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HomeMy WebLinkAboutUtility Briefing on AEA-AIDEA-DCRA Transition July 7, 1993UTILITYB 2FING Alaska Energy Authority Alaska Industrial Development &Export Authority Department of Community &Regional Affairs Alaska Energy Offices 701 East Tudor Anchorage,Alaska July 7,1993 9:30 a.m. LEP Z5/o Utility Briefing on AEA/AIDEA/DCRA Transition July 7,1993 ,Contents 1.Agenda 2.AEA Invitation Memo 3.AIDEA/AFA Policy Memo |4,Current Status of Transition 5.Chart of AEA Functions &Organization Chart 6.AEA Functions by Directorate °Planning and Project Development Facility Operations and Engineering ¢Summary of Contractual Agreements for Operating Projects (Does not include permits or licenses) Bradley Construction Rural Programs Accounting and Administration°°7.Appendix °Chapters 18 and 19 SLA 1993 93Q3\AH5069(1) Utility and AEA Operations Meeting July 7,1993,9:30 a.m. Alaska EnergyAuthority Agenda 9:30 Introduction of Attendees 9:40 Why We're Here/General Transition Timetables Ron Garzini,Executive Director,AEA 10:00 Statements and Introductions from AIDEA and DCRA Riley Snell,AIDEA Edgar Blatchford,Commissioner,DCRA Don Harris,Director,Division of Energy,DCRA 10:30 Summary Review of AEA Functions and Obligations Brent Petrie,AEA AEA Staff Planning and Project Development _Facility Operations and Engineering Bradley Construction Rural Programs Accounting and Administration 11:30 Utilities'Input (to carry over into afternoon as required) 12:00 Lunch Break 1:30 Reconvene for Work Sessions as required agenda.doc ves:DATE: TO: FROM: SUBJECT: Alaska Energy Authority MEMORANDUM June 17,1993 Bradley Project Management Committee Members Four Dam Pool Members Vince Motolla,Fairbanks Municipal Utilities Systems Bob Hufman,Alaska Electric Generation &Transmission Cooperative Bob Martin,Tlingit-Haida Regional Electrical Authority Charlie Walls,Alaska Village Electric Cooperative,Inc. Diane Rabb,Rural Alaska Power Association Dave Hutchens,Alaska Rural Electric Cooperative Association,Inc. Brad Reeve,Alaska Systems Coordinating Council Ronald A.Garzini >Executive Director [pasAlaskaEnergyAuthority Utility and AEA Operations At the request of several managers,we have rescheduled a meeting to discuss the implementation of recent legislative actions that affect the Energy Authority and the existing State-owned energy projects. We will not be discussing new intertie financing nor operations of individual projects such as Bradley Lake. We will present an outline of AEA functions,financing activities andprojectsunderway.We will talk in detail about the provisions of thedismembernentactandplansandtimetablestoeffecttherequirementsof the act.Once the details are well-known we will discuss some possible new roles for the utility industry.It is our hope that these discussions canassistinamoreefficienttransition,and make sure no worthwhile functions are lost. The meeting is scheduled for July 7,1993,trom 9:30 a.m.to 4:00 p.m.intheAlaskaEnergyAuthorityconferenceroomat701EastTudorRoad. WONIAIILOL) Subject:Utility and AEA OperationsJune17,1993 The tentative schedule ts: 9:30 a.m.-12:00 p.m. 12:00 p.m.-1:00 p.m. 1:00 p.m.-2:00 p.m. 2:00 p.m,-2:15 p.m. 2:15 p.m.-3:00 p.m. 3:00 p.m.-4:00 p.m. AEA Functions and project requirements Lunch Work Session Break Work Session Conclusions Please confirm the company representatives to Terri Ganthner at 261-7256 by June 30. As a related reminder the Four Dam Pool PMC has scheduled their next meeting for July 8 at the Alaska Energy Authority offices. SES:ja cc:BrentN.Petrie,Alaska Energy AuthorityStanleyE.Sieczkowski,Alaska Energy AuthorityGloriaManni,Alaska Energy AuthonityDaveEberle,Alaska Energy AuthorityHervHensley,Alaska Energy Authority ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY June 11,1993 Mr.Dave L.Highers Chairman Bradley Lake Project Management Committee Chugach Electric Association P.O.Box 196300 Anchorage,Alaska 99519-6300 Subject:AEA Legislation --Clarification of State Position Dear Mr.Chairman: To be sure everyone understands the course of activities associated with the implementation of AEA Legislation, following.are the groundrules AIDEA and AEA will follow in negotiation with the attached utilities. I.Negotiations relating to Bradley Lake,existing Railbelt intertie and Four Dam Pool issues. A.There will be no changes in Project ownership or FERC licenses. B.Contract changes (Bradley and Four Dam Pool Power Sales Agreements and Alaska Intertie Agreement)will be limited to changes required to implement'the legislation.This may mean no contract changes. Cc.AEA/AIDEA will negotiate with a single utilitymanagerandutilityattorneyfromeachgroup(e.g.,one manager/attorney team for Bradley and existingintertieissues,one team for Four Dam _Pool). Utilities should work out any differences between themselves on their own without state participation, and negotiate with the state only when ready to proceed with a sinyle utility position. If.Negotiations relating to New Interties. 480 WEST TUDOR «ANCHORAGE,ALASKA 99503-6690 +(907)561-8050 *FAX (907)561-8998 Mr.David L.Highers June ll,1993 Page 'l'wo A.Utilities should resolve all issues between themselves without state participation. B.Utilities should negotiate with the state with a single manager/attorney team.Similarly,the state will negotiate through a single two person team. We have arranged for a meeting at AEA offices at 9:30 a.m. July 7,1993,to discuss transition options for certain functions presently conducted by AEA.A separate announcement on this meeting will also be sent to you. Sincerely,Sincerely, William R.Sne Ronald A.VGarzini Executive Director Executive Director AIDEA AEA WRS:RAG:bj£ Distribution: Jim Kliasen,Department of Law Carolyn Jones,Department of Law James Baldwin,Department of Law Edgar Blatchford,Commissioner,Department of Community &Regional Affairs Stan Sieczkowski,Alaska Energy Authority Brent Petrie,Alaska Energy Authority ¢Dick Emerman,Alaska Energy Authority Dave Eberle,Alaska Energy Authority Gloria Manni,Alaska Energy Authority Herv Hensley,Alaska Energy Authority Seirae ALASKA INDUSTRIAL DEVELOPMENT|pes AND EXPORT AUTHORITY June ll,1993 Mr.Dennis Lewis Chairman Four Dam Pool Project Management Committee City of Petersburg Petersburg Utilities P.O.Box 329 Petersburg,Alaska 99833 Subject:AEA Legislation - Clarification of State Position Dear Mr.Chairman: To be sure everyone understands the course of activities associated with the implementation of AEA Legislation, following are the groundrules AIDEA and AEA will follow in negotiation with the attached utilities. I.Negotiations relating to Bradley Lake,existing Railbelt intertie and Four Dam Pool issues. A.There will be no changes in Project ownership or FERC licenses. B.Contract changes (Bradley and Four Dam Pool Power Sales Agreements and Alaska Intertie Agreement)will be limited to changes required to implement'the legislation.This may mean no contract changes. Cc.AEA/AIDEA will negotiate with a single utilitymanagerandutilityattorneyfromeachgroup(e.g.,one manager/attorney team for Bradley and existing intertie issues,one team for Four Dam Pool). Utilities should work out any differences between themselves on their own without state participation, and negotiate with the state only when ready to proceed with a single utility position. Il.Negotiations relating to New Interties. 480 WEST TUDOR +ANCHORAGE,ALASKA 99503-6690 «(907)561-8050 -FAX (907)561-8998 Mr.Dennis Lewis June Ll),1993 Paye Two A.Utilities should cesolve all issues between themselves without state participation. B.Utilities should negotiate with the state with a Single manager/attorney team.Similarly,the state will negotiate through a single two person team. We have arranged for a meeting at AEA offices at 9:30 a.m. July 7,1993,to discuss transition options for certain functions presently conducted by AEA.A separate announcement on this meeting will also be sent to you. Sincerely,G4William[Sade Gin A.Jo Executive Director Executive Director AIDEA AEA WRS:RAG:bj£ Distribution: Jim Klasen,Department of Law Carolyn Jones,Department of Law James Baldwin,Department of Law Edgar Blatchford,Commissioner,Department of Community &Regional Affairs Stan Sieczkowski,Alaska Energy AuthorityBrentPetrie,Alaska Energy Authority;;°Dick Emerman Alaska Energy Authority Dave Eberle,Alaska Enesrgy Authority Gloria Manni,Alaska Energy Authority Herv Hensley Alaska Energy Authority ALASKA ENERGY AUTHORITY 1993 TRANSITION 1993 Current Status July 1,1993 °76 Employees (mainly engineers,technical specialists,accountants and support staff). °Approximately $1 billion in physical assets (mainly power plants,substations,and transmission lines and associated support elements). °Annual revenues from utilities related to operations of state-owned facilities are about $30 million of which $4.3 million was appropriated in AEA's 1994 state budget for costs related to contract operations,maintenance,administration and insurance. °Major contractual Agreements (Bradley Lake,Four Dam Pool,Anchorage- Fairbanks Intertie,Larsen Bay Hydro,small interties,waste heat projects)include: ed Long term power supply and wheeling agreements. eo Financial obligations and reporting requirements to bond holders and lenders. ad Contracts for operation and maintenance. ooo = Approximately 50 non-AEA employees are employed by local utilities at AEA owned facilities for dispatch maintenance,and supervision. eo Trustee Agreements. ed FERC Licensing requirements for hydroelectric facilities. °Loan receivables of over $37 million. °Conduit financings of about $94 million. °Long term debt of about $340 million for owned facilities. 93Q2\JA4905(1) OTHER ONGOING PROGRAMS °Snettisham acquisition (also related to Eklutna project acquisition by Anchorage area utilities). °Federal Initiatives and Alternative Financing. 00 New technology initiatives. 900 so absorption freezing. 000 hybrid generation systems/batteries. 000 small scale coal combustion. °"Rural"Programs. 00 151 capital projects underway in FY1993. ad $8 million in FY1994 capital budget for ongoing programs in technical assistance,efficiency upgrades,safety. 0 Bulk Fuel Tank Repair program. oo Consolidation of numerous rural electric utilities. id Power Cost Equalization (PCE)and Bulk Fuel loans. aKAA AKL 93Q2A4905(2) MAJOR PROVISIONS OF LEGISLATION This is dismemberment not consolidation legislation.More difficult task than the AHFC/ASHA/DCRA housing merger which consolidated rather than dismembered programs. °°Rural programs of the Energy Authority are transferred to Dept.of Community and Regional Affairs (DCRA)by 12/31/93.DCRA will also assume the administration of all AEA's loan funds,as amended by Ch 18/SLA 93. Energy Authority continues to exist as a public corporation.Power to construct and acquire projects is eliminated.The AIDEA Board will serve as the AEA Board as of 8/11/93. $90 million appropriated to Dept.of Administration for payment as grants for Railbelt interties. $35 million appropriated to DCRA for zero interest,50-year loan for construction of Sutton-Glennallen intertie.The $35 million appropriation is contingent on completion of a feasibility study satisfactory to DCRA. $20 million appropriated to DCRA for 3%,15-year loan for construction of Tyee- Swan intertie.In addition approximately $4 million is appropriated to DOA as a grant for the Tyee-Swan Intertie. Intertie construction costs are expected to exceed the appropriated amounts. AIDEA is authorized to issue revenue bonds for up to $120 million for the Railbelt interties,$25 million for Sutton-Glennallen,and $40 million for Tyee-Swan. Xx $66.9 million is appropriated to a Power Cost Equalization and Rural Electric Capitalization Fund (PCE/RECF).3%of the PCE/RECF fund balance is available for rural electric project grants.This fund accumulates interest earnings,but other future contributions to the fund or expenditures from the fund will require appropriation. $5 million is appropriated to DCRA for payment as a grant for the Tazimina hydro project.Since estimated project cost exceeds $10 million,supplemental financing will be needed but is not addressed. Two or more utilities authorized to form "joint action groups."Additional legislation likely required. 93Q2\JA4905(3) GENERAL POLICY OBJECTIVES Rural Programs Goals: °Continue delivery of services and projects with minimal disruption. Move Rural Programs to DCRA by December 31,1993. ad Actions planned and underway using prior year and FY94 capital funds to be implemented by AFA as planned for the 1994 field season. Move general fund loan and grant programs to DCRA by 12/31/93. Maximize contracting for services for construction,operations,and maintenance.| Contract out most of circuit rider functions in FY94. Alaska Energy Authority (AEA)/Alaska Industrial Development_and_Export Authority (AIDEA)Goals: Minimize staffing to ultimately serve only a fiduciary or financing holder role. Contract with professional utilities for other services. Will require a new owner/operator relationship to shift more administrative responsibility to utilities (may require operations staffing at AIDEA beyond 12/31/93 if utilities cannot agree). Will require modification of existing operator contracts. 93Q2\JA4905(4) LOANS/FINANCIAL RURAL PROGRAMS PLANNING/PROJECT FACILITIES OPERATIONS & ASSISTANCE/GRANTS T DEVELOPMENT ENGINEERING -I ©Power Cost Equalization Program e Capital Projects &Programs e Reconnaissance/Feasibility Studies °rating Agreements/Contracts/«Bulk Fuel Loan Program -Rural Power System Upgrade e Federal Initiatives Operanne for.e Power Project Fund -Bulk Fuel System Upgrades e Plans of Finance/Project Financing -Four Dam Pool ¢Power Development Revolving Loan -ency Bulk Fuel Repairs/e Self-Insurance Financing -Anchorage-Fairbanks IntertieFund(to become Four Dam Pool Spill Prevention e Alaska Electric Power Statistics -Larsen Ba Transfer Fund)-Operation,Technical &Emergency ||+Federal Biomass Program °te and'Maintain Bradley Lake e Rural Electrification Revolving Loan Assistance e ASCC Coordination ojectFund-Electric System,Life,Health,e Rural Community/Utility Profiles -Develop Operating Agreement e Electrical Service Extension Fund Safety vements e Altemative Energy Technology e FERC Compliance -Statewide Electric/Power Project Research &Development e Ensure Technical Standards Development -biomass -coal -e Emergency Response/Notification-Waste Heat Program -solar -batteries e Review Operations for Safety,-Rural Utility Regionalization,-wind -hybrids Efficiency,ReliabilityConsolidationsandBusiness-geothermal -small hydro -Assist in Repairs/ProjectManagement;-energy conservation Modifications -Approx.150 Active Projects e Project Management CommitteeseEmergencyResponseeTechnicalTrainingeCircuitRider °tion of Small Interties and aste Heat SystemseRuralConstructionAssistance Staff =__5 positions Staff =_17positions Staff =__6positions Staff =__16 positions SUPPORT FUNCTIONS +Board of Directors Liaison e Accounting/Auditing «Administrative Support e Contracts Management Procurement e Annual Report e Capital &Operating -Word Processing e Risk Management/Self-AutoCAD/Drafting «Litigation Budget Coordination -Mail/Receptionist °Insurance Programs Equipment/Materials «Personnel/Labor Relations ¢Bond Compliance -Office Management Management e Legislative Liaison e Records/Library Management Staff =_4posittons Staff =__9 positions e Data Processing Staff=_12 positions Staff =__3positions e Warehouse Management Staff =_4 positions JIQNITSOGS ORG?-93 Alaska Energy Authority L-\) RURAL LISA 10484-20J PROJECTSCOURDINATOR) RURAL MANAGEMENT TECHNICIAN BOARD OF Organization Chart -- I 199.3 EXECUTIVEUiyDIRECTOR 0401-28 TITLE EXECUTIVE SPECIALSECRETARYASSISTANT PCN-RANGE L9as4-16 J 9476-23 PI L OFFICER L ovse-10 | DIRECTOR DIRECTOR RURAL ACCTG,&DCTPROGRAMSADMIN.DEVELOPMENT 0421-25 0406-25.0405-25 AD ASST TT SENIOR ADMIN.ECONOMIST ASSIST. it 0440-14 7-23 9455-14 DEVELOPIENT]DEVELOPMENTADMIN,SPECIALIST}SPECIALIST CLERK u u 9465-20 J L_9466-20]0434-1 PUBLICATIONS]STATISTICAL]SPECIALIST ANALYST Losog-ia |L_o406-20| |}ENGINNERING INT L 1 H BANAGER PERMITS &ORMATI Pcee Race are 1517 ACCOUNTANT 'ACCOUNTANTELECTRICALNGINEERINGRowSYSTEMSGFicerDANADMIENGINEERSUPPORTSPECIALIST-J SUPERVISOR 04 0433-24 0449-21 2495 20 oe Q =0-4 9438-19 S ENGINEER 11 civit \e ADMIN im PED i]ENGDMEER picbeey emsbowror|=Pann ysty Reciaaciad[OPERATIONS -PROGRAMME ACCOUNTANT ACCOUNTANT9450-22 |jassistawr 0443-22 04e7-;Mba-!-0410-12 7 0432-14 L04139-16 J O454 ar ENGINEER |ST.CORRES DFO SYSTDG][RICE 'ADMIN Veh |_|secre rary ANALYST.|[Specialist TECHNICI ACCOUNTING0498-18 TECHNICIAN =0424-18 rvsbosre 0463-17 L n423-18_J 4n9-10 - ENGINE ERI eee |0467-12]Lees TECHNICIAN CORRES RECDRDS CONTRACTS o |_|SECRETARY COORDINA a Aorta s Tear ACCOUNTING -0492-15 'CLERK-9470-9 =469-1 42-4 CLERK DOCUMENTS|In PROCESSOR AC COUNTTCLERK 0473-D4pe-10 475-30 RECEP TEDAST FILE =CLERK 2428-7 0474-8 OFFICE L-}Part-Time 0464 7-$-93 Functions --Planning and Project Development Directorate Reconnaissance and feasibility studies -#Plans of finance and project financing (in conjunction with Accounting/Admin.) #Self insurance financing and risk management support Power statistics statewide Rural community and utility profiles Alternative energy technology research and development °o ° ° ° ° biomass coal solar batteries wind energy conservation hybrids°small hydro - {)3'iP ge th al Lee ',[°geothermal ti"oh &Federal initiatives is an U° °o <€Project management committee representation and support _-i ° °o Snettisham purchase lnewtechnologyfunding.eat? 'we Vs ¥da tt pw iIRe3 Four Dam Pool Bradley Lake Alaska systems coordinating council support functions ° o ° ° Alaska Electric Power Statistics Report Selected Alaskan Electric Utilities at a Glance NERC Reliability Assessment Data Submission and subsequent chapter U.S.Dept.of Energy,OE-411,Coordinated Regional Bulk Power Supply Program Report Mutual Assistance Reference Book -Updates ASCC Coordinator (file taxes,prepare budgets,schedule meetings,prepare and distribute meeting packets including minutes) 93Q3\AH5069(2) FUNCTIONS: F ACILITIES OPERATIONS,MAINTENANCE,AND ENGINEERING 1.Develop and implement policies,agreements,and contracts to operate the state- owned hydroelectric projects. 2.Review maintenance procedures to insure projects comply with technical standards and safety codes. 3.Review operations to ensure plants are operated safely,efficiently and reliably. 4)Manage the permitting,lands,licenses,and FERC requirements to comply withlawandregulations.. 5.Prepare project budgets,work orders,estimates and reports. 6.Provide engineering,technical assistance and coordination for repairs and/or we project modifications.,2.\\(Ave 7.Provide technical reports and coordinate response for property losses and -- ..a ia 4insuranceclaims."joufo?8.Provides for the maintenance and local operation at Bradley Lake.VG 9.Assist Rural Programs,Planning and Administration. 10.Project Management Committee participation. FY94 OPERATION &ENGINEERING HYDRUELLLIRIL OPER.&MAINT,PROJECT STAFF FUNCTIONS .TITLE 1-Permits ROW Spec. EXECUTIVE AEA Support 1-Civil Engineer \DIRECTOR Staff 3-Accountants 1-Elect.Engr. 1-Admin.Assist. 1-Draftsman 1-Corres.Sec. DIRECTOR 1-Contract OFF. FACILITY OPERATION ENGR. | SR.SR. OPERATION OPERATION ENGINEER.ENGINEER, PROPOSED UTILITY AND UTILITY QPERATION&MAINTENANCE =4DAM POOL HYDRN'S.OPERATION MAINTAINANCE ||1 | SOLOMO TYEE SWAN TERROR BRADLEY GULCH LAKE LAKE LAKE LAKE 8 9 77 9.75 4 COPPER VALLEY REA THOMAS BAY POWER AU KETCHIKAN PUB,UTILITY 1-CH.Plant Operator S-Plant Operator 1-AMMS Trainer 1-Lineman 1-Manoger 4 1/4-Dispatcher 1-Gen.Foreman 1-Mechanic/Operator 1-Elec./Operator 1-Casual Labor 1-Fore Maint/Oper 3-7/10-Dispatcher 1-Mech./Dperator 1-Elec./Operator 1/4-Meter Relay Tech. 1/2-Lineman KODIAK ELEC.ASSOC. 1/35-Temp.Maint. 1-CH.Mech./Operator 4-Dispatcher 2-Mech/Operator 4/5-Mech.Rellef. 1/2-Maint.Operator \ 1/2-Lineman 1/2-Elect.Retlef ALASKA ENERGY AUTHORITY UTILITY CONTRACTOR 1-Gen.Fore 1-Electrician 1-Mechanic 1-Electrician LARSEN BAY l/e CITY of LARSEN BA 1/2-Plant Operator ANCHORAGE-FAIRBANKS INTERTIE AGREEMENT OR MEMORANDUM OF UNDERSTANDING 1.Alaska Intertie Agreement 2.Operating Agreement for Testing the Alaska Intertie 3.Maintenance Agreements a.Alaska Electric Generation &Transmission b.Chugach Electric Association (Teeland Excluded) C.Golden Valley Electric Association 4.SCADA Agreements a.Golden Valley Electric Association b.Anchorage Municipal Light &Power c.Chugach Electric Association 5.Transmission Service Agreement a.Matanuska Electric Association 6.Self Insurance Program,Line of Credit Agreement (AEA and Bank of America, Anchorage) Revised:07/06/93 02:11 PM BRADLEY LAKE AGREEMENTS OR MEMORANDUM OF UNDERSTANDING 1.Power Sales Agreement (AEA-Utilities) 2.Dispatch Agreement (AEA-CEA) 3.Transmission Facilities Maintenance Agreement (AEA-HEA DRAFT) 4,Allocation and Scheduling Procedures (UTILITIES) 5.Transmission Interconnect Agreement (AEA-HEA-UTILITIES) 6.Amendment to Agreement for Sale of Transmission Capability (UTILITIES) 7.Agreement for the Wheeling of Electric Power and for Related Services ("Services Agreement")(UTILITIES) 8.Soldotna Static Var Compensator Facilities Maintenance Agreement (AEA- UTILITIES) 9.Soldotna Substation Agreement (DRAFT) 10.Daves Creek Substation Agreement (AEA-CEA) 11.|Power Revenue Bond Resolution (AEA)and related documents. 12.Trust Agreement/SeaFirst Bank (AEA-Bank) 13.Communications Equipment (MOU)(AEA-HEA-CEA) Revised:07/06/93 02:08 PM FOUR DAM POOL AGREEMENT OR MEMORANDUM OF UNDERSTANDING 1.Long Term Power Sales Agreement a.Provision of Services (MOU) b.Pledge of Cooperation between Canada (MOU)(PMC) c.Capital Assets AEA Transfer Management/PMC (MOU) d.Use of the R&R Fund (MOU) e.Working Capital Fund f.Facilities Use Agreement g.Insurance Agreement h.Settlement Agreement with Four Dam Pool Litigants 1.Banking Services Agreement j.Construction Loan Fund Transfer Agreement k.Agreement of Intent to Enter Power Sales Agreement 1.Trust Agreement 2.Operations and Maintenance Agreement -Terror Lake and Swan Lake (DRAFT) 3.Solomon Gulch Acquisition Agreement 4.Swan Lake Acquisition Agreement 5.Terror Lake Acquisition Agreement 6.Operation and Maintenance Agreement -Solomon Gulch and Tyee Lake 7.Power Development Revolving Loan Fund Loan Agreement 8.SeaFirst Bank Trust Agreement -Solomon Gulch (REA Loans Defeasance) 9.Solomon Gulch Mortgage and Quitclaim,Transfers and Assignment (AEA-REA) 10.|Use of Water Resources Agreement -Solomon Gulch (AEA-VFDA) 11.Self Insurance Program/Line of Credit and Capital Reserve Account at Bank of America,Anchorage 12.Initial Project Revolving Loan Fund/Bank of America,Anchorage Revised:07/06/93 02:17 PM LARSEN BAY HYDROELECTRIC PROJECT AGREEMENTS OR MEMORANDUM OF UNDERSTANDING 1.Cooperative Agreement (City of Larsen Bay and AEA) 2.Trust Indenture (AEA -SeaFirst Bank Formerly Security Pacific Bank,WA) 3.Draft Operation and Maintenance Agreement -(City of Larsen Bay and AEA) 4,Power Sales Agreement (City of Larsen Bay and Kodiak Salmon Packers) 5.Grant Agreement (City of Larsen Bay and AEA) 6.Loan Agreement (City of Larsen Bay and AEA) 7 Construction Agreement (City of Larsen Bay and AEA (Closed)) 8.Letter of Credit Agreement (AEA -SeaFirst Bank,Formerly Security Pacific Bank,WA) 9.vA anon Agreement (AEA -SeaFirst Bank,Formerly Security Pacific Bank,WA 10.Koniag's Land Lease Revised:07/06/93 02:13 PM Bradley Lake Construction A.Bradley Lake 1.Coordinate/manage remaining construction work -B(a)_fishwater intake clean-out (b)completion of remediation/crushing contractAC)painting powerhouse floor (d)diversion tunnel drain modifications (e)static VAR 2.Close-out open contracts (currently 6 remain) 3.Pursue warranty/back charge claims Ka)Enserch -tunnel dewatering (b)ABB-SVC capacitor replacement/protection changes (c)FUJI -generator oil mist (d)|Woodward -Governor card modifications 4.Bond related actions (a)engineers final completion report (b)release of surplus state appropriations 5.Budget items (a)final contract payments (b)utility support charges 1.SVC tests cost 2.relay c/protection costs 6.Other remaining tasks (a)formalize moose mitigation agreements/trust (b)finalize Divcom microwave additions O&M (c)_negotiate Bradley Lake O&M agreement (d)additional ABB studies for Kenai IntertieO&M =(e)_assist with O&M management while Larry Wolf is recovering (f)continuing property records 93Q3\AHS5069(3) In addition,Mr.Eberle is detailed to support O&M and Planning &Project Development in the following projects: B.O&M Support 1.Terror Lake Tunnel dewatering and Hidden Basin evaluation 2.Swan Lake generator repair C.Planning Support 1.King Cove Hydroelectric Project 2.Unalaska Geothermal Project3.Northwest Arctic Coal XNcdS 93Q3\AH5069(4) RURAL PROGRAMS DIRECTORATE FUNCTIONAL ORGANIZATION Electrical Engineering/Technical Coordination,Planning &Training Mechanical Engineering/T echnical Electrical Life,Health &Safety Project Agreements &Coordination Bulk Fuel Repairs Rural Power System Upgrades Bulk Fuel Upgrades Electric Service Extension Fund Rural Utility Consolidation Waste Heat Projects Metering Projects Business Management Training Waste Heat O&M Technical Training (Electrical)Technical Training Coordination Technical Training (Mechanical) Emergency Response Emergency Response Coordination -------Emergency Response Assistance to PP&D Assistance to PP&D Assistance to PP&D Rural Technical Assistance -------- -------Rural Technical Assistance Circuit Rider Maintenance_.-- ---- -- ---Circuit Rider Maintenance FUNCTIONS:DIRECTORATE OF ACCOUNTING & ADMINISTRATION The directorate administers/manages the following programs: °Power Cost Equalization (PCE)program °Bulk Fuel Revolving Loan Fund (BFRLF) °Power Project Fund (PPF) °Rural Electrification Revolving Loan Fund (RERLF) The directorate supports the Alaska Energy Authority's business in the following areas: °Procurement,Contract Administration °Material &Equipment Inventory/Warehouse Management °Accounting:General &Program/Project Related/Audits °Budget °Data Processing °Records Center &Library °Administrative Coordination .Insurance/Risk Management °Financing Compliance and Administration .Alaska Energy Authority/Power Revenue Bonds °Conduit Financing 93Q2\MA4699(1) POWER COST EQUALIZATION PROGRAM The Power Cost Equalization (PCE)program provides economic assistance to electricity consumers in rural communities by paying part of their electricity costs directly to utilities.Cost of electricity in rural Alaska in many instances is three to five times higher that the charge in more urban area of the state.In FY94,about 175 communities with a total population of about 68,000 are expected to participate in the program.This is one of the various state energy programs administered by the Energy Authority.It affects almost all the rural communities that receive technical support and grants from the Rural Programs directorate and communities/utilities that borrow regularly from the Bulk Fuel Revolving Loan Fund and other loan programs of the Energy Authority. Financial and technical data provided by the utilities participating in the PCE program is widely used by other Energy Authority staff,utility managers,project developers,etc. 93Q2\MA4699(2) BULK FUEL REVOLVING LOAN FUND The Bulk Fuel Revolving Loan Fund (BFRLF)provides State assistance in bulk purchase of petroleum fuels to rural communities with populations of under 2,000,in the form of loans not to exceed $50,000 per year,at interest rates set by law.An interest rate is assigned based on the applicant's number of previous BFRLF loans;the first loan bears no interest,the second loan is at five percent and subsequent loans are made at the average municipal bond yield rate (currently about 6.5 percent).Loans are to be repaid in one year or less. Most rural villages are dependent on fuel oil for generation of electric power and space heating.The majority of these villages are not connected to the State's population centers by roads,and depend on seasonal barge deliveries.Because most waterways are frozen for six or more months per year,villages must purchase large quantities of fuel for delivery prior to freeze-up.The annual need to disburse a relatively large amount of cash creates a financial hardship for many communities that may not qualify for commercial loans.This is a very active loan program. 93Q2\MA4699(3) RURAL ELECTRIFICATION REVOLVING LOAN FUND The Rural Electrification Revolving Loan Fund (RERLF)provides assistance to local utilities for extending electrical service into previously unserved areas of the state. RERLF loans are made only to electrical utilities holding an Alaska Public Utilities Commission Certificate of Public Convenience and Necessity.To be eligible for RERLF loan,the utility must make an investment in the project of the cost of acquisition and installation of one transformer,one span of line,one pole and one service drop for each initial customer.Additionally,at least three new customers must be served by the project to make it eligible for an RERLF loan. The interest rate on all RERLF loans is 2%.The maximum loan amount is $500,000,or $250,000 if the fund balance is less than $3 million at the time of application. Administration of this fund is generally associated with the management of the outstanding loans,as funding has not been available for new loans.Also the establishment of the Electrical Service Extension Fund in FY92,has supplanted the demand for this program. 93Q2\MA4699(4) POWER PROJECT FUND LOANS The Power Project Fund provides loans to local utilities and eligible governmental units for the development of new small-scale power production facilities,and facilities for conservation,bulk fuel storage,transmission and distribution,or potable water supply projects.There is no limit set on the amount that can be borrowed from the PPF.The amount is based on the borrower's need,its ability to repay the loan,and the balance available in the fund.PPF loans have a maximum term of 50 years.The interest rate may not be less than 5%and must be the lesser of the average weekly yield of municipal bonds for the 12 months preceding the date of the loan or a rate determined by the Authority that allows the project to be financially feasible.The Authority may take collateral for loans but is not required to by statute. Relatively few small loans have been issued in recent years under this program due to lack of funds.Activities are generally associated with the administration of the outstanding loans. 93Q2\MA4699(5) PROCUREMENT,CONTRACT ADMINISTRATION These functions are performed under specific departmental delegated authority from the Department of Transportation and Public Facilities for contracts related to construction and operation of projects and delegated authority from the Department of Commerce and Economic Development on all other matters.The unit provides centralized services agency wide and it is responsible for processing and retaining all significant procurement or contractual documents and to insure that the contractors'insurance policies required by contract are in place and updated,if needed. MATERIAL &EQUIPMENT INVENTORY/WAREHOUSE MANAGEMENT This function includes management of project materials and equipment,usually associated with large projects during construction or operation and actual inventory control activities which include monitoring property identification and tagging,through the disposal of excess property.An agency wide data base is maintained for this purpose. This function includes management of the agency warehouse and provides receiving, expediting services and follow up on warranty issues,where applicable. ACCOUNTING AND AUDIT This function maintains appropriate accounting structures and systems to provide financial reports and statements for specific projects/programs of the Energy Authority and at agency level.Accounting records related to state appropriations and funds are maintained in the Alaska State Accounting System (AKSAS);a integrated accounting and budget reporting system was implemented effective FY93 to accommodate functions not available in AKSAS and to account for non-state funds of the Authority held by various trustee banks. 93Q2\MA4699(6) The format of financial statements of the Energy Authority (Enterprise Fund)was prescribed by state legislative auditor,effective FY89.The financial records of the Authority are audited annually by an independent certified public accountant firm.Both requirements are in compliance with AS 44.83.900. This function may perform or manage the audit of its contractors or of the users of its programs,for compliance.It interfaces with external auditors in their review/audit of the Energy Authority fiscal records at agency,program or project level. BUDGET The activities of the Alaska Energy are funded by state and non-state funds.The state funds are obtained through three types of budgets:Capital,Loans and Operations.The Energy Authority is subject to and complies with the Executive Budget Act (AS 44.83.950).The non-state funds consist of;(a)bonds proceeds,or other long term financing;the use of these monies is usually restricted to the construction project or development of program for which the financing was secured,and (b)program receipts paid by the communities/utilities utilizing the operating projects owned by the Energy Authority (electric power purchase/wheeling;waste heat). The budget function provides coordinating support functions agency-wide for the preparation of the state budget,and preliminary budget tools as the automated "matrix" system. 93Q2\MA4699(7) DATA PROCESSING Data Processing provides general support for 75 to 80 micro-computers (PC)systems used by the Energy Authority staff.Most,but not all of these micro-computers are located in the offices of the Energy Authority,with 10 to 12 systems installed at various locations around the state to support power production projects.A Local Area Network (LAN)is installed at the main office location.The LAN provides homogenous structures, inter-action among users,information sharing and centralized data storage by direct connection,telecommunication and dial-up services. Specialized operation software,custom applications and packaged programs are provided by data processing for the users PC,such as:word processing,ad-hoc accounting spreadsheet reports,data base management and electronic mail services.In addition, supports two highly specializing systems that process all of the accounting needs of the Energy Authority:the State Accounting System (AKSAS)and an in-house installed integrated accounting system that provides for job cost accounting and general ledger,up to financial statements.Power Cost Equalization system,Bradley Lake Hydroelectric Project (construction)accounting,Management Information Systems and purchasing request tracking are supported by Data Processing.Library and records management systems are in place and are being updated so that local storage and retrieval of documents can be effectively performed.LAN and telecommunications,provides access to other state services such as AKPAY and Legislative information systems.Graphic and automated drafting capabilities for project management are supported on several of the larger scaled PCs. 93Q2\MA4699(8) RECORDS CENTER &LIBRARY Provides centralized storage and maintenance of the vital records of the Energy Authority in compliance with the specific project/program requirements,as well as state or Federal Energy Regulatory Commission (where applicable)requirement. Ensures effective operations and maintenance of the Energy Authority library. ADMINISTRATIVE COORDINATION Provides full office administrative support,including word processing,general office maintenance,telephone and facsimile services,mail and receptionist functions.Office space,access,security and assigned vehicle coordination are also provided through this support function. INSURANCE/RISK MANAGEMENT The Energy Authority is exposed to risks in the performance of its mandate.Those risks are covered either by the state risk management plans,or by Energy Authority specific plans that have been established with the guidance and support of the Division of Risk Management,such as for the operation of the Energy Authority's hydroelectric plants and transmission lines. The daily risk management is performed by the respective directors or specialized staff, based on the specific risk and/or specific program.The Accounting &Administration directorate performs the agency wide administrative functions,including interface with the state Division of Risk Management,insurance companies,administration of self insurance programs,procurement of insurance,claims,etc.It provides centralized records of the insurance policies. 93Q2\MA4699(9) FINANCING,COMPLIANCE AND ADMINISTRATION;ALASKA ENERGY AUTHORITY /POWER REVENUE BONDS AND CONDUIT FINANCING This function participates in the formulation of financing instruments,and once the financing is in place,it performs and/or monitors the tasks required of the Energy Authority to remain in compliance with the covenants in its financing agreements.Lack of compliance may result in events of default for the respective bond resolution associated with the financing of Bradley Lake,Larsen Bay and the conduit financing of three other projects. Current outstanding debt is about $340 million.Conduit financing (original issue)about $94 million) 93Q2\MA4699(10) =SUMMARY OF PROVISIONS CHAPTERS 18 AND 19,SLA 1993 Functions/Programs Transferred to DCRA I.Power Project Fund (loan program for energy projects) A.$35 million loan for Sutton-Glennallen intertie --DCRA to determine whether feasibility study and plan of finance are satisfactory. B.$20 million loan for Tyee-Swan intertie. $3 million loan for completion of Seward-Lawing transmission line. D.Sources of funds for other future loans: 1.20%of Four Dam Pool debt repayments (about $2 million per year). 2.Loan repayments for all existing Power Project Fund loans (also about $2 million per year). 3.Does not include repayments of Sutton-Glennallen and Tyee- Swan loans --these go back to Railbelt Energy Fund. II.Power Cost Equalization and Rural Electric Capitalization Fund A..PCE administrative functions formerly conducted by AEA are transferred to DCRA.APUC continues to set PCE rates for regulated utilities.DCRA to set rates for unregulated utilities,but may contract with APUC to continue doing this as well. Funds available include: 1.$66.9 million appropriation. 2.Future interest earnings on the fund balance. 3.40%of Four Dam Pool debt repayments (about $4 million per year). 4,Future appropriations --legislative intent that minimumfundingofPCEover20yearswillbe$17 million per year. Rural utility grants (75%state,25%local match)are allowed for up to3%of PCE/REC Fund balance.This amounts to about $2 million in first year,expected to decline thereafter. Il. IV. VII. VU. Southeast Energy Fund A.Available for use by Tyee-Swan intertie participating utilities. B.Funded by 40%of Four Dam Pool debt repayments (about $4 million per year). C.FY 94 fund receipts appropriated as a grant to Ketchikan for Tyee- Swan. Note on Use of Four Dam Pool Debt Repayments A percentage of Four Dam Pool debt repayments is intended for use in each of the programs above: Power Project Fund 20%(about $2 million per year). PCE/REC Fund 40%(about $4 million per year) Southeast Energy Fund 40%(about $4 million per year) However,these intended uses of Four Dam Pool debt repayments are not automatic --they must be appropriated each year. Electrical Service Extension Fund FY 94 funding is $500,000. Bulk Fuel Revolving Loan Fund About 50 loans per year --total annual loan amount about $2 million.A Rural Electrification Revolving Loan Fund Current balance available about $100,000.No recent activity in this program. Loan Committee Established A.Seven members (3 from Administration,4 public). B.All loans,except bulk fuel loans and loans specifically appropriated by A Legislature,submitted to Committee.Committee must approve any loans submitted to it for over $500,000. IX.Named Recipient Grant for Tazimina $5 million appropriated to DCRA to administer as "named recipient"grant toTliamna-Newhalen-Nondalton Electric Cooperative for Tazimina hydro project. X.Federal Biomass Program Federal funds and program function to DCRA. XI.Rural Capital Projects and Programs Based on provision that AEA rural programs go to DCRA,FY 94 capital appropriations to be transferred include the following: Rural Power System Upgrades $2,000,000 Bulk Fuel System Upgrades $2,000,000 Emergency Bulk Fuel Repairs and Spill Prevention $1,000,000 Rural Operation,Technical and Emergency Assistance $1,300,000 Electric System Life,Health,Safety Improvements $730,000 Statewide Electric and Power Project Development $500,000 Alternative and Applied Energy Technology Development $500,000 Rural Utility Regionalization,Consolidation,and Bus.Mgmt.$270,000 In addition to these programs and several smaller FY 94 appropriations,there are about 150 rural capital projects of varying scope that are presently active. XII.Circuit Rider Maintenance Program Direct and contract rural maintenance assistance goes to DCRA under provision that AEA rural programs are transferred. XIII.Directive on Contracting With Private Sector DCRA is instructed to carry out its new duties by contracting with appropriate entities in the private sector to the maximum extent feasible. Functions/Programs to Remain with AEA I.AEA power to acquire,plan,design,and _construct_projects has been eliminated. A.AEA may or may not have the power to acquire the Snettisham hydro ¥.project under the transitional language of the Act.An attorneygeneral's opinion on this matter has been requested. II. III. B.Although AEA no longer has the power to conduct feasibility studies,studies in progress can be completed under the transitional language of the Act. The power to finance,operate,and maintain projects remains with AEA. A.Because AEA cannot own additional projects (with the possible exception of Snettisham),the power to finance appears to apply only to third-party (i.e."pass-through")financings,or refinancing of existing AEA debt. B.Regarding operations and maintenance,AEA is instructed to contract with utilities or others to the maximum extent feasible. New Board of Directors The Act provides that the Board of the Alaska Industrial Development and Export Authority (AIDEA)will also serve as the Board of AEA. LAWS OF ALASKA 1993 Source Chapter No. HCS CSSB 106(FIN 18 AN ACT Transferring certain projects of and amending and transferring programs of the Alaska Energy Authority to the Department of Community and Regional Affairs;relating to the Alaska Energy Authority;permitting the Alaska Industrial Development and Export Authority to issue revenue bonds for certain plants or facilities for energy resources;permitting utilities to form joint action agencies;authorizing the Alaska Industrial Development and Export Authority to issue revenue bonds for power transmission interties;relating to rates for a public utility that sends or receives power over Certain power transmission interties;relating to the power cost equalization and capital improvement fund;amending the purpose of the Railbelt energy fund. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: THE ACT FOLLOWS ON PAGE |! Approved by the Governor:May 13,1993 Actual Effective Date:August 11,1993 t10 ll Chapter 18 AN ACT Transferring certain projects of and amending and transferring programs of the Alaska Energy Authority to the Department of Community and Regional Affairs;relating to the Alaska Energy Authority;permitting the Alaska Industrial Development and Export Authority to issue revenue bonds for certain plants or facilities for energy resources;permitting utlities to form joint action agencies;authorizing the Alaska Industrial Development and Export Authority to issue revenue bonds for power transmission interties;relating to rates for a public utility that sends or receives power over certain power transmission interties;relating to the power cost equalization and capital improvement fund;amending the purpose of the Railbelt energy fund. *Section 1.FINDINGS AND INTENT.(a)The legislature finds that adequate,reliable, -I-HCS CSSB 106(FLN) ooOoANDWm&|Bwowll<aorTl <alllllalll ooeYAOH&|SBY=©20 Chapter 18 electric service at affordable rates is a necessary ingredient of a modem society and a | prosperous developing economy.The legislarure further finds that at the current stage of , social and economic development in the state,direct participation by the state is necessary to assist in the development of a regional electric ransmission infrastructure and to assist in holding rates in high cost service areas to affordable levels. (b)The legislature recognizes the high cost of electric power in rural Alaska and intends that funding for power cost equalization from the general fund and from the power cost equalization and rura,electric capitalization fund remain at a minimum of $17,000,000 annually through the year 2013.The legislature further intends that this long-term commitment to the power cost equalization program will permit and encourage the electric utility industry and its lenders to develop the plans,make the investments,and take other actions that are necessary or prudent to meet the utility needs of residents in rural Alaska. *Sec.2.AS 37.05.520 is amended to read: Sec.37.05.520.RAILBELT ENERGY FUND.There is established in the general fund the Railbelt energy fund.The fund consists of money appropriated to it by the legislature.The Department of Revenue shall manage the fund.Interest received on money in the fund shall be accounted for separately and may be appropriated into the fund annually.The legislature may appropriate money from the fund for programs,projects,and other expenditures to assist in meeting Railbelr energy n includin jects for retrofittin te-owned buildings and facilities for_energy conservation. *Sec.3.AS 42.05.141(b)is amended to read: (b)The commission shall perform the duties assigned to it under AS _42.45.100 -42.45.190 [AS 44.83.162]. *Sec.4.AS 42.05.431 is amended by adding a new subsection to read: (h)When setting or reviewing rates for a public utility that sends or receives power over the power transmission interties between Fairbanks and Healy or berween Anchorage and the Kenai Peninsula,the commission shall consider those costs that have not been directly assigned to other individual generating utilities by the utility responsible for the construction of the intertie to have been incurred for the system existing on the effective date of this subsection. HCS CSSB 106(FIN)-2- Chapter 18 *Sec.5.AS 42 is amended by adding a new chapter to read: CHAPTER 45.RURAL AND STATEWIDE ENERGY PROGRAMS. ARTICLE 1.POWER ASSISTANCE PROGRAMS. Sec.42.45.010.POWER PROJECT FUND.(a)The power project fund is established as a separate fund.The fund shall be distinct from any other money or funds of the department and includes only money appropriated by the legislature and money deposited under (g)of this section. (b)Subject to AS 42.45.060,the department may make loans from the power project fund (1)to electric utilides,regional electric authorities,municipalities, regional and village corporations,village councils,independent power producers,and nonprofit marketing cooperatives to pay the costs of (A)reconnaissance studies,feasibility studies,license and permit applications,preconstruction engineering,and design of power projects; (B)constructing,equipping,modifying,improving,and expanding small-scale power production facilities that are designed to produce less than 10 megawatts of power,conservation facilities,bulk fuel storage facilities,and transmission and distribution facilities,including energy production,transmission and distribution,and waste energy conservation facilities that depend on fossil fuel,wind power,tidal,geothermal,biomass, hydroelectric,solar,or other nonnuclear energy sources;and (C)reconnaissance studies,preconstruction engineering,design, construction,equipping,modification,and expansion of potable water supply including surface storage and groundwater sources and transmission of water from surface storage to existing distribution systems; (2)to a borrower for a power project if (A)the loan is entered into under a leveraged lease financing arrangement, (B)the party that will be responsible for the power project is an electric utility,regional electric authority,municipality,regional or village corporation,village council,independent power producer,or nonprofit -3-HCS CSSB 106(FIN) oeNHNAA&|]we-peteonAA&|]NY=OS19 Chapter 18 marketing cooperative;and (C)the borrower seeking the loan demonstrates to the department that the financing arrangement for the power project will reduce project financing costs below costs of comparable public power projects. (c)Before making a loan from the power project fund,the department shall, by regulation,specify (1)standards for the eligibility of borrowers and the types of projects to be financed with loans; (2)standards regarding the technical and economic viability and revenue self-sufficiency of eligible projects; (3)collateral or other security required for loans; (4)the terms and conditions of loans; (5)criteria to establish financial feasibility and to measure the amount of state assistance necessary for particular projects to meet the financial feasibility cTiteria;and (6)other relevant criteria,standards,or procedures. (d)A loan made by the department shall be made according to the standards, criteria,and procedures established by regulation under this section. (e)Repayment of the loans shall be secured in any manner that the department determines is feasible to assure prompt repayment under a loan agreement entered into with the borrower.The department may make an unsecured loan from the power project fund to a borrower regulated by the Alaska Public Utilities Commission under AS 42.05 if the borrower has a substantial history of repaying long-term loans and the Capacity to repay the loan.Under a loan agreement,repayment may be deferred for 10 years or unul the project for which the loan is made has achieved earings from its operations sufficient to pay the loan,whichever is earlier. (f)Power projects are subject to the following limitations on interest and specific restrictions: (1)power projects for which loans are outstanding from the former water resources revolving loan fund (former AS 45.86)on July 13,1978,may receive additional financing from the power project fund;if granted, HCS CSSB 106(FIN)- 4- oeNDWH&|Wp-_-=eOkeeotewenAH&WNmeOo20 Chapter 18 (A)the term of the additional financing may not exceed 50 years; (B)the interest of the additional financing must be at a rate of not less than three or more than five percent a year on the unpaid balance; (C)the grant of the additional financing must be conditioned on the repayment of loan principal and interest to begin on the earlier of (i)the date of the start of commercial operation of the project,or (ii)10 years from the date the loan is granted; (2)a loan for a power project (A)may not be granted for a term that exceeds 50 years;and (B)shall be granted at an interest rate that is not less than zero percent and that is the lesser of (i)a rate equal to the percentage that is the average weekly yield of municipal bonds for the 12 months preceding the date of the loan,as determined by the department from municipal bond yield rates reported in the 30-year revenue index of the Weekly Bond Buyer, or (ii)a rate determined by the department that allows the project to meet criteria of financial feasibility established under (c)of this section. (g)Loan repayments and interest earned by loans from the power project fund shall be deposited in the power project fund unless an appropriation to fund the loan directs otherwise. (h)The legislature may forgive the repayment of a loan made from the power project fund for a reconnaissance study or a feasibiliry study when the department finds that the power project for which the loan was made is not feasible. (i)Money in the power project fund may be used by the legislature to make appropriations for costs of administering the fund. Sec.42.45.020.RURAL ELECTRIFICATION REVOLVING LOAN FUND. (a)The rural electrification revolving loan fund is established in the department.The -5-HCS CSSB 106(FIN) %CoeoYDAhe&NHoelleleeeeeeSUOIAakAaDNSOS21 Chapter 18 fund consists of (1)appropriations made to the fund;and (2)repayments of principal and interest on loans made under this secuon.- (b)Subject to AS 42.45.060,the department may make loans from the rural electrification revolving loan fund to electric utilities certified by the Alaska Public Utilities Commission.A loan from the fund may be made only for the purpose of extending new electric service into an area of the state that an electric utility may serve under a certificate of public convenience and necessity issued by the Alaska Public Utilities Commission.A loan may be made from the fund to an electric utility if the utility invests the money necessary to provide one pole,one span of line,one transformer,and one service drop for each consumer for whom immediate service would be provided by the extension of electric service.However,a loan may not be made from the fund unless (1)the loan is recommended by a loan advisory committee appointed under AS 42.45.030,and (2)the extension of electric service would provide immediate service to at least three consumers. (c)A loan from the rural electrification revolving loan fund shall bear an annual rate of interest of two percent of the unpaid balance of the loan. (d)When the department makes a loan under this section,the electric utility receiving the loan shall, (1)in addition to the rates that it is authorized to charge,charge the consumers served by the electric service extended with the loan proceeds an amount sufficient to pay the interest costs of the loan; (2)pay to the department annually an amount equal to (A)interest of two percent on the unpaid balance of the loan; and (B)payments on the unpaid balance of the principal of the loan for each new consumer served by the electric service extended with the loan proceeds;payments on the unpaid balance of the principal of the loan shall be HCS CSSB 106(FIN)-6- afcoPmNDA&|]NmSYNONOreetspeBPmoMeOWIAARkOHRESChapter 18 made at a rate equal to the difference between the actual cost of making the service connection to the consumers and the minimum invesunent per consumer required of the utility before a loan is made under (b)of this section. (e)The department shall (1)adopt regulations necessary to carry out the provisions of this section; (2)administer the rural electrification revolving loan fund;and (3)submit to the legislature within the first 10 days of each regular legislative session a report of actions taken by the department under this section and an accounting of the rural electrification revolving loan fund. (f)Money in the rural electrification revolving loan fund may be used by the legislature to make appropriations for costs of administering the fund. (g)On June 30 of each fiscal year the unexpended and unobligated cash balance of the fund that is attributable to loans owned by the fund lapses into the general fund. (h)In this section, (1)"consumer”means a person or a governmental agency,if the person or governmental agency requests and offers to pay for electrical service to a facility or part of a facility;the department shall consider a person who,or a governmental agency that,offers to pay for electrical service to several facilities to be a separate consumer for each facility,if each facility is physically separate from another facility, other than through electric service lines,and if the person or governmental agency requests and offers to pay for electrical service to each facility; (2)"facility”means a structure capable of receiving and using electrical energy;and (3)"governmental agency"includes,with respect to the state or federal government or a municipal government,a legislative body,board of regents, administrative body,board,commission,committee,subcommittee,authority,council, agency,public corporation,school board,department,division,bureau,or other subordinate unit,whether advisory or otherwise,of the state,federal,or municipal government. -7-HCS CSSB 106(FIN) oOoNDWN&|NWLS= OF8®3DAUA&|]WY=©eSZRBURERRESRChapter 18 Sec.42.45.030.LOAN ADVISORY COMMITTEE.When an application for a rural elecrrificacion loan is submitted to the department under AS 42.45.020,the department shall appoint a local advisory commitee from persons residing in the area that the applicant utility is certified to serve.The loan advisory committee shall consider the loan application and shall recommend whether the loan application is to be approved or disapproved.The loan advisory committee may make a favorable recommendation only if it determines that development in the area of the proposed extension of electric service is likely to provide for full repayment of the loan under AS 42.45.020(d)within 10 years.In making that determination,the committee shall consider (1)permanence of the premises to be served by the extension; (2)land use patterns in the area; (3)access for the line that would be installed with loan proceeds; (4)availability of other utility service in the area;and (5)the economic feasibility of the extension of electric service with the proceeds of the loan. Sec.42.45.040.SOUTHEAST ENERGY FUND.The Southeast energy fund is established as a separate fund.The fund consists of money transferred to it under AS 42.45.050.The department may make grants from the Southeast energy fund to utilities participating in the power transmission intertie between the Swan Lake and Tyee Lake hydroelectric projects for power projects,for repayment of loans,and for Payments on bonds. Sec.42.45.050.FOUR DAM POOL TRANSFER FUND.(a)The four dam pool transfer fund is established in the department.The fund consists of repayments of principal and income that would have been deposited in the former power development revolving loan fund under former AS 44.83.500. (b)Subject to appropriation,the department shall transfer the balance of the four dam pool transfer fund each month in accordance with this subsection.Subject to appropriation (1)40 percent of the balance in the four dam pool transfer fund shall be transferred to the power cost equalization and rural electric capitalization fund to HCS CSSB 106(FIN)-8- Chapter 18 be used for power cost equalization and rural electric projects; (2)40 percent of the balance in the four dam pool transfer fund shall be transferred to the Southeast energy fund to be used for power projects for utilicies participating in the power transmission intertie berween the Swan Lake and Tyee Lake hydroelectric projects;and (3)20 percent of the balance in the four dam pool transfer fund shall be transferred to the power project fund to be used for statewide utility projects. Sec.42.45.060.APPROVAL BY LOAN COMMITTEE AND LEGISLATURE.(a)A loan committee consisting of seven members is established. The committee is composed of the commissioner of community and regional affairs, the commissioner of commerce and economic development,the director of management and budget,or the designees of the commissioners or the director,and four public members. (b)The public members of the committee are appointed by and serve at the pleasure of the governor.Public members serve staggered four-year terms.Only one public member may be appointed from each judicial district described in AS 22.10.010.Public members of the committee serve without compensation but are entitled to travel and per diem as provided for members of boards and commissions under AS 39.20.180.A public member of the committee serves until a successor is appointed.An appointment to fill a vacancy among the public members on the committee is for the remainder of the unexpired term. (c)The commissioner of community and regional affairs serves as chair of the committee.The committee may elect other officers as necessary.A majority of the members of the committee constitute a quorum and may exercise the powers of the committee. (d)A meeting by an electronic medium as provided in this subsection has the same legal effect as a meeting in person.The committee may meet and transact business by an electronic medium if (1)public notice of the time and locations where the meeting will be held by an electronic medium has been given in the same manner as if the meetng were held in a single location; -9-HCS CSSB 106(FIN) owceNDAA&|NB==selcrhhlltlllllleC©CeOrWIARABHESChapter 18 (2)participants and members of the public in anendance can hear and have the same right to participate in the meeting as if the meeting were conducted in person;and | (3)copies of pertinent reference materials,statutes,regulations,and audio-visual materials are reasonably available to participants and to the public. (e)A member of the committee may not vote on a resolution of the committee relating to a lease or contract to be entered into by the department under this chapter if the member is a party to the lease or contract or has a direct ownership or equity interest in a firm,partnership,corporation,or association that is a party to the contract or lease.When abstaining from voting,the member must disclose the reason for the abstention.4 member who is a member of an electric cooperative that is organized under or subject to AS 10.25 (Electric and Telephone Cooperative Act)may vote on a resolution relating to a contract or lease to which that cooperative is a party.The member shall disclose the cooperative membership at the ime of voting.A resolution of the committee that is approved by a majority of the members present who are not barred from voting under this subsection is a valid action of the committee for all purposes. . (f)Except for loans from the bulk fuel revolving loan fund (AS 42.45.250), the department shall submit the loans that the department proposes to approve under this chapter to the committee for the committee's review.The department may not enter into a loan for an ammount equal to or greater than $500,000 unless the committee approves the loan or unless the loan has received legislative approval under (g)of this section.The department may not enter into a loan for an amount less than $500,000 for a period of 30 days after submission of the proposal to the committee.If,within the 30 days,the committee notifies the department that it intends to review a loan for less than $500,000,the department may not enter into the loan unless it is approved by the committee. (g)The departrnent may not enter into a loan for a major project unless it has legislative approval of the project and the amount.An appropriation for the loan that names the project subject to this subsection constitutes approval under this subsection. Projects subject to legislative approval under this subsection include HCS CSSB 106(FIN)-10- eoOeNDHWBh|WYm-eeeeeeeeC©erRIARBKBEOHRESChapter 18 (1)a project in which the cumulative state monetary involvement, through loans,grants,and bonds,is at least $5,000,000;or (2)a project for which a loan of more than $5,000,000 has been requested. ARTICLE 2.POWER COST EQUALIZATION AND RURAL ELECTRIC CAPITALIZATION. Sec.42.45.100.POWER COST EQUALIZATION AND RURAL ELECTRIC CAPITALIZATION FUND.(a)The power cost equalization and rural electric capitalization fund is established as a separate fund for the purpose of (1)equalizing power cost per kilowatt-hour statewide at a cost close to or equal to the mean of the cost per kilowart-hour in Anchorage,Fairbanks,and Juneau by paying money from the fund to eligible electric utilities in the state;and (2)to make grants to eligible utilities under AS 42.45.180 to improve the performance of the utility. (b)The fund shall be administered by the department as a fund distinct from the other funds of the department.The fund is composed of (1)money appropriated to provide power cost equalization to eligible electric utilities and to provide grants for utility improvements;and (2)interest earned on those appropriations. (c)The fund is not a dedicatedfund. Sec.42.45.110.ENTITLEMENT TO POWER COST EQUALIZATION.(a) The costs used to calculate the amount of power cost equalization for all electric utilities eligible under AS 42.45.100 -42.45.150 include all allowable costs,except return on equity,used by the Alaska Public Utilities Commission to determine the revenue requirement for electric utilities subject to rate regulation under AS 42.05. The costs used in determining the power cost equalization per kilowatt-hour shall exclude any other type of assistance that reduces the customer's costs of power on a kilowatt-hour basis and that is provided to the electric utility within 60 days before the commission determines the power cost equalization per kilowatt-hour of the electric utility.In calculating power cost equalization,the commission may not consider validated costs or kilowatt-hour sales associated with a United States Department of -I1-HCS CSSB 106(FIN) eoOoNDAMU&&he=-_=lllOoOARAWwW&|NH=OoChapter 18 Defense facility. (b)An eligible electric utility is entided to receive power cost equalization (1)for sales of power to local community facilities,calculated in the aggregate for each community served by the electric utility,for actual consumption of not more than 70 kilowatt-hours per month for each resident of the community;the number of community residents shall be determined under AS 29.60.020,and (2)for actual consumption of not more than 700 kilowart-hours per month sold to each customer in all classes served by the electric utility except (A)customers of the utility under (1)of this subsection;and (B)customers that are state or federal offices or state or federal facilities other than public schools. (c)The amount of power cost equalization provided per kilowatt-hour under (b)of this section may not exceed 95 percent of the power costs,or the average rate per eligible kilowatt-hour sold,whichever is less,as determined by the department. However, (1)during the state fiscal year that began July 1,1993,the power costs for which power cost equalization were paid to an electric utility were limited to minimum power costs of more than 9.5 cents per kilowatt-hour and less than 52.5 cents per kilowart-hour, (2)during each following state fiscal year,the department shall adjust the power costs for which power cost equalization may be paid to an electric uality based on the weighted average retail residential rate in Anchorage,Fairbanks,and Juneau;and (3)the power cost equalization per kilowatt-hour may be determined for a utility without historical kilowatt-hour sales data by using kilowatt-hours generated. (d)An electric utiliry whose customers receive power cost equalization under AS 42.45.100 -42.45.150 shall set out in its tariff the rates without the power cost equalization and thé amount of power cost equalization per kilowatt-hour sold.The rate charged to the customer shall be the difference between the two amounts.Power cost equalization paid under AS 42.45.100 -42.45.150 shall be used to reduce the cost HCS CSSB 106(FIN)-12- a?©OBO tWDA&|SWC=-_eeeleleek©eIAARNKRKSS20 Chapter 18 of all power sold to local community facilicies,in the aggregate,to the extent of 70. kilowatt-hours per month per resident of the community,and to reduce the cost of the first 700 kilowatt-hours per customer per month for all other classes served by the electric uulity except state and federal offices and state and federal facilities other than public schools. (e)The power cost equalization program shall be administered by the department based on a determination by the department under (a)and (c)of this section of power cost equalization per kilowart-hour for each eligible electric utility. (f)The department may not deny an eligible electric utility power cost equalization because complete cost information is not available.The department shall assist an eligible electric utility that is exempt from rate regulation under AS 42.05 to provide the cost information the department considers necessary to comply with AS 42.45.100 -42.45.150.Only power costs that are supportable may be considered in calculating power cost equalization.Each electric utility is responsible for keeping records that provide the information necessary to comply with AS 42.45.100 - 42.45.150 including records of monthly kilowart-hour sales or generation,monthly fuel balances,fuel purchases,and monthly utility fuel consumption. (g)The department shall determine the cost of fuel for each eligible electric utility using the procedure for approving fuel cost rate adjustments of electric utilities subject to rate regulation under AS 42.05. (h)Each electric utility receiving power cost equalization approved by the department shall (1)report monthly to the department within the ime and in the form the department requires;and (2)use operational equipment designed to meter individual utility customer power consumption and to determine and record the utility's overall fuel consumpton. (i)The department shall review the report required under (h)of this section. After review and approval of the report,the department shall,subject to appropriation, pay to each eligible electric utility an amount equal to the power cost equalization per kilowatt-hour determined under (a)and (c)of this section,multiplied by the number -13-HCS CSSB 106(FIN) omenNADAA&|]WDwwontTlaTl=nllaonSEee-©O24AUA&|WNY=CO20 Chapter 18 of kilowatt-hours eligible for power cost equalization that were sold during the preceding month to all customers of the utility under (b)of this section.Payment shall be made by the department within 30 days after receipt from the utility of the report required under (h)of this section.If appropriations are insufficient for payment in full, the amount paid to each electric utlity is reduced on a pro rata basis. Sec.42.45.120.NOTICE TO CUSTOMERS.If an electric utility receives power cost equalization under AS 42.45.100 -42.45.150,the utility shall either give to its electric service customers eligible under this program,for each period for which the payment is received, . (1)the following notice: NOTICE TO CUSTOMER For the current billing period the utility will be paid under the State of Alaska's power cost equalization program (AS 42.45.100)to assist the utility and its customers in reducing the high cost of generation of electric energy.Your total electrical service cost $0... Less state equalization $...... Your charge $......;OF (2)a notice approved by the department that provides electric service customers the same information provided by the notice in (1)of this section. Sec.42.45.130.COST MINIMIZATION.(a)In order to qualify for power cost equalization,each electric utility shall make every reasonable effort to minimize administrative,operating,and overhead costs,including using the best available technology consistent with sound utility management practices.In reviewing applications for power cost equalization,the department may require the elimination of unnecessary operating expenses.Each eligible electric utility shall cooperate with appropriate state agencies to implement cost-effective energy conservation measures and to plan for and implement feasible alternatives to diesel generation. (b)In this section,"energy conservation measures”include weatherization and other insulating methods,utilization of waste heat,appropriate sizing of new generating equipment,and other programs of the state or federal government intended and HCS CSSB 106(FIN)-14- eoOoYDnH&|GWw|acecetsoonCeerianweuokrzsChapter 18 available for energy Conservation. Sec.42.45.140.CUSTOMER PETITIONS.If the department receives a petition requesting power cost equalization,signed by at least 25 percent of the customers of an electric utility that is subject to rate regulation under AS 42.05 and that has not applied for power cost equalization under AS 42.45.100 -42.45.150,the department shall require the utility to submit a power cost equalization application. Upon a determination of eligibility for power cost equalization,the utility,as a part of its service,shall receive power cost equalization and pass power cost equalization benefits to its customers under AS 42.45.100 -42.45.150. Sec.42.45.150.DEFINITIONS FOR AS 42.45.100 -42.45.150.In AS 42.45.100 -42.45.150, (1)"community facility”means a water and sewer facility,public outdoor lighting,charitable educational facility,or community building whose operations are not paid for by the state,the federal government,or private commercial interests; (2)"eligible electric utility”or "electric utility”means a public, cooperative,or other corporanion,company,individual,or association of individuals, and includes the lessees,trustees,or receivers appointed by a court,that (A)owns,operates,manages,or controls a plant or system for the furnishing,by generation,transmission or distribution,of electric service to the public for compensation; (B)during calendar year 1983,had a residential consumption level of power eligible for power cost equalization under former AS 44.83 of less than 7,500 megawatt hours or had a residential consumption level of power eligible for power cost equalization under former AS 44.83 of less than 15,000 megawatt hours if the utility served two or more municipalities or unincorporated communities;and (C)during calendar year 1984,used diesel fired generators to produce more than 75 percent of the electrical consumption of the utility;an electric utility that is a subsidiary of another electric utility is an "eligible electric utility”if the operations of the subsidiary,considered separately,meet -15-HCS CSSB 106(FIN) woOoNDRNNhe&wedll<aoT<_<nooowoOBNNDAUW&|SYY=S&S20 Chapter 18 the eligibiliry requirements of AS 42.45.100 -42.45.150;if an electric utiliry did not receive power cost assistance in 1983 but is otherwise eligible for power cost equalizauon under AS 42.45.100 -42.45.150,the utility is an "eligible electric utility”; | (3)"power costs”means costs used in determining power cost equalization under AS 42.45.110(a)and (c). Sec.42.45.160.ADJUSTMENTS TO POWER COST EQUALIZATION.(a) The commission may adjust the power cost equalization per kilowatt-hour,determined under AS 42.45.100 -42.45.150,payable to an electric utility that is subject to rate regulation under AS 42.05 if the (1)commission has approved a fuel cost rate adjusmment caused by an increase or decrease in the electric utility's cost of fuel; (2)commission has approved a permanent or interim rate increase or decrease that establishes a higher or lower power cost; (3)authority has discovered,in reviewing the monthly data submitted by the electric utility,discrepancies that require adjustment of the power cost equalization;or (4)authority determines that appropriations are insufficient to finance full payments to eligible electric utilites. (b)An electric utility that is eligible to receive power cost equalization under this section and that receives power cost equalization per kilowatt-hour approved by the department shall report monthly to the department within the time and in the form the department requires.An electric utility shall report (1)the power cost equalization per kilowart-hour approved by the department, (2)the total kilowatt-hours sold to each class of customer during the preceding month; (3)the total kilowatt-hours eligible for power cost equalization under this section sold to each class of customer during the preceding month; (4)the total kilowatt-hours generated during the preceding month,if available; HCS CSSB 106(FIN)-16- uooNDn&|]BH=eeCenmnuwanweaauonrtsChapter 18 (5)any department approved amendments to the schedule of rates in effect during the preceding month;and (6)an increase or decrease in the current unit price of fuel from the base price used by the department in determining power costs if the change is expected to result in a subsequent power cost equalization adjustment. (c)The provisions of AS 42.45.100 -42.45.150 relating to the determination of the amount of power cost equalization and payment of the equalization assistance apply to equalization assistance under this section. Sec.42.45.170.EQUALIZATION ASSISTANCE TO UNREGULATED UTILITIES.(a)An electric utility that is not subject to rate regulation by the Alaska Public Utilities Commission under AS 42.05 may receive power cost equalization if the utility is otherwise eligible for equalization assistance under AS 42.45.100 - 42.45.150 and if the utility (1)files with the department financial data necessary to determine the power cost equalization per kilowatt-hour as prescribed by the department and that is in compliance with AS 42.45.100 -42.45.150; (2)reports monthly to the department,within the time and in the form required,the information required in (b)of this section; | (3)sets rates .(A)that consider the power cost equalization provided under AS 42.45.100 -42.45.150 by subtracting from its revenue requirements for electric services the power cost equalization per kilowatt-hour that it is eligible to receive;and (B)under which the power cost equalization provided in AS 42.45.060 -42.45.110 is applied as a credit only against the cost of kilowatt-hours eligible for equalization assistance under AS 42.45.100 - 42.45.150 that are consumed by each customer in any month; (4)allows audits that the department determines are necessary to ensure compliance with this section;and (5)furnishes its electric service customers eligible under this program a notice as specified in AS 42.45.120. -17-HCS CSSB 106(FIN) 0OIDA&®WwNHmMNeeeeeeeeeeeeee©0PONYHAUA&|SNY=COChapter 18 (b)An electric utility that is eligible to receive power cost equalization under this section shall report in accordance with (a)(2)of this section (1)the power cost equalization per kilowatt-hour approved by the departrnent, (2)the total kilowart-hours sold to each class of customer during the preceding month; (3)the total kilowart-hours eligible for power cost equalization under this section sold to each class of customer during the preceding month; (4)the total kilowatt-hours generated during the preceding month,if available; (5)any amendments to the schedule of rates in effect during the preceding month;and , (6)an increase or decrease in the current unit price of fuel from the base price used by the department in determining power costs if the change is expected to result in a subsequent equalization assistance level adjustment. (c)An electric utility that is eligible to receive power cost equalization under this section may have its power cost equalization per kilowatt-hour determinaton changed by the department if the department (1)has verified an increase or decrease in the electric utlity's cost of fuel; (2)has verified an increase in rates based on an increase in costs; (3)has discovered,in reviewing the monthly data submitted by the electric utility,discrepancies that require adjustment of the power cost equalization:or (4)determines that appropriasons are insufficient to finance full payments to eligible electric udilites. (d)The provisions of AS 42.45.100 -42.45.150 relating to the determination of the amount of power cost equalization and payment of the equalization assistance apply to equalization assistance under this section. (e)An application for power cost equalization by an electric utility that is eligible to receive power cost under this section does not extend the jurisdiction of the Alaska Public Utilities Commission beyond that established by AS 42.05. HCS CSSB 106(FIN)-18- ©eHAUH&|WwoeeeeeeeoAARUYNReEOSSSRBYRRECw&-Chapter18 Sec.42.45.180.GRANTS FOR UTILITY IMPROVEMENTS.(a)The department may make a grant from the fund for an eligible usiliry for a small power project that will reduce the cost of generating or wransmitting power to the customers of the utility.The amount of the grant may not exceed 75 percent of the cost of the project.The department may not make a grant under this section unless the eligible utiliry has secured financing for 25 percent of the cost of the project from a source other than the power cost equalization and rural electric capitalization fund,as provided under (c)of this section. (b)The department may not allocate more than three percent of the balance in the fund to grants under this section in a fiscal year. (c)In determining whether an eligible utility has secured financing for 25 percent of the cost of the project from a source other than the power cost equalization and rural electric capitalization fund,the department shall accept solicited and unsolicited proposals for third party financing or for a joint venture between the uclity and an entity from the private sector provided that the private sector participant has (1)a valid state business license; (2)a resolution or letter of agreement executed by the eligible utility agreeing to participation by the private sector participant, '(3)a business plan that illustrates how the proposed project will reduce the cost of generating or transmitting power to the customers of the utility. (d)In this section, (1)"eligible utility”has the meaning given in AS 42.45.150; (2)"project”includes (A)power generation systems; (B)transmission systems; (C)distribution systems, (D)metering systems; (E)energy store systems; (F)energy conservation programs;and (G)bulk fuel storage facilities; (3)"small power project”means a new or modified project that will -19-HCS CSSB 10 FiN) omenHDWH&|NWNm=_-ps=©Chapter 18 either generate,store,or conserve no more than 1.5 megawatts of power or provide a metering system,transmission system,distribution system,or bulk fuel storage facility that has an estimated cost of less than $3,000,000. Sec.42.45.190.|DEFINITION FOR AS 42.45.100 -42.45.190.In AS 42.45.100 -42.45.190,"fund”means the power cost equalization and rural electric capitalization fund established under AS 42.45.100. ARTICLE 3.ELECTRICAL SERVICE EXTENSION FUND. Sec.42.45.200.ELECTRICAL SERVICE EXTENSION FUND ESTABLISHED.(a)The electrical service extension fund is established as a separate fund in the department.The fund consists only of money appropriated to it by the legislature. (b)The department may make grants from the electrical service extension fund to certificated electric utilities and to electric utilities exempt from certification under AS 42.05.711,as a first priority,to pay for costs of site preparation and construction for the extension of electrical service to private residences and small businesses not currently served by an electric utiliry and,as a second priority,for making improvements to existing utilities.The amount of a grant made under this section may not exceed 60 percent of the total cost of construction of the project.The costs considered in making a grant may not include costs of planni-.:,feasibility studies,or design. (c)An electric utility that has received a grant under this section may charge a connection fee for initial connection to the electrical service made available because of the construction.The connection fee for each residential or commercial structure shall conform to the line extension policy of the utility., (d)The department shall adopt regulations under AS 44.62 (Administrative Procedure Act)to implement this section. (e)In this section,"certificated”means holding a ceruficate of public convenience and necessity issued by the Alaska Public Unlities Commission under AS 42.05. ARTICLE 4.BULK FUEL REVOLVING LOAN FUND. Sec.42.45.250.BULK FUEL REVOLVING LOAN FUND.(a)The bulk fuel HCS CSSB 106(FIN)-20- oOoYNDR&&hwpe-_-=OleOleloCeoerwriaweoeaonkus7 Chapter 18 revolving loan fund is established in the deparmnent to assist communities in purchasing bulk fuel.A community,or a private individual who has written endorsement from the governing body of the community,is eligible for a loan from the bulk fuel revolving loan fund for a bulk fuel purchase. (0)Money in the fund may be used by the legislature to make appropriations for costs of administering this section. (c)The foreclosure expense account is established as a special account within the bulk fuel revolving loan fund.This account is established as a reserve from fund equity. (d)The departnent may spend money credited to the foreclosure expense account when necessary to protect the state's security interest in collateral on loans made under this section or to defray expenses incurred during foreclosure proceedings after a default by an obligor. (e)Loans made from the bulk fuel revolving loan fund to one borrower in any fiscal year are not subject to AS 42.45.060 and (1)may not exceed $100,000; (2)shall be repaid in one year or less;and (3)may not exceed 90 percent of the wholesale price of the fuel purchased. (f)Interest may be charged on a loan made from the bulk fuel revolving loan fund.Interest shall be charged on a loan at a rate equal to the percentage of the average weekly yield of municipal bonds for the 12 months preceding the date of the loan,as determined by the department from municipal bond yield rates reported in the 30-year revenue index of the Weekly Bond Buyer.However,if the department finds that a community cannot afford to repay a portion of interest on a loan,and makes a determination in writing,the deparmment may reduce or eliminate the interest rate applicable to the loan. (g)Repayments of the principal,the interest,and the money chargeable to principal or interest that is collected through liquidation by foreclosure or other process on a loan made under this section shall be paid into the bulk fuel revolving loan fund. The fund is noc a dedicated fund. -21-;HCS CSSB 106(FIN) oFOoOoSABDNW&|BweleeeyOocosnAUW&|]NY--CO20 Chapter 18 (h)The department may conrract for the administration of the bulk fuel loan program established in this secon. (i)The department shall dispose of property acquired through default or foreclosure of a loan made under this section.Disposal shall be made in a manner that serves the best interests of the state,and may include the amortization of payments over a period of years. (j)The department may adopt regulations necessary to carry out the provisions of this section,including regulations to establish reasonable fees for services provided and charges for collecting the fees. (k)The department may collect the fees and collection charges established under (i)of this section and shall deposit the money in the general fund. (1)In this section, (1)"bulk fuel storage faciliry”means a storage tank capable of holding at least 10,000 gallons of petroleum fuel;and (2)"community”means an organized municipality or an unincorporated village that is a social unit,with a population of less than 2,000 people. ARTICLE 5.JOINT ACTION AGENCEES. Sec.42.45.300.JOINT ACTION AGENCIES.Two or more public utilities may form a joint action agency for the purpose of participation in the design, construction,operation,and maintenance of a generating or transmission facility and to secure financing for carrying out the design,construction,operation,and maintenance of the facility.A joint action agency may request the Alaska Induswial Development and Export Authority to issue revenue bonds for projects of the agency. A joint action agency has the powers of a public utility under AS 42.05. ARTICLE 6.MISCELLANEOUS PROVISIONS. Sec.42.45.400.ASSISTANCE TO RURAL UTILITIES.The department shall provide technical assistance to rural utilities including catastrophe prevention programs and other training programs for utility projects.The department shall provide rural utlities with the technical assistance and training that the utilities need to improve the efficiency,safety,and reliability of their power systerms and to prevent emergency situations from developing.At a minimum,the assistance and training must include HCS CSSB 106(FIN)-22- oeCOwDAehwwWwon_-_=-==efetlOotllSIAAeAOHRESChapter 18 information on (1)reduci z distribution line losses; (2)installacon of generators that are more fuel efficient, (3)preventative maintenance programs; (4)safety inspections; (5)installing and maintaining waste heat systems; (6)improved metering systems; (7)improved management and administration;and (8)coordinating regional activities,including circuit rider maintenance programs. (b)In providing rural utilities with technical assistance and training,the department shall give priority to contracting with the private sector for these services. Sec.42.45.410.RELATIONSHIP WITH PRIVATE SECTOR.The department shall,to the maximum extent feasible,carry out its powers and duties under this chapter by entering into contracts with appropriate entities in the private sector. ARTICLE 7.GENERAL PROVISIONS. Sec.42.45.990.DEFINITIONS.In this chapter,unless the context otherwise requires, (1)"department”means the Department of Community and Regional Affairs; | (2)"feasibility study” (A)means a study conducted to establish the economic and environmental practicality of completing a proposed power project; (B)includes engineering and design work to meet the requirements for submission of a license application for a proposed new project to the Federal Energy Regulatory Commission; (3)"power”includes electrical energy generated,distributed,bought, or sold for lighting,heating,power,and every other useful purpose; (4)"power project"or "project”means a plant,works,system,or facility,together with related or necessary facilities and appurtenances,including a divided or undivided interest in or a right to the capacity of a power project or project, -23-HCS CSSB 106(FIN) oocoYDnHhh|WY=vlotiololonEoeoeoNNAUH&|SNY&S&SChapter 18 thar is used or is useful for the purpose of (A)electrical or thermal energy production other than nuclear ( energy production; (B)waste energy utilization and energy conservation;or (C)transmission,purchase,sale,exchange,and interchange of electrical or thermal energy,including district heating or interties; (5)"reconnaissance study”means a study conducted to assess the present and future electrical and thermal energy needs of an area. *Sec.6.AS 44.47.050(a)is amended to read: (a)The department may (1)advise and assist local governments; (2)serve as staff for the Local Boundary Commission; (3)conduct studies and carry out experimental and pilot projects for the purpose of developing solutions to community and regional problems; (4)promote cooperative solutions to problems affecting more than onecommunityorregion,including joint service agreements,regional compacts,and other y forms of cooperation; (5)serve as a clearinghouse for information useful in solution of community and regional problems,and channel to the appropriate authority requests for information and services;| (6)advise and assist community and regional governments on matters of finance,including but not limited to bond marketing and procurement of federal funds; | (7)prepare suggested guidelines relating to the content of notice of bond sale advertisements,prospectuses,and other bonding matters issued by local governments; (8)administer state funds appropriated for the benefit of unorganized regions within the state,allowing for maximum participation by local advisory councils and similar bodies; (9)carry out those administrative functions in the unorganized borough (that the legislature may prescribe; HCS CSSB 106(FIN)-24- eat©OYAAW&®BwmettgudctctannoneeraneOeoersChapter 18 (10)study existing and proposed laws and stase activities that affect community and regional affairs and submit to the governor recommended changes in chose laws and activices; (11)coordinate activities of the state that affect community and regional affairs; (12)assist in the development of new communities and serve as the agent of the state for purposes of participation in federal programs relating to new communities; (13)supervise planning,management,and other activities required for local eligibility for financial aid under those federal and state programs that [WHICH] provide assistance to community and regional governments; (14)administer state and,as appropriate,federal programs for revenue sharing,grants,and other forms of financial assistance to community and regional governments; (15)provide staff assistance,as requested,wo the Rural Affairs Commission; (16)apply for,receive,and use funds from federal and other sources, public or private,for use in carrying out the powers and duties of the department; (17)request and utilize the resources of other agencies of state government in carrying out the purposes of this chapter to the extent such utilization is more efficient than maintaining departmental staff,reimbursing the other agencies when appropriate; (18)[REPEALED (19)]advise and assist municipalities on procedures of assessment, valuation,and taxation,and notify municipalities of major errors in those procedures; 9 out the ers and duti it under AS 42.45: (20)carry out other functions and duties,consistent with law,necessary or appropriate to accomplish the purpose of this chapter. *Sec.7.AS 44.83.030 is repealed and reenacted to read: Sec.44.83.030.MEMBERSHIP OF THE AUTHORITY.The directors of the Alaska Energy Authority are the members of the Alaska Industrial Development and -25-HCS CSSB 106(FIN) Chapter 18 Export Authority. *Sec.&AS 44.83.040(a)is amended to read: (a)The chair_and vice-chair of the Alaska Industrial Development and Export Authority shall serve as officers of the Alaska Energy Authority 1 2 3 4 5 [DIRECTORS SHALL ELECT ONE OF THEIR NUMBER AS CHAIRMAN AND 6 MAY ELECT OTHER OFFICERS THEY DETERMINE DESIRABLE].The powers 7 of the Alaska Energy Authority [AUTHORITY]are vested in the directors,and three 8 [FOUR]directors of the authority constimte a quorum.Action may be taken and 9 motions and resolutions adopted by the Alaska Energy Authority (AUTHORITY)at 10 a meeting by the affirmative vote of a majority of the directors.The directors of the 11 Alaska Energy Authority [AUTHORITY]serve without compensation,but they shall 12 receive the same travel pay and per diem as provided by law for board members 13 under_AS 39.20.1890. 14 *Sec.9.AS 44.83.070 is amended to read: 15 Sec.44.83.070.PURPOSE OF THE AUTHORITY.The purpose of the 16 authority is to promote,develop,and advance the general prosperity and economic 17 welfare of the people of the state by providing a means of (CONSTRUCTING, 18 ACQUIRING,]financing and operating power projects and facilities that recover and 19 use waste energy. 20 *Sec.10.AS 44.83.080 is amended to read: 21 Sec.44.83.080.POWERS OF THE AUTHORITY.In furtherance of its 22 corporate purposes,the authority has the following powers in addition to its other 23 powers: 24 (1)to sue and be sued; 25 (2)to have a seal and alter it at pleasure; 26 (3)to make and alter bylaws for its organization and internal 27 management, 28 (4)to adopt regulations governing the exercise of its corporate powers; 29 (5)to (ACQUIRE,WHETHER BY CONSTRUCTION,PURCHASE, 30 GIFT OR LEASE,AND TO]improve,equip,operate,and maintain power projects; 31 (6)to issue bonds to carry out any of its corporate purposes and HCS CSSB 106(FIN)-26- oOoOoYNDMA&|wm|nlgallcandicEanonEE©erItAABAHES20 Chapter 18 powers,including [THE ACQUISITION OR CONSTRUCTION OF A PROJECT TO BE OWNED OR LEASED,AS LESSOR OR LESSEE,BY THE AUTHORITY,OR BY ANOTHER PERSON,OR THE ACQUISITION OF ANY INTEREST IN A PROJECT OR ANY RIGHT TO CAPACITY OF A PROJECT,]the establishment or increase of reserves to secure or to pay the bonds or interest on them,and the payment of all other costs or expenses of the authority incident to and necessary or convenient tO Carry out its corporate purposes and powers; (7)to sell,lease as lessor or lessee,exchange,donate,convey,or encumber in any manner by mortgage or by creation of any other security interest,real or personal property owned by it,or in which it has an interest,when,in the judgment of the authority,the action is in furtherance of its corporate purposes; (8)to accept gifts,grants,or loans from,and enter into contracts or other transactions regarding them,with any person; (9)to deposit or invest its funds,subject to agreements with bondholders; (10)to enter into contracts with the United States or any person and, subject to the laws of the United States and subject to concurrence of the legislature, with a foreign country or its agencies,for the financing,(CONSTRUCTION, ACQUISITION,]operation,and maintenance of all or any part of a power project, either inside or outside the state,and for the sale or transmission of power from a project or any right to the capacity of it or for the security of any bonds of the authority issued or to be issued for the project; (11)to enter into contracts with any person and with the United States, and,subject to the laws of the United States and subject to the concurrence of the legislature,with a foreign country of its agencies for the purchase,sale,exchange, transmission,or use of power from a project,or any right to the capacity of it, (12)to apply to the appropriate agencies of the state,the United States, and to a foreign country and any other proper agency for the permits,licenses,or approvals as may be necessary,and to [CONSTRUCT,]maintain and operate power projects in accordance with the licenses or permits,and to obtain,hold,and use the licenses and permits in the same manner as any other person or operating unit, -27-HCS CSSB 106(FLN) efooOeNHDA&|]WN=ESSEol9we=eOF6DONAHD&|]NY--©&Chapter 18 (13)[TO PERFORM RECONNAISSANCE STUDES,FEASIBILITY STUDIES,AND ENGINEERING AND DESIGN WITH RESPECT TO POWER PROJECTS; (14)]to enter into contracts or agreements with respect to the exercise of any of its powers,and do all things necessary or convenient to carry out its corporate purposes and exercise the powers granted in this chapter, (14)(15)TO EXERCISE THE POWER OF EMINENT DOMAIN IN ACCORDANCE WITH AS 09.55.240 -09.55.460; (16)]to recommend to the legislature (A)(THE ISSUANCE OF GENERAL OBLIGATION BONDS OF THE STATE TO FINANCE THE CONSTRUCTION OF A POWER PROJECT IF THE AUTHORITY FIRST DETERMINES THAT THE PROJECT CANNOT BE FINANCED BY REVENUE BONDS OF THE AUTHORITY AT REASONABLE RATES OF INTEREST; | (B)}]the pledge of the credit of the state to guarantee repayment of all or any portion of revenue bonds issued to assist in construction of power projects; (B)((C)}an appropriation from the general fund (i)for debt service on bonds or other project purposes; (ii)to reduce the amount of debt financing for the project; {(D)AN APPROPRIATION TO THE POWER PROJECT FUND FOR A POWER PROJECT; (E)REPEALED (F)DEVELOPMENT OF A PROJECT UNDER FINANCING ARRANGEMENTS WITH OTHER ENTITIES USING LEVERAGED LEASES OR OTHER FINANCING METHODS; (G)AN APPROPRIATION FOR A POWER PROJECT ACQUIRED OR CONSTRUCTED UNDER AS 44.83.380 -44.83.425 (ENERGY PROGRAM FOR ALASKA)}. HCS CSSB 106(FIN)-28- a Chapter18 *Sec.11.AS 44.83.090(a)is amended to read: (a)The authority shall,in addition to the other methods that [WHICH]it may find advantageous,provide a method by which municipal electric,rural electric, cooperative electric,or private electric utilities and regional electric authorities,or other persons authorized by law to engage in the distribution of electricity may secure a reasonable share of the power generated by a project,or any interest in a project,or for any right to the power and shall sell the power or cause the power to be sold at the lowest reasonable prices that [WHICH]cover the full cost of the electricity or services,including capital and operating costs,debt coverage as considered appropriate by the authority,and other charges that may be authorized by this chapter.Except for a contract or lease entered into under former AS 44.83.380 -44.83.425,a contract or lease for the sale,transmission,and distribution of power generated by a project or any right to the capacity of it shall provide: (1)for payment of all operating and maintenance expenses of a project and costs of renewals,replacements,and improvements of it, (2)for interest on and amortization charges sufficient to retire bonds of the authority issued for the project and reserves for them,plus a debt service coverage factor as may be determined by the authority to be necessary for the marketability of its bonds; (3)for monitoring of the project by the authority or its agents; (4)for full and complete disclosure to the authority of all factors of costs in the transmission and distribution of power,so that rates to any persons may be fixed inidally in the contract or lease and may be adjusted from time to time on the basis of true cost data; (5)for periodic revisions of the service and rates to persons on the basis of accurate cost data obtained by the accounting methods and systems approved by the directors and in furtherance and effectuation of the policy declared in this chapter, (6)for the cancellation and termination of a contract or lease upon violation of its terms by any person; (7)for security for performance as the authority may consider -29-HCS CSSB 106(FIN) aeChapter 18 practicable and advisable,including provisions assuring the continuance of the distribution and transmission of power generated by a project and the use of its facilities for these purposes;and (8)other terms not inconsistent with the provisions and policy of this chapter as the authority may consider advisable. *Sec.12.AS 44.83.110(b)is amended to read: (b)Notwithstanding any other provisions of this chapter,the trust indenture, trust agreement,secured loan agreement,or other instument or the resolution constituting a contract with bondholders shall contain a covenant by the authority that it will at all times maintain rates,fees,or charges sufficient to pay,and that a contract entered into by the authority for the sale,transmission,or distribution of power shall contain rates,fees,or charges sufficient to pay the costs of operation and maintenance of the project,the principal of and interest on bonds issued under the trust agreement as the same severally become due and payable,to provide for debt service coverage as considered necessary by the authority for the marketing of its bonds and to provide for renewals,replacements,and improvements of the project,and to maintain reserves required by the terms of the trust agreement.This subsection does not require a covenant that varies from a covenant entered into in accordance with the provisions of former AS 44.83.380 -44.83.425. *Sec.13.AS 44.83.382(a)is amended to read: (a)A power development fund is established in the Alaska Energy Authority to carry out the purposes of former AS 44.83.380 -44.83.425. *Sec.14.AS 44.83.384(a)is amended to read: (a)The fund may be used by the authority to provide money for (1)[RECONNAISSANCE AND FEASIBILITY STUDIES AND POWER PROJECT FINANCE PLANS PREPARED UNDER AS 44.83.177 - 44.83.181; (2)THE COST OF A POWER PROJECT,INCLUDING BUT NOT LIMITED TO COSTS OF ACQUIRING NECESSARY LICENSES,PREPARING ENGINEERING DESIGNS,OBTAINING LAND,AND CONSTRUCTING THE POWER PROJECT; HCS CSSB 106(FIN)-30- ©oNDN&|™WwéSLeeeeee©OIAAWEEHESChapter 18 (3)]the defeasance of bonds,or the payment of debt service on loans for or on an issue of bonds sold in connection with a power project constructed _or acquired before the effective date of this section; (2)[(4)]the cost of operating and maintaining power projects constructed or acquired before the effective date of this section;and (3)[(5)]debt service on power projects constructed _or_acquired before the effective date of this section. *Sec.15.AS 44.83.388(a)is amended to read: (a)The authority shall maintain records of power project allocations from the fund for each power project (1)approved in accordance with former AS 44.83.185;and (2)for which an allocation is made from an appropriation made by the legislature without specifying an appropriation to a project. *Sec.16.AS 44.83.396(a)is amended to read: (a)A power project that was [IS]acquired or constructed as part of the former energy program for Alaska is owned,and shall be administered,by the authority. *Sec.17.AS 44.83.398(a)is amended to read: (a)The authority shall sell power produced from power projects acquired or constructed under the former energy program for Alaska.For purposes of this section, Tyee Lake,Swan Lake,Solomon Gulch,and Terror Lake hydroelectric facilities are consideredtobeonepowerproject.This power project is referred to as the inidal project. *Sec.18.AS 44.83.398(f)is amended to read: (f)The provisions of (b)of this section do not apply to an intertie thar is authorized as a separate project under former AS 44.83.380.The authority shall establish and maintain separate power rate schedules applicable to each intertie that it has acquired or constructedas a separate power projectunderthe energy program for Alaska.The power rate schedules shall produce sufficient revenue from utilities connected by the intertie to pay (1)operation,maintenance,and equipment replacement costs of the intertie;(2)debe service of the intertie;and (3)safety inspections and -31-HCS CSSB 106(FIN) ow2IQAA&|NY=aaee>oy©eXAHA&BwDNH=Oo20 Chapter 18 investigations of the intertie by the authority.If the authority determines that an intertie has ceased to function as a separate project and has become a part of one or more other power projects as a transmission line,the power rate schedules established under this subsection shall be terminated and a wholesale power rate applicable to the former intertie shall be calculated under (b)of this section for the project or projects of which it has become a part *Sec.19.AS 44.83.510(a)is amended to read: (a)(THE AUTHORITY MAY BORROW FROM THE FUND FOR THE PURPOSE OF FINANCING A POWER PROJECT ACQUIRED OR CONSTRUCTED BY THE AUTHORITY UNDER THE ENERGY PROGRAM FOR ALASKA (AS 44.83.380 -44.83.425).]Repayment of a loan from the former power development revolving loan fund must be made with the proceeds from the sale of power from projects in the former energy program for Alaska.Except as provided in AS 44.83.398(i),the payments required to be made by the authority on a loan from the fund constitute debt service for the purpose of calculating the wholesale power rate in AS 44.83.398(b)(1). *Sec.20.AS 44.83.530 is amended to read: Sec.44.83.530.DEFINITIONS.In AS 44.83.500 -44.83.530, (1)"fund"means the former power development revolving loan fund; and (2)"power project”means a project acquired or constructed under the former energy program for Alaska,AS 44.83.380 -44.83.425. *Sec.21.AS 44.83.930(a)is amended to read: (a)When a project is operated by the authority,the authority shall enter into one or more contracts for the sale of electrical power,energy,transmission capacity, or service from the project.Unless the contract is entered into under former AS 44.83.380 -44.83.425,a contract entered into under this section must meet all requirements of AS 44.83.090. *Sec.22.AS 44.83.990(3)is amended to read: (3)"feasibility study” (A)means a study conducted for the purpose of establishing the HCS CSSB 106(FIN)-32- ooOeNDAMN&|wem=NNNROetettpets= SoCaSIABROKReMOSChapter 18 economic and environmental practicality of completing a proposed power project under former AS 44.83.181; (B)includes engineering and design work to meet the requirements for submission of a license application for a proposed new project to the Federal Energy Regulatory Commission; *Sec.23.AS 44.88.105(d)is amended to read: (d)The chairman of the authority shall annually,no later than January 2, certufy in writing to the governor and the legislature the amount,if any,required to restore a capital reserve fund to the capital reserve fund requirement.The legislature may appropriate to the authority the amount certified by the chairman of the authority. The authority shall deposit the amounts appropriated under this subsection during a fiscal year in the proper capital reserve fund.Nothing in this section creates a debt or liability of the state.In this subsection,"capital reserve fund”means a capital reserve fund that (1)is created under this section on or before January 1,1989;[,OR] (2)secures refunding bonds if the refunding bonds are issued to refund bonds that are secured by a capital reserve fund created under this section on or before January 1,1989;or (3)secures bonds issued on or after the effective date of this section for er int *Sec.24.AS 44.88.155(d)is amended to read: (d)A loan participation purchased by the authority with assets of the enterprise development account or with proceeds of bonds secured by assets of the enterprise development account (1)may not exceed $10,000,000;however,in the case of a loan may exceed (2)may not be purchased unless (A)the project applicant is not,or,if the applicant is not a single proprietorship,all members of the business enterprise or enterprises constituting the project applicant are not,in default on another loan made by -33-HCS CSSB 106(FIN) awoenreNDAhm|]NHUlortill <asill- olllll=aSeonADAWheYBN=OS19 Chapter 18 the state or by a public corporation of the state;and (B)at least 20 percent of the principal amount of the loan is retained by the loan originator, (3)may not be purchased if the loan to be purchased exceeds the cost of the project or 75 percent of the appraised value of the project,whichever is less, unless the amount of the loan in excess of this limit is federally insured or guaranteed or is insured by a qualified mortgage insurance company; (4)may not be purchased if the participation in the loan to be purchased is for a term longer than three-quarters of the authority's estimate of the life of the project or 25 years from the date the loan is made,whichever is earlier; however,in the case of a loan participation for a power transmission intertie,the term_may not be longer than 50 years from the date the loan is made; (5)may be made only if the participation in the loan to be purchased contains amortization provisions;the amortization provisions (A)must be complete and satisfactory to the authority and require periodic payments by the borrower, (B)may allow the loan originator to amortize the portion of the loan retained by the loan originator using a shorter amortization schedule than the amortization schedule for the portion of the loan held by the authority if (i)in the authority's opinion,the project financed can support the increased debt service;and (ii)the accelerated amortization schedule is required to induce the originator to make the loan; (6)may be made only if the participation in the loan to be purchased is in the form and contains the terms and provisions with respect to insurance,repairs, alterations,payment of taxes and assessments,default reserves,delinquency charges, default remedies,acceleration of maturity,secondary liens,and other matters the authority prescribes;and | (7)may be made only if the participation in the loan to be purchased is secured as to repayment by a mortgage or other security instrument in the manner the authority determines is feasible to assure timely repayment under a loan agreement HCS CSSB 106(FIN)-34- Chapter18 entered into with the borrower. *Sec.25.AS 44.88.155(g)is amended to read: (g)Notwithstanding any other provision of this section,the authority may waive or modify the requirements of this section as it considers appropriate and prudent in order to finance a project if the authority intends to own the project oc in order to finance 2power transmission intertie project. *Sec.26.AS 44.88.900(10)is amended to read: (10)"project”means (A)a plant or facility used or intended for use in connection with making,processing,preparing,transporting,or producing in any manner, goods,products,or substances of any kind or nature or in connection with developing or utilizing a natural resource,or extracting,smelting,transporting, converting,assembling,or producing in any manner,minerals,raw materials, chemicals,compounds,alloys,fibers,commodities and materials,products,or substances of any kind or nature; (B)a plant or facility used or intended for use in connection with a business enterprise;a (C)commercial activity by a small enterprise; (D)a plant or facility demonsrating technological advances of new methods and procedures and prototype commercial applications for the exploration,development,production,transportation,conversion,and use of energy resources; (E)infrastructure for a new tourism desdnation facility or for the expansion of a tourism destination facility; n facility,other ¢facilit d i in (D)of thi for the genera transmission ¥men ti versi rces; *Sec.27.AS 39.50.200(b)(46)and AS 44.83.045 are repealed. *Sec.28.AS 39.50.200(b)(46);AS 44.83.010,44.83.105,44.83.162,44.83.163,44.83.164, 44.83.165,44.83.170,44.83.177,44.83.179,44.83.181,44.83.183,44.83.185,44.83.187, 44.83.189,44.83.300,44.83.310,44.83.320,44.83.325,44.83.330,44.83.340,44.83.350, -35-HCS CSSB 106(FLN) teOoOotAmW&®&YWw-_-_-Olltlopt©eIAA&wn=OSChapter 18 44.83.360,44.83.361,44.83.363,44.83.370,44.83.380,44.83.384(b),44.83.384/(c),44.83.390, 44.83.392,44.83.400,44.83.410,44.83.500,44.83.510(b),44.83.520,44.83.600,44.83.605. 44.83.610,44.83.615,44.83.620,44.83.625,44.83.630,44.83.650,44.83.990(8),and 44.83.99Q(9)are repealed. *Sec.29.The Alaska Industrial Development and Export Authority may issue bonds to finance the acquisition,design,and construction of a power transmission intertie of at least 138 kilovolts between Healy and Fairbanks and owned,for the benefit of all of the utilities participating in the intertie,by Golden Valley Electric Association,Inc.The principal amount of the bonds may not exceed $60,000,000. *Sec.30.The Alaska Industrial Development and Export Authority may issue bonds to finance the acquisition,design,and construction of a power transmission intertie of at least 138 kilovolts between Anchorage and the Kenai Peninsula to be owned,for the benefit of all of the utilities participating in the interties,by Chugach Electric Association,Inc.The principal amount of the bonds may not exceed $60,000,000. | *Sec.31.The Alaska Industrial Development and Export Authority may issue bonds to finance the acquisition,design,and construction of a power transmission intertie of at least 115 kilovolts between the Swan Lake and Tyee Lake hydroelectric projects and owned,for the benefit of all of the utilines participating in the intertie,by Ketchikan Public Utilities.The principal amount of the bonds may not exceed $40,000,000. *Sec.32.The Alaska Industrial Development and Export Authority may issue bonds to finance the acquisition,design,and construction of a power transmission intertie of at least 138 kilovolts between Sutton and Glennallen and owned,for the benefit of all of the utilities participating in the intertie,by Copper Valley Electric Association.The principal amount of the bonds may not exceed $25,000,000. *Sec.33.APPLICABILITY.The repeal of statutes by sec.28 of this Act does not affect existing bonds or actions that have been taken under the repealed provisions. *Sec.34.TRANSITION.All litigation,hearings,investigations,and other proceedings pending under a law amended or repealed by this Act,or in connection with functions transferred by this Act,continue in effect and may be continued and completed by the Alaska Energy Authority or the Department of Community and Regional Affairs,as appropriate, notwithstanding a transfer or amendment or repeal provided for in this Act.Centficates, HCS CSSB 106(FIN)-36- eo?oOMDNHheWwhtoweeeeeeeeeC©SeraweoannasChapter 18 orders,and regulations issued or adopted under authority of a law amended or repealed by this Act remain in effect for the term issued,or until revoked,vacated,or otherwise modified under the provisions of this Act.All contracts,rights,liabilities,bonds,notes,or other obligations created by or under a law amended or repealed by this Act,and in effect on the effective date of this Act remain in effect notwithstanding this Act's taking effect.The Department of Community and Regional Affairs shall assume,for those programs and projects transferred to it,the licenses,contracts,rights,liabilities,notes,or other obligations of the former Alaska Energy Authority with the same limitations and provisions as under a license, contact,right,liability,note,or other obligation of the former Alaska Energy Authority.Real property,records,equipment,and other property of the Alaska Energy Authoriry related to the programs and projects transferred to the department shall be transferred to the Department of Community and Regional Affairs. . *Sec.35.TRANSITIONAL PROVISION CONCERNING EMPLOYEES OF THE ALASKA ENERGY AUTHORITY.When the Department of Community and Regional Affairs determines that continued employment of certain employees of the Alaska Energy Authority is necessary to continue uninterrupted service to programs,facilities,and power projects formerly owned by the Alaska Energy Authority that have been transferred to the department under this Act,the department may continue the employment of those employees. *Sec.36.INITIAL TERMS OF LOAN COMMITTEE.Notwithstanding AS 42.45.06Qb), enacted by sec.5 of this Act,the initial terms of two of the public members of the loan committee established under AS 42.45.060 shall be for rwo years.The remaining two public members shall serve four-year terms as provided in AS 42.45.060. *Sec.37.CONTRACTS WITH PRIVATE SECTOR.The Alaska Energy Authority shall, to the maximum extent feasible,enter into contracts with public utilities and other entities to carry out its duties with respect to the maintenance and operation of power projects owned -by the Alaska Energy Authority. *Sec.38.ORDERLY TRANSFER OF FUNCTIONS.(a)Notwithstanding the effective date of this Act,the governor,the Department of Community and Regional Affairs,the Alaska Energy Authority,and the office of management and budget shall implement this Act in an orderly fashion.The transfer of rural programs operated by the Alaska Energy Authority to the Department of Community and Regional Affairs must be completed no later than -37-HCS CSSB 106(FIN) "eaooNIDO&|]Ww=Chapter 18 December 31,1993.Unal a program is transferred under this section,the Alaska Energy Authority may continue to administer that program under the former provisions of AS 44.83, notwithstanding the repeal of provisions of AS 44.83 in sec.28 of this Act. (b)The Alaska Energy Authority shall assist the members of the Alaska Industrial Development and Export Authority to prepare for the powers and duties granted to them under this Act *Sec.39.In accordance with AS 01.10.030,if a provision of this Act,or the application of a provision of this Act to a person or circumstance,is held invalid,the remainder of this Act and the application to other persons or circumstances shall not be affected thereby. HCS CSSB 106(FIN)-38- LAWS OF ALASKA 1993 Source Chapter No. HCS CSSB_126(FIN)19 AN ACT Making appropriations for grants and loans for hydroelectric projects including power transmission interties,to capitalize certain funds for energy grant and loan programs in the state,including the power cost equalization and rural electric capitalization fund,to the Department of Community and Regional Affairs for operating costs related to power projects and programs and to capitalize the Railbelt energy fund. BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: THE ACT FOLLOWS ON PAGE 1! Approved by the Governor:May 13,1993 A atenl CE PPantinn Diateas Anmiet 11 1002 10 il Chapter 19 AN ACT Making appropriations for grants and loans for hydroelectric projects including power transmission interties,to capitalize certain funds for energy grant and loan programs in the state,including the power cost equalization and rural electric capitalization fund,to the Department of Community and Regional Affairs for operating costs related to power projects and programs and to capitalize the Railbelt energy fund. *Section 1.(a)Subject to the conditions set out in (b)and (c)of this section,the sum .of $43,200,000 is appropriated from the Railbelt intertie reserve (sec.159,ch.208,SLA 1990) to the Department of Administration for payments as a grant under AS 37.05.316 to Golden Valley Electric Association for the benefit of all the utilities participating in the intertie for design and construction of a power transmission intertie of at least 138 kilovolts between Healy and Fairbanks.' "om eomeNANHNBm|]WHoeNeWweNYNNNOEOESS|-_aeonweseweeiriankunwrezsChapter 19 (b)The appropriation made by (a)of this section is contingent upon the execution of a written agreement between the electric utilities participating in the Healy-Fairbanks power transmission intertie,the Department of Administration,and the Alaska Industrial Development and Export Authority that provides that the participating utility or utilities agree to ) (1)pay the design and construction costs for the Healy-Fairbanks power transmission intertie that exceed $43,200,000; (2)pay the operation and maintenance costs of the Healy-Fairbanks power transmission intertie;and (3)allocate,in proportion to the system peak demands of the utilities participating in the intertie,less a 1.5 mill per kilowatt hour charge for all energy assessed to the line paid by the receiving utility, (A)the costs of construction that exceed the amount of the grant under this section; (B)the operation and maintenance costs;and (C)the costs that may reasonably be charged for services provided, including transmission to the intertie. (c)The appropriation made by (a)of this section is contingent upon the execution of a written agreement between the electric utilities participating in the intertie and the department in which Golden Valley Electric Association agrees to provide the other participating utilities access to the intertie for the purpose of assured access to resources, economy energy transactions,and other similar uses. *Sec.2.(a)Subject to the conditions set out in (b)and (c)of this section,the sum of $46,800,000 is appropriated from the Railbelt intertie reserve (sec.159,ch.208,SLA 1990) to the Department of Administration for payment as a grant under AS 37.05.316 to Chugach Electric Association for the benefit of all the utilities participating in the intertie for design and construction of a power transmission intertie of at least 138 kilovolts between Anchorage and the Kenai Peninsula. (b)The appropriation made by (a)of this section is contingent upon the execution of a written agreement between the electric utilities participating in the Anchorage-Kenai Peninsula power transmission intertie,the Department of Administration,and the Alaska HCS CSSB 126(FIN)-2- a Sasee ofFHDNH&|]NHm=weNYNYNYNOOOSe&onreSeerIaankhanosChapter 19 Industrial Development and Export Authority that provides that the participating utility or utilities agree to (1)pay the design and construction costs for the Anchorage-Kenai Peninsula power transmission intertie that exceed $46,800,000; | (2)pay the operation and maintenance costs of the Anchorage-Kenai Peninsula power transmission intertie;and (3)allocate,in proportion to the system peak demands of the utilities participating in the intertie less a 1.5 mill per kilowatt hour charge for all energy generated by the Bradley Lake hydroelectric project purchased by the receiving utility, (A)the costs of construction that exceed the amount of the grant under this section; (B)the operation and maintenance costs;and (C)the costs that may reasonably be charged for services provided, including transmission to the intertie. (c)The appropriation made by (a)of this section is contingent upon the execution of a written agreement between the electric utilities participating in the intertie and the department in which Chugach Electric Association agrees to provide the other participating utilities access to the intertie for the purpose of assured access to resources,economy energy transactions,and other similar uses. *Sec.3.The balance in the Railbelt intertie reserve,after the appropriations made by secs.|and 2 of this Act are paid,is appropriated to the Railbelt energy fund (AS 37.05.520). *Sec.4.(a)Subject to the conditions set out in (b)-(d)of this section,the sum of $35,000,000 is appropriated from the Railbelt energy fund (AS 37.05.520)for deposit in the power project fund (AS 42.45.010)for payment as a loan under AS 42.45.010 to the participating utilities for the design and construction of a power transmission intertie of at least 138 kilovolts between Sutton and Glennallen. (b)Notwithstanding AS 42.45.010(g),repayments of principal and interest on the loan for which an appropriation is made under (a)of this section are appropriated to the Railbelt energy fund (AS 37.08.520). | (c)The appropriation made by (a)of this section is contingent on the participating utility or utilities and the Department of Community and Regional Affairs entering into an -3-HCS CSSB 126(FIN) eoeoNAA&|SWY=eSNoleeetma©©CONAUW&|]NHFS©zRekaoRChapter 19 agreement for a loan at zero interest for a term of 50 years. (d)The appropriation made by (a)of this section is contingent upon the completion of a feasibility study and finance plan satisfactory to the Department of Community and Regional Affairs as set out in former AS 44.83.181. (e)In this section,"participating utilities”means the utility or utilities participating in the design,construction,operation,and maintenance of the power transmission intertie between Sutton and Glennallen. *Sec.5.(a)Subject to the conditions set out in (b)and (c)of this section,the sum of $20,000,000 is appropriated from the Railbelt energy fund (AS 37.05.520)for deposit in the power project fund (AS 42.45.010)for payment as a loan under AS 42.45.010 to the participating utilities for design and construction of a power transmission interte of at least 115 kilovolts between the Swan Lake and Tyee Lake hydroelectric projects. (b)Notwithstanding AS 42.45.010(g),repayments of principal and interest on the loan for which an appropriation is made under (a)of this section are appropriated to the Railbelt energy fund (AS 37.05.520). (c)The appropriation made by (a)of this section is contingent on the participating utility or utilities and the Department of Community and Regional Affairs entering into an agreement for a loan at three percent interest for a term of 15 years. (d)In this section,"participating utilities”mean the utilities participating in the design, construction,operation,and maintenance of the power transmission intertie between the Swan Lake and Tyee Lake hydroelectric projects. *Sec.6.The sum of $3,900,000 is appropriated from the general fund to the Department of Community and Regional Affairs for operating costs for carrying out its powers and duties under AS 42.45 and AS 44.47.050(19)and (20). *Sec.7.The unexpended and unobligated balances of the following appropriations are repealed and reappropriated to the Railbelt energy fund (AS 37.05.520): (1)that portion of the appropriation made by sec.25,ch.80,SLA 1979,page 66,line 38,as amended by sec.448(a),ch.105,SLA 1985,and sec.275(a),ch.130,SLA 1986,that is allocated by sec.25,ch.80,SLA 1979,page 67,line 5 (Bradley Lake hydro project -$80,000); (2)that portion of the appropriation made by sec.1(a),ch.90,SLA 1981,as HCS CSSB 126(FIN)-4- eoeoNDNH&|]NHmmweNNNNNKNFSS|==aanrwrcseeawaunwhtantsChapter 19 amended by sec.69,ch.92,SLA 1981,and sec.236,ch.141,SLA 1982,that is allocated by sec.1(a)(1),ch.90,SLA 1981,as amended by sec.69,ch.92,SLA 1981 (Bradley Lake - $5,000,000); (3)that portion of the appropriation made by sec.1(b),ch.90,SLA 1981,as amended by sec.69,ch.92,SLA 1981,and sec.236,ch.141,SLA 1982,that is allocated by sec.I(b)(1),ch.90,SLA 1981,as amended by sec.69,ch.92,SLA 1981 (Bradley Lake - $10,000,000); (4)sec.241,ch.141,SLA 1982 (Bradley Lake hydroelectric project - $3,000,000); (5)AS 44.83.420,repealed by sec.318,ch.171,SLA 1984 (Bradley Lake hydroelectric project); (6)sec.5,ch.41,SLA 1986 (Bradley Lake hydroelectric project - $50,000,000); (7)sec.3,ch.128,SLA 1986,page 8,line 7,as amended by sec.1,ch.96, SLA 1987 (Alaska Power Authority,Bradley Lake hydroelectric project -$50,000,000); (8)sec.6,ch.172,SLA 1988 (Bradley Lake power project -$7,000,000). *Sec.8.(a)The sum of $13,200,000 is appropriated from the general fund to the Railbelt energy fund (AS 37.05.520). (b)The sum of $66,900,000 is appropriated from the general fund to the Railbelt energy fund (AS 37.05.520). (c)The sum of $66,900,000 is appropriated from the Railbelt energy fund (AS 37.05.520)to the power cost equalization and rural electric capitalization fund (AS 42.45.100)to capitalize the fund. *Sec.9.The sum of $5,000,000 is appropriated from the general fund to the Department of Community and Regional Affairs for payment as a grant under AS 37.05.316 to the Iliamna-New Halen-Nondalton Electric Cooperative for the design and construction of a 700 kilowatt hydroelectric power project on the Tazimina River and for the associated distribution system. *Sec.10.The balances in the following funds on the effective date of this section are appropriated from the named former funds or accounts under the Alaska Energy Authority to the named funds established in the Department of Community and Regional Affairs to -5-HCS CSSB 126(FIN) eoSeNAON&|SNHm=ol -UlllarTillallla=eeeoovanawn&|SNY=©&20 Chapter 19 capitalize the funds: ALASKA ENERGY FUND OR ACCOUNT DEPARTMENTAL FUND Power cost equalization fund Power cost equalization and rural electric (AS 44.83.162)capitalization fund (AS 42.45.100) Power project fund (AS 44.83.170)Power project fund (AS 42.45.010) Rural electrification revolving Rural electrification revolving loan fund (AS 44.83.361)loan fund (AS 42.45.020) Power development revolving loan fund Four dam pool transfer fund (AS 44.83.500)(AS 42.45.050) Bulk fuel revolving loan fund Bulk fuel revolving loan fund (AS 44.83.600)(AS 42.45.250) *Sec.11.The sum of $3,000,000 is appropriated from the general fund to the power project fund (AS 42.45.010)for payment as a loan to the City of Seward for completion of the electric transmission line from Seward to the Lawing substation. *Sec.12.A sum equal to the amounts deposited in the Southeast energy fund (AS 42.45.040)beginning on the effective date of this Act and ending on June 30,1994,is appropriated from the Southeast energy fund to the Department of Administration for payment as a grant under AS 37.05.316 to the Ketchikan Public Utilities for expenses related to the power transmission intertie between the Swan Lake and Tyee Lake hydroelectric projects. *Sec.13.The sum of $126,600 is appropriated from federal receipts to the Department of Community and Regional Affairs for federally authorized energy programs and projects. *Sec.14.A sum equal to the retained money held by the Alaska Energy Authority that is related to the authority's rural programs is transferred and appropriated to the Department of Community and Regional Affairs for the purposes originally intended and for other energy- related purposes and projects. *Sec.15.This Act takes effect only if the Eighteenth Alaska State Legislature enacts an Act that gives the Department of Community and Regional Affairs responsibility for rural power projects and programs. HCS CSSB 126(FIN)-6-