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Home My WebLink AboutInside Passage Electric Cooperative, Inc. Hoonah Electric Utility Upgrade Project Dec 31, 2010'wwwwvewvweJewevwewvwWwwrwTwwowwow:Business Operating Plan of the Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Project DECEMBER 31,2010 Inside Passage Electric Cooperative,Inc. P.O.Box 210149 Auke Bay,AK 99821 Phone:(907)789-3196 Fax:(907)790-8517 INSIDE PASSAGE ELECTRIC COOPERATIVE January 3,2011 David Lockard,Project Manager Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage,Alaska 99503 Dear Mr.Lockard; I have reviewed the Business Operating Plan for Inside Passage Electric Cooperative,Inc.Hoonah Electric Utility Upgrade Project.I have contacted Jodi Mitchell who is out of the office on medical leave and she has instructed me to acknowledge and accept the terms and conditions contained in the Plan. Please let me know if you have any questions. Respectfully, Inside Passage Electric Cooperative Cc:Jodi Mitchell /CEO General Manager Peter Bibb /Operations Manager P.O.Box 210149 Auke Bay,Alaska 99821 (907)789-3196 Fax (907)790-8517 'TABLE OF CONTENTS I.EEXECUTIVE SUMMARY........csssssesscscccccccsssescscscecennsessesesesccenscaeenssssesescceneneressscsesceesccuascesessosssaccessccesons 2 II.BACKGROUND .......s0sesesescececcssnsssevsceserecncusssscseceucccucnecsescacsecseneeescsesseseneuacsassseseecesconccsssevesenceesensssessases 3 Selected Statistics -Hoonah .....ceccssssscsecssessesesscssescsssescsssesesssesesssessssseassesessusassssesesssssasesssssssasansesaccetseneseasesecsesssees 3 TIT.FACILITY UPGRADE ..........csssssssssccccccccessessessccccceenensrseseccucencusscseessscceceuenenscsesescecesencsssescsescncenacssserecese 4 Electric Power Generation Facility Description......esscssscsssssesnssssessssersssssessssesssssssusessssrsessnsensssssusenseenssnssssesy 4 Project Exclusions .......scsssscssssssessssssesssssssssssessvesssessscestsesssssesssssnsasscsssssessseusssarsssecsussseessuessasssseesecseessiesseuestssessnesesees 4 Electric Power Generation Facility Capacity .....scssssssssssssssssessssssssessecssessnsssnesssescesscssssssecsnscssessseessssenssesesenseasess 4 Site Plan and Project Layout..cscsccsssssesscssecsssssessssssssecssassssessonsssessesssesssssessessssessesesseseaseasssensensaneesesessescesensseersenss 4 TV.FACILITY PARTICIPANTSG........ccccocsssecccnsssccnsnsscccnsvsccescnscsenssvescecensscceesenssesenapscconsescessensesenenasescosnessseaes 7 Contact [mforrmation ...cccccccsscsscscsessescsscsesesessesscsesccsessesesssescassesessscscssavecassensesasseneasetsssesssesesssessssesesensseossesesesstereseessees 7 V.FINANCIAL AND OTHER RESPONSIBILITIES .......ccsssssconsnsesccecsssccvecenscsconnsescnsssasonaneseseccesssssesesnsssanases 8 Turnover and Assumption of Responsibilities /Sustainability........csssssesssessssseessseesssseessssescsssessnsecssssecssasssssnes 8 Staffing and Tratning......ccesssssssssecseesessesssssssssssessenssssssscesecscsnssssesssssssasecsuessessescasesscsesssssseeeseeseauessesensnnsassasseneensees 8 Financial Responsibilities .......cccsssessessessessessnseasesesessensssccssesuressssseseessecsecsseesecsessasessssessacansesnesseceasansenesseanersensesensens 9 Audits and Reporting ...ccccssssessssssecssssssesssssessessssssssnesseessssssesssesssesssessnsseseersessecssesssssansecacesnecsnsessesanecseeseenansseneey 9 VI.SECONDARY OPERATOR ........ccccccssccssscnssscnseconsscescccescrsesccnsssecessenscsensssenescsessseussssnssseecssencsonsssaossesenes 10 VIT.INSURANCE...cssscecenscnnessncsnnnnnccncncnceneccnscsoeceseesasesessnsescscssscsssssssssssnssessenssasasensnsacsnensnaceseseos 10 VIII.REGULATORY REQUIREMENTS ......cssscossscccssccsssensssensescressssassssenscnsssceessonessonssssaessceneccuscssnsesacesacosoesnes 10 IX.FINANCIAL INFORMATION ......ccccosssscsceccussccesscsececcsscccssccsscecsssscesssussecessesenesensesaessseesesccasauscsecesensesees 11 Key Financial Assumptions .....ccsssescssessssessssecsssecsssscssscnssecsseessnecnsacensseseasecaasecsuecsousesusecsurecunsscnnecennecaneccareenasessanennnetay 11 Key Operating Assumptions ........ssccsssecssssesssesssescssessssesessecsssessseessseccsnecsssecssecssacersuegenesinecnsesenasennieesanecsarecnneeenneenneeey 11 Explanation of Financial Terms .......ccccsssssssesssessssseccsnessesnssessnsessussecsneesanecsenneeecnsressnseecsuseesanasenssneesaneressereseansecease 11 TABLES Table A:Power Generation and Consumption Summa ry.......cccccssesssssseersessneensesseesnnscnessnecsnesnneensennnecnseensesensoey 12 Table B:40 Year R&R Schedule -Non Generators Table C:40 Year Generator R&R Schedule...esssseseeeeeeeeeees Table D:40 Year R&R Cashflow o.cccccsssssscssssscsessssscecssesssssssesseseserssesseesesesessscecsesesensnessdssassususenssesesasssecesseaasensanes APPENDIX A:PRIMARY OPERATOR STATEMENT OF QUALIFICATION APPENDIX B:O&M AND R&R COST ESTIMATE ADDITIONAL RELATED AND ATTACHED DOCUMENTS SEE BACK 1.SITE CONTROL DOCUMENTS COVER FOR 2.GRANT AGREEMENT CD VERSION OF THIS PLAN. Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 1 of 16 I.EXECUTIVE SUMMARY This Business Operating Plan (the "Plan”)provides a guideline for the Inside Passage Electric Cooperative,Inc.'s (the "Utility")maintenance,operation and sustainability of the Hoonah Electric Utility Upgrades (the "Facility'). The Inside Passage Electric Cooperative,Inc.operates an electric utility from offices in Auke Bay, Alaska,which provides services to the southeast Alaska communities of Angoon,Hoonah,Kake, Klukwan and Chilkat Valley.The Utility operates on a not-for-profit basis and,accordingly,seeks only to generate revenues sufficient to pay operating and maintenance costs,capital expenditures, depreciation and interest on indebtedness and to provide for the establishment of reasonable margins and reserves.As a RCA economically-regulated utility,the Utility's accounting records conform to the Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission,as modified for loan recipients of the Rural Utilities Service (RUS),and the Utility's rates and tariffs are set following RCA procedures and policies. As the owner and operator,the Utility will be responsible to operate and maintain the newly installed Facility in Hoonah.This Plan has been developed to assist with that effort and estimates the resources required to replace and renew the Facility assets over 40 years.It is anticipated that the new Facility will not result in increased costs for on-going operations and maintenance.The Utility does not allocate its operating or general/administrative costs to each of its individual plant locations;therefore,this Plan does not include operation and maintenance needs and costs and/or general and administrative costs. The Rural Power System Upgrade Program will construct a new Electric Power Generation Facility in Hoonah.The Hoonah Facility will consist of four diesel engine generators,automated switchgear,fuel storage and transfer equipment,a fire suppression system and a step-up transformer bank. The Facility will be turned over to the Utility after the satisfactory completion,as determined by the AEA ot its representative,of a 14-day test period.After this test period,the AEA will provide written notice (Certificate of Substantial Completion)stating that the Facility is ready for Beneficial Occupancy.Upon receipt of this Certificate,the Utility will become the Primary Operator and will assume responsibility for the use,day-to-day operations and long-term maintenance of all Facility components,except those noted elsewhere in the Plan.When the project has been completed (the Facility is complete,crews have demobilized,invoices have been paid and there are no outstanding issues),the AEA will issue,through its Grants Manager,a Notice of Project Completion. Document Interrelationships Attached to this Plan are Site Control Documents and a Grant Agreement.Acceptance of the Plan by execution of the Grant Agreement is pre-requisite to funding from the Denali Commission (the "Commission”),which will be provided through a separate Grant Agreement (See Attachments for a copy of the Grant Agreement). Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 2 of 16 II.BACKGROUND The Denali Commission was established by the Federal Government to fund improvement projects within the State of Alaska,including the Rural Power System Upgrade Program.The Alaska Energy Authority is a state-owned corporation that assists in the development of safe,reliable and environmentally sound energy systems for Alaska's communities.AEA will coordinate the planning, construction and funding of the Hoonah Electric Utility Upgrade Project,which is to be partially funded by the Commission. Hoonah is located on the northeast shore of Chichagof Island,40 air miles west of Juneau.It is the principal village for the Huna,a Tlingit tribe which has occupied the Glacier Bay/Icy Strait area since pre-contact.The Northwest Trading Co.built the first store in Hoonah in 1880 and in 1912 the Hoonah Packing Co.built a large cannery one mile north of town.The City of Hoonah was incorporated in 1946. Hoonah is dependent on air transportation for movement of small freight and passengers;the State owns and operates an airport with a 2,997'long by 75'wide asphalt runway and a seaplane base, which are served by small aircraft from Juneau.Hoonah has a State ferry terminal and harbor/dock and freight arrives by barge or plane.Scheduled transportation to Hoonah is by the Alaska State Ferry and several air taxi services. Fishing and local government are mainstays of the economy;commercial fishing and logging have supported the population.Commercial fishing permits are held by approximately 115 residents. Some employment occurs at the Hoonah Cold Storage plant.The City and School District are the main public sector employers.Since summer 2004,Hoonah has been hosting cruise ship visitors at Icy Strait Point,which provides additional seasonal employment. Selected demographic and historical data for the community 1s provided below: Selected Statistics -Hoonah Population 2009 (DCCED Certified Population)764 2000 860 1990 795 1980 680 1970 748 1960 686 1950 563 Housing (2000 Data) Occupied Housing 300 Vacant Housing Due to Seasonal Use 10 Other Vacant Housing 38 Economic Data (2000 Data) Unemployment Rate 20.5% Median Household Income $39,028 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 3 of 16 III.FACILITY UPGRADE The Rural Power System Upgrade Program will construct a new Electric Power Generation Facility in Hoonah that will consist of four diesel engine generators,automated switchgear,fuel storage and transfer equipment,a fire suppression system and a step-up transformer bank. Electric Utility Upgrade Description The AEA contracted with Alaska Energy &Engineering,Inc.to develop a Conceptual Design Report (CDR)for the Electric Power Upgrade Project,which was submitted to the AEA on May 29 2009.The purpose of the CDR is to provide a concept design and construction cost estimate for upgrades to the electrical generation system for the community of Hoonah.This Plan is based upon the information contained in the CDR as well as updated Facility designs dated November 2010. > The new Hoonah Electric Utility Facility will be located on land owned by the City of Hoonah and leased to the Utility.The new facility will be located near the existing powerplant,within a portion of Lots 2 and 3,Hoonah Indian Village,U.S.Survey 4539,Sitka Recording District,First Judicial District, State of Alaska. Project Exclusions Neither the AEA nor the Commission will take responsibility for the following,which are not a part of this project: e Off-site fuel storage #Abandonment or decommissioning of existing facilities e Environmental cleanup The AEA and the Commission will not provide any guarantees,warrantees or ongoing support, other than that which is defined in the Plan.However,manufacturer warranties will be transferred at the time of project turnover (defined in Section IV.Primary Operator). Electric Power Generation Facility Capacity The generators,one at 1,100 kW,one at 1050 kW and two at 475 kW,are sized so that any two will have sufficient combined capacity to meet normal peak community loads.The Facility's power generation capacity will be in excess of its present usage.The Commission guidelines dictate that extra capacity is provided to account for 10 years of growth in electric power requirements. The new switchgear will provide automatic paralleling and load control of the four generating units. The load control system will monitor the electrical demand on the generators and provide automatic selection of the most efficient combination of generating units to meet the demand.The switchgear will automatically start the most suitable engine,bring it up to speed,automatically synchronize the unit and close the engine circuit breaker.When a unit is taken off line,either for maintenance or due to a reduction in electric load,the switchgear will automatically remove the unit from the bus and allow the engine to cool down before shutdown.Generator controls and relaying will provide complete protection and monitoring of each engine and generator. Site Plan and Project Layout The following diagrams detail the site plan and project layout: Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 4 of 16 Site Plan SITE PLANx 1"=400' SEE SHEET SH2 FOR POWER PLANT SPECIFIC NOTES [i>INSTALL NEW BURIED ARCTIC PIPEHEATRECOVERYSUPPLY&RETURN PIPELINES [Z>INSTALL NEW HEAT EXCHANGER ANDCIRCPUMPINMECHANICALROOM,/ceLITYP(5) PROJECT:_orm BY:JTD/SUS |SCALE T=400RURALPOWERSYSTEMCFGRADEPROJECTcaesenmybomTc?=10 TME FILE saw SHEET OF AREA PLAN Hoon-BP-aREAS Hs Stote of AlogkooteOFoTDepartmentofCiAIDEA/AEA®MEN See oe.Pease Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 5 of 16 Project Layout AFTER COOLER,RADIATOR,CHARGE AIR TYP(2)TYP(3)|COOLERS yon 1 ra )cr 7 .oo &"&)a iS-ire Z i ul D ¢REUSE :e EXISTING mic HxR/\0 aS 12,000 C70 CI7 Q PUMP-GEN #3,GEN is =GALLON GEN #1,,RACK 475kWw475kW DAYgst||(CONTROL 1,100kW O TANK ROOM GENERATION ©A ROOM 6 A |p[ee ONL fo ©5 oe =-&© Ne automaric PARALLELING FIRE SUPPRESSIONN yA SWITCHGEAR AGENT RACK Gyrus PLANT_PLAN C18METAL BUILDING SLAB ON 7 GRADE FOUNDATION |\f |ENGINEERED ; 5 0 +4.!, = (heen Pua SECTIONm0" PROJECT:Cram ay JTD/SUS|SCALE:AS NOTED StateofAjagkaRURALPOWERiSBeSTERRabePROJECTDIEDBYJTDwett-7=r It Deporgent ©pADEA/AEAralEnergyGroupmEFILEaESHEETa,oN oeMast orthatr Lights St.f2arDETAILSHOON-BP-oTLSIS HJ3 ** Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 6 of 16 IV.FACILITY PARTICIPANTS The Facility participants are: Grantee/Primary Operator:Inside Passage Electric Cooperative,Inc.(IPEC) Primary Contact Name:Jodi Mitchell,CEO/General Manager Phone:(907)789-3196 Fax:(907)790-8517 Address:P.O.Box 210149,Auke Bay,AK 99821 Usage:The IPEC will own and operate the Facility. The Utility will own 100%of the Facility and is responsible for the Operation and Maintenance ("O&M”)and Renewal and Replacement ("R&R”)of the Facility and all associated costs. Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 7 of 16 V.FINANCIAL AND OTHER RESPONSIBILITIES The Primary Operator for the Hoonah Facility will be the Inside Passage Electric Cooperative,Inc. A detailed statement of qualification for the Primary Operator is included as AppendixA:Primary Operator Statement ofQuahification. Turnover and Assumption of Responsibilities /Sustainability The Facility will be turned over to the Utility after the satisfactory completion,as determined by the AEA or its representative,of a 14-day test period.After this test period,the AEA will provide written notice (Certificate of Substantial Completion)stating that the Facility is ready for Beneficial Occupancy.Upon receipt of this Certificate,the Utility will become the Primary Operator and will assume responsibility for the use,day-to-day operations and long-term maintenance of all generation facility components. When the project has been completed (the Facility is complete,crews have demobilized,invoices have been paid and there are no outstanding issues),the AEA will issue,through its Grants Manager,a Notice of Project Completion.This Notice is included in the Grant Agreement,see Additional Related and Attached Documents. The Primary Operator is responsible for the long-term sustainability of the Facility for the benefit of the local community.The complete Facility will be maintained according to guidelines outlined in this plan,all manufacturers'recommendations for maintenance,and all state and federal laws,codes and regulations governing operation. The Primary Operator agrees to maintain a valid "Certificate of Public Convenience and Necessity” and remain in good-standing with RCA.The Utility agrees that its accounting records will conform to the Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission,as modified for loan recipients of the Rural Utilities Service (RUS),and the Uulity's rates and tariffs will be set following RCA procedures and policies. Staffing and Training The Primary Operator will designate a Manager (the "Manager')for the Facility.The Manager will be the point of contact for communications between the Primary Operator,the Commission and all other interested parties.The Primary Operator will name the Manager prior to the start of operation and will inform the Commission,in a timely fashion,whenever a Manager is to be replaced.The Manager will manage the Primary Operator 's enterprises and will be given complete responsibility for operating the Facility in compliance with this Plan. It is recognized that there will be,from time to time,turnover in various operational,maintenance and administrative positions.Because all functions are essential to the successful operation of the Facility,replacements will be recruited and trained as necessary.The Manager will be responsible for maintaining adequate staffing and training at all times,and when the Primary Operator lacks trained operators and administrative staff,training will be obtained to ensure sustained Facility operation. Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 8 of 16 Financial Responsibilities There are three general cost categories,in addition to fuel costs,that will be incurred in the ongoing operation and upkeep of the Electric Utility equipment -O&M,G&A and R&R.The Primary Operator will incur a number of expenses relating to the O&M of the equipment.O&M items are defined as expenses that are incurred on a regular basis (operator labor,supplies,etc.)and maintenance expenses that are incurred on an annual basis.Whereas,G&A costs are routine administrative expenses incurred to manage and operate the utility and Facility,including insurance, bookkeeper labor and depreciation expenses.Given that the Primary Operator is economically- regulated by RCA,and,that it operates within several different communities and does not allocate its O&M or G&A by community,this Plan does not include estimates for future O&M and/or G&A expenses. Instead,the Plan focuses on presenting estimates for the future renewal and replacement (R&R)of the new Facility assets.R&R costs are those expenses defined as items costing greater than $5,000 and/or that are not replaced on an annual basis.Tab/e B:40 Year R¢*R Schedule-Non Generator and Table C:40 Year Generator R¢>R Schedule detail the anticipated R&R items,the frequency of their replacement,their present day value and estimated future value.And,Table D:40 Year Re>R Cashflow provides an pro forma amortization schedule that estimates annual per kWh costs to fund the 40 year renewal and replacement of the new Facility assets. The Primary Operator will maintain sufficient operating and reserve cash balances to meet the O&M,G&A and R&R needs of the Facility.See Appendix A:Statement ofQualification for an overview of the Primary Operator's fiscal controls and accounting procedures. At least once a year,no later than November 30",the Primary Operator will develop a budget for the upcoming fiscal year,January 1"through December 31",which includes the O&M,G&A and R&R costs of the Hoonah Facility. Audits and Reporting The Primary Operator will arrange for an annual financial audit that is conducted by qualified, independent auditors.The Primary Operator will provide an annual report of operations to the Commission that includes a summary description of O&M and R&R projections;annual O&M and R&R budgets,expenditures and account balances;and,any other information appropriate to the Facility.The Commission will review the reports and the annual financial audits of Facility operations and will actively monitor the Primary Operator's ability to operate consistent with guidelines outlined in this Plan.The Commission has reserved the right to visit the site and to access all books and records related to the Facility at any time upon written request. Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 9 of 16 VI.SECONDARY OPERATOR The Primary Operator agrees that,if the Primary Operator is not operating the Facility in compliance with the terms and conditions of the Plan and/or does not maintain a valid "Certificate of Public Convenience and Necessity”the Denali Commission may,in its discretion,propose to the RCA an operator to serve as the Secondary Operator. VII.INSURANCE The Primary Operator is required to be insured for General Liability and Property and,annually,will provide the Denali Commission with proof of insurance. VIII.REGULATORY REQUIREMENTS The Primary Operator is responsible for ensuring adherence to all applicable state and federal regulations.The Facility will be provided with,and will have on-site,if applicable,any of following spill response and related regulatory plans that need to be implemented: e Environmental Protection Agency (EPA)Spill Prevention Control and Countermeasures (SPCC)Plan (40 CFR Part 112)-This plan confirms compliance of the Facility with the spill prevention and operating requirements of 40 CFR Part 112.A Registered Professional Engineer must certify the plan. This plan will include operator guidelines for spill training,drills,prevention and response and other related environmental information to ensure the environmental integrity of the Utility and the community.The plan will be developed near the end of Facility construction.The Primary Operator will participate in development and review of the plan as requested. The Primary Operator will submit to the State of Alaska,DEC a Pre-approved Emissions Limit prior to facility operation,if required. Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 10 of 16 IX.FINANCIAL INFORMATION All estimates and assumptions contained in this Plan are preliminary and are anticipated to change as the project progresses.The Financial Tables are presented in this plan to illustrate the Utility's approximate kWh cost for repair and renewal of the new Facility assets over 40 years.As a RCA- regulated utility,the Utility's actual rates will be set following RCA procedures and policies.The information presented in this Plan,is illustrative;it is not intended that the Utility will change its rates annually;but,instead will apply for tariff changes with the RCA as conditions within the Utility dictate. Key Financial Assumptions e Operating and maintenance/general and administrative will not be significantly impacted by the proposed new facility:including annual insurance and audit costs. e Annual inflation rate of 1.5%. e Annual collections rate of 98%. e Annual kWh usage for Hoonah is estimated to grow at .5%-2%annually. Key Operating Assumptions e Line loss and interdepartmental use are assumed to be 7%per year. e Initial first year power generation is estimated to be 4,750,000 kWh for Hoonah. e Initial annual billed kWh is estimated to be 4,400,000 kWh for Hoonah. Explanation of Financial Terms e Total Annual Billed kWh -The annual estimated kWh of demand from all users groups (residential,municipal,commercial,industrial,sales for resale,etc.)that is billed for payment. e Assumed Annual Collectable kWh -The annual estimated kWh that is deemed to be collectable upon billing for payment. Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 11 of 16 TABLE A Power Generation and Consumption Summary Total Annual Line .Assumed Year Generated Loss and nenNew Collectable kWh/Year Unbilled kWh/Year 1 4,750,000 332,500 4,417,500 |4,329,150 2 4,845,000 339,150 4,505,850 4,415,733 Assumed Collection Rate 3 4,941,900 345,933 4,595,967 4,504,048 EE QR ONE | 4 5,040,738 352,852 4,687,886 4,594,129 5 5,141,553 359,909 4,781,644 4,686,011 6 5,244,384 367,107 4,877,277 4,779,731 Annual kWh Increase 7 5,349,271 374,449 4,974,822 4,875,326 Years 1-10 8 5,456,257 381,938 5,074,319 4,972,833 PP"200% 9 5,565,382 389,577 5,175,805 5,072,289 10 5,676,690 397,368 5,279,321 5,173,735 11 5,705,073 399,355 5,305,718 fF 5,199,604 Annual kWh Increase 12 5,733,599 401,352 5,332,247 5,225,602 Years 11 -40 13 5,762,267 403,359 5,358,908 5,251,730 |SE Q.50% 14 5,791,078 405,375 5,385,702 5,277,988 15 5,820,033 407,402 5,412,631 5,304,378 16 5,849,133 409,439 5,439,694 5,330,900 Annual Line Loss/Unbilled 17 5,878,379 411,487 5,466,893 5,357,555 ES IN So ee 18 5,907,771 413,544 5,494,227 5,384,342 19 5,937,310 415,612 5,521,698 5,411,264 20 5,966,996 417,690 5,549,307 5,438,320 21 5,996,831 419,778 5,977,053 5,465,512 22 6,026,816 421,877 5,604,938 5,492,840 23 6,056,950 423,986 5,632,963 ||--_5,520,304 24 6,087,234 426,106 5,661,128 5,547,905 25 6,117,670 428,237 5,689,434 5,575,645 26 6,148,259 430,378 5,717,881 5,603,523 27 6,179,000 |432,530 |5,746,470 5,631,541 28 6,209,895 434,693 5,775,202 5,659,698 29 6,240,945 436,866 5,804,078 5,687,997 30 6,272,149 439,050 5,833,099 5,716,437 31 6,303,510 441,246 5,862,264 5,745,019 32 6,335,028 443,452 5,891,576 5,773,744 33 6,366,703 445,669 5,921,034 5,802,613 34 6,398,536 447,898 5,950,639 5,831,626 35 6,430,529 450,137 5,980,392 5,860,784 36 6,462,682 452,388 6,010,294 5,890,088 37 6,494,995 454,650 6,040,345 5,919,538 38 6,527,470 456,923 6,070,547 5,949,136 39 6,960,107 459,208 6,100,900 5,978,882 40 6,592,908 461,504 6,131,404 6,008,776 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 12 of 16 TABLE B 40 YEAR "R and R"SCHEDULE -NONGENERATOR* *SEE NEXT PAGE FOR GENERATOR R&R SCHEDULE Year of Present Day Annual Inflated Activity R&R Activity Value Total Value Depreciation 5 Replace Values/Gauges $1,430 R&R Activities:Cost Activity Year Term Repair Ext.&Int.Siding/Doors 5,314 B2]Pump Replacement &Electrical $3,800 10/20/30/40 10 Upgrade Floors /Walls/Ccthngs 8,144 C2[Replace Day Tank $29,250 40 40 Battery/Alternator 2,800 c2[Replace El I for Fuel &Radiator $14,000 40 40 Repair Ballasts/Lenses/Devices 645 1 $18,334 [I$19,459 B2|Replace Vatues/Gauges $1,430 $/15/25/35 5 10 Pump Replacement &Electrical 3,800 B3]Floor/Roof Repair $4,177 10/20/30/40 10 Floor/Roof Repair 4,177 C3|Upgrade Floor/Roofs $_16,824 _20/40 20 Repair Ext.&Int.Siding/Doors 5,314 B3lRepair Ext &Int Siding/Doors $5,314 $/10/15/25/30/35 5 | Repair Roof 3,583 c3)Replace Walls /Windows /Specialities $64,175 40 40 Change Door Hardware 2,118 B3}Repair Roof $3,583 10/20/35 10 Upgrade Floors/Walls/Ceihngs 8144 B3{Change Door Hardware $2,118 10/30 20 Repair Ducts/Grilles 6,143 BalU pgrade Floors/Walls/Ceilings $8,144 5/10/15 /25/30/35 5 Repair Fire Suppression System 3,000 C3|Replace Doors/Roofing $45,906 20/40 20 Repair Ballasts/Lenses/Devices O45 TS 36,924 ]{$42,218 car pl Mechanical Sy $313,300 40 40 15 Replace Values/Gauges $1,430 BalRepair Ducts/Grilles $6,143 10/30 20 Repair Ext.&Int.Siding/Doors 5,314 c1]Refurbish Ducts /Grilles /Controls $23,205 20/40 2 | Upgrade Floors/Walls/Ceilings 8,144 Ba{Repair Fire Supp System $3,000 10/30 10 Battery/Altemator 2,800 CAlReplace Fire Supp System $117,000 40 2 Repair Ballasts/Lenses/Devices 645 1 $18,334 [1 $22,583 B3|Replace Window Seals $643 20 20 20 Pump Replacement &Electrical $3,800 B5{Repair Ballasts /Lenses/Devices $«645 $/10/15/25/30/35 5 Hloor/Roof Repair 4,177 C5)Replace Fixtures /Devices/Alarms $_14,622 20/40 20 Repair Roof 3,583 Co|Replace Feeders/Cond $37,500 20/40 20 Upgrade Floor/Roofs 16,824 B5|Replace Curcuit Breakers/Fuses $1,800 20 2 Replace Doors/Roofing 45,906 cs[Replace Conductors /Switches/Transfc $159,700 40 40 Replace Window Seals 643 Bo|Minor Replace Switchgear/Controls $30,500 20 20 Refurbish Ducts/Grilles/Controls 23,205 Co|Major Replace Switchgear/Controls $263,500 40 40 Replace Curcuit Breakers/Fuses 1,800 Bol[Battery/Alternator $2,800 5/15/25/35 5 Minor Replace Switchgear/Controls 30,500 Replace Fixtures/Devices/Alarms 14,622 Replace Feeders/Conductors 37,500 |]$182,559}$242,247 Inflation Rate 25 Replace Values/Gauges $1,430 Reinvestment Rate Repair Ext.&lat.Siding/Doors 5,314 Upgrade Floors/Walls/Ceilings 8,144 Battery/Alternator 2,800 Repar Ballasts/Lenses/Devices 64571 $18,334 |]$26,208 30 Pump Replacement &Electrical 3,800 Floor /Roof Repair 4,177 Repair Ext.&Int.Siding/Doors 5,314 Change Door Hardware 2,118 Upgrade Floors/Walls/Ceilings 8144 Repair Ducts/Grilles 6,143 Repair Fire Suppression System 3,000 Repair Ballasts/Lenses/Devices O45 11S 33,341 41 $51,344 35 Replace Values/Gauges $1,430 Repair Ext.&Int.Siding/Doors 5,314 Repair Roof 3,583 Uperade Floors/Walls/Ceilings 8,144 Battery/Alternator 2,800 Repair Ballasts/I enses/Devices GAS]$21,917 I$36,360 40 Pump Replacement &Electrical $3,800 Floor/Roof Repair 4,177 Replace Day Tank 29,250 Replace Electrical for Fuel &Radiator 14,000 Upgrade Floor/Roofs 16,824 Replace Walls/Windows/Specialities 64,175 Replace Doors/Roofing 45,906 Replacement Mechanical Systems 313,300 Refurbish Ducts/Grilles/Controls 23,205 Replace Fire Suppression System 117,000 Replace Fixtures/Devices/Alarms 14,622 Major Replace Switchgear/Controls 263,500 Replace Conductors/Switches/Transformers 159,700 Replace Feeders/Conductors 37,500 |]$1.106.957 Tf $1.978.366 BIy -2353 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 13 of 16 TABLE C 40 YEAR GENERATOR "R and R"SCHEDULE Year of Present Day Annual Inflated Activity R&R Activity Value Total Value 1 Top End 3456 GenSet $33,566 |}S$33,566 }|$33,566 2 Major Inframe 3456 GenSet $62,222 11}$62,222 |]$63,155 3 Top End 3456 GenSet $33,566 11 $33,566 1]$34,581 4 Major Inframe 3456 GenSet $62,222 |]$62,222 {1 $65,064 5 Top End 3456 GenSet $33,566 |]$33,566 ||$35,626 6 Major Inframe 3456 GenSct $62,222 |{$62,222 ||$67,031 7 Top End 3456 GenSet $33,566 |}$33,566 ||$36,703 8 Repower 3456 GenSct $118,400 1}$118,400 }]$131,406 9 Top End 3456 GenSet $33,566 11$33,566 |}$37,812 10 Top End New 3512 GenSet $36,975 Major Inframe 3456 GenSet $62,222 }]]$99,197 41 $113,421 11 Top End 3456 GenSet $33,566 ||S$33,566 ||$38,955 12 Major Inframe 3456 GenSet $62,222 1]$62,222 1]$73,294 13 Top End 3456 GenSet $33,566 ||$33,566 fj $40,132 14 Major Inframe 3456 GenSet $62,222 ||$62,222 HI $75,510 15 Top End 3456 GenSet $33,566 ||$33,566 |]$41,345 16 Repower 3456 GenSet $118,400 }]$118,400 ]]$148,027 17 Top End 3456 GenSet $33,566 |]$33,566 |]$42,595 18 Major Inframe 3456 GenSet $62,222 |]$62,222 |}$80,143 19 Top End 3456 GenSet $33,566 |]$33,566 1 $43,882 20 Major Inframe 3456 GenSet $62,222 Major Inframe 3512 GenSet $91,500 {|$153,722 {|$203,982 21 Top End 3456 GenSet $33,566 J{S$33,566 11 $45,209 22 Major Inframe 3456 GenSet $62,222 {1 $62,222 |$85,061 23 Top End 3456 GenSct $33,566 11 $33,566 J}$46,575 24 Repower 3456 GenSet $118,400 }7 $118,400 4,$166,752 25 Top End 3456 GenSet $33,566 |]$33,566 HI $47,983 26 Major Inframe 3456 GenSct $62,222 ||$62,222 4)$90,281 27 Top End 3456 GenSet $33,566 |]$33,566 }1 $49,433 28 Major Inframe 3456 GenSet $62,222 |1$62,222 ||$93,00929_||Top End 3456 GenSet_$33,566 ||$33,566 ||$50,927 30 Top End New 3512 GenSet $36,975 Major Inframe 3456 GenSet $62,222 1}$99,197 }]{$152,761 31 Top End 3456 GenSct $33,566 1]$33,566 }]$52,466 32 Repower 3456 GenSct $118,400 ||$118,400 }]$187,845 33 |Top End 3456 GenSet ys 33,566 1]$33,566 |}$54,052 34 Major Inframe 3456 GenSct $62,222 |}$ 62,222})$101,701 35 Top End 3456 GenSet $33,566 118 33,566 |]$55,686 36 Major Inframe 3456 GenSet $62,222 |}$ 62,222])$104,774 37 Top End 3456 GenSet $33,566 |]$33,566 |]$57,369 38 Major Inframe 3456 GenSet $62,222 1|$62,222]|$107,941 39 Top End 3456 GenSet $33,566 |]$33,566 {|$59,103 40 Major Inframe 3512 GenSet $91,500 Repower 3456 GenSet $118,400 |]$209,900 |]$375,135 Inflation Rate 1.5% Reinvestment Rate 3% R&R Activities:Cost Activity Year Bo{Top End New 3512 GenSet $36,975 10/30 B6[Top End 3456 GenSet $33,566 Every 2 Years C6|Major Inframe 3456 GenSet $62,222 2/4/6/10/12/14/18 20/22/26/28/30/34/36/38 C6}Repower 3456 GenSet $118,400 8/16/24/32/40 C6|Major Inframe 3512 GenSet $91,500 20/40 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 14 of 16 TABLE D 40 YEAR RENEWAL AND REPLACEMENT CASHFLOW R&R ; Assumed Year Beg.of Annual Renewals/Interest End of Collectable R&R $/KwHYearDepositsReplacementsEarnings(Net Year KwH/YearBalanceofFees)Balance 1 $:$77,925 |$33,566 |$-|$44,359 4,329,150 $0.018 2 $44,359 |$80,675 |$63,155 |$-|$61,879 4,415,733 $0.018 3 $61,879 |$83,523 |$34,581 |$819,$111,641 4,504,048 $0.019 4 $111,641]$86,472 |$65,064 |$1,397 |$134,445 4,594,129 $0.019 5 $134,445 |$89,524 |$55,085 |$2,381 |$171,266 4,686,011 $0.019 6 $171,266 |$92,684 |$67,031 |$3,127]$200,046 4,779,731 $0.019 7 $200,046 |$95,956 1 $36,703 |$4,900]$264,200 4,875,326 $0.020 8 $264,200 |$99,343 |$131,406 |$3,984]$236,122 4,972,833 $0.020 9 $236,122]$102,850 |$37,812 |$3,966 |$305,126 5,072,289 $0.020 10 $305,126,$106,481]$155,639]$2,990 |$258,957 5,173,735 $0.021 11 $258,957]$108,618 |$38,955 |$4,400 |$333,021 5,199,604 $0.021 12 $333,021 |$110,799]§73,294 1 $5,195]$375,720 5,225,602 $0.021 13 $375,720|]$113,023)$40,132 |$6,712]$455,323 5,251,730 $0.022 14 $455,323 |$115,292}$75,510 |$7,596 }$502,702 5,277,988 $0.022 15 $502,702]$117,607 |$63,928 |$8,775 |$565,156 5,304,378 $0.022 16 $565,156]$119,968]$148,027]$8,343 |$545,438 5,330,900 $0.023 17 $545,438 18 122,376]$42,595 |$10,057 |$635,276 5,357,555 $0.023 18 $635,276 |$124,833]$80,143 |$11,103 |$691,068 5,384,342 $0.023 19 $691,068 |$127,339]$43,882 |$12,944 |$787,468 5,411,264 $0.024 20 $787,468|$129,895}$446,228 |$6,825 |$477,960 5,438,320 $0.024 21 $477,960 |$132,503 |$45,209 |$8,655 |$573,909 5,465,512 $0.024 22 $573,909 |$135,163 |$85,061 |$9,777)$3 633,787 5,492,840 $0.025 23 $633,787 |$137,876 |$46,575 |§$11,744 |$736,832 5,520,304 $0.025 24 $736,832|$ 140,644[$166,752]$11,402 |$722,126 5,547,905 $0.025 25 $722,126 )$143,467 |$74,191 |$12,959 |$804,361 5,575,645 $0.026 26 $804,361 ]$146,347 |$90,281 1 $14,282 |$874,709 5,603,523 $0.026 27 $874,709 |$149,285 |$49,433 1$16,506 |$991,067 5,631,541 $0.027 28 $991,067 {$152,282 |$93,009 |$17,961 |$1,068,301 5,659,698 $0.027 29 $1,068,301 |$155,339 |$50,927 |$20,347 |$1,193,060 5,687,997 $0.027 30 $1,193,060|$158,4587$204,106]$19,779 |$1,167,191 5,716,437 $0.028 31 $1,167,191 |$161,639 |$52,466 |$22,294 |$1,298,658 5,745,019 $0.028 32 $1,298,658 {$164,884 ]$187,845 1 $22,216 |$1,297,913 5,773,744 $0.029 33 $1,297,913 |$168,194 |$54,052 |$24,877 |$1,436,932 5,802,613 $0.029 34 $1,436,932 |$ 171,570}$101,701 |$26,705 |$1,533,506 5,831,626 $0.029 35 $1,533,506 |$175,014]$92,046 |$28,829 |$1,645,304 5,860,784 $0.030 36 $1,645,304]$ 178,528]$104,774]$30,811 |$1,749,867 5,890,088 $0.030 37 $1,749,867 |$182,112 |$57,369 |$33,850 |$1,908,460 5,919,538 $0.031 38 $1,908,460 |$ 185,768]$107,941}$36,010 |$2,022,297 5,949,136 $0.031 39 $2,022,297 |$189,497 |$59,103 |$39,264 |$2,191,955 5,978,882 $0.032 40 $2,191,955 ]$193,301 |$2,353,501 |$-1$31,755 6,008,776 $0.032 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 15 of16 Inflation Rate : Reinvestment Rate : Invested Escrow Fees: Initial KwH Collectable : Initial Cost per KwHT : Annual increase : eA 50% 3 OOY 4,329,150 $2 0.018 15% APPENDIX A:PRIMARY OPERATOR STATEMENT OF QUALIFICATION The Primary Operator Statement of Qualification includes: 1.A description of the Primary Operator,its personnel and experience,and its responsibilities and functions.This discussion includes a description of the ability and history of the Primary Operator to operate an electric power generation facility and utility as a business and/or its history of operating other business enterprises,as well as a description of the Primary Operator's fiscal controls and accounting procedures.This discussion details organization history,management and structure;identification of key personnel,their experience and responsibilities;and,proposed organization of the electric utility management and operations,including an organizational chart. 2.A description of the Primary Operator's,if any,staffing or training needs. 3.A description of the training plan proposed by the Primary Operator to address current and future needs. Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Page 16 of 16 INSIDE PASSAGE ELECTRIC COOPERATIVE,INC. Community History Hoonah is located on the northeast shore of Chichagof Island,40 air miles west of Juneau. Hoonah is the principal village for the Huna,a Tlingit tribe which has occupied the Glacier Bay/Icy Strait area since prehistory.Currently,Hoonah is the largest Tlingit village in Alaska. The Northwest Trading Company built the first store in Hoonah in 1880;in 1881,the Presbyterian Home Mission and school were built.By 1887,450 to 500 people wintered in the village.A post office was established in 1901 and in 1912 the Hoonah Packing Co.built a large cannery one mile north of town.In 1944,a fire destroyed much of the City and many priceless Tlingit cultural objects.The City of Hoonah was incorporated in 1946. Hoonah is dependent on air transportation for movement of small freight and passengers; the State owns and operates an airport with a 2,997'long by 75'wide asphalt runway and a seaplane base,which are served by small aircraft from Juneau.Hoonah has a State ferry terminal and harbor/dock.Freight arrives by barge or plane.Scheduled transportation to Hoonah is by the Alaska State Ferry and several air taxi services. Hoonah's airport is closed 20 to 30 days a year due to poor weather,which usually consists of foggy periods in the spring and fall,due to Hoonah's maritime climate.The climate is also characterized by cool summers and mild winters.Summer temperatures average 52 to 63;winter temperatures average 26 to 39.Precipitation averages 100 inches annually,with 71 inches of snowfall. Fishing and local government are mainstays of the economy.Commercial fishing permits are held by approximately 115 residents.Some employment occurs at the Hoonah Cold Storage plant,while the City and the School District are the main public sector employers. Since summer 2004,Hoonah has been hosting cruise ship visitors at Icy Strait Point,which provides additional seasonal employment.Subsistence activities are an important component of the lifestyle,and most residents maintain a subsistence lifestyle.Salmon, halibut,shellfish,deer,waterfowl and berries are harvested. Water is derived from Gartina Creek and is treated and piped to all homes and facilities.A new water treatment facility was completed in October 1998.Piped sewage is processed in a sewage treatment plant -approximately 98%of the homes are fully plumbed.The City ptovides garbage collection services once a week and the Inside Passage Electrical Company provides electricity. Description of Business History In 2004,Tlingit &Haida Regional Electric Authority was re-organized to an electric cooperative that is now known as Inside Passage Electric Cooperative,Inc.(IPEC).IPEC is a non-profit,independent electric utility owned by the members it serves and,accordingly, seeks only to generate revenues sufficient to pay operating and maintenance costs,capital Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix A-1 expenditures,depreciation and interest on indebtedness and to provide for the establishment of reasonable margins and reserves.IPEC is governed by a Board of Directors elected from the membership,which sets policies and procedures that are implemented by the cooperatives'professional staff. IPEC operates its utility from offices in Auke Bay and serves Hoonah (463 services),Kake (321 services),Chilkat Valley (231 services),Angoon (227 services)and Klukwan (61 services)for a total of 1,303 customers.Effective January 1,2004,with the formation of IPEC,the utility subject to economic regulation by the Regulatory Commission of Alaska (RCA). IPEC customers pay a postage stamp rate,based upon customer class,and are billed monthly and pay by cash,check or credit card.The 2010 rates are: 2010 RATES* Residential $.544132 Small Commercial and Small $.565532 Community Facility (1st 500 kWh) Small Commercial and Small $.507132 Community Facility (over 500 kWh) Large Commercial and Large $.497832 Community Facility (1st 1,500 kWh)Demand Charge $12.30 per kWh Large Commercial and Large $.497832 Community Facility (over 1,500 kWh)|Demand Charge $12.30 per kWh *Includes a fuel surcharge of $.0927 and a Regulatory Cost Charge of $.000432 IPEC participates in the Power Cost Equalization (PCE)program and its PCE rate is $.3049. In 2009,IPEC generated approximately 4,800,000 kWh and,of these,approximately 4,400,000 kWh were sold. IPEC purchases its fuel from Hoonah Trading Company -on average 12 to 15 times per month,depending upon the load.The weighted average cost of fuel for IPEC,as of August 31,2010,was $2.977707. Description of Fiscal Controls and Accounting Procedures The IPEC operates on a January to December fiscal year.The Accounts Payable Tech enters the invoice;the Administrative Officer reviews and approves the invoice batch;and, then checks are signed by machine using the CEO/General Manager and Administrative Officer signatures.Any checks over $50,000 must be signed manually.Signers on the IPEC bank account include the CEO/General Manager,Administrative Officer,Controller and Board President. IPEC uses the NISC accounting software.The most current financial audit for the IPEC was presented in April,2010 by Mikunda Cottrell &Co.,Inc.,a certified public accountancy firm with offices in Anchorage and Kenai,which does not identify any deficiencies in internal control over financial reporting that was considered to be a material weakness. Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix A-2 =IPEC Management and Structure Below are the nates of the 2010 Board of Directors. FY2010 IPEC BOARD OF DIRECTORS Richard George,President (Angoon) Wilbur Brown,Sec-Treasurer (Kake) Grace Villarreal (Hoonah) Kimberley Stron,Vice-President (Klukwan) Jim Cox (Chilkat Valley) The organizational chart below shows the structure of the IPEC operations.At the apex of management is the Board of Directors. IPEC Organizational Chart Board Member Board Member Board Member Board Member Board Member Angoon Chilkat Valley Hoonah Kake Klukwan Richard George Jim Cox Grace Villarreal Wilbur Brown Kimberley Strong President Director Director Treasurer/Secretary Vice-President j | Chief Executive Officer &General Manager Jodi Mitchell Administrative Officer Jerry Medina Controller Roxanne Drake-Burkhart { Accounts Payable Tech.Billing Officer Janice Keen Lorenzo Jaravata Operations Manager Peter Bibb Generations Manager Keith Berggren Head Operator Angoon Ed Kookesh Jr. Head Operator Chilkat Valley Fred Anderson Head Operator Hoonah Don Bolton Head Operator Kake Frank Hughes Jr. Identification of Key Personnel The IPEC has overall direction from Jodi Mitchell,who is the Chief Executive Officer/General Manager and reports directly to the Board of Directors.She will be the main contact for the Facility and will work with AIDEA/AEA and the Denali Commission to ensure IPEC's role in the project timeline. The following chart illustrates the staff relationships of the Hoonah electric facility upgrade: Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix A-3 HOONAH ELECTRIC FACILITY UPGRADE KEY PERSONNEL ORGANIZATIONAL CHART Jodi Mitchell CEO &General Manager I || Jerry Medina Peter Bibb Keith Berggren Administrative Officer Operations Manager Generations Manager Roxanne Drake-Burkhart Controller Don Bolton Hoonah Head Operator Accounts Payable Technician Janice Keen Project Staffing CEO/General Manager Jodi Mitchell has worked with Inside Passage Electric since 1993, when she started as controller,and became Chief Executive Officer/General Manager in 2008.Ms.Mitchell also serves on the Sealaska Corporation board of directors,Governor's Renewable Energy Fund Advisory Committee (REFAC),is former chair and trustee of the Kootznoowoo Permanent Fund Settlement Trust,serves as Vice-President of the Kwaan Electric Transmission Intertie Cooperative and is a member of the Southeast Conference energy committee.Ms.Mitchell holds a Bachelor of Science degree in Business Administration from the University of Oregon and is a Certified Management Accountant. She is a 2007 graduate of the National Rural Electric Cooperative Association's Management Intern Program (NRECA MIP).As CEO/General Manager,Ms.Mitchell overalls and directs the day-to-day functions of the utility. Administrative Officer Jerry Medina oversees the utility accounting functions.Mr.Medina has an Accounting degree and Business Management degree from the Salt Lake Community College and joined IPEC in 2008.Roxanne Drake-Burkhart is the IPEC Controller and oversees financial accounting and customer billing functions.Ms.Drake-Burkhart reports directly to the Administrative Officer who reports to the CLO/General Manager. Peter Bibb,Operations Manager,and Keith Berggren,Generations Manager,are responsible for the operations and maintenance of the utility's power generation and distribution functions.The duo reports directly to the CEO/General Manager and supervise the field operations,including supervising the Hoonah Head Operator,Don Bolton. See attached resumes for additional information. Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix A-4 . RESUMES /JOBS DESCRIPTION Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix A-5 Inside Passage Electric Cooperative,Inc. P.O.Box 210149 Auke Bay,AK 99821 Phone:(907)789-3196 Fax:(907)790-8517 Johanna (Jodi)Mitchell Employment Inside Passage Electric Cooperative,Inc. 2008-Present Chief Executive Officer/General Manager Oversees and directs all aspects of the day-to-day functions of the electric utility. Previous Experience Inside Passage Electric Cooperative,Inc./THREA, Auke Bay,AK 1999-2008 Chief Financial Officer 1993-1999 Controller Sealaska Corporation,Juneau,AK 1988-1993 Senior Accountant Amaray Office Tech,Redmond,WA 1988 General Ledger Accountant Safeco Corporation,Seattle,WA 1987-1988 Accounting Technician Sealaska Corporation,Juneau,AK 1984-1986 Finance Intern Education 1988 University of Oregon-Eugene Bachelor of Science,Business Administration Finance Major with Accounting Minor 1996 =Certified Management Accountant 2007 Graduate of the National Rural Electric Cooperative Association's (NRECA)Management Internship Program Skills &Training Sixteen years experience with a rural Alaskan electric cooperative, primarily in the financial and management sectors of the industry. Advanced experience in all aspects of financial accounting and strategic planning and financial analysis.Excellent supervisory and team-building skills and oral and written communication skills. Team leader and player,proven grant writing skills and effective lobbying skills.Also can speak and write Spanish nearly fluently. Affiliations Director,Sealaska Corporation and Alaska Power Association Former Chair,Kootznoowoo Permanent Fund Settlement Trust Vice President,Kwaan Electric Transmission Intertie Cooperative,Inc. Member,Institute of Certified Management Accounts,Governor's Renewable Energy Fund Advisory Committee,Southeast Alaska Energy Committee of Southeast Conference and Alaska Legacy Plan,In-State Energy Group Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix A-6 Inside Passage Electric Cooperative,Inc. P.O.Box 210149 Auke Bay,AK 99821 Phone:(907)789-3196 Fax:(907)790-8517 Jerry P.Medina Employment Inside Passage Electric Cooperative 2008-Present Administrative Officer Oversees the utility accounting functions. Previous Experience City of Hoonah,Hoonah,AK 2003-2008 City Administrator City of Holladay,Holladay,UT 1999-2003 City Administrator City of Taylorsville,Taylorsville,UT 1996-1999 City Recorder/Auditor Grantsville City,Grantsville,UT 1992-1996 SOS Computer Systems,Orem,UT 1989-1992 Technical Support Representative Tooele Federal Credit Union,Tooele,UT 1981-1989 Accounting Officer Education 1982 Salt Lake Community College,Salt Lake City,UT AS Business Management 1981 Salt Lake Community College,Salt Lake City,UT AS Accounting Skills &Training 27 years of financial experience in government and private sector, 18 years of municipal government budgetary experience,12 years experience as a City Administrator and excellent oral and written presentation skills Affiliations Secretary Kwaan Electric Transmission Intertie Cooperative,Inc. Director ARECA Insurance Exchange Southeast Conference Energy Committee Alaska Municipal Manager Association (2003-08) Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix A-7 Peter Bibb Inside Passage Electric Cooperative,Inc. P.O,Box 210149 Auke Bay,AK 99821 Phone:(907)789-3196 Fax:(907)790-8517 Employment Previous Experience Education &Training Skills Inside Passage Electric Cooperative 2006-Present Operations Manager Responsible for the overall electrical power operations of five isolated Southeast Alaska communities.Responsible for the planning,coordination and execution of electric power distribution projects and has knowledge of the overall business operation and organizational procedures. 2006 Chatham Electric,Heavy Equipment Mechanic Performed prevention maintenance,troubleshoot electrical and mechanical equipment problems and assisted linecrew and telephone crew in the field. Alaska Electric Light and Power Company 2001-2005 Transmission and Distribution Engineer Investigated,planned,designed and submitted Job Orders to Linecrew for the construction of electrical line extensions and upgrades. 1991-2001 VP,Director of Consumer Affairs Responsible for the leading and managing of the Customer Service Department and reported directly to the President. Boeing Commercial Aircraft Company 1987-1991 Tool Design Engineer Employed as a design engineer for the commercial aircraft division to design and build tools to fabricate aircraft assemblies. 1981-1985 BSMET,Oregon Institute of Technology Four-year degree in Mechanical Engineering Technology 1984-1986 ASEET,Oregon Institute of Technology Two-year degree in Electronics Engineering Technology 1980 Graduated High School,Juneau,AK Planning for short and long-term solutions,working on multiple projects and job duties concurrently,ability to clearly communicate and understands systems and processes to provide solutions and improvements Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix A-8 Inside Passage Electric Cooperative,Inc. P.O.Box 210149 Auke Bay,AK 99821 Phone:(907)789-3196 Fax:(907)790-8517 Roxanne Drake-Burkhart Employment Previous Experience Education &Training Skills Community Service Inside Passage Electric Cooperative,Inc. 1995-Present Controller Responsible for all the financial accounting functions as well as all audits and state and federal quarterly and annual filings. Klukwan Forest Products,Juneau,AK 1992 -1995 Financial Accountant Accumulate,analyze,process and report financial information that is timely,accurate and relevant to management needs. 1990-1992 Accounts Payable Manager Responsible for the accounting for seven companies and for supervising three accounts payable clerks. Sealaska Corporation,Juneau,AK 1988-1990 Accounts Payable Tech Responsible for computer processing of weekly accounts payable check runs and inputting of payable invoices. Klukwan Forest Products,Juneau,AK 4-88 to 8-88 |Accounts Receivable Clerk Responsible for processing and reconciling expense reports to the general ledger for over two hundred employees. Sitka Community Association,Sitka,AK 1987-1988 Account/Fiscal Officer Trainee Assist CPA in the development and modification of specific aspects of the existing accounting system to improve procedures and assure conformity to policy and accounting principles. Tlingit-Haida Regional Housing Authority,Juneau,AK 1982.HS Graduate,Sitka High School,Sitka,AK 1984 Diploma,International Air Academy,Vancouver,WA 1982-1983 Reno Business College,Reno NV Major:Associate of Arts Minor:Business Admin/Computer Accounting (incomplete) 1991-1993 _University of Alaska SE,Juneau,AK Financial Accounting,Income Tax,Managerial Accounting and Accounting courses. Working knowledge of Apple I],Boroughs,Vector and IBM personal computers,IBM word processor,COMPACE 286, MS-Word,Excel,Lotus,Supercal,QuattroPro and Timeline computer systems. Big Brother/Big Sister Board of Directors Glacier Valley Elem.School Parent Group President Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix A-9 Inside Passage Electric Cooperative,Inc. P.O.Box 210149 uke Bay,AK 99821 Phone:(907)789-3196 Fax:(907)790-8517 Keith E.Berggren Employment Inside Passage Electric Cooperative,Inc. 1990 -Present Generation Supervisor Responsible for maintaining Air Quality permits,Oil Spill response plans,supervising Power Plant operators and scheduling maintenance of generators and all duties of Lead Mechanic. Previous Experience Tlingit &Haida Regional Electrical Authority,Juneau,AK 1982-1990 Lead Mechanic Responsible for maintenance and repair of all equipment. Supervise mechanics and powerhouse operators.Installation of generators and related equipment.Keep track of schedules for maintenance of equipment,ordering parts and inventory.Keep track of Oil Spill records and training of operators. Mechanic Responsible for the repair and maintenance of the diesel engines, generators,fuel systems,switchgear maintenance and repair of vehicles. Livingston Copters (Div of ERA Helicopters)Juneau,AK 1979-1982 Parts Manager Ordering parts and inventory of parts.Coding of invoices and tracking billing.Keeping track and ordering fuel. Taku Oil Sales,Juneau,AK 1979 Fuel Truck Driver Fuel truck driver for heating fuel.Sold marine fuel on fuel dock. Livingston Copters (Div of ERA Helicopters)Juneau,AK 1977-1979 Parts Manager Ordering parts,track inventory,code bills and track and order fuel. NC Machinery,Anchorage &Juneau,AK 1975-1977 Mechanic Apprentice Worked on Cylinder Heads,3208 fuel systems and marine gear. Helped on D398 and D399 overhauls. Education &Training Visible Emissions Certification,Anchorage 2000 and 1999 Oil Spill simulation,Gilbert Bay 1997 SEAPRO &Coastguard HASWOPER Refresher,Juneau 1998,1996,1995,1994 Basic Excel Learning connection,Juneau Northwest Public Power Ass.Planning for Supervisor and Principles of Supervisor Management,1989 Multi-Amp Electrical Print Reading Basier Electric Power &Control &Protection Conference 3500 school Catepillar and Power generation Catepillar Fuel and Diesel Systems,NC,Juneau Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix A-10 JOB DESCRIPTION ELECTRIC POWER GENERATION UTILITY MANAGER Location:Auke Bay Supervisor:IPEC Board of Directors Summary:Plans and directs activities of electric utility.Ensures facility is maintained according to guidelines outlined in Business Plan,the Operations and Maintenance Manual, all manufacturers'recommendations for maintenance and all state and federal laws and regulations governing operation. Essential Duties and Responsibilities include the following.Other duties may be assigned. Acts as point of contact for communications between Inside Passage Electric Cooperative,the Denali Commission,Regulatory Agencies and other interested patties. Interprets company policies and methods and develops specific operating procedures. Delegates functional activities to workers and establishes supervisory schedules and responsibilities to ensure quality and timeliness of independent decisions required to provide continuous setvice to public and safety of workers. Ensures maintenance of operator training program and training records so that trained operators are available to maintain sustained Facility operation. Ensures completion of annual report of operations to the Denali Commission and other required reporting. Ensures implementation of the spill response and related regulatory plans and ensures that required spill response and related regulatory plans are updated and available on-site:Ensures the reliability of the spill response equipment, maintenance of the proper records and conduct of periodic spill drills. Ensures proactive program to recognize,identify and correct operational problems within the facility.Investigates,evaluates and determines best application of new developments in electric power generation industry,and devises other means of securing maximum efficiency of personnel and equipment. Ensures maintenance of property records and upkeep of equipment and structures. Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix A-11 Job Description Electric Power Generation Utility Manager Page 2 SUPERVISORY RESPONSIBILITIES: Directly supervises management employees in the Utility.Carries out supervisory responsibilities in accordance with the organization's policies and applicable laws. QUALIFICATIONS:To perform this job successfully,an individual must be able to perform each essential duty satisfactorily.The requirements listed below are representative of the knowledge,skill,and/or ability required. Education and/or Experience.Bachelor's degree or equivalent;or three to five years of direct related experience and/or training;or equivalent combination of education and experience. Language Skills.Ability to read and interpret documents such as regulatory/compliance documents,safety rules,operating and maintenance instructions,and procedure manuals.Ability to write detailed reports and correspondence.Ability to speak effectively before groups of customers or employees of organization. Reasoning Ability.Ability to solve practical problems and deal with a variety of concrete variables in situations where only limited standardization exists.Ability to interpret a variety of instructions furnished in written,oral,diagram or schedule form. Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix A-12 APPENDIX B:O&M AND R&R COsT ESTIMATE POWER PLANT OPERATION &MAINTENANCE AND REPLACEMENT &RENEWAL COSTS IPEC-HOONAH POWER PLANT HOONAH,ALASKA PREPARED BY:CLIENT Alaska Energy and Engineering,Inc.AEA P.O.Box 111405 813 W.Northern Lights Blvd. Anchorage,Alaska 99511-1405 Anchorage,Alaska 99503 November 1,2010 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix B-1 NOTES REGARDING THE PREPARATION OF THIS ESTIMATE These Operations/Maintenance and Replacement/Renewal costs are based on preliminary drawings and do not include costs that could incur due to unexpected events such as natural disaster,vandalism,etc. Each work item is priced using utility maintenance staff or "Force Account"local labor with exception of major testing,replacement,etc.,which are priced using outside consultant/contractor rates,per diem and travel costs."Force Account"labor rates are assumed as an average hourly rate for each village scenario. O&M costs are established on yearly basis in 2010 dollars and should be projected to the initial 40 years of the facility using appropriate inflation factor over next 40 years. Renewal costs are based on repairing power plant building and equipment two to twenty times over 40 years. Replacement costs are based one to fifteen times over 40 years. Please note that this report excludes all work to the existing power plant. ESTIMATING ASSUMPTIONS Operation/Maintenance Costs:All costs are on yearly basis for one time event only. 0 5 10 15 20 25 30 35 40 Years:rT !t il I |||| i l |I T 1 T T 1 Renewal/Replacement Costs:Total cost column represents one time event only.Years in parentheses indicate number of times to be renewed/replaced.Therefore,the Business Plan should apply the total dollars and multiply by the number of years item to be renewed or replaced. Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix B-2 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS SUMMARY One Time Cost PAGE 3 TOTAL COST (In 2009 Dollars) A.Operations &Maintenance Costs (First Year)30,423 x B.Renewal Costs (Over 40 Years) C.Replacement Costs (Over 40 Years) 40 Years =$1,216,935 See Business Plan Table See Business Plan Table TOTAL O&M AND RENEWAL/REPLACEMENT COSTS (2007 DOLLARS):See Business Plan NOTE:Items B and C costs are for multiple events over 40 years period.See Business Plan Tables for actual costs including inflation factor and number of occurrences/event. Inside Passage Electric Cooperative,Inc. Hoonah Flectric Utility Upgrade Business Operating Plan Appendix B-3 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS QUANTITY MATERIAL LABOR EQUIPMENT A.Operations &Maintenance Costs (First Year)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units |Meas Price $Unit Hrs Rate $Price $$ 1.SITE MAINTENANCE Annual maintenance 12 Mos 50.00 600 6.000 72.000 25.00 1,800 2,400 Building foundation 2,730 SF Included Above Boardwalk /Stairs SF not used Steel grate/ramp SF not used TOTAL 1.:600 1,800 2,400 2.FUEL TANK,PIPELINES AND TRANSFORMER Check 3-Phase step-up transformer 1 EA 12.000 12.000 25.00 300 300 Fuel delivery Included In Cost of Fuel Perform minor repairs,replace faulty valves and gauges (1 tank)1 LOT 500.00 500 16.000 16.000 25.00 400 50.00 50 950 TOTAL 2.:500 700 50 1,250 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix B-4 PAGE 4 Seo POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS QUANTITY MATERIAL LABOR EQUIPMENT A.Operations &Maintenance Costs (First Year)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units |Meas Price $Unit Hrs Rate $Price $$ 3.OTHER COSTS NOTE:Included with Business Plan Table B. Operator training 1 EA Administration -clerical 12 Mos Administration -supervision 12 Mos Annual audit (in Juneau)1 LOT Power plant insurance (building and gensets,switchgear, gallon daytank,etc.)1 EA TOTAL 3.: 4.BUILDING SYSTEMS Check the following and repair as necessary: Foundation 2,730 SF 0.02 55 0.020 54.600 25.00 1,365 0.20 546 1,966 Floor structure 2,730 SF 0.05 137 0.020 54.600 25.00 1,365 1,502 Roof structure 2,867 SF 0.05 143 0.020 57.330 25.00 1,433 1,577 Inside Passage Flectric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix B-5 PAGE 5 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS QUANTITY MATERIAL LABOR EQUIPMENT A.Operations &Maintenance Costs (First Year)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units |Meas Price $Unit Hrs Rate $Price $$ 4.BUILDING SYSTEMS (Continued) Exterior walls 3,322 SF 0.05 166 0.013 43.189 25.00 1,080 1,246 10'W x 10°H overhead door 1 EA 100.00 100 4.000 4.000 25.00 100 200 3'0"x7'0"single door 4 EA 15.00 60 1.000 4.000 25.00 100 160 3'6"x3/6"windows 1 EA 10.00 10 0.500 0.500 25.00 13 23 Metal roofing 2,867 SF 0.02 57 0.020 57.330 25.00 1,433 1,491 Interior partitions 368 SF 0.05 18 0.020 7.360 25.00 184 202 Clean floors 2,730 SF 0.10 273 0.030 81.900 25.00 2,048 2,321 Clean interior wall finishes 3,322 SF 0.01 33 0.007 23.255 25.00 581 615 Ditto ceiling finishes 2,730 SF 0.01 27 0.007 19.110 25.00 478 505 Specialties 1 LOT 200.00 200 2.000 2.000 25.00 50 250 TOTAL 4.:1,280 10,229 546 12,055 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix B-6 PAGE 6 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS QUANTITY MATERIAL LABOR EQUIPMENT A.Operations &Maintenance Costs (First Year)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units |Meas Price $Unit Hrs Rate $Price $$ 5.MECHANICAL Check heating,ventilation and ducts, grilles,louvers and controls 2,730 SF 0.10 273 0.016 43.680 25.00 1,092 1,365 Fire alarm and fire suppression system inspection and certification (outside contractor)1 LOT 500.00 500 10.000 10.000 75.00 750 1,250 TOTAL 5.:773 1,842 2,615 6.ELECTRICAL Check service and distribution 2,730 SF 0.013 35.490 25.00 887 887 Change lamps/replace lenses (13 fixtures x 33%)4 EA 24.00 96 0.700 2.800 25.00 70 166 Check devices,switches,etc.1 LOT 6.000 6.000 25.00 150 150 TOTAL 6.:96 1,107 1,203 Inside Passage Flectric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix B-7 PAGE 7 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS QUANTITY MATERIAL LABOR EQUIPMENT A.Operations &Maintenance Costs (First Year)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units |Meas Price $Unit Hrs Rate $Price $$ 7.POWER GENERATION SYSTEMS Check 1100 KW genset radiators, mufflers and additives 1 EA 18.000 18.000 25.00 450 450 Ditto 1050 KW 1 EA 18.000 18.000 25.00 450 450 Ditto 476 KW 1 EA 8.000 8.000 25.00 200 200 Ditto switchgear and controls 1 EA 12.000 12.000 25.00 300 300 Change oil,oil filter,fuel filter and air filters in generator engine 1 EA 8500.00 8,500 40.000 40.000 25.00 1,000 9,500 TOTAL 7.:8,500 2,400 10,900 SUMMARY (YEARLY) 1.SITE MAINTENANCE $2,400 2.FUEL TANK,PIPELINES AND TRANSFORMER 1,250 3.OTHER COSTS -- 4.BUILDING SYSTEMS 12,055 5.MECHANICAL 2,615 6.ELECTRICAL 1,203 7.POWER GENERATION SYSTEMS 10,900 TOTAL IN PRESENT DOLLARS/YEAR:$30,423 Inside Passage Flectric Cooperative,Inc. Hoonah Hlectric Utility Upgrade Business Operating Plan Appendix B-8 PAGE 8 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS PAGE 9 QUANTITY MATERIAL LABOR EQUIPMENT B.Renewal Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units |Meas Price $Unit Hrs Rate $Price $$ 1.SITE Repair decking (at 5,10,15,25, 30 and 35 years -6 times)SF 0.30 0.060 25.00 0.15 not used Minor repairs to steel grate/ramp at module (ditto)SF 0.45 0.080 25.00 0.25 TOTAL 1.: 2.FUEL &OIL PUMPS,PIPING AND ELECTRICAL Replace fuel pumps (at 10,20,30 and 40 years -4 times,1 tank)1 LOT 2500.00 2,500 8.000 8.000 25.00 200 100.00 100 2,800 Replace valves and gauges (at 5, 15,25 and 35 years -4 times)1 LOT 1250.00 1,250 6.000 6.000 25.00 150 30.00 30 1,430 Refurbish electrical systems for fuel system and pump (at 10,20,30 and 40 years -4 times)1 LOT 500.00 500 16.000 16.000 25.00 400 100.00 100 1,000 TOTAL 2.:4,250 750 230 5,230 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix B-9 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS PAGE 10 QUANTITY MATERIAL LABOR EQUIPMENT B.Renewal Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units |Meas Price $Unit Hrs Rate $Price $$ 3.BUILDING SYSTEMS Minor repairs to floor system (at 10, 20,30 and 40 years -4 times)2,730 SF 0.15 410 0.030 81.900 25.00 2,048 2,457 Ditto roof structure (ditto)2,867 SF 0.10 287 0.020 57.330 25.00 1,433 1,720 Repair exterior siding (at 5,10, 15,25,30 and 35 years -6 times)3,322 SF 0.20 664 0.030 99.666 25.00 2,492 3,156 Ditto interior (ditto)3,322 SF 0.10 332 0.020 66.444 25.00 1,661 1,993 Repair/caulk 14'0"x12'0"overhead door (ditto)EA 100.00 4.000 25.00 not used Repair/caulk 6'0"x7'0"door (at 5,10,15,25,30 and 35 years - 6 times)2 EA 12.00 24 1.500 3.000 25.00 75 99 Ditto 3'6"x5'0"window (ditto)2 EA 8.00 16 1.000 2.000 25.00 50 66 Repair metal roofing and flashings (at 10,20 and 35 years -3 times)2,867 SF 0.25 717 0.040 114.660 25.00 2,867 3,583 Change door hardware (at 10 and 30 years -2 times)7 EA 265.00 1,855 1.500 10.500 25.00 263 2,118 Inside Passage [lectric Cooperative,Inc. Yoonah Electric Utility Upgrade Business Operating Plan Appendix B-10 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS PAGE 11 QUANTITY MATERIAL LABOR EQUIPMENT B.Renewal Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units Meas Price $Unit Hrs Rate $Price $$ 3.BUILDING SYSTEMS (Continued) Replace acoustical glazing and seals on 3'6"x5'0"interior window (at 20 years -1 time)18 SF 27.50 481 0.370 6.475 25.00 162 643 Paint floors (at 5,10,15, 25,30 and 35 years -6 times)2,730 SF 0.18 491 0.040 109.200 25.00 2,730 3,221 Patch and clean interior walls (at 5, 10,15,25,30 and 35 years -6 times)3,322 SF 0.22 731 0.025 83.055 25.00 2,076 2,807 Ditto ceilings (ditto)2,730 SF 0.15 410 0.025 68.250 25.00 1,706 2,116 Repair specialties (at 10,20,and 30 years -3 times)LOT 50.00 1.000 25.00 Not Used TOTAL 3.:6,417 17,562 23,979 4.MECHANICAL Replace filters,check motor belts, bearings,etc.(at 5,10,15,25,30 and included in Tab A -O&M #7 35 years -0 times)LOT 700.00 16.000 25.00 Repair ducts,grilles and controls (at 10 and 30 years -2 times)2,730 SF 1.00 2,730 0.050 136.500 25.00 3,413 6,143 Inside Passage Electric Cooperative,Inc. Hoonah Flectric Utility Upgrade Business Operating Plan Appendix B-11 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS PAGE 12 QUANTITY MATERIAL LABOR EQUIPMENT B.Renewal Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units |Meas Price $Unit Hrs Rate $Price $$ 4.MECHANICAL (Continued) Repair fire suppression system and recharge system (at 10 and Labor &T&PD included in annual inspection 30 years -2 times)1 LOT 3000.00 3,000 75.00 3,000 TOTAL 4.:5,730 3,413 9,143 5.ELECTRICAL Replace panel circuit breakers,fuses, etc.(at 20 years -1 times)1 LOT 1200.00 1,200 24.000 24.000 25.00 600 1,800 Replace fixture ballasts and lenses (at 5,10,15,25,30 and 35 years - 6 times -13 fixtures x 33%)4 EA 60.00 240 1.500 6.000 25.00 150 390 Repair devices (ditto)12 EA 2.50 30 0.750 9.000 25.00 225 255 TOTAL 5.:1,470 975 2,445 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix B-12 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS PAGE 13 QUANTITY MATERIAL LABOR EQUIPMENT B.Renewal Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units |Meas Price $Unit Hrs Rate $Price $$ 6.POWER GENERATION SYSTEMS Top End Overhaul new 3512 genset (at 10 &30 years)1 EA 21850.00 21,850 175.000 175.000 75.00 13,125 2000.00 2,000 36,975 Top End Overhaul old 3512 genset EA 21850.00 175.000 75.00 2000.00 (Unit is on permanent standby) Top End Overhaul 3456 genset 2 EA 9958.00 19,916 75.000 150.000 75.00 11,250 2000.00 2,400 33,566 (at 1,3,5,7,9,11,13,15,17,19,21,23,25,27,29,31,33,35,37,and 39 yrs) 2nd Top End Overhaul new 3512 genset (IPEC does a Major Inframe at 22000)EA 26200.00 210.000 75.00 2000.00 Refurbish switchgear and controls, instrumentation and recalibrate (at 20 years -1 times)4 LOT 20000.00 20,000 100.000 100.000 100.00 10,000 500.00 500 30,500 Change battery,alternator,etc. (at 5,15,25.35 -4 times)1 LOT 2500.00 2,500 12.000 12.000 25.00 300 2,800 TOTAL 6.:64,266 34,675 4,900 103,841 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix B-13 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS PAGE 14 QUANTITY MATERIAL LABOR EQUIPMENT B.Renewal Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units _|Meas Price $Unit Hrs Rate $Price $$ SUMMARY 1.SITE 2.FUEL &OIL PUMPS,PIPING AND ELECTRICAL 5,230 3.BUILDING SYSTEMS 23,979 4.MECHANICAL 9,143 5.ELECTRICAL 2,445 6.POWER GENERATION SYSTEMS 103,841 TOTAL IN PRESENT DOLLARS OVER 40 YEARS:$144,638 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Upgrade Business Operating Plan Appendix B-14 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS PAGE 15 QUANTITY MATERIAL LABOR EQUIP/FRT C.Replacement Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units (Meas Price $Unit Hrs Rate $Price $$ 1.SITE Replace decking (at 20 and 40 years -2 times)SF 5.50 0.100 25.00 not used Replace steel grate/ramp/stairs (at 40 years -1 time)EA 2000.00 20.000 75.00 500.00 TOTAL 1.: 2.FUEL TANK AND ELECTRICAL Replace day tank (at 40 years -1 time)1 EA 20000.00 20,000 90.000 90.000 75.00 6,750 2500.00 2,500 29,250 Replace electrical system for fuel &radiator system (at 40 years -1 time)1 LOT 10000.00 10,000 50.000 50.000 75.00 3,750 250.00 250 14,000 TOTAL 2.:30,000 10,500 2,750 43,250 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Business Operating Plan Appendix B-15 (i @ POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS PAGE 16 QUANTITY MATERIAL LABOR EQUIP/FRT C.Replacement Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTALUnitsMeasPrice$Unit Hrs Rate $Price $$ 3.BUILDING SYSTEMS Shim piles and replace bracings not used (at 20 and 40 years -2 times)EA 255.00 6.000 25.00 215.00 Upgrade floor system (at 20 and 40 years -2 times)2,730 SF 0.25 683 0.100 273.000 25.00 6,825 7,508 Ditto roof structure (ditto)2,867 SF 2.00 5,733 0.050 143.325 25.00 3,583 9,316 Refurbish exterior walls (at 40 years -1 time)3,322 SF 12.00 39,866 0.120 398.664 25.00 9,967 49,833 Refurbish interior walls (at 40 years -1 time)3,322 SF 1.25 4,153 0.070 232.554 25.00 5,814 9,967 Replace 14'0"x14'0"overhead door (at 20 and 40 years -2 times)1 EA 2500.00 2,500 10.000 10.000 25.00 250 not used Ditto 6'0"x7'0"double door (ditto)EA 785.00 3.000 25.00 Ditto 3'0"x7'0”single door (ditto)2 EA 380.00 760 3.000 6.000 25.00 150 910 Replace metal roofing (at 20 and 40 years -2 times)2,867 SF 42.00 34,398 0.125 358.313 25.00 8,958 43,356 Replace 3'0"x7'0"interior doors (at 20 and 40 years -2 times)2 EA 655.00 1,310 2.500 5.000 25.00 125 1,435 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Business Operating Plan Appendix B-16 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS PAGE 17 QUANTITY MATERIAL LABOR EQUIP/FRT C.Replacement Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTALUnitsiMeasPrice$Unit Hrs Rate $Price $$ 3.BUILDING SYSTEMS (Continued) Replace 3'6"x5'0"window unit (at 40 years -1 time)35 SF 35.00 1,225 0.400 14.000 25.00 350 1,575 Paint trim and doors (at 20 and 40 years -2 times)4 EA 20.00 80 1.250 5.000 25.00 125 205 Replace specialties (at 40 years - 1 time)41 LOT 2500.00 2,500 12.000 12.000 25.00 300 2,800 TOTAL 3.:93,208 36,446 126,904 4.MECHANICAL Replace major mechanical equipment (at 40 years -1 time)1 LOT 227500.00 227,500 1060.000 1060.000 80.00 84,800 5000.00 1,000 313,300 Refurbish grilles,louvers,ducts and controls (at 20 and 40 years -2 times)2,730 SF 4.50 12,285 0.040 109.200 75.00 8,190 1.00 2,730 23,205 Replace fire suppression system (at 40 years -1 time)1 LOT 100000.00 100,000 200.000 200.000 80.00 16,000 1000.00 1,000 117,000 TOTAL 4.:339,785 108,990 4,730 453,505 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Business Operating Plan Appendix B-17 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS PAGE 18 QUANTITY MATERIAL LABOR EQUIP/FRT C.Replacement Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTAL Units [Meas Price $Unit Hrs Rate $Price $$ 5.ELECTRICAL Replace panels,disconnect switches, motor controls,etc.(at 40 years -1 time) 1 LOT 30000.00 30,000 240.000 240.000 80.00 19,200 1500.00 1,500 50,700 Replace conductors only (at 40 years - 1 time)1 LOT 20000.00 20,000 200.000 200.000 80.00 16,000 1000.00 1,000 37,000 Replace light fixtures (at 20 and 40 years - 2 times)13.EA 152.50 1,983 1.500 19.500 75.00 1,463 3,445 Replace devices (ditto -2 times)12 EA 18.00 216 0.500 6.000 75.00 450 666 Replace fire alarm system (at 20 and 40 years -2 times)2,730 SF 2.35 6,416 0.020 54.600 75.00 4,095 10,511 Replace transformers (at 40 years - 1 time)1 §EA 65000.00 65,000 50.000 50.000 80.00 4,000 3000.00 3,000 72,000 TOTAL 5.:123,614 45,208 5,500 174,322 Inside Passage Electric Cooperative,Inc. Iloonah Electric Utility Business Operating Plan Appendix B-18 POWER PLANT OPERATIONS AND MAINTENANCE AND REPLACEMENT AND RENEWAL COSTS PAGE 19 QUANTITY MATERIAL LABOR EQUIP/FRT C.Replacement Costs (Over 40 Years)No.of |Unit Unit Cost MH Total Cost Unit Cost TOTALUnits|Meas Price $Unit Hrs Rate $Price $$ 6.POWER GENERATION SYSTEM Major Inframe 3456 genset 2 EA 17911.00 35,822 140.000 280.000 80.00 22,400 2000.00 4,000 62,222 (at 2,4,6,10,12,14,18,20,22,26,28,30,34,36,and 38 yrs) Repower 3456 genset 2 EA §5000.00 110,000 40.000 80.000 80.00 6,400 3500.00 2,000 118,400 (at 8,16,24,32,and 40 years) Major Inframe 3512 genset 1 EA 60000.00 60,000 375.000 375.000 80.00 30,000 1500.00 1,500 91,500 (at 20 and 40 years) Repower 3512 genset EA 80.00 (at >>40 years) Replace switchgear and controls complete (at 40 years -1 time)1 LOT 250000.00 250,000 100.000 100.000 80.00 8,000 2000.00 5,500 263,500 Replace equipment feeders and conductors (at 20 &40 years -2 times)1 LOT 20000.00 20,000 200.000 200.000 80.00 16,000 1000.00 1,500 37,500 TOTAL 6.:475,822 82,800 14,500 573,122 SUMMARY 1.SITE 2.FUEL TANK AND ELECTRICAL 43,250 3.BUILDING SYSTEMS 126,904 4.MECHANICAL 453,505 5.ELECTRICAL 174,322 6.POWER GENERATION SYSTEM 573,122 TOTAL RENEWAL:$1,371,103 Inside Passage Electric Cooperative,Inc. Hoonah Electric Utility Business Operating Plan Appendix B-19 ADDITIONAL RELATED AND ATTACHED DOCUMENTS 1.Site Control Documents 2.Grant Agreement wA Z2VU1V0-V001404-0 "Recording Dist:103 -Sitka :11/1/2010 1:01 PM Pages:1 of 6 *AAIAAEAUOO AUER LEASE AMENDMENT Dated:Ortnbta 22910 Made By and Between INSIDE PASSAGE ELECTRIC COOPERATIVE,INC. Lessee P.O.Box 210149,Auke Bay,Alaska 99821 and CITY OF HOONAH Lessor P.O.Box 360,Hoonah,Alaska 99829 Amending a Lease of Real Property dated August 27,1976, and recorded on October 19,1976,at Book 37,Page 755; As previously amended by an Amended Lease of Real Property dated May 16,1977, and recorded on May 17,1977,at Book 39,Page 202; As previously amended by an Amended Lease of Real Property dated July 5,1977, and recorded on July 11,1977,at Book 39,Page 601; As previously amended by an Assignment and Assumption Agreement dated March 18,25, 2005,and recorded on January 19,2010,as Document No.2010-000067-0; All of the above-referenced documents being recorded jn the records of the Sitka Recording District,First Judicial District}State of Alaska. % 'AFTER RECORDING IN THE SITKA RECORDING DISTRICT, PLEASE RETURN TO: City of Hoonah P.O.Box 360 Hoonah,AK 99829 LEASE AMENDMENT Power Plant Facility Lease between City of Hoonah and Inside Passage Electric Cooperative,Inc. (Successor in interest to the Tlingit-Haida Regional Electrical Authority) A power plant facility lease ("the Lease”)was entered into by and between the City of Hoonah (City),as Lessor,and the Tlingit-Haida Regional Electric Authority (THREA),as Lessee,on or about August 27,1976,and recorded on October 19,1976,at Book 37, Page 755,records of the Sitka Recording District,First Judicial District,State of Alaska. The Lease encumbers a portion of Lots 2 and 3,Hoonah Indian Village,U.S.Survey 4539,Sitka Recording District,First Judicial District,State of Alaska. The Lease was subsequently amended on May 16,1977,and recorded on May 17,1977,at Book 39,Page 202;and amended again on July 5,1977,and recorded on July 11,1977,at Baok 39 at Page 601);both amendments recordedin the records of the Sitka Recording District,First Judicial District,State of Alaska. On or about March 18,2005,THREA,Inside Passage Electric Cooperative,Inc., ("IPEC”)and City entered into an "Assignment and Assumption Agreement”whereby THREA assigned all its rights,interests,duties and responsibilities under the Lease,as amended,to IPEC;IPEC agreed to assume THREA's rights,interests,duties,and responsibilities under the Lease,as amended;and the City consented to the assignment.The Assignment and Assumption:Agreement was recorded in the SitkaRecordingDistrict,First Judicial District,State of'Alaska,on January 19,2010 asDocumentNo.2010-000067-0. The current mailing address of the Lessor,City of Hdonah is P.O.Box 360,Hoonah,AK 99829.The current mailing address of the Lesseg,IPEC is P.O.Box 210149,AukeBay,AK 99821. This amendment is made pursuant to paragraph number 18 of the original Lease.The purpose of this amendment is to replace the legal description of the real property,as previously amended by an Amended Lease of Real Property dated July 15,1977,with the as-built surveyed location of the premises as shown on the attached Exhibit A. The parties hereby agree that the attached Exhibit A,dated December 1,2009,containing theas-built surveyed location of the Hoonah IPEC Power Plant Site,shall replace the metes and bounds legal description of Paragraph 1,Page 1 of the Amended Lease of Real Property, LA 2010-001404-0 previously executed by the parties on July 7,1977,and shall be considered the legaldescriptionofthepremisesforallpurposesundertheLease,as amended. The parties further agree that: 1.All other provisions of the aforementioned Lease,as amended,remain in full force and effect. 2.This amendment sets forth all terms,conditions and agreements of the parties and supersedes any previous understanding or agreements regarding the provisions contained in this amendment whether oral or written.No modification of this amendment or the aforementioned Lease is effective unless in writing and by both parties. 3.The effective date of the amendment will be the date that this amendment has been signed by both parties. BY SIGNING THIS LEASE Amendment,the Lessor and the Lessee,agree to be bound by its provisions as set out above. *e TL 2010-001404-0 Inside Passage Electric Cooperative,Inc. Lessee DATED:Oeterlona §,210 By:A Its:aS ACKNOWLEDGMENT STATE OF ALASKA ) FIRST JUDICIAL DISTRICT ss. ) is is it ray fi"on pho S ,2010,before me appeared'a ake ,known by me to be the .€&.0-+_,Of Inside Passage Electric Cooperative,Inc.,who executed this Lease Amendment pnd acknowledged to the undersigned {that he is duly authorized to execute this Lease Amendment on!behalf of the Inside Passage Electric Cooperative,Inc.as Lessee. (SEAL)Notaky Pupflic'in&for ka STATE OF ALASKA My commission expires'v4AGES.I.OFFICIALSEAL fpee¥Lorenzo N.Jaravata Jr.i)NOTARY PUBLIC 'SSR My Commission Expires 06/13/2012 %? & rf8, Nun 2010-001404-0 City of Hoonah Lessor DATED:DHO AYO By:Rhert S Line bxIts:St pattem. ACKNOWLEDGMENT STATE OF ALASKA ) )ss, FIRST JUDICIAL DISTRICT } This is to certify that on Beat t®,2010,before me appeared Retoech Phunedle knownbymetobetheCityAdmtunsintes,of the City of Hoonah,who executed this Lease AmendmentandacknowledgedtotheundersignedthatheisdulyauthorizedtoexecutethisLeaseAmendmenton behaif of the City of Hoonah as Lessor. (SEAL)Odie P UDR AmeNotaryPublicin&for the State of AlaskaMycommissionexpires:"I -(1-14 Notary PublicALICEL.WILLIAMS State of Alaska My Commission Expires Jul 19,20144 ee;”ati 2010-001404-0 Plastic Cap on Rebor 1410-S »M.5RecoveredRV ”sz,Os%.25 % C193 . 2 a >402 "os 2 NSLP ® »a\<e NXg N bo) N '" ™.. >"S - Aluminum Prima Monument 1410- Recovered,Typical-Of Three Shown 4 fd 5 &3 38 IPEC POWER eSGeSPLANTSITEwe N 9SsaulBross6,83 cs 1.794 Acres ;a ron aPipeMon.aes ""N >go :\\Recovered WG IN '%.4,tS 9 20»BAY241935'\031 'f) ;AT 3 71 yh(5.12__.W ATA ID,214CisL3 -230.04 (Compute =thWinker=<--f C3,L2/C18.13”BLM pross CappedronPipeMonumenSSAA,Of Record Typical :arc OF 4 Of Three Shown=",AC cere lgaate/*e.Lease BoundaryoAaSetAt30.From o :parent Centerline7)7,hite Alice Road off af a Fleld Survey Date:0 100tbyZein.-Nov.6-8,2009 US SURVEY FEET Graphic_Scale 200 TITLE:EXHIBIT A Portion of Lots 2 &3,U.S.Survey No.4559,AK PROJECT: HOONAH IPEC POWER PLANT SITE SCALE:1"=100'DRAWN BY:emg PREPARED BY: SHEET:1 OF 1 Manley Land Surveyors,Inc.DATE:12/1/09}PO Box FA Woniey Hot Spins,Noska 99756 State of Alaska Department of Community and Economic DevelopmentAIDEA/AEAfyRuralEnergyGroup FE RASS! *©B13 West Northern Lights Blvd. *&* i 2010-001404-0 il