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HomeMy WebLinkAboutBPMC Nov 17, 2015PNagPSY10. 11. 12. 13. 14. 15. BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE REGULAR MEETING AGENDA Tuesday,Nov.17,2015 9:30 a.m.-11:30 a.m. Alaska Energy Authority's Board Room 813 West Northern Lights Boulevard,Anchorage,AK To participate by teleconference,dial 1-888-585-9008 and use code 467 050 126. CALL TO ORDER ROLL CALL FOR COMMITTEE MEMBERS PUBLIC ROLL CALL AGENDA COMMENTS /MOTION FOR APPROVAL PUBLIC COMMENTS APPROVAL OF MEETING MINUTES --Sept 25,2015 OLD BUSINESS A.Resolution 14-11 -Mediation or dispute resolution process Kirk Gibson NEW BUSINESS A.Access permit request by Troy Jones B.Dynamic Scheduling Chugach/ML&P C.Update on Dynamic Dispatch Report by Burke Wick (CEA) COMMITTEE REPORTS OPERATORS REPORT EXECUTIVE SESSION 1.HEA's antitrust claims 2.MEA's letter to AEA 3.Change in AEA position regarding HEA transmission issue and notification of intent to elevate the issue COMMITTEE ASSIGNMENTS MEMBERS COMMENTS NEXT MEETING DATE -TBD ADJOURNMENT ITEM6 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE MEETING REGULAR MEETING Alaska Energy Authority,Anchorage,Alaska September 25,2015 1.CALL TO ORDER Chair Borgeson called the regular meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:01 a.m. 2.ROLL CALL (for Committee members) Cory Borgeson (Golden Valley Electric Association [GVEA]);Sara Fisher-Goad (Alaska Energy Authority [AEA]);Lee Thibert (Chugach Electric Association [CEA]);Joe Griffith (MatanuskaElectricAssociation[MEA]));Mark Johnston (Anchorage Municipal Light &Power [MLP]); J ohn Foutz (City of Seward);and Harvey Ambrose (Homer Electric Association [HEA]).3.!PUBLIC ROLL CALL (for all others present Bryan Carey,J ocelyn Garner,Teri Webster (AEA);Crystal Enkvist (Alaska Power Association); Brian Bjorkquist (Attorney General's Office [AGO]));Paul Riese,Burke Wick (CEA);Bob Day, Emily Hutchinson,Alan Owens,Maynard Smith (HEA);Kirk Gibson (McDowell Rackner & Gibson);Ed Jenkin (MEA);Anna Henderson,Ken Langford (MLP);Mike Kreger (Perkins Coie);Rick Baldwin (phone),David Gillespie,Bernie Smith (Public);Sydney Hamilton,andSunnyMorrison(Accu-Type Depositions).;,: 4.AGENDA COMMENTS/MOTION FOR APPROVAL Chair Borgeson suggested 8C.Homer's Notice of Claims be held in Executive Session,and that it comes after Item 12.Member Comments.Chair Borgeson asked for a motion to approve the agenda with this amendment. Mr.Ambrose objected to multiple items and their inclusion on the agenda.He provided Chair Borgeson with a printed list of HEA's objections to the agenda items,with accompanying reasons for the objections.Mr.Ambrose informed he provided HEA's list of objections before a motion to approve the agenda was made. HEA's objections to published agenda items are transcribed as follows: "HEA objects to the inclusion of Item 7B.Resolution 14-11 -Mediation or dispute resolution process,Kirk Gibson,for discussion on the BPMC's agenda.Mr.Gibson has professional and ethical responsibilities owed to each individual member of the BPMC.This particular question of a "contractual agreed to dispute resolution"has been raised by the protesting utilities in the lawsuits.HEA does not consent to McDowell Rackner &Gibson's representation of the group in connection with any matter in the lawsuit,particularly in providing an opinion on a matter that my be adverse to one or more members of the group he claims to represent." DRAFT BPMC Minutes 9/25/15 Page 1 of 10 "HEA also objects to the inclusion of Item 8C.Homer's Notice of Claims,Kirk Gibson,for discussion on the BPMC's agenda.This item appear to be a reference to a letter from HEA's lawyers to the attorneys for four utilities,ML&P,GVEA,MEA,and CEA.The letter was not sent to this committee.What the four utilities do,or don't do,in response to the notice is not a proper matter for this committee's action.” "HEA's objection to additional agenda Items proposed by MEA by email 9/17/15."An explanation by AEA of their 'new'position in the on-going litigation.".HEA objects to the inclusion of this item on the agenda.It is not appropriate for the BPMC to ask the AEA for "an explanation of its position in litigation."Should the parties in the on-going Supreme Court matter have questions for AEA,they should ask them through their lawyers in the litigation." "'A potential motion to notify the Trustee on the bonds of the status of the litigation and the new assertion of restraint of trade by HEA.'HEA objects to the inclusion of this item on the agenda. AEA is the Borrower and the entity that communicates with its Lenders.The BPMC should not be involved in communication between the Borrower and the Lenders on the bonds." "'A discussion of the purpose and objective of mediation with HEA.'HEA objects to the inclusion of this item on the agenda.First,the BPMC is not a party in the lawsuit and would not be mediating with HEA.Second,none of the utilities in the litigation should be asked to state their purposes and objectives at a meeting of the BPMC.Third,the BPMC is not the appropriate entity to sponsor settlement discussions between the litigants in the lawsuit.On that point,HEA has sated to the RCA's lawyer that it is willing to participate in good faith settlement discussion,within the context of the litigation settlement proceedings.""Possible BPMC response to RCA letter to the legislature,inter alia.|HEA objects to the inclusion of this item on the agenda.The contemplated action,a BPMC response to an RCA letter to the Legislature,exceeds the BPMC's authority under the Power Sales Agreement and should not be an item for discussion on the agenda." Chair Borgeson thanked Mr.Ambrose.Chair Borgeson asked for a motion to approve the agenda as he previously amended with Item 8C.Homer's Notice of Claims to be held in Executive Session coming after Item 12.Member Comments. MOTION:Mr.Johnston made a motion to approve the agenda as amended with Item 8C. Homer's Notice of Claims to be held in Executive Session coming after Item 12.Motion seconded by Mr.Foutz. Chair Borgeson noted Mr.Ambrose's objections to the agenda have been read into the record. Mr.Griffith suggested the agenda include AEA's discussion on its position on the motions AEA is filing in the litigation.Mr.Griffith suggested the agenda include BPMC counsel Kirk Gibson discuss his role and who he represents. Chair Borgeson recommended adding a new agenda Item 8D.AEA's Attorney's Role,to discuss legal counsel's representation. DRAFT BPMC Minutes 9/25/15 Page 2 of 10 Chair Borgeson recommended adding a new agenda Item 8E.AEA Litigation Position,to be discussed during Executive Session. Mr.Ambrose expressed objections to the proposed amended agenda to add Item 8E and the inclusion of Item 7B and 8C as stated earlier. Chair Borgeson reviewed the proposed agenda with amendments under the current motion as follows:Item 8C -to be held in Executive Session,including discussion of notifying the trustees; Add Item 8D -AEA's Attorney's Role,to discuss legal counsel's representation;Add Item 8E - AEA Litigation Position to be held in Executive Session;Executive Session comes after Item 12. The maker of the motion and the second did not voice objection to amending the original motion as stated by Chair Borgeson.Mr.Ambrose restated his objections to the original agenda and his objections to the amendments to the agenda. The motion passed to approve the agenda as amended,with Mr.Ambrose voting against. 5..PUBLIC COMMENTS None. i '6.APPROVAL OF PRIOR MEETING MINUTES-July 30,2015 MOTION:Mr.Foutz made a motion to approve prior meeting minutes of July 30,2015 asamended.Motion seconded by Vice-Chair Thibert.-Mr.Ambrose requested aan error be corrected iin the minutes att Item 8B,on page two,firstsentence,"Mr.Gibson informed he wrote a letter to Rick Baldwin of HEA,at the direction of theChair."It should read,"Mr.Gibson informed he wrote a letter to Harvey Ambrose,at the direction of the Chair.” The maker of the motion and the second verbally accepted the amendment to the minutes. The motion passed unanimously to approve the prior meeting minutes of July 30,2015 as amended. 7.OLD BUSINESS A.AEG&T to MEA signed consent form Mr.Gibson reported he and Mr.Bjorkquist worked with MEA's counsel and resolved the relevant issues.Mr.Gibson informed he gave Mr.Pease the new document for Mr.Griffith to sign.Once Mr.Gibson receives that signed document,he will send out consents for the members to execute and return.This will complete the process. DRAFT BPMC Minutes 9/25/15 Page 3 of 10 B.Resolution 14-11 -Mediation or dispute resolution process Chair Borgeson invited Mr.Gibson to report on this agenda item. Before Mr.Gibson began,Mr.Ambrose renewed HEA's objections to this agenda item and restated the reasons for it being an inappropriate discussion. Mr.Gibson informed his report is from the context that BPMC issued Resolution 14-11.Mr. Gibson gave a brief history of the issues and the order of events leading to the current appeal under the advisement of the Supreme Court.Mr.Gibson stated at this juncture,the BPMC is the responsible party,according to Alaska's courts and law.The ultimate decision of the Supreme Court could overturn this position.Mr.Gibson noted the BPMC needs to reconsider Resolution 14-11 to decide whether or not to confirm the findings. Mr.Gibson explained he was tasked by the Chair to approach and develop a mediation process. The first step is the agreement by the Committee to mediate.This has not been met.The second step is to choose a mediator.Mr.Gibson described his process in determining three mediator candidates to present to the Committee for consideration based upon these factors: Inside Alaska vs.outside Alaska;knowledge of energy issues and the Railbelt;mediation and negotiation experience;respect in the industry.Mike Dotten,Fred Schmidt,and Bill Saupe were the three potential candidates chosen.:a . Chair Borgeson suggested the Committee discuss the willingness to mediate this dispute,then discuss the acceptability of the recommended mediator candidates,and finally,discuss the order of Resolution 14-11 for clarification. Mr.Johnston believes it would be useful for HEA to state whether or not they would participate in mediation,since the Committee cannot move forward if HEA will not participate. Mr.Ambrose restated HEA's objection this should not be an item of discussion in this meeting. Mr.Ambrose gave reasons why HEA would not mediate under the BPMC forum.BPMC is not a party to the lawsuit and would not be mediating with HEA.It is inappropriate for the utilities in the litigation to be discussing purposes and objectives at a BPMC meeting.BPMC is not an appropriate entity to sponsor settlement discussions between the litigants in the lawsuit.Mr. Ambrose informed HEA has stated to the RCA's lawyer that HEA is willing to participate in good faith settlement discussions,including mediation,within the context of the litigation settlement proceedings,but not in the context of the BPMC. Mr.Griffith believes HEA's position that they are not interested in settlement discussions with the BPMC should be reported to the RCA. In the event the Committee reports to the RCA,Mr.Ambrose requested a complete report be given showing HEA's clear position of willingness to enter into settlement discussions with the parties,but not in this context.Mr.Ambrose stated HEA has made that offer and there are parties at the table who have objected and have not been willing to enter into those discussions. DRAFT BPMC Minutes 9/25/15 Page 4 of 10 Vice-Chair Thibert asked for clarification from Mr.Ambrose regarding HEA's willingness to mediate,but not in the forum of the BPMC.Mr.Ambrose agreed HEA is happy to discuss settlements with the parties to the ongoing litigation,with attorneys present,just like any mediation would typically occur,but not in the context of the BPMC.HEA believes the purpose of this Committee is to manage the Bradley Lake Hydroelectric Project,and does not have the authority to enter into these settlement discussions. Chair Borgeson stated the BPMC agreements HEA signed created a process that gives the BPMC authority for dispute resolution and arbitration between the utilities,which goes beyond solely managing the project. Mr.Ambrose indicated the dispute resolution sections of the Power Sales Agreement and the Services Agreement are not the same.He noted dispute resolution procedures have only been developed for the Power Sales Agreement and the issues being litigated are not found under the Power Sales Agreement. Chair Borgeson asked if Homer agreed to the creation of the Dispute Resolution Committee.Mr.Ambrose stated HEA's position in the very beginning of that process was HEA did not agree anything that was going to be discussed was appropriate for dispute resolution at this Committee, but HEA was willing to have discussions in order to clarify points.Chair Borgeson informedtherewasavote,and Homer voted yes.He requested Mr.Gibson find those minutes for the nextmeeting,in the event they are needed. Mr.Ambrose believes HEA has made their position clear at the hearings before the RCA andwillnotenterintofurtherdiscussioninthisforum. Chair Borgeson requested Mr.Gibson give his opinion on these issues.Mr.Gibson believes the root issue is regarding BPMC's authority.The courts in the State of Alaska have determined thatBPMCdoeshavethejurisdictiontohandletheseissues.It is on appeal to the Supreme Court by HEA. Chair Borgeson reminded the Committee the RCA had asked for a stay of the decision by Judge Corey,and the Supreme Court Justice who denied the stay said he did not see that HEA was likely to win on the merits.Mr.Gibson noted that was a paraphrasing of the order. Chair Borgeson asked Mr.Ambrose which parties here have not been willing to mediate.Mr. Ambrose stated he does not have that information and could consult with counsel. Chair Borgeson took a poll of the other members regarding willingness to mediate within the BPMC.Mr.Foutz believes mediation is appropriate through the BPMC.Mr.Johnston stated willingness to mediate in any forum.Mr.Thibert stated willingness to mediate in any forum. Chair Borgeson stated willingness to mediate and thought BPMC was making progress in facilitating the mediation.Mr.Griffith agreed to mediation.Ms.Fisher-Goad believes all parties in the litigation were willing to mediate,but not within the context of the BPMC. DRAFT BPMC Minutes 9/25/15 Page 5 of 10 Chair Borgeson requested comments regarding the three mediators presented as choices.Mr. Griffith questioned the reasons for proceeding since HEA said no to mediation.Mr.Ambrose noted HEA has reviewed the presented mediators,but will not comment unless they are brought forward under the proper context of RCA or the Supreme Court. Vice-Chair Thibert commented there are parties who do not believe RCA has jurisdiction in this issue.Vice-Chair Thibert asked if the Railbelt Utilities Group (RUG)would be an appropriate place for mediation.Mr.Ambrose explained he knows little about the RUG and therefore, cannot comment.Mr.Johnston stated willingness to mediate under the auspices of the RUG. Chair Borgeson requested Mr.Gibson provide an update on the order for the payments to Homer.Mr.Gibson read the order from Resolution 14-11.Chair Borgeson asked if HEA ts submitting the expenses to CEA as outlined in the order.Mr.Ambrose refused to discuss the issues in this venue because they are currently under litigation.Chair Borgeson asked Mr. Thibert if CEA has received the relevant invoices from HEA.Mr.Thibert noted he will find out the status and report back to the Committee. Chair Borgeson tasked Mr.Gibson for a report oon how the BPMCshould proceed with theenforcementoftheorder.. 8.NEW BUSINESS A.Dynamic Scheduling update Mr.Langford provided a copy of his presentationentitled Dynamic Scheduling of Bradley LakeOutputtotheCommittee.He gave a full detailed report.- Mr.Thibert asked when the future phases of dynamic scheduling for the remaining participants, other than CEA and ML&P,will occur.Mr.Langford noted he will provide the schedule to the Committee. Chair Borgeson inquired about the scenario if HEA or GVEA is buying power from ML&P now, could HEA or GVEA use dynamic scheduling for Bradley power.Mr.Langford agreed that scenario is accurate. Mr.Ambrose expressed his appreciation for the work on dynamic scheduling and believes all parties should have the ability to utilize dynamic scheduling at Bradley.Mr.Ambrose shared the potential issue of a system impact to HEA caused by dynamic scheduling and believes capacity needs to be reserved for the full range of operation across any given hour.Mr.Ambrose indicated compensation is another issue. Vice-Chair Thibert commented as long as HEA has the capacity to make additional sales,there would be no impact or constraint to the system. B.HEA proposed annual schedule and budget DRAFT BPMC Minutes 9/25/15 Page 6 of 10 Mr.Day reported the expectation of up to $100,000 of weather-dependent clearing work to be completed on approximately 80 miles of the Soldotna segment in FY16.This is part of the Bradley agreements,but is a separate activity from the Bradley budget,and will be directly billed to the utilities that have purchased capacity on the Soldotna segment.The clearing contract will go through a bidding process. D.AEA's Attorney's Role Mr.Griffith requested Mr.Gibson provide clarification to the Committee regarding who counsel represents.Mr.Griffith requested AEA provide a response based on Mr.Gibson's answer. Mr.Gibson stated he represents the group as a collective.Mr.Gibson noted his engagement letter was unanimously passed by the BPMC.The engagement letter clearly states Mr.Gibson will work for the collective and specifically stated Mr.Gibson does not represent individual members.Mr.Gibson cited the Rules of Professional Responsibility 113 and read passages from his engagement letter.Mr.Gibson informed he has engaged ethics counsel regarding thisissue -and feels confidentin his position.:\ Mr.Ambrose expressed disagreement and informed HEA has sent a letter to Mr.Gibsonregardingtheiropinion. Chair Borgeson requested Mr.Gibson provide a copy of his engagement letter to the Committeemembers. Vice-Chair Thibert asked if HEA does not agree that counsel represents the BPMC as a whole and not individual members.Mr.Ambrose summarized HEA believes it is inappropriate to payaportionofcompensationtocounselwhosepositiondoesnotalignandmaydoharmfulthingstoHEA. 9.COMMITTEE REPORTS Ms.Garner advised two reports were prepared and submitted to the Budget Subcommittee and are included in the Committee packets.She gave a detailed presentation on both reports.The first report is the Bradley Lake 4th Quarter Report showing the summary of the revenues and expenses.The current year surplus is $1,394,000,which will be audited in November and brought before the Committee for approval after it is finalized,at which time it can be paid out. Ms.Garner reviewed the second page of the 4th Quarter Report showing the capital purchases made during the year not paid for with the R&C Fund.She indicated the third page of the report is the O&M budget to actual expenses for the year,and the surplus is due to the O&M budget coming under budget for the year. Ms.Garner discussed the second report entitled Bradley Lake Budget to Actual Expense Report 7/1/2015 through 7/31/2015.The O&M budget is currently under budget by $100,000. DRAFT BPMC Minutes 9/25/15 Page 7 of 10 Chair Borgeson expressed his appreciation for these detailed reports being provided more quickly than usual.Ms.Garner informed the August reported is expected in mid-October. 10.OPERATORS REPORT Mr.Maynard Smith gave a presentation on the nozzle rebuild and provided members with a handout.He informed members will see numbers related to a request for adjustment to the contract price for the nozzle rebuild work included in today's operator's report.HEA requested BPMC's guidance on how to proceed in this matter.Mr.Smith informed HEA is coincidentally involved in dispute over billing with this contractor on a matter unrelated to the Bradley Project. Mr.Smith reported this is a time and materials contract.The contractor NAES madea bid error on one of the rates entered into the bid table and brought it to attention after the work was underway.The error was investigated thoroughly and the O&D Committee believes the numbers are supportable.The request is for BPMC to consider whether or not to permit a reformation oftheratesforUnit1andUnit2. Mr.Ambrose informed the O&D Committee,under review of legal counsel,passed a resolution to permit the reformation of the rates for Unit 1 and Unit 2.Mr.Ambrose wanted this issue included on the agenda for the remaining BPMC parties to consent to this reformation.Mr. Ambrose informed HEA will abstain from the vote because of its current dispute with this same contractor. Mr.Smith informed the O&D Committee has been discussing postponement on the work on Unit 2 until spring of 2016 for unrelated reasons that will be presented in the operator's report,and the contractor is willing to accept a postponement in the contract if the bid price is reformed as outlined in Unit 2 with no other cost increase.Mr.Smith reviewed the bid price reform for Unit 1 is about $30,000,and for Unit 2 is about $83,000.The rate for Unit 2 includes a margin for overhead and profit.The contractor is only asking to be made whole to his cost on Unit 1. Mr.Day provided context that these project costs,including the increased costs,are approximately $100,000 less than the costs for the same project 12 years ago. MOTION:Mr.Johnston made a motion to adjust the budget for the two requested amounts of $29,117.14,and $82,602.92.Motion seconded by Mr.Foutz. A roll call vote was taken,the motion was approved,with Mr.Ambrose abstaining. Mr.Owens gave a detailed review of the operators report provided to the Committee.Mr. Owens described the process of the nozzle refurbish project and expressed his overall content with the project. Mr.Owens informed the Bradley Management audit is ongoing.MWH was onsite August 25th. FERC also was onsite reviewing the facility and the dam. DRAFT BPMC Minutes 9/25/15 Page 8 of 10 Chair Borgeson requested further information regarding the process of clearing debris from the fish water area.Mr.Owens reported an overall unified plan is being developed and will be brought before the Committee at a later date.Chair Borgeson asked if the water coming out of the fish water is still declining.Mr.Owens indicated there is still a reduced flow. Mr.Carey provided a detailed update on the process AEA's original FERC engineering contractor Dow]is undergoing to create a plan to maintain the fish water releases during the draw-down construction period and to minimize the risk of violation.There should be no change in the overall budget for this work.Mr.Carey discussed the different scenarios meeting targets depending on the amount of rain during the wintertime. Chair Borgeson asked if Bradley is going through a relicensing process.Mr.Carey noted the Bradley license does not expire until 2035,and the relicensing process would begin approximately five years before the expiration.Ms.Fisher-Goad informed there is a licensing amendment for Battle Creek. Vice-Chair Thibert asked if the Battle Creek diversion will become part of the Bradley LakeProject.Mr.Carey agreed.Py Ms.Fisher-Goad indicated she recently sent a brief report to the Committee members reviewing some of the activity Mr.Carey has been completing as Project Manager for AEA.Ms.Fisher- Goad noted there have been no comments or questions on the report.She is willing to continue furnishing this informational report on a regular basis.* 11.COMMITTEE ASSIGNMENTS :Chair Borgeson assignedtasks to Mr.Gibson.Mr.Gibsonis to research the ability BPMC has toenforceResolution14-11.Mr.Gibsonis to send out his engagement letter to the Committee members.Mr.Gibson is to contact the Attorney General's Office regarding their review of HEA's claims. 12.MEMBERS COMMENTS Mr.Ambrose stated he will comment before the Executive Session. Vice-Chair Thibert expressed his appreciation to AEA for receiving the recent additional informative report. 8.NEW BUSINESS (Continued) Ms.Fisher-Goad requested explanation on why it is appropriate to go into Executive Session to discuss the dispute and enforcement of Resolution 14-11,Homer's Notice of Claims,and AEA's Litigation Position.Mr.Gibson advised immediate knowledge of these matters would have an adverse effect on the finances of the project and an adverse effect on the Committee.This is allowed under Section 511.4 of the bylaws. DRAFT BPMC Minutes 9/25/15 Page 9 of 10 MOTION:A motion was made by Vice-Chair Thibert to go into Executive Session to discuss confidential legal and financial matters regarding the dispute and enforcement of Resolution 14-11,Homer's Notice of Claims,Notifying Trustees,and AEA's Litigation Position.Motion seconded by Mr.Johnston. Mr.Ambrose expressed HEA's opposition to going into Executive Session because the items to be discussed are not the proper business of the Committee.He noted his understanding of Section 511.4 under the bylaws,and informed the subject matter is inappropriate for the Committee's discussion. Chair Borgeson stated Mr.Ambrose's objections were noted.The utilities were informed they may have legal counsel present during Executive Session. Mr.Ambrose requested HEA's printed list of objections and reasons for the objections be included as part of the minutes. The motion was approved,with Mr.Ambrose and Ms.Fisher-Goad voting against. Cc.Executive Session:11:56 a.m.. Legal matters regarding the dispute and enforcement of Resolution 14-11,Homer's Notice of Claims,Notifying Trustees E.AEA Litigation Position The Committee reconvened its regular meeting at 12:43 p.m. 13.NEXT MEETING DATE. The next meeting date is set for November 17th,2015. Vice-Chair Thibert informed he will be absent the next meeting.Mr.Wick will attend in his stead. 14.ADJOURNMENT There being no further business for the committee,the meeting adjourned at 12:45 p.m. BY: Cory Borgeson,Chair Attest: Sara Fisher-Goad Alaska Energy Authority,Secretary DRAFT BPMC Minutes 9/25/15 Page 10 of 10 ITEM 8A MEMORANDUM TO:Bradley Project Management Committee FROM:Bryan Carey Project Manager DATE:November 17,2015 SUBJECT:Access Permit -Troy Jones Mr.Troy Jones has requested permission to travel over project areas to access his Bear Cove property. Attached related to the request is a copy of information AEA received from Mr.Jones,a letter from Senator Gary Stevens and Representative Paul Seaton,and the Alaska Energy Authority's (AEA)response to the Legislators'letter. AEA has worked with Homer Electric Association,Inc.(HEA)to develop a proposal for the BPMC to address requests for access from persons having special circumstances,such as Mr.Jones.The conceptual approach includes the following: e The person must obtain a permit from AEA on behalf of the BPMC,and from HEA.This approach allows BPMC to exercise general oversight,and allows HEA to exercise more specific controls over persons accessing Bradley Lake project areas.A copy of the draft BPMC and draft HEA permit are attached. e HEA's permit will require the person contact HEA each time before access project areas.This approach should enable HEA to address any project operational or safety issues that arise from time-to-time,such as by modifying the access routes. e No motorized access will be permitted until FERC license restrictions are removed.The FERC license incorporates the Mitigation Plan and the Public Safety Plan.Each plan prohibits motorized vehicle use by recreational users of project areas. If the BPMC approves this conceptual approach,AEA and HEA will work with Mr.Jones and FERC,if necessary as anticipated,to implement the access permit program.AEA expects FERC will require further coordination with affected resource agencies,such as the state and federal managers of adjacent lands. Information AEA received respecting Mr.Jones Request for Access The Jones family is one of the original families who homesteaded in the Homer area near the head of Kachemak Bay,and have been a part of the community for more than 65 years.JoneshimselfhaslivedattheendofEastEndRoadsince1956. In addition to the original homestead parcels,Jones owns property in Bear Cove,across Kachemak Bay from his family's homestead.Jones and his family travelled frequently around the head of Kachemak Bay for many years prior to both the existence of the Fox River Flats Critical Habitat Area ("FRFCHA"),as well as the construction of the Bradley Lake Hydroelectric Project ("the Project"),using a trail dating back to the 1920s past Sheep Point built for accessing the area's fox farms .Jones and his family travel to their Bear Cove property by foot,horseback,and snowmachine,following the coastline after crossing overland to the southeast side of Kachemack Bay.The Jones'conduct traditional subsistence activities in the Bear Cove vicinity,including hunting and trapping. When the Project was under consideration,Jones was involved in the public planning process for a number of reasons,not the least of which included his need to preserve access to Bear Cove. From the time of construction,through the winter of 2013-2014,Jones routinely used a snowmachine for winter access,as well as horseback and by hiking in the summer,to his Bear Cover property by traveling behind the powerhouse,down the edge of the road to the other side of the public dock,and back to the flats leading to the Martin River. During the winter of 2013-2014,while traveling to Bear Cove with his snowmachine,an unknown Homer Electric Association,Inc.("HEA")employee confronted Jones and informed him that it was unlawful for him to traverse the Project area behind the powerhouse.Preventing Jones from continuing to use the developed area behind the powerhouse effectively prevents Jones from reaching his property over land via his customary and traditional access.As you know,the powerhouse sits at the northeast comer of the Project area's coastline infrastructure. The tailrace,an excavated artificial channel,empties from the powerhouse into Kachemak Bay. By its very nature,the water flowing from the powerhouse moves too swiftly to freeze.There are no bridges over the tailrace,and it extends from above the ordinary high water mark into the ocean waters of the bay.The channel is too wide to jump across,too dangerous to swim,and the channel too deep to attempt an inherently risky action with a snowmachine of "skipping"across the water's surface.The physical nature of the mountains around Bradley Lake prohibit a person from traveling around the Project with either a horse or a snowmachine.Therefore,the only reasonable way to reach the other side of the tailrace is to travel behind the powerhouse. DEG ENWETpALASKASTATELEGISLATURE!\(ger 14 79m tHTANlnivyOSE.AIDEA|calling,Oma ea ==te AEA SENATOR GARY STEVENS :REPRESENTATIVE PAUL SEATON 305 Centers Ave,STE |270 W.Pioneer Ave Kodiak,AK 99615 Homer,AK 99603 (907)486-4925 (907)235-2921Fax(907)486-5264 Fax (907)235-4008 SENATE DISTRICT P -HOUSE DISTRICT 31 October 13.2015 Sara Fisher-Goad,Executive Director Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage,AK 99503 Dear Ms.Fisher-Goad, My constituent,Troy Jones of Homer,has contacted me regarding a right-of-way issue near theBradleyLakePowerHouse,maintained by Homer Electric Association (HEA)on land owned by the Alaska Energy Authority (AEA).Mr.Jones and his family were denied snowmobile access in this area during the winter of 2013-2014 in accordance with the project's 1992 Public Safety Plan.As you may know,prior to that,Mr.Jones and his family used this trail to access family property on Bear Cove for many years. Documentation provided by Mr.Jones cites his usage history of this area,as well as background on the issue of public access dating to public hearings on the project.Mr.Jones'documentation also contends the AEA's determination that snowmobile access in the Fox River Flats Critical Habitat Area falls outside of the agency's authority. It is my understanding HEA has suggested developing a policy that would indemnify them fromlegalrecourseforanyonesufferingharmwhiletraversingtheprojectarea.That,along with Mr. Jones'established history of use of the land make a reasonable argument for a further review of AEA's decision in this matter.I respectfully ask your assistance with this process. Thank you for your consideration of this letter.|look forward to your reply. fod Paul Seaton cc:Commissioner Chris Hladick,DCCED Troy Jones I=/ALASKAGapENERGYAUTHORIT October 16,2015 The Honorable Gary Stevens The Honorable Paul Seaton Alaska Senate Alaska Legislature 305 Center Ave.Suite q 270 W.Pioneer Ave Kodiak,AK 99615 Homer,AK 99503 Dear Senator Stevens and Representative Seaton; This letter responds to your October 13,2015,letter inquiring about obtaining access to the Bradley Lake hydroelectric project area for your constituent,Troy Jones. At my direction,the Alaska Energy Authority (AEA)has been working with Homer Electric Association (HEA)to develop a policy that will allow limited access over Bradley Lake project lands to persons,such as Mr.Jones,who have historical usage to access their property.Neither AEA nor HEA can simply implement a new policy.Instead,the policy must be approved by both the Federal Energy Regulatory Commission (FERC)and the Bradley Lake Project Committee (BPMC).! FERC approval is required because the FERC license for the Bradley Lake project incorporates numerous project plans,including the 1992 Public Safety Plan and 1985 Mitigation Plan.The 1985 plan limits public access over project lands,and bars access by motorized vehicle.The 1992 plan bars non-authorized people from the power plant,camp,and runway in addition to restating public cannot bring a motorized vehicle on the project lands.Allowing Mr.Jones access via motorized vehicle will require FERC approval. AEA believes that FERC is likely to require consultation with resource agencies before approving revising the project Mitigation Plan to allow motorized access.Project lands to be crossed are owned by the Bureau of Land Management (BLM).Also likely to arise in consultation with resource agencies is the impact of a new Bradley Lake access plan on the adjacent Fox River Flats Critical Habitat Area.While AEA understands it has no management authority over that area,the FERC consultation processes will compel AEA to consider potential impacts to landowners in developing a new Bradley Lake access policy. BPMC approval is required because under the Bradley Lake power sales agreement,the BPMC has general management authority over the Bradley Lake project.AEA has "step-in”rights 1 The BPMC is comprised of AEA and the six Railbelt utilities that purchase Bradley Lake power -HEA,Chugach Electric Association,the City of Seward,Anchorage Municipal Light and Power,Matanuska Electric Association,and Golden Vailey Electric Association. a[-ae reenact,ra a eee seems v eorengies'Tee og tet "Ao.x .a i .eaPYtageteseSteteMyyer.laa te BSSN ee OeESERRRECSD-pea Kener ayalutioniryrorg 813 West Northern Lights Boulevard Anchorage,Alaska 99503 1 907.771.3000 Tolf Free (Alaska Only)888.300.8534 F 907.771.3044 Senator Stevens and Representative Seaton October 16,2015 Page 2 of 2 limited to when BPMC management fails to properly manage.Examples include if the BPMC fails to comply with the FERC license or fails to pass an adequate budget.Absent those limited circumstances,AEA lacks authority to unilaterally manage the project. I expect the proposed policy AEA is developing with HEA will be presented to the BPMC in November.That policy is likely to include certain conditions beyond requiring indemnification to ensure the safety of Mr.Jones,project personnel and equipment,and administrative convenience for HEA.A permit issued under a new policy is likely to identify access routes and require Mr.Jones to notify HEA before entering project lands.This notice will make HEA aware of an anticipated visitor,and allow HEA to inform Mr.Jones if any project conditions require altering access routes for safety or other project related reasons.AEA believes that ongoing coordination between Mr.Jones and HEA will be required for any new policy to be successful. Bryan Carey,AEA Bradley Lake project manager,contacted Mr.Jones this spring to explain the process to gain appropriate approval and how we are working to implement his request.We are providing Mr.Jones a copy of this response that further explains the process. We are happy to meet with you and Mr.Jones to discuss further. Sincerely, V Polen "GodSaraFisher-Goad Executive Director cc:Commissioner Hladick,DCCED Troy Jones BRADLEY LAKE HYDROELCTRIC PROJECT BPMC ACCESS PERMIT This Access Permit is made this _day of ,2015,by and between the ALASKA ENERGY AUTHORITY (AEA),a public corporation of the State of Alaska,whose business address is 813 West Northern Lights Blvd.,Anchorage,Alaska 99503,on behalf of the Bradley Project Management Committee (BPMC),and whose address is ,(Permittee). BEFORE ENTERING THE PROJECT AREA,THE PERMITTEE MUST OBTAIN A BRADLEY LAKE FACILITY LIMITED ACCESS PERMIT FROM THE BRADLEY LAKE PROJECT OPERATOR, HOMER ELECTRIC ASSOCIATION,INC.(HEA).THIS BPMC ACCESS PERMIT DOES NOT AUTHORIZE ACCESS TO ANY PROJECT AREAS. PERMITTEE SHALL NOT USE ANY MOTORIZED VEHICLES ON PROJECT AREAS UNDER THIS PERMIT. 1.APPROVAL FOR ISSUING ACCESS PERMIT:AEA,on behalf of the BPMC,approves the HEA as Bradley Lake Project Operator issuing a Bradley Lake Facility Limited Access Permit to Permittee,subject to each the terms and conditions contained in this BPMC Access Permit.Permittee accepts and agrees to abide by the terms and conditions contained in both this Access Permit and the Bradley Lake Facility Limited Access Permit issued by HEA. 2.LOCATION OF THE PERMITTED ACCESS:The Bradley Lake Facility Limited Access Permit shall establish the location of allowed access to the Bradley Lake Project areas. 3.TERM:This Access Permit shall continue until (insert date) 4,RESPONSIBILITY FOR LIABILITY AND DAMAGES:Permittee assumes all responsibility,risk and liability for all activities of Permittee,its employees, agents,invitees,contractors,subcontractors,or licensees directly or indirectly conducted in connection with this permit,including environmental and hazardous substance risks and liabilities,whether accruing during or after the term of this permit. Page 1 of 10 Pages (a)Permittee shall defend indemnify,and hold harmless the Bradley Lake operator,the BPMC,Utility members of the BPMC,the Alaska Energy Authority,the State of Alaska,and their respective employees,and agents (collectively "Indemnified Parties”)from and against any and all suits,claims,actions,losses,costs,penalties, and damages of whatever kind or nature,including all attorney's fees and litigation costs,arising out of,in connection with,or incident to any act or omission by Permittee,its employees,agents,invitees,contractors,subcontractors,or licensees, unless the sole proximate cause of the injury or damage is the negligence or willful misconduct of the Indemnified Parties.Within 15 days Permittee shall accept any such cause or action or proceeding upon tender by the State.This indemnification shall survive the termination of the permit. (b)Permittee shall be liable to the Alaska Energy Authority,the State of Alaska,the (a) (b) (c) Bradley Lake operator,the BPMC,Utility members of the BPMC,or any of their respective their respective employees,and agents,for any liabilities,damages, injuries,costs or expenses incurred by which in any way arises from or is connected with any activities under this Permit whenever the liability,damage,cost or expense results from breach of the terms or conditions associated with this Permit,or from any wrongful or negligent act of Permittee,its agent or invitees. .LIMITATIONS ON ACCESS: Neither this Access Permit nor the Bradley Lake Facility Limited Access Permit authorizes any activity other than crossing the Bradley Lake project area.Access within the project area is strictly limited to the routes and areas designated by the Bradley Lake Operator.Other uses of the permitted area including shall require additional approval prior to making any such modifications. This Access Permit and the Bradley Lake Facility Limited Access Permit apply only to access within the Bradley Lake Project area,and do not grant access over adjacent property necessary to reach the Bradley Lake Project area.The Permittee shall obtain any necessary permission to access areas outside the Bradley Lake Project area from the appropriate landowner or land managing agency. Permittee acknowledges that the Bradley Lake Operator may regulate Permittee's access to facilitate the operation and maintenance of the Bradley Lake Project and safe access.For these purposes,the Bradley Lake Operator may provide specific instructions to Permittee,or may provide warnings,barricades,or other safety measures.Permittee agrees to obey all such access and vehicular traffic instructions, restrictions and warnings. Page 2 of 10 Pages (d) (¢) (f) (a) (b) (c) Permittee shall comply with all measures in the Bradley Lake Hydroelectric Project FERC Mitigation Plan,dated November 1985,including any future changes.PERMITTEE ACKNOWLEDGES THAT THE MITIGATION PLAN CURRENTLY PROHIBITS ALL MOTORIZED VEHICULAR USE.PERMITTEE SHALL NOT USE ANY MOTORIZED VEHICLES UNDER THIS PERMIT.If the Mitigation Plan is amended to allow motorized vehicular access,this Permit may be amended. No new access trails or roads are authorized without the express written permission of the Alaska Energy Authority. All stream-crossing activity is subject to AS 16.05.870.Stream-crossings shall be coordinated with the State of Alaska,Department of Fish and Game,respective to AS 16.05.840 and AS 16.05.870.Mobile ground equipment shall be kept out of lakes,streams,or rivers except for necessary crossings within the permitted area and approved by the State of Alaska,Department of Fish and Game.Compaction or removal of the insulating snowcover from deep water pools of rivers known to harbor overwintering fish must be avoided.To prevent additional freeze down of these pools,watercourses must be crossed at shallow riffle areas from point bar to point bar whenever possible. 6.SPECIAL STIPULATIONS: The Permittee shall comply with the requirements and stipulations included in this permit and all applicable federal,state,and local laws,regulations,rules and orders,existing or hereafter adopted,affecting in any manner,operation on the permit.Permittee shall ensure compliance.by its employees,agents,contractors, subcontractors,licensees,or invitees. The authorizing of this Permit is subject to the express condition that the exercise of the rights and privileges granted under this Permit will not unduly interfere with the operation,maintenance,or management of the Bradley Lake hydroelectric project.If any undue interference arises,the Permittee agrees and consents to the Bradley Lake operator suspending any or all access activities allowed in connection with the Permit. All activities shall be conducted in a manner to minimize disturbance to the surface-protecting vegetative mat.All areas where soils are damaged must be restored consistent with the natural terrain features and revegetated. Page 3 of 10 Pages (d) (f) (g) Harassment or molesting of wildlife or destruction of known habitat is prohibited.. Wildlife shall not be "herded,buzzed”or otherwise harassed through use of vehicles. The Alaska Historic Preservation Act (AS §41.25.000)prohibits the appropriation,excavation,removal,injury or destruction of any historic, prehistoric or archeological resources of the State.No historic site,archeological site,or camp,either active or abandoned,shall be disturbed in any manner,nor shall any item be removed there from.Should cultural or paleontological resources be discovered as a result of this activity,work which would disturb such resources shall be stopped,and the State Historic Preservation Office shall be contacted immediately. Fuel and hazardous substances.The Permittee may not store or transport hazardous substances or fuels in containers under the Access Permit or the Bradley Lake Facility Limited Access Permit.Permittee is responsible for preventing spillage and contamination of contiguous land and water as well as cleaning up any _oil or other pollutants that result from activities associated with this permit. "Containers"means any item,which is used to hold fuel or hazardous substances.This includes tanks,drums,double-walled tanks,portable testing facilities,fuel tanks on small equipment such as light plants and generators, flow test holding tanks,slop oil tanks,bladders,and bags. "Hazardous substances"are defined under AS 46.03.826(5)as (a)an element or compound which,when it enters the atmosphere,water,or land,presents an imminent and substantial danger to the public health or welfare,including fish, animals,or vegetation;(b)oil;or (c)a substance defined as a hazardous substance under 42 U.S.C.9601(14). Spill Notification.The Permittee shall immediately notify the Department of Environmental Conservation (DEC)by telephone,and immediately afterwards send DEC a written notice by facsimile,hand delivery,or first class mail, informing DEC of:any unauthorized discharges of oil to water,any discharge of hazardous substances other than oil;and any discharge or cumulative discharge of oil greater than 55 gallons solely to land and outside an impermeable containment area.If a discharge,including a cumulative discharge,of oil is greater than 10 gallons but less than 55 gallons,or a discharge of oil greater than 55 gallons is made to an impermeable secondary containment area,the Permittee shall report the discharge within 48 hours,and immediately afterwards send DEC a written Page 4 of 10 Pages notice by facsimile,hand delivery,or first class mail.Any discharge of oil, including a cumulative discharge,solely to land greater than one gallon up to 10 gallons must be reported in writing on a monthly basis.The posting of information requirements of 18 AAC75.305 shall be met.Scope and Duration of Initial Response Actions (18 AAC 75.310)and reporting requirements of 18 AAC 75, Article 3 also apply. The Permittee shall supply DEC with all follow-up incident reports.Notification of a discharge must be made to the nearest DEC Area Response Team during working hours:Anchorage (907)269-7500,fax (907)269-7648;Fairbanks (907)451-2121, fax (907)451-2362;Juneau (907)465-5340,fax (907)465-2237.The DEC oil spill report number outside normal business hours is (800)478-9300. (h)Every reasonable effort shall be made to prevent,control,or suppress any fire in the operating area.Uncontrolled fires shall be immediately reported to the US Forest Service and the AEA.Any controlled burning will require appropriate burning permits obtained prior to this activity from the Dept.of Natural Resource, Division of Forestry and the Department of Environmental Conservation. (i)All eagles,their eggs,and their nests shall be protected by the Permittee from disturbance and/or destruction.The Permittee will be held responsible for knowing the locations of all raptor nests within authorized area and shall to the extent possible using the best technology available minimize disturbance and adverse impacts.The Permittee will not allow human disturbance or operational activity to jeopardize the continued existence of raptors and nesting activity. The Permittee shall consult with the U.S.Fish and Wildlife Service regarding operational activities in close proximity to raptor nests. 7.ASSIGNMENT BY PERMITEE:Permitee shall not assign or transfer its interest in this Access Permit without the prior written consent of AEA on behalf of the BPMC. 8.SEVERABILITY:If any provision of this Access Permit is determined to be unenforceable or illegal for any reason,the remaining provisions of this Access Permit shall not be affected by that illegality or unenforceability. 9.WAIVERS:Any waivers at any time by any party to this Access Permit of its rights with respect to a default or any other matter arising under or in connection with the easement shall not be deemed a waiver with respect to any subsequent default or matter. Page 5 of 10 Pages IN WITNESS WHEREOF,AEA on behalf of the BPMC and Permittee have caused their duly authorized representatives to sign this Agreement. ALASKA ENERGY AUTHORITY,on behalf of the BPMC BY: TITLE: PERMITTEE BY: TITLE: Page 6 of 10 Pages Bradley Lake Facility Limited Access Permit Owner Operator Alaska Energy Authority Homer Electric Association 813 W Northern Lights Blvd 3977 Lake Street Anchorage,AK,99503 Homer,AK 99603 (800)315-6338 (907)235-4444 "a rat eetegiaLait easax chivities,”umber-of people in your partyaoByPETS$0USoo ele erie Rae te =" |permit requirement Signing |theyee aFase0onywithallpermitreanirements wr:Cl.Un juthorized mototized ¥.'by the Jaska serpy aac ITEM10 Bradley Lake Operators Report November 2015 Unit Statistics:11/10/2015 Generation Unit 1 (MWhrs)Unit 2 (MWhrs)Total (MWhrs) October 2015 24,229 23,807 48,036 Hydraulics Avg.Lake Level (ft)Usage (ac ft)Fishwater (ac ft) October 2015 1,155.73 47,901 2,126 Lake Level -November 10 --1,148.8' Projects: 1)Nozzle refurbish,unit #2 -This project was postponed until May of 2016 to enable both Bradley units to remain on line to reduce lake level for the spring fisnwater project.Reschedule date will depend on winter snow/ice conditions at the lake and completion of the fishwater debris removal project. All nozzle tips and parts are on site.NAES opted to leave the tool trailer and tools chests on site. Final billing for services and parts provided by NAES for Unit #1 needle rebuild was $462,596.This billing and future Unit #2 costs are projected to be within the budget authorized by the BPMC in the September meeting.Final payments to VOITH Hydro will be paid this month and a total Unit #1 project billing will be available in December. 2)Eire system review and upgrade -Work on this project was delayed until January due to other project priorities.It will move forward with development of an initial draft for work scope and investigation into vendors in Alaska that can accomplish the work.This review and upgrade will be accomplished in several phases.The first phase will be annual fire system certification at which time the various fire alarm panels will be tested and reviewed.Following panel review the first fire systems that will be replaced are the engineering computer room system and the main control room Halon system. 3)Fishwater screen debris removal Draft proposals of the following documents are in the review process: a.AEA engineering consultants have developed a draft 'Water Release Plan'. b.HEA has developed a draft RFP containing the Scope of Work that will be provided to prospective contractors.HEA plans to complete the RFP reviewandhaveitavailableforissuetocontractorsonNovember18".The scope of work and project overview will be presented to the O&D Committee at theNov.13”meeting. Bradley Lake Operator Report Page 1 Operations and Maintenance: 1) 2) 3) 4) 5) 6) Dam inspection -The dam and associated equipment was inspected on October22".All systems were tested and proved functional.A report was issued to AEA and the consulting engineers. Long term R&R report -A conference session was conducted on October 29" with D.Hittle and Associates to conduct review and revision of the draft Long Term R&R report.A preliminary report was delivered to MWH and AEA.The final report should be released by the end of November. MWH management audit -HEA completed review of the draft management audit report conducted by MWH.Comments were forwarded to AEA onNovember6".The draft report indicated that BLPP O&M costs are lower than national average and unit availability was above national average.HEA will utilize the input of D.Hittle and MWH to further improve the management and operation of BLPP. Penstock flow measurement totalizer -The Accusonic penstock flow monitoring system has been repaired.All transmitters and sensors are functional.A transmitter board in the main console failed and was replaced by Accusonic at no cost to BLPP. Fishwater flow requirement -Starting November 2"the fishwater flow requirement was reduced to winter levels of 40 CFM. Powerhouse overhead door -The main bearing and overhead door actuator were replaced by HEA Bradley lake operators this month.This overhead door is obsolete and the manufacturer has gone out of business.It isa 16'x 16' overhead roll-up door.Plant personnel purchased aftermarket parts and reconfigured them to function with the current door configuration.The bearing cost was $32.00 and the actuator motor and gearbox was $1,438.The cost was several thousand dollars under the cost of a new door. Bradley Lake Operator Report Page 2 Ii. BRADLEY LAKE HYDROELECTRIC PROJECT PROJECT MANAGEMENT COMMITTEE Resolution 14-11 RESOLUTION RESOLVING THE DISPUTED ISSUES BETWEEN THE DESIGNATED UTILITIES AND HOMER ELECTRIC ASSOCIATION,INC. A. B. B. C. D. RESOLUTION Table of Contents HEA's Position The Designated Utilities'Position The Disputed Issues Arise under the Bradley Lake Agreements .............:ccccceeccecscesececesecececnceecsceneverecacereeseceenseseceseceaceesersevanseaseneees The BPMC Has Authority to Consider and Resolve Issues Arising Under the Bradley Lake Agreements The Bradley Lake Agreements Were Not Modified, Amended,or Terminated By the Expiration of the Lease and Chugach Is Still Entitled to Operate, Maintain,Repair,Dispatch,and Wheel Project Energy Over the S/Q Lime........ce ee eeeeseecereceseeceeeeeetcoecececcoeecseeecececesseneesrecseeeesseeaseseneseneeeneess HEA Will Be Permitted Some Additional Compensation for the Use of Its System Associated With the Transmission of Project Energy North of the Soldotna Substation Resolution 14-11 Resolving Dispute between Utilities PPerere rer ererrre rere errr ee Tete Pete See eee eee ere reer FINDINGS OF FACT AND CONCLUSIONS OF LAW A. Peres reer reer eter errr ere eer ee Page 1 of 18 BY THE BPMC: I.SUMMARY On February 7,2014,we found that this Bradley Lake Project Management Committee ("BPMC”)has authority to consider and decide on their merits the disputed issues between the Designated Utilities!and Homer Electric Association,Inc.("HEA”),regarding the continuing effect of the Bradley Lake Agreements and bonding documents?after the expiration of the Lease' and whether HEA is entitled to any additional compensation for Chugach's continued use of certain electrical facilities north of the Soldotna Substation for the purpose of wheeling energy from the Bradley Lake Hydroelectric Project ("Project”)under the terms of the Bradley Lake Agreements.*Our analysis in support of our finding on authority is contained herein. Now,after having provided all parties with the opportunity to fully advance evidence,and brief and argue their positions with regard to the disputed issues,we find that (1)the Bradley Lake Agreements were not modified,amended,or terminated by the expiration of the Lease;(2)the 1 Chugach Electric Association,Inc.("Chugach”),Golden Valley Electric Association, Inc.("GVEA”),Matanuska Electric Association,Inc.("MEA”),and the Municipality of Anchorage d/b/a Municipal Light &Power (""ML&P'”). 2 The Bradley Lake Agreements include (1)the Agreement for the Sale and Purchase of Electric Power ("Power Sales Agreement”),(2)the Agreement for the Wheeling of Electric Power and for Related Services ("Services Agreement”),(3)the Agreement for the Sale of Transmission Capability,dated December 8,1987,and the Amendment to Agreement for Sale of Transmission Capability,dated March 7,1989 ("Transmission Sharing Agreement”)(hereinafter "Bradley Lake Agreements”or "Agreements”);and (4)Alaska Power Authority Power Revenue Bond Resolution ("Bond Resolution”). Agreement for the Lease of Facilities,executed by and between Chugach and HEA in September 1985. 4 See Transcript of February 7,2014,BPMC Meeting at 104:15-106:6. Resolution 14-11 Resolving Dispute between Utilities Page 2 of 18 Bradley Lake Agreements continue to provide Chugach with the contractual right and obligation to operate,maintain,repair,dispatch,and wheel Project energy over the electrical facilities owned by HEA from the Soldotna Substation north to the Quartz Creek Substation;and (3)HEA is being adequately compensated for Chugach's continuing operation,maintenance,repair,dispatching, and wheeling of Project energy over the electrical facilities owned by HEA from the Soldotna Substation north to the Quartz Creek Substation but will receive additional compensation as a reasonable resolution of the disputes.° II.BACKGROUND The Project was made possible through a series of integrated contracts referred to as the Bradley Lake Agreements and bonding covenants.Under the Bradley Lake Agreements,among other things,power is sold and transmitted from the Project across Project facilities to the Bradley Junction,where it then enters the transmission system of Alaska Electric and Energy Cooperative, Inc.("AEEC”),®a wholly owned HEA asset.From Bradley Junction,Project energy flows north along AEEC's transmission line running from Bradley Junction to the Soldotna Substation ("Soldotna Segment”).The transmission of Project energy across the Soldotna Segment is governed by the Transmission Sharing Agreement.Under the Transmission Sharing Agreement, Chugach,GVEA,ML&P,and MEA contributed to the cost of constructing the Soldotna Segment in exchange for secure transmission capacity on the Soldotna Segment. HEA raised other technical disputes regarding Chugach's performance under the Bradley Lake Agreements in HEA's Statement Regarding Dispute Resolution Procedures filed with the BPMC on January 23,2014.Those disputes are not addressed in this Resolution and will be considered and resolved by the BPMC through a separate resolution. A single-member generation and transmission cooperative owned by HEA. Resolution 14-11 Resolving Dispute between Utilities Page 3 of 18 From the Soldotna Substation,Project energy then flows north through AEEC's transmission line running from the Soldotna Substation to the Quartz Creek Substation ("S/Q Line”).For the past 25 years,Chugach has operated,maintained,repaired,dispatched,and wheeled Project energy north of the Soldotna Substation through certain electrical facilities, including the S/Q Line,pursuant to the Services Agreement,'which continues in effect for another 25 years.®There is no provision in the Services Agreement that refers to the Lease or that suggests the expiration of the Lease will impact the rights and obligations of any party to the Services Agreement or any of the Bradley Lake Agreements. The Lease was associated with Chugach's wholesale power sales to HEA,and the Lease expired on January 1,2014.2 HEA believes that,when the Lease expired on January 1,2014, Chugach lost the right and the obligation to operate and maintain the electrical facilities north of the Soldotna Substation owned by HEA (including the S/Q Line).The Designated Utilities disagree.The Designated Utilities believe that,despite the expiration of the Lease,the Services Agreement provides Chugach with the right and the obligation to operate and maintain all electrical facilities north of the Soldotna Substation used to wheel Project energy (including the S/Q Line). On December 12,2013,the BPMC passed Resolution 2013-02,preliminarily finding that the disputed issues are within the BPMC's authority to resolve and beginning the dispute resolution process by appointing a Dispute Resolution Committee to address the disputed issues raised by HEA and the Designated Utilities.The Dispute Resolution Committee scheduled and held five 7 See Services Agreement at 7-8. 8 See Services Agreement at 3,28-29. 9 See Lease at 2. Resolution 14-11 Resolving Dispute between Utilities Page 4 of 18 meetings at the offices of the Alaska Energy Authority ("AEA”)to address the issues identified in BPMC Resolution 2013-02.!°On January 24,2014,the Dispute Resolution Committee asked all interested parties to file briefs addressing three issues:(1)whether the BPMC has the authority to address the underlying disputed issues;(2)whether Chugach has the right and obligation to continue operating,maintaining,and repairing the electrical facilities used to wheel Project energy from the Soldotna Substation north under the terms of the Services Agreement;and (3)whether HEA is entitled to any additional compensation for Chugach's continuing use of certain of HEA's electrical facilities north of the Soldotna Substation used for wheeling Project energy. On January 27,2014,the BPMC passed Resolution 2014-02 requiring that "[a]ll Project participants shall act in good faith to maintain the status quo and permit Chugach to continue to dispatch,operate,maintain,and repair,the S/Q Line under the terms of the Services Agreement and the other Bradley Lake Agreements during the pendency of the dispute.”On February 4,2014, the Designated Utilities!'and HEA'?both filed briefs addressing the issues identified in Resolution 2013-02.On February 7,2014,based upon consideration of the arguments presented by both the Designated Utilities and HEA,the BPMC found that it has authority to consider and decide the disputed issues on their merits.'?The supporting analysis for the BPMC's decision on authority is detailed below.On April 11,2014,the Dispute Resolution Committee made specific findings regarding the disputed issues in Resolution 14-09.Those findings have been considered by the 10 Those meetings were held on the following dates:January 24,2014;January 27,2014; February 7,2014;April 11,2014;and April 17,2014. Designated Utilities'Brief on Disputes with Homer Electric Association,Inc. ("Designated Utilities'Br.”). Position Statement of Homer Electric Association,Inc.("HEA's Br.”). m1 12 13,See Transcript of February 7,2014,BPMC Meeting at 104:15-106:6. Resolution 14-11 Resolving Dispute between Utilities Page 5 of 18 BPMC and are incorporated into the findings in this Resolution.On April 17,2014,the Dispute Resolution Committee passed Resolution 14-10 declaring that the parties had reached an impasse and recommended that the BPMC move forward with formal dispute-resolution procedures.On April 17,2014,the BPMC approved the Dispute Resolution Committee's Resolutions 14-09 and 14-10.Now,in accordance with the dispute-resolution obligations under the Services Agreement and the BPMC's Bylaws,the BPMC has determined to decide the disputed issues on their merits.'4 14 Certain matters were referred to the Bradley Lake Operations and Dispatch Committee ("O&D Committee”).The technical and operational information provided by the O&D Committee in response has been duly considered by the BPMC and is incorporated into this Resolution. Resolution 14-11 Resolving Dispute between Utilities Page 6 of 18 Il.THE PARTIES'POSITIONS A.HEA's Position. HEA asserts that the BPMC does not have the authority to consider or decide the disputed issues on their merits.'>HEA further asserts that the BPMC's authority derives from the Power Sales Agreement and that the Power Sales Agreement does not give the BPMC authority to resolve the underlying disputed issues.!°Specifically,HEA argues that the BPMC does not have the authority to consider or resolve the issue of compensation to HEA for wheeling Bradley power.!” HEA argues that "[nJo provision in any of the [Bradley Lake Agreements]speaks to”the compensation issue.!*Instead,HEA states that the ultimate decision regarding compensation will be made by the Regulatory Commission of Alaska ("RCA”)or by a court.!® Moreover,HEA's position is that Chugach's right to access and transmit Project energy over HEA's facilities arose entirely from the Lease,not the Bradley Lake Agreements.2°HEA asserts that the "expiration of both the [Lease]and the HEA-[Chugach]power sales agreement” terminated Chugach's right to receive power at HEA's Soldotna Substation and to operate any of HEA's transmission facilities.2!HEA explains that upon the expiration of the Lease,HEA began operating as an independent load-balancing authority and assumed the responsibility of providing 15 See HEA's Br.at 2. 16 See HEA's Br.at 2. 17 See HEA's Br.at 2. 18 HEA's Br.at 2. 19 HEA's Br.at 2. 20 See HEA's Br.at 3. 21 HEA's Br.at 3. Resolution 14-11 Resolving Dispute between Utilities Page 7 of 18 transmission services between Bradley Junction and Quartz Creek.”?Finally,HEA argues that the Services Agreement does not require HEA to maintain the December 31,2013,status quo.”? B.The Designated Utilities'Position. The Designated Utilities assert that the disputed issues arise out of the Bradley Lake Agreements,and the status quo must be maintained until the disputes are resolved.74 The Designated Utilities argue that the BPMC has the authority to consider and decide the disputed issues on their merits.Specifically,the Designated Utilities argue that the Power Sales Agreement creates and defines the BPMC's broad rights and obligations with respect to the management, operation,and improvement of the Project,and the Power Sales Agreement requires the BPMC to adopt procedures for resolving disputes that arise under the Bradley Lake Agreements.”>The Designated Utilities assert that,pursuant to the Power Sales Agreement,the BPMC adopted the Bradley Project Management Committee Bylaws ("Bylaws”),which contain specific procedures for dispute resolution.”®The Designated Utilities further argue that the Bylaws'dispute-resolution procedures give the BPMC the authority to decide,on their merits in accordance with Article 12 and Section 5.10 of the Bylaws by majority vote,those issues the BPMC determines are within its authority to consider.”The Designated Utilities point out that the Services Agreement similarly provides that all disputes arising thereunder are subject to resolution in a manner consistent with 22 See HEA's Br.at 4. 23.See HEA's Br.at 4. 4 See Designated Utilities'Br.at 1-7;see also Tr.67:18-24 (Feb.7,2014,Dispute Resolution Committee Meeting). 25 See Designated Utilities'Br.at 6. 26 See Designated Utilities'Br.at 6. 27 See Designated Utilities'Br.at 6. Resolution 14-11 Resolving Dispute between Utilities Page 8 of 18 the BPMC's adopted dispute-resolution procedures.2?The Designated Utilities,therefore, conclude that pursuant to the Power Sales Agreement,the Bylaws,and the Services Agreement, the BPMC has the authority to (1)determine whether it has authority to consider the disputed issues,and (2)to resolve,on their merits by a majority vote,those issues the BPMC determines are within its authority to resolve.” Moreover,the Designated Utilities argue that the Services Agreement and the Lease are unrelated agreements and that the termination of the Lease did not terminate Chugach's rights and obligations under the Services Agreement to operate,maintain,and repair the electrical facilities north of the Soldotna Substation,including the S/Q Line,for wheeling Project energy.*°The Designated Utilities assert that Chugach's rights and obligations with regard to the S/Q Line are governed by the Services Agreement,not the Lease.*!Further,the Designated Utilities assert that HEA has been and is still being fairly compensated for the use of its facilities to wheel Project energy north as a part of the "net economic benefits”all Project Participants recognized and receive under the Bradley Lake Agreements.°? 28 See Designated Utilities'Br.at 6. 29 See Designated Utilities'Br.at 6-7. 30 See Designated Utilities'Br.at 2-5. 31 See Designated Utilities'Br.at 2-5. 32 See Designated Utilities'Br.at 7. Resolution 14-11 Resolving Dispute between Utilities Page 9 of 18 IV.FINDINGS OF FACT AND CONCLUSIONS OF LAW A.The Disputed Issues Arise Under the Bradley Lake Agreements. The BPMC finds that the disputed issues between the Designated Utilities and HEA are essentially a disagreement over Chugach's and HEA's relative rights and obligations with regard to electrical facilities owned by HEA and operated by Chugach to dispatch and wheel Project energy under the Services Agreement.The BPMC finds that this dispute is governed by the terms of the Services Agreement and the Bradley Lake Agreements.Further,the BPMC finds that there exists a dispute as to whether HEA is entitled to any additional compensation for the use of HEA's electrical facilities north of the Soldotna Substation for wheeling Project energy.The BPMC finds that this dispute is also governed by the terms of the Services Agreement and the other Bradley Lake Agreements. B.The BPMC Has Authority to Consider and Resolve Issues Arising Under the Bradley Lake Agreements. Upon consideration of the Bradley Lake Agreements,the Bylaws,and the arguments put forth by both the Designated Utilities and HEA,the BPMC finds that it has authority to consider and resolve the disputed issues on their merits by a majority vote.*?The BPMC finds that the disputed issues between the Designated Utilities and HEA concern Chugach's continuing contractual rights and obligations to operate,maintain,repair,dispatch and wheel Project energy over the electrical facilities north of the Soldotna Substation and are within the BPMC's authority to address and resolve under both the Power Sales Agreement and the Services Agreement. 33 If the resolution of such a dispute also involves an amendment to any of the Bradley Lake Agreements,then such an amendment would also have to be made consistent with the language for amendment of the Bradley Lake Agreements. Resolution 14-11 Resolving Dispute between Utilities Page 10 of 18 The Power Sales Agreement and the Services Agreement place a broad range of rights and obligations upon the BPMC.**Section 13(c)of the Power Sales Agreement requires the BPMC to oversee the "management,operation,maintenance,and improvement”of the Project and requires the BPMC to "{a]rrange for the operation and maintenance of the Project,and the scheduling,production,and dispatch of Project power.”This language requires the BPMC to address operation and management issues as well as issues associated with the scheduling and dispatch of power.The current disputes between the Designated Utilities and HEA concern each of these areas of the BPMC's authority.Further,Section 13(b)requires the BPMC to adopt "procedural rules”for "dispute resolution.” Similarly,Section 10(b)of the Services Agreement expressly incorporates and designates the BPMC as the entity responsible for resolving disputes under the Services Agreement. Specifically,the Services Agreement provides: At the meetings referred to in Section 10(a),the Parties shall also review performance under this Agreement,including difficulties encountered under the Agreement by any of the Parties and allegations (if any)of failure of any Party to perform the Agreement in good faith in accordance with its terms or intent. The Parties agree that any further procedures for dispute resolution under this Agreement shall be entrusted (if the Authority concurs)to good faith negotiation and adoption by the [BPMC],with Chugach's affirmative vote required for adoption of such procedures.*° This language requires the BPMC to address difficulties encountered with,and the failure of any Party to perform in accordance with,the terms of the Services Agreement.The current disputes between the Designated Utilities and HEA concern each of these areas of the BPMC's authority. 34 See Power Sales Agreement at 19-23;see also Services Agreement at 18. 35 Services Agreement at 18. Resolution 14-11 Resolving Dispute between Utilities Page 11 of 18 The BPMC's authority over the issues in dispute between the Designated Utilities and HEA is also consistent with the exemption of the Bradley Lake Agreements from any regulatory oversight under AS 42.05.431(c).Absent such an exemption,the rights and responsibilities of utilities over electrical facilities and rates would be resolved by the RCA.In the case of the Bradley Lake Agreements,however,the Legislature exempted all such matters from the RCA and permitted them to be addressed and resolved by the industry through the specialized experience and expertise of the BPMC. This ruling on the authority of the BPMC is required under Article 12 of the Bylaws entitled "Procedures for Dispute Resolution.”Article 12.2 of the Bylaws states that "in the event the authority of the [BPMC]to act is at issue,the [BPMC]shall first make a finding as to its authority.” Once such a finding is made,the BPMC has the authority to decide,on their merits,those issues the BPMC determines are within its authority to consider.Finally,with regard to these particular disputes,Article 5.10.2 of the Bylaws provides that "the act ofa majority of votes taken during a meeting at any time when a quorum is present,shall be an act of the [BPMC],and binding on the members.”?° The BPMC,therefore,concludes that (1)the disputed issues between the Designated Utilities and HEA arise under the Bradley Lake Agreements;and (2)the Power Sales Agreement, the Services Agreement,and the Bylaws provide the BPMC with the authority and the responsibility to resolve the disputed issues between the Designated Utilities and HEA. OF The Bradley Lake Agreements Were Not Modified,Amended,or Terminated by the Expiration of the Lease,and Chugach Is Still Entitled to Operate, Maintain,Repair,Dispatch,and Wheel Project Energy Over the S/Q Line. 36 Emphasis added. Resolution 14-11 Resolving Dispute between Utilities Page 12 of 18 Upon consideration of the Bradley Lake Agreements and the evidence and arguments put forth by both the Designated Utilities and HEA,the BPMC finds that Project energy enjoys priority status for transmission services from the Project north to the Project Participants.The expiration of the Lease did not modify,amend,or terminate the Services Agreement or the priority status that Project energy enjoys thereunder.Instead,transmission services across the S/Q Line continue to be governed by the Services Agreement.The Services Agreement requires Chugach to operate,maintain,repair,dispatch and wheel Project energy over the electrical facilities from the Soldotna Substation north.?”And,the Services Agreement requires Chugach to perform those services for 50 years.°®The shorter term of the Lease is never mentioned in the Services Agreement.*?Significantly,the Services Agreement does not limit Chugach's rights or obligations to operate,maintain,repair,dispatch and wheel Project energy over HEA's facilities north of the Soldotna substation to the term of the Lease.Instead,the Services Agreement requires Chugach to exercise such rights and obligations throughout the 50-year term of the Services Agreement without any qualification or limitation relating to the Lease.Notably,the Services Agreement was executed two years affer the Lease.”Thus,if the parties had intended that the expiration of the Lease would terminate Chugach's rights and obligations under the Services 37 See Services Agreement at 2 ("At the request of any Wheeling Utility,Chugach will provide wheeling,storage,and energy purchase services to such Utility for that Utility's Bradley Lake Energy in accordance with the provisions of this Agreement.”);see also Services Agreement at 7-8 ("Chugach will in good faith and at all times:...operate, maintain,and repair the electrical facilities used to perform the services provided hereunder....”). 38 See Services Agreement at 3,28-29. 39 The Lease expired on January 1,2014.See Lease at 2. 40 The Lease was approved by the Commission in Order U-85-013(3),June 4,1985.The Services Agreement was executed on Dec.8,1987.Services Agreement at 1. Resolution 14-11 Resolving Dispute between Utilities Page 13 of 18 Agreement,they would have expressly qualified or limited those rights and obligations to the term of the Lease.Further,such a limitation would not be reasonable to imply,given the Services Agreement's express requirement that Chugach operate,maintain,repair,dispatch and wheel Project energy over HEA's facilities north of the Soldotna substation for 50 years,the length of time the bonds would be outstanding.Finally,GVEA,MEA,and ML&P were not parties to the Lease between Homer and Chugach and,thus,expiration of the Lease could not be deemed to affect GVEA's,MEA's,and ML&P's rights under the Services Agreement. Additionally,the Services Agreement can only be amended,renegotiated,or terminated at an earlier date by unanimous agreement.*!As such,the Chugach delivery point for Project energy may only be changed from the Soldotna Substation to the Quartz Creek Substation as a "successor facility”through the "written consent of all Parties."42 HEA's attempts to unilaterally terminate, amend,or renegotiate the Services Agreement through its Tariff Filings and actions impeding Chugach's ability to operate,maintain,repair,dispatch and wheel Project energy over the S/Q Line are improper. The BPMC,therefore,concludes that the expiration of the Lease,which was neither referenced in nor related to the Bradley Lake Agreements,does not affect the continuing rights and obligations under the Services Agreement or the priority status Project energy enjoys thereunder. Instead,HEA must act in good faith to honor its commitments under the Services Agreement and allow Chugach to continue operating,maintaining,repairing,dispatching,and wheeling Project energy over HEA's facilities north of the Soldotna Substation. 41 See Services Agreement at 3-4. 42 See Services Agreement at 3.As the Designated Utilities point out,at least ten sections of the Services Agreement would have to be amended in order to effectuate such a change in delivery point.See Designated Utilities'Br.at 2,n.5. Resolution 14-11 Resolving Dispute between Utilities Page 14 of 18 D.HEA Will Be Permitted Some Additional Compensation for the Use of Its System Associated With the Transmission of Project Energy North of the Soldotna Substation. The BPMC finds that the parties to the Services Agreement and the Transmission Sharing Agreement anticipated that the Project would produce "net economic benefits”for all the parties,including HEA.**Specifically,all parties received the benefit of being able to purchase cheap power from the Project.Further,HEA received contribution from the other Project Participants to build the Soldotna Segment.'HEA was designated as the operator of the Project and receives compensation for its services provided as such.HEA's system is more reliable as a result of having the Project located on the southern edge of HEA's system.HEA receives the ongoing benefit of Chugach operating and dispatching Project energy at less than Chugach's actual costs of providing such services.And,HEA is benefited as a result of its right to pay for the scheduled dispatch of its Project power on an energy-delivered basis as opposed to an energy- reserved basis.The BPMC finds that,in exchange for those benefits,HEA committed its system to be used for the transmission of Project energy to the Project Participants in accordance with the Bradley Lake Agreements.Thus,HEA is adequately compensated under the Bradley Lake Agreements for the use of HEA's system and is entitled to no additional compensation. Nonetheless,in the interest of reaching a resolution among the Project Participants,the BPMC orders that HEA is to receive additional payments from the other Project Participants for the continuing use of HEA's facilities north of the Soldotna Substation throughout the term of the Services Agreement.While HEA is not entitled to any additional compensation under the controlling Bradley Lake Agreements,the BPMC holds that permitting HEA some additional 43 Services Agreement at 1;Transmission Sharing Agreement at 1. 44 Transmission Sharing Agreement at 2-3. Resolution 14-11 Resolving Dispute between Utilities Page 15 of 18 compensation would be the most efficient and reasonable resolution of the disputes.Such a resolution,while providing HEA with additional compensation,preserves the structure and terms of the Bradley Lake Agreements by maintaining and continuing Chugach's responsibility and obligation to operate,maintain,repair,dispatch,and wheel Project energy over HEA's facilities north of the Soldotna Substation.Such a resolution also provides the most efficient continuing means to dispatch Project energy to the Project Participants. The amount of additional compensation shall consist of both a fixed and a variable component.The fixed component is to be an amount of Three Hundred Thousand Dollars ($300,000)per year,which provides additional compensation to HEA to resolve the disputes concerning the Project Participants'continuing use of HEA's transmission facilities from the Soldotna Substation north under the Bradley Lake Agreements.The variable component is to consist of reasonable costs incurred by Chugach in fulfilling its responsibilities under the Services Agreement to maintain and repair HEA's transmission system from the Soldotna Substation north when such maintenance is performed by or through HEA's own efforts.Chugach has the continuing obligation under the Services Agreement to authorize and approve all such variable maintenance costs.Such fixed and variable amounts are consistent with the maximum compensation HEA has recovered historically from Chugach through the formula elements set forth in the Bradley Lake Agreements and represent a reasonable remedy under the circumstances of these disputes.These fixed and variable payments are effective and required from January 1, 2014,until the expiration of the Services Agreement. Resolution 14-11 Resolving Dispute between Utilities Page 16 of 18 V.RESOLUTION THE BPMC FURTHER RESOLVES: 1.As discussed in the body of this Resolution,the BPMC has the jurisdiction and obligation to resolve the disputes at issue. 2.As discussed in the body of this Resolution,the expiration of the Lease had no effect on the operation of the Services Agreement. 3.As discussed in the body of this Resolution,Chugach will continue to operate in accordance with the rights and obligations agreed to in the Services Agreement.Accordingly, Chugach will continue to operate,maintain,repair,dispatch,and wheel Project energy over HEA's facilities north of the Soldotna Substation in accordance with the terms of the Services Agreement. 4.As discussed in the body of this Resolution,HEA is violating BPMC Resolution 14-02 by not maintaining the status quo while this dispute is being resolved by the BPMC. 5.HEA shall take all reasonable steps to provide Chugach with the information and physical capability (where HEA cooperation is needed)to continue to perform its responsibilities in the same manner as Chugach did prior to January 1,2014. 6.HEA shall act in good faith to provide such cooperation as Chugach may from time to time request to allow Chugach to fulfill its responsibilities to operate,maintain,repair,dispatch, and wheel Project energy over HEA's facilities north of the Soldotna Substation under the Services Agreement,as those responsibilities have been clarified in the body of this Resolution. 7.HEA shall amend its tariff filings designated TA355-32 and TA356-32 ("HEA's Tariff Filings”)with the RCA to expressly provide that HEA's Tariff Filings shall not apply to any and all services or rates covered by the Bradley Lake Agreements,as those services and rates have been interpreted and more fully identified in the body of this Resolution.Additionally,such amendment shall specifically and expressly provide that (a)HEA's Tariff Filings shall not apply Resolution 14-11 Resolving Dispute between Utilities Page 17 of 18 to any services associated with the transmission of Project energy;(b)HEA's Tariff Filings shall not affect the priority status that Project energy currently enjoys under the Bradley Lake Agreements;and (c)HEA's Tariff Filings shall not apply to or require compensation for the use of HEA's facilities associated with the transmission of Project energy.HEA shall file such an amendment to its Tariff Filings in accordance with this Resolution of the BPMC within 15 days from the date of this Resolution. 8.HEA is to submit its request for variable component cost recovery to the BPMC in accordance with terms announced in section IV.D.of this Resolution within 15 days from the date of this Resolution. 9.Chugach is to submit appropriate payments to HEA,consistent with compensation terms announced in section IV.D.of this Resolution,within 30 days of the date of this Resolution. 10._-All parties are entitled to seek immediate judicial enforcement of the terms of this Resolution before the Superior Court for the State of Alaska,Anchorage District. DATED AND EFREGHING tthis J.day of Maw ,2014.=SERS ¥Aux*,%Rae @POR4 O%=FOI owe x LB J=3:EAL iE By b ob houwr EF cant3¢S so:IdyEvans %,1970S C ShairyelopeawLAD Sara Fisher-Goad Secretary Resolution 14-11 Resolving Dispute between Utilities Page 18 of 18