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HomeMy WebLinkAbout10.23.2020 IMC.Executed.MinutesAlaska Intertie Management Committee PECIAi. MF ; MINUTE: Friday, October 23, 2020 Telephonic 1. CALL TO ORDER Chair Brian Hickey called the meeting of the Alaska Intertie Management Committee to order on October 23, 2020, at 9:02 a.m. A quorum was established. 2. ROLL CALL FOR COMMITTEE MEMBERS Members present: Brian Hickey (Chugach Electric Association (CEA)); Jeff Warner (Municipal Light and Power (ML&P)); Ed Jenkin (Matanuska Electric Association (MEA)); John Bums (Golden Valley Electric Association (GVEA)); and Kirk Warren (Alaska Energy Authority (AEA)). 3. PUBLIC ROLL CALL Public present: Sunny Morrison (Accu-Type Depositions); Jennifer Bertolini (AEA); David Lockard (AEA); Lee Thibert (CEA); Russel Thornton (CEA); Stefan Saldanha (Department of Law); Pete Sarauer (GVEA), Brian Walsh (GVEA); Larry Jorgenson (HEA); Kirk Gibson (McDowell Rackner & Gibson PC); and Bernie Smith. 4. PUBLIC COMMENTS - None 5. AGENDA APPROVAL MOTION: Mr. Jenkin made a motion to approve the agenda. Motion seconded by Mr. Warner. The agenda was approved with no objection. 6. NEW BUSINESS 6A. IMC Consent to Assignment of Alaska Intertie Agreement - ML&P / Chugach Transaction Chair Hickey asked Kirk Gibson, McDowell Rackner & Gibson, if this item should be addressed in executive session. Mr. Gibson stated that he does not think it is necessary to enter into executive session for the discussion. MC special Meeting Minutes -October 23, 2020 MOTION: Mr. Warren made a motion to adopt Resolution 20-1, consent to the assignment of Alaska Intertie Agreement Intertie operation changes and amendment of IMC Bylaws. Motion seconded by Mr. Jenkin. Chair Hickey requested Mr. Gibson provide an overview of the resolution. Mr. Gibson explained that this special meeting is addressing the ML&P/Chugach transaction. The parties need express written consent from the IMC to approve the transaction for purposes of the Alaska Intertie Agreement (AIA). After the consent is provided, ML&P's Intertie operational responsibilities have to be reassigned, including operational issues with respect to reserve obligations and the annual system demand requirements. As a result of the transaction, there are voting issue concerns and amendments to the Bylaws that need to be discussed. Mr. Gibson discussed that the IMC cannot unreasonably withhold or delay the consent, and unless there is a legitimate objection, the IMC should move forward with the consent. Mr. Gibson informed that MEA, GVEA, Chugach, and ML&P were involved in the proceeding at the RCA and it seems that all differences have been resolved. The consent requires a vote of 75% of the members, equaling greater than 66% of the total system demand. The IOC has met on the operational issues and they recommend that the duties of ML&P as a southern operator be assigned to Chugach. The IOC has also reviewed other operational responsibilities, including the reserve requirements under Exhibit H of the AIA. It has been recommended and agreed upon by the IOC and Chugach that Chugach will be additionally responsible for all of ML&P's reserve requirements as set forth in Exhibit H. Mr. Gibson reviewed the issue of annual system demand, voting and cost responsibility. For purposes of starting on day one after the transaction, the IOC agreed that the annual system demands of ML&P and Chugach would be combined. Mr. Gibson explained the annual system demands combination gives Chugach 52.5% of the post -transaction annual system demand, which could give Chugach voting prowess and control of the voting issues, at roughly 19.1 % for MEA and 28.4% for GVEA. AEA remains a member. Chugach has offered, and the IOC has recommended acceptance of a post -transaction modified voting approach. Chugach suggested each utility have 33.3% or 1/3 the total weight for voting purposes, in order to meet the required 66% votes for any action. Mr. Gibson reiterated the consent of ML&P's assignment of its interest from the AIA designates the operator for the southern assets of the Alaska Intertie, adopts Chugach's proposal for modifying the annual system demand levels for purposes of IMC voting post -transaction, adopts Chugach's proposal for handling the burden of ML&P's reserve obligations post -transaction, and directs that the IMC Bylaws be amended accordingly to change the voting requirements and to expressly show that the amendment is for voting requirements only. Mr. Gibson discussed the IMC Bylaws have a few other issues that need to be updated. He requested the opportunity, as IMC Counsel, to not only update the Bylaws voting issues, assuming the resolution passes, but also address issues, such as notice provisions and other updates that occurred within the Alaska statute. There were no questions. IMC Special Meeting Minutes -October 23, 2020 2 Chair Hickey requested the Chair of the Intertie Operating Committee (IOC) speak to the participation in Resolution 20-1. Mr. Warner, IOC Chair, commented that Mr. Gibson did a good job of providing an overview. W. Warner reported that the assignment from the IMC to the IOC was to review the spinning reserve requirements in Exhibit H, as it relates to the acquisition, develop a plan going forward, address the issue of the southern controller, address any minimum intertie transfer capability rights (MITCR) implications related to how costs are shared within the AIA between the participants, and review related agreements. No conflicts were found with related agreements. The IOC discussed with Mr. Gibson regarding voting and further options after the acquisition occurs. Mr. Warner explained that Exhibit H became effective in the mid-1980s, and is potentially outdated. Per the Railbelt reliability requirements, a study needs to be performed focusing on load shed requirements, spinning reserve, and coordination for purposes of determining the minimum requirements for spinning reserve within the Railbelt. The intent of the IOC is to begin those forward -looking discussions at the next meeting after the acquisition. Mr. Warner discussed that the IOC reviewed the annual system demand by taking the sum of the existing demand within the current MITCR calculation for both ML&P and Chugach, for a total of 368.7. Mr. Warner noted that this total is within 2% to 4% of the actual total, and can be used for IMC purposes to approve this resolution and move forward to approve the acquisition. Mr. Warner relayed that the IOC discussed the fact that ML&P and Chugach reach their peak at different times and it is likely that the number could be slightly lower. Mr. Warner informed that the southern controller issue was discussed and the IOC recommends that Chugach take over. There was no opposition related to that issue. The IOC concurred on these different issues and voted to include these items in the IMC resolution before the members. Chair Hickey expressed appreciation for the description of the capacity combination. He believes this will affect the planning reserve number. There were no questions. A roll call was taken, and the motion to adopt Resolution 20-1 passed unanimously. 7. MEMBERS COMMENTS Mr. Warner expressed appreciation to Mr. Gibson for his involvement at the IOC level and the preparation of documents. Mr. Burns echoed the comments of appreciation to Mr. Gibson, especially for reaching out to utilities individually to explain implications and the various provisions of the resolution. Mr. Burns thanked the IOC for their efforts and the ultimate culmination of a clean resolution that is in the best interest of all the utilities on the Railbelt. Mr. Jenkin echoed previous comments, and added his appreciation for Mr. Warner's leadership throughout the IOC meeting and process. IMC Special Meeting Minutes -October 23, 2020 3 Chair Hickey advised that he will use the Chair's prerogative to make an assignment. Chair Hickey assigned Mr. Gibson to update the Bylaws and clean up those sections of the contract that Mr. Gibson referred to earlier. Chair Hickey expressed appreciation to the IOC, Mr. Gibson, and others who dedicated their efforts in creating the resolution. 8. NEXT MEETING DATE - December 11, 2020 The next scheduled meeting is Friday, December 11, 2020. Mr. Gibson commented that at the next meeting, assuming the ML&P/Chugach transaction moves forward, a new Chair will need to be elected. 9. ADJOURNMENT There being no further business of the AIMC, the meeting adjourned at 9:28 am. v U Brian HickLChair, WC Special Meeting Minutes-0cWber 23, 2020 4