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HomeMy WebLinkAbout2024.03.22 IMC Executed MinutesAlaska Intertie Management Committee (IMC) REGULAR MEETING MINUTES Alaska Energy Authority Board Room Friday, March 22, 2024 1. CALL TO ORDER Chair Andrew Laughlin called the meeting of the Alaska Intertie Management Committee to order on March 22, 2024, at 9:00 a.m. 2. ROLL CALL OF COMMITTEE MEMBERS Members present: Ed Jenkin (Matanuska Electric Association (MEA)); Andrew Laughlin (Chugach Electric Association (CEA)); Travis Million (Golden Valley Electric Association (GVEA)); and Bill Price (Alaska Energy Authority (AEA)). A quorum was established to conduct business. 3. PUBLIC ROLL CALL Joel Paisner (IMC Counsel); Keith Palchikoff (GVEA); Dan Bishop (GVEA); Jon Sinclair (MEA); Russell Thornton (CEA); Bryan Carey (AEA); Pamela Ellis (AEA); Kent Sullivan (AEA -Counsel); Pat Domitrovich, (AEA); Julian Jensen, interested citizen; Jennifer Bertolini, (AEA); Sunny Morrison (Accu-Type Depositions); Tracy Hayes (MEA). 4. PUBLIC COMMENTS - none S. AGENDA APPROVAL Chair Laughlin asked if there were any changes to the Agenda or is there a motion to approve. MOTION: Mr. Jenkin moved to approve the Agenda with one change to add an item under New Business to discuss potential Encroachment into the Intertie Right -of -Way. Mr. Million seconded the motion. Chair Laughlin asked if there was any discussion. Hearing none, he stated the addition will be Item 713 on the agenda. Amended Agenda was approved without objection. 6. APPROVAL OF PRIOR MINUTES — January 12, 2024, and January 26, 2024 Chair Laughlin asked committee members to review the minutes and if there were any changes. He made two changes to the January 26, 2024 minutes --on page 3, second paragraph, IVR to IMC Meeting Minutes 0312212024 Page 1 of 6 IBR. He also said on the same page, the second paragraph from the bottom should be "b string" as well as third paragraph from the bottom, should be "b string." MOTION: Mr. Jenkin moved to approve the amended Meeting Minutes of January 12, 2024, and January 26, 2024. Mr. Price seconded the motion. The Minutes were approved without objection. 7. NEW BUSINESS - none 7a. FY25 IMC Budget Pam Ellis, AEA Controller, presented the proposed Intertie budget for Fiscal Year 2025 (FY25). She stated this year, a new summary page has been added to provide typical budgeted revenues and expenses for the Alaska Intertie, and now includes a budget component for two grant awards. The grants are separate from the Operations and Maintenance (O&M) budget. She explained for FY25, utility contributions are expected to be less than FY24 by $845,643. This is based primarily on what is reported for the MWh, which is required to be reported for each utility for FY25 and the overall reason for the increases. She said expenses for FY25 are expected to be down by $784,100 compared to FY24 for the O&M budget. There are two significant increases and one significant decrease that makes up that balance. She called attention to FERC 569, which would be the first increase, and noticed that maintenance of structures will be $400,000 higher for the reinsulate of dead end tangent structures. The next item that is going to be significantly higher is FERC 570, which is the maintenance of station equipment. It will be $296,900 higher. Most of the increased cost will be the Cantwell Install Breakers and Teeland Substation, which is painting and machine repairs. The last expense, a large decrease, is FERC 571, which is the maintenance of the overhead lines, which is various repairs and repair costs. That is anticipated to be a decrease of $1.5 million, which is the largest decrease. She concluded the net of those three items, accounts for the $784,100 decrease. Of special note is AEA admin cost is budgeted to increase $220,000 because of additional work that is going to be required to administer those new grants. Ms. Ellis said there are two new grants coming up for FY25--one is for snow load and the other is for the synchrophaser system. The grant match budget item was determined by the subcommittee. The utilities grant matching contributions worksheet on page 6 provides the percentage shares of each power purchaser. This worksheet also illustrates the required match. Chair Laughlin asked if there were any questions for Pam. IMC Meeting Minutes 0312212024 Page 2 of 6 Mr. Price stated there is an additional budget item that needs to be added to the budget that came up after it was submitted to IOC. He asked to add a $50,000 placeholder for SVC Engineering. He explained there is an issue with the Healy SVC that needs to be addressed and a line will be added under 570 called SVC Engineering for $50,000. Mr. Jenkin asked about FERC 569, is the reference to reinsulate is associated with the grant. Jon Sinclair, MEA, explained the reference to reinsulate is for insulating some of the insulators between Teeland to Douglas and He clarified it is not part of the grant, which is north of Douglas. Chair Laughlin asked for more detail about what is being insulated and why. Mr. Sinclair responded that some of those insulators are 115, not 138 and need to be addressed. Mr. Price said that the budget intentionally separated the grants from the O&M, presuming that was the desire of the committee. MOTION: Mr. Price moved that the Intertie Management Committee post the Fiscal Year 2025 budget with the amended $50,000 for engineering. Mr. Jenkin seconded the motion. A roll call vote was taken, and the motion passed unanimously. 7b. Encroachment into Intertie Right -of -Way (ROW) Discussion Mr. Jenkin stated that the committee has been approached informally about expansion of a solar farm or construction of a solar farm adjacent to the Intertie. The question asked is there any level of installation of solar panels compatible with the right-of-way use for that line. He suggested there might be a committee that can look into that and make that determination whether a solar panel is a compatible use of the right-of-way. He assumed that means clearing would not have to be done in that area, but there would have to be some restriction because the IMC would need access to the right-of-way. Chair Laughlin stated that unless there is any further discussion for the IMC, he assigned the task to research this question to the IOC and report back to the IMC. 8. OLD BUSINESS A. GRID Resilience Grant Application Chair Laughlin stated that GRID Resilience Grant Application is on the Agenda to make note that Keith Palchikoff with Golden Valley Electric submitted the grant applications to AEA last month, and committee will wait to hear back. He thanked Keith for all his hard work. IMC Meeting Minutes 0312212024 Page 3 of 6 9. COMMITTEE REPORTS 9a. Budget to Actuals Ms. Ellis, AEA Controller, presented the budget to actuals report of revenues and expenses for the period of July 1, 2023, through January 31, 2024. She said the IMC is more than halfway through the fiscal year. She called attention to the revenue section. Usage is up at about 90% of what was anticipated to be budgeted for all of FY24, which is of special note. It is $341,905 more than budgeted. This is due to the higher than anticipated energy usage. She referred to the expense section and said operating expenses were less than budgeted by $1,937,306, which is primarily due to timing of invoicing versus annualized budget. She explained there are several categories within the budget that do not currently have actual percents, but as the year progresses there will be activity. She said actual administrative expenses were less than budgeted by $18,015, which is due to less than anticipated labor and indirect costs. She said the results of actual revenues and expenses is currently showing a surplus $3,636 777. She concluded her report. Mr. Laughlin summarized usage is up, expenses are down and there is quite a surplus. Ms. Ellis said she expects expenses to pick up and speculates the budget may be under, but the next few months will provide more information. Mr. Jenkin commented that there are consistently timing issues because the budget runs through two construction seasons, one at the very beginning of the budget, one at the very end of the budget, which makes it hard to know if projects are behind or on schedule. He recommended that project managers designate which construction season for build and the expenses could be spread accordingly. He explained if the project tasks scheduled for the first season are not completed, there would be a variance and the IMC could ask questions as to why the delay. He said the current process makes it difficult to know what questions to ask. Mr. Jenkin asked since there is a significant amount of usage, should there be a mid -year recalculation that would represent a change in wheeling rates, considering being significantly over budget with a lot more revenue. He said it seems there are two choices, (1) address it mid- course by relooking at wheeling costs, or (2) end up with a large refund at the end of the year. Chair Laughlin asked other committee members about the mid -year adjustment question. Mr. Price commented that in comparing usage rates, it is a question for GVEA because just through January, usage already exceeds what is forecasted for FY25, which was 200,000 megawatts. He said as of January, usage is already roughly 224,000 megawatts. IMC Meeting Minutes 0312212024 Page 4 of 6 Mr. Million responded he expects GVEA usage coming up the Intertie is going to be greatly reduced going forward unless something changes for potential use of economy energy. He agreed GVEA has exceeded budget, but he expects those numbers to drastically reduce in the second half of this fiscal year. Mr. Jenkin summarized that it seems there is less impetus to do a mid -course correction because usage is going be closer to expectations, as far as percent wise. Mr. Million agreed. He said he does not think it would worth spending the time looking into corrections for this year, unless something changes. Chair Laughlin asked if there were any further discussion or questions regarding the budget to actuals. There were none. 9b. IOC Committee Mr. Sinclair with MEA stated the summary of the Intertie Operating Committee (IOC) meeting is in the IMC meeting packet. Many of the topics have already been covered today including the budget for next year and the applications. He said he is available to answer any questions. He called attention to first item on the summary, the Primary Frequency Response Policy, and said the draft was reviewed at the last meeting thoroughly and many comments made. The IOC is still working through those comments. He said an example is what is considered the largest single contingency, how to define that, and how to break out spending. He said he hopes to have a draft for the Committee review at the next meeting. Mr. Sinclair said the IOC summary also addressed the subcommittee information spreadsheet, which has been updated now. He thanked everyone for providing those to keep it updated to know who to contact if there is a committee assignment. He said regarding the IVR study, the Railbelt System Studies Subcommittee (SSS) is putting together a request for proposals (RFP) for a new IVR study since NREL was canceled. He said the SSS is also looking at a study for upgrading the line to 230 and RFPs for this study that are pending. He concluded his summary of the IOC meeting and said he would take any questions. Committee members discussed the some corrections to contacts listed on the subcommittee information spreadsheet and concluded those will be corrected and re -distributed. Chair Laughlin asked when to anticipate hearing back on the grant awards. Mr. Sinclair responded in 60 to 90 days, which brings it to a May timeframe. He said the grant applications are being reviewed and will be sent to the Department of Energy (DOE) to review and award. IMC Meeting Minutes 0312212024 Page 5 of 6 9C. Operator's Report Russell Thornton with Chugach Electric stated that there is a written Operator's Report in the meeting packet. He said the Alaska Intertie usage is up 26%, which has been discussed. This increase was led by increased usage by Golden Valley over FY22 usage. He said there have been no Intertie trips since the last meeting. He said there was a substantial cold spell and the reliability report shows seven report reportable events, all of them generation. He said five of the seven, happened during that cold snap. The frequency response for the previous period is stabilizing around an average of about 12 to 13 megawatts (MW) per tenth of a hertz, responding very well. He said with the cold snap, there was some higher inertia generation online and now, with the HEA battery, as previously discussed, the performance has been above 10 MW for 10 diverge, which is a good thing. He concluded his report. 10. MEMBERS COMMENTS Chair Laughlin opened the floor for members' comments. Mr. Price had a final comment on the subcommittee information sheet will be further updated and distributed today or Monday. He thanked everyone their efforts in keeping it updated. Mr. Jenkin stated that he would like to echo the chair's comments and appreciation for the work that went into the grant applications and getting those submitted. He also thanked IOC for putting together a well thought out and summarized budget. Mr. Million stated that he echoed other comments already made and had no additional comments. Chair Laughlin stated he also thanks committee members for all of their hard work. He said he will also have some changes to the spreadsheet and will get changes to Mr. Price. 11. NEXT MEETING DATE - May 3, 2024 12. ADJOURNMENT With no further business to discuss, Chair Laughlin asked for a motion to adjourn the meeting. Ed Jenkin moved to adjourn the meeting. Bill Price seconded the motion. Chair Laughlin adjourned the meeting at 9:33 m. 'L.Ifz Andrew Laughlin, Chair Bill Price, Secretary IMC Meeting Minutes 0312212024 Page 6 of 6