes 11 4.0 In SUMMATY ......ee cecsessesesceessseeeeseteeeeeeneerseeneerees 12 II The Mission of the New Corporation.........sccssesseeees TIT Programs and Revenue........ccssesssesssseseseeeeeeersesssereceens 1.0 Managing Corporation Owned Facilities 0.cece ssssesessestseeseresseeees 2.0 The Energy Development Fund... 3.0 The Power Cost Equalization PLOQTAM......ssssscssssssssssesessssssscenssseseseneseesenesensseneseseees 4.0 Contract Services...escssesssetsssssereeseeeseeeees 5.0 Project Specific Grants ......ssessesesssceeeesesssseseseens 6.0 Capital Projects Management SX COMStIUCTION oo...eeessscsseveetstsssescsssssssesseseosseeoseees 7.0 Interest Earning &Arbitrage oes TV -RiSkS -weeeeceseessscsesscssscseescsssssecsssesessssssesesecesscsssoensnsssseseaes 1.0 Oversight and Control on.ssseescessesssesees 2.0 Cash Flow to Support Operations.......... 3.0 Im SUMMATY oc sesestseecceeeeceeecesscesssseeseoeeeeas Figure VI-1 Implementation Schedule... V___Implementation Plan Appendix A =Regional Utilities 0.0...cesses teesesteneneeenens 1.0 Encouraging Good Management PLACTICES ......seessesssssssscscseesseecsssesessssesssasscesssssssscsenses 2.0 Private Sector Participation... Figure A-1 Existing Large PCE Utilities ................0 Figure A-2 Existing Regional Utilities... Figure A-3 Proposed Regional Utilities... Appendix B Cash Flow Proforma Notes ........scssssessssesees Appendix C Cash Flow Anallyses........ssssssssssssesssssessessesseeses Case One OVETSVICW ...ccccssceccssssssssscesssscesetseseosesseseeesseasens Case One Cash FIOW ......ccsccsecscsssccssscsscsssscsscesssesseeensscens Case Two OVErViIEW ....ccccssssscssscsscscecsesseessscaseesesreesseeeees Case One Cash FIOW ........ccscsscssscssscsssccssecsscessssstseeesenees Case Three OVErView ........ccccccsccssscessscssesssessecceneeesseseeees Case Three Cash FIOW .........cccsccsssssssscescscesssscesseesssseees Appendix D Investment Regions ..........ssssssseecereneeeseseees Figure D-1 Investment Regions...........csceseereseneenees Figure D-2 Southeast Investment Region.............64 Figure D-3 Central/Interior Investment |5124(0) Figure D-5 Northern/Western Investment Region (Southwest Area)......sssesssessseeeens Figure D-6 Northern/Western Investment Region (Yukon/Kuskokwim Area)............... Figure D-7 Northern/Western Investment Region (Northern Area).......sssssseeesereees Appendix E Draft Legislation ue sssssseseeeseceeeseeeeeees AppendixF The Structure of the New Corporation........ 1.0 Finance...ssseseesssssccessssssecssessesesessessessecnsscesseens 2.0 Planning and Development.........ssseseeseeeees 3.0 Project Facilitation and Management................ 4.0 Facilities Operations and Management............. 5.0 Public Information...eessseesssceeseceeseseeeees 6.0 Agency SUPPOFTt uu...sesessecsssesssssseessseeesseseeees Figure F1 Organization Chart...sssesssseceeeseeeeeees EXECUTIVE SUMMARY 91Q4\IT2107 EXECUTIVE SUMMARY Nearly 16 years ago the legislature saw the narrow window of opportunity presented by the coming revenue windfall.They recognized that the dollars generated by the extraction of non- renewable resource (Prudhoe Bay oil)could be used to develop renewable energy supplies such as hydroelectric potentials and created the Alaska Power Authority!(the Authority)to develop these resources. As Alaska continues to grow and mature;so must its institutions.The Authority is no exception.over the years since its creation it has evolved into its current structure in response to legislative mandates. First it worked to construct large scale projects;later it became the agency that would respond to energy emergencies,improve energy efficiency in rural areas and manage the Power Cost Equalization (PCE)program?.It became the builder and operating manager of several large hydroelectric projects and manager of related transmission facilities.It also became a convenient conduit for implementing projects justified and funded on the basis of political merit. If the Authority were to remain the vehicle that administers energy loans and grants,the current structure of the organization might be just what is needed.On the other hand,were the Authority to assume a more aggressive role in shaping the energy future of Alaska,a different structure might better serve that purpose. 1 Alaska Statute Title 44,Chapter 83 enacted in 1976.That statute was amended by Executive Order #75,in 1989,changing the name of the Authority from the "Alaska Power Authority"to the "Alaska Enmergy Authority". 2Power Cost Equalization Program (PCEP)was instituted by the legislature in 1985. The progam provides cost assistance to electric consumer not served by inexpensive hydroelectric and natural gas produced electricity. 91Q4\IT2107 -4- This paper discusses the implications of the latter proposition;that of the a proactive facilitator in the development of higher quality energy services,delivered to all Alaskans at a reduced cost.The Alaska Energy Corporation (the Corporation)described herein,could serve a purpose similar to that delivered by the Rural Electrification Administration during the development of the electrical infrastructure of the lower 48.It could aggressively build power grids throughout Southeast and Central/Interior Alaska,tie villages in rural Alaska together to increase efficiency of operation and reduce cost,export excess power to Canada,facilitate the construction of new generation plants and aid in the economic development of the state as a whole. 1.0 The Need For years,state economists and oil industry experts have predicted a 1992 production decline in the Prudhoe Bay oil fields.New analyses of the decline's impact on future state revenues continue to be published.One thing,however,is certain:there will be a decline in state revenues.If we are to continue providing approprate levels of services to communities,utilities and state residents,let alone improve them,the legislature,administration and private institutions of the state must look to new funding stratigies. One way of increasing the amount of money available for energy projects is to reduce administrative costs and improve the effictiveness of service delivery.To accomplish these ends, the reorganization plan recommends modifying the agency's internal organization to meet specific,long-term funding and development objectives.The proposal does not seek to reduce service levels to Alaskan utilities and communities,rather to ensure that they continue to be adequately served within the finances available. Alaska is clearly behind other states in electrifying its communities;electrification of Alaska has not kept pace with 91Q4\IT2107 -5- 2.0 the federally financed,lower-48 infrastructure development of the mid-1900's.The availability,cost and reliability of power provided the lower 48 states is in sharp contrast to today's electric systems in Alaska.In many ways,the work needed to develop Alaska's energy resources appears to be overwhelming. However,by devising a creative,long-term development plan and securing a reliable,long-term revenue stream,Alaska's energy infrastructure can be developed to the benefit of all Alaskans.The proposed plan addresses these issues. Adapting to Change Since its creation the Authority has reorganized itself a number of times.Each of these organizational changes was undertaken to adapt the Authority's way of doing business to its changing role in the development of Alaska's energy production and delivery systems.Created and organized during the state's revenue heyday,the Authority's first role was to identify,design and construct large hydroelectric projects.With the decline in large project responsibilities during the mid-1980s3,and a greater legislative emphisis on rural energy concerns as well as operation of existing facilities,the Authority reorganized to become responsive to that change in mandate.Over the past 5 years the mission of the Authority evolved to that of manager of a broad array of energy-related programs4 and,as a result has become a reactive organization,functioning from legislative session to legislative session As the state's primary energy agency,The Authority has served, and is now serving,a necessary role that benefits both private and public sector;it could,however,become more proactive. The Authority could work more closely with the legislature,the 3During the past 5 years the only large project undertaken by the Authority has been the construction of the Bradley Lake Hydroelectric Project. 4Power Cost Equalization Program,Power Project Loan Fund,Manage construction of the Bradley Lake Hydroelectric Project to name a few. 91Q4\IT2107 -6- 3.0 administration,the general public and energy-related interests developing an energy policy;policy the legislature,and the administration could support.It could take a more active role in planning and organizing Alaska's energy future. The restructuring plan proposes creation of a state owned corporation having a greater ability to predict annual revenue and having access a broader range of financing methods; methods that do not rely on approprations from the general fund.This plan is founded on the idea that,given greater latitude in financial control,the Authority would be better able to function on a business like basis;thereby providing more cost effective services to Alaska's energy industry.This plan also discusses proposed changes to the agency's internal structure as well as its statutory authorities.Such changes will result in an organization more capable of meeting the changing energy needs of Alaska during 1990's and in the decades to come. The Purpose of the Alaska Energy Corporation The purpose of the proposed Alaska Energy Corporation (the Corporation)would remain unchanged from that cited in the 1976 legislation which created the Authority.The restructuring plan focuses however,sharply on specific missions,objectives and a financial structure of a reorganized Authority.The mission of the Corporation would be to: .Reduce energy costs to all Alaskans .Encourage long-term economic development within the various regions of the state. Facilitatate the development of energy policy as well as the enhancement,modernization and expantion of the energy infrastructure for the state. 91Q4\T2107 -7- 4.0 Programs and Revenue To date the major share of the Authority's operations and projects have been financed through the sale of bonds and legislative appropriation.In the mid 1980s a loan from the state paid for about 40%of the 4-Dam Pool projects;the remaining 60%was paid for through direct legislative appropriation.In the late 1980s and early 90s a combination of approprations and revenue bonds provided funding for the Bradley Lake and Larsen Bay hydroelectric projects.In addition,"conduit financing",using the proceeds of revenue bonds issued through the Authority allowed the construction of $39 million in powerhouse facilities at Galena and Glennallen.The restructuring plan discusses how the Energy Authority could continue to provide support for needed energy programs through the use of alternative sources of financing without additional appropration from the general fund.. The long-term expense of the Power Cost Equalization (PCE) program must be considered in light of diminishing state revenues.An adequately endowed and restructured Energy Authority would be able to continue funding the PCE program's annual costs without additional appropriation from the legislature.The plan carries with it a proposal to replace the current PCE program with the Corporation's "Rural Energy Cost Assistance Program (RECAP).Benefits to participants of RECAP include:concentrating program resources at the utility level rather than toward individual customers;providing incentives for utility cost improvements and passing resulting savings on to individual consumers;providing access to low- cost/no-cost loan program and providing a technical assistance program designed to meet the needs of smaller utilities. In order for a utility to participate in the new Corporation's loan and assistance programs,however,the utility would have to demonstrate just how such participation could benefit the 91Q4\IT2107 -8- 5.0 6.0 energy consumer.The Corporation would look for energy rate reductions,increased reliability or availability as an element of program qualification. The Organizational Structure of the Corporation The plan outlines a proposed new internal structure for the Corporation.The proposed structure is streamlined to improve management of existing projects and to better meet service objectives outlined herein.The Authority's current programs, as well as its enhanced role as facilitator of energy development,form the basis of the design of the Corporation's internal structure.The proposed structure is also based on a philosophy that would include a greater measure of participation by private businesses in energy generation and transmission projects. Actions of the Legislature Attached to this plan is draft legislation which,among other things,would create a number of funds.5 Although a large appropriation would initially be required,these funds would allow state supported energy services to continue without annual injections of large capital appropriations from the state in future years.Furthermore,the funding from these funds currently exisit;the legislature need only reappropriated existing money now contained in the Railbelt Energy and Intertie funds. ) Endowment of the trust funds is the first element of establishing the financing capabilities of the Corporation.The second key ingredient invioves management of revenue.Currently,the Authority collects,and returns to the General Fund,annual revenues of about $10 million from operating power projects. SThe Alaska Energy Corporation Trust Fund,an Operating Reserve Fund,a Self- insurance Fund,a Power Projects Revolving Loan Fund and a Bond Reserve Fund. 91Q4\IT2107 -9- 7.0 Retaining and reinvesting these revenues would provide funding for the state's energy program and assure the new Corporation's long-term financial well-being.Both the trust fund and re-investment of current revenues would have to meet legislative approval. The Benefit Securing diversified avenues of financing are amoung the leading benefits of this proposal.Capital intensive energy projects require larger,long-term funding commitments; building Alaska's energy infrastructure cannot be constructed and paid for on an annual fiscal year funding basis. Improvements in the cost and effictiveness of the service the Corporation provides is another benefit.This includes increasing private sector participation in project development, and streamlining the agency's internal organization to meet new,long-term planning and development objectives.A new organization that is permitted to accept higher levels of outside investment can attract capital and alternative energy technologies that are best-suited to the state's unique environment.An agency that can use its revenues to leverage financing of new capital projects can provide stable development opportunities in the face of declining state revenues. Under the new organization,should the legislature require energy studies and planning expertice or even management of construction of new facilities,the talents and capabilities of the Corporation's organization and staff would continue to be available to it.The plan,however is not contingent upon ongoing support through legislative grants. 91Q4\IT2107 -10- 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 0.0 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 MILLIONSOFBARRELS/DAYState of Aoska NN Alaska Energy AuthorityP.0.Box 190880 701 East Tudor Rood Aosks 99619-0869 ENERGY PLAN OIL PRODUCTION so-omr X Orewn OF AEA Ne.FLL Omanierveti|Dete 12/17/01 40 30 wn m < - - Oo ©20 te oO "Y =z LEGISLATIVE INVESTMENTS © -3 10 = 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 StateofAloekamNAlaskaEnergyAuthoritya»*|P.0.Box 190669 701 East Tudor Rood Aloeka 99519-0889 Project ENERGY PLAN Title CASE ONE INVESTMENTS Ao Om X Orawn CH AEA No. FILE:GSMITH\ORAPH|Dobe 12/17/81 =Pr a Se eo on Oe wi.°MILLIONSOFBARRELS/DAY0.5 0.0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 ENERGY PLAN OIL PRODUCTION co-om X Jorewn cH ALA the, Fak enanhewen|bee 12/17/81 MILLIONSOFDOLLARS40 30 AEC INVESTMENTS 20 10 LEGISLATIVE INVESTMENTS 0 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Stete of Alaska ms :Alaska Energy AuthorityalP.O.Box 190860 Project ENERGY PLAN Title CASE TWO INVESTMENTS Orewn CH Oote 12/17/01 |ijAEA,Ne. I.INTRODUCTION 91Q4\IT2107 I INTRODUCTION This paper discusses the newly defined missions,needs and structure of the Alaska Energy Authority (the Authority).It describes how a restructured Authority could better serve the future energy needs of the people of the state. 1.0 The Mandate In 1976 the legislature created the Alaska Energy Authority®. That legislation cites the public purpose the Authority.The legislature,in AS 44.83 states,in part: These broad mandates of the Authority remain unchanged by the restructuring proposed herein.However,over the past 15 years,the developmental environment of Alaska has changed. "(2)the establishment of power projects at these sites {'...numerous potential hydroelectric and fossil fuel gathering sites...']is necessary to supply power at the lowest reasonable cost to the state's municipal electric,rural _electric, cooperative electric and private electric utilities and regional authorities.... "(3)the achievement of the goals of lowest reasonable consumer power costs and beneficial long-term economic growth .... "(b)....to reduce power costs and otherwise to encourage economic growth of the state..." 6Alaska Statute Title 44,Chapter 83 was amended by executive order #75,in 1989, changing the name of the authority from the "Alaska Power Authority"to the "Alaska Energy Authority'. 91Q4\IT2107 -ll- Since its inception,the Authority has changed to meet the needs of the time.After it was initialy formed it started work on large dollar projects and managed the design and construction of major hydroelectric and electric transmission facilities.The last of these major projects,the Bradley Lake Hydroelectric Project,was completed this past summer.Over the past 5 years,while state oil revenue has been relitively constant,the role of the Authority has been to provide technical and emergency assistance to smaller communities and utilities and it manages the Power Cost Equalization Program.Today, with the decline in state oil revenues coming fast upon us,the strategic objectives of the Authority must again be redefined.The Authority must again be restructured into a vehicle capable of meeting the needs of this new era. 2.0 The Long Range View is Essential In addressing the energy future of the state,projects that require 3-,4-,5-,6-and even 10-year schedules have been identified.Building the Alaska's energy infrastructure requires continuity over a number of years,if not decades. Those who designed and built the electric power infrastructure that serves the contiguous U.S.60 years ago faced a challenge similar to that Alaskans face today.Although the technical problems may and physical environment may differ,the fundamental problem was the same -electrifying a vast, sparsely populated land. The U.S.is now served by an efficient power generation, transmission and distribution system only because those who did the planning and design were allowed the luxury of the long range view.It took the TVA,REA,BPA',to name but three power development agencies,a half century to electrified rural 7The Tennessee Valley Authority,the Rural Electrification Administration and the Bonneville Power Administration 91Q4\IT2107 -12- 3.0 America.The Authority,the agency charged with the responsibility for planning and construction of major Alaskan energy systems,however,focuses on year to year (from legislative session to legislative session)funding. Because of state oil revenue,during the past 15 years the state has had the money to build major energy projects and to provide emergency and technical assistance to smaller utilities. The state has been able to to provide assistance to those who who do not have access to inexpensive hydroelectric or natural gas generated electricity.In the years to come,as oil revenues decline,power cost assistance programs become more contentious among Alaskan lawmakers.Money for capital intensive energy projects will become evermore scarce. Furthermore,the environmental costs associated with diesel generation systems are growing at an unprecedented rate. Today the assets constructed over the years must be put to work in a way that will continue to facilitate the delivery of high quality,inexpensive energy to all Alaskans. The Objectives of Restructuring In matters of the development of Alaska's energy infrastructure,the legislature,the administration and the Authority should not be focusing on the near term issues.This is a long-range undertaking requiring implimentation of long- range stratigies.The Authority must be restructure not only so as to reduce its own internal operational cost and the cost of programs it administers;it must also be restructured so that it becomes the implimenter of long-range plans.Furthermore, and perhaps most important,the Authority must find ways to mitigate the impact of diminished state revenues on rural energy programs while providing affordable energy to fuel private sector enterprise. 91Q4\IT2107 -13- Although the restructured Authority could continue to serve the state as a builder of energy projects large,and small,funded by legislative appropriation,a self funding entity,similar in concept to the Rural Electricafacation Administration or the Alaska Rail Road Corporation,could better serve the needs of Alaska in coming years. 91Q4\IT2107 -14- Il.THE MISSION OF THE NEW CORPORATION 91Q4\IT2107 II THE MISSION OF THE NEW CORPORATION The public purpose statements,cited in Authority's enabling legislation (see Section I)are broad;some specificity is required.In this section, the original legislative mandate is addressed in light of the economic realities of the 1990s and onward. The restructuring plan for the Authority,the plan that would change the Alaska Energy Authority to the Alaska Energy Corporation, requires clear definition of long term goals and objectives.The missions of the Corporation are stated here together with their related objectives. Mission:Reducing Energy Costs to All Alaskans. Objectives:To Facilitate .. °and maintain state energy planning and policy development. °construction of revenue producing energy projects °the formation of regional utilities. °participation of private sector enterprise in energy production,transmission and distribution. improvement of the business efficiency of local,utilities. °reduction of the cost of energy generation,transmission and distribution through the application of new ideas and technologies. and provide: °Streamlined program administration and technical assistance to regional utilities. 91Q4\IT2107 -15- Mission:Encourage Long Term Economic Development of Alaska. Objectives: 9 Accelerate the development of transmission corridors. °Stimulate economic development in-state. Improve export of goods,services and energy. Leverage state investment with private investment. ° Facilitate the increased of coal,hydro,geothermal natural gas and alternative fuels in the generation of electricity. Formulate,facilitate and maintain state energy planning and policy development. Mission:Increase the Availablity of Affordable Electric Power to All Alaskans. Objectives: °Facilitate implementation of rural energy projects. °Develop methods of sharing energy cost savings on a state- wide basis. °Formulate,facilitate and maintain state energy planning and policy development through corrdinatied approach with public and private sectors interests. The word "facilitate"appears often in the listed objectives;in fact,one "mission"of the Corporation becomes that of facilitator in matters of energy development.Although the mission of the Corporation is not change markedly from that of the Authority,the new organizational structure of the Corporation,when cast in the role of facilitator,will differ significantly from that of the Authority that has been acting the role of builder over past years. The proposed restructuring also impacts internal operations of the Corporation.Programs would be geared toward achieving long term service goals as outlined above.The operative phrase here is "long term".Since the Corporation will,by mandate,take the long range 91Q4\IT2107 -16- view,it will develop strategic energy plans.The Corporation could,in concert with the administrative branch,and with counciltation from the legislature,the new Corporation could become principal authors of the state-wide energy policy as well. 91Q4\IT2107 -17- Ill PROGRAMS AND REVENUE 91Q4\IT2107 III PROGRAMS AND REVENUE If the Corporation is financially self-sustaining,its view must be long range -to succeed,the Corporation would have to think proactively.If funding is secured through legislative appropriation,the Authority's thinking must be focused on instructions prescribed by the past legislature -to succeed the Authority's thinking has to be reactive.To effectively accomplish the objectives set out in Section II it is, therefore,essential that funds required to undertake its mission be generated by the Corporation itsself. The cost of running the new Corporation,operating its facilities,and facilitating the development of new of new capital projects,can be paid for with funds generated by energy sales,interest income,repayment of loans and payment for services rendered.For this reason,the restructured Corporation would tend to function more like an ordinary business than an agency of state government.Programs undertaken on the Corporation's own initiative would necessarily be strongly linked to revenue;revenue it would generate exclusive of legislative grants. Once endowed,the Corporation need not be constantly fed from the shrinking supply of state revenue.Should,however,the legislature wish the Corporation to act as a vehicle to administrate grants,the Corporation would stand ready to serve in that capacity. Under the restructuring proposed herein,the Corporation would receive revenue from a number of different sources: 91Q4\IT2107 -18- 1.0 Managing Corporation Owned Facilities: Upon restructuring,the Corporation would not only own,and manage operation of several facilities,it could bank revenues generated by them.Specifically revenues from the following projects would flow into the Corporations Operating Reserve Fund (see paragraph III.1.2 Funds in this section): °The 4 Dam Pool8 -Swan Lake (near Ketchikan) -Tyee Lake (near Wrangell) -Solomon Gulch (near Valdez) -Terror Lake (near Kodiak) Snettisham °Bradley Lake °The Anchorage/Fairbanks Tieline °A number of waste heat capture and district heating and small electric generation and transmission projects Additionally,as time passes,the Corporation would continue to invest in the state's energy infrastructure and would,as a result, accumulate additional assets. Just as in any other business,the Corporation would negotiate a position in each project in which it became involved.Since the Corporate mandate is to facilitate the construction of Alaska's energy infrastructure,a long range undertaking,the Corporation would make financial arrangements that served its long range perspective.For example,it would seek payment for project facilitation in the form of a kilowatt-hour,or BTU 8Four hydroelectric projects whose operations,revenues and costs are shared through a management agreement. 91Q4\IT2107 -19- charge on all energy generated,or wheeled,though its projects. In the case of rural energy projects,where the project purpose is to reduce RECAP (the Corporation's replacement for the PCE program)expenditures,for example,just savings in new operations costs may be an attractive reason to invest in the project.Because of the opportunity to generate new revenue, or reduce program costs,the newly restructured Corporation would have incentive to optimize revenue from the existing projects as well as those projects constructed in the future. Allocation of revenue generated from "profitable"power projects to regional utility assistance programs would be the principal means of reducing energy costs to all Alaskans.The principal mechanisums for managing such monies would be through management of the various funds discussed below. The net proceeds from power sales,and interest earning etc would flow into the Operating Reserve Fund.Revenue from loans would flow back into the revolving loan fund and so on. 2.0 The Funds. The Corporation would create 5 funds.each fund designed to serve a different,yet essential,purpose: 1.0 The Alaska Energy Corporation Trust Fund In order for the new Corporation to meet its legislative mandate it would be endowed with funds now residing in the Railbelt Energy and Intertie Funds.That endowment would flow into the The Alaska Energy Corporation Trust Fund and would be maintained,in nominal dollar terms,in this fund in perpituity.Earnings from this fund would be used to sustain the Corporation's growth over the years to come. 91Q4\IT2107 -20- 2.0 3.0 4.0 The Self-insurance Fund Currently,about a million dollars per year is contributed to the 4-dam pool self-insurance fund.This fund would be maintained,strengthened and managed according to prudent risk management requirements.Currently the self-insurance fund contains about $9.5 million. Earnings from this fund would be used as revenue of the new Corporation. Bond Reserve Fund Holder of Authority bonds now require the Authority to maintain a bond reserve fund.The amount,and allowable use of moneys residing in this fund is specified by the requirements of bonds issued.As the Coproration continues to finance projects through the sale of Corporate revenue bonds,this fund will be strengthened and managed in accordance with good financial management practices and the requirements of bond issues. Power Projects (Revolving)Loan Fund Currently about $21 million is owed the Authority in the form of Power Projects Loans.These loan receivables would form the basis of a revolving loan fund which would provide low cost loans to communities and utilities. 5.0 91Q4\IT2107 Operating Reserve Fund Net cash flow into,and out of the Corporation would move through an Operating Reserve Fund.This fund would be maintained and managed in accordance with the cash flow requirements of the Corporation. -21- 3.0 4.0 All of these funds would be managed to optimize earning, within the policy guidelines established by the Board of Directors and good cash and investment management practicese. The Power Cost Equalization Program (PCEP). Analysis of cash flow for the new Corporation,once adequately endowed,indicates that Corporation programs could replace the current Power Cost Equalization (PCE)program on an ongoing basis.The PCE programs would be replaced by the Rural Energy Cost Assistance Program (RECAP);a corporation funded substitute.The Corporation's portion of energy cost assistance would include several kinds of assistance including direct grants to regional utilities,technical assistance and low and no interest loans. The RECAP would not create revenue,rather the programs that collectively make up the Rural Energy Cost Assistance Program would become a significant expense to the Corporation in the years to come. Contract Services. As with the present Authority staff,The Corporation would maintain a staff having considerable expertise in finance, accounting,economics,engineering,construction project management and facilities operations.Currently,this staff is utilized in the operations and maintenance of various facilities, and to act as construction managers for various capital projects. The legislature would continue to have access to these resources as it has in the past.Furthermore,this expertise would continue to be made available to local energy utilities, other state entities and to private and public organizations (within the policy guidelines adopted by the Corporation's board of directors). 91Q4\IT2107 -22- 5.0 6.0 The technical capabilities of the Corporation would not, however,be used to compete with private consulting firms and contractors.Rather,the very special knowlege the Corporation staff will have,as well as its legal status,may make the Corporation's offices convenient for others to utilize in project implimentation and some technical assistance matters. Such contract related services would become a minor source of future revenue for the Corporation. Project Specific Grants. The legislature may,from time to time,wish the Corporation to act as manager for the construction grants for certain specific projects it deems important to the development of the state's energy infrastructure.In such instances,the Corporation would stand ready to provide its expertise to the state,a borough or a community in the role of project facilitator,or even project manager. As in the case of contract services,the Corporation would generate revenue through its activities as grant administrator. Capital Projects Management and Construction. Some of the monies that for-profit companies would normally refer to as "profit"would,in the case of the restructured Corporation,be used as investment leverage in the financing of new capital works.That is to say that along with funding the Rural Energy Cost Assistance Program,a portion of "profit" generated by the Corporation would be reinvested into building the energy infrastructure of the State. Thus,the Corporation would be involved in the management of capital projects construction and some Revenue and 91Q4\IT2107 -23- Expense,indicated on the cash flow analyses (Appendix C)is associated with catagory of activity 7.0 Interest Earning and Arbitrage. Since the Corporation will be managing monies required of its operations as well as capital construction,revenue will,from time to time be produced from interest on cash accounts.Also on occasion revenue may be generated from Arbitrage transactions. 91Q4\IT2107 -24- IV RISKS 91Q4\IT2107 IV RISKS Just as any other corporation,a reorganized,Alaska Energy Corporation faces imponderables forces the future has to offer.The design of the Corporation should be such that it attempts to mitigate risks.Though no one can predict future events with any degree of certainty,some obvious pit falls can be identified and measures can be taken to mitigate potential future risks. 1.0 Oversight and Control. What control does the public maintain over the restructured Corporation? 1.1 Legislative Oversight. Under the proposal discussed in this paper,the legislature would not provide annual funding to the Corporation to support its day-to-day operations.Thus,some degree of legislative oversight would be lost.On the other hand,what the legislature would do,it could undo.If the legislature perceived the Corporation were not fulfilling its promised mandate,it could,by law change its structure to one more responsive to legislative control. 1.2 Operational Control. Goals,objectives,policies and strategies employed by the Corporation would be the business,as they are now,of the Board of Directors.Members of Board of Directors would be appointed to by the Governor and would serve a fixed,6 year term.In this way,although the Governor would appoint new Directors from time to time,the Board,as a whole would have a tenure that would span administrations. 91Q4\IT2107 -26 - 13 Day-to-day Management. The day-to-day business of the Corporation will be conducted by a President and Chief Executive Officer who would serve at the pleasure of the Board of Directors. 2.0 Cash Flow to Support Operations The restructured Corporation would be insulated,to a degree, from the cyclical nature of the national and state economies. The bulk of its revenue would be derived from earnings generated by the Alaska Energy Corporation Trust Fund and from energy production and transmission tariffs. 2.1 2.2 91Q4\IT2107 Earning on the Trust Fund Earnings on the Trust Fund are calculated on the "real" interest (i.e.the spread between inflation and nominal interest)on the Trust Fund.This value is fairly stable, therefore,this source of income should be fairly constant.Of course dramatic changes in world,and national economies could have some effect on this source of revenue. Revenue from Energy Charges The revenue from production and transmission of energy will be based on rates that have been negotiated at the time of project development and will become contractual requirements of a specific project.Unless the buyer is unable to pay,this source of revenue should be predictable over the long term. -27- 23 Revenue from Loans Like revenue from energy charges,revenue from loans should be fairly predictable.The revenue rate is fixed at the time the loan is made,and unless the borrower becomes insolvent,this revenue stream should be fairly predictable. It should be noted that none of these principal sources of revenue rely,in a directly way,on Prudhoe Bay oil production, the ANWR question nor the unit price of oil.Obviously,if the economic engine that drive the state is dramatically throttled, communities and utilities will have a difficult time paying money owed the Corporation -that's a risk few,Alaskan corporations can avoid. 3.0 In Summary The Corporation will face risks similar to those risks faced by other corporations doing business in Alaska.However,by developing revenue streams that are generated by long term contracts rather than legislative appropration and by guiding the Corporation with strategies based on long term planning, many risks can be mitigated. 91Q4\IT2107 -28 - V IMPLEMENTATION PLAN 91Q4\IT2107 V IMPLEMENTATION PLAN Implementation the restructuring of the Authority into the Alaska Energy Corporation started with the development of this plan.As this restructuring plan is reviewed by the Board of Directors,the Governor's Office,the Office of Management and Budget and key legislators it will be modified.As the enabling legislation is debated further modifications to the plan will surface.Thus,the implimentaiton plan can only be thought of now,(during the writing of this document)in the most general terms such as schedule. While Management and Budget is reviewing this document,draft legislation would be created and the process of legislative review and action could begin.By mid-May,1992 the Governor may sign legislation enabling a newly restructured Alaska Energy Corporation to formally start business on July 1,1993.The 12 month window between mid-May 1992 and July 1,1993 would provide time to work with the board of directors in the business of implimenting internal reorganization.Reorganization must be carried out in parallel with the day-to-day programs management effort required of the Authority's usual mission. The schedule of events is depicted in graphic form on the attached figure.That graphic indicates milestones that must be achieved along the implementation route. °August 15,1992:The detailed corporate restructuring and implementation plan could be completed and ready for review by the Board of Directors. January 1,1993:The newly restructured organization will begin transitional operation.Fiscal 1993 could be the transition year;changing operations from Authority policies to operating policies newly developed operating policies for use by the Corporation. 91Q4\IT2107 -29- The details of the restructuring process cannot be developed until the final enabling legislation is passed by the legislature and signed into law by the Governor.However,since staffing required of the restructured Corporation will be similar to that required of the Authority,the detailed restructuring plan will generally focus on strategies through which existing staff can be repositioned within the organization.During the transition year,a few new people would be hired,while some existing staff may elect to leave,in general,however, the impact of reorganization on staff will be the reorientation of the organizational objectives and increasing the Corporate productivity. 91Q4\IT2107 -30- IMPLEMENTATION SCHEDULE 1991 1992 NOV DEC JAN FEB MAR APR MAY JUN JUL AUG SEP oct NOV bec 6-Zl=Z)ALIAOHINYADUINIWHSVIVALYHOPON!M\HLINSSExecutive Director's Approval oF Board Approval * Governor's Approval '* OMB Plan Review /Approval Required Legislative ActionsContractualObligationsReview Pre-file Bill Draft Legislation Meetings -Utility Organizations 4LegislativeApproval Legislative Action Governor's Signature * App't Implementation Team Detailed Implementation Plan eel Executive Director Approval * Board Approval * Detailed Business Development Plan Implementation Divestiture /Aquisitions Move Staffing Accounting System Contract Re-negotiations Policy/Procedure Revisions ee FY93 Int Budget Revision Announcements Launch Dale *tJan93 APPENDIX A REGIONAL UTILITIES 91Q4\IT2107 APPENDIX A.REGIONAL UTILITIES Among the Corporation's clients will be the "regional utilities". Though the Corporation would not be prohibited from servicing others,it would offer preferential service to "qualified”utilities?. Unlike the REA,the Corporation would work with for-profit utilities just as it would work with non-profit cooperatives.A parallel,however could be drawn between the REA's rural electrical cooperative and the qualified regional utility. The Corporation would streamline its operations,while encouraging the formation of regional utilities",by favoring the regional utility in its dealings.The idea of encouraging the formation of regional utilities has been talked of in Alaska for some time.The concept is based on two thoughts:a)If the responsibility and authority to own and operate an energy utility were controlled more locally,then it is more likely that the utility's service would be responsive to local needs,and b)since the rural Alaskan local utility is typically so small that it can not afford to hire professional management or technical staff,then collecting a number of very small utilities into a single regional utility could provide the requisite revenue to support professional staff.In this way,a regional utility could be owned and operated by people that resided regionally,while having enough critical mass to afford the professional expertise to operate the utility effectively. An idealized picture of the typical "regional utility"is a utility that would serve 5 or 6,or as many as 10 communities within a region of the State.The regional utility should produce at least 3 million kWh per year and/or have annual revenues exceeding $500,000. "Qualification"as a regional utility would require the utility to:a)generate and/or distribute (retail sales)at least a million kWh annually,and generate revenue in excess Of $500,000 annually,b)employ good business-like practices in the management of its day-to-day operations and c)be a financially viable corporation ofthestateofAlaska. 91Q4\IT2107 -32- 1.0 2.0 Encouraging Good Management Practices. If the Corporation's policy were to participate in the industry in the role of technical and financial facilitator,as contrasted with grant administrator,the Corporation could focus on making decisions based on the financial and engineering feasibility of projects,as contrasted with making decisions based on political need.That is not to say that grants could not be used in the financing of energy projects.If the legislature wished the Corporation to act as builder,it need only provide the project funding.However,the Corporation would not,on its own, finance a project unless it made engineering and financial sense,or it was paid for through a grant.. The Corporation would tend to favor clients (i.e.regional utilities)who worked to lower energy prices to the consumer though good managment practice.Such favoritism would have the effect of encouraging good management practices within regional utilities,and therefore,reducing the cost of power delivered to citizens. Private Sector Participation. Regulated,privately owned utilities typically can produce services as efficiently as REA coops and utilities that are owned and operated by local political subdivisions of the state (i.e. boroughs and cities).For this reason the Corporation would not discriminate between the privately and publicly owned utility in the administration of its programs;so long as the utility were "qualified"to receive assistance as provided by the Corporation.Qualification could require that the privately owned utility be regulated by the Alaska Public Utilities Commission (APUC)and that it be of the requisite size to provide efficient utility operations.By including for-profit,as well as non-profit,companies in its financial and technical 91Q4\IT2107 -33- assistance programs,privately held utilities could gain access to low interest loans that the Corporation could made available to the industry as a whole. Furthermore,including private companies would encouraged the private construction of not only generation and distribution facilities,but transmission systems as well,and would help to spur development of the energy infrastructure throughout Alaska. 91Q4\IT2107 -34- raeEXISTING LARGE UTILITIES @ PCE UTRITES 25 got -” o oS,:.Mate of MasksSohmcoeox.Unaleeks .Alaska Energy Authority ud P.O,Gun 190008 otAnaharege, "REGIONAL PLANNING EXISTING LARGE UTILITIESAcathe meoresamns 3 | afEXISTING REGIONAL UTILITIES snarl 2 LETHcose wr"REGIONAL PLANNING Tite EXISTING REGIONAL UTILITIES LA te--.foanifenn tog edPROPOSED REGIONAL UTILITIES --zZ”ave Sheldon Point gy \no Nightrnu fqn iia, Kwiglilin fy/iJ Sf G Pie Ao MeesClaYe #3aint Poul '4raeGeorgbyvelt fink] 7 ("A "A re Bsen Reee:NfitiePoitdNy ingsvas¥ AY mn nsior"REGIONAL PLANNING Tit PROPOSED REGIONAL UTILITIES ALA the. 3 APPENDIX B CASH FLOW NOTES 91Q4\IT2107 APPENDIX B.Notes on Cash Flow Spreadsheets 1.0 Overview Sheets 1.01 1.02 Page 1 of 2 This sheet contains the assumptions describing the case scenario.In the section entitled "Modeling Parameters" the variables used in the cash flow analysis are listed. These values are a part of the formulas (algorithms) placed in the spread sheet cells. Page 2 of 2 This sheet displays an overview of the results of the cash flow analysis for the period 1991 through 2013.The first two years (1991 and 1992)are listed for comparison purposes. 1.02.1 Corporate Investment &Assistance This line contains the sum of the four expenditures shown on the Summary Cash Flow - Expenses sheets listed as "Grants to Communities and Utilities","Loans to Communities and Utilities","Technical Assistance to Communities and Utilities"and "Investments in Capital Projects".The three RECAP program investments are maintained,in the aggregate,at a constant number (usually the 1993 PCEP funding level). This line is shown to indicate the level of assistance to communities and utilities the Corporation could reasonably be expected to sustain under the assumptions of the scenario listed. 1.02.2 Legislative Appropriation This line contains the sum of the three revenue sources shown on the Summary Cash Flow - Revenue sheets listed as "Administrative Office Expense","Power Cost Equalization Program" and "Grants &Operating Expense."It represents the annual contribution to the Authority,or Corporation,the state would provide through legislative grant. 2.0 1.02.3 1.02.4 1.02.5 1.02.6 1.02.7 Total Value of All Funds The two "Cash Flow Models"sheets contains a list of the values of 5 funds that would be maintained by the Corporation.The "Total Value of All Funds"is the sum of the individual values of each fund in any given year. Net Depreciated Value of Capital Assets The "Cash Flow Models"sheets contain the calculation of the "Total Net Value of Capital Assets"(about the middle of the page;under the bold heading "Total Plant Cost").The value on the Cash Flow Models sheet has been transferred to the Overview sheet for the sake of convenient. Net Cash Flow This line contains the difference between revenue totals and expense totals shown on the Summary Cash Flow -Revenue and Expense sheets. Total Annual Revenue The "Total Annual Revenue"value shown on the Summary Cash Flow -Revenue sheet has been transferred to the Overview sheet for the sake of convenient. Total Annual Capital Spending The "Total Annual Capital Spending"values shown on "Cash Flow Models"sheets has been transferred to the Overview sheet for the sake of convenient. Cash Flow Summary -Revenue -(1991 -2002) The following is a list of notes whose reference appears on the extreme left column of the Summary Cash Flow -Revenue and Expense spreadsheets. Revenue from Funds The restructuring plan includes establishing 5 funds:the Alaska Energy Corporation Trust Fund,the Power Projects Revolving Loan Fund,the Bond Reserve Fund, the Self-Insurance Fund and the Operating Reserve Fund. 2.01.1 2.01.2 Each of these funds is described in the following. note(a)The Alaska Energy Corporation Trust Fund, The cash flow analysis assumes the legislature endows Alaska Energy Corporation Trust fund The value of the endowment for each case study is listed on the "Case Overview sheet . The source of funding of the Alaska Energy Corporation Trust fund is the remaining balance in the Railbelt Energy and Intertie funds.Under the restructuring plan,these funds would be placed in the trust of the Corporation who would receive interest earning from the funds The principal of the funds would be maintained in terms of nominal dollars.After the fund were maintained on account of inflation,the remaining funds (net earnings)would be available to Corporate management to carry out programs mandated by the board of directors. note(b)Operating Reserve Fund Where as the Alaska Energy Corporation Trust Fund must be maintained at the same,or greater, nominal value over time,other funds must necessarily be managed to achieve different purposes. The Operating Reserve Fund is set up to receive net positive annual income from operations,or provide funds in situations where a net annual operating loss may occur.Managers of the Corporation will maintain foreword cash planning so that the Board of Directors may be kept informed as to anticipated annual income or loss.The Operating Reserve fund will be managed on a 5 year horizon so as to provide cash flow during period of planned operating loss. Funds in excess of the planned,future cash requirements will be used to provide Loans to 2.01.3 2.01.4 Utilities and Communities and Investment in Capital Plant (see Summary Cash Flow - Expenses and notes r,s and y). Most case studies indicate the Operating Reserve Fund would maintain a balance in the range of tens of millions of dollars.Interest earned from this fund would be a part of the Corporation income stream. In some analyses the value of the Operating Reserve Fund drops below zero to a negative number.This circumstance indicates that the Corporation would have to borrow money to bridge the capital gap.In such cases,although grants to Utilities and Communities would continue,loan activities for capital projects could diminish. note(b)Bond Reserve Fund As a requirement of the Authority's current bond debt,it maintains a bond reserve fund today. That fund will be maintained and grow as may be required of current and future bond holders and prudent debt management practice.Most case studies indicate the Bond Reserve Fund would maintain a balance of tens of millions of dollars. Interest earned from this fund would be a part of the Corporation income stream. note(b)Insurance Fund The Authority currently maintains a self- insurance fund.Additionally something over a million dollars each year is being contributed to this fund.The restructuring plan requires that the current practice of contributing to this fund, as well as maintaining is balance in nominal terms,be continued.This fund will be managed according to tenants of good risk management and will continue to grow as the Corporation acquires additional capital plant. For the purposes of this analysis the fund is maintained and grows according to current contributions in nominal dollars.while,at the 2.02 same time,the capital in the fund is maintained in nominal dollar terms. Most case studies indicate the Self-insurance Fund would maintain a balance in the range of several tens of millions of dollars.Interest earned from this fund would be a part of the Corporation Income stream. 2.01.5 note(c)Power Project Loan Fund As of June 30,1991 the Power Project Loan Fund had a receivable balance of $26,774,199.This fund would be maintained by the Corporation as a principal part of its mandated programs.The amount listed on the The Summary Cash Flow - Expense sheet under "Loans to Communities and Utilities"is,for analytical purposes,added to the "Power Projects (Revolving)Loan Fund total shown on the supporting documentation sheet entitled "Cash Flow Models"(under the bold heading "Funds"). For the purpose of this analysis,it is assumed that the loan principal is never paid and that interest earned is only that amount shown on the Case Overview sheet;usually the assumed inflation rate. The 5 funds discussed above are detailed for each case study,or analysis,on the sheet marked "Cash Flow Models"under the bold heading "Funds". Legislative Appropriations This category of revenue is provided for the purpose of comparing legislative appropriation to the Authority of the past to the legislative grants the Corporation may receive in the future.In most cases the analysis is made based on the assumption that legislative appropriation will not be forthcoming after fiscal 1993. 2.02.1 note(d)Administrative Office Expense On the sheet marked "Cash Flow Models",under the bold heading "Administrative Office Expense"the various categories of administrative expense are listed. 2.02.2 note(e)Power Cost Equalization Program (PCEP) This item contains the amounts of money that was received by the Authority during FY 1991 and anticipated amounts for FY 1992,from the state,on behalf of Power Cost Equalization Program (PCEP).The PCEP could be restructured to become self funding in years to come;such is assumed in the analysis.The fiscal discretion of the Corporation's PCE replacement program can be seen on the Cash Flow Summary -Expense sheet under the bold heading "Rural Energy Cost Assistance Program (funded by the Corporation)”. 2.02.3 note(f)Grants and Operating Expense This item contains the total of all grants from the state that will be administered,by the Corporation,on behalf of the state.It includes past grant program amount (1991 &1992)and projects the level of future grant activities after restructuring (1994 and beyond).This line item accounts for the projected value of grants for bulk fuel storage repair and replacement and grants for community energy projects 2.03 Revenue from Operating Facilities The Authority participates in the management capital plant valued at (as of June 30,1991)at $793,370,500. During restructuring that plant would become the property of the Alaska Energy Corporation.Revenues received from operation of this plant would become revenue of the Corporation. Before restructuring the Revenue from Facilities Operations included payments from the 4-Dam pool and Anchorage/Fairbanks intertie management committees. 2.03.1 2.03.2 2.03.3 These payments are made to AEA its service in certain facilities operations. note(g)4-Dam Pool The 4-Dam Pool will remain property of the Alaska Energy Corporation.All revenues generated by those facilities will flow directly to the Corporation.Money not expended by the operation and maintenance of the 4-Dam Pool will be used by the Corporation for what ever purpose the board of directors may deem in keeping with the purpose of the Corporation.The values shown on this line for 1991 and 1992 indicates the historic payment for services rendered by the AEA. After restructuring,this line item includes only the receipts paid the Corporation.Values indicated on this line are taken from the "Cash Flow Models sheet (see listing under the bold title '""4-Dam Pool Gross Revenue"). note(h)Bradley Lake Hydroelectric Project The power sale agreements that lead to the financing of the Bradley Lake project dictate that all proceeds from the power sales be used to pay debt service, maintenance and operations costs required of the facility.For this reason the Corporation can receive no net income from the sale of energy produced by this project until the year 2022.This line lists revenues generated by the project that are Identical amounts are indicated as flowing from the Corporation on Cash Flow Summary -Expense sheet under the bold heading "Capital Projects Related Expenses". note(i)Other Projects Constructed Before 1992 This line indicates the cost of operating the Anchorage/Fairbanks Intertie only.Some minor revenue generated by waste heat recovery and district heating projects have been omitted.As in the case of the Bradley Lake project,these costs are passed through the Authority and appear as expenses on the sheet marked "Corporation on Cash Flow Summary - Expense",under the bold heading "Capital Projects Related Expenses". 2.03.4 note(k)Revenue from Future Projects by 2.04 Investment Region For planning purposes the state has been subdivided into three regions.Capital investment and revenue from projects located in each region are listed in the analysis. Each time the Corporation facilitates a long term energy project,provides financing for a hydro project or transmission line or otherwise uses its good offices to promote the production,transmission or distribution of energy,it will receive a share of revenue produced by that facility.For the purpose of this study work,that revenue share is generally assumed to be one half of one cent per kilowatt hour,or 1 dollar per million BTU transmitted or generated.For the export of energy to Canada (for example)the revenue rate may be larger than the half cent. For different case studies,different projections of future revenue are made.For example,the assumed flow of revenue from future projects for some case studies been delayed and/or diminished when compared to the same revenue stream for other case studies.The "Case Overview sheet lists the assumptions concerning this revenue source. Detail of revenue assumptions from future projects are listed on a series of supporting documentation spreadsheets collected together in Appendix Other Sources of Revenue 2.04.1 note(l)Contributed Capital &Bond Proceeds This item shows the historic activities in the account due principally to the Bradley Lake Project.The cost of project construction and the revenue from bond sales,and associated costs, are considered to balance in-so-far as net cash flow computations are concerned.Bond proceeds for future projects have been omitted from this analysis because they are presumed to flow through the Corporation.However,the cost of engineering,planning,and environmental Awork that will be recovered from bond sales is accounted for under the revenue heading from :"Contracts and Capital Projects Services". 2.04.2.note(m)Grants from Others Other state agencies may wish to participate in Corporate projects,as may agencies of the federal government,other nations (note Alaska's proximity to Canada and Russia)and private corporations.The Corporation will support a program to seek such grants,particularly in the area of technical research and product,or method,development. 2.04.3 note(n)Contract and Capital Project Projects Services This line item contains the allowance for capital projects planning,design and construction administration.It also provides a place to account for revenue from communities,other agencies of the state,foreign nations and private corporations who may wish to avail themselves of the expertise of Corporate staff.The value indicated herein is 15%capital spending for the year plus the Grant Administration Expense indicated on the Cash Flow Model sheet under the bold heading Administrative Office Expense. The capital spending numbers used here are contained on the Cash Flow Models sheet under the bold heading "Total Annual Capital Spending" 3.0.Cash Flow Summary -Expenses 3.01 Administrative Expenses Items listed under this category are the basic aministrative,management and professional services required of the Corporation to operate within the requirements of the case under study. 3.01.1 note(o)General &Administrative Expense 3.02 3.01.2 3.01.3 This item accounts for the expense related to support of executive offices of the Corporation - basic overhead costs.After restructuring,only the most basic administrative costs will be included in this item.Other administrative expense related to specific programs are accumulated under the expense item "Program Support Services". A break-down of Administrative expenses is presented on "Cash Flow Models sheets"under the bold heading "Administrative Expense".In estimating these expenses,formulas using factors presented under the heading General Administrative Expense Assumptions shown on page 1 of the Case Overview sheet are employed. note(p)Program Support Services Each program administered by the Corporation must bear its own administrative costs.This item accounts for the cost of administrating the various grant and loan programs.The value indicated is calculated using the several factors listed under General Administrative Expense Assumptions shown on the Case Overview sheet. note(q)Contract &Construction Administration Services This line item contains the allowance for capital projects planning,design and construction administration.It also provides a place to account for revenue from communities,other agencies of the state,foreign nations and private corporations who may wish to avail themselves of the expertise of Corporate staff. This line is related to Revenue sources described in paragraph 2.04.3.It is calculated as 5%of the current year capital spending plus 5%each of the next two future year's capital spending,plus the estimated Grant Administration Expense. Investments 3.03 The Corporation will make investments in energy projects throughout the state. 3.02.1 3.02.2 3.02.2. note(r)Inflation Proofing Trust, Loan and Insurance Funds As a matter of policy,the Alaska Energy Corporation Trust Fund,and Self-Insurance funds will be "inflation proofed"annually.That is to say,the Corporation will,as a minimum, annually invest an amount of money into each of these funds so that it maintains constant buying power over the years. The assumption as to the annual inflation,over the period of the analysis is indicated on page 1 of 2 of the Case Overview.The value of the fund at any time is indicated on the Cash Flow Models sheet under the bold face heading "Funds". note(s)Investment in Capital Projects Each year a portion of the balance of the Operating Reserve Fund will be invested into capital projects.The exact amount to be so invested will be calculated according to long range planning criteria set out by the board of directors and in accordance with be near and mid-term requirements of fund.For the purpose of case studies,it is assumed that a fixed percentage of the Operating Reserve Fund balance is invested in capital projects.That percentage is noted on the Case Overview sheet. note(t)Development and Planning This item includes mid-range planning (0 to 5 years)and development of project feasibility for new projects and markets.The value shown is calculated according to the assumption listed on the Case Overview Sheet as "Planning,Research &Development". Capital Projects Related Expenses Listed here are the expenses related to operations and maintenance of the capital plant owned by the Corporation Except where noted,debt service transactions associated with bond payments are not included in the analysis.In preparing the analysis it has been assumed that,as in the case of the Bradley Lake Project,each project bears its own costs and that debt service revenue from projects is equal to debt service expense 3.03.1 3.03.2 3.03.3 note(u)4-Dam Pool Expenses related to the 4-Dam pool are listed on the Cash Flow Models sheet and reproduced here for convenience.(also see Revenue from Facilities Operations on the "Cash Flow Summary -Revenue sheet).Since the analysis assumes debt services associated with this project will flow to the Corporation,debt service expense is not included in this item. note(v)Bradley Lake Hydroelectric Project. Expenses related to the Bradley Lake Project, including debt service,are listed here.Annual operating expense is listed on the Cash Flow Models sheet and reproduced here for convenience.(also see Revenue from Facilities Operations on the "Cash Flow Summary - Revenue sheet). note(w)Larsen Bay Hydroelectric and Other Projects This item only accounts for the Larsen Bay, Anchorage/Fairbanks Intertie and Snettisham projects (see "Cash Flow Models"sheet under the bold heading Plant Operating Expense (exclusive of Insurance) Under this item,only the debt service is included for the Larsen Bay Hydroelectric project."Other Projects”include the Anchorage/Fairbanks Intertie (management and maintenance expense only)and the operating expense associated with the Snettisham hydroelectric projects. The cost of operation of the new capital projects to be constructed in the investment regions are x7 3.04 3.03.4 assumed to "wash"as was the assumption with debt service associated with these projects. Furthermore the Corporation may or may not own and operate these facilities. note(x)Contribution to Self- Insurance Fund The state will continue to provide general liability insurance as it does today.The cost of workers compensation insurance is included in G &A and program support items (salaries).The values shown here are contributions to the 4-dam pool self-insurance fund. Self-Insurance Fund contributions are increased annually in order to keep up with inflation assumptions indicated on the Case Overview sheet.Furthermore,the Corporation will have to continue to increase the level of the self- insurance fund if it continues to accumulate additional plant facilities.It is for that reason the analysis allows that fund to continue to grow at the rate indicated in the Cash Flow Models sheet. Rural Energy Cost Assistance Program (funded by the Corporation) This program is discussed in more detail elsewhere.It consists of three elements;Grants to Communities and Utilities,Loans to Communities and Utilities and 3.04.1 Technical Assistance to Communities &Utilities. note(y)Grants to Communities and Utilities Grants to Communities and Utilities is one of three RECAP programs proposed to,over time, replace the PCE program.In some study scenarios grants accounted for here can completely replace the current PCEP funding level,in others the RECAP contribution levels are well below the level of PCEP funding. 3.04.2 note(y)Loans to Communities and Utilities 3.05 3.04.3 Low cost subsidized loans will be made to regional utilities.This expense item account for such new loan disbursements.The amount of this line item is calculated as a percentage of the Operating Reserve Fund indicated on the Cash Flow Models Sheet,or as a fixed amount, depending on the case scenario.The percentage, or amount,assumed for any analysis is indicated on the Case Overview sheet under the heading "Energy Loans". note(y)Technical Assistance to Communities and Utilities This item includes technical assistance in the form of field assistance,management and technical workshops,code and regulatory compliance and health and life safety programs. The amounts indicated on the Summary Cash Flow -Expense sheet are calculated as a percentage of Corporate Revenue. Legislative Appropriations Administered by the Corporation 3.05.1 note(z)Power Cost Equalization Depending upon the case study,the Power Cost Equalization Program (PCEP)could be phased out over the coming decade or during fiscal 1993. PCEP would be replaced with the Corporations Rural Energy Cost Assistance Program (RECAP).The legislature could,however, continue to set the amount of this grant program and direct its expenditure as it has in past years. After restructuring this program would become supplemental to RECAP. Values indicated in this line item are calculated as the revenue value indicated under "Legislative Appropriation"less the cost of administrating the PCE program.The assumption as to the cost of administrating the PCEP is shown on the Case Overview sheet under "general Administrative Expense Assumptions". 3.05.2 note(z)Legislative Grants 4.0 The legislature may wish to use the offices of the Corporation to administrate various grants it may make to communities.This item accounts for expenses associated with rendering such services (see item 2.02.3 above). Cash Flow Models These sheet contain a number of models assumed for the preparation of the Proforma Cash Flow Analysis. 4.01 4.02 4.03 Administrative Expense Administrative expense models are calculated according to assumptions listed on the Case Overview Sheet,page 1 of 2. Annual Capital Construction The AEA,legislators,other agencies of the government, as well as ordinary citizens,have suggested undertaking various energy projects.A listing of these suggested projects has been prepared and some of the suggested projects have been studied for financial feasibility.The estimate of Annual Capital Construction is based on the assumption that the financially feasible projects will be constructed within the schedule prepared by the AEA. A list of capital projects is available and contained in another appendix of this document. Total Plant Cost 4.03.1 Total Plant Cost This line is the sum of the price paid for all capital plant owned by the Corporation.It is calculated by adding last year's value to this year's Total Annual Capital Spending number. 4.03.2 Plant Value Before Depreciation Values listed on this line are calculated by adding Total Annual Capital Spending to last year's Total Net Value of Capital Assets.The value is 4.04 4.03.3 Funds 4.04.1 4.04.2 4.04.3 4.04.4 prepared to assist in calculation of "Total Net Value of Capital Assets". Annual Depreciation Annual depreciation of capital plant is calculated based on the assumption that the average remaining life of all capital plant is listed on the Case Overview sheet. Trust Fund The various analyses assume different levels of endowment.The Alaska Energy Corporation Trust Fund is the fundamental capital element of a more independent Corporation.The fund is increased each year according to the assumption of annual inflation indicated on the Case Overview sheet. Revolving Loan Fund This fund exists today in the form of loans payable from borrowers.As loans are made (shown under "Loans to Communities and Utilities"as an expense on the Summary Cash Flow -Expense)the fund grows.The analysis assumes that no principal payments are made to the loan fund (which distorts the values of the fund indicated for later years). Bond Reserve Fund This fund is calculated as a percentage of the amount of project funds financed over the years. The percentage is listed on the Case Overview sheet.This fund is overstated in that capital construction indicated in the analysis is probably overstated. Self-Insurance Fund Each year about a million dollars is invested into the self-insurance fund.For the purpose of this analysis,this fund is maintained,in nominal dollar terms,and annual contributions continue to be made to the fund. 4.04.5 Operating Reserve Fund The difference between Total Revenue and Total Expense,indicated on the Summary Cash Flow sheets,flows into (or out of)this fund.Also, contributions to the Rural Energy Cost Assistance Program as well as the Investment in Capital Projects flow from this fund. 4.05 Plant Operating Expense Estimates of plant operating expense are contained under this heading as indicated on the sheet.All entries except for "Other Projects"are based upon current operating costs inflated as according to inflation assumptions indicated on the Case Overview sheet.In the case of "Other Projects",it is assumed that the operations costs of new facilities can be estimated as a percentage of the "Total Plant Cost less the estimated cost for operation of Bradley,the 4-Dam Pool,the Anchorage/Fairbanks intertie and Snettisham Dam.The percentage factor used in this calculation is indicated on the Case Overview sheet as "Plant Operating Expense". 4.06 4-Dam Pool Gross Revenue The analysis assumes that all revenue generated by the 4-Dam pool flows into the Corporation.The level of production of the Tyee dam is estimated based on the assumption that the Swan Lake/Tyee intertie would be completed in 1997 and that the total production of Tyee can be sold by 1999. APPENDIX C CASH FLOW ANALYSIS 91Q4\IT2107 THE ALASKA ENERGY CORPORATION Case one Overview Page 1 of 2 27-Dec-91 Analysis 1 Given the study conditions,cash flow into the Corporation's Energy Cost Assistance Programs can match the current level of PCE funding (in nominal dollars). 2 Over the study period (20 years)the Corporation would provide about $114 million in low cost loans to small utilities and communities. 3 During the study period the Corporation would render about $20 in technical assistance to smaller utilities and communities;About $1 million per year. 4 Ofall case studies where rust find endowment le assumed to be $115 million,this case one study offers the most optimistic conditions and results. Case Study Assumptions: *The Corporation is endowed with a $115 million trust fund. *After FY1993,the PCE Program and other state funded grant programs are replaced with the Corporation's own Rural Energy Cost Assistance Programs. *Expectations from power sales revenue is high. *The 4-Dam Pool and Larsen Bay Hydro Projects loan receivable is transfered from the state to the Corporation. *All loan funds are granted,intact,to the Corporation. *All numbers are in 1991 dollars. *The scenario assumes the Corporation agressively pursue development of hydro potential of Southeast Alaska. i?) Modeling Parameters: Alaske Energy Corporation Trust Fund Endowment (1992)$115 million Plant Operating Expense 1.5 %of Plant Value +Inflation Receipts from loan activities 0.00 %of Last Year's Balance Revenue from New Generation 0.005 Dollars per kWh Capital Recovery Factor on Debt n/a =.%of Capital Investment Revenue trom New Transmission 0.005 Dollars per kWh General Administrative Expense Assumptions |Return from Trust Fund 2.50 %of Fund Balance Executive Office Expense 0.50 %of Average Spending Decline in PCE Program Grants n/a %Annually Loan Administration Expense 1.50 %of Loaned Amounts Planning,Research &Development 0.25 %Gross Revenue PCEP/RECAP Expense 0.90 %of Program Investment in Capital Plant 20.00 %of Reserve Fund Grant &Construction Admin 15.00 %of Grant Amount Rural Energy Cost Assistance Program Bond Reserve 5.00 %of Bond Issue Grants To Communities &Utilities see notes above Annual Inflation Rate 0.00 %Annually Loans to Communities &Utilities 20.00 %of Reserve Fund Depreciation lite of all equipment and plant.15 =years Tech.Assistance to Communities &Utilities 1.50 %of Annual Revenues THE ALASKA ENERGY CORPORATION Case one Overview Page 2 0f2 27-Dec-91 Overview of Proforma Cash Flow Analysis 1991 through 2001 Authority Operations -><-----Corporate Operations Key pro forma Data:1991 1992».1993 1994 1995 1996 1997 1998 1999 2000 2001 Corp.Investment &Assistance Wa va 4,808 18,330 26,363 27,999 29,015 28,453 27,899 27,881 29,211 Legislative Approprations 25,695 24,609.21,203 0 0 0 fr)1)fr))0 Total Value of All Funde va 168,537.184,019 =213,435 =209,907 221,328 =229,489 =238,835 =249,479 262,563 272,393 Net Value of Plant Facilities va 1,059,390.1,148,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 Net Cash Flow va Wea =:20,704 4,045 2,880 -1,380 1,386 145 3,278 2,000 5,525 Total Annual Revenue 113,682 60,376 85,881 63,972 64,136 58,604 61,945 64,292 66,438 65,698 60,933 Total Annual Capital Spending na na 161,451 153,401 144,051 72,108 =76,500 =88.5420 94,917 80,750 42,500 2002 through 2013 Key pro forma Data:2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Corp.Investment &Assistance 29,029 27,803 27,504 30,016 33,826 34,065 32,951 31,611 31,187 31,016 31,137 31,348 Legistative Approprations it)i')i')Oo it)[¢)it)[¢]0 0 it)it) Total Value of All Funds 277,106 287,704 300,190 315,521 323,189 329,395 335,679 342,636 350,234 358,218 366,427 374,722 Net Value of Plant Facilities 1,187,053 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Net Cash Flow 838 6,127 9,623 71 -2,706 -2,815 -1,603 -386 332 641 664 619 Total Annual Revenue 70,278 72,802 73,252 62,488 62,913 62,961 59,654 66,391 59,607 57,324 57,359 64,826 Total Annual Capital Spending 77,917 92,792 92,792 0 (4)oO (e)0 (0)(9)(6)0 THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue -(1993 -2002)Case one Page 1 of 2 27-Dec-91 <-----Corporation Operations ----> Sources of Revenue 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Revenue from Funds a Alaska Energy Corp.Trust Fund (¢)(9)2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 Reserve Bond &insurance Funds 0 0 788 1,013 1,748 1,660 1,842 1,922 2,018 2,153 2,356 2,478 c Power Project Loan Fund 6,586 6,500 a 0 0 0 (?]0 (0)(0)(s)(t) a The analysis assumes the the Ralibelt interle &Energy tunds are re-appropriated to the Alaska Energy Corporation Trust Fund.This item is interest earned on that fund. a.The Corporation will maintain ineuranea,bond reserve and operating reserve funds.The amount shown is the interest earning on these funds. Interest earned on the Bradley Lake Bond funde le excluded from the calculation because of contractural requirements. c_This line indicates estimates of the revenue received from payments made by borrowers against of this fund. Note:Detalled activities of these theese three funde are shown on the Proforma Cash Flow Models sheets -attached. Legislative Approprations viet d Administrative Office Expense 969 1,106 1,056 0 oO 0 0 0 0 (¢]9)oO e@ Power Cost Equalization Program (PCEP)19,358 15,203 17,030 0 iY)0 (¢](0)(¢)0 0 (¢) f Grants &Operating Expense §,348 8,300...43,117 0 0 )7)0 0 7)0 0 d-e An administrative expense model ls shown on the Proforma Cash Flow Models sheets -attached.PCEP is described in the AEA Budget Document. ft Before Reorganization this is Power Development Revolving Loan Fund.After restructureing values shown are grants from the legislature. Revenue from Facilities Operations : g 4Dam Pool 0 0 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 26,004 h Bradley Lake Hydroelectric Project 12,437 25,551 6,725 6,725 6,725 5,575 5,770 5,980 6,210 6,460 6,725 7,015 1 Other Projects Constructed before 1992 "9,629 1,620 1,620 4,605 1,610 1,610 1,615 1,615 1,620 1,620 k Revenue from Future Projects by investment Regions Southcentral Inveetment Region 0 On a 0 300 6,000 6,000 6,250 6,750 6,750 6,750 6,750 Southeast Investment Region 0 0.3,300 4,013 4,263 5,056 7,356 7,356 7,716 8,716 9,216 11,516 Northern/Western investment Regions )oa 33 314 333 333 333 333 333 333 333 g Revenue estimates for the 4-dam pool are constructed on the assumption that the rate will be 6.6 cent per kWh sold and Tyee is connected to Swan Lake in 1996. h Values shown are for debt service and operating expense.All revenue,except project management expense,passes through the Corporation yielding no net cash flow. i Figures shown are for operation of the Anchorage/F airbanks Intertie operations and Larsen Bay Hydro project debt service. K The revenue shown for future projects is forecast based on the assumption that new generation and transmission projects will yield at least a half cent per kilowatt hour of energy produced or wheeled.Appendix F to this document contains a listing of all future projects presumed to produce revenues listed herein. Other Sources of Revenue |Contributed Capital &Bond Proceeds 68,768 1,916 0 0 0 0 tt)(¢)0 ¢)0 0 m Grants from Others i?)ie)Q i¢)(¢)ie)(¢))0 0 (¢)0 n Contract and Capital Projects Services 196 1,800 24,685 23,010 21,608 10,816 11,475 13,281 14,238 12,113 6,375 11,688 1 Capital contributions are related to Bradiey Lake financing.oe Total Annual Revenue 113,682 60,376 85,881 63,972 64,136 58,604 61,945 64,292 66,438 65,698 60,933 70,278 aneporfadoota5te THE ALASKA ENERGY CORPORATION Cash Flow Summary -Expenses -(1993 -2002)Case one Page 1 of 2 27-Dec-91 <----Corporation Operations ---> Expenses 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Expenses o General &Administrative Expense 969 1,106 435 433 350 357 311 308 308 321 327 322 p Program Support Services Oo 0 279 153 0 0 0 0 (¢)(¢)it)i!) q_Contract &Construction Admin Services 196 1,800 23,413 18,478 14,633 11,858 12,998 13,210 10,908 10,058 10,660 13,175 o G&A expense estimates,after reetructuring,are eetimated as a function of gross average revenue. p Program support eervices (l.e.management of PCEP &etc.)are estimated as a percentage of program funding. q Support of capital projects le estimated as a percentage of the average annual programmed construction plus annual grants to be administered by the Corporation.. investments ¢Inflation Proofing Trust &insurance Funds 0 (')a i)(')[)i*)0 0 oO 0 i!) 8 Investment in Capital Projects 68,768 1,916 0 0 4,141 4,950 5,526 5,250 4,973 4,944 5,599 5,999 t Development&Planning 0 0 200.215 175 178 156 154 154 161 164 161 t The Alaska Energy Corporation Trust Fund and the Sel-Insurance Fund are maintained in nominal dollars. 8 The Corporation will inveet in new capital plant as net cash flow allows.Investment is a function of the Operating Reserve Fund balance at any time. t The expenditure for Planning and Development is a function of the average revenue received by the Corporation. Capital Project Related Expenses . u 4Dam Pool 1,903 2,159 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 v Bradley Lake Hydroelectric Project 9,500 22,350 6,725 6,725 6,725 5,575 §,770 5,960 6,210 6,460 6,725 7,015 W Lareen Bay Hydroelectric &Other Project 0 0 6,462 8,763 6,179 7,186 8,251 9,500 10,849 11,986 12,540 13,619 x Contribution to Self-Insurance Fund 1,034 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 u_-Valuse listed here include operating costs only.The analysis assumes the loan receivable on the 4-Dam pool projects would become receivable to the Corporation. v_Values listed include annual debt service and project operating costs.note:No net cash flow can be captured by the Corporation until after 2022. w The analysis assumes the loan receivable on the Larsen Bay project will become receivable to the Corporation.Revenue from future projects is listed in Appendix F. x =An insurance trust fund exists and will be maintained into the future.Payments are maintained in nominal dollars. Rural Energy Coet Assistance Programe (funded by the Corporation) y Grants to Communities &Utilities 0 0 [)]17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 y Loans to Communities &Utilities 6,586 6,500 0 (¢]4,141 4,950 5,526 5,250 4,973 4,944 5,599 5,999 y Technical Assistance to Communities &Utilities Wa n/a 1,305 1,300 1,051 1,070 934 923 924 963 982 965 y These three items make up the bulk of the Rural Energy Cost Assistance Program to be funded by the Corporation.The amounts of each element are discussed elsewhere. Legislative Approprations Administrated by the Corporation z Power Cost Equalization 19,358 15,203 16,877 i?)Os 0 [*)¢)ie)oO 0 0 z Legislative Grants 5,348 8,300 2,649 0 [?]0 (0)i?)0 Oo (¢)(0) Z_These items account for grants from the legislature. Total Annual Expenses 113,682 60,376 65,176 59,928 61,256 59,984 63,332 64,436 63,160 63,698 66,4548 71,116 aw THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue-(2003 through 2013)Case one Page 2 of 2 S\ Sources of Revenue 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Revenue from Funds Alaska Energy Corp.Trust Fund 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 Reserve Bond &insurance Funds 2,456 2,571 2,760 3,025 3,068 3,027 2,983 2,970 2,986 3,021 3,063 Power Project Loan Fund oO 0 t¢)i!)it)o (8)0 0 fe)fe) Legisiative Approprations Administrative Office Expense [)(6)(*)0 0 (*)(*)0 (1)Oo ft) Power Cost Equalization Program (PCEP)[)0 (*)it)0 0 it)(+)0 (t)0 Grants &Operating Expense oO 0 t)0 0 0 Y)0 (9)(?)(9) Revenue from Facilities Operations Net 4-Dam Pool Revenue 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 Bradley Lake Hydroelectric Project 7,325 7,660 8,020 8,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Other Projects Constructed before 1992 1,625 1,625 1,630 1,635 1,640 1,645 1,650 1,655 1,660 1,660 1,660 Corporation Revenue from Investment Regions Southcentral Investment Region 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 Southeast Investment Region 11,516 11,516 14,116 14,116 14,116 14,116 14,116 14,116 14,116 14,116 14,116 Northerr/Western investment Regions 333 333 333 333 333 333 333 333 333 333 333 Other Sources of Revenue Contributed Capital &Bond Proceeds i¢)t+)i!)(¢)0 0 ie)(¢](e)ie)re) Grants from Others i?)(¢)0 0 (¢)ie)(e)0 0 (e)fe) Contract and Capital Projects Services 13,919 13,919 it)(¢)0 0 ()0 (0)fe)fe) Ld Total Annual Revenue 72,802 73,252 62,488 62,913 62,961 59,654 66,391 59,607 57,324 $7,359 64,826 =- ; = THE ALASKA ENERGY CORPORATION Cash Flow Summary -Expenses-(2003 through 2013)Case one Page 1 of 2 27-Dec-91 . Expenses 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Expenses General &Administrative Expense 335 340 336 320 318 322 321 323 312 30S 288 Program Support Services 0 227 224 243 271 274 266 257 252 251 252 Contract &Construction Admin Services 9,279 4,640 0 0 t°)0 0 0 0 0 0 Investments Inflation Proofing Trust &Insurance Funds ie)0 ie]0 if)(Y)0 te)0 (0)0 investment in Capital Projects 4,694 4,727 5,952 7,877 8,031 7,490 6,927 6,606 6,529 6,595 6,723 Development &Planning 164 170 122 174 166 157 155 158 155 153 145 Capital Project Related Expenses 4Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Bradiey Lake Hydroelectric Project 7,325 7,660 8,020 6,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Larsen Bay Hydroelectric &Other Project 14,937 16,256 16,169 16,051 15,930 15,818 15,714 15,615 15,517 15,418 15,317 Contribution to Self-Insurance Fund 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 Rural Energy Cost Assistance Programs (funded by the Corporation) Grants to Communities &Utilities 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 Loans to Communities &Utilities 4,894 4,727 §,952 7,877 8,031 7,490 6,927 6,606 6,529 6,595 6,723 Technical Assistance to Communities &Utilities 985 1,020 1,082 1,043 993 942 928 945 928 917 871 Legislative Approprations Administrated by the Corporation Power Cost Equalization i?)ie)(¢)0 0 i!)0 i?)0 0 (0) Legislative Grants i?)0 (e)0 is)0 0 (¢)ie)(s)(0) Total Annual Expenses 66,675 63,629 61,717 65,619 65,776 61,258 66,777 59,276 56,683 56,694 64,207 THE ALASKA ENERGY CORPORATION Cash Flow Models (1991 -2002)case one Page 1 of 2 27-Dec-91 supporting documentation) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Office Expense General &Administrative 778 607 435 433 350 357 311 308 308 321 327 322 Loan Administration Expense 91 105 0 (*]o 0 oO 0 0 (e)(e)(3) PCEP Expense 120 174 153 0 0 0 0 0 0 )(9)0 Grant Administration Expense Wea 220 468 i¢)[¢]0 0 0 0 (0)fs)0 Total Administrative Office Expenee 989 1,106 1,056 433 350 357 311 308 308 321 327 322 Annual Capital Spending ° : Centra//Interior Investment Region Wa 289,638 56,950 62,475 77,633 26,208 26,208 25,500 25,500 25,500 it)i?) Southeast Investiment Region va 13,250 78,250 63,568 63,568 45,900 50,292 63,042 69,417 55,250 42,500 77,917 Northem/Western investment Region wa 23,276 26,251 27,358 2,850 0 0 o 0 o !)o Total Annual Capital Spending 68,768 326,164:°:161,451 153,401 144,051 72,108 76,500 88,542 94,917 80,750 42,500 77,917 Total Plant Coet 902,167 1,228,331 °°1 989,782 1,543,183 1,687,234 1,759,342 1,835,842 1,924,384 2,019,300 2,100,050 2,142,550 2,220,467 Plant Value Before Annual Depreciation 902,167 1,119,534 1,220,840 1,299,606 1,362,267 1,347,735 1,333,417 1,332,110 1,338,132 1,330,075 1,283,366 1,272,611 Annual Depreciation 108,797 60,144 74,636 81,389 86,640 90,818 89,849 88,894 88,807 89,209 88,672 85,558 Total Net Value of Captial Assets 793,370 1,059,390 1,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 1,187,053Fundsae Trust Fund QO 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 Power Project (Revolving)Loan Fund 26,774 22,000 28,500 28,500 26,500 32,641 37,591 43,116 48,366 53,339 58,282 63,882 Bond Reserve Fund 1,000 22,037 29,977 37,647 29,033 32,390 35,939 40,104 44,601 48,391 50,236 53,832 Self insurance Fund 6,483 9,500 10,542 11,584 12,626 13,668 14,710 15,752 16,794 17,636 18,878 19,920 Operating Reserve Fund i)Q 20,704 24,749 27,629 26,249 24,863 24,718 27,996 29,997 24,472 Total Value of all Funds 168,537 184.019 213,435 209,907 221,328 229,489 238,835 249,479 262,563 272,393 277,106 Piant Operating Expense (excluding Insurance) Bradley na Wa 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,480 1,580 1,560 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro va na 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects [¢)i¢)2,382 4,683 2,099 3,106 4,171 5,420 6,769 7,906 8,460 9,539 Total Operating Expense 7,269 7,369 14,851 17,152 14,568 15,575 16,640 17,889 19,238 20,375 20,929 22,008 4-Dam Pool Gross Revenue tate production Terror Lake 0.066 139 «9,174 9,174 9,174 |9,174 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 0.066 30 =:1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 0.066 80 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 0.066 50 8,250 8,250 8,250 8,250 8,250 8,250 8,250 8,250 8,250 9,570 Total 4-Dam Pool 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 26,004 Ad THE ALASKA ENERGY CORPORATION Cash Flow Models (2003 -2013)case one Page 2 of 2 27-Dec-91 (supporting documentation) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Office Expense General &Administrative 335 340 336 320 318 322 321 323 312 305 288 Loan Administration Expense 73 71 89 118 120 112 104 99 98 99 101 PCEP Expense 153 153 153 153 153 153 153 153 153 153 153 Grant Administration Expense (')i)oO ()oO i')0 it)it)oO 0 Total Administrative Office Expense 562 565 578 §91 §92 587 578 575 563 557 $42 Annual Capital Spending Central/Interior Investment Region 0 [?]0 0 [¢]Oo 0 (9)i?)(¥)[+] Southeast investiment Region 92,792 92,792 {¢]i')[¢)i?)0 0 0 0 0 Northern/Western Investment Region 0 oO i)(')i!)it)0 0 ()(¢)i!) Total Annual Capital Spending 92,792 92,792 0 (?)0 0 [¢)0 ce]{?]i?) Total Piant Cost 2,313,259 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 New Plant total 1,060,033 1,172,992 1,171,767 1,169,842 1,169,688 1,170,229 1,170,792 1,171,113 1,171,190 1,171,124 1,170,996 Plant Value Before Annual Depreciation 1,279,645 1,287,796 1,202,473 1,116,620 1,036,455 962,014 892,917 828,762 769,255 714,002 662,719 Annual Depreciation 84,641 85,323 85,853 80,165 74,441 69,097 64,1354 59,528 §5,252 51,284 47,600 Total Net Value of Captial Assets 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Funds Trust Fund 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 Power Project (Revolving)Loan Fund 69,881 74,776 79,502 65,455 93,331 101,362 108,852 115,779 122,385 128,914 135,509 Bond Reserve Fund 58,227 58,650 58,588 58,492 56,484 58,511 58,540 58,556 58,560 58,556 58,550 Self insurance Fund 20,962 22,004 23,046 24,068 25,130 26,172 27,214 28,256 29,298 30,340 31,382 Operating Reserve Fund 23,634 29,761 39,384 40,155 37,449 34,634 33,030 32,644 32,976 33,617 34,281 Total Value of all Funds 287,704 300,190 315,521 323,189 329,395 335,679 342,636 350,234 358,218 366,427 374,722 Plant Operating Expense (excluding Insurance) Bradley 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 10,857 12,178 12,089 11,971 11,850 11,738 11,634 11,535 11,437 11,338 11,237 Total Operating Expense 23,326 24,647 24,558 24,440 24,319 24,207 24,103 24,004 23,906 23,807 23,706 4-Dam Pool Gross Revenue Terror Lake 9,174 9,174 9,174 9,174 9,174 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 1,980 1,980 1,980 1,980 1.980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 5,280 5,280 §,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 9,570 9,570 9,570 9,570 9,570 9,570 9.570 9,570 9,570 9,570 9,570 Total 4-Dam Pool 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 THE ALASKA ENERGY CORPORATION Case two Overview Page 1 of 2 27-Dec-91 dsAnalysis 1 Given the study conditions,cash flow into the Corporation's Energy Cost Assistance Program can match the current level of PCE funding (in nominal dollars). 2 Over the study period the Corporation would provide about $90 million in low cost loans to smaller communities and utilities. 3 During the study period the Corporation would provide about $19 million in technical assistance to smailer communities and utilities. 4 Ofthe 4 cases studied where the trust fund endowment is $115 miilion,this case is the second most optimistic. Case Study Assumptions: *The Corporation is endowed with a $115 million trust fund. *After FY1993,the PCE Program and other state funded grant programs are replaced with the Corporation's own Rural Energy Cost Assistance Programs. *Expectations from power sales revenue is moderately high.Revenue from new projects lages 3 years compared to Case one.Revene expectations are,however high. *The 4-Dam Pool and Larsen Bay Hydro Projects loan receivable is transfered from the state to the Corporation. *All loan funds are granted,intact,to the Corporation. *The scenario assumes the Corporation agressively pursue development of hydro potential of Southeast Alaska. *All numbers are in 1991 dollars. 0 Modeling Parameters: Alaska Energy Corporation Trust Fund Endowment (1992)$115 -million Plant Operating Expense 1.5 %of Plant Value +Inflation Receipts from loan activities 0.00 %of Last Year's Balance Revenue from New Generation 0.005 Dollars per kWh Capital Recovery Factor on Debt nia =%&of Capital Investment Revenue from New Transmission 0.005 Dollars per kWh General Administrative Expense Assumptions |Return from Trust Fund 2.50 %of Fund Balance Executive Office Expense 0.50 %of Average Spending Decline in PCE Program Grants n/a %Annually Loan Administration Expense 1.50 %of Loaned Amounts Planning,Research &Development 0.25 %Gross Revenue PCEP/RECAP Expense 0.90 %of Program Investment in Capital Plant 20.00 %of Reserve Fund Grant &Construction Admin 15.00 %of Grant Amount Rural Energy Cost Assistance Program Bond Reserve 5.00 %of Bond Issue Grants To Communities &Utilities see notes above. Annual Inflation Rate 0.00 %Annually Loans to Cogimunities &Utilities 20.00 %of Reserve Fund Depreciation Life of All equipment and plant.15 -syears Tech.Assistance to Communities &Utilities 1.50 %of Annual Revenues THE ALASKA ENERGY CORPORATION Case two Overview Page 2 0f2 27-Dec-91 Overview of Cash Flow Analysis 1991 through 2001 Authority Operations -><-----Corporate Operations Key pro forma Data:1991 1992"«1993 1994 1995 1996 1997 1998 1999 2000 2001 Corp.Investment &Aseistance Na ve 1,308 18,313 25,012 25,470 26,003 23,442 21,237 21,528 24,634 Legislative Appropratione 25,695 24,609 21,203 ))0 0 )0 )0 Total Value of All Funds Wa 168,537 164,019 210,135 203,725 213,395 215,440 219,329 226,383 242,715 253,682 Net Value of Plant Facilities Wa 1,059,390 1,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 Net Cash Flow n/a va 17,404 1,129 1,727 6,326 5,493 564 7,655 6,165 -2,866 Total Annual Revenue 113,682 60,376 82,681 61,027 61,626 51,135 54,645 60,034 64,242 63,660 59,212 Total Annual Capital Spending ne ne «NG 4,451 153,401 144,051 =s-72,108 =76,500 «=88,S42.s«94,917 =80,750 -S_42,500 ° 2002 through 2013 Key pro forma Data:2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Corp.Investment &Assistance 26,160 25,964 25,484 27,929 32,108 32,008 30,719 29,910 30,014 30,435 30,866 31,161 Legislative Approprations 0 0 0 o o e)(*]0 0 0 oO tY) Total Value of All Funds 258,858 267,613 278,224 293,478 299,212 304,194 310,256 317,898 326,006 334,166 342,284 350,348 Net Value of Plant Facilities 1,187,053 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Net Cash Flow -1,292 5,949 10,539 -126 -3,092 -2,017 194 1,083 1,107 848 570 440 Total Annual Revenue 67,150 71,009 72,382 59,761 61,076 61,967 59,518 66,274 59,536 57,289 57,342 64,814 Total Annual Capital Spending 77,917 92,792 92,792 i?)0 it)i?)(e)0 0 0 i?) THE ALASKA ENERGY CORPORATION Cash Flow Summary -evenue-(1993 -2002)Case two Page 1 of 2 a 27-Dec-91 <---Corporation Operations --->;= Sources of Revenue 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Revenue from Funds a Alaska Energy Corp.Trust Fund 0 0 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 Reserve Bond &Insurance Funds 0 0 788 1,013 1,666 1,506 1,660 1,619 1,615 1,771 2,088 2,317 c Power Project Loan Fund 6,586 6,500 Qa Oo [0](*)i?)(¢)0o (a)fv)fe) The analysis assumes the the Ralibek interle &Energy funds are re-appropriated to the Alaska Energy Corporation Trust Fund.This item is interest earned on that fund. The Corporation will maintain ineurance,bond reserve and operating reserve funds.The amount shown is the interest earning on these funds. Interest earned on the Bradley Lake Bond funde le excluded from the calculation because of contractural requirements. c This line indicates estimates of the revenue received from payments made by borrowers against of this fund. note:Detailed activities of these theese three funds are shown on the Proforma Cash Flow Models sheets -attached. Legisiative Approprations d Administrative Office Expense 989 1,106 1,056 0 (+)[0]0 (9)i8)i?)(¢)oO @ Power Cost Equalization Program (PCEP)19,358 15,203 17,030 0 i?)Oo oO (9)(e)(¢)fe)(¢) f Grants &Operating Expense 5,348 8,300.:3,117 fe)0 ¢)0 0 0 (9)0 Oo d-e An administrative expense model is shown on the Proforma Cash Flow Models sheets -attached.PCEP is described in the AEA Budget Document. €Before Reorganization this Is Power Development Revolving Loan Fund.After restructureing values shown are grants from the legislature. Revenue from Facilities Operations 24,684g4DamPooloOi)24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 26,004 h Bradley Lake Hydroelectric Project 12,437 25,551 8,725 6,725 6,725 5,575 5,770 5,980 6,210 6,460 6,725 7,015 {Other Projecte Constructed before 1992 1,620 1,620 1,620 1,605 1,610 1,610 1,615 1,615 1,620 1,620 k Revenue from Future Projects by investment Regions A Southcentral Investment Region i)0)8)0 i!)100.2100 4,100 6,083 6333 6583 6,750 Southeast investment Region (+)+)0 1,100 2,438 3,858 4444 5558 6589 7,476 7,929 8549 Northern/Western Investment Regions )fs)0 ft)11 116 227 327 333 333 333 333 g Revenue estimates for the 4-dam pool are constructed on the assumption that the rate will be 6.6 cent per kWh sold and Tyee is connected to Swan Lake in 1996. h_Values shown are for debt service and operating expense.All revenue,except project management expense,passes through the Corporation yielding no net cash flow. i Figures shown are for operation of the Anchorage/Fairbanks intertie operations and Larsen Bay Hydro project debt service. K The revenue shown for future projects is forecast based on the assumption that new generation and transmission projects will yield at least a half cont per kilowatt hour of energy produced or wheeled.Appendix F to this document contains a listing of all future projects presumed to produce revenues listed herein. Other Sources of Revenue 1 Contributed Capital &Bond Proceeds 68,768 1,916 0 0 0 it)t)0 0 0 0 0 m_Grants from Others 0 0 Q 0 (¢)(¢)0 (¢)0 0 0 fe) n Contract and Capital Projects Services 196 1,800 24,685 23,010 21,608 10,816 11,475 13,281 14,238 12,113 6,375 11,688 1 Capital contributions are related to Bradley Lake financing. Total Annual Revenue 113,682 60,376 82,581 61,027 61,626 51,135 54,845 60,034 64,242 63,660 59,212 67,150 THE ALASKA ENERGY CORPORATION Cash Flow Summary -Expenses-(1991 -2002)Case two Page 1 of 2 27-Dec-91 <----Corporation Operations --> Expenses 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Expenses o General &Administrative Expense 989 1,106 435 428 340 342 290 279 277 299 313 312 p Program Support Services (°)0 279 153 o 0 o 0 0 .°)oO oO q_Contract &Construction Admin Services 196 1,800 23,413 18,478 14,633 11,858 12,998 13,210 10,908 10,058 10,660 13,175 ©G&A expense estimates,after restructuring,are estimated as a function of gross average revenue. p Program support services (i.e.management of PCEP &etc.)are estimated as a percentage of program funding. q_Support of capital projects be estimated as a percentage of the average annual programmed construction plus annual grants to be administered by the Corporation... investments t Inflation Proofing Trust &insurance Funds i!)ct)Qo (e)0 i)0 0 0 0 i)0 8 Investment in Capital Projects 68,768 1,916.0 t')3,481 3,707 4,052 2,787 1,688 1,801 3,332 4,565 t Development &Planning 0 0.:200 206 170 171 145 140 138 149 157 156 t The Alaska Energy Corporation Trust Fund and the Self-insurance Fund are maintained in nominal dollars. 8 The Corporation will invest in new capital plant as net cash fiow allows.Investment is a function of the Operating Reserve Fund balance at any time. t The expenditure for Planning and Development is a function of the average revenue received by the Corporation. Capital Project Related Expenses 7 ; u 4Dam Pool 1,903 2,159 5,768 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 v_Bradley Lake Hydroelectric Project 9,500 22,350.6,725 6,725 6,725 5,575 5,770 5,980 6,210 6,460 6,725 7,015 W Larsen Bay Hydroelectric &Other Project 0]OQ.6,462 8,763 6,189 7,215 8,301 9,588 10,986 12,170 12,758 13,858 x Contribution to Self-Insurance Fund 1,034 1042.-1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 u_-Value listed here include operating costs only.The analysis assumes the loan receivable on the 4-Dam pool projects would become receivable to the Corporation. v Values listed include annual debt service and project operating costs.note:No net cash flow can be captured by the Corporation until after 2022. w The analysis assumes the loan receivable on the Larsen Bay project will become receivable to the Corporation.Revenue from future projects is listed in Appendix F. x =An insurance trust fund exists and will be maintained into the future.Payments are maintained in nominal dollars. Rural Energy Cost Assistance Programs (funded by the Corporation) y Grants to Communities &Utilities 0 [0]Q 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 y Loans to Communities &Utilities 6,586 6,500 0 0 3,481 3,707 4,052 2,787 1,688 1,801 3,332 4,565 y Technical Assistance to Communities &Utilities na n/a 1,305 1,283 1,020 1,026 869 838 830 896 940 936 y These three items make up the bulk of the Rural Energy Cost Assistance Program to be funded by the Corporation.The amounts of each element are discussed elsewhere. Legislative Approprations Administrated by the Corporation z Power Cost Equalization 19,358 15,203 16,877 0 a.0 [e)e)ie]0 0 oO z_Legislative Grants 5,348 8,300 2,649 (0)(0)0 (0)0 0 (¢)(9)0 Z These items account for grants trom the legislature. Total Annual Expenses 113,682 60,376 65,176 59,898 59,839 57,461 60,338 59,470 56,587 57,495 62,078 68,442 Ss THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue-(2003 through 2013)Case two Page 2 of 2 Sources of Revenue 2003 2004 2005 2006 2007 2008 2009 2010 2011 ,2012 2013 Revenue from Funds Alaska Energy Corp.Trust Fund 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 Reserve Bond &Insurance Funds 2,363 2,467 2,633 2,921 2,941 2,890 2,866 2,898 2,951 3,004 3,051 Power Project Loan Fund 0 0 0 0 0 0 (Y)¢)0 0 te) Legislative Approprations Administrative Office Expense [?]0 (+)0 0 0 (?)(t)0 (e)(9) Power Cost Equalization Program (PCEP)i!)0 it)0 0 0 0 0 0 0 fs) Grants &Operating Expense 0 t)i')0 0 0 oO 0 0 tY)(e) Revenue from Facilities Operations Net 4-Dam Pool Revenue 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 Bradley Lake Hydroelectric Project 7,325 7,660 8,020 8,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Other Projects Constructed before 1992 1,625 1,625 1,630 1,635 1,640 1,645 1,650 1,655 1,660 1,660 1,660 Revenue from Future Projects by Investment Regions Southcentral Investment Region 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 Southeast Investment Region 9816 10,749 11,516 12,382 13,249 14,116 14,116 14,116 14116 14,116 14,116 Northern/Western investment Regions 333 333 333 333 333 333 333 333 333 333 333 Other Sources of Revenue Contributed Capital &Bond Proceeds it)t')it)i?)it)0 i?)0 QO i¢)(¢) Grants from Others 0 [0](9)[9]i?)0 [0]0 0 (8)0 Contract and Capital Projects Services 13,919 13,919 (0)(0)(0)i')0 i?)(¢)(0)fe) Total Annual Revenue 71,009 72,382 59,761 61,076 61,967 59,518 66,274 59 536 57,289 57,342 64,814 THE ALASKA ENERGY CORPORATION v/Cash Flow Summary -Expenses-(2003 through 2013)Case two Page 1 of 2 27-Dec-91 ; Expenses 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Expenses General &Administrative Expense 313 326 326 311 310 313 2 314 305 300 266 Program Support Services t)213 209 227 259 258 249 243 244 247 250 Contract &Construction Admin Services 9,279 4,640 0 0 i?)0 0 i*)0 0 0 investments Inflation Proofing Trust &Insurance Funds ie)0 oO 0 0 i¢]0 0 0 0 0 investment in Capital Projects 3,992 3,733 4,923 7,031 7,006 6,387 5,984 6,023 6,239 6,460 6,630 Development &Planning 156 164 119 169 161 152 152 156 154 153 145 Capital Project Related Expenses 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Bradley Lake Hydroelectric Project 7,325 7,660 8,020 6,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Lareen Bay Hydroelectric &Other Project 15,190 16,526 16,452 16,347 16,242 16,146 16,056 15,966 15,872 15,775 15,676 Contribution to Self-ineurance Fund 4,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 Rural Energy Coet Assistance Programs (funded by the Corporation) Grants to Communities &Utilities 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 Loans to Communities &Utilitios 3,992 3,733 4,923 7,031 7,006 6,387 5,984 6,023 6,239 6,460 6,630 Technical Assistance to Communities &Utilities 950 987 1,053 1,016 966 914 913 939 927 915 871 Legisiative Approprations Administrated by the Corporation Power Cost Equalization i?)(0)0 i?)o-i?)ie)0 oO (9)ie)(0) Legislative Grants 0 ie)0 0 0 i?)ce)¢)0 9)(¢) Totat Annual Expenses 65,061 61,844 59,886 64,168 63,985 59,324 65,191 58,429 56,441 96,772 64,374 THE ALASKA ENERGY CORPORATION Cash Flow Models (1991 -2002)case two Page 1 of 2 27-Dec-91 supporting documentation) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Office Expense General &Administrative 778 607 435 428 3x40 342 290 279 277 299 313 312 Loan Administration Expense 91 105 0 0 it)(')0 0 0 (¢)0 (t) PCEP Expense 120 174 153 0 0 0 0 0 0 0 0 0 Grant Administration Expense Wa 220 --468 t')(')(¢)0 0 0 (e)(0)(+) Total Administrative Office Expense 969 1,106 1,056 428 340 342 290 279 277 299 313 312AnnualCapitalSpendingTees Central/interior Investment Region Wea 289,638 56,950 62,475 77,633 26,208 26,208 25,500 25,500 25,500 (9)[0] Southeast Investiment Region Wa =:13,250 78,250 =«63,568 «=-s_«463,568 =45,900 50,292 «63,042 69,417 85,250 42,500-S-s«77,917 Northern/Western investment Region va 23,276 26,251 27,358 2,850 0 0 )0 (e)o (0) Total Annual Capital Spending 68,768 326,164°.161,451 153,401 144,051 72,108 76,500 88,542 94,917 80,750 42,500 77,917 Total Plant Cost 902,167 1,228,331 ©.1,389,782 1,543,183 1,687,234 1,759,342 1,835,842 1,924,384 2,019,300 2,100,050 2,142,550 2,220,467 Plant Value Before Annual Depreciation 902,167 1,119,534.1,220,640 1,299,606 1,362,267 1,347,735 1,333,417 1,332,110 1,338,132 1,330,075 1,283,366 1,272,611 Annual Depreciation 108,797 60,144 -74,636 81,389 86,640 90,818 89,849 88,894 88,807 89,209 88,672 85,558 Total Net Value of Captial Assets 793,370 1,059,390 1,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194.694 1,187,053 Funds "s ee Trust Fund QO 115,000°°:145,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 Power Project (Revolving)Loan Fund 26,774 22,000 28,500 28,500 28,500 31,981 35,688 39,740 42527 44,215 46,016 49,348 Bond Reserve Fund 1,000 22,037.29,977 37,647 29,066 32,486 36,108 40,396 45,057 49,005 50,963 54,631 Self Insurance Fund 8,483 9,500...10,542 11,584 12,626 13,668 14,710 15,752 16,794 17,836 18,878 19,920 Operating Reserve Fund O-Qa 17,404 18,534 20,260 13,934 8,441 9,005 16,660 22,825 19,959 Total Value of all Funds 168,537 184,019 210,135 203,725 213,395 215,440 219,329 228,383 242,715 253,682 258,858 Plant Operating Expense (excluding Insurance) Bradley va Wa 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,480 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro Wa n/a 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 0 0 2,382 4,683 2,109 3,135 4,221 5,508 6,906 8,090 8,678 9,778 Total Operating Expense 7,269 7,369 14,851 17,152 14,578 15,604 16,690 17,977 19,375 20,559 21,147 22,247 4-Dam Pool Gross Revenue rate production Terror Lake 0.066 139 869,174 9,174 9,174 |9,174 9,174 9,174 9,174 9,174 9,174 9,174Solomon0.066 30 1,980 1,980 1,980 1,980 1,98 1,980 1,980 1,980 1,980 1.980 Swan Lake Hydro 0.066 80 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 0.066 50 8,250 8,250 8,250 8,250 8,250 8,250 8,250 8,250 8,250 9,570 Total 4-Dam Pool 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24.684 24.684 26,004 2/ THE ALASKA ENERGY CORPORATION Cash Flow Models (2003 -2013)case two Page 2 of 2 27-Dec-91 (supporting documentation) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Office Expense General &Administrative 313 326 326 311 310 313 312 314 305 300 286 Loan Administration Expense 60 56 74 108 105 96 90 90 94 97 99 PCEP Expense 153 153 153 153 153 153 153 153 153 153 153 Grant Administration Expense (')it)i')(¢)i)(')0 o o (t)0 Total Administrative Office Expense 527 535 553 570 568 562 555 558 552 550 539 Annual Capital Spending CentralVinterior Investment Region 0 0 i")QO oO 0 0 0 0 [¢)0 Southeast investiment Region 92,792 92,792 fe)0 0 ft)oO 0 (*)fe)Y) Northern/Western Investment Region 0 *)0 0 0 o 0 !)oO 0 0 Total Annual Capital Spending 92,792 92,792 0 Y)f(t)*)0 0 (e)0 a) Total Plant Cost 2,313,259 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 New Plant total 1,080,936 1,173,986 1,172,796 1,170,688 1,170,713 1,171,332 1,171,735 1,171,697 1,171,480 1,171,259 1,171,089 Piant Value Before Annual Depreciation 1,279,845 1,287,796 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 Annual Depreciation 84,641 85,323 65,853 80,165 74,441 69,097 64,134 §9,528 55,252 51,284 47,600 Total Net Value of Captial Assets 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Funds Trust Fund 115,000 115,000 115,000.115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 Power Project (Revolving)Loan Fund 53,913 57,905 61,638 66,561 73,592 80,598 66,985 92,969 98,991 105,231 111,691 Bond Reserve Fund 59,071 58,699 58,640 58,534 58,536 58,567 58,587 58,585 58,574 58,563 58,554 Seif insurance Fund 20,962 22,004 23,046 24,088 25,130 26,172 27,214 28,256 29,298 30,340 31,362 Operating Reserve Fund 18,667 24,616 35,154 35,029 31,936 29,919 30,113 31,196 32,302 33,150 33,720 Total Vaiue of all Funds 267,613 278,224 293,478 299,212 304,194 310,256 317,898 326,006 334,166 342,284 350,348 Plant Operating Expense (excluding Insurance): Bradley 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,580 1,580 1,560 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 11,110 12,446 12,372 12,267 12,162 12,066 11,976 11,886 11,792 11,695 11,596 Total Operating Expense 23,579 24,915 24,841 24,736 24,631 24,535 24,445 24,355 24,261 24,164 24,065 4Dam Pool Gross Revenue Terrors Lake 9,174 9,174 9,174 9,174 °91 74 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 5,280 §,280 5,280 5,280 §,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 Total 4-Dam Pool 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 - THE ALASKA ENERGY CORPORATION Case three Overview *Page 1 of2 'J 27-Dec-91 Analysis 1 Given the study conditions,cas flow into the Corporation's Energy Cost Assistance Programs can match the current level of PCE funding.Note,however that in this study grant payment 2 Over the study period about $85 million in low cost loans to smail utilities and communities are indicated. 3 During the study period about $17.5 miltion in technical assistance to smaller communities and utilities is provided. 4 Of the 4 cases studied where the trust funde endowment Is $115 million,this is the next to the worst case scenario. Case Study Assumptions: *The Corporation is endowed with a $115 million trust fund. *After FY1993,the PCE Program and other state funded grant programs are replaced with the Corporation's own Rural Energy Cost Assistance Programs. *Expectations from power sales revenue is low.Revenue from new projects are only 60%of revenues indicated in Case one. *The 4-Dam Pool and Larsen Bay Hydro Projects loan receivable is transfered from the state to the Corporation. *Allloan funds are granted,intact,to the Corporation. *This case study scenario assumes the Corporation pursues a moderate development of hydro potential in Southeast Alaska. *All numbers are in 1991 dollars. *The analysis does not demonstrates that,given the study conditions,the combined cash fiow into the Corporation's Energy Cost Assistance Programs (grant,loan and assistance) *meets the current level of PCE grant tunding.The accuracy of thie analysis,however,is not good enough prove that all cash flow requirements will be met. Modeling Parameters: Alaska Energy Corporation Trust Fund Endowment (1992)$115 -million Plant Operating Expense 1.5 %of Plant Value +Inflation Receipts from loan activities 0.00 %of Last Year's Balance Revenue from New Generation 0.005 Dollars per kWh Capital Recovery Factor on Debt n/a =%of Capital Investment Revenue from New Transmission 0.005 Dollars per kWh General Administrative Expense Assumptions |Return from Trust Fund 2.50 %of Fund Balance Executive Office Expense 0.50 %of Average Spending Decline in PCE Program Grants n/a %Annually Loan Administration Expense 1.50 %of Loaned Amounts Planning,Research &Development 0.25 %Gross Revenue PCEP/RECAP Expense 0.90 %of Program Investment in Capital Plant 20.00 %of Reserve Fund Grant &Construction Admin 15.00 %of Grant Amount Rural Energy Cost Assistance Program Bond Reserve 5.00 %of Bond issue Grants To Communities &Utilities see notes above. Annual inflation Rate 0.00 %Annually Loans to Communities &Utilities 20.00 %of Reserve Fund Depreciation Life of All equipment and plant.15 years Tech.Assistance to Communities &Utilities 1.50 %of Annual Revenues "THE ALASKA ENERGY CORPORATION Case three Overview Page 20f2 27-Dec-91 8 diminish,Overview of Cash Flow Analysis 1991 through 2001 Authority Operations --><-------Corporate Operations Key pro forma Data:1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Corp.Investment &Assistance va ve 1,805 17,030 20,511 20,905 21,955 21,282 20,478 20,271 20,973 Legislative Approprations 25,695 24,609 .-21,203 0 0 0 0 0 0 0 ") Total Value of All Funds wa 168,537 184,019 +=210,185.204,568 =217,752 222,884 =229,044 =.237,874 =249,752 258,016 Net Value of Plant Facilities wa 1,059,390 1,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 Net Cash Flow Wa wa 42,404 1,973 5,249 -3,364 4,021 -1,038 3,512 2,054 4,943 Total Annual Revenue 113,682 60,376 62,581 60,587 60,647 49,526 52,245 56,222 59,256 58,178 53,343 Total Annual Capital Spending na na «909,451 :183,401 144,051 72,108 76500 88542 94,917 80,750 -42,500 2002 through 2013 Key pro forma Data:2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Corp.investment &Assistance 20,530 =.20,395 20,048 21,005 22,787 22,663 22,349 22,185 22,204 22,274 22,362 22,461 Legislative Approprations 1)0 )1)1)1)1)))1)1)) Total Value of All Funds 261,736 269,668 279,000 291,918 296,230 301,465 307,332 313,797 320,347 326,997 333,775 340,675 Net Value of Plant Facilities 1,187,053 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Net Cash Flow "1,735 4,787 8,905 616 -1,570 823 95 354 439 496 530 573 Total Annual Revenue 60,863 64,164 65,153 52,204 53,131 53,665 50,907 57,692 50,951 48,686 48,723 56,186 Total Annual Capital Spending 77,917 92,792 92,792 0 [0]()0 0 (0)(0)(0)0 THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue-(1993 -2002)Case three Page 1 of 2 27-Dec-91 <-----Corporation Operations --> Sources of Revenue 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Revenue from Funds a Alaska Energy Corp.Trust Fund it)i)2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 Reserve Bond &Insurance Funds 0 0 788 1,013 1,666 1,527 1,769 1,801 1,832 1,946 2,157 2,282 c Power Project Loan Fund 6,586 6,500 a o 0 o 0 o oO (0)(0)(s) a The analysis assumes the the Rallbett interie &Energy funds are re-appropriated to the Alaska Energy Corporation Trust Fund.This item is interest earned on that fund. a.The Corporation will maintain insurance,bond reeerve and operating reserve funds.The amount shown is the interest earning on these funds. Interest earned on the Bradley Lake Bond funds le excluded from the calculation because of contractural requirements. c_This line indicates estimates of the revenue received from payments made by borrowers against of this fund. note:Detailed activities of these theee three funde are shown on the Proforma Cash Flow Models sheets -attached. Legislative Approprations d Administrative Office Expense 989 1,106 ©1,056 i')0 it)0 0 (Y)iY)0 (0) @ Power Cost Equalization Program (PCEP)19,358 15,203..17,030 0 iY)0 0 0 0 0 (¢)(0) f Grants &Operating Expense 5,348 8,300.3,117,)0 )0 0 0 0 0 0 d-e An administrative expense model is shown on the Proforma Cash Flow Modeis sheets -attached.PCEP is described in the AEA Budget Document. f Before Reorganization this is Power Development Revolving Loan Fund.After restructureing values shown are grants from the legislature. Revenue from Facilities Operations a 2 g 4Dam Pool oO i)24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 26,004 h Bradley Lake Hydroelectric Project 12,437 25,551 6,725 6,725 6,725 §,575 5,770 5,980 6,210 6,460 6,725 7,015 i Other Projects Constructed before 1992 1,620 1,620 1,620 1,605 1,610 1,610 1,615 1,615 1,620 1,620 k Revenue from Future Projects by Investment Regions ES Southcentral Investment Region 0 o i?)0 (0)60 1,260 2,460 3,650 3,800 3,950 4,050 Southeast Investment Region fe)0 0 660 1,463 2,315 2,666 3,335 3,953 4,485 4,757 5,129 Northern/Western Investment Regions 0 0 0 ie)7 69 136 196 200 200 200 200 g Revenue estimates for the 4-dam pool are constructed on the assumption that the rate will be 6.6 cent per kWh sold and Tyee is connected to Swan Lake in 1996. h_Values shown are for debt service and operating expense.All revenue,except project management expense,passes through the Corporation yielding no net cash flow. 1 Figures shown are for operation of the Anchorage/F airbanks Intertie operations and Larsen Bay Hydro project debt service. K The revenue shown for future projects is forecast based on the assumption that new generation and transmission projects will yield at least a half cent per kilowatt hour of energy produced or wheeled.Appendix F to this document contains a listing of all future projects presumed to produce revenues listed herein. Other Sources of Revenue 1 Contributed Capital &Bond Proceeds 68,768 1,916 0 0 0 0 0 0 0 0 Y)ce) m_Grants from Others i?)ie)Q i!)(¢)(¢)(e)fe)0 (¢)fe)(0) n Contract and Capital Projects Services 196 1,800 24,685 23,010 21,608 10,816 11,475 13,281 14,238 12,113 6,375 11,688 {Capital contributions are related to Bradley Lake financing.. Total Annual Revenue 113,682 60,376 82,581 60,587 60,647 49,526 §2,245 56,222 59,256 58,178 53,343 60,863 _ a) THE ALASKA ENERGY CORPORATION Cash Flow Summary -Expenses-(1991 -2002)Case three Page 1 of 2 27-Dec-91 <----Corporation Operations --> Expenses 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Expenses o General &Administrative Expense 989 1,106 435 428 339 340 285 271 263 280 269 285 p Program Support Services 0 ie)279 153 0 0 0 0 0 0 iY)0 q_Contract &Construction Admin Services 196 1,800 23,413 18,478 14,633 11,858 12,998 13,210 10,908 10,058 10,660 13,175 o G&A expense estimates,after restructuring,are estimated as a function of gross average revenue. p Program support services (i.e.management of PCEP &etc.)are estimated as a percentage of program funding. q_Suppor of capital projects ie estimated as a percentage of the average annual programmed construction plus annual grants to be administered by the Corporation.. Investments Inflation Proofing Trust &Insurance Funds 0 i')0 0 i!)0 o it)0 0 {')i?) 8 investment in Capital Projects 68,768 1,916 |0 [?)3,481 3,875 4,925 4,252 3,448 3,241 3,943 4,354 t Development&Planning i!)Oo.200 206 170 170 142 135 132 140 145 142 rt The Alaska Energy Corporation Trust Fund and the Self-insurance Fund are maintained in nominal dollars. 8 The Corporation will invest in new capital plant as net cash flow allows.Investment is a tunction of the Operating Reserve Fund baiance at any time. t The expenditure for Planning and Development is a function of the average revenue received by the Corporation. Capttal Project Related Expenses . u_-4Dam Pool 1,903 2,159 5,788 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 v_Bradley Lake Hydroelectric Project 9,500 22,350 6,725 6,725 6,725 5,575 §,770 5,980 6,210 6,460 6,725 7,015 W Lareen Bay Hydroelectric &Other Project 0 [0]6,462 8,763 6,189 7,212 8,286 9,550 10,922 12,085 12,663 13,766 x Contribution to Self-insurance Fund 1,034 1,042 1,042 1,042 4,042 1,042 4,042 1,042 1,042 1,042 1,042 1,042 u_--Valuse listed here include operating cosets only.The analysis assumes the loan receivable on the 4-Dam pool projects would become receivable to the Corporation. v_Values listed include annual debt service and project operating costs.note:No net cash flow can be captured by the Corporation until after 2022. w The analysis assumes the loan receivable on the Larsen Bay project will become receivable to the Corporation.Revenue from future projects is listed in Appendix F. x An insurance trust fund existe and will be maintained into the future.Payments are maintained in nominal dollars. Rural Energy Coet Assistance Programs (funded by the Corporation) y Grants to Communities &Utilities i)oO Q 15,747 12,531 12,136 11,251 11,966 12,792 12,951 12,219 11,822 y Loans to Communities &Utilities 6,586 6,500 0 0 3,481 3,875 4,925 4,252 3,448 3,241 3,943 4,354 y Technical Assistance to Communities &Utilities Wa Wa 1,305 1,283 1,018 1,019 654 812 790 839 868 854 y These three items make up the bulk of the Rural Energy Cost Assistance Program to be funded by the Corporation.The amounts of each element are discussed elsewhere. Legislative Approprations Administrated by the Corporation z Power Cost Equalization 19,358 18,203 16,877 i')oO,0 (*)(9)0 0 0 oO z_Legislative Grants 5,348 8,300 2,649 (9)(0)0 (¢)oO (1)i?)Oo (0) Z_These items account for grants trom the legislature. Total Annual Expenses 113,682 60,376 65,176 58,614 55,397 52,890 56,267 57,260 55,744 56,124 58 286 62,598 THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue-(2003 through 2013)Case three Page 2 of 2 N) Sources of Revenue 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 "--" Revenue from Funds Alaska Energy Corp.Trust Fund 2,875 2,675 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 Reserve Bond &insurance Funds 2,277 2,371 2,515 2,763 2771 2,758 2,764 2,793 2,828 2,865 2,903 Power Project Loan Fund oO 0 i!)0 0 [¢)(0)0 (9)(s)0 Legisiative Approprations Administrative Office Expense (+)i')i")(')0 i*)it)(¢)(s)oO fe) Power Coet Equalization Program (PCEP)i*)0 0 iY)0 (Y)oO (!)0 it)0 Grants &Operating Expense (1)te)(')0 0 0 (e)0 oO (+)(*) Revenue from Facilities Operations Net 4-Dam Pool Revenue 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 Bradley Lake Hydroelectric Project 7,325 7,660 8,020 6,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Other Projects Constructed before 1992 1,625 1,625 1,630 1,635 1,640 1,645 1,650 1,655 1,660 1,660 1,660 Revenue from Future Projects by Investment Regions Southcentral investment Region 4,050 4,050 4,050 4,050 4,050 4,050 4,050 4,050 4,050 4,050 4,050 Southeast Investment Region 5,889 6,449 6,909 7,429 7,949 8,469 8,469 8,469 8,469 8,469 8,469 Northern/Western investment Regions 200 200 200 200 200 200 200 200 200 200 200 Other Sources of Revenue Contributed Capital &Bond Proceeds 0 0 oO 0 ce)ie]0 ¢)0 ie)0 Grants from Others (*)0 (?)tt)it)it)(1)(e)it)(0)0 Contract and Capital Projects Services 13,919 13,919 0 (0)¢)0 e)(4)0 (9)0 Total Annual Revenue 64,164 65,153 52,204 53,131 53,665 50,907 57,692 50,951 48,686 48,723 56,186 THE ALASKA ENERGY CORPORATION Cash Flow Summary -Expenses-(2003 through 2013)Case _three Page 1 of 2 27-Dec-91 . Expenses 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Expenses General &Administrative Expense 295 300 297 261 273 270 267 271 264 260 245 Program Support Services (')166 163 169 180 179 178 177 177 178 178 Contract &Construction Admin Services 9,279 4,640 i')i)[¢)0 t)0 is)0 0 Investments inflation Proofing Trust &insurance Funds oO it)0 oO i¢)i!)i)0 te)(9)(¢) investment in Capital Projects 3,365 3,018 3,975 5,757 5,633 5,319 5,155 5,174 5,244 5,332 5,431 Development &Planning 144 149 108 151 142 132 131 135 133 131 124 Capital Project Related Expenses 4-Dam Pool 5,789 5,789 5,789 5,789 §,789 5,789 5,789 5,789 5,789 5,789 5,789 Bradley Lake Hydroelectric Project 7,325 7,660 8,020 8,175 6,175 4,905 11,680 4,905 2,600 2,600 10,025 Larsen Bay Hydroelectric &Other Project 15,106 16,454 16,305 16,309 16,224 16,144 16,067 15,989 15,911 15,631 15,749 Contribution to Self-insurance Fund 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 Rural Energy Cost Assistance Programs (funded by the Corporation) Grants to Communities &Utilities 12,803 13,120 12,104 10,366 10,544 10,916 11,087 11,045 10,988 10,911 10,857 Loans to Communities &Utilities 3,365 3,018 3,975 5,757 5,633 §,319 §,155 5,174 §,244 §,332 §,431 Technical Assistance to Communities &Utilities 862 892 951 908 852 795 789 811 798 787 742 Legisiative Approprations Administrated by the Corporation Power Cost Equalization (¢)(e)(e)te)(9)it)(t)i?)oO (¢)i) Legislative Grants ie)i?)(¢)0 [¢)0 (¢)0 i)(¢)0 Total Annual Expenses 59,377 56,248 52,819 54,702 54,488 50,811 57,339 50,512 48,190 48.193 55.613 es 17,404 1,973 5,249 -3,364 -4,021 -1,038 3,512 2,054 -4,943 -1,735 THE ALASKA ENERGY CORPORATION Cash Flow Models (1991 -2002)case three Page 1 of 2 27-Dec-91 supporting documentation) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Office Expense General &Administrative 778 607 435 428 339 340 285 271 263 280 289 285 Loan Administration Expense 91 105 0 ie)fy)(t)0 9]t)(0)0 fe) PCEP Expense 120 174 153 it)i!)i?)0 0 0 0 (+)0 Grant Administration Expense va 220 2-s«468 0 o (9))0 (e)(0)11)oO Total Administrative Office Expense 969 1,106 1,056 428 339 340 285 271 263 280 289 285 Annual Capital Spending . Central/Interior investment Region Wa 289,638 56,950 62,475 77,633 26,208 26,208 25,500 25,500 25,500 oO oO Southeast Investiment Region Wa 13,250 78,250 63,568 63,568 45,900 50,292 63,042 69,417 55,250 42,500 T7917 Northern/Western Investment Region va 23,276.26,251 27,358 2,850 o )0 0 9)0 0 Total Annual Capital Spending 68,768 326,164 .-161,451:153,401 144,051 72,108 76,500 88,542 94,917 80,750 42,500 77,917 Total Plant Cost 902,167 1,226,331 »1,389,782,1,543,183 1,687,234 1,759,342 1,835,842 1,924,384 2,019,300 2,100,050 2,142,550 2,220,467 Piamt Value Before Annual Depreciation 902,167 1,119,534 1,220,840 1,299,606 1,362,267 1,347,735 1,333,417 1,332,110 1,336,132 1,330,075 1,283,366 1,272,611 Annual Depreciation 106,797 60,144.74,6396 81,369 86,640 90,818 89,649 88,894 88,807 89,209 88,672 85,558 Total Net Value of Captial Assets 793,370 1,059,390 4,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 1 ,187,053FundsDegen Trust Fund 0 115,000 .115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 Power Project (Revolving)Loan Fund 26,774 22,000 28,500 28,500 26,500 31,961 35,856 40,781 45,034 48,482 51,722 55,665 Bond Reserve Fund 1,000 22,037 ©:.29,977 37,647 29,066 32,477 36,056 40,270 44,644 48,719 50,647 54,325 Self Insurance Fund 8,483 9,500 =10,542 11,584 12,626 13,668 14,710 15,752 16,794 17,836 18,878 19,920 Operating Reserve Fund 0 0 17,404 19,377 24,626 21,262 17,241 16,203 19,714 21,768 16,625 Total Value of all Funds 168,537 184,019 210,135 204,568 217,752 222,884 229,044 237,874 249,752 258,016 261,736 Plant Operating Expense (excluding Insurance)/ Bradley Wa na 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,480 1,580 1,560 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro Wa Wa 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 0 0 2,382 4,683 2,109 3,132 4,206 5,470 6,842 8,005 8,583 9,686 Total Operating Expense 7,269 7,369 14,851 17,152 14,578 15,601 16,675 17,939 19,311 20,474 21,052 22,155 4-Dam Pool Gross Revenue rate production Terror Lake 0.066 139 9,174 9,174 9,174 9,174 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 0.066 30 1,980 1,980 1,980 ""1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 0.066 80 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 0.066 50 8,250 8,250 8,250 8,250 8,250 8,250 8,250 8,250 8,250 9,570 Total 4-Oam Pool 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 26,004 4,787 8,905 616 -1,570 823 95 354 439 496 530 573 THE ALASKA ENERGY CORPORATION Cash Flow Models (2003 -2013)case three Page 2 of 2. 27-Dec-91 (supporting documentation) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Office Expense General &Administrative 295 300 297 281 273 270 267 271 264 260 245 Loan Administration Expense 50 45 60 86 85 80 77 78 79 80 81 PCEP Expense 115 118 109 93 95 98 100 99 99 98 98 Grant Administration Expense 0 0 i*)[0]0 0 0 0 i?)0 i?) Total Administrative Office Expense 461 464 466 460 452 448 444 448 442 438 424 Annual Capital Spending Central/interior investment Region [']0 i!)oO oO 0 0 0 0 0 0 Southeast Investiment Region 92,792 92,792 oO t)o (*)0 o oO 0 0 Northern/Western Investment Region 0 [?]0 (?]0 oO 0 0 0 0 QO Total Annual Capital Spending 92,792 92,792 i)0 oO 0 0 o 0 oO ) Total Plant Coet 2,313,259 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 New Plant total 1,061,562 1,174,701 1,173,744 1,171,963 1,172,086 1,172,400 1,172,565 1,172,546 1,172,475 1,172,387 1,172,288 Plant Value Before Annual Depreciation 1,279,845 1,287,796 1,202,473 1,116,620 1,036,455 962,014 692,917 828,782 769,255 714,002 662,719 Annual Depreciation 84,641 85,323 85,853 80,165 74,441 69,097 64,134 59,528 §5,252 51,284 47,600 Total Net Value of Captial Aesots 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Funds Trust Fund 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 Power Project (Revolving)Loan Fund 60,019 63,384 66,402 70,377 76,134 81,767 87,087 92,241 97,415 102,659 107,991 Bond Reserve Fund 58,797 58,735 58,687 58,598 58,604 58,620 58,628 58,627 58,624 58,619 58,614 Self insurance Fund 20,962 22,004 23,046 24,088 25,130 26,172 27,214 28,256 29,298 30,340 31,382 Operating Reserve Fund 15,090 19,877 28,783 26,167 26,596 25,773 25,868 26,222 26,661 27,156 27,687 Total Value of all Funds 269,868 279,000 291,918 296,230 301,465 307,332 313,797 320,347 326,997 333,775 340,675 Plant Operating Expense (excluding Insurance) Bradley 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 11,028 12,374 12,315 12,229 12,144 12,064 11,987 11,909 11,831 11,751 11,669 Total Operating Expense 23,497 24,843 24,784 24,698 24,613 24,533 24,456 24,378 24,300 24,220 24,138 4-Dam Pool Gross Revenue Terror Lake 9,174 9,174 9,174 9,174 9.174 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 Total 4-Dam Pool 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 Nn Case four Overview SoTHE ALASKA ENERGY CORPORATION Page 2 0f 2 27-Dec-91 Overview of Cash Flow Analysis 1991 through 2001 Authority Operations -><----Corporate Operations Key pro forma Data:1991 1992 :1993 1994 1995 1996 1997 1998 1999 2000 2001 Corp.investment &Assistance Wa ve 1,305 12,030 13,669 13,967 14,524 14,809 15,004 15,157 15,297 Legislative Approprations 25,695 24,609 «21,203 0 0 0 0 0 ")0 0 Total Value of All Funds Wa 168,537.184,019 209,117 204698 215,631 224,195 232,719 241,278 249,088 253,881 Net Value of Plant Facilities We 1,059,390 1,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 Net Cash Flow na Wa .16,386 2,968 5,563 2,853 1,947 1,530 1,401 226 1,474 Total Annual Revenue 113,682 60,376 63,206 41,739 42,356 39,247 40,371 41,775 42,987 43,219 42,640 Total Annual Capital Spending na na 161,451 153,401.-144,051 72,108 76,500 88542 94,917 80,750 42,500 2002 through 2013 Key pro forma Data:2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Corp.Investment &Assistance 14,675 15,172 15,122 15,108 15,076 14,884 14,716 14,586 14,495 14,420 14,359 14,311 Legislative Approprations 0 0 0 0 0 0 0 0 0 9)(e](9) Total Value of All Funds 258,813 265,482 267,335 269,607 270,270 271,161 272,346 273,820 275,402 277,067 278,826 280,667 Net Value of Plant Facilities 1,187,053 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Net Cash Flow -501 -141 "317 -1,919 -1,684 -1,292 918 -743 613 -481 -368 -248 Total Annual Revenue 45,551 46,648 47,295 45,037 45,388 45,544 42,437 49,211 42,444 40,152 40,163 47,602 Total Annual Capital Spending 77,917 92,792 92,792 QO (8)(6)(0)0 ie)(¢)(0)(0) THE ALASKA ENERGY CORPORATION Case four Overview Page 1 of 2 WS 27-Dec-91 OS Analysis 1 Given revenue assumptions used in this case,the total of all assistance programa for smaller communities and utilities equald about 70%of the current level of PCE funding. 2 This study scenario provides about $26 million In low cost loans to smaller communities and utilities over the 20 year study period. 3 During the 20 year study period,abour $14 million is provided in technical assistance to smaller utilities and communities. 4 Of the 4 case studies where the trust fund le endowed at $115,this study assumes the worst case revenue scenario. Case Study Assumptions: *The Corporation is endowed with a $115 million trust fund. *After FY1993,the PCE Program and other state funded grant programs are replaced with the Corporation's own Rural Energy Cost Assistance Programs. *Expectations from power sales revenue ie low.Revenue from new projects are only 20%of revenues indicated in Case one. *The 4Dam Pool and Larsen Bay Hydro Projects loan receivable is transfered from the state to the Corporation. *All loan funds are granted,intact,to the Corporation. All ni are in 1991 dollars. the ecenario in which the Corporation is endowed with a $115 trust fund.The ecenario assumes the Corporation slowly pursues development of hydro potential 0 Modeling Parameters: Alaska Energy Corporation Trust Fund Endowment (1992)$115 =million Plant Operating Expense 15 %of Plant Value +Inflation Receipts from loan activities 0.00 %of Last Year's Balance Revenue from New Generation 0.005 Dollars per kWh Capital Recovery Factor on Debt n/a =%of Capital investment Revenue from New Transmission 0.005 Dollars per kWh General Administrative Expense Assumptions |Return from Trust Fund 2.50 %of Fund Balance Executive Office Expense 0.50 %of Average Spending Decline in PCE Program Grants n/a %Annually Loan Administration Expense 1.50 %of Loaned Amounts Planning,Research &Development 0.25 %Gross Revenue PCEP/RECAP Expense 0.90 %of Program investment in Capital Plant 10.00 %of Reserve Fund Grant &Construction Admin 15.00 %of Grant Amount Rural Energy Cost Assistance Program Bond Reserve 5.00 %of Bond Issue Grants To Communities &Utilities see notes above. Annual Inflation Rate 0.00 %Annually Loans to Gagnmunities &Utilities 5.00 %of Reserve Fund Depreciation Lite of All equipment and plant.15 years Tech.Assistance to Communities &Utilities 1.50 %of Annual Revenues Cash Flow Summary -Revenue-(1993 -2002)CaseTHEALASKAENERGYCORPORATION four Page 1 of 2 27-Dec-91 <----Corporation Operations ---->: Sources of Revenue 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Revenue from Funds a Alaska Energy Corp.Trust Fund ('){')2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 Reserve Bond &insurance Funds i')(')788 1,013 1,640 1,530 1,783 1,973 2,155 2,334 2,492 2,573 e Power Project Loan Fund 6,586 6,500 (1)0 0 0 0 0 0 fe)0 fe) a The analysis assumes the the Ralibelt interie &Energy funds are re-appropriated to the Alaska Energy Corporation Trust Fund.This item is interest earned on that fund. The Corporation will maintain ineuranca,bond reserve and operating reserve funds.The amount shown is the interest earning on these funds. interest earned on the Bradley Leake Bond tunde le excluded from the calculation because of contractural requirements. c_This line indicates estimates of the revenue received from payments made by borrowers against of this fund. note:Detailed activities of these theee three funde are shown on the Proforma Cash Flow Modeis sheets -attached. d Administrative Office Expense 969 1,106 1,056 0 i")(¢)[*)Oo 0 (e)(+)(e) @ Power Cost Equalization Program (PCEP)19,358 15,203 _17,030 0 0 0 (9)ce)0 0 (9)o {Grants &Operating Expense 5,348 8,300.3,117 7)))0 0 0 ry fr)) d-e An administrative expense model ie shown on the Proforma Cash Flow Models sheets -attached.PCEP is described in the AEA Budget Document. f Before Reorganization this is Power Development Revolving Loan Fund.After restructureing values shown are grants from the legislature. Revenue from Facilities Operations a . g 4Dam Pool 0 0 .-24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 26,004 h Bradley Lake Hydroelectric Project 12,437 25,551 6,725 6,725 6,725 5,575 5,770 5,960 6,210 6,460 6,725 7,015 i Other Projects Constructed before 1992 4,620 1,620 1,620 1,605 1,610 1,610 1,615 1,615 1,620 1,620 k Revenue from Future Projects by Investment Regions ae Southcentral investment Region 0 oOo.(0)0 (0)20 420 820 1,217 1,267 1,317 1,350 Southeast Investment Region 0 0 0 220 488 772 889 1,112 1,318 1,495 1,586 1,710 Northern/Western Investment Regions 0 o 0 ¢)2 23 45 65 67 67 67 67 g Revenue estimates for the 4-dam pool are constructed on the assumption that the rate will be 6.6 cent per kWh sold and Tyee is connected to Swan Lake in 1996. h Values shown are for debt service and operating expense.All revenue,except project management expense,passes through the Corporation yielding no net cash flow. i Figures shown are for operation of the Anchorage/F airbanks Intertie operations and Larson Bay Hydro project debt service. K The revenue shown for future projects is forecast based on the assumption that new generation and transmission projects will yield at least a half cent per kilowatt hour of energy produced or wheeled.Appendix F to this document contains a listing of all future projects presumed to produce revenues listed herein. Other Sources of Revenue 1 Contributed Capital &Bond Proceeds 68,768 1,916 Q 0 i]0 9)(°)0 0 O 0 m Grants from Others i?)i)Q (1)0 (¢)(¢)it)0 (¢)i¢)(0) n_Contract and Capital Projects Services 196 1,800 5,311 4,602 4,322 2,163 2,295 2,656 2,848 2,423 1,275 2,338 1 Capital contributions are related to Bradley Lake financing.oe Total Annual Revenue 113,682 60,376 63,206 41,739 42,356 39,247 40,371 41,775 42,987 43,219 42,640 45,551 N \) THE ALASKA ENERGY CORPORATION Cash Fiow Summary -Expenses-(1991 -2002)Case _four Page 1 of 2 27-Dec-91 <----Corporation Operations ----> Expenses 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Expenses o General &Administrative Expense 989 1,106 435 395 276 246 206 203 202 209 213 215 p Program Support Services i)i)279 153 i)0 0 0 0 0 (+)0 q_Contract &Construction Admin Services 196 1,800 5,057 3,696 2,927 2,372 2,600 2,642 2,182 2,012 2,132 2,635 o G&A expense estimates,after restructuring,are ectimated as a function of gross average revenue. p Program support services (i.e.management of PCEP &etc.)are estimated as a percentage of program funding. q_Support of capital projects ie estimated as a percentage of the average annual programmed construction plus annual grants to be administered by the Corporation.. investments t Inflation Proofing Trust &Insurance Funds (*)()Qo [¢)0 i?)0 (*)(Y)0 it)() 8 Investment in Capital Projects 68,768 1,916 _i]1?)1,639 1,937 2,494 2,779 2,974 3,127 3,267 3,289 t Development&Pianning t)Oo |200 158 138 123 103 102 101 104 107 107 rt The Alaska Energy Corporation Trust Fund and the Self-insurance Fund are maintained in nominal dollars. &The Corporation will invest in new capital plant as net cash flow allows.Investment is a function of the Operating Reserve Fund balance at any time. t The expenditure for Planning and Development is a function of the average revenue received by the Corporation. Capital Project Related Expenses : 4-Dam Poo!1,903 2,159 .§,788 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 v_Bradley Lake Hydroelectric Project 9,500 22,350 >...6,795 6,725 6,725 5,575 5,770 5,980 6,210 6,460 6,725 7,015 W Larsen Bay Hydroelectric &Other Project (9)0.6,462 8,763 6,228 7,281 8,391 9,678 11,057 12,221 12,810 13,929 x Contribution to Self-Ineurence Fund 1,034 1,042.1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 4,042 u_-Valuse listed here include operating costs only.The analysis aseumes the loan receivable on the 4-Dam pool projects would become receivable to the Corporation. v Values listed include annual debt service and project operating costs.note:No net cash flow can be captured by the Corporation until after 2022. w The analysis assumes the loan receivable on the Larsen Bay project will become receivable to the Corporation.Revenue from future projects is listed in Appendix F. x An ineurance trust fund existe and will be maintained Into the future.Payments are maintained in nominal dollars. Rural Energy Coet Assistance Programs (funded by the Corporation) y Grants to Communities &Utilities 0 i!)i')10,844 10,384 10,325 10,166 10,031 9,936 9,641 9,757 9,741 y Loans to Communities &Utilities 6,586 6,500 0 [¢)819 969 1,247 1,389 1,487 1,563 1,633 1,645 y Technical Assistance to Communities &Utilities Wa Wa 1,305 1,186 627 737 617 610 607 626 640 644 y These three tems make up the buik of the Rural Energy Cost Assistance Program to be funded by the Corporation.The amounts of each element are discussed elsewhere. Legislative Approprations Administrated by the Corporation z Power Cost Equalization 19,358 15,203 16,877 i?)Q fe)(9)0 0 0 0 (e) z_Legislative Grants 5,348 8,300 2,649 ie)0 ie)ce]0 ie)0 0 0 Z_These items account for grants from the legislature. Total Annual Expenses 113,682 60,376 46,820 38,751 36,793 36,394 38,424 40,245 41,587 42,993 44,114 46,051 SS THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue-(2003 through 2013)Case four Page 2 of 2 Sources of Revenue 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2604 Revenue from Funds Alaska Energy Corp.Trust Fund 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 2,875 Reserve Bond &Insurance Funds 2,655 2,781 2,788 2,806 2,784 2,768 2,762 2,765 2,773 2,784 2,798 Power Project Loan Fund °]°)Oo oO te)0 0 0 )(0)0 Legislative Approprations Administrative Office Expense (')0 i¢)(e)o 0 it)(¢)(8)oO (e) Power Cost Equalization Program (PCEP)0 t)0 it)()0 oO [*)(°)(9)oO Grants &Operating Expense 0 0 oO 0 (¢]0 0 fe)0 te)fe) Revenue from Facilities Operations Net 4-Dam Pool Revenue 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 Bradiey Lake Hydroelectric Project 7,325 7,660 8,020 8,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Other Projects Constructed before 1992 1,625 1,625 1,630 1,635 1,640 1,645 1,650 1,655 1,660 1,660 1,660 Revenue from Future Projects by investment Regions Southcentral investment Region 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 Southeast Investment Region 1,963 2,150 2,303 2,476 2,650 2,823 2,823 2,823 2,823 2,823 2,823 Northern/Western investment Regions 67 67 67 67 67 67 67 67 67 67 67 Other Sources of Revenue Contributed Capital &Bond Proceeds 0 0 0 (°)0 (e)0 (¢)0 o (a) Grants from Others 0 ie)(¢)i?)0 0 0 0 0 (e)(e) Contract and Capital Projects Services 2,784 2,784 0 0 0 0 0 0 (e)0 fa) ce Total Annual Revenue 46,648 47,295 45,037 45,388 45,544 42,437 49,211 42,444 40,152 40,163 47 602 THE ALASKA ENERGY CORPORATION Of”Cash Flow Summary -Expenses-(2003 through 2013)Case four Page 1 of 2 27-Dec-91 Expenses 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Expenses General &Administrative Expense 222 228 234 236 236 235 229 234 227 223 207 Program Support Services 0 112 111 111 111 W1 110 110 109 109 109 Contract &Construction Admin Services 1,856 928 (*)ie)it)-0 0 0 i¢)0 0 Investments Inflation Proofing Trust &Insurance Funds i?)it)it)it)i)(¢)0 0 (¢)i*)(8) Investment in Capital Projects 3,142 3,092 3,078 3,046 2,854 2,686 2,556 2,465 2,390 2,329 2,281 Development &Planning 110 112 78 116 115 113 111 114 112 110 102 Capital Project Related Expenses 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Bradley Lake Hydroelectric Project 7,325 7,660 8,020 8,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Lareen Bay Hydroelectric &Other Project 15,274 16,619 16,573 16,527 16,485 16,444 16,406 16,369 16,333 16,298 16,264 Contribution to Self-insurance Fund 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 Rural Energy Cost Assistance Programs (funded by the Corporation) Grants to Communities &Utilities 9,802 9,810 9,794 9,812 9,914 10,007 10,085 10,112 10,164 10,206 10,276 Loans to Communities &Utilities 1,571 1,546 1,539 1,523 1,427 1,343 1,278 1,232 1,195 1,165 1,140 Technical Assistance to Communities &Utilities 657 674 697 695 689 680 667 686 670 659 614 Legislative Approprations Administrated by the Corporation Power Cost Equalization ce)(9)(¢)QO e%0 (¢)(¢)(e)(e)(e)(0) Legislative Grants (¢)ie)(e)oO (¢)0 0 fe)0 0 0 Total Annual Expenses 46,789 47,612 46,956 47,072 46,837 43,355 49,953 43,057 40.633 40,530 47,850 THE ALASKA ENERGY CORPORATION Cash Flow Models (1991 -2002)case'four Page 1 of 2 27-Dec-91 supporting documentation) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Office Expense General &Administrative 778 607 435 395 276 246 206 203 202 209 213 215 Loan Administration Expense 91 105 .0 i)0 0 i*)it)0 fe)0 (+) PCEP Expense 120 174:153 1)))1)0 )ry 1)0 Grart Administration Expense Wa 220 468 0 0 0 0 )0 ()fy)i) Total Administrative Office Expense 9689 1,106 1,056 395 276 246 206 203 202 209 213 215 Central/interior investment Region n/a =.289,638 =.«456,950 62,475 77,633 26,208 26,208 25,500 25,500 25,500 0 ) Southeast Investiment Region a =:13,250.78,250 «63,568 «63,568 +=45,900 50,292 63,042 «69,417 55,250 42,500 s«77,917 Northemn/Western Investment Region Wa «23,276.26,251 27,358 2,850 )(i)0 0 0 o ty) Total Annual Capital Spending 68,768 326,164 161,451 153,401 144,051 72,108 76,500 88,542 94,917 80,750 42,500 77,917 Total Plant Cost 902,167 1,228,331 1,389,782 1,543,183 1,687,234 1,759,342 1,835,842 1,924,384 2,019,300 2,100,050 2,142,550 2,220,467 Plant Value Before Annual Depreciation 902,167 1,119,534 1,220,840 1,299,606 1,962,267 1,347,735 1,333,417 1,332,110 1,338,132 1,330,075 1,263,366 1,272,611 Annual Depreciation 108,797 60,144 74,636 81,389 =86,640 =90,818 + -s 89,849 88,894 88,807 «89,209 88,672 -s«€85,558 Total Net Value of Captial Assets 793,370 1,059,390 ©1,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 1,187,053 Trust Fund O 115,000°.::115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 Power Project (Revolving)Loan Fund 26,774 22,000 26,500 28,500 29,319 3,288 31,535 32,924 34,411 35,974 37,606 Bond Reserve Fund 1,000 22,037 37,647 29,199 32,707 36407 40,696 45,293 49,174 51,136 54,867 Self insurance Fund 8,483 9,500.11,584 12,626 13,668 14,710 15,752 16,794 17,836 18,878 19,920 Operating Reserve Fund )16,386 19,374 24936 27,789 29,736 31,267 32,667 32,893 31,419 Total Value of all Funds 168,537 -209,117 204,698 215,631 224,195 232,719 241,278 249,088 =253,881 =.258,813 Piant Operating Expense (excluding Insurance) Bradley ve a 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,480 1,580 "1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro Wa Wa 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 0 0 2,382 4,683 2,148 3,201 4,311 5,598 6,977 8,141 8,730 9,849 Total Operating Expense 7,269 7,369 14,851 17,152 14,617,15,670 =16,780 =-18,067 =-:19,446 =20,610 21,199 22,318 4-Dam Pool Gross Revenue rate production Terror Lake 0.066 139 9,174 9,174 9,174 ,|9,174 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 0.066 30 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 0.066 80 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 0.066 50 8,250 8,250 8,250 8,250 8,250 8,250 8,250 8,250 8,250 9,570 Total 4-Dam Pool 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 26,004 If, THE ALASKA ENERGY CORPORATION Cash Flow Models (2003 -2013)case four Page 2of2 S 27-Dec-91 (supporting documentation) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Office Expense General &Administrative 222 228 234 236 236 235 229 234 227 223 207 Loan Administration Expense 24 23 23 23 21 20 19 18 18 17 17 PCEP Expense 88 88 88 88 89 90 91 91 91 92 92 Grant Administration Expense 0 0 0 0 i?)(9)i?)¢)(¢)(¢)(9) Total Administrative Office Expense 334 340 345 347 347 345 339 343 337 332 317 Annual Capital Spending Central/interior Investment Region Oo (')it)[¢)i?))ie)CY)it)it)(¢) Southeast investiment Region 92,792 92,792 Oo it)o 0 (0)0 0 ce)ce) Northern/Western investment Region 0 i!)0 it)0 (?)(*)Ct)Ce)i?)(¢) Total Annual Capital Spending 92,792 92,792 0 it)(*)Cs)it)0 (e)it)o Total Plant Coet 2,313,259 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 New Plant total 1,061,786 1,174,627 1,174,642 1,174,673 1,174,865 1,175,034 1,175,163 1,175,255 1,175,329 1,175,390 1,175,438 Plant Value Before Annual Depreciation 1,279,845 1,287,796 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 Annual Depreciation 64,841 85,323 85,853 60,165 74,441 69,097 64,134 59,528 §5,252 51,284 47,600 Total Net Value of Captial Assets 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Funds Trust Fund 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 115,000 Power Project (Revolving)Loan Fund 39,252 40,823 42,369 43,908 45,431 46,858 48,201 49,479 50,711 51,907 53,071 Bond Reserve Fund 59,349 58,731 58,732 58,734 58,743 58,752 $8,758 58,763 58,766 58,770 58,772 Self Insurance Fund 20,962 22,004 23,046 24,088 25,130 26,172 27,214 28,256 29,298 30,340 31,382 Operating Reserve Fund 30,918 30,777 30,459 28,540 26,856 25,564 24,647 23,904 23,291 22,810 22,442 Total Vaiue of all Funds 265,482 267,335 269,607 270,270 271,161 272,346 273,820 275,402 277 067 278,826 280,667 Plant Operating Expense (excluding Insurance) Bradiey 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 11,194 12,539 12,493 12,447 12,405 12,364 12,326 12,289 12,253 12,218 12,184 Total Operating Expense 23,663 25,008 24,962 24,916 24,874 24,833 24,795 24,758 24,722 24,687 24,653 4-Dam Pool Gross Revenue Terror Lake 9,174 9,174 9,174 9,174 2 74 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 §,280 Tyee Lake Hydro 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 95/0 Total 4-Dam Pool 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 THE ALASKA ENERGY CORPORATION Case five Overview Page 1 of 2 30-Dec-91 Analysis Given the assumptions used in this case,The Corporation's Energy Cost Assistance Program can match current PCE grant funding. The study assumptions presume that over $110 million in low cost loans would be made available to smaller communities and utilities during the 20 year period. Over the period 1994 through 1907 $20 million per year would be provided to assist in the construction of railbelt transmission facilities. 1 2 3 During the 20 year study period,about a mililon dollars,in the form of technical assistance,would be provided to smaller communities and utilities each year. 4 5 Of the 4 case studies where $200 million le provided in initial capital,this study assumes the best case revenue scenario. Case Study Assumptions: *The Corporation receives $200 million in initial endowments:a $120 million trust fund and an $80 operating reserve fund. *After FY1993,the PCE Program and other state funded grant programs are replaced with the Corporation's own Rural Energy Cost Assistance Programs. *Expectations from power sales revenue is high. *The 4-Dam Pool and Larsen Bay Hydro Projects loan receivable is transfered from the state to the Corporation. *Allloan funds are granted,intact,to the Corporation. *Revenue assumptions for this study are identical to the revenue assumptions provided in Case one. 0 Modeling Parameters: Alaska Energy Corporation Trust Fund Endowment (1992)$200 -million Plant Operating Expense 1.5 %of Plant Value +Inflation Receipts from loan activities 0.00 %of Last Year's Balance Revenue from New Generation 0.005 Dollars per kWh Capital Recovery Factor on Debt nla =%of Capital Investment Revenue from New Transmission 0.005 Dollars per kWh General Administrative Expense Assumptions |Return from Trust Fund 2.50 %of Fund Balance Executive Office Expense 0.50 %of Average Spending Decline in PCE Program Grants n/a %Annually Loan Administration Expense 1.50 %of Loaned Amounts Planning,Research &Development 0.25 %Gross Revenue PCEP/RECAP Expense 0.90 %of Program Investment in Capital Plant 20.00 %of Reserve Fund Grant &Construction Admin 15.00 %of Grant Amount Rural Energy Cost Assistance Program Bond Reserve 5.00 %of Bond Issue Grants To Communities &Utilities see notes above Annual Inflation Rate 0.00 %Annually Loans to Communities &Utilities 20.00 %of Reserve Fund Depreciation life of all equipment and plant.15 --syears Tech.Assistance to Communities &Utilities 1.50 %of Annual Revenues Gy OS -- THE ALASKA ENERGY CORPORATION Case five Overview Page 2 012 30-Dec-91 Overview of Proforma Cash Flow Analysis 1991 through 2001 Authority Operations ->me <--------Corporate Operations Key pro forma Data:1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Corp.Investment &Assistance ne We 17,305 42,340 42,102 42,130 41,989 35,562 30,116 27,446 27,966 Legislative Approprations 25,695 24,609 -21,203 0 ry 0 ry ry 0 0 0 Total Value of Ali Funds na 173,537 268,219 283,900 261,735 257,142 249,553 242,979 250,497 262,679 272,789 Net Value of Plant Facilities Na 1,059,390 1,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 Net Cash Flow Wa na 7,069 -17,600 -11,140 -14,356 -13,604 6,761 1,265 2,470 4,303 Total Annual Revenue 113,682 60,376 88,006 66,077 65,898 59,850 62,844 64,870 66,707 65,800 60,986 Total Annual!Capital Spending Wa na 161,451 153,401 144,051 72,108 76,500 88,542 94,917 80,750 42,500 2002 through 2013 Key pro forma Data:2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Corp.Investment &Assistance 27,967 27,232 27,349 30,097 33,987 34,233 33,056 31,876 31,229 31,050 31,172 31,387 Legislative Approprations i)0 0 0 0 ie]0 0 0 0 ie)0 Total Value of All Funds 278,126 289,250 301,759 317,205 324,879 331,054 337,314 344,266 351,876 -359,883 368,119 376,440 Net Value of Plant Facilities 1,187,053 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Net Cash Flow 204 6,714 9,822 739 -2,816 -2,914 -1,661 -406 335 652 675 626 Total Annual Revenue 70,343 72,898 73,375 62,618 63,048 63,095 59,786 66,520 59,735 57,451 57,486 64,953 Total Annual Capital Spending 77,917 92,792 92,792 (0)0 (0)0 (0)0 (¢)(0)0 THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue-(1993 -2002)Case five Page 1 of 2 30-Dec-91 <-----Corporation Operations ------> Sources of Revenue 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Revenue from Funds a Alaska Energy Corp.Trust Fund 0 i¢)3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 Reserve Bond &insurance Funds 0 i)2,788 2,993 3,385 2,781 2,616 2,376 2,162 2,130 2,283 2,417 c Power Project Loan Fund 6,586 6,500 0 0 0 0 0 0 0 )fy)(e) The analysis assumes the the Rallbek interle &Energy funds are re-appropriated to the Alaska Energy Corporation Trust Fund.This item is interest earned on that fund. The Corporation will maintain ineurance,bond reserve and operating reserve funds.The amount shown is the interest earning on these funds. interest earned on the Bradley Lake Bond funde ie excluded from the calculation because of contractural requirements. c This line indicates estimates of the revenue received from payments made by borrowers against of this fund. note:Detailed activities of these theese three funds are shown on the Proforma Cash Flow Models sheets -attached. Legislative Approprations d Administrative Office Expense 989 1,106 -4,056 (¢)i¢)it)ie)0 (a)(e)ie)(e) e@ Power Cost Equalization Program (PCEP)19,358 15,203 17,030 i?)0 i!)i*)(e)(e)(¢)(¢)(+) f Grants &Operating Expense 5,348 8,300...3,117 0 0 ce)oO 0 (t)0 0 (t) d-e An administrative expense model is shown on the Proforma Cash Flow Models sheets -attached.PCEP is described in the AEA Budget Document. f Before Reorganization this is Power Development Revolving Loan Fund.After restructureing values shown are grants from the legislature. Revenue from Facilities Operations ee g 4Dam Pool 0 0 24,684 24684 24,684 24,684 24684 24,684 24684 24684 24684 26,004 h Bradley Lake Hydroelectric Project 12,437 25,551 6,725 6,725 6,725 5,575 5,770 5,980 6,210 6,460 6,725 7,015 4 Other Projects Constructed before 1992 1,620 1,620 1,620 1,605 1,610 1,610 1,615 1,615 1,620 1,620 k Revenue from Future Projects by Investment Regions * Southcentral investment Region 0 oO:a Qa i!)300 6,000 6,000 6,250 6,750 6,750 6,750 6,750 Southeast Investment Region 0 0 3,300 4,013 4,263 5,056 7,356 7,356 7,716 8,716 9,216 11,516 Northern/Western Investment Regions )0. " @ 33 314 333 333 333 333 333 333 333 Q Revenue estimates for the 4-dam pool are constructed on the assumption that the rate will be 6.6 cent per kWh sold and Tyee is connected to Swan Lake in 1996. h Values shown are for debt service and operating expense.Ali revenue,except project management expense,passes through the Corporation yielding no net cash flow. i Figures shown are for operation of the Anchorage/F airbanks Intertie operations and Larsen Bay Hydro project debt service. K_The revenue shown for future projects is forecast based on the assumption that new generation and transmission projects will yield at least a half cent per kilowatt hour of energy produced or wheeled.Appendix F to this document containsa listing of all future projects presumed to produce revenues listed herein. Other Sources of Revenue t Contributed Capital &Bond Proceeds 68,768 1,916 0 (¢)0 it)ie)0 (¢)(6)(e)fs) m Grants from Others 0 i)i¢)i¢)0 (9)0 0 0 i?)(¢)(0) n_Contract and Capital Projects Services 196 1,800 24,685 23,010 21,608 10,816 11,475 13,281 14,238 12,113 6,375 11,688 |Capital contributions are related to Bradley Lake financing.ve Total Annual Revenue 113,682 60,376 88 006 66,077 65,898 59,850 62,844 64,870 66,707 65,800 60,986 70,343 THE ALASKA ENERGY CORPORATION Cash Flow Summary -Expenses-(1993 -2002)Case five Page 1 of 2 30-Dec-91 <-----Corporation Operations ----> Expenses 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Expenses o General &Administrative Expense 989 1,106 435 437 357 367 320 314 313 324 329 322 p Program Support Services Oo 0 279 153 0 0 fe)ie)()0 ft)0 q_Contract &Construction Admin Services 196 1,800 23,413 18,478 14,633 11,858 12,998 13,210 10,908 10,058 10,660 13,175 o G&A expense estimates,after restructuring,are estimated as a function of gross average revenue. p Program support services (i.e.management of PCEP &etc.)are estimated as a percentage of program funding. Q Support of capital projects is estimated as a percentage of the average annual programmed construction plus annual grants to be administered by the Corporation.. Investments ¢Inflation Proofing Trust &insurance Funds t*)oO.0 (¢)it)0 it)it)(¢)it)oO i¢) 8 Investment in Capital Projects 68,768 1,916 .16,000 2,000 2,000 2,000 2,000 8,795 6,074 4,722 4,975 5,469 t Development &Pianning 0 o-200 220 179 183 160 157 156 162 164 161 rs The Alaska Energy Corporation Trust Fund and the Self-insurance Fund are maintained in nominal dollars. 8 The Corporation will invest in new capital plant as net cash flow allows.Investment is a function of the Operating Reserve Fund balance at any time. t The expenditure tor Planning and Development is a function of the average revenue received by the Corporation. Capital Project Related Expenses u__4-Dam Poo!1,903 2,159 §,789 5,789 5,789 5,789 §,789 §,789 5,789 §,789 5,789 5,789 v Bradley Lake Hydroelectric Project 9,500 22,350 6,725 6,725 6,725 5,575 5,770 5,980 6,210 6,460 6,725 7,015 W Larsen Bay Hydroelectric &Other Project 0 0 6,222 8,493 6,211 7,262 8,380 9,576 10,909 12,049 12,612 13,699 x Contribution to Self-Ineurance Fund 1,034 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 u_-Valuse listed here include operating costs only.The analysis assumes the loan receivable on the 4-Dam pool projects would become receivable to the Corporation. v_Values listed include annual debt service and project operating costs.note:No net cash flow can be captured by the Corporation until after 2022. w The analysis assumes the loan receivable on the Larsen Bay project will become receivable to the Corporation.Revenue from future projects is listed in Appendix F. x An insurance trust fund exists and will be maintained into the future.Payments are maintained in nominal doilars. Rural Energy Coet Assistance Programs (funded by the Corporation) y Grants to Communities &Utilities 0 0 0 37,030 37,030 37,030 37,030 17,030 17,030 17,030 17,030 17,030 y Loans to Communities &Utilities 6,586 6,500 0 2,000 2,000 2,000 2,000 8,795 6,074 4,722 4,975 5,469 y Technical Assistance to Communities &Utilities n/a a 1,305 1,310 1,072 1,100 959 943 938 972 987 967 y These three items make up the bulk of the Rural Energy Cost Assistance Program to be funded by the Corporation.The amounts of each element are discussed elsewhere. Legislative Approprations Administrated by the Corporation z Power Cost Equalization 19,358 15,203 16,877 (0)De 0 0 i?)(8)(9)(0)(0) z Legislative Grants 5,348 8,300 2,649 0 [0]0 (9)(¢)i?)(0)(9) Z_These items account for grants from the legislature. Total Annual Expenses 113,682 60,376 80,936 83,677 77,038 74,206 76,447 71,631 65,443 63,330 69.288 70,138 SS THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue-(2003 through 2013)Case five Page 2 of 2 'Sources of Revenue 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 ZO13 Revenue from Funds Alaska Energy Corp.Trust Fund 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 Reserve Bond &Insurance Funds 2,427 2,568 2,765 3,035 3,077 3,033 2,987 2,972 2,988 3,023 3,065 Power Project Loan Fund 0 ()(e)(¢)0 0 (9)(¢)fe)fa)fe) Legislative Approprations Administrative Office Expense 0 0 0 0 (t)0 (¢)0 0 (¢)(0) Power Cost Equalization Program (PCEP)[*)0 i?)(t)(+)0 it)0 (+)(s)0 Grants &Operating Expense t*)0 0 te)0 (¢]t)0 0 0 0 Revenue from Facilities Operations Net 4-Dam Pool Revenue 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 Bradley Lake Hydroelectric Project 7,325 7,660 8,020 8,175 6,175 4,905 11,680 4,905 2,600 2,600 10,025 Other Projects Constructed before 1992 1,625 1,625 1,630 1,635 1,640 1,645 1,650 1,655 1,660 1,660 1,660 Corporation Revenue from Investment Regions Southcentral Investment Region 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 Southeast investment Region 11,516 11,516 14,116 14,116 14,116 14,116 14,116 14,116 14,116 14,116 14,116 Northern/Western investment Regions 333 333 333 333 333 333 333 333 333 333 333 Other Sources of Revenue Contributed Capital &Bond Proceeds i?)ie)0 i?)it))0 0 (¢)(e) Grants trom Others 0 0 0 i?)(e)(¢)(e)(¢)(¢)fe)fs) Contract and Capital Projects Services 13,919 13,919 i)(¢)(¢)(¢)(e)0 0 fe) *. Total Annual Revenue 72,898 73,375 62,618 63,048 63,095 59,786 66,520 59,735 57,451 57,486 64,953 THE ALASKA ENERGY CORPORATION Cash Flow Summary -Expenses-(2003 through 2013)Case __five Page 1 of 2 8S 30-Dec-91 Expenses 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2613 Administrative Expenses General &Administrative Expense 331 336 333 319 319 323 322 _324 313 305 288 Program Support Services 0 222 223 243 273 275 266 258 253 251 282 Contract &Construction Admin Services 9,279 4,640 (¢)t')(')oO 0 (¢)[0]0 oO Investments inflation Proofing Trust &Insurance Funds it)°i*)(¢)it)(¢)(*)0 oO (°)0 investment in Capital Projects 4,608 4,649 5,992 7,956 8,104 7,541 6,958 6,626 6,545 6,612 6,742 Development &Planning 164 170 122 174 166 157 155 158 155 153 146 Capital Project Related Expenses 4Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Bradley Lake Hydroelectric Project 7,325 7,660 8,020 8,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Larsen Bay Hydroelectric &Other Project 15,022 16,344 16,254 16,134 16,013 15,900 15,795 15,696 15,598 15,499 15,398 Contribution to Self-insurance Fund 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 Rural Energy Cost Assistance Programs (funded by the Corporation) Grants to Communities &Utilities 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 Loans to Communities &Utilities 4,608 4,649 5,992 7,956 8,104 7,541 6,958 6,626 6,545 6,612 6,742 Technical Assistance to Communities &Utilities 986 1,021 1,083 1,044 995 944 930 947 930 919 873 Legislative Approprations Administrated by the Corporation Power Cost Equalization 0 (¢)0 O ¢*.e 0 0 0 0 ie)0 (¢) Legislative Grants ie)oO e)¢)(9)(¢)i)0 (9)i¢)0 Total Annual Expenses 66,184 63,552 61,880 65,864 66,010 61,446 66,926 59,400 56,799 56,411 64,327 7,069 -17,600 -11,140 -14,356 -13,604 6,761 1,265 2,470 -4,303 204 ™ THE ALASKA ENERGY CORPORATION Cash Flow Models (1991 -2002)case five Page 1 of 2 30-Dec-91 supporting documentation) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Office Expense General &Administrative 778 607 435 437 357 367 320 314 313 324 329 322 Loan Administration Expense 91 105 0 0 0 0 oO (0)0 fe)0 0 PCEP Expense 120 174 153 0 o o (0)0 0 0 0 (1) Grant Administration Expense Wa 220 468 oO i*)0 0 oO 0 fe)0 oO Total Administrative Office Expense 989 1,106 1,056 437 357 367 320 314 313 324 329 322 Annual Capital Spending Central/interior investment Region Wa =269,638 56,950 62,475 77,633 26,208 26,208 25,500 25,500 25,500 0 0 Southeast Investiment Region Wa 13,250 78,250 63,568 63,568 45,900 50,292 63,042 69,417 55,250 42,500 77,917 Northern/Western Investment Region na 23,276 -26,251 27,358 2,850 it)it)i!)i!)(¢)(t)(e) Total Annual Capital Spending 68,768 326,164.161,451 153,401 144,051 72,108 76,500 88,542 94,917 80,750 42,500 77,917 Total Piant Cost 902,167 1,228,331 1,389,782 1,543,183 1,687,234 1,759,342 1,635,842 1,924,384 2,019,300 2,100,050 2,142,550 2,220,467 Plant Value Before Annual Depreciation 902,167 1,119,534 ©1,220,840 1,299,606 1,362,267 1,347,735 1,333,417 1,332,110 1,338,132 1,330,075 1,283,366 1,272,611 Annual Depreciation 108,797 60,144 74,636 81,389 86,640 90,818 89,849 88,894 88,807 89,209 88,672 65,558 Total Net Value of Captial Assets 793,370 1,059,390 1,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 1,187,053 Funds me Trust Fund QO 120,000:120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 Power Project (Revotving)Loan Fund 26,774 22,000 28,500 28,500 30,500 32,500 34,500 36,500 45,295 51,369 56,090 61,065 Bond Reserve Fund 1,000 22,037 29,177 36,747 29,140 32,645 36,370 40,357 44,799 48,601 50,477 54,100 Self Insurance Fund 8,483 9,500 10,542 11,584 12,626 13,668 14,710 15,752 16,794 17,836 18,878 19,920 Operating Reserve Fund Oo 80,000 80,000 87,069 69,469 58,329 43,973 30,370 23,609 24,873 27,344 23,041 Total Value of all Funds 173,537 .268,219 283,900 261,735 257,142 249,553 242,979 250,497 262,679 272,789 278,126 Plant Operating Expense (excluding Insurance) Bradley Wa n/a 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 §,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,480 1,580 1,560 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro n/a n/a 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 0 0 2,142 4,413 2,131 3,182 4,300 5,496 6,829 7,969 8,532 9,619 Total Operating Expense 7,269 7,369 14,611 16,882 14,600 15,651 16,769 17,965 19,298 20,438 21,001 22,088 4-Dam Pool Gross Revenue fate production Terror Lake 0.066 139 9,174 9,174 9.174,9,174 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 0.066 30 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 0.066 80 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 0.066 50 8,250 8,250 8,250 8,250 8,250 8,250 8,250 8,250 8,250 9,570 Total 4-Dam Pool 24,684 24 684 24 684 24,684 24,684 24,684 24,684 24,684 24 684 26,004 6,714 9,822 739 -2,816 -2,914 -1,661 -406 335 652 675 "SeTHEALASKAENERGYCORPORATIONCashFlowModels(2003 -2013)case five Page 2 of 2 30-Dec-91 (supporting documentation) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Office Expense General &Administrative 331 336 333 319 319 323 322 324 313 305 288 Loan Administration Expense 69 70 90 119 122 113 104 99 98 99 101 PCEP Expense 153 153 153 153 153 153 153 153 153 153 153 Grant Administration Expense (¢)0 []i?)[0]i?)0 0 is)[9](0) Total Administrative Office Expense 554 559 576 §92 594 589 580 577 564 558 543 Annual Capital Spending Central/Interior Investment Region 0 0 0 i¢)Oo 0 oO 0 (8)i¢)ie) Southeast Investiment Region 92,792 92,792 it)0 0 (8)(Y)0 0 (e)oO Northern/Western investment Region 0 0 t')i*)(¢)i°)(¢]0 ()oO ¢) Total Annual Capital Spending 92,792 92,792 0 ¢)0 i!)0 0 0 i*)0 Total Piant Cost 2,313,259 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 New Plant total 1,080,319 1,173,070 1,171,727 1,169,763 1,169,615 1,170,178 1,170,761 1,171,093 1,171,174 1,171,108 1,170,977 Plant Value Before Annual Depreciation 1,279,845 1,287,796 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 Annual Depreciation 84,841 85,323 85,853 80,165 74,441 69,097 64,134 59,528 55,252 51,284 47,600 Total Net Value of Captial Aesets 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Funds Trust Fund 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 Power Project (Revolving)Loan Fund 66,534 71,142 75,791 81,783 89,739 97,843 105,384 112,342 118,968 125,513 132,125 Bond Reserve Fund 58,509 58,654 58,586 58,488 58,481 58,509 58,538 58,555 58,559 58,555 58,549 Self Insurance Fund 20,962 22,004 23,046 24,088 25,130 26,172 27,214 28,256 29,298 30,340 31,382 Operating Reserve Fund 23,246 29,959 39,782 40,520 37,704 34,790 33,130 32,724 33,058 33,710 34,385 Total Value of all Funds 289,250 301,759 317,205 324,879 331,054 337,314 344,266 351,876 359,883 368,119 376,440 Plant Operating Expense (excluding Insurance) Bradley 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 10,942 12,264 12,174 12,054 11,933 11,820 11,715 11,616 11,518 11,419 11,318 Total Operating Expense 23,411 24,733 24,643 24,523 24,402 24,289 24,184 24,085 23,987 23,888 23,787 4-Dam Pool Gross Revenue Terror Lake 9,174 9,174 9,174 9,174 9,174 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9,570 Total 4-Dam Pool 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 THE ALASKA ENERGY CORPORATION Case six Overview Page 1 of 2 30-Dec-91 Analysis 1 Given the assumptions used in this case study,the Corporation's Energy Cost Assistance Program can match current PCE grant funding. 2 About $76 million in low cost loans would be made to smaller communities and utilities during the 20 year study period. 3 During the 20 year study period,about $20 million in the form technical asssistance would be made available to smaller utilities and communities. 3 Over the period 1994 through 1997 $20 million per year would be provided for the purpose of Raiibelt interie construction. 4 Ofthe 4 case studies were $200 le provided in inkial capital,thid study assumes the next to the best case revenue scenario. Case Study Assumptions: *The Corporation receives $200 million in initial endowments:a $120 million trust fund and an $80 operating reserve fund. *After FY1993,the PCE Program and other state funded grant programs are replaced with the Corporation's own Rural Energy Cost Assistance Programs. *Expectations from power sales revenue is moderate.Revenue from new projects lages 3 years compared to Case one. *The 4-Dam Pool and Larsen Bay Hydro Projects loan receivable Is transfered from the state to the Corporation. *Ailloan funds are granted,intact,to the Corporation. Modeling Parameters: Alaska Energy Corporation Trust Fund Endowment (1992) Receipts from loan activities Capital Recovery Factor on Debt General Administrative Expense Assumptions Executive Office Expense Loan Administration Expense PCEP/RECAP Expense Grant &Construction Admin Bond Reserve Annual Inflation Rate Depreciation Life of All equipment and piant. 0.00 n/a 0.50 1.50 0.90 15.00 5.00 0.00 15 $200 =million %of Last Year's Balance %of Capital mean %of Average Spending %of Loaned Amounts %of Program %of Grant Amount %of Bond issue %Annually years Plant Operating Expense Revenue from New Generation Revenue from New Transmission Return from Trust Fund Decline in PCE Program Grants Planning,Research &Development Investment in Capital Piant Rural Energy Cost Assistance Program Grants To Communities &Utilities Loans to Cammunities &Utilities Tech.Assistance to Communities &Utilities 1.5 0.005 0.005 2.50 n/a 0.25 20.00 %of Plant Value +Inflation Dollars per kWh Dollars per kWh %of Fund Balance %Annually %Gross Revenue %of Reserve Fund see notes above. 20.00 %of Reserve Fund 1.50 %of Annual Revenues UWTHE ALASKA ENERGY CORPORATION Case six Overview Page 2 0f2 30-Dec-91 Overview of Proforma Cash Flow Analysis 1991 through 2001 Authority Operations -><----------Corporate Operations ans Key pro forma Data:1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 ,Corp.Investment &Assistance va ve 33,068 40,324 40,071 40,084 39,921 19,882 19,868 18,945 22,483 Legislative Approprations 25,695 24,609 21,203 (*)0 0 0 0 0 0 (9) Total Value of All Funds va 173,537 268,219 280,650 256,555 250,141 235,827 223,262 234,186 248,984 261,089 Net Value of Plant Facilities we 1,059,390 1,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 Net Cash Flow ne va 11,991 18,530 12.011.-20,131 18,984 4,186 8,743 8,543 206 Total Annual Revenue 113,682 60,376 84,706 63,132 62,995 52,037 55,406 60,254 64,127 63,637 59,218 Total Annual Capital Spending va Wa 161,451 153,401 144,051 72,108 76,500 88,542 94,917 80,750 42,500 2002 through 2013 Key pro forma Data:2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Corp.Investment &Assistance 24,960 25,548 25,494 28,072 32,224 32,038 30,672 29,819 29,906 30,328 30,767 31,067 Legislative Approprations o t*)0 0 ce)oO 0 0 0 i¢)(e)0 Total Value of All Funds 267,179 276,406 286,447 301,635 307 226 312,074 318,039 325,618 333,682 341,805 349,884 357,906 Net Value of Plant Facilities 1,187,053 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Net Cash Flow -230 6,281 10,472 +341 -3,286 -2,130 153 1,086 1,124 864 579 442 Total Annual Revenue 67,217 71,125 72,525 59,895 61,208 62,094 59,640 66,393 59,654 57,407 57,461 64,933 Total Annual Capital Spending 77,917 92,792 92,792 0 (¢)(¢)i?)(0)(¢)(¢)it)i?) THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue -(1993 -2002)Case _six Page 1 of 2 30-Dec-91 <---Corporation Operations ----->. Sources of Revenue 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Revenue from Funds a Alaska Energy Corp.Trust Fund 0 (¢)3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 b Reserve Bond &Insurance Funds 0 i?)2,788 2,993 2,910 2,282 2,097 1,714 1,375 1,623 1,968 2,258 c Power Project Loan Fund 6,586 6,500 ¢)0 0 0 0 (9)0 (e)(e)(s) The analysis assumes the the Ralibekt nterie &Energy funds are re-appropriated to the Alaska Energy Corporation Trust Fund.This item is interest earned on that fund. The Corporation will maintain ineuranoe,bond reeerve and operating reserve funds.The amount shown is the interest earning on these funds. Interest earned on the Bradley Lake Bond funds ie excluded from the calculation because of contractural requirements. c_This line indicates estimates of the revenue received from payments made by borrowers against of this fund. note:Detailed activities of these these three funds are shown on the Proforma Cash Flow Models sheets -attached. Legislative Approprations d Administrative Office Expense 989 1,106 1,056 i?)(¢)it)i)is)(9)oO (e)0 ©Power Cost Equalization Program (PCEP)19,358 15,203 17,030 i¢)e)it)0 ()it)0 (0)ie) f Grants &Operating Expense 5,348 8,300 3117 0 i¢)0 it)i?)0 i!)(?)i?) d-e An administrative expense modol is shown on the Proforma Cash Flow Models sheets -attached.PCEP is described in the AEA Budget Document. f Before Reorganization this is Power Development Revolving Loan Fund.After restructureing values shown are grants from the legislature. Revenue from Facilities Operations g 4Dam Pool 0 O §-24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 26,004 h Bradley Lake Hydroelectric Project 12,437 25,551 6,725 6,725 6,725 5,575 5,770 5,980 6,210 6,460 6,725 7,015 i Other Projects Constructed before 1992 1,620 1,620 1,620 1,605 1,610 1,610 1,615 1,615 1,620 1,620 k Revenue from Future Projects by investment Regions , Southcentral investment Region ())(0)8)Oo .100 2100 4,100 6083 6333 6583 6,750 Southeast Investment Region ))O 1,100 2438 3,858 4444 5558 6589 7,476 7,929 8,549 Northern Western Investment Regions 1))0 0 11 116 227 327 333 333 333 333 Q Revenue estimates for the 4-dam pool are constructed on the assumption that the rate will be 6.6 cent per kWh sold and Tyee is connected to Swan Lake in 1996. h_Values shown are for debt service and operating expense.Ail revenue,except project management expense,passes through the Corporation yielding no net cash flow. i Figures shown are for operation of the Anchorage/F airbanks intertie operations and Larsen Bay Hydro project debt service. K The revenue shown for future projects is forecast based on the assumption that new generation and transmission projects will yield at least a half cent per kilowatt hour of energy produced or wheeled.Appendix F to this document contains a listing of all future projects presumed to produce revenues listed herein. Other Sources of Revenue 1 Contributed Capital &Bond Proceeds 68,768 1,916 i¢)0 0 (8)(0)(9)(¢)i?)it)fe) m Grants from Others 0 ie)0 0 0 (¢)(¢)0 (¢)0 ce)(0) n Contract and Capital Projects Services 196 1,800 24,685 23,010 21,608 10,816 11,475 13,281 14,238 12,113 6,375 11,688 |Capital contributions are related to Bradley Lake financing.-. Total Annual Revenue 113,682 60,376 84,706 63,132 62,995 52,037 55,406 60,254 64,127 63,637 59,218 67,217 oS THE ALASKA ENERGY CORPORATION Cash Flow Summary -Expenses-(1991 -2002)Case six Page 1 of 2 30-Dec-91 <- --Corporation Operations ---> Expenses 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Expenses o General &Administrative Expense 989 1,106 435 431 347 351 297 264 279 300 313 312 p Program Support Services 0 (*)279 153 it)(+)(e)0 ie)(0)(t)i?) q_Contract &Construction Admin Services 196 1,800 23,413 18,478 14,633 11,858 12,998 13,210 10,908 10,058 10,660 13,175 o G&A expense estimates,after restructuring,are estimated as a function of gross average revenue. p Program support services (i.e.management of PCEP &etc.)are estimated as a percentage of program funding. q_Support of capital projects is estimated as a percentage of the average annual programmed construction plus annual grants to be administered by the Corporation.. investments t Inflation Proofing Trust &insurance Funds i)i')0 t')0 i)0 0 0 (¢)(e)i?) 8 Investment in Capital Projects 68,768 1,916 16,000 4,000 1,000 1,000 1,000 1,000 1,000 508 2,257 3,965 t Development &Planning i¢)0 200 212 174 176 148 142 140 150 157 156 6 The Alaska Energy Corporation Trust Fund and the Seif-Insurance Fund are maintained in nominal dollars. 6 The Corporation will invest in new capital plant as net cash flow allows.investment is a function of the Operating Reserve Fund balance at any time. t The expenditure for Pianning and Development is a function of the average revenue received by the Corporation. Capital Project Related Expenses u_-4Dam Pool 1,903 2,159 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 v.Bradley Lake Hydroelectric Project 9,500 22,350 6,725 6,725 6,725 5,575 5,770 5,980 6,210 6,460 6,725 7,015 W Larsen Bay Hydroelectric &Other Project (¢]0 6,222 8,508 6,226 7,292 8,425 9,738 11,147 12,350 12,954 14,063 x Contribution to Self-insurance Fund 1,034 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 u__-Valuse listed here include operating costs only.The analysis assumes the loan receivable on the 4-Dam pool projects would become receivable to the Corporation. v Values listed include annual debt service and project operating costs.note:No net cash flow can be captured by the Corporation until after 2022. w The analysis assumes the loan receivable on the Larsen Bay project will become receivable to the Corporation.Revenue from future projects is listed in Appendix F. x =Aninsurance trust fund exists and will be maintained into the future.Payments are maintained in nominal dollars. Rural Energy Cost Assistance Programs (funded by the Corporation) y Grants to Communities &Utilities it)te)Q 37,030 37,030 37,030 37,030 17,030 17,030 17,030 17,030 17,030 y Loans to Communities &Utilities 6,586 6,500 15,760 1,000 1,000 1,000 1,000 1,000 1,000 508 2,257 3,965 y Technical Assistance to Communities &Utilities ofa n/a 1,305 1,294 1,041 1,054 891 652 838 899 940 935 y These three items make up the bulk of the Aural Energy Cost Assistance Program to be funded by the Corporation.The amounts of each element are discussed elsewhere. Legislative Approprations Administrated by the Corporation z Power Cost Equalization 19,358 15,203 16,877 (0)O°.0 (6)(0)(8)(0)(0)(6) z Legislative Grants 5,348 8,300 2,649 (¢)ce](8)i?)(0)19)(¢)(0)(¢) Z_These items account for grants from the legislature. Total Annual Expenses 113,682 60,376 96,696 81,662 75,006 72,167 74,390 56,068 55,584 55,094 60,124 67 44/ >x THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue-(2003 through 2013)Case six Page 2 of 2 Sources of Revenue 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Sf Revenue from Funds Alaska Energy Corp.Trust Fund 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 Reserve Bond &Insurance Funds 2,354 2,485 2,642 2,928 2,943 2,887 2,861 2,891 2,944 2,998 3,045 Power Project Loan Fund ()i?)it)()0 0 i?)(e)f*)(e)fe) Legislative Approprations Administrative Office Expense 0 0 0 0 0 0 oO 0 0 ft)(0) Power Cost Equalization Program (PCEP)i)i)oO 0 it)0 0 i¢)(e)(0)(*) Grants &Operating Expense ()0 0 te)fe)0 o 0 0 fe)f(t) Revenue from Facilities Operations Net 4-Dam Pool Revenue 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 Bradley Lake Hydroelectric Project 7,325 7,660 8,020 8,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Other Projects Constructed before 1992 1,625 1,625 1,630 1,635 1,640 1,645 1,650 1,655 1,660 1,660 1,660 Revenue from Future Projects by Investment Regions Southcentral Investment Region 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 6,750 Southeast investment Region 9816 10,749 11,516 12,382 13,249 14,116 14,116 14,116 14,116 14116 14,116 Northern/Western Investment Regions 333 333 333 333 333 333 333 333 333 333 333 Other Sources of Revenue Contributed Capital &Bond Proceeds 0 c?]0 QO Oo (¢)(9)(8)it)(9)(0) Grants trom Others 0 ie)0 (0)ie)fe)0 ie]0 (¢)oO Contract and Capital Projects Services 13,919 13,919 ie)0 0 (¢)0 fe)0 (e)fe) itd Total Annual Revenue 71,125 72,525 59,895 61,208 62,094 59,640 66,393 59,654 57,407 57,461 64,933 THE ALASKA ENERGY CORPORATION Cash Flow Summary -Expenses-(2003 through 2013)Case six Page 1 of 2 30-Dec-91 Expenses 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Expenses General &Administrative Expense 304 321 324 312 341 315 314 315 306 301 287 Program Support Services re)210 209 228 260 259 249 242 243 246 249 Contract &Construction Admin Services 9,279 4,640 i¢)oO i?)ie)(¢)0 fe)0 0 Investments Inflation Proofing Trust &insurance Funds 0 (*)0 o oO i*)0 oO (9)(e)(1) Investment in Capital Projects 3,784 3,738 4,994 7,088 7,020 6,363 5,937 5,968 6,185 6,410 6,582 Development &Planning 158 165 120 170 161 153 152 157 155 153 145 Capital Project Related Expenses 4Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Bradley Lake Hydroelectric Project 7,325 7,660 8,020 8,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Larsen Bay Hydroelectric &Other Project 15,398 16,734 16,659 16,553 16,448 16,352 16,263 16,174 16,081 15,985 15,686 Contribution to Self-insurance Fund 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 Rural Energy Cost Assistance Programe (funded by the Corporation) Grants to Communities &Utilities 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 17,030 Loans to Communities &Utilities 3,784 3,738 4,994 7,088 7,020 6,363 5,937 5,968 6,185 6,410 6,582 Technical Assistance to Communities &Utilities 950 988 1,054 1,018 968 916 915 941 928 917 873 Legislative Approprations Administrated by the Corporation Power Cost Equalization ie)(e)0 0 0 0 (9)0 (6)(e)0 Legislative Grants 9)(¢)0 0 (8)t¢)(9)ie)0 (¢)0 Total Annual Expenses 64,845 62,054 60,236 64,493 64,224 59,487 65,508 58,530 56,543 566K?64.491 THE ALASKA ENERGY CORPORATION Cash Flow Models (1991 -2002)case six Page 1 of 2 30-Dec-91 supporting documentation) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Office Expense General &Administrative 778 607 435 431 347 351 297 284 279 300 313 312 Loan Administration Expense 91 105 0 it)it)(¢)0 0 (e)(e)(1)(e) PCEP Expense 120 174 153 0 0 ()oO 0 0 0 (e)(!) Grant Administration Expense Wa 220 468 i)i')it)i)0 is)()0 fe) Total Administrative Office Expense 989 4,106 1,056 431 347 351 297 284 279 300 313 312 Annual Capital Spending Central/interior Investment Region Wa 289,638 56,950 62,475 77,633 26,208 26,208 25,500 25,500 25,500 is)(¢) Southeast Investiment Region n/a 13,250 78,250 63,568 63,568 45,900 50,292 63,042 69,417 55,250 42,500 77,917 Northern/Western Investment Region Wa 23,276 26,251 27,358 2,850 ie)fe)it)(e)o (¢)(s) Total Annual Capital Spending 68,768 326,164 161,451 153,401 144,051 72,108 76,500 88,542 94,917 80,750 42,500 77,917 Total Piant Cost 902,167 1,228,331 -1,389,782 1,543,183 1,687,234 1,759,342 1,635,842 1,924,384 2,019,300 2,100,050 2,142,550 2,220,467 Plant Value Before Annual Depreciation 902,167 1,119,534 1,220,840 1,299,606 1,362,267 1,347,735 1,333,417 1,332,110 1,338,132 1,330,075 1,283,366 1,272,611 Annual Depreciation 108,797 60,144 .-74,636 81,389 86,640 90,818 89,849 88,894 88,807 89,209 88,672 85,558 Total Net Value of Captial Assets 793,370 1,059,390 1,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 1,187,053 Funds Rt Trust Fund QO 120,000 ...120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 Power Project (Revolving)Loan Fund 26,774 22,000 '28,500 44,260 45,260 46,260 47,260 48,260 49,260 50,260 50,768 53,024 Bond Reserve Fund 1,000 22,037 29,177 36,797 29,190 32,745 36,520 40,897 45,593 49,605 §1,617 55,315 Self insurance Fund 8,483 9,500 .10,542 11,584 12,626 13,668 14,710 15,752 16,794 17,836 18,878 19,920 Operating Reserve Fund 80,000 60,000 68,009 49,479 37,468 17,337 -1,647 2,540 11,283 19,826 18,920 Total Value of all Funds 173,537 268,219 280,650 256,555 250,141 235,827 223,262 234,186 248,984 261,089 267,179 Piant Operating Expense (excluding Insurance) Bradley na Wa 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,480 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro nla Wa 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 0 i)2,142 4,428 2,146 3,212 4,345 5,658 7,067 8,270 8,874 9,983 Total Operating Expense 7,269 7,369 14,611 16,897 14,615 15,681 16,814 18,127 19,536 20,739 21,343 22,452 4-Dam Pool Gross Revenue tate production Terror Lake 0.066 139 9,174 9,174 9,174 oo 9,174 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 0.066 30 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 0.066 80 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 0.066 50 8,250 8,250 8,250 8,250 8.250 8,250 8,250 8,250 8,250 9,570 Total 4-Dam Pool 24.684 24.684 24,684 24,684 24684 24684 24664 246864 24.684 26 004 Li THE ALASKA ENEAGY CORPORATION Page 2 of 2CashFlowModels(2003 -2013)case six 30-Dec-91 (supporting documentation) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Office Expense General &Administrative 304 321 324 312 311 315 314 315 306 301 287 Loan Administration Expense 57 56 7 106 105 95 69 90 93 96 99 PCEP Expense 153 153 153 153 153 153 153 153 153 153 183 Grant Administration Expense 0 0 0 0 ()it)i?)0 i¢)i)i) Total Administrative Office Expense 514 530 552 571 570 564 556 558 552 550 539 Annual Capital Spending Central/interior Investment Region o (*)i*)(')(t)i?)i?)0 (e)i!)0 Southeast Investiment Region 92,792 92,792 f°)(*)it)oO i*)(e)it)(')0 Northern/Western investment Region 0 0 oO oO (!](¢]o Oo 0 o 9) Total Annual Capital Spending 92,792 92,792 0 [0][0][0][0]0 (0)i?)0 Total Piant Cost 2,313,259 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 New Piant total 1,061,144 1,173,981 1,172,725 1,170,631 1,170,699 1,171,356 1,171,782 1,171,751 1,171,534 1,171,310 =1,171,137 Plant Value Before Annual Depreciation 1,279,845 1,287,796 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 Annual Depreciation 84,841 85,323 65,853 80,165 74,441 69,097 64,134 §9,528 §5,252 51,284 47,600 Total Net Value of Captial Assets 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Funds Le Trust Fund 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 420,000 Power Project (Revolving)Loan Fund 56,990 60,773 64,511 69,505 76,594 83,614 89,977 95,914 101,882 108,066 114,476 Bond Reserve Fund 59,765 58,699 58,636 $8,532 58,535 58,568 58,589 58,588 58,577 58,565 58,557 Self Insurance Fund 20,962 22,004 23,046 24,088 25,130 26,172 27,214 28,256 29,298 30,340 31,382 Operating Reserve Fund 18,689 24,970 35,442 35,101 31,815 29,685 29,838 30,924 32,048 32,912 33,491 Total Value of all Funds 276,406 286,447 301,635 307,226 312,074 318,039 325,618 333,682 341,805 349,884 357,906 Plant Operating Expense (excluding Insurance) Bradley 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 11,318 12,654 12,579 12,473 12,368 12,272 12,183 12,094 12,001 11,905 11,806 Total Operating Expense 23,787 25,123 25,048 24,942 24,837 24,741 24,652 24,563 24,470 24,374 24,275 4-Dam Pool Gross Revenue Terror Lake 9,174 9,174 9,174 9,174 0 A174 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyve Lake Hydro 9,570 9,570 9,570 9.570 9,570 9,570 9,570 9570 9,570 9,570 9,970 Total 4-Dam Pool 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26 004 26,004 26,004 hyTHE ALASKA ENERGY CORPORATION Case seven Overview Page 1 of 2 30-Dec-91 Analysis 1 Given the assumptions used in this case study,the Corporation's Energy Cost Assistance Program can,in total,match the current PCE grant program. 2 About $33 million in low cost loans would be made to small communities and utilities during the 20 year study period. 3 During the 20 year study period about $18 million would be spent on technical assistance to smalier communities and utilities. 4 Over the period 1994 through 1907 $20 million annually would be contributed to construction of Railbelt Intertie projects. 5 Ofthe 4 cases studied where $200 million le provided in initial capital,this study assumes the the next to the worst case revenue scenario. Case Study Assumptions: *The Corporation receives $200 million in initial endowments:a $120 million trust fund and an $80 operating reserve. *After FY1993,the PCE Program and other state funded grant programs are replaced with the Corporation's own Rural Energy Cost Assistance Programs. *Expectations from power sales revenue is low.Revenue from new projects are only 60%of revenues indicated in Case one. *The 4-Dam Pool and Larsen Bay Hydro Projects loan receivable is transfered from the state to the Corporation. *All loan funds are granted,intact,to the Corporation. ie) Modeling Parameters: Alaska Energy Corporation Trust Fund Endowment (1992)$200 -million Plant Operating Expense 1.5 %of Plant Value +inflation Receipts from loan activities 0.00 %of Last Year's Balance Revenue from New Generation 0.005 Dollars per kWh Capital Recovery Factor on Debt n/a =.%of Capital Investment Revenue from New Transmission 0.005 Dollars per kWh General Administrative Expense Assumptions |Return from Trust Fund 2.50 %of Fund Balance Executive Office Expense 0.50 %of Average Spending Decline in PCE Program Grants nia =%Annually Loan Administration Expense 1.50 %of Loaned Amounts Planning,Research &Development 0.25 %Gross Revenue PCEP/RECAP Expense 0.90 %of Program Investment in Capital Plant 10.00 %of Reserve Fund Grant &Construction Admin 15.00 %of Grant Amount Rural Energy Cost Assistance Program Bond Reserve 5.00 %of Bond issue Grants To Communities &Utilities see notes above. Annual Infiation Rate 0.00 %Annually Loans to Gommunities &Utilities 5.00 %of Reserve Fund Depreciation life of all equipment and plant.15 years Tech.Assistance to Communities &Utilities 1.50 %of Annual Revenues THE ALASKA ENERGY CORPORATION Case seven Overview Page 2 0f2 30-Dec-91 Overview of Proforma Cash Flow Analysis 1991 through 2001 Authority Operations -><---------Corporate Operations Key pro forma Data:1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Corp.investment &Assistance Wa na 13,245 41,030 45,801 43,827 42,010 19,519 17,191 17,287 17,938 Legislative Approprations 25,695 24609 21,203 0 0 0 0 0 0 0 0 Total Value of Ali Funds a 173,537 268,619 288,780 266,054 256,577 239,689 224,242 232,224 243,878 251,888 Net Value of Piant Facilities Wa 1,059,390 1,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 Net Cash Flow ne Wa 7,709 "19,741 -18,170 -24,905 -23,281 958 6,507 4,759 -2,151 Total Annual Revenue 113,682 60,376 84,706 62,702 62,514 50,865 52,995 56,433 58,988 57,963 53,207 Total Annual Capital Spending na na 161,451 153,401 144,051 72,108 76,500 88,542 94,917 80,750 42,500 2002 through 2013 Key pro forma Data:2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Corp.investment &Assistance 17,563 18,198 18,300 18,983 20,038 20,169 20,277 20,436 20,649 20,858 21,059 21,253 Legislative Approprations (8)(¢)0 it)(t)(¢)0 (¢)it)i!)o ie) Total Value of All Funds 255,059 262,394 270,251 282,446 285,720 289,341 293,542 298,325 303,151 307,998 312,889 317,820 Net Value of Plant Facilities 1,187,053 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Net Cash Flow 1,020 6,822 10,552 1,308 1,082 1,595 2,126 2,091 2,007 1,944 1,884 1,849 Total Annual Revenue 60,799 64,173 65,234 52,322 53,291 53,874 51,182 58,027 51,336 49,114 49,190 56,690 Total Annual Capital Spending 77,917 92,792 92,792 0 0 (0)0 0 i)(¢)0 (0) THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue-(1993 -2002)Case seven Page 1 of 2 30-Dec-91 <-----Corporation Operations ------> Sources of Revenue 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Revenue from Funds a Alaska Energy Corp.Trust Fund i?)it)3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 b Reserve Bond &Insurance Funds 0 0 2,788 3,003 3,409 2,740 2,394 1,887 1,438 1,607 1,896 2,093 c Power Project Loan Fund 6,586 6,500 it)(t)(*)0 (e)(*)0 (¢)(e)fe) The analysis assumes the the Railbek interie &Energy funds are re-appropriated to the Alaska Energy Corporation Trust Fund.This item is interest earned on that fund. The Corporation will maintain insurance,bond reserve and operating reserve funds.The amount shown is the interest earning on these funds. Interest earned on the Bradley Lake Bond funde le excluded from the calculation because of contractural requirements. c This line indicates estimates of the revenue received trom payments made by borrowers against of this fund. note:Detailed activities of these these three funds are shown on the Proforma Cash Flow Models sheets -attached. Legislative Approprations d Administrative Office Expense 989 1,106 1,056 (¢)(')(e)(¢)it)(¢)(¢)fe)fe) ©Power Cost Equalization Program (PCEP)19,358 15,203 17,030 0 0 oO 0 oO (¢)(0)0 (¢) f Grants &Operating Expense §,348 8,300 3,117 0 0 0 0 e)0 0 0 0 d-e An administrative expense model is shown on the Proforma Cash Flow Models sheets -attached.PCEP is described in the AEA Budget Document. t Before Reorganization this is Power Development Revolving Loan Fund.After restructureing values shown are grants from the legislature. Revenue from Facilities Operations g 4Dam Pool {?)i!)24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 26,004 h_Bradley Lake Hydroelectric Project 12,437 25,551 6,725 6,725 6,725 5,575 5,770 5,980 6,210 6,460 6,725 7,015 i Other Projects Constructed before 1992 1,620 1,620 1,620 1,605 1,610 1,610 1,615 1,615 1,620 1,620 k Revenue from Future Projects by Investment Regions Southcentral investment Region 0 0 (¢)(¢](4)60 1,260 2,460 3,650 3,800 3,950 4,050 Southeast Investment Region ))0 660 1,463 2315 2666 3335 3953 4,485 4,757 5,129 Northern/Western Investment Regions )0 0 4)7 69 136 196 200 200 200 200 g Revenue estimates for the 4-dam pool are constructed on the assumption that the rate will be 6.6 cent per kWh solid and Tyee is connected to Swan Lake in 1996. h Values shown are for debt service and operating expense.All revenue,except project management expense,passes through the Corporation yielding no net cash flow. 1 Figures shown are for operation of the Anchorage/Fairbanks Intertie operations and Larsen Bay Hydro project debt service. K The revenue shown for future projects is forecast based on the assumption that new generation and transmission projects will yield at least a half cent per kilowatt hour of energy produced or wheeled.Appendix F to this document containsa listing of all future projects presumed to produce revenues listed herein. Other Sources of Revenue 1 Contributed Capital &Bond Proceeds 68,768 1,916 0 0 t)i?)(¢)(¢)0 ie)ie)0 m_Grants from Others (e)0 i!)i°)(e)ie)fe)(0)ie)(¢)ie)fe] n_Contract and Capital Projects Services 196 1,800 24,685 23,010 21,608 10,816 11,475 13,281 14,238 12,113 6,375 11,688 1 Capital contributions are related to Bradley Lake financing.-. Total Annual Revenue 113,682 60,376 84,706 62,702 62,514 50,865 52,995 56,433 58,988 57,963 53,207 60,799 meal THE ALASKA ENERGY CORPORATION Cash Flow Summary -Expenses-(1991 -2002)Case seven Page 1 of 2 30-Dec-91 <-----Corporation Operations --> - Expenses 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Expenses o General &Administrative Expense 989 1,106 435 431 346 350 293 277 267 281 289 284 p Program Support Services 0 0 279 153 0 0 0 0 0 ie)0 0 q_Contract &Construction Admin Services 196 1,800 23,413 18,478 14,633 11,858 12,998 13,210 10,908 10,058 10,660 13,175 o G&A expense estimates,after restructuring,are estimated as a function of gross average revenue. p Program support services (i.e.management of PCEP &etc.)are estimated as a percentage of program funding. q_Support of capital projects is estimated as a percentage of the average annual programmed construction pilus annual grants to be administered by the Corporation.. investments t Inflation Proofing Trust &Insurance Funds t¢)(*)Q (')i*)!)i)(e)(¢)0 (e)ie) s Investment in Capital Projects 68,768 1,916 8,000 4,000 8,771 6,797 4,980 2,489 161 257 908 1,384 t Development &Planning 0 o 200 212 173 175 147 139 134 140 144 142 ¢The Alaska Enesgy Corporation Trust Fund and the Self-insurance Fund are maintained in nominal dollars. 8 The Corporation will invest in new capital plant as net cash flow allows.Investment is a function of the Operating Reserve Fund balance at any time. t The expenditure for Planning and Development is a function of the average revenue received by the Corporation. Capital Project Related Expenses u__4Dam Pool 1,903 2,159 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 v_Bradley Lake Hydroelectric Project 9,500 22,350 6,725 6,725 6,725 5,575 5,770 5,980 6,210 6,460 6,725 7,015 W Larsen Bay Hydroelectric &Other Project ¢)[0]6,342 8,583 6,175 7,155 8,227 9,518 10,940 12,147 12,771 13,919 x Contribution to Self-insurance Fund 1,034 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 u_--Valuse listed here include operating costs only.The analysis assumes the loan receivable on the 4-Dam pool projects would become receivable to the Corporation. v_Values listed include annual debt service and project operating costs.note:No net cash flow can be captured by the Corporation until after 2022. w The analysis assumes the loan receivable on the Larsen Bay project will become receivable to the Corporation.Revenue from future projects is listed in Appendix F. x An insurance trust fund exists and will be maintained into the future.Payments are maintained in nominal dollars. Rural Energy Cost Assistance Programs (funded by the Corporation) y Grants to Communities &Utilities 0 0 Q 31,736 31,606 32,582 33,660 14,953 16,148 16,059 15,709 15,487 y Loans to Communities &Utilities 6,586 6,500 3,940 4,000 4,385 3,398 2,490 1,245 81 128 454 692 y Technical Assistance to Communities &Utilities va Wa 1,305 1,294 1,039 1,050 880 832 801 842 867 851 y These three items make up the bulk of the Rural Energy Cost Assistance Program to be funded by the Corporation.The amounts of each element are discussed elsewhere. Legislative Approprations Administrated by the Corporation z Power Cost Equalization 19,358 15,203 16,877 0 O-«(0)(¢)(e)0 0 0 (e) z Legislative Grants 5,348 8,300 2,649 (6)[0)0 oO 0 0 0 (]0 Z These ttems account for grants from the legislature. Total Annual Expenses 113,682 60.376 76,996 82,443,80,684 75,770 76.276 55475 ABI 938.204 SH SHB 99.779 XY) THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue-(2003 through 2013)Case seven Page 2 of 2 Sources of Revenue 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Revenue trom Funds Alaska Energy Corp.Trust Fund 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 Reserve Bond &Insurance Funds 2,161 2,327 2,509 2,798 2,855 2,908 2,974 3,053 3,131 3,207 3,281 Power Project Loan Fund Oo i*)it)(1)i!)(*)i?)()(s)fe)(0) Legisiative Approprations Administrative Office Expense (¢)o 0 (Y)0)9](¢)i?))oO 0 Power Cost Equalization Program (PCEP)i)¥)0 0 0 o (t)0 0 (e)(0) Grants &Operating Expense i')t)0 0 (*)(?)it)0 0 i¢)0 Revenue trom Facilities Operations Net 4-Dam Pool Revenue 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 Bradley Lake Hydroelectric Project 7,325 7,660 8,020 6,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Other Projects Constructed before 1992 1,625 1,625 1,630 1,635 1,640 1,645 1,650 1,655 1,660 1,660 1,660 Revenue from Future Projects by Investment Regions Southcentral Investment Region 4,050 4,050 4,050 4,050 4,050 4,050 4,050 4,050 4,050 4,050 4,050 Southeast investment Region '§,889 6,449 6,909 7,429 7,949 8,469 8,469 8,469 8,469 B,469 8,469 Northern/Western investment Regions 200 200 200 200 200 200 200 200 200 200 200 Other Sources of Revenue Contributed Capital &Bond Proceeds 0 0 ce)(*)(e)i?)(¢)(¢)0 i¢)fe) Grants from Others i¢)0 0 i?)i?)0 0 i!)0 (¢)fe) Contract and Capital Projects Services 13,919 13,919 QO (0)(¢)(0)(0)(0)0 (0)(0) Total Annual Revenue 64,173 65,234 $2,322 53,291 53,874 51,182 58,027 51,336 49,114 49,190 56,690 THE ALASKA ENERGY CORPORATION Cash Flow Summary -Expenses-(2003 through 2013)Case seven Page 1 of 2 30-Dec-91 Expenses 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Expenses General &Administrative Expense 261 287 286 272 263 259 256 262 257 254 240 Program Support Services i?)149 149 151 154 155 156 156 157 158 158 Contract &Construction Admin Services 9,279 4,640 0 0 ie)0 0 0 0 0 (¢) investments Inflation Proofing Trust &insurance Funds i?)i)*)(¢)(1)it)0 t)i)0 (¢) investment in Capital Projects 1,168 1,270 1,953 3,008 3,139 3,247 3,406 3,619 3,828 4,029 4,223 Development &Planning 143 148 108 151 142 133 132 136 134 132 125 Capital Project Related Expenses 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 §,789 5,789 5,789 5,789 Bradiey Lake Hydroelectric Project 7,325 7,660 8,020 8,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Lareen Bay Hydroelectric &Other Project 15,293 16,666 16,637 16,592 16,545 16,496 16,445 16,390 16,333 16,273 16,209 Contribution to Self-insurance Fund 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 Rural Energy Cost Assistance Programs (funded by the Corporation) Grants to Communities &Utilities 15,586 15,504 15,103 14,617 14,606 14,609 14,535 14,405 14,313 14,223 14,170 Loans to Communities &Utilities 584 635 976 1,504 1,569 1,623 1,703 1,809 1,914 2,014 2,112 Technical Assistance to Communities &Utilities 860 891 951 909 854 797 792 815 803 792 748 Legislative Approprations Administrated by the Corporation Power Cost Equalization (¢)0 fe)(e)*0 0 ce)O 0 8)0 Legislative Grants ie)0 0 0 0 i?)0 0 0 0 ie) Total Annual t-xpenses 57,351 54,682 51,014 52,209 52,279 49,056 55,936 49,330 4741/0 47,306 54.641 THE ALASKA ENERGY CORPORATION Cash Flow Models (1991 -2002)case seven Page 1 of 2 30-Dec-91 supporting documentation) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Office Expense General &Administrative 778 607 435 431 346 350 293 277 267 281 289 284 Loan Administration Expense 91 105 oO i?)(1)(')(')(*)0 ft)Oo is) PCEP Expense 120 174 153 0 t)0 0 (*)0 0 oO 0 Grant Administration Expense Wa 220 468 0 [9][0](0)[9]0 (9)(0)(t) Total Administrative Office Expense 989 1,106 1,056 431 346 350 293 277 267 281 289 264 Annual Capital Spending Central/Interior Investment Region Wa 289,638 56,950 62,475 77 633 26,208 26,208 25,500 25,500 25,500 (0)0 Southeast Investiment Region Wa 13,250 78,250 63,568 63,568 45,900 50,292 63,042 69,417 55,250 42,500 77,917 Northern/Western Investment Region a 23,276 26,251 27,358 2,850 (0)0 0 (¢)0 (9)(0) Total Annual Capital Spending 68,768 326,164 161,451 153,401 144,051 72,108 76,500 88,542 94,917 80,750 42,500 77,917 Total Plant Cost 902,167 1,226,331 1,369,782 1,543,183 1,687,234 1,759,342 1,835,642 1,924,384 2,019,300 2,100,050 2,142,550 2,220,467 Plant Value Before Annual Depreciation 902,167 1,119,534 1,220,840 1,299,606 1,362,267 1,347,735 1,333,417 1,332,110 1,338,132 1,330,075 1,283,366 1,272,611 Annual Depreciation 108,797 60,144 74,636 81,389 86,640 90,818 89,849 88,894 88,807 89,209 88,672 85,558 Total Net Value of Captial Assets 793,370 1,059,390 1,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 1,187,053 Funds Se Trust Fund Q 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 Power Project (Revolving)Loan Fund 26,774 22,000 -...-28,500 32,440 36,440 40,825 44,224 46,714 47,958 48,039 48,167 48,621 Bond Reserve Fund 1,000 22,037 |:.:29,577 37,047 29,020 32,286 35,862 40,164 44,902 48,927 51,007 54,833 Self Insurance Fund 6,483 9,500 ..10,542 11,584 12,626 13,668 14,710 15,752 16,794 17,836 18,878 19,920 Operating Reserve Fund 80,000 60,000 87,709 67,968 49,798 24,893 1,612 2,569 9,077 13,836 11,685 Total Value of all Funds 173,537 268,619 288,780 266,054 256,577 239,689 224,242 232,224 243,878 251,888 255,059 Plant Operating Expense (excluding Insurance) Bradley Wa va 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,480 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro Wa n/a 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 0 0 2,262 4,503 2,095 3,075 4,147 5,438 6,860 8,067 8,691 9,839 Total Operating Expense 7,269 7,369 14,731 16,972 14,564 15,544 16,616 17,907 19,329 20,536 21,160 22,308 4-Dam Pool Gross Revenue rate production Terror Lake 0.066 139 «9,174 9,174 9,174 o,,9,174 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 0.066 30 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 0.066 80 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 0.066 50 8,250 8,250 8,250 8,250 8,250 8,250 8,250 8,250 8,250 9,570 Total 4-Dam Pool 24,684 24,684 24 684 24,684 24,684 24,684 24,684 24,684 24 684 26,004 £9 IGTHE ALASKA ENERGY CORPORATION Cash Flow Models (2003 -2013)case seven Page 2 of 2 30-Dec-91 (supporting documentation) 2003 2004 2005,2006 2007 2008 2009 2010 2011 2012 2013 Administrative Office Expense General &Administrative 281 287 286 272 263 259 256 262 257 254 240 Loan Administration Expense 9 10 15 23 24 24 26 27 29 30 32 PCEP Expense 140 140 136 132 131 131 131 130 129 128 128 Grant Administration Expense 0 it)it)i?)0 0 i)0 0 it)0 Total Administrative Office Expense 430 437 437 426 418 415 412 419 415 412 399 Annual Capital Spending Central/interior Investment Region t)0 (¢)(t)0 0 oO °)(¢)0 0 Southeast Investiment Region 92,792 92,792 0 0 0 (¢)0 i*)0 0 0 Northern/Western Investment Region t)i*)0 (¢)i!)i!)(¢)oO *)(°)0 Total Annual Capital Spending 92,792 92,792 0 0 0 0 ()LY)0 it)it) Total Plant Cost 2,313,259 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 New Plant total 1,083,759 1,176,449 14,175,766 1,174,711 1,174,580 1,174,472 1,174,313 1,174,100 1,173,891 1,173,690 1,173,496 Plant Value Before Annual Depreciation 1,279,845 1,287,796 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 Annual Depreciation 84,841 85,323 85,853 80,165 74,441 69,097 64,134 59,528 55,252 51,284 47,600 Total Net Value of Captial Assets 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Funds Trust Fund 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 Power Project (Revolving)Loan Fund 49,313 49,897 50,532 51,509 53,013 54,582 56,206 57,909 59,718 61,632 63,647 Bond Reserve Fund 59,414 58,822 58,788 58,736 58,729 $8,724 58,716 58,705 58,695 58,685 58,675 Self Insurance Fund 20,962 22,004 23,046 24,088 25,130 26,172 27,214 28,256 29,298 30,340 31,382 Operating Reserve Fund 12,705 19,527 30,079 31,387 32,469 34,064 36,190 38,281 40,288 42,232 44,116 Total Value of all Funds 262,394 270,251 282,446 285,720 289,341 293,542 298,325 303,151 307,998 312,889 317,820 Plant Operating Expense (excluding insurance) Bradley 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Poot 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 11,213 12,586 12,557 12,512 12,465 12,416 12,365 12,310 12,253 12,193 12,129 Total Operating Expense 23,682 25,055 25,026 24,981 24,934 24,885 24,834 24,779 24,722 24,662 24,598 4-Dam Pool Gross Revenue Terror Lake 9,174 9,174 9,174 9,174 9,1 74 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 9,570 9,570 9.570 9.570 9,570 9,570 9,570 9,570 9,570 9.570 9,570 Total 4-Dam Pool 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 oN THE ALASKA ENERGY CORPORATION Case eight Overview Page 1 of 2 ma 30-Dec-91 Analysis Given the assumptions used in this case study the Corporation's Energy Cost Assistance Program can,in its total,match the current PCE grant program. About $18 million in low cost loans would be made to small communities and utilities during the 20 year study period. During the 20 year study period about $14 million annually would be spent on technical assistance to smaller communities and utilities. Over the period 1994 through 1987 $20 million annually would be contribnutyed to construction of Railbelt Intertie projects. Of the 4 cases studied where $200 million le provided in Initial capital.this study presents the worst case revenue scenario.ase.OND=Case Study Assumptions: *The Corporation is endowed with a $200 million trust fund. *After FY1993,the PCE Program and other state funded grant programs are replaced with the Corporation's own Rural Energy Cost Assistance Programs. *Expectations from power sales revenue is very low.Revenue from new projects lages 3 years and is dimished by 80%compared to Case one. *The 4-Dam Pool and Larsen Bay Hydro Projects loan receivable is transfered from the state to the Corporation. *All loan funds are granted,intact,to the Corporation. i?) Modeling Parameters: Alaska Energy Corporation Trust Fund Endowment (1992)$200 million Plant Operating Expense 1.5 %of Piant Value +inflation Receipts from loan activities 0.00 %of Last Year's Balance Revenue from New Generation 0.005 Dollars per kWh Capital Recovery Factor on Debt nia =%of Capital Investment Revenue from New Transmission 0.005 Dollars per kWh General Administrative Expense Assumptions |Return from Trust Fund 2.50 %of Fund Balance Executive Office Expense 0.50 %of Average Spending Decline in PCE Program Grants n/a %Annually Loan Administration Expense 1.50 %of Loaned Amounts Planning,Research &Development 0.25 %Gross Revenue PCEP/RECAP Expense 0.90 %of Program Investment in Capital Plant 7.00 %of Reserve Fund Grant &Construction Admin 15.00 %of Grant Amount Rural Energy Cost Assistance Program Bond Reserve 5.00 %of Bond Issue Grants To Communities &Utilities see notes above. Annual Inflation Rate 0.00 %Annually Loans to Oammunities &Utilities 7.00 %of Reserve Fund Depreciation Life of All equipment and plant.15 years Tech.Assistance to Communities &Utilities 1.50 %of Annual Revenues THE ALASKA ENERGY CORPORATION Case eight Overview -Page 202 30-Dec-91 Overview of Cash Flow Analysis 1991 through 2001 Authority Operations --><------_Corporate Operations mn Key pro forma Data:.1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 Corp.Investment &Assistance a Wa 92,421 39,030 43,154 41,628 40,091 14,251 12,647 12,795 13,013 Legislative Approprations 25,695 24,609 ---«-21,203 0 0 0 0 0 0 0 0 Total Value of All Funds na 173,537 268,739 =---290,346 «=.263,265 «=-251,846 =237,730 +=-223,269 «=232,600 §=s-_«240,619 =245,668 Net Value of Plant Facilities n/a 1,059,390 _1,146,208 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 Net Cash Flow na ne 7,479 -21,789 -21,960 -23,428 -22,921 2,114 3,121 1,927 152 Total Annual Revenue 113,682 60,376 «=65,331 «43,857 44,248 =40,523 40,956 «41,702 42,294 42,544 42,013 Total Annual Capital Spending Wa Wa 161 451 153,401 144,051 72,108 76,500 68,542 94,917 80,750 42,500 2002 through 2013 Key pro forma Data:2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Corp.Investment &Assistance 12,514 =12,830 13,230 13,338 13,403 13,347 13,300 13,270 13,258 13,250 13,244 13,242 Legislative Approprations i?)(*)i*)oO i*)o i!)Oo i)0 i?)0 Total Value of All Funds 250,925 257,941 259,963 262,326 263,071 264,017 265,154 266,487 267,854 269,244 270,678 272,147 Net Value of Plant Facilities 1,187,053 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Net Cash Flow 1,017 1,552 927 -803 671 425 -181 "116 -79 -28 13 69 Total Annual Revenue 44,970 46,111 46,800 44,577 44,959 45,144 42,061 48,857 42,108 39,832 39,856 47,306 Total Annual Capital Spending 77,917 92,792 92,792 (0)(0)(?][¢)Oo 0 (0)(8)(¢) THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue-(1993 -2002)Case eight Page 1 of 2 ia30-Dec-91 <----Corporation Operations ---->. Sources of Revenue 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Revenue from Funds a Alaska Energy Corp.Trust Fund Oo 0 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 Reserve Bond &Insurance Funds i¢)it)2,788 3,006 3,408 2,681 2,243 1,775 1,337 1,535 1,740 1,867 c Power Project Loan Fund 6,586 6,500 0 oO oO o ce]oO 0 (9)0)(0) a=The analysis assumes the the Ralibekt interie &Energy funds are re-appropriated to the Alaska Energy Corporation Trust Fund.This item is interest earned on that fund. a.The Corporation will maintain Ineurance,bond reserve and operating reserve funds.The amount shown is the interest earning on these funds. Interest earned on the Bradley Lake Bond funds le excluded from the calculation because of contractural requirements. c_This line indicates estimates of the revenue received from payments made by borrowers against of this fund. note:Detailed activities of theee these three funds are shown on the Proforma Cash Flow Models sheets -attached. Legislative Approprations d Administrative Office Expense 989 1,106 1,056 it)(')ie)[t)(*)(¢)ft)o (e) @ Power Cost Equalization Program (PCEP)19,358 15,203 17,030 0 O 0 0 (t)ie](e)ie)0 t Grants &Operating Expense 5,348 8300 3,117 oO Y)0 0 oO 0 0 (0)0 d-e An administrative expense model is shown on the Proforma Cash Flow Models sheets -attached.PCEP is described in the AEA Budget Document. {Before Reorganization this le Power Development Revolving Loan Fund.After restructureing values shown are grants from the legisiature. Revenue from Facilities Operations g 4Dam Pool 0 i)24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 24,684 26,004 h_Bradley Lake Hydroelectric Project 12,437 25,551 8,725 6,725 6,725 5,575 5,770 5,980 6,210 6,460 6,725 7,015 i Other Projects Constructed before 1992 -1,620 1,620 1,620 1,605 1,610 1,610 1,615 1,615 1,620 1,620 k Revenue from Future Projects by investment Regions Southcentral Investment Region (6)(e](¢]0 1]20 420 820 1,217 1,267 1,317 1,350 Southeast Investment Region i)i)0 220 488 772 889 1,112 1,318 1,495 1,586 1,710 Northern Western Investment Regions )))0 2 23 45 65 67 67 67 67 Revenue estimates for the 4-dam pool are constructed on the assumption that the rate will be 6.6 cent per kWh sold and Tyee is connected to Swan Lake in 1996. Values shown are for debt service and operating expense.All revenue,except project management expense,passes through the Corporation yielding no net cash flow. Figures shown are for operation of the Anchorage/F airbanks Intertie operations and Larsen Bay Hydro project debt service. The revenue shown for future projects is forecast based on the assumption that new generation and transmission projects will yield at least a half cent per kilowatt hour of energy produced or wheeled.Appendix F to this document containsa listing of all future projects presumed to produce revenues listed herein.Ar506Other Sources of Revenue 1 Contributed Capital &Bond Proceeds 68,768 1,916 i")0 0 [')0 0 0 0 0 fe) m Grants from Others 0 0 Q it)i?)()(¢)(¢)0 oO i¢)(0) n Contract and Capital Projects Services 196 1,800 §,311 4,602 4,322 2,163 2,295 2,656 2,848 2,423 1,275 2,338 1 Capital contributions are related to Bradley Lake financing. Total Annual Revenue 113,682 60,376 65,331 43,857 44,248 40,523 40,956 41,702 42,294 92,544 42,013 44,970 THE ALASKA ENERGY CORPORATION Cash Flow Summary -Expenses-(1991 -2002)Case elght Page 1 of 2 30-Dec-91 < ----Corporation Operations -->; Expenses 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Expenses o General &Administrative Expense 989 1,106 435 399 283 256 214 210 205 208 2i1 211 p Program Support Services i')i)279 153 (e)(*)it)0 9)(¢)(¢)i¢) q Contract &Construction Admin Services 196 1,800 5,057 3,696 2,927 2,372 2,600 2,642 2,182 2,012 2,132 2,635 o G&A expense estimates,after reetructuring,are estimated as a function of gross average revenue. p Program support services (i.e.management of PCEP &etc.)are estimated as a percentage of program funding. q_Support of capital projects is estimated as a percentage of the average annual programmed construction plus annual grants to be administered by the Corporation.. Investments 4 Inflation Proofing Trust &Insurance Funds i]0.Qo 0 o o 0 i)0 0 i¢)0 8 Investment in Capital Projects 68,768 1,916.-5,600 2,000 6,124 4,598 3,061 1,421 -183 +35 183 318 t Development &Planning oO oO 200 163 141 128 107 105 103 104 105 106 tr The Alaska Energy Corporation Trust Fund and the Self-insurance Fund are maintained in nominal dollars. 'g@ The Corporation will invest in new capital plant as net cash flow allows.Investment is a function of the Operating Reserve Fund balance at any time. t The expenditure for Planning and Development is a function of the average revenue received by the Corporation. Capital Project Related Expenses u__-4Dam Pool 1,903 2,159 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 v_Bradley Lake Hydroelectric Project 9,500 22,350 6,725 6,725 6,725 5,575 5,770 5,980 6,210 6,460 6,725 7,015 W Larsen Bay Hydroelectric &Other Project 0 0 6,378 8,649 6,149 7,162 8,263 9,570 10,996 12,208 12,843 14,007 x Contribution to Self-Insurance Fund 1,034 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 u__-Valuse listed here include operating costs only.The analysis assumes the loan receivable on the 4-Dam pool projects would become receivable to the Corporation. v_Values listed include annual debt service and project operating costs.note:No net cash flow can be captured by the Corporation until after 2022. w The analysis assumes the loan receivable on the Larsen Bay project will become receivable to the Corporation.Revenue from future projects is listed in Appendix F. x An insurance trust fund exists and will be maintained into the future.Payments are maintained in nominal dollars. Rural Energy Coet Assistance Programs (funded by the Corporation) y Grants to Communities &Utilities i?)i¢)it)33,833 30,059 31,665 33,326 10,780 12,397 12,241 12,014 11,878 y Loans to Communities &Utilities 6,586 6,500 5,516 2,000 6,124 4,598 3,061 1,421 -183 -35 183 318 y Technical Assistance to Communities &Utilities Wa n/a 1,305 1,197 848 767 643 629 616 625 633 634 y These three items make up the bulk of the Rural Energy Cost Assistance Program to be funded by the Corporation.The amounts of each element are discussed elsewhere. Legisiative Approprations Administrated by the Corporation z Power Cost Equalization 19,358 15,203 16,877 ce]Oo"s 0 (e)(9)(0)19)(0)(9) z_Legislative Grants 5,348 8,300 2,649 0 ()(0)0 0 0 i?)i?)(0) Z_These items account for grants from the legislature. Total Annual Expenses 113,682 60,376 57,852 65,646 66,209 63,951 63,876 39 588 39,174 40,618 41.660 43,953 THE ALASKA ENERGY CORPORATION Cash Flow Summary -Revenue-(2003 through 2013)Case eight Page 2 of 2 Sources of Revenue 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Revenue from Funds Alaska Energy Corp.Trust Fund 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 3,000 Reserve Bond &Insurance Funds 1,994 2,161 2,203 2,252 2,258 2,268 2,283 2,305 2,328 2,352 2,377 Power Project Loan Fund (e)0 0 (e)(e)0 0 (e)(1)(0)(e) Legislative Approprations Administrative Office Expense (4)[+]i!)0 0 0 0 (')0 it)(¢) Power Cost Equalization Program (PCEP)0 0 0 oO 0 0 0 0 0 it)0 Grants &Operating Expense 0 (1)i)0 oO 0 it)i?)0 i)(¢) Revenue from Facilities Operations Net 4-Dam Pool Revenue 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 Bradley Lake Hydroelectric Project 7,325 7,660 8,020 8,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Other Projects Constructed betore 1992 1,625 1,625 1,630 1,635 1,640 1,645 4,650 1,655 1,660 1,660 1,660 Revenue from Future Projects by investment Regions Southcentral Investment Region 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 1,350 Southeast Investment Region 1,963 2,150 2,303 2,476 2,650 2,823 2,823 2,823 2,823 2,823 2,823 Northerny Western Investment Regions 67 67 67 67 67 67 67 67 67 67 67 Other Sources of Revenue Contributed Capital &Bond Proceeds i)0 ie)it)e)0 it)0 (4)it)(0) Grants from Others o ie)(°)(e)ie)0 (¢)(¢)0 (s)fe) Contract and Capital Projects Services 2,784 2,784 i?)it)(¢)0 (e)ie)()fs)0 Total Annual Revenue 46,111 46,800 44,577 44,959 45,144 42,061 48,857 42,108 39,832 39,856 47,306 7)THE ALASKA ENERGY CORPORATION Cash Flow Summary -Expenses-(2003 through 2013)Case elght Page 1 of 2 30-Dec-91 Expenses 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Expenses General &Administrative Expense 211 217 224 226 228 228 222 228 222 218 203 Program Support Services Oo 112 112 112 113 112 112 12 W2 112 112 Contract &Construction Admin Services 1,856 928 is)i*)0 fe)(°)0 0 0 0 investments Inflation Proofing Trust &Insurance Funds 0 0 oO 0 0 0 0 )0 ie)0 Investment in Capital Projects oO 400 508 573 517 470 440 428 420 414 412 Development &Planning 108 111 7 115 114 12 110 113 Ww 109 101 Capital Project Related Expenses 4Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Bradley Lake Hydroelectric Project 7,325 7,660 8,020 8,175 8,175 4,905 11,680 4,905 2,600 2,600 10,025 Larsen Bay Hydroelectric &Other Project 15,399 16,785 16,777 16,768 16,761 16,754 16,747 16,741 16,734 16,728 16,722 Contribution to Self-Insurance Fund 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 1,042 Rural Energy Cost Assistance Programs (funded by the Corporation) Grants to Communities &Utilities 11,854 11,765 11,632 11,569 11,631 11,687 11,729 11,722 11,745 11,762 11,809 Loans to Communities &Utilities 329 400 508 573 517 470 440 428 420 414 412 Technical Assistance to Communities &Utilities 648 665 689 687 682 673 661 680 665 654 609 Legislative Approprations Administrated by the Corporation Power Cost Equalization 0 0 0 (¢)e O fe)(¢)(9)(°)(8)0 Legislative Grants 0 0 o (¢)0 i?)0 0 0 0 (¢) Total Annual Expenses 44,559 45,873 45,380 45,631 45,568 42,242 48,973 42,188 39,860 SO B45 Al est 4200 THE ALASKA ENERGY CORPORATION Cash Flow Models (1991 -2002)case eight Page 1 of 2 30-Dec-91 supporting documentation) 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 Administrative Office Expense General &Administrative 778 607 435 399 283 256 214 210 205 208 211 211 Loan Administration Expense 91 105 i*)0 i)(t)0 [?)(+)(e)(0)(e) PCEP Expense 120 174 153 0 0 0 0 0 0 0 )0 Grant Administration Expense Wa 220 468 0 0 0 0 0 0 0 o 0 Total Administrative Office Expense 989 1,106 1,056 399 283 256 214 210 205 208 211 211 Annual Capital Spending : Central/interior Investment Region va 289,638 56,950 62,475 77,633 26,208 26,208 25,500 25,500 25,500 0 0 Southeast investiment Region Wa 13,250 78,250 63,568 63,568 45,900 50,292 63,042 69,417 55,250 42,500 77,917 Northern/Western investment Region wa 23,276 26,251 27,358 2,850 oO o o Oo )oO oO Total Annual Capital Spending 68,768 326,164 161,451 153,401 144,051 72,108 76,500 88,542 94,917 80,750 42,500 77,917 Total Plant Cost 902,167 1,228,331 1,389,782 1,543,183 1,687,234 1,759,342 1,835,842 1,924,364 2,019,300 2,100,050 2,142,550 2,220,467 Plant Value Before Annual Depreciation 902,167 1,119,534 1,220,840 1,299,606 1,362,267 1,347,735 1,333,417 1,332,110 1,338,132 1,330,075 1,283,366 1,272,611 Annual Depreciation 108,797 60,144 74,636 81,389 86,640 90,818 89,849 88,894 88,807 89,209 88,672 85,558 Total Net Value of Captial Assets 793,370 1,059,390 1,146,205 1,218,216 1,275,627 1,256,917 1,243,568 1,243,215 1,249,325 1,240,866 1,194,694 1,187,053 . Funds ce " Trust Fund O 120,000.120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 Power Project (Revolving)Loan Fund 26,774 22,000 28,500 34,016 36,016 42,140 46,738 49,799 51,220 51,037 51,001 51,184 Bond Reserve Fund 1,000 22,037 .29,697 37,267 28,933 32,309 35,981 40,337 45,092 49,131 51,247 55,127 Self insurance Fund 8,483 9,500 10,542 11,584 12,626 13,668 14,710 15,752 16,794 17,836 18,878 19,920 Operating Reserve Fund 60,000 80,000 87,479 65,690 43,729 20,302 -2,619 -505 2,615 4,542 4,694 Total Value of all Funds 173,537 268,739 290,346 263,265 251,846 237,730 223,269 232,600 240,619 245,668 250,925 Plant Operating Expense (excluding Insurance) Bradley va Wa 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,480 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro na n/a 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects i')0 2,298 4,569 2,069 3,082 4,183 5,490 6,916 8,128 8,763 9,927 Total Operating Expense 7,269 7,369 14,767 17,038 14,538 15,551 16,652 17,959 19,385 20,597 21,232 22,396 4-Dam Pool Gross Revenue rate production Terror Lake 0.066 139 9,174 9,174 9,174 |enl?4 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 0.066 30 =1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 0.066 80 5.280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 0.066 50 8,250 8.250 8,250 8,250 8,250 8,250 8,250 8,250 8,250 9,570 Total 4-Dam Pool 24,684 24,684 24,684 24,684 24,684 24.684 24,684 24,684 24,684 26,004 THE ALASKA ENERGY CORPORATION > Cash Flow Models (2003 -2013)case elght "Page 2 of2 30-Dec-91 (supporting documentation) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Administrative Office Expense General &Administrative 211 217 224 226 228 228 222 228 222 218 203 Loan Administration Expense 5 6 8 9 8 7 7 6 6 6 6 PCEP Expense 107 106 105 104 105 105 106 105 106 106 106 Grant Administration Expense 0 [)(')t)(*)it)(¢)0 (e)(t)0 Total Administrative Otfice Expense 322 329 336 339 341 340 335 340 334 330 316 Annual Capital Spending Central/interior investment Region c')i*)0 ()(Y)(e)0 0 (e)(¢)0 Southeast Investiment Region 92,792 92,792 oO 0 0 (8)0 0 (e](e)0 Northern/Western Investment Region 0 o oO i*)(¢)0 0 0 i?)(¢)o Total Annual Capital Spending 92,792 92,792 0 (e)oO 0 0 0 fe)i)(0) Total Plant Cost 2,313,259 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 2,406,050 New Plant total 1,064,926 1,177,319 1,177,211 1,177,146 1,177,202 1,177,249 =1,177,279 =1,177,291 1,177,300 =1,177,305 =1,177,307 Piant Value Before Annual Depreciation 1,279,645 1,267,796 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 Annual Depreciation 64,641 85,323 85,853 80,165 74,441 69,097 64,134 59,528 55,252 51,284 47,600 Total Net Value of Captial Assets 1,195,004 1,202,473 1,116,620 1,036,455 962,014 892,917 828,782 769,255 714,002 662,719 615,119 Funds Trust Fund 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 120,000 Power Project (Revolving)Loan Fund 51,502 51,831 52,231 52,739 §3,312 §3,829 54,299 54,740 55,167 55,587 56,001 Bond Reserve Fund 59,766 58,866 58,861 56,857 58,860 58,862 58,864 58,865 58,665 58,865 58,865 Solf insurance Fund 20,962 22,004 23,046 24,088 25,130 26,172 27,214 28,256 29,298 30,340 31,382 Operating Reserve Fund 5,711 7,262 8,189 7,387 6,715 6,290 6,110 5,994 5,914 5,886 5,899 Total Value of all Funds 257,941 259,963 262,326 263,071 264,017 265,154 266 487 267 854 269,244 270,678 272,147 Plant Operating Expense (exciuding insurance) Bradley 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 2,600 4-Dam Pool 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 5,789 Fairbanks/Achorage Tieline 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 1,580 Snettisham Hydro 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 2,500 Other Projects 11,319 12,705 12,697 12,688 12,681 12,674 12,667 12,661 12,654 12,648 12,642 Total Operating Expense 23,788 25,174 25,166 25,157 25,150 25,143 25,136 25,130 25,123 25,117 25,111 4-Dam Pool Gross Revenue Terror Lake 9,174 9,174 9,174 9,174 9A 4 9,174 9,174 9,174 9,174 9,174 9,174 Solomon 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 1,980 Swan Lake Hydro 5,280 5,280 5,280 5,280 §,280 5,280 5,280 5,280 5,280 5,280 5,280 Tyee Lake Hydro 9,570 9,570 9,570 9,570 9,570 9,570 9,570 9.570 9,570 9,570 9,570 Total 4-Dam Pool 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 26,004 APPENDIX D INVESTMENT REGIONS 91Q4\IT2107 APPENDIX D INVESTMENT REGIONS For planning purposes,the state has been divided into three "investment regions".The boundaries of these regions were selected based upon transportation,economic and environmental criteria. 1.0 The Southeast Investment Region The Southeast Investment region (see map)is bounded on the South by Dixson Entrance and on the North by Whitehorse and Yakutat. Southeast Alaska is rich in hydroelectric potential.22 potential new project,having an aggregate capital value of about $900 million (1991 dollars)have been identified through out the region.These project include hydroelectric dams;high voltage, direct current,submarine cable transmission;a number of micro-hydro projects and other energy projects.If demand warrented,during the period 1991 through 2005 the annual production of electric energy,produced in Southeastern Alaska, could grow by as much as 900 million kilowatt hours without outstripping the available,generation potential of the region.. The hydroelectric potential of the region,without counting environmentally difficult or extremely costly projects,is adequate to sustain an annual Southeast load growth of more than 8%over the next 15 years.More importantly however, this resource is available to replace current diesel fired generation and could provide large blocks of power for sale to industry as well as potential for export to Canada. 2.0 Central/Interior Investment Region The Central/Interior investment region is home to three fifths of the state's population.This region is bounded on the North 3.0 by Circle (on the Yukon River),on the East by Dawson City (Canada)and on the South by Homer.It includes those communities that are tied together by railroad and highways transportation systems Though the region contains vast hydroelectric potential,it is also a storehouse of oil,natural gas and coal.Potential hydroelectric projects have a very difficult time competing with the cheap natural gas of the region.This is particularly true in view of environmental concerns attendant to hydroelectric project. This region of the state demands more than 8 times the electric energy consumed by the Southeast region.Near term electric load growth will,in most cases,be provided by natural gas, fired-combined cycle machines.In the long term coal may become a primary generation source for future load growth. 9 major energy projects have been identified for potential development in this region.The bulk of the capital investment in this region,about $390 million (1991 dollars),is scheduled for the expansion and upgrade of the regions electric transmission grid;linking sources of cheap hydro and natural gas generated electricity to load centers. Northern/Western Investment Region The Northern/Western Investment Region covers such a broader range of climatic and economic districts,and has been subdivided into three sub-regions,or areas:a)the Southwest area including the Aleutian Chain,Kodak Island and Bristol Bay;b)the Yukon-Kuskokwim area bounded on the East by Lake Minchumina,on the South by Goodnews Bay and on the Northwest by Kotlik and c)the Northern area which includes the Northwest Arctic and North Slope Boroughs,and is bounded on the South by the Yukon River valley. This investment region is not accessible by overland transportation systems.Transportation is accomplished by barge and air;only the Southwestern area is accessible by barge during winter months.Electricity in this region is universally generated by diesel fueled power plants (except for Barrow and Prudhoe Bay which generate electricity with natural gas).There are extensive,coal resources in the Northern and Yukon areas of the region.However these coal resources are currently undeveloped. 23 electric generation and transmission projects,valued at about $130 million (1991 dollars),have been identified by the Alaska Energy Authority as potentially worthy of development. Additionally,about 10 district heating/waste heat recovery projects have been determined to be financially feasible.The majority of these projects are aimed at displacing diesel generated electricity with geothermal,coal and increasing system efficiency through the use of community-to-community intertie lines. Figure D-1-Investment Regions CENTRAL/INTERIORCpeINVESTMENTREGION SOUTHEAST INVESTMENT REGION Sule uf Aue X Alaska Energy CorporatonFuBoobwuded -ful tust boas RoseAentunayeMushuY¥SIS UBCY EE GIONAL PLANNING "*CPARGE?T.PROJECTS 6 fAppruree ata one aeHesygeenbeBee eeed Irte boot ath ewee "yaé Figure D-2-Southeast Investment Region 91LQ4\IT2107 -53- SOUTHEAST INVESTMENT TARGET PROJECTS thva 6 My are"wr"4,is wdWhitehorse"poheGoatLakeHydrobt Lake Dorothy Hydro Snettisham Hydro Greens Creek Hydro Scenery Creek Hydro Thomas Bay Hydro Goat Creek Hydro Elfin Cove Hydro Johnny Mountain Mines |-Stikine River Hydro_ Sunrise Loke Hydro |.-Tyee Lake Hydro _-swan Lake Hydro |Lake Grace Hydro Thorne Bay Wood Waste Black Bear Lake Hydro REGION -2-"'ule uf Aosta AP MARS POEL ES Alaska Energy Corporaton 0 ton IwUueey 7Ot tut leew RousAmnurageAtusho94519 U6O¥ REGIONAL PLANNING 'e SOUTHEAST INVESTMENT KEGION TARGET CHOSECTS Approved ["a teimuenon Vesyred 40's te inte 12789 Di wet 16-71-71BHPONdNKLIASDALIBOMLOWADYINIWISTIVSOUTHEAST ALASKA INVESTMENT REGION PROJECTS PROJECT |1992|1993|1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 |2006 Klawock/Thorne Bay Thorne Bay Wood Waste Juneau/Greens Creek Black Bear Lake Hydro Yakutat (waste heat-freezing) Tyee/Johnny Mf. Snettisham/Stikine Swon Lake/Tyee Lake Elfin Cove Hydro Sitka/Kake Klawock /Hydaburg/Hollis Dorothy Loke Hydro Stikine/Johnny Mt. Ketchikan/Metlakaila Greens Creek /Hoonah/Tenakee Skagway/Whitehorse Sunrise Lake Hydro Goat Loke Hydro Juneau/Haines/Skagway Tenakee/Sitka Petersburg/Kake Thomas Bay Hydro Scenery Creek Hydro Lhd hdd lid 2008 hda dh hd 2008 2009 2010 2011 Figure D-3-Central/Interior Investment Region CENTRAL/INTERIOR INVESTMENT REGION TARGET PROJECTS anGCircie¢ayCentral@@Circla-Hot Springs ay aNpelFalkbanks\LG Ne>Nerfana \ D€awson B Delta Junction|CityTok, Glennalién \Copper Center -2 "fate of Mame a Alaska Energy Corporation PO toe 1yU8EY-700 tuat toaor towMuMmayeAuste99519 U8OY "REGIONAL PLANNING He CENTIAL/INTERION INVE ST TARGE ven Of [approves Heeoqpred LOGE:ute\fet bad Inte Ve 4 wt 7 b6-Zi-ZhALIWOHLAYADNINZVASVIVaeOTONd\HIIASSCENTRAL/INTERIOR INVESTMENT REGION PROJECTS PROJECT |1992[1993|1994|1995|1996 1997 |1998/1999 |2000]2001 |2002|2003|2.004 |2005]2006 |2007 |2008}2008 |2009]2010|2011 Healy /Fairbanks VELALLLE Power Creek Allison Lake Glennallen/Delta Junction Tetlin/Tok OP IOOE SL)--- Circle Springs/Central Anchorage/Soidotna SPT IAT Fo Bradley /Valdez/Cordova CSET MATT s Chenega Bay Hydro Central/Circle ITED ASSP -- Figure D-7-Northern/Western Investment Region (Northern Area) NORTH/WEST INVESTMENT REGION NORTHERN AREA TARGET PROJECTS Barrow Wainwrightan Atqasuk Kotzebue wa State of Masa laska Energy Corporation PO Bos Wwunee 704 tent leeu Aouad Aamnnarege Aushea 99519 Us - ; REGIONAL PLANNING NOWTHERN AREA TARGET PROJECTS b6-ZI=-Z1ALIWOHLNYADUINIVISVTVBHISOVd\HUNSSNORTH/WEST INVESTMENT REGION PROJECTS NORTHERN AREA 1982 1994 1995 1997 1999 2000 2001 2002 2003 2004 2005 2006 Kotzebue (waste heat-freezing) Stebbins/St.Michael Fort Yukon/Air Force Wainwright Kaktovik Nome (waste heat-heating) Kotzebue (waste heat-heating) Kotzebue Wind Atqasuk Coal Pligrim Springs Geothermal 2007 2008 2008 2009 2011 Figure D-5-Northern/Western Investment Region(Southwest Area) NORTH/WEST INVESTMENT REGION SOUTHWESTERN AREA TARGET PROJECTS REGIONAL PLANNING UUTHRESTERN AkEA Taku steeds lager une Appt ured ata tie Drees 12 tes Beret t fe.bad Date Ut9 Sree vous bG-TI-7BH"Oud\HUMSOALIVOMLNYADWINIWNSVIVNORTH/WEST INVESTMENT REGION PROJECTS SOUTHWESTERN AREA PROJECT |1992]1993|1994|1995 1996 11997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2008 2009 2010 Akutan Hydro King Cove/Cold Bay King Cove Hydro Old Harbor Hydro Tazimina Hydro Unalaska Geothermal Sand Point (waste heat-heating) Cold Bay (waste heal-heating) St.Paul Coal St.George Coal St.George (waste heat-freezing) St.Paul (waste heat-freezing) Chignik Hydro IG FSAPES0-- CLddtdid dee aaLdddhts Viididthiedhidtddd iidddadhdhdtddidddes WZZZACZLE. 2011 Figure D-6-Northern/Western Investment Region (Yukon/Kuskokwim Area) NORTH/WEST INVESTMENT REGION YUKON-KUSKOKWIM AREA TARGET PROJECTS a O \ Mountain Village R n@SaintMary's af \Y ¢Red f \m\|Kuhgeg/Co sigstmte ChauthbalukTuluksak e Vma@LimeMageMokrong"me@'Akiak Nye | sook Bay Bethel Kwigillingok N \ 5 Alaskh Energs "Cor oratearaeeonoacperenen__stag aneSetteuses Prot :£3 .REG IONAL PLANNING -_YUKON AUSKOKNIM nea jane ,em NersTESay(rn hed (ule ' b6-7b--7iALISOMINYADUINITVISTIVBHIOW\HLIASONORTH/WEST INVESTMENT REGION PROJECTS YUKON-KUSKOKWIM AREA PROJECT 1902 |1993|1994 1995 11996 |1997 |1998 |1999 |2000]2001 |2002 |2003 |2004 |2005 |2006 |2007 |2008 |2008 |2009 |2010]2011 Takoina Hydro SAF sa- Nyac Hydro ISLES OTS» St.Mary's/Mt.Village Bethel /Nunapiitchuk Lime Village Telida Emmonok (waste heat-freezing) Bethe!(waste heat-freezing) Mekoryuk (waste heat-freezing) Toksook Bay/Tuntunak Mt.Village (waste heol-heating) Kwigillingok /Kongiganok Red Devil/Sieetmute Bethel /Aklachak /Aklok /Tuluksak Anlak /Chauthbaluk (2770770 Appendix E Draft Legislation APPENDIX F THE STRUCTURE OF THE NEW CORPORATION 91Q4\IT2107 APPENDIX F THE STRUCTURE OF THE NEW CORPORATION The Corporation,as conceived herein,is multifaceted.It would function to an extent like an Alaskan Rural Electrification Administration.In the sense that it would formulate strategic energy planning and energy policy,it would function a little like the Northwest Power Planning Commission.Its work in facilitating entrepreneurial enterprise within Alaska's energy industry is somewhat akin to the work done by development authorities around the nation.The Corporation could best be described as a "state energy development authority". The Corporation would be organized into six units.Three of which would contain the executive functions:the office of the president of the Corporation,the Finance Department and the Project Management Department,the latter two managed by vice-presidents.Three support units would round out the necessary Corporation organization; Planning and Development,Facilities Operations Management,Public Information and Agency Support.The support units would be managed by directors. 1.0 The Department of Finance. The Corporation's new management structure will contain a Department of Finance managed by the Vice-President for Finance.This corporate officer will be responsible for drafting power sales agreements,review of major contracts,develop bond sale documentation,analyze project financial feasibility and provide technical assistance in matters of finance to regional utilities.Staff assignments in the Department of Finance will be house counsel,tariff analyst,and project analyst. 91Q4\IT2107 2.0 3.0 The Department of Project Management Project Management would be the responsibility of the Department of Project Management.This department would be managed by the Vice-President for Project Management. The Corporation would function as facilitator in the growth of capital investment into Alaska's infrastructure.In this capacity, the Corporation would examine promising projects,sort out the impediments to project investment and implement and work to remove such impediments.For example,the Corporation could help to establish project feasibility,develop funding alternatives,participate in permit and rights-of-way acquisitions and secure agreements among parties to a project. For its part in project facilitation the Corporation could secure a per kilowatt-hour,or BTU,charge on energy wheeled or generated,and in some cases (i.e.when the Corporation would assist industry in acquiring a needed power source)the Corporation could even recoup a portion of its costs in facilitating the project.In other cases,where improving the rural energy infrastructure,so as to reduce energy costs to citizens is the project purpose,the Corporation might consider its facilitation efforts to be a routine part of its mission and charge the project nothing for its assistance. Planning and Development. The Office of Planning and Development would be managed by the Director for Corporate Development.This executive would manage a staff including engineering planners and economists. The office would support other offices of the Corporation in matters of energy policy and planning as well as project development. 91Q4\IT2107 2.1 2.2 2.3 91Q4\IT2107 Project Identification and Definition New projects must be defined and examined for their financial and technical feasibility.Activities required to identify potential projects and test their feasibility will be the purview of the Office of Planning and Development. Strategic Energy Planning and Policy The new Corporation,by virtue of its position as facilitator of energy production,transmission and distribution,on a State-wide basis,would be the logical contractor to develop and maintain the State's strategic energy plan.This activity could be carried out by the same group that facilitates the research and development activities of the Corporation. Research Doing business in rural Alaska is obviously not like doing business in the South 48;Alaska's technical and management challenges are unique.To succeed in reducing the cost of energy to all Alaskans,the Corporation must undertake initiatives to think better and try new ideas.The structure of a new Corporation should support a facet designed to facilitate research and development into management and engineering aimed at reducing energy costs throughout Alaska.The operative word here is "facilitate".Though the Corporation need not necessarily "do"the research,it should fund some research and work with other power and cold regions research organizations (i.e.Energy & Power Research Institute,Northwest Power Planning Council,the Alaska Science and Technology Foundation and U.S.Department of Energy )to place into practice 4.0 5.0 new ideas that,when implemented,serve the energy needs of Alaskans. Facilities Operations Management Operation of Corporate owned facilities,such as dams and transmission lines,would be managed by the Office of Facilities Operations.This office would be headed by the Director for Facilities Operations.Most Corporate owned facilities would actually be operated by contractors specializing in facilities operations.Therefore,the majority of the staff of this office would support contract managers. Additional to the responsibilities attendant to the managing power production and the like,this office would also provide technical assistance to regional utilities,draft facilities operations contracts and consult to other offices of the Corporation in matters of operations costs and facilities design. Public Information The Office of Public Information is important to maintaining free access of information concerning Corporate activities to legislators,public interest groups and the media.Additionally, close coordination must be maintained between the Corporation and key legislative committees,the Governor and Cabinet members.This important office would be managed by the Director for Public Information.One special assistant would be assigned the duty of maintaining liaison between the Corporation and the legislature and the office of the Governor. Since the Corporation would be responsible for generating state wide energy policy,this communication link between law makers and the administration is doubly important. 91Q4\IT2107 Other key staff of this office would be assigned the task of industry liaison.This person would "market"projects that were important to both the development of Alaska's energy infrastructure and to industry.An example of this sort of project is the transmission tie from Juneau to Greens Creek. This project will result in shutting down several megawatts of diesel generation and result in the sale of excess capacity from the Snettisham Dam. Additionally,this office would support a technical editor who would support publication activities of other Corporate offices as well as generate formal documents such as the Corporation's annual report and special reports to the state legislature and the administrative branch. 6.0 Agency Support A number of support activities must be organized and managed.These include accounting,engineering,asset management,administration of the PCEP/RECAP programs, personnel,procurement and administrative support to regional utilities.All of these activities would be managed by a Director of Administrative Operations. 91Q4\IT2107 ALASKA ENERGY CORPORATION FUNCTIONAL ORGANIZATION STATE OF ALASKA BOARD OF DIRECTORS PRESIDENT VICE PRESIDENT VICE PRESIDENT PROJECT .pe MANAGEMENT FINANCE DIRECTOR DIRECTOR DIRECTOR DIRECTOR AGENCY FACILITIES PLANNING &PUBLIC SUPPORT OPERATIONS DEVELOPMENT INFORMATION Hropest RESTRUCTURING ale of Abishane r)Alaska Energy Corporahon PO tus 19086 -JO baal badus Row Amburaye Alushe 98519 0809 THE CORVGKATION fate FUNCTIONAL ORGANIZATION 1 [ype ee "aueeee