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HomeMy WebLinkAbout2022.06.24 IMC Executed MinutesAlaska Intertie Management Committee (IMC) REGULAR MEETING MINUTES Alaska Energy Authority Board Room Friday, June 24, 2022 1. CALL TO ORDER Chair John Burns called the meeting of the Alaska Intertie Management Committee to order on June 24, 2022, at 8:58 a.m. A quorum was established. 2. ROLL CALL FOR COMMITTEE MEMBERS Members present: John Burns (Golden Valley Electric Association (GVEA)); Andrew Laughlin (Chugach Electric Association (CEA)); Ed Jenkin (Matanuska Electric Association (MEA) ); and David Lockard (Alaska Energy Authority (AEA)). 3. PUBLIC ROLL CALL Public present: Betty Caudle (Accu-Type Depositions); Joel Paisner (Ascent Law Partners); Jennifer Bertolini (AEA); Beazit Redzepi (AEA); Russell Thornton (CEA); Pete Sarauer (GVEA); Larry Jorgensen (HEA); David Pease (MEA); and Bernie Smith (Public). 4. PUBLIC COMMENTS — None 5. AGENDA APPROVAL MOTION: Mr. Jenkin made a motion to approve the agenda, as presented. Motion seconded by Mr. Lockard. The agenda was approved without objection. 6. APPROVAL OF PRIOR MINUTES — May 20, 2022 MOTION: Mr. Jenkin made a motion to approve the Meeting Minutes of May 20, 2022. Motion seconded by Mr. Laughlin. Chair Burns commented that Ms. Bertolini does a great job providing the Minutes to the members in advance. Chair Burns complimented the Transcriber for the comprehensive preparation of the Minutes. Mr. Lockard indicated that the second sentence on page three should be corrected to read, "Mr. Jenkin discussed that he sent an explanation of the administrative cost increases to Mr. Lockard and to Dan Bishop." There was no objection to the correction. Mr. Lockard indicated that the last sentence in the sixth paragraph on page three should be corrected to read, "The monthly contribution is $21,277.78." There was no objection to the correction. IMC Meeting Minutes — June 24, 2022 1 Mr. Jenkin indicated that the last sentence of the first paragraph on page four should be corrected to read, "Mr. Jenkin informed that the IOC process is ongoing to engage a contractor regarding the Asset Management Plan line item." There was no objection to the correction. The Minutes of May 20, 2022, including the three corrections, were approved without objection. 7. NEW BUSINESS 7A. Approval of FY23 IMC Budget Chair Burns requested Beazit Redzepi, AEA, to present the information. Mr. Redzepi informed that the proposed FY23 IMC Budget was previously presented and approved for the 30-day public comment period. No public comments were received. The FY23 IMC Budget is now being presented to the Committee for final approval. Mr. Redzepi discussed that the FY23 Budget contains revenues of approximately $3.5 million, total expenses of approximately $3.3 million, consisting of Intertie operating costs of $2.5 million and Intertie administration costs of $766,000. The expected energy projection for FY23 totals approximately 452,000 Mwh. Mr. Redzepi reviewed the usage, capacity, and administrative cash flow totals. There were no questions. MOTION: Mr. Jenkin made a motion to approve the FY23 IMC Budget, as submitted. Motion seconded by Mr. Laughlin. The motion was approved without objection. 8. COMMITTEE REPORTS 8A. Budget to Actuals Chair Burns invited Mr. Redzepi to present the Budget to Actual Report through May 31, 2022. Mr. Redzepi provided an overview of the report. The total revenues are approximately $2.4 million. The operating expenses are approximately $967,000, and the AEA administrative expenses are approximately $140,000, totaling approximately $1.1 million in expenses. The current projection is a budget surplus of $1.38 million. This amount will change upon receipt of the final numbers. Mr. Redzepi reviewed the budgeted usage and actual usage as shown on page four. Mr. Lockard noted that a significant cost from the Finance Department occurred at the end of last year under Temporary Staffing Services. He asked if that additional amount has been reflected on page three. Mr. Redzepi indicated that the additional cost has not yet been reflected in the report. The budget was revised at the previous meeting to anticipate the cost. Chair Burns asked for the reason why the additional cost was not yet reflected in the report, even though the budget amendment of $120,000 was approved at the previous meeting. Mr. Redzepi explained that the amount is an end -of -the -year accrual that is reallocated from Shared Services based on the calculations. The posting occurs at the end of the year. IMC Meeting Minutes — June 24, 2022 2 Chair Burns asked if a different methodology could be implemented so that there is not a surprise at the end of the year. Mr. Redzepi informed that discussions are occurring regarding the possibility of posting monthly, rather than on an annual basis at the end of the year. Mr. Lockard identified that page two of the approved FY23 Budget shows AEA Administrative Costs for FY22 Budget listed as $100,000, rather than the inclusion of the additional $120,000, for a total of $220,000. There were no questions regarding the clarification. Chair Burns discussed that the approved FY23 Budget has a 36% increase of Intertie usage. The increase becomes a constraint if the projected energy consumption of the Intertie continues to struggle as it has previously. Chair Burns expressed concern regarding the reality of the budget and noted that the budget is based on projections. He emphasized the importance of monitoring the revenue projections. Chair Burns requested Mr. Redzepi describe the different accounting methodologies and evaluations that staff is considering. Mr. Redzepi explained that the consideration is to shift the process from an annual, end -of -the -year process to a monthly, end -of -the -month process. There were no additional questions. Chair Burns asked if there is a report from the Intertie Operating Committee (IOC). A member commented that the IOC has not met since the last IMC meeting, and that Subcommittee meetings have occurred. Chair Burns informed that he understands that the Subcommittee is conducting thorough evaluations regarding the asset management component of the discussions. There were no questions. 9. MEMBER COMMENTS Mr. Laughlin thanked Chair Burns for the efficient meeting. He expressed appreciation for the reports and information. Mr. Lockard commented on Chair Burns' concern regarding the cost of the budget. Mr. Lockard highlighted the current activity on the Railbelt, including the increased usage, the increased efforts of maintenance, and improvements at the SVC level related to power oscillation damper tuning and snow load monitoring system. Mr. Lockard recognized his enthusiasm for the value of the asset to the Railbelt. He expressed appreciation for the emphasis on funding for the asset to ensure the operation continues. Mr. Jenkin noted the quick process of approving the budget. He recognized the significant amount of effort conducted by the IOC and the Budget Subcommittee in preparing and vetting the budget. Chair Burns agreed with Mr. Jenkin's comments. He noted that the IOC conducted a vetting process of the budget prior to the IMC's review. Chair Burns noted that each member has a representative on the IOC and on the Subcommittees. Chair Burns agreed with Mr. Lockard's comments and is encouraged by the understanding that the Railbelt system is engaged in a IMC Meeting Minutes — June 24, 2022 3 concerted effort to view the system holistically and to work collaboratively. Chair Burns expressed appreciation to the Intertie participants for the asset management efforts and improvements. He noted his concern regarding deferred maintenance, such as foundation and snow -load issues, and expressed appreciation that these items are under discussion. 10. NEXT MEETING DATE — July 29, 2022 Chair Burns informed that the next meeting is July 29, 2022. He requested that the IOC provide an update regarding strategic planning and asset management. A comment was made that elections will occur at the next meeting. There were no questions. 11. ADJOURNMENT There being no further business of the AIMC, the meeting adjourned at 9:21 a.m. John Burn Chair avi Secretary bryo h L' Q r-C(8 IMC Meeting Minutes — June 24, 2022 4