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HomeMy WebLinkAbout02.17.2017 IMC Approved minutesIntertie Management Committee Regular Meeting MEETING MINUTES Friday, February 17, 2017 Anchorage, Alaska 1. CALL TO ORDER Chairman Mark Johnston called the meeting of the Intertie Management Committee to order on February 17, 2017 at 8:38 a.m. 2. ROLL CALL FOR COMMITTEE MEMBERS Brian Hickey Chugach Electric Association (CEA) Cory Borgeson Golden Valley Electric Association (GVEA) Tony Izzo Matanuska Electric Association (MEA) Kirk Warren Alaska Energy Authority (AEA) Mark Johnston Anchorage Municipal Light & Power (ML&P) 3. PUBLIC ROLL CALL David Pease, Gary Kuhn, Jim Brooks (MEA; Bob Day, Larry Jorgensen; Lee Thibert, Burke Wick, Russ Thorne, Mark Johnson (CEA); Anthony Scott (ML&P); Dan Bishop (GVEA); John Foutz (City of Seward); David Lockard, Bryan Carey, Teri Webster, Valerie Leavitt (AEA); Kirk Gibson (McDowell Rackner & Gibson PC); Brian Bjorkquist (Dept. of Law); Bernie Smith, Jay Lang (RCA); Henri Dale; TW Patch. 4. AGENDA APPROVAL MOTION: Mr. Borgeson made a motion to approve the agenda. Motion seconded by Mr. Hickey. The motion passed unanimously. 5. PUBLIC COMMENTS None 6. APPROVAL OF PRIOR MEETING MINUTUES – December 14, 2016 and December 28, 2016 MOTION: Mr. Hickey made a motion to approve the agenda. Motion seconded by Mr. Izzo. The motion passed unanimously. 7. OLD BUSINESS a. Douglas Substation Upgrades Mr. Johnston stated the Douglas Station Upgrades was postponed at the last meeting, December 28, 2016, from any action to thoroughly review documents with legal counsel. A revised Utility MOA took into account all corrections that have been made to date. February 17, 2017 IMC Meeting Minutes Page 2 of 5 Mr. Kuhn affirmed all the additions, or revisions, to the project summary are current. AEA is working out the final procurement document, with direction from the committee, to proceed with the project. The EPS estimated a total cost of $1,581,229. The breakdown of funding responsibility is AEA at 41 percent, MEA at 26 percent, and the IMC at 33 percent. AEA does not have approval for the sole source portion of the procurement from the Department of Administration yet but is expected to be approved soon. The sole source request is for the relays that are made by Switzer Engineering Laboratories, which are common in the railbelt and are identified as a specification with no substitutes. MOTION: Mr. Izzo made a motion to approve the Intertie Management Committee Resolution 17-1, #2 in the upper right corner, and in addition move to approve the Utility Memorandum of Agreement for 2016 Douglas Substation Improvements. Motion seconded by Mr. Borgeson. The motion passed unanimously. Mr. Hickey brought four documents and provided copies for the committee members to walk through in order to explain Chugach’s interpretation of the Intertie participants’ rights to the use of the Teeland-Douglas section of the intertie and the associated assets. These documents were; The 1984 Douglas Substation Agreement, The Joint Use Agreement (covers AEA Owned line section from Teeland to Hollywood road), 1986 Transmission Service Agreement, covers the MEA Line section from Hollywood Road to Douglas, 2004 Regulatory Commission Order No. 4, U-03-100. Mr. Hickey stated he understands the agreement covering modifications to the control room (the MOA) will provide effectively the same access rights found in the first document, the 1984 Douglas substation agreement. The agreement will give the IMC rights to enter, to occupy, and perform necessary work for construction, testing, and maintenance for the project. Everyone will have rights for the new installed equipment. Mr. Pease, MEA’s counsel, stated that with the assistance from Mr. Kirk Gibson, they both believe the IMC has continued access to the lock and to the equipment for which ownership has been retained as in the 1984 Lease Agreement. However, they are not offering an interpretation of the older agreements and documents. Mr. Bjorkquist referenced the 1984 Douglas Substation Agreement, attachment C, column 1 has AEA retained ownership, and column 2 has MEA ownership. The items in the MEA column is what the IMC will not have continued access to and rights to, thru this new agreement. Mr. Hickey stated that most of the items on the list will be replaced in the control enclosure. Line #18 is not clear, 138 bus. He assumed the IMC will have the rights to the AEA’s 138 bus that goes through the substation. Mr. Kuhn concurred that the intention was for the IMC to have rights to access and maintain the 138 Bus as necessary for intertie purposes. Mr. Kuhn detailed the MOA and the resolution. He believes the document replaces a component, which is the relay panels and control room. The MOA states continued unrestricted access for 45 years. Mr. Hickey stated his understanding is to still have access to the equipment associated with the transfer of power through Douglas substation. No access is needed in anything that directly February 17, 2017 IMC Meeting Minutes Page 3 of 5 serves the MEA load, except for in operational regard for the purposes of establishment of clearances on the intertie. Mr. Borgeson stated he wants it clear if he votes in favor of this it is with the assumption and not with a capitulation that we are giving up our termination rights or any rights that survive the termination of this 1984 Agreement. Mr. Kuhn stated he will defer to the GM, but it is not our intent to limit the access. Our intent is to replace the control enclosure. Mr. Borgeson stated there are also provisions in there as to what will be charged upon termination. He would not vote for this if rights are going to being terminated by virtue of this new agreement. Mr. Bjorkquist stated only the Agreement will be terminated, but for interpretation, we would really need to defer to MEA, but they are not willing to discuss that. Mr. Hickey stated his understanding is we are not giving anything up but actually gaining access to the specific pieces of equipment. Mr. Johnston concurred. Mr. Izzo stated it is MEA’s intent and belief the document we are proposing be approved by the IMC. Mr. Hickey affirmed he is not going to worry about the 138 bus, ten-foot section. He went into detail his understanding of rights of transmission using the Joint Use Agreement, the 1986 Transmission Service Agreement, and the 2004 Regulatory Commission Order No. 4, U-03-100. Mr. Pease stated to Mr. Hickey he is doing exactly what MEA said they will not discuss. Mr. Pease stated MEA is not going to agree upon any interpretation. They made it clear at the December meeting they were not prepared to do this in the context of the relay control enclosure. If this is a condition of going forward than they will pull support from the project. Mr. Borgeson stated he is appreciating Mr. Hickey’s explanation of his understanding and it has really helps him and other committee members’ position to understand. Mr. Warren stated this really speaks towards the e-mail from yesterday regarding AEA’s participation in the project when the 1984 Agreement Lease Agreement goes away. AEA does not believe there will be any agreement in place for transmission of power. AEA is still willing to support the project but wants the utilities understand that. Something will have to happen in order to continue transmission but it is unclear what that is. Mr. Johnston informed Mr. Hickey he may continue, seeing no objections. Mr. Hickey stated his concerns at the last meeting. These concerns were that the participants outline and understand, both the participants’ rights and the contractual basis for them with respect to the assets that they were agreeing to make significant capital investments in through he Douglas Substation upgrade project. He believes as he understands it and believes, to the February 17, 2017 IMC Meeting Minutes Page 4 of 5 State’s point, the utilities don’t have a guaranteed 80 MW transfer capability from Hollywood north, the contractually guaranteed right on this section of line is between [0 to (80 MW minus the Douglas load)] this depends on what MEA load exists north of Douglas. And further the participants only have the right to 40MW of transfer capability from Teeland to Hollywood should MEA require 40 MW in this area. In summary, he believes the utilities have the rights to access the equipment at Douglas needed, and from a power transfer perspective, will have a minimum of 40MW of transfer capability from Teeland to Hollywood road and then will have between [0-(80MW minus the MEA load of Douglas and MEA loads north of Douglas)]. At some future point, the utilities would need to negotiate with MEA if loads increase north of Douglas to a level that they could not transfer sufficient power from Teeland to Fairbanks. So long as the participants agree that this is where we stand, and that we are willing to make investments based on this power transfer capability, Mr. Hickey stated his support for the upgrade project. MOTION: Mr. Izzo made a motion to approve the Intertie Management Committee Resolution 17-1, #2 in the upper right corner, and in addition move to approve the Utility Memorandum of Agreement for 2016 Douglas Substation Improvements. Motion seconded by Mr. Borgeson. The motion passed unanimously. 8. NEW BUSINESS a. Enforcement of reliability standards Mr. Mark Johnson presented the committee with progress of the enforcement of reliability standards committee. Mr. Johnson has been working with Mr. Gibson in proposing a matrix of their approach, which had a consensus by the committee. There was further discussion on monetary sanctions. The committees’ number one goal is to draft an outline without the monetary sanctions included, but with the understanding that is the next stage. This process will occur in the next month and regular progress reports to the committee will take place. Mr. Wick has provided the committee with the railbelt standards but do not have a consensus of all utilities accepting those standards. The IMC did not want to approve the standards until the penalties are included. HEA has been and will be involved in developing the penalties and continue to be invited to the meetings. An agreement to the standards for spinning reserves has occurred, but there is not an agreement on the procedure for carrying those spinning reserves amongst the utilities. Revamping the enforcement of the reliability standards has been completed by EPS. 9. IOC / OPERATOR’S REPOT – ML&P/GVEA There were no reports Mr. Dale asked for the power pooling utilities to do a presentation to the IMC on how it will work with the IMC. Mr. Borgeson suggested a presentation to the utilities would be more appropriate. 10. COMMITTEE ASSIGNMENTS 11. NEXT MEETING DATE