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HomeMy WebLinkAbout2022-08-03 AEA Agenda and docs 813 West Northern Lights Boulevard, Anchorage, Alaska 99503 T 907.771.3000 Toll Free 888.300.8534 F 907.771.3044 REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG Alaska Energy Authority Board Meeting August 3, 2022, 2022, 8:30 AM AGENDA Dial 1 (888) 585-9008 and enter code 212-753-619# Public comment guidelines are below. 1. CALL TO ORDER 2. ROLL CALL BOARD MEMBERS 3. AGENDA APPROVAL 4. PRIOR MINUTES – May 25, 2022 5. PUBLIC COMMENTS (2 minutes per person) see call in number above 6. NEW BUSINESS-NONE 7. OLD BUSINESS A. BPMC’s prepayment of certain debt obligations to the SSQ Line 8. DIRECTOR COMMENTS A. Response to Board Questions B. Letter from Dept. of Administration regarding AEA FY22 Audit C. Owned Assets Update D. Bradley Lake Required Project Work Update E. State Energy Program (SEP) Update F. Power Cost Equalzation (PCE) Memo G. Renewable Energy Fund (REF) Update H. Power Project Fund – Southfork Hydro, LLC I. Alternative Energy & Energy Efficiency (AEEE) Update J. Electric Vehicle Update K. EURP Update L. AEA / GVEA Black Rapids Training Center Line Extension Grant M. AEA Whittier Chugach Electrification Project Grant N. Community Outreach O. Articles of Interest P. Next Regularly Scheduled AEA Board Meeting Wednesday, September 14, 2022 9. BOARD COMMENTS 10. ADJOURNMENT Public Comment Guidelines Members of the public who wish to provide written comments, please email your comments to publiccomment@akenergyauthority.org by no later than 4 p.m. on the day before the meeting, so they can be shared with board members prior to the meeting. On the meeting day, callers will enter the teleconference muted. After board roll call and agenda approval, we will ask callers to press *9 on their phones if they wish to make a public comment. Alaska Energy Authority Page 2 of 2 This will initiate the hand-raising function. We will unmute callers individually in the order the calls were received. When an individual is unmuted, you will hear, “It is now your turn to speak.” Please identify yourself and make your public comments. 813 W Northern Lights Blvd, Anchorage, AK 99503  Phone: (907) 771-3000  Fax: (907) 771-3044  Email: info@akenergyauthority.org REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG Alaska Energy Authority BOARD MEETING MINUTES Wednesday, May 25, 2022 Anchorage, Alaska 1. CALL TO ORDER Chair Pruhs called the meeting of the Alaska Energy Authority to order on May 25, 2022, at 8:31 am. A quorum was established. 2. ROLL CALL BOARD MEMBERS Members present: Chair Dana Pruhs (Public Member); Vice-Chair Bill Kendig (Public Member); Julie Sande (Commissioner DCCED) (Arrived 8:50 a.m.); Albert Fogle (Public Member); Deven Mitchell (SOA-DOR); 9Bill Vivlamore (Public Member); and Randy Eledge (Public Member). 3. AGENDA APPROVAL MOTION: A motion was made by Vice-Chair Kendig to approve the agenda, as presented. Motion seconded by Mr. Mitchell. The motion to approve the agenda, passed without objection. 4. PRIOR MINUTES – April 13, 2022 MOTION: A motion was made by Vice-Chair Kendig to approve the prior minutes of April 13, 2022, as presented. Motion seconded by Mr. Mitchell. The motion to approve the minutes of the April 13, 2022, minutes passed without objection. 5. PUBLIC COMMENTS (2 minutes per person) Chair Pruhs asked that comments be limited to two minutes and to be based on today’s agenda items. He requested each person state their name and affiliation, if any. Jennifer Bertolini, AEA, provided directions to those online wishing to make a public comment. Gary Hennigh noted that he has been CEO of King Cove Municipal Utility and City Administrator for the last 32 years. He respectfully requested that Board members read the comments he sent today related to comments that King Cove made a year ago. Those comments describe the frustrations of not being considered eligible as a PCE community for reasons that relate directly to King Cove’s renewable energy accomplishments. King Cove believes they should be eligible for the PCE Program. Mr. Hennigh discussed the back-and-forth communication with AEA and Commissioner Sande that reveals the misunderstanding of the problems that King Cove is not in the PCE Program and the reasons King Cove should be in the Program. Mr. Hennigh requested Alaska Energy Authority Page 2 of 15 that the Board review the material he provided today and direct AEA to provide King Cove with a serious review of the issue to get beyond the erroneous statements going back and forth. He believes that the issue is being masqueraded in a manner that is not fair to the city of King Cove. He asked the Board to please intervene to help resolve the issues. Ken Castner commented that he is not sure when the financing for the SQ Line was set up in 2020. He noted that there was approval at the prior meeting for a one-time payment to pay down the cost of that acquisition and the funds that were used were earmarked for required project work. Mr. Castner discussed that the approval included a $700,000 fee to be paid, but he does not know if that fee payment will be to AIDEA or to the bond bank. Mr. Castner stated that if the $700,000 payment was to AIDEA, he would ask why terms and conditions were favorable to AIDEA and unfavorable to the consumer. Mr. Castner noted that he would like to know if the payment was a pass-through penalty or any other penalty. There were no members of the public online or in-person who wished to make a public comment. Chair Pruhs requested Curtis Thayer, AEA Executive Director, comment regarding the King Cove issue. Mr. Thayer stated that Mr. Hennigh is correct that much communication has occurred. Mr. Thayer stated that AEA understands King Cove’s concerns and the Department of Law (DOL) has communicated to AEA that King Cove is not eligible for PCE. AEA has notified King Cove of Department of Law’s determination. Mr. Thayer stated that King Cove has not applied for funding for the PCE Program because they know they do not qualify. Mr. Thayer stated that he has spoken with Commissioner Robert Pickett of the Regulatory Commission of Alaska (RCA) regarding this issue because AEA jointly administers the PCE Program. A joint letter will be sent to King Cove to further clarify the understanding. Mr. Thayer will provide the letter to Board members. Mr. Thayer informed that in the history of the King Cove hydro project, AEA has provided $2.8 million in grants. AEA also provided a Renewable Energy Fund (REF) grant of $675,000. King Cove also participated in an AEA project loan of $1.3 million. The Aleutians East Borough granted King Cove $500,000 for their project. King Cove provided matching funds of $150,000. The Alaska Municipal Bond Bank loaned King Cove $525,000, and an additional loan of $1 million. The total receipt is $6.95 million for their successful project. Their project falls below the floor rate of .19 cents and therefore, it is ineligible for PCE. Chair Pruhs requested for the record that Mr. Thayer state the reason again why King Cove does not meet the PCE requirements. Mr. Thayer explained the PCE Program has a floor rate and a ceiling rate. The floor is established at the average rate of Anchorage, Fairbanks, and Juneau. This year, the rate was established at .19 cents. PCE does not pay for any rate that is .19 cents or below. PCE will pay for the delta from the .19 cents floor up to .75 cents. Mr. Thayer stated that King Cove is below .19 cents and has traditionally been below .19 cents, even though they have not filed any paperwork with AEA to verify that they are below .19 cents. Chair Pruhs asked that if King Cove has a rate above .19 cents, then they would be within the PCE subsidized category. Mr. Thayer agreed. Chair Pruhs asked who set the .19 cents formula. Mr. Thayer explained that the formula is set legislatively by statute and the RCA makes the calculations Alaska Energy Authority Page 3 of 15 and enforces the formula. Chair Pruhs asked Mr. Thayer if King Cove needs to go to the Legislature or to RCA to get relief for this issue. Mr. Thayer commented that the Legislature would have to change the formula. AEA sought out the Department of Law’s opinion, who concurs that King Cove does not qualify for PCE. Chair Pruhs commented that King Cove needs to be made aware of the findings. Mr. Thayer agreed and noted that he has already spoken to Commissioner Pickett regarding the joint clarifying letter. Chair Pruhs requested for the record that Mr. Thayer respond regarding the comment related to the early payoff of the SSQ Line and the loan documents. Mr. Thayer explained that AEA acquired the SSQ Line, which was the matter of litigation for several years. The line was a stranded asset owned by Homer Electric Association (HEA), and did not serve any of their customers. The line runs between Sterling and Quartz Creek. The line went down during the Swan Lake Fire. AEA worked with all of the utilities and AEA acquired the line for the total cost that was not to exceed $17 million. AEA went out for a bond and AIDEA offered to provide the financing in a private placement bond. The term sheet was agreed to by all parties. The term sheet contained the standard prepayment penalty, which is a fee for an early pay-off. The utilities decided that they wanted to put $12 million in excess payments toward the SSQ Line debt, and by regulation and by statute, the prepayment penalty fee of $700,000 was included as part of the transaction costs. The utilities made the decision and understood the prepayment fee transaction cost of $700,000 and the payment is proceeding forward by July 1. If the utilities had not made the decision to pay the bond down early, then the $700,000 fee would not be absorbed. Mr. Thayer explained that the prepayment penalty provision is a normal market condition within term sheets. It is not special to AIDEA and was not negotiated by AIDEA. It is an industry standard. Mr. Mitchell clarified that governmental purpose bonds are typically issued with 10-year par calls and if the bond is paid off before the 10-year par call, the interest expense is on the principal to the call date and the principal at the call date on the bonds. This is what creates the penalties. Mr. Mitchell explained that the funds have to be invested in U.S. government-backed securities and the differential between the interest rate on the bonds and reinvestment of the funds to the call date creates the penalty. Mr. Mitchell informed that AEA did not get $700,000 as a result of the transaction. The $700,000 went to the investors. There being no other apparent public comments, Chair Pruhs closed the public comment session. 6. NEW BUSINESS - NONE 7. OLD BUSINESS A. Required Project Work Update – Department of Law Memos: Mr. Thayer discussed that the individual memos are linked to the agenda and included in the packet. The required project work to upgrade the transmission lines from Bradley Lake to Quartz Creek, including the addition of a battery system, falls within the provision in the Power Sales Agreement that once the bonds were paid off, the excess payments could be either given back to the State Treasury into the Railbelt Energy Fund or could be given towards required project work, Alaska Energy Authority Page 4 of 15 as deemed by DOL to benefit the Bradley Lake Hydro Project. Mr. Thayer explained that the Bradley Lake Management Committee (BPMC), consisting of the utilities and AEA, sent a letter to DOL last year identifying a series of upgrades to utilize the excess payments for the required project work. DOL has since issued the five different memos linked to the agenda. DOL requires that a third-party independent engineering firm is contracted to provide expert analysis to determine if the designated required project work projects are standard and consistent with Prudent Utility Practice. Mr. Thayer indicated that the five DOL memorandums linked to the agenda are now part of the public record and the confidential and deliberative identifiers have been waived. Chair Pruhs asked when the economic analysis and the return on the investment for the public for the required project work will be provided. Mr. Thayer indicated that analysis is currently being completed. He noted the next steps include determining what work needs to be done and preparing cost estimates and technical feasibilities. The individual utility boards will approve the projects and then the project will come before the AEA Board for final approval before the bonds are issued. This process is almost identical to the recent SSQ Line process. Mr. Thayer commented that the anticipated amount is about $200 million. Chair Pruhs asked for the list of owners for the required project work. Mr. Thayer indicated that AEA will ultimately own the required project work. AEA owns the SSQ Line and is upgrading capacity from Bradley Lake to the SSQ Line. AEA will own that capacity. This is an agreement with the utilities. The project is going to pay for the batteries. The utilities are going to operate the batteries within their system and give first-use to Bradley Lake power. Chair Pruhs requested additional clarification regarding the ownership of the fixed assets. Mr. Thayer discussed that primarily Homer Electric Association (HEA), AEA, Chugach Electric Association (CEA), and Golden Valley Electric Association (GVEA) own the batteries. Chair Pruhs asked how it works from a legal and fiduciary standpoint that AEA will own the improvements to fixed assets that are owned by an entity other than AEA. Mr. Thayer requested Stefan Saldanha, Department of Law, to respond. Mr. Saldanha expressed the understanding is that most of the upgrades to the transmission line will be a new line right next to the existing line, which makes the upgrade a hard asset. Chair Pruhs asked if the upgrade is a new line on a fixed asset that is owned by a third-party. He asked if AEA would be leasing for $1 a year. Mr. Saldanha agreed. He noted that the pole would be owned by HEA. The leading idea for the design of the upgraded line is a completely new line using HEA’s right-of-way. HEA will keep the right-of-way and through a letter of intent will allow AEA to use the right-of-way. All of the new infrastructure will be owned by the Project. Chair Pruhs asked if the upgrades are a comingling of assets. Mr. Saldanha agreed. Chair Pruhs discussed a hypothetical scenario and asked what would happen if there was another fire on the HEA right-of-way with an AEA asset. Mr. Saldanha explained that the access to the right-of-way should be clear in that case. The current letter of intent includes a preliminary agreement on the right-of-way management. The definitive agreement has not been negotiated. Alaska Energy Authority Page 5 of 15 Vice-Chair Kendig asked if the letter of intent is available to review at this meeting. Mr. Thayer noted that he does not have the letter of intent with him. Vice-Chair Kendig asked if there are any plans for further negotiations regarding the letter of intent. He discussed that if the right-of-way stays with HEA, then the possibility remains that the previous issues will occur again. Vice-Chair Kendig asked if the right-of-way will be renegotiated after the design phase is completed. Mr. Saldanha explained that there is a possibility for renegotiation, but at the moment, HEA wants to keep the right-of-way. Commissioner Sande asked Mr. Thayer to explain the design scenario that would necessitate taking down the existing line. Mr. Thayer explained that doubling the size of the line may require new poles. Chair Pruhs expressed his concern regarding the conflicts that can and will happen where there are multiple owners on a common right-of-way. He asked if it is correct that if a utility has an ownership stake, there is a mark-up on their cost of operation. Mr. Thayer agreed there would be a cost of operation, the wheeling rate. Chair Pruhs asked if administrative costs are included within the wheeling rate. Mr. Thayer agreed. Chair Pruhs discussed the costs and administrative costs associated with the SSQ Line owned by AEA. He asked why there is not a wheeling rate on the SSQ Line owned asset. Mr. Thayer explained that it has not been a government practice to set money aside for projects. Chair Pruhs discussed the utilities on either side of the SSQ Line have wheeling rates. He requested a White Paper on the justification that AEA’s SSQ Line does not have a wheeling rate and the utility lines on either side of the SSQ Line have wheeling rates. Chair Pruhs commented that there is an economic consequence to AEA for owning the SSQ Line asset and AEA is not being compensated for the costs. He noted that the discussion today costs AEA. Mr. Thayer explained that the costs are charged to the Project and paid by the utilities. The utilities reimburse AEA for costs associated with Bradley Lake, the SSQ Line, and the Intertie, including engineering costs, Mr. Thayer’s time, and accounting time. Chair Pruhs noted that the White Paper request is particular to ownership costs, and the comparison with the nonprofit utilities and how they treat ownership costs. Chair Pruhs discussed the importance of understanding ownership and operation of an asset and understanding the economic benefits to the public. He noted another aspect of ownership is the liability side and he wants to make sure that the AEA will have a hold harmless within the program for any reason such as failure, damage, bodily injury, or forest fires. Mr. Thayer referred to the informational map included in the documents which shows the transmission lines from Homer to Fairbanks and delineates the work related to each memo. He noted that also included in the documents is a recent resolution by the BPMC supporting the required project work. i. May 19, 2022 Memo – Soldotna to Sterling Transmission Line Upgrade ii. April 27, 2022 Memo – BESS Purchase Alaska Energy Authority Page 6 of 15 iii. March 7, 2022 Memo – Bradley Junction to Soldotna Transmission Line Upgrade iv. January 24, 2022 Memo – D. Hittle & Associates Report on repair and replacement of infrastructure and equipment v. November 10, 2021 Memo – Sterling to Quartz Creek Transmission Line Upgrade Chair Pruhs requested Mr. Thayer discuss the battery purchases, battery energy storage systems (BESS), for the record. Mr. Thayer indicated that the utilities are currently evaluating the type, size, and life of the battery selection based on their needs. Mr. Thayer showed the $115 million Battery Energy Storage Systems for Grid Stabilization line item on the page titled BPMC Special Committee Projects. The total cost for the first tranche is $270 million. He noted that the interest rate changes have affected the amount of work that can be completed from last year’s forecasted work. Mr. Thayer discussed that applications for $60 million of formula funding are available for grid resiliency and redundancy. Chair Pruhs commented that the budgeted amount for the batteries is a large portion of the total costs. He noted that a battery is a shorter-term asset that will need to be replaced. Mr. Thayer indicated that batteries will be added in Anchorage in Kenai, and the batteries will be replaced in Fairbanks. Mr. Thayer discussed that the typical life of the batteries is 20 years. Chair Pruhs requested that the battery financing term is less than the useful life of the battery. He does not want a 20-year note on a 20-year battery. Mr. Thayer agreed. There were no additional questions. 8. DIRECTOR COMMENTS A. Response to Board Questions Mr. Thayer discussed that the Power Plant Database overview will be presented at the June 29, 2022 Board meeting. There were no questions. B. AEA Budget Update i. Operating – FY23 ii. Capital – FY23 Mr. Thayer discussed the budgets included in the packet. He commented that AEA had a banner year in Juneau. There were no changes in the operating budget from the previous several years. He reviewed the capital budget; Bulk fuel Upgrades at $5.5 million and a federal match of $7.5 million, Electrical Emergencies Programs at $200,000, Round XIV Renewable Energy Project Grants at $15 million, Rural Power Systems Upgrades at $10 million and a federal match of $10 million, Strategic Plan for Railbelt Assets at $2.5 million, Electrical Vehicle Infrastructure Plan at $1.5 million, interest from Volkswagen Settlement at $400,000, and Grid Modernization, Reliability, Resiliency and Transmission Projects at $250,000. Alaska Energy Authority Page 7 of 15 Mr. Thayer discussed the Infrastructure Investment and Jobs Act (IIJA) funds include Grid and Transmission Resilience federal funding at $12.1 million per year for five years. This requires a State match of $1.8 million. Mr. Thayer explained the timeline. Four new PCN positions were approved by the Legislature and will be added with this appropriation. Chair Pruhs asked if the new positions are separate from the typical organizational chart. Mr. Thayer noted that the positions are AIDEA employees who are designated AEA by fiscal note. The positions will be filled and added into the flowchart. The funding for the positions is in place for five years. Chair Pruhs asked if the employees will be told that there is five years’ of funding for their positions during the project time, subject to future projects. Mr. Thayer explained that they will be State employees and additional work or additional IIJA funding is not precluded at this time. Commissioner Sande commented on the excellent job of Mr. Thayer and staff related to the budget, the IIJA funds and questions. Commissioner Sande stated that she would not do anything to deter applicants, given the current status of personnel, recruitment and the internal barriers within State government hiring. She cautioned that the conversation of the five years’ of funding could cause a good applicant to step-away from a position. She acknowledged that currently, AEA cannot be nimble or competitive with pay. Mr. Thayer commented that those four employees might move within the organization. He noted the $200 million in upgrades that have not been reflected in personnel. Chair Pruhs stated that he is not questioning the justification. He discussed the transparency that the four positions will be hired as project-related employees and that there will be opportunities as things change in the future. Chair Pruhs commented that he views the five years dedicated funding as a positive aspect when hiring for these positions. Mr. Thayer reiterated that the Governor and the Legislature chose to make the four positions full-time public employees. Mr. Fogle asked if the PCN positions will expire after the project work is complete. Mr. Thayer indicated the positions will not expire in five years. He explained that AEA is currently on a rapid growth curve, but if the workflow lessens, then the organization will change and it is possible that employees could be laid off or moved to another PCN position to meet the needs of the organization. Chair Pruhs expressed his opinion that contract employee positions attract better quality people because contract positions pay more. He does not believe that the State of Alaska has the bandwidth under the PCN positions to attract high-caliber people for projects. Mr. Thayer expressed that State employees are dedicated professionals and that being in the private sector does not mean that the person is more competent. Mr. Thayer requested a recess. Chair Pruhs denied the request. Mr. Thayer told Chair Pruhs not to impugn public employees and the employees of the Agency. Chair Pruhs explained that he is talking about advertising for additional employees related to projects. Mr. Mitchell commented that this type of project funding is the normal course of business within DOT-based project work. He believes that all of Chair Pruhs’ viewpoints were represented and Alaska Energy Authority Page 8 of 15 considered during the legislative process when they determined that the PCN approach, rather than the contract approach, was the best implementation. Mr. Mitchell agreed that it is difficult in this market to find qualified labor and more flexibility can help attract qualified personnel. He believes there are still individuals who are interested in year-round work and who would be interested in the security of working for AEA for five years. Chair Pruhs commented that he believes that would have been the scenario two years ago. He feels that today, the private companies are having a difficult time filling positions even with their high salary offers. Chair Pruhs discussed that he wants to find a way to attract people to the projects so that AEA looks good and does a good job. He expressed his concern regarding the PCN positions and its constraints. Mr. Mitchell commented that the plan will go forward and if the positions are not filled with qualified people, then the discussion can occur during next year’s budget to switch the position from a personnel line item to a contract line item in order to accomplish the mission. Mr. Thayer agreed that finding qualified people is an issue. Chair Pruhs asked for input from Commissioner Sande. Commissioner Sande expressed her understanding that Chair Pruhs’ concerns were focused on AEA’s ability to be competitive and she believes that Chair Pruhs wants to assist the Agency in finding the best qualified applicants for the positions. Chair Pruhs commented that the State of Alaska is fortunate to have the high price of oil and to have funding from the federal government. The challenges include obtaining equipment, materials, and people. He noted the focus is on managing the challenges. Commissioner Sande discussed that there will be constraints with economic development if the workforce issues are not resolved. The workforce issues are a priority for the State. She noted the concern that using the techniques of recruiting from the Lower 48 may not be available in certain areas and that other options may have to be explored. Chair Pruhs commented that a challenge for workforce development is that they do not have people to train. He expressed concern that it will draw out more than five years to fill the positions and to get the work completed. Mr. Fogle noted that the money that is available now will be affected by inflation. Chair Pruhs agreed that the deliverable will be less. The discussion continued regarding workforce challenges. Chair Pruhs expressed his goal to ensure that Mr. Thayer has the tools for AEA to successfully execute the program and provide a deliverable to the public. Mr. Fogle suggested that the Executive Directors of AIDEA and AEA should have the ability and flexibility to designate the positions either as PCN or contract employee, depending on the circumstance. Chair Pruhs agreed and Commissioner Sande agreed. Commissioner Sande believes the Board has a responsibility to assist in every way to reduce barriers to hiring. Mr. Fogle asked if the 27 renewable energy projects will be completed in the next year. Mr. Thayer Alaska Energy Authority Page 9 of 15 noted that the projects will begin next year and they have a two to five-year span. Mr. Fogle asked if the 27 projects have community matching funds. Mr. Thayer explained that the match ranges from 20% to 100%. Mr. Fogle expressed his belief that there will be cost overruns because of inflation. Mr. Thayer noted that the funding through the grant is the only amount available. Cost overruns are not paid for by the grant. Mr. Fogle asked if the communities know they will have to pay for any cost overruns. Mr. Thayer agreed. Commissioner Sande informed Mr. Thayer that she has committed his participation and further conversations about infrastructure, operating and maintenance. Mr. Thayer agreed. Mr. Thayer discussed another tranche in the IIJA funding of $3.6 million, including the State Energy Program and the Energy Efficiency Conservation Block Grant. The IIJA Electric Vehicle Infrastructure is a joint action with DOT for $7.7 million, with a total of $50 million over the next five years. In addition, there is competitive funding of $2.5 billion dollars. Mr. Thayer commented on the challenge and difficulty of finding a grant writer. Mr. Fogle requested clarification regarding the relationship of the Electrical Vehicle Infrastructure Plan of $1.5 million and the Electric Vehicle Infrastructure funding of $7.7 million. Mr. Thayer explained that the planning funds of $1.5 million will be used to justify the plan for the total $50 million over the next five years. The funds will be used for the State highway system and the marine highway system. It will fund electric vehicle charging stations and upgrades to community power and systems in order to meet the federal requirements and national standards. The application is lengthy, consisting of approximately 200 pages, and is due August 1. AEA has already started the application process because of the previous program that funded nine charging stations. Mr. Fogle asked if any charging stations have been placed on the Alaska-Canadian Highway (ALCAN). Mr. Thayer agreed. Mr. Fogle asked if private sector stations such as Chevron and Tesoro are looking to add electrical charging stations next to their gas pumps, rather than the government funding the cross-country network. Mr. Thayer discussed that independent chargers are being established. He noted that one of AEA’s solicitations is to find the private sector interest for the charging stations. The charging stations will be owned and operated by the site host. The technology this year changed dramatically from the technology available last year. Mr. Thayer discussed that the charging stations have the capability of taking a credit card. The price is determined by the individual site. Mr. Thayer gave the example that the charging stations at the State Office building in the parking garage required that a credit card is used because of the associated cost. The cost is approximately $1.50 an hour. Mr. Thayer discussed the Endowment line item of Power Cost Equalization of $32 million. There was an increase in available kilowatts to rural Alaska from 500 kW to 750 kW, which is an additional fiscal note of $15 million in this budget category. The Endowment earned $150 million last year and $50 million is being returned after the cascade of PCE, community assistance, and the $25 million available for excess earnings toward powerhouses and the Renewable Energy Program. Chair Pruhs asked for the balance amount. Mr. Thayer noted it is approximately $1.1 billion. Discussion occurred that the year-to-date returns are trending approximately negative 1%. Alaska Energy Authority Page 10 of 15 Chair Pruhs noted that a drop in 1% is not bad compared to 8% inflation, and 50% for the price of fuel. He believes there will be pressure on the fund next year with the average of fuel at $11 to $16 per gallon. Chair Pruhs requested Mr. Thayer to discuss micro-nuclear reactors. Mr. Thayer informed that the Governor passed a bill regarding micro-nuclear reactors. He explained that due to the Cold War, Alaska had legislation and statutes that did not allow for nuclear. The bill removed those statutes for small targeted nuclear projects. The first small project test case is at Eielson Air Force Base and should be fully operational in 2027. Mr. Thayer noted that many remote mines are looking 10 years in the future for the option of micro-nuclear reactors. Other rural towns are looking at this option for 20 years in the future. Mr. Thayer advised that the Idaho National Laboratory specializes in nuclear research. They are working with the Governor’s Office and he met with them on Monday. AEA is participating in the Nuclear Working Group. The anticipation is that micro-nuclear reactors will solve problems, and it will take time and much testing to implement. Chair Pruhs asked if it would be advantageous for AEA to assign a group to become highly educated about the business during the implementation at Eielson. He believes this would be a great opportunity for AEA to understand the process. Mr. Thayer agreed and informed that AEA is a member of the Working Group for Eielson and staff is assigned. Chair Pruhs requested that a 10-year plan is developed for AEA to gain the position of knowledge within the state regarding micro-nuclear as AEA regarding hydrocarbon power generation. Mr. Thayer agreed. Mr. Fogle asked if the waste is going to be shipped to Utah. Mr. Thayer indicated that those details are all part of the discussions. There were no additional questions. C. Bradley Lake Hydroelectric update – Battle Creek Diversion Project Callback Acceptance Mr. Thayer discussed that GVEA did not participate in the original construction of the Battle Creek Diversion Project. The contract contains a provision that allows GVEA to buy-in at a later date. GVEA exercised that right to buy-in at a 16.9% share for approximately $1.88 million, which was refunded to the participating utilities. The call-back is complete. Mr. Fogle asked if GVEA is going to buy into Dixon Diversion. Mr. Thayer agreed that the next step is for GVEA to review that option. Mr. Fogle asked if the buy-in was at a set rate or a premium. Mr. Thayer noted that the set rate was an agreed upon amount within the agreement. There were no additional questions. D. Dixon Diversion Project Update Mr. Thayer advised that the BPMC approved the budget funding for the Dixon Diversion Project. The BPMC requested and received $1 million from the REF. The BPMC matched the funds. AEA filed with Federal Energy Regulatory Commission (FERC). The first agency public meeting is set to be in Homer on June 14. Contractors are being procured for the environmental and engineering work. All of the Railbelt utilities are participating in the feasibility of the project. This Alaska Energy Authority Page 11 of 15 is the largest hydro project in Alaska in the last 30 years, since the construction of Bradley Lake. There were no questions. E. Hydro Update Mr. Thayer discussed the included memorandum from Bryan Carey, AEA Director of Owned Assets, that provides the updates on the major hydro projects, including Cordova Hydro Storage Assessment Project, Fivemile Creek Hydroelectric Project, Nuyakuk River Hydroelectric Project, Thayer Lake, and the Water Supply Creek Hydro Final Design. Chair Pruhs asked if Susitna-Watana is included in this information. Mr. Thayer noted Susitna- Watana is not included in this update because it is not an active funded project. Chair Pruhs asked if the Dixon Diversion Project is considered active. Mr. Thayer agreed. Chair Pruhs asked what is necessary for Susitna-Watana to become active. Mr. Thayer stated there is no funding assigned to Susitna-Watana. The funding discussions at the end of the legislative session did not result in any funding. Chair Pruhs asked if the money that was spent is off the books. Mr. Thayer informed that the $200 million is still being carried on the books and there have been no write-offs. Chair Pruhs asked when that accounting function will occur. Mr. Thayer advised that staff has a conversation with the auditors every year on the activity status. Chair Pruhs asked Mr. Thayer’s opinion if the conversations regarding moving the project forward will ever materialize between the Administration and the Legislature. Mr. Thayer believes it would solve problems because it would take the Railbelt to 50% to 60% renewable energy. The utilities would have an interest in using about 450 megawatts of the approximately 600 megawatts produced. This leaves excess capacity for industry. The cost estimates were at .06 cents, without inflation. There are interested parties in building, operating, and possibly owning the project. It would take approximately $80 million to $100 million to obtain a FERC license. Chair Pruhs asked Dona Keppers, AEA, what percentage of the balance sheet does the $200 million represent. Ms. Keppers indicated that she can provide that answer to Chair Pruhs. Mr. Fogle asked if the utilities can come together to finance the project. Mr. Thayer discussed that this is a State project. The State can derisk the project by finishing the FERC permits. The State has invested $200 million in the permits. Ongoing work includes focusing on BLM issues with DNR regarding ownership of some of the land and transfer to the State. This would reduce lease payments on the land. Mr. Fogle asked if the State is the only entity that can get the FERC license. Chair Pruhs noted that once a license is obtained, then there are options as to what entities can build and operate the project. Mr. Fogle asked if there is a way that AIDEA can float a bond to have AEA finish the FERC licensing. Chair Pruhs indicated that there has to be support from others besides AEA. Mr. Thayer noted that the last time Susitna-Watana was before the Legislature, it passed unanimously. He cannot say that would be the case today and there will be a new Legislature in January. Mr. Thayer discussed that there are adamant supporters of the project and he believes that there is overwhelming support for the project. AEA is assigned responsibility per statute for obtaining the FERC license and developing the project. Alaska Energy Authority Page 12 of 15 Chair Pruhs asked if it would help if AEA created a line item in the budget for the work that is being completed on the land issues. Mr. Thayer agreed. He stated that conversation can occur in the fall when the budget is being developed. The cost estimates also need to be funded and updated because the world has changed since 2014. If the cost of power remains at .06 cents or .07 cents, then it is better than the current cost. If the cost of power is at .20 cents, then it becomes a dead issue. Mr. Fogle asked if the Permanent Fund could invest in Susitna-Watana. Mr. Mitchell commented that the Permanent Fund has an allocation of approximately $200 million for in-state investments. He noted that it would be difficult for the Permanent Fund to take on the project due to concentration issues, but it could be considered. There has been a historical reluctance for the Permanent Fund to be a development fund for Alaska because of Alberta’s lack of success with economic development efforts within their permanent fund. Chair Pruhs noted that the FERC permit has to be obtained before any conversations begin with the Permanent Fund regarding the multiple ways that they could discuss financing the project. Mr. Fogle asked for suggestions on how to obtain the $100 million to complete the FERC licensing without going to the Legislature. Mr. Thayer explained that the State is the owner and the Legislature has to provide the financing for the FERC licensing. Mr. Mitchell added that only a special category of high-risk investors would make an investment of at-risk capital for high return expectations. Chair Pruhs commented on the challenges that Alaska has had with spending money for engineering and environmental studies on mostly good projects that did not come to fruition due to the political or economic environment. Chair Pruhs expressed utmost concern that the auditors will make AEA write off the money spent. He reiterated the strategic standpoint to keep the project viable and to determine how to get the funding to complete the FERC licensing. Mr. Thayer discussed that the Board passed a resolution regarding owned assets that was used as part of the negotiation features with the Governor’s Office and with the Legislature to get that funding approved. He agreed that putting forward a Board resolution that identifies the need to update cost estimates and analysis for Susitna-Watana would be a helpful foundation in negotiations with the Governor’s Office during the next budget cycle. Chair Pruhs expressed his support. He believes this would preserve the asset, providing concurrence that the project is viable and warrants additional funding. Mr. Mitchell commented that it would be interesting to have the information available in the report to determine the cost per kWh in order to understand the viability. Mr. Thayer advised that information and economic evaluation is available, and he will provide the information. There were no additional questions. Alaska Energy Authority Page 13 of 15 F. VW Settlement Update Mr. Thayer informed that the Volkswagen Settlement update is included in the packet. The Legislature will allow the $400,000 in interest to be used for Diesel Emission Reduction Act (DERA) projects in rural Alaska for powerhouse upgrades. G. Electric Vehicle (EV) Update Mr. Thayer noted this information was previously reviewed. The applications will be provided in the next Board packet. Public outreach is occurring and is one of the components for the EV infrastructure. Mr. Fogle asked if the Electric Vehicle Association is happy with AEA. Mr. Thayer believes they are. He noted that they are part of the process and are attending the Working Group meetings. H. Electric Utility Relief Program (EURP) Update Mr. Thayer discussed the Electric Utility Relief Program utilized COVID-19 funding through the Department of Commerce and was administered by AEA. Approximately $3 million of the available $7 million was disbursed. This is one of many relief program options for reimbursements to utilities for COVID-19 residential debt. Mr. Thayer informed that Round 3 will begin next week. The relief time period will be from April 30, 2021 to December 21, 2021. The federal funding disbursement period has been extended a couple of years beyond the end of 2022. Discussion with Department of Commerce will occur after Round 3 to determine how the remaining balance will be handled. Commissioner Sande commented that Alaska is not the only state that is experiencing similar situations with multiple relief programs. She asked if the federal government has received push-back to try to change or loosen any of those rules in order to access a bigger portion of the funding. Mr. Thayer noted that the federal government extended of the usage years. He suggested that Commissioner Sande have a conversation with the Governor’s Office to determine if they want to utilize the remaining funds for another COVID-19 related program that is within the parameters of the federal guidance. There were no additional questions. I. Village Energy Efficiency Program (VEEP) Update Mr. Thayer informed that the VEEP Program had approximately $567,000 available from various sources. The four communities who have eligible projects and received funding are Saint George, Port Heiden, Galena, and Gakona. The eligible projects on the provided list that received no funding total approximately $1.8 million. Mr. Thayer discussed that there will be a review of using the $2 million federal monies to fund those. The map provided shows the rural communities of the projects. J. Power Cost Equalization Update Alaska Energy Authority Page 14 of 15 Mr. Thayer reviewed the earlier discussion about the increase from 500 kW to 750 kW. There are now 15 communities that need to become compliant by August 31, 2022. Staff continues to work with the communities and with Alaska Power Association to get the community submissions out of the delinquent status. K. Legislative Update Mr. Thayer discussed that many of the recent responses to legislators are included in the Board packet. L. Community Outreach Mr. Thayer informed that he will be joining Alan Weitzner, AIDEA, for continued community outreach events in urban and rural communities. The schedule will be provided at the next meeting. M. Articles of Interest – Included in packet. N. Next Regularly Scheduled AEA Board Meeting Wednesday, June 29, 2022 Mr. Thayer expressed appreciation to Brandy Dixon, AEA, for her excellent efforts in coordinating with the Governor’s Office on the Governor’s three-day Energy Sustainability Conference that is underway. Mr. Thayer noted that he will be moderating a panel today, and Mr. Weitzner moderated panels yesterday. The attendees and participants include over 500 people from as far away as Australia and Norway. Mr. Thayer discussed that there has been good debate at the conference on many issues regarding sustainability. He commented that the Governor is very pleased with the conference. Mr. Thayer announced that TW Patch, AEA Director of Planning, will be retiring for the second time on June 1, 2022. He was brought out of retirement to serve in his current role. Mr. Thayer invited Mr. Patch to provide comments. Mr. Patch offered his well wishes and words of advice to Board members. Mr. Thayer informed that AEA and the Governor’s Office are extending a trip to Bradley Lake and Battle Creek the day before the next Board meeting to the new Board members; Mr. Mitchell, Mr. Eledge, and Mr. Vivlamore. Mr. Thayer thanked Ms. Bertolini for her efforts for today’s meeting. 9. EXECUTIVE SESSION: NONE 10. BOARD COMMENTS Chair Pruhs expressed appreciation to Mr. Thayer and staff. Alaska Energy Authority Page 15 of 15 Commissioner Sande commended the team for all of their work. She noted that before she became Commissioner, she did not have a full appreciation of the staff’s tremendous involvement in responding to requests from legislators and producing information to the legislators. She thanked staff for their impressive assistance during the session. Commissioner Sande expressed appreciation and respect to Mr. Patch on behalf of the Board. 11. ADJOURNMENT There being no further business of the Board, the AEA meeting adjourned at 10:33 am. ___________________________________________________ Curtis W. Thayer, Executive Director / Secretary 813 W Northern Lights Blvd, Anchorage, AK 99503  Phone: (907) 771-3000  Fax: (907) 771-3044  Email: info@akenergyauthority.org REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG MEMORANDUM TO: Curtis Thayer, Executive Director FROM: Dona B. Keppers, Chief Financial Officer DATE: June 29, 2022 RE: SSQ Line Power Revenue Bond, 10th Series Debt Prepayment to AIDEA June 29, 2022 The Alaska Energy Authority holds a $17,000,000 Power Revenue Bond, Tenth Series 2020 under Resolution No 2020-08 pursuant to the original Power Revenue Bond Resolution No. 1989-12, and Trust Agreement and Loan Agreement (the “Agreements”) dated and executed on December 17, 2020, with AIDEA. The Loan Agreement contains Section 3.05 for an Optional Prepayment. The BPMC approved the use of the remaining FY22 Bradley Lake Excess Payment as a prepayment towards the SSQ Line Debt. On April 29, 2022, the Alaska Energy Authority (AEA) as the Borrower, issued a Prepayment Notice to AIDEA indicating the intent to prepay a portion of principal, interest and associated loan fees prior to June 30, 2022 on the SSQ Line Debt. On June 29, 2022, AEA paid $11,499,758.96 to AIDEA as the Registered Owner under the Loan Agreement: Payment 6/29/2022 Interest: $ 293,424.66 Principal: $ 10,940,000.00 Prepayment Penalty: $ 266,334.30 Total: $ 11,499,758.96 Outstanding Loan Balance At June 30, 2022 $ 6,060,000.00 As a result of this transaction, the outstanding principal balance will be $6,060,000.00, where the Borrower will be responsible for revised principal and interest payments per the Loan Agreement through July of 2040. Page 1 of 3 – BPMC RESOLUTION 22-03 PROVIDING FOR ADVANCED PAYMENT FOR REQUIRED PROJECT WORK BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE RESOLUTION NO. 22- 03 PROVIDING FOR ADVANCE PAYMENT FOR REQUIRED PROJECT WORK INTRODUCTION The Bradley Lake Project Management Committee (“BPMC”) is responsible for the management, operation, maintenance, and improvement of the Bradley Lake Hydroelectric Project (the “Project”), subject to the non-delegable duties of the Alaska Energy Authority (the “Authority”). At its December 10, 2021 meeting, the BPMC approved Resolution No. 21 -02 that endorsed a plan to unconstrain the benefits of the Bradley Lake Hydroelectric Project (the “Project”) through the development of a series of projects, and related financing to increase the energy available to the Project’s utility purchases (“Purchasers”). The recent purchase by the Authority of the Sterling Substation to Quartz Creek Substation transmission line (“SSQ Line”) and its related financing is o ne of the initial steps taken by the BPMC and the Authority to resolve some of the Project’s transmission-related issues. Shovel-ready projects like the SSQ Line are designed to optimize the use of the Project with the goal being to minimize costs and stabilize rates for consumers while providing jobs and other economic development opportunities from the Kenai to Fairbanks; without a burden on the State’s budget. The BPMC and the Authority have determined that it is in the best interest of the Project, the Purchasers and the customers served by the Project to advance pay certain debt obligations on the SSQ Line transaction. PURPOSE OF BPMC RESOLUTION 22-03 BPMC Resolution 22-03 sets forth the intent of the BPMC to allow the prepayment of certain debt obligations that were necessary to purchase the SSQ Line. BPMC RESOLUTION NO. 22-03 WHEREAS, the Bradley Lake Project Management Committee (“BPMC”) receives its authority under the Bradley Lake Hydroelectric Project A greement for the Sale and Purchase of Electric Power (“Power Sales Agreement”). Page 2 of 3 – BPMC RESOLUTION 22-03 PROVIDING FOR ADVANCED PAYMENT FOR REQUIRED PROJECT WORK WHEREAS, the BPMC is responsible for the management, operation, maintenance, and improvement of the Bradley Lake Hydroelectric Project (the “Project”), subject to the non-delegable duties of the Alaska Energy Authority (the “Authority”). WHEREAS, the Project provides some of the lowest cost renewable energy on the Railbelt Electric System (“System”). WHEREAS, the BPMC has determined that it is prepared to take specific steps in order to begin the improvements and upgrades to the System that will cost effectively enable the development of resources that will enhance the deliverability of energy produced by the Project. WHEREAS, BPMC Resolution No. 20-05 and Resolution No. 20-06 collectively authorized the purchase of certain transmission rights and facilities including the Sterling to Quartz Creek transmission line (“SSQ Line”), which became part of the Project. WHEREAS the Department of Law (“DOL”) issued a memorandum dated November 10, 2020, and found that the definition of Required Project Work is broad enough to allow for the SSQ Line upgrades to be considered Required Project Work under the Power Sales Agreement, confirming the BPMC’s proposals. WHEREAS, the BPMC believes the transaction involving the purchase of the SSQ Line was an important initial step to enhance the deliverability of energy produced by the Project. WHEREAS, in order to advance the upgrade to the SSQ line, the BPMC considered and approved a budget amendment to its fiscal year 2022 budget providing a prepayment on the debt obligations for the SSQ Line. THEREFORE, BE IT RESOLVED THAT, the aforementioned comments and Recitals are incorporated and made part of this Resolution No. 22-03; BE IT ALSO RESOLVED THAT, Resolution 21-02 and its Recitals are incorporated into this Resolution 22-03 as if fully set forth; BE IT ALSO RESOLVED THAT, as part of the BPMC’s responsibilities for the management and improvement of the Project, the BPMC will use the funds available for essential and agreed-upon Required Project Work to fund the advanced debt payment; BE IT ALSO RESOLVED THAT, the BPMC approves the fiscal year 2022 budget amendment to provide the advanced debt payment, that such payment is considered debt service to be included in Annual Project costs, and such a payment be made before the end of fiscal year 2022; 25th 813 W Northern Lights Blvd, Anchorage, AK 99503  Phone: (907) 771-3000  Fax: (907) 771-3044  Email: info@akenergyauthority.org REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG RGYAUTHORITY.ORG Board Questions from May 25, 2022 AEA Board Meeting 1. AEA Provide an overview / demonstration of the Rural Power House Assessment. (outstanding from April 13, 2022 Board Meeting) 2. White Paper regarding zero administrative costs charged for owned assets. Include comparison with non-profits and the economic benefit for the public (i.e. reliability, monthly energy costs, etc). of owning. – ON HOLD 3. Explore if any Board action (Resolution?) may help preserve Su-Wa asset and creates the Board support for Legislature (Juneau) to consume. – ON HOLD 4. Provide Cost per kwh related to hydro update. Railbelt Electric Utilities - 2021 Reported Asset ValuesUtility Plant CategoryCEA1GVEA HEA/AEEC MEAIntangible 9,306,358$ 913,132$ Generation 837,345,143$ 603,518,621$ 242,572,051$ 339,814,633$ Transmission 346,398,832$ 151,830,021$ 66,107,152$ 91,131,850$ Distribution 496,019,140$ 274,651,627$ 255,463,496$ 340,390,442$ General 78,873,995$ 82,127,058$ 32,568,015$ 32,764,711$ Unclassified electric plant in service 128,891,974$ 272,899$ 4,255,748$ 2,894,148$ Experimental plant unclassified -$ -$ -$ Less Electric Plant Sold -$ -$ -$ Beluga River Natural Gas Field 186,903,860$ -$ -$ Plant Acquisition and adjustment -$ 22,698,956$ -$ -$ Other 1,828,410$ -$ -$ Construction Work in Progress (CWIP) 34,253,304$ 14,003,605$ 43,262,892$ 11,441,830$ Plant Held for Future Use -$ . 1,141,627$ 252,657$ Leased to Others -$ 1,715,056$ -$ Acquisition Adjustments -$ 7,474,677$ -$ Total Utility Plant 2,119,821,016$ 1,149,102,787$ 655,473,846$ 818,690,271$ Notes:1CEA aquired ML&P in October 2020Source: 2021 Railbelt Utility Regulatory Commission of Alaska (RCA) Annual Report Filings Railbelt Electric Utilities - 2020 Reported Asset ValuesUtility Plant Category CEA GVEA HEA/AEEC MEAML&P1Intangible 8,460,377$ -$ 913,132$ -$ -$ Generation 837,186,723$ 579,654,524$ 240,672,215$ 339,795,992$ -$ Transmission 353,242,733$ 149,871,542$ 66,107,152$ 80,003,410$ -$ Distribution 495,385,923$ 272,622,285$ 251,507,453$ 326,452,911$ -$ General 76,273,775$ 81,437,659$ 33,708,949$ 30,201,790$ -$ Unclassified electric plant in service 105,881,169$ -$ 3,966,374$ 6,058,824$ -$ Experimental plant unclassified -$ -$ -$ -$ -$ Less Electric Plant Sold -$ -$ -$ -$ -$ Beluga River Natural Gas Field2179,729,938$ -$ -$ -$ -$ Plant Acquisition and adjustment -$ 22,698,956$ -$ -$ -$ Other1,828,409$ -$ -$ -$ -$ Construction Work in Progress (CWIP) 38,075,575$ 19,386,750$ 16,008,892$ 15,367,588$ -$ Plant Held for Future Use -$ -$ 1,141,626$ 252,657$ -$ Leased to Others -$ -$ 1,714,708$ -$ -$ Acquisition Adjustments -$ -$ 7,474,677$ -$ -$ Total Utility Plant 2,096,064,622$ 1,125,671,716$ 623,215,178$ 798,133,172$ -$ Source: 2020 Railbelt Utility Regulatory Commission of Alaska (RCA) Annual Report FilingsNotes:1ML&P requested extensions with the RCA. Annual Reports expected to available on 5/28/2021 - not yet posted as of 6/3/20212Note on page 37 of CEA's 2021 RCA report states that 2020 presentation of BRU reserves was changed to $179,729,938 in the 2021 financial statements.As of 6/3/2021ML&P - Not yet filed Railbelt Electric Utilities - 2019 Reported Asset ValuesUtility Plant CategoryCEA GVEA HEA/AEEC MEA ML&PIntangible 6,148,200$ -$ 913,132$ -$ 30,307,071$ Generation 423,589,672$ 575,711,857$ 240,565,516$ 339,628,375$ 561,203,140$ Transmission 298,211,033$ 147,416,178$ 69,863,834$ 75,370,456$ 72,971,246$ Distribution 333,594,738$ 266,568,096$ 249,977,726$ 320,375,863$ 244,166,275$ General 58,614,421$ 79,922,753$ 33,196,433$ 28,639,340$ 42,466,443$ Unclassified electric plant in service 71,941,610$ -$ -$ 1,629,985$ -$ Experimental plant unclassified -$ -$ -$ -$ -$ Less Electric Plant Sold -$ -$ -$ -$ -$ Beluga River Natural Gas Field 48,595,009$ -$ -$ -$ -$ Plant Acquisition and adjustment-$ 22,698,956$ -$ -$ -$ Other 1,828,409$ -$ -$ -$ -$ Construction Work in Progress (CWIP) 16,966,608$ 14,062,797$ 6,003,906$ 13,659,608$ 29,967,785$ Plant Held for Future Use -$ -$ 1,141,626$ 252,657$ -$ Leased to Others -$ -$ 1,714,708$ -$ -$ Acquisition Adjustments -$ -$ 7,474,677$ -$ -$ Total Utility Plant 1,259,489,700$ 1,106,380,637$ 610,851,558$ 779,556,284$ 981,081,960$ Source: 2019 Railbelt Utility Regulatory Commission of Alaska (RCA) Annual Report Filings Table 1Historical Residential Service Electric Rate Summary, by Utility, 2018‐2021Utility2018 2019 2020 2021 2018‐2019, % Change 2019‐2020, % Change 2020‐2021, % ChangeHEA 0.216569$              0.238598$           0.239033$                                 0.239796$                     10.2% 0.2% 0.3%CEA ‐ North (Legacy ML&P) 0.163929$              0.203738$           0.175373$                                 0.162366$                     24.3%‐13.9%‐7.4%CEA ‐ South 0.186889$              0.191168$           0.203863$                                 0.197786$                     2.3% 6.6%‐3.0%GVEA 0.227919$              0.220638$           0.237213$                                 0.257676$                      ‐3.2% 7.5% 8.6%MEA 0.194169$              0.195568$           0.194213$                                 0.196616$                     0.7%‐0.7% 1.2%AEL&P 0.114498$              0.140513$           0.135570$                                 0.119592$                     22.7%‐3.5%‐11.8%Average 0.183996$              0.198371$           0.197544$                                 0.195639$                     7.8%‐0.4%‐1.0%Source: Reg Comm of Alaska (RCA) ‐ Sample Monthly Rates ‐ 2018‐2020 ‐ http://rca.alaska.gov/RCAWeb/RCALibrary/SampleMonthlyRates.aspxTable 2Historical Electrical Utility Rates ‐ Residential Service ‐ 2021, by UtilityItem Assessment Type HEACEA ‐ North (Legacy ML&P)2CEA ‐ South2GVEA MEA AEL&PRegulatory Cost Charge$ per kWh 0.001016$           0.001016$                                 0.001016$                     0.001016$                     0.001016$                     0.001016$                     Cost of Power Adj. Surcharge (COPA) $ per kWh 0.078010$           0.043580$                                 0.04358 0.129690$                     0.068580$                     0.002876$                     Customer Charge monthly flat fee20.00$                  13.62$                                        8.00$                              22.50$                            13.00$                            8.60$                              Energy Charge1$ per kWh 0.16077$             0.11777$                                    0.15319$                        0.12697$                        0.127020$                     0.11570$                        Total Residential Charge$ per kWh 0.239796 0.162366 0.197786 0.257676 0.196616 0.119592Note: 1MEA: Over 1,300 kWh, rate decreases to $0.11422/kWh; AEL&P: off‐peak rate decreases to $0.09512CEA's energy charge includes gross revenue tax, BRU surcharge/credit, and a rate reduction rebate for North district.Source: Utility Websites May 18, 2022Table 2Historical Electrical Utility Rates ‐ Residential Service ‐ 2020, by UtilityItem Assessment Type HEA CEA ‐ North (Legacy ML&P) CEA ‐ South GVEA MEA AEL&PRegulatory Cost Charge$ per kWh 0.000593$           0.000593$                                 0.000593$                     0.000593$                     0.000593$                     0.000593$                     Cost of Power Adj. Surcharge (COPA) $ per kWh 0.077670$           0.022040$                                 0.068190$                     0.109650$                     0.069090$                     0.019277$                     Customer Charge monthly flat fee20.00$                  13.62$                                        8.00$                              22.50$                            13.00$                            8.60$                              Energy Charge1$ per kWh 0.16077$             0.15274$                                    0.13508$                        0.12697$                        0.12453$                        0.11570$                        Total Residential Charge$ per kWh 0.239033 0.175373 0.203863 0.237213 0.194213 0.13557Note: 1MEA: Over 1,300 kWh, rate decreases to $0.11198/kWh; AEL&P: off‐peak rate decreases to $0.0951Source: Reg Comm of Alaska (RCA) ‐ Sample Monthly Rates ‐ 2020 ‐ http://rca.alaska.gov/RCAWeb/Documents/Reports/2020Electric.pdf Table 3Historical Electrical Utility Rates ‐ Residential Service ‐ 2019, by UtilityItem Assessment Type HEA CEA ‐ North (Legacy ML&P) CEA ‐ South GVEA MEA AEL&PRegulatory Cost Charge$ per kWh 0.000978$           0.000978$                                 0.000978$                     0.000978$                     0.000978$                     0.000978$                     Cost of Power Adj. Surcharge (COPA) $ per kWh 0.081530$           0.050020$                                 0.065120$                     0.096390$                     0.074240$                     0.023835$                     Customer Charge monthly flat fee20.00$                  13.62$                                        8.00$                              22.50$                            13.00$                            8.60$                              Energy Charge1$ per kWh 0.15609$             0.15274$                                    0.12507$                        0.12327$                        0.12035$                        0.11570$                        Total Residential Charge$ per kWh 0.238598 0.203738 0.191168 0.220638 0.195568 0.140513Note: 1MEA: Over 1,300 kWh, rate decreases to $0.10281/kWh; AEL&P: off‐peak rate decreases to $0.0951Source: Reg Comm of Alaska (RCA) ‐ Sample Monthly Rates ‐ 2019 ‐ http://rca.alaska.gov/RCAWeb/Documents/Reports/2019Electric.pdfTable 4Historical Electrical Utility Rates ‐ Residential Service ‐ 2018, by UtilityItem Assessment Type HEA CEA ‐ North (Legacy ML&P) CEA ‐ South GVEA MEA AEL&PRegulatory Cost Charge$ per kWh 0.000899$           0.000899$                                 0.000899$                     0.000899$                     0.000899$                     0.000899$                     Cost of Power Adj. Surcharge (COPA) $ per kWh 0.067010$           0.010290$                                 0.068080$                     0.110710$                     0.079200$                     (0.010401)$                    Customer Charge monthly flat fee20.00$                  13.62$                                        8.00$                              17.50$                            13.00$                            9.22$                              Energy Charge1$ per kWh 0.14866$             0.15274$                                    0.11791$                        0.11631$                        0.11407$                        0.12400$                        Total Residential Charge$ per kWh 0.216569$           0.163929$                                 0.186889$                     0.227919$                     0.194169$                     0.114498$                     Note: 1MEA: Over 1,300 kWh, rate decreases to $0.10256/kWh; AEL&P: off‐peak rate decreases to $0.1020Source: Reg Comm of Alaska (RCA) ‐ Sample Monthly Rates ‐ 2018 ‐ http://rca.alaska.gov/RCAWeb/Documents/Reports/2018Electric.pdf Railbelt Utilities: 2019 - 2021 Long-Term DebtUtilityLong-Term Debt (2021)Long-Term Debt (2020)Long-Term Debt (2019)2020-2021, % Change2019-2020, % ChangeLong-Term Debt per MWh Sold (2021)NoteMEA 427,637,485$ 437,182,703$ 449,077,046$ -2.2% -2.6% $532RCA Annual Report Filing for year ending Dec 31, 2021. FERC Form No. 1, Page 28 of PDF, Line 24 (Total Long Term Debt)CEA11,232,514,957$ 1,274,372,521$ 504,704,127$ -3.3% 152.5% $581RCA Annual Report Filing for year ending Dec 31, 2021. FERC Form No. 1, Page 21 of PDF, Line 24 (Total Long Term Debt)GVEA 397,891,451$ 421,081,610$ 431,626,952$ -5.5% -2.4% $333RCA Annual Report Filing for year ending Dec 31, 2021. FERC Form No. 1, Page 21 of PDF, Line 22 (Total Long Term Debt)ML&P - - 507,431,235$ 0.0%HEA/AEEC 316,301,756$ 306,120,368$ 306,158,107$ 3.3% 0.0% $658RCA Annual Report Filing (HEA) for year ending Dec 31, 2021. FERC Form No. 1, Page 19 of PDF, Line 22 (Total Long Term Debt). RCA Annual Report Filing (AEEC) for year ending Dec 31, 2021. FERC Form No. 1, Page 19 of PDF, Line 22 (Total Long Term Debt).Notes:1CEA's significant increase in its long-term debt in 2020 is in majority part owing to CEA's acquisition of ML&P in 2020, financed through bonding Railbelt Utilities Sold Power, 2019-2021Utility2021 (MWh) 2020 (MWh) 2019 (MWh) 2020-2021, % Change 2019-2020, % Change Source PageCEA 2,122,043 1,276,867 1,112,596 66% 15% P. 89 line 12GVEA 1,196,397 1,221,995 1,150,147 -2% 6% p.78HEA/AEEC 480,457 453,019 473,838 6% -4% p. 76 (HEA) and p. 78 (HEA)MEA804,543 789,939 791,052 1.8% -0.1% p.103 & p.108ML&P - 1,154,178 0% 0%Total 4,603,440 3,741,820 4,681,811 23% -20%Source: RCA Electric Utility Annual Report Filings, 2019/2020/2021 Railbelt Utilities: 2019 - 2021 Interest ExpenseUtilityInterest Expense (2021)Interest Expense (2020)Interest Expense (2019) 2020-2021, % Change 2019-2020, % ChangeInterest Expense per MWh Sold (2021)NoteMEA 19,112,867$ 19,815,438$ 20,236,956$ -3.5% -2.1% $24RCA Annual Report Filing for year ending Dec 31, 2021. FERC Form No. 1, Page 33 of PDF, Line 64 (Net Interest Charges)CEA 39,984,494$ 25,173,733$ 21,999,964$ 58.8% 14.4% $19RCA Annual Report Filing for year ending Dec 31, 2021. FERC Form No. 1, Page 28 of PDF, Line 70 (Net Interest Charges)GVEA 16,168,917$ 16,860,329$ 19,111,511$ -4.1% -11.8% $14RCA Annual Report Filing for year ending Dec 31, 2021. FERC Form No. 1, Page 26 of PDF, Line 64 (Net Interest Charges)ML&P1- 20,828,788$ - -RCA Annual Report Filing for year ending Dec 31, 2019. FERC Form No. 1, Page 28 of PDF, Line 64 (Net Interest Charges)HEA/AEEC 11,356,528$ 12,331,221$ 12,900,962$ -7.9% -4.4% $24RCA Annual Report Filing (HEA) for year ending Dec 31, 2021. FERC Form No. 1, Page 23 of PDF, Line 64 (Net Interest Charges). RCA Annual Report Filing (AEEC) for year ending Dec 31, 2021. FERC Form No. 1, Page 24 of PDF, Line 64 (Net Interest Charges).Notes:2019 CEA + ML&P42,828,752$ 1CEA's increase in interest expense in 2021 is in majority part owing to CEA's acquisition of ML&P in 2020, financed through bonding Railbelt Utilities: 2019 - 2021 Proprietary CapitalUtilityProprietary Capital (2021)Proprietary Capital (2020)Proprietary Capital (2019) 2020-2021, % Change 2019-2020, % ChangeProprietary Capital per MWh Sold (2021)NoteMEA 184,095,052$ 173,015,663$ 161,377,927$ 6.4% 7.2% $229RCA Annual Report Filing for year ending Dec 31, 2021. FERC Form No. 1, Page 28 of PDF, Line 14 (Total Proprietary Capital)CEA 206,000,938$ 198,849,413$ 194,466,913$ 3.6% 2.3% $97RCA Annual Report Filing for year ending Dec 31, 2021. FERC Form No. 1, Page 20 of PDF, Line 16 (Total Proprietary Capital)GVEA 255,645,986$ 228,066,051$ 217,343,788$ 12.1% 4.9% $214RCA Annual Report Filing for year ending Dec 31, 2021. FERC Form No. 1, Page 21 of PDF, Line 14 (Total Proprietary Capital)ML&P - 299,321,917$ - -RCA Annual Report Filing for year ending Dec 31, 2019. FERC Form No. 1, Page 23 of PDF, Line 14 (Total Proprietary Capital)HEA/AEEC 176,026,484$ 167,709,716$ 146,900,525$ 5.0% 14.2% $366RCA Annual Report Filing (HEA) for year ending Dec 31, 2021. FERC Form No. 1, Page 19 of PDF, Line 14 (Total Proprietary Capital). RCA Annual Report Filing (AEEC) for year ending Dec 31, 2021. FERC Form No. 1, Page 19 of PDF, Line 14 (Total Proprietary Capital).Notes:2021 2020 2019HEA 122,386,416$              114,970,820$              104,583,096$                     AEEC 53,640,068$                 52,738,896$                 42,317,429$                       Total 176,026,484$              167,709,716$              146,900,525$                      Railbelt Utilities: 2019 - 2021 Net IncomeUtilityNet Income (2021) Net Income (2020) Net Income (2019) 2020-2021, % Change 2019-2020, % Change Net Income per MWh Sold (2021)NoteMEA 12,999,541$ 12,778,968$ 8,230,418$ 1.7% 55.3% $16RCA Annual Report Filing for year ending Dec 31, 2021. FERC Form No. 1, Page 33 of PDF, Line 65 (Net Income Before Extraordinary Items)CEA 9,578,479$ 4,996,881$ 5,119,627$ 91.7% -2.4% $5RCA Annual Report Filing for year ending Dec 31, 2021. FERC Form No. 1, Page 28 of PDF, Line 71 (Net Income Before Extraordinary Items)GVEA 17,739,448$ 17,855,277$ 11,243,052$ -0.6% 58.8% $15RCA Annual Report Filing for year ending Dec 31, 2021. FERC Form No. 1, Page 26 of PDF, Line 65 (Net Income Before Extraordinary Items)ML&P - 14,082,192$ - -RCA Annual Report Filing for year ending Dec 31, 2019. FERC Form No. 1, Page 28 of PDF, Line 65 (Net Income Before Extraordinary Items)HEA/AEEC 5,963,919$ 6,328,038$ 7,019,560$ -5.8% -9.9% $12RCA Annual Report Filing (HEA) for year ending Dec 31, 2021. FERC Form No. 1, Page 23 of PDF, Line 65 (Net Income Before Extraordinary Items). RCA Annual Report Filing (AEEC) for year ending Dec 31, 2021. FERC Form No. 1, Page 24 of PDF, Line 65 (Net Income Before Extraordinary Items).Notes:2019 CEA + ML&P 19,201,819$                          2019 2020 2021HEA 5,480,205$                             5,522,053$                             4,391,918$                         AEEC 1,539,355$                             805,985$                                1,572,001$                         Total 7,019,560$                             6,328,038$                             5,963,919$                          Alaska Railbelt Utility Entity InformationUtility CPCN Full Name Service Area RegionCEA 8 Chugach Electric Associaton, Inc. Anchorage, JBER, Tyonek, Turnagain Arm, Whittier, Hope, Moose Pass, Cooper LandingGVEA 13 Golden Valley Electric Association Fairbanks, Cantwell, Livengood, Delta JunctionHEA 32 Homer Electric Association, Inc. Homer, Fritz Creek, Seldovia, Port Graham, Anchor Point, Kenai, Soldotna, NikiskiAEEC (HEA) 640 Alaska Electric & Energy Cooperative See HEAMEA 18 Matanuska Electric Association, Inc. Wasilla, Palmer, Eagle River, Willow, Talkeetna, Petersville, Sutton, Chickaloon, Point MackenzieML&P 121 Municipality of Anchorage d/b/a Municipal Light and PowerSee CEA, ML&P was sold to CEA in Oct 2020Source: RCA Certificated Utilities Reports Utility Document NameRCA Tracking Number Date of Submission to RCA RCA File Link Extended Filing DateCEA 2021 Annual Report CPCN 8 for Chugach Electric Association, Inc. TR2201916 4/29/2022LinkN/AGVEA 2021 Annual Report CPCN 13 for Golden Valley Electric Association, Inc. TR2202351 5/31/2022Link5/31/2022HEA 2021 Annual Report CPCN 32 for Homer Electric Association, Inc. TR2201420 4/1/2022LinkN/AMEA 2021 Annual Report CPCN 18 for Matanuska Electric Association, Inc. TR2201385 3/31/2022LinkN/AAEEC (HEA) 2021 Annual Report CPCN 640 for Alaska Electric and Energy Cooperative, Inc. TR2201449 4/4/2022LinkN/AML&P1N/AN/A N/A N/AUtility Document NameRCA Tracking Number Date of Submission to RCA RCA File Link Extended Filing DateCEA 2020 Annual Report and Financial Auditors Report CPCN 8 for Chugach Electric Association, Inc. TR2103042 5/28/2021LinkN/AGVEA 2020 Annual Report CPCN 13 for Golden Valley Electric Association, Inc. TR2102817 5/14/2021LinkN/AHEA 2020 Annual Report CPCN 32 for Homer Electric Association, Inc. TR2101933 4/1/2021LinkN/AMEA 2020 Annual Report CPCN 18 for Matanuska Electric Association, Inc. TR2101824 3/30/2021LinkN/AML&P 2020 Annual Report Extension Request CPCN 121 for Municipality of Anchorage, D/B/A Municipal Light & Power TR2101455 3/9/2021Link5/28/2021AEEC (HEA) 2020 Annual Report CPCN 640 for Alaska Electric and Energy Cooperative, Inc. TR2102623 4/30/2021LinkN/AUtility Document NameRCA Tracking Number Date of Submission to RCA RCA File LinkCEA 2019 Annual Report CPCN 8 for Chugach Electric Association, Inc. TR2002344 3/31/2020LinkGVEA 2019 Annual Report CPCN 13 for Golden Valley Electric Association, Inc. TR2003090 5/5/2020LinkHEA 2019 Annual Report CPCN 32 for Homer Electric Association, Inc. TR2002309 3/31/2020LinkMEA 2019 Annual Report CPCN 18 for Matanuska Electric Association, Inc. TR2002270 3/31/2020LinkML&P 2019 Annual Report CPCN 121 for the Municipality of Anchorage d/b/a Municipal Light and Power TR2002280 3/31/2020LinkAEEC (HEA) 2019 Annual Report CPCN 640 for Alaska Electric and Energy Cooperative, Inc. TR2002364 4/1/2020LinkUtility Document NameRCA Tracking Number Date of Submission to RCA RCA File LinkCEA 2018 Annual Report CPCN 8 for Chugach Electric Association, Inc. TR1901749 3/29/2019LinkGVEA 2018 Annual Report CPCN 13 for Golden Valley Electric Association, Inc. TR1902581 5/2/2019LinkHEA 2018 Annual Report CPCN 32 for Homer Electric Association, Inc. TR1901793 4/1/2019LinkMEA 2018 Annual Report CPCN 18 for Matanuska Electric Association, Inc. TR1901782 3/29/2019LinkML&P 2018 Annual Report CPCN 121 for the Municipality of Anchorage d/b/a Municipal Light and Power TR1901825 3/29/2019LinkAEEC (HEA) 2018 Annual Report CPCN 640 for Alaska Electric and Energy Cooperative, Inc. TR1901792 4/1/2019Link1CEA aquired ML&P in October 2020 June 3, 2022 Curtis Thayer, Executive Director Alaska Energy Authority 813 W. Northern Lights Blvd. Anchorage, AK 99503 Subject: ACFR Letter 02 2022 Financial Statements AEA Advances Dear Curtis Thayer: This is the annual request for advances from the State of Alaska and the financial statements of the Alaska Energy Authority for inclusion in the State of Alaska Annual Comprehensive Financial Report (ACFR). Electronic format emailed to doa.dof.acfr.letters@alaska.gov is our preferred method for receiving these reports. In order to meet the statutory deadline for publishing the ACFR, we need to receive your draft financial statements by October 3, 2022 and audited financial statements by October 17, 2022. It is very important for us to know if you and your auditors can meet this date. Please contact this office by August 3 if you cannot meet these deadlines. Note disclosure is always a difficult task when incorporating several entities into the ACFR. To facilitate this process, please ensure that the following information is provided for proper note disclosures: •Debt Service – Long-term debt disclosures, including the amount of principal and interest owed to maturity by type of debt, and the debt service requirements for the next five years and thereafter in five-year increments (principal, interest, and total). •Short-term Debt Schedule – Please provide a schedule of changes in short-term debt (beginning balances, increases, decreases, and ending balance) per the requirements of GASB Statement No. 38. •Interfund Receivables, Payables, and Debt – For the ACFR, we do not classify interfund balances as receivables, payables, or debt. If you have interfund balances, do not net them. Instead report them separately as Due to or from Primary Government (or Component Units or Other Governments, as appropriate) on all financial statement shells for inclusion in the ACFR. •Net Pension Liability – Disclosure of information for net pension liability and expense that meet the requirement of GASB Statement No. 68. •Net OPEB Liability – Disclosure of information for net OPEB liability and expense that meet the requirement of GASB Statement No. 75. •Future Loan Commitments – Agreements entered into for future loan commitments and funds that have not been disbursed as of June 30, 2022. •Capital Assets – Information for each class of depreciable and non-depreciable capital assets. This information should contain the beginning balance, additions, deletions, and ending balance. •Related Party Transactions – Disclosure of information for material related party transactions that meet the requirements of GASB Statement No. 56. •Pollution Remediation Obligations – Provide the financial statement impact and any required note disclosures that meet the requirements of GASB Statement No. 49. If the above information is not included in the notes to your financial statements, please provide separate schedules detailing this information. The following new GASB Statements will be implemented for the FY 2022 reporting period: •GASB 87 - Leases •GASB 89 – Construction-period interest •GASB 92 – Omnibus (multiple effective dates) •GASB 93 – LIBOR Removal and Lease Modifications •GASB 97 – Certain Component Unit Criteria and Section 457 Plans The Division of Legislative Audit (DLA) is the group auditor for the State of Alaska ACFR. As such, they follow the American Institute of Certified Public Accountants, Codification of Statements on Auditing Standards, AU-C Section 600. Under this guidance, DLA references your auditor’s report in their ACFR opinion. In order for DLA to reference your auditor’s report, it cannot be a restricted use report. Further, the audit report must state the audit was done in accordance with auditing standards generally accepted in the United States of America, or Government Auditing Standards issued by the Comptroller General of the United States. In order to comply with AU-C 600 and provide an opinion on the ACFR, DLA will be contacting your auditor to initiate necessary two-way communications, and to obtain applicable confirmations and assurances from your auditor. Confirmations received by your auditor will need to be completed and returned by the deadline established by DLA. Curtis Thayer, Executive Director Alaska Energy Authority ACFR Letter 02 Page 2 Please share the information in this letter with your auditors as you discuss audit scheduling for FY 2022 and provide us with the name of your audit firm and the contact information for the responsible partner and the audit manager. AEA Advance In order to meet the statutory deadline for publishing the ACFR we will need certain financial information pertaining to advances from the State of Alaska to the Alaska Energy Authority. Please submit the AEA advance information to the Division of Finance email doa.dof.acfr.letters@alaska.gov by September 7, 2022. T h a n k y o u f o r y o u r a s s i s t a n c e . I f y o u h a v e a n y q u e s t i o n s , p l e a s e c o n t a c t C i a r a M e e k a t 4 6 5 - 5 6 0 6 . Deadlines September 7, 2022 – AEA Advance October 3, 2022 – Draft Financial Statements October 17, 2022 - Audited Financial Statements Sincerely, Mallorie Fagerstrom, CPA State Accountant MF/asm cc: Dona B. Keppers, AEA, Chief Financial Officer Jeanette Levine, AEA, Assistant Controller Brandon S. Clark, AEA, Senior Accountant Jenny McDowell, CED, Finance Officer Curtis Thayer, Executive Director Alaska Energy Authority ACFR Letter 02 Page 3 813 West Northern Lights Boulevard Anchorage, Alaska 99503 T 907.771.3000 Toll Free 888.300.8534 F 907.771.3044 REDUCING THE COST OF ENERGY IN ALASKA WWW.AKENERGYAUTHORITY.ORG MEMORANDUM TO: Curtis W. Thayer, Executive Director FROM: Bryan Carey, P.E., Director of Owned Assets DATE: June 17, 2022 RE: Railbelt Owned Asset Update Below is a update on the Alaska Energy Authority (AEA) owned assets Alaska Intertie  Subcommittee work on Vegation Management & Preventative Mainteance plan continues as well as HB29 analysis.  Procurement for the State Var Compensator (SVC) extended 5 year service contract is underway. The previous contractor & SVC manufacturer, Alstom Inc. was purchased by General Electric Inc. (GE) during the past 5 year period of performance and a determination was made that the contract could not be extended by amendment with the new owner, thus a new contract is necessary. Bradley Lake Hydroelectric Project  Normal operations at Bradley Lake hydroelectric as new hires learn the plant.  Lake level rising quickly from a low (~1190’) elevation the first week of May.  Golden Valley Electric Association paid the Bradley Project Management Committee (BPMC) funds to become a participant in the Battle Creek Project.  Mid-June Battle Creek pipe was flowing 135 cfs water (270 ac-ft water/day) to Bradley Lake. Inaccessable by road because of snow.  Chugach Electric Association (CEA) has been designated by the BPMC to perform design and procurement for the AEA owned Sterling-Quartz (SSQ) section upgrade.  CEA doing public procurements for engineenering and environmental services for SSQ upgrade.  Dixon Diversion Initial Consultation Document filed with the Federal Energy Regulatory Commission (FERC) April 27, 2022.  Dixon Diversion Joint Agency and Public Meeting held June 14 in Homer, Alaska followed by agency site visit (June 15). Media attended meeting. 813 W Northern Lights Blvd, Anchorage, AK 99503  Phone: (907) 771-3000  Fax: (907) 771-3044  Email: info@akenergyauthority.org REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG MEMORANDUM DATE: July 13, 2022 TO: Curtis Thayer, Executive Director THROUGH: Audrey Alstrom, P.E., Director, Alternative Energy and Energy Efficiency FROM: Taylor Asher, Project Manager SUBJECT: State Energy Program (SEP) Update Fiscal Year Plan The State Energy Program funds support agency work in many capacities. Funding for this current fiscal year is categorized into activity titles: Program Management, Outreach and Education, EV Program Development, and Technical Assistance. Funding for the upcoming fiscal year changed the EV Program Development to ‘Alternative Energy and Energy Efficiency Program Development” to allow more flexibility and shift away from funding EV charging stations as EVs have a new funding source through the Infrastructure Investment and Jobs Act (IIJA). The program funds the Alaska Energy Efficiency Partnership, a stakeholder group of over 50 public, private, and non-profit entities from around Alaska working together toward a shared vision of making Alaska more energy efficient. SEP work also includes outreach and education in the state's eleven energy regions, including the annual Power Pledge Challenge that has continued to grow and gain statewide media attention, resulting in higher participation of students across the state. The program supports the Electric Vehicle working group, including quarterly meetings, technical meetings, and the quarterly newsletter. The program will support staff time for the Nuclear, Wind and Solar Working Groups in the coming year. FY 23 will also include roughly $160,000 in carry forward budget that is funding the EV Planning and working group contracts with Michael Baker and the increased staff time associated with planning. Infrastructure Bill AEA anticipates additional funding to the program through the infrastructure bill that has dedicated $500 million for FY22-FY26 (Section 40109) via formula to State Energy Offices for any eligible SEP activity, to be spent over five years, with no match required. Based on historic numbers, $4 million is estimated (the existing MOU splits the funds 50/50 between AEA and AHFC). The bill adds mandatory electric transmission and distribution planning to SEP and strengthens transportation and alternative fuel planning options within the allowable SEP activities. The IIJA updated the program requirements to ensure that every state has an Energy Security Plan that is in place, updated, exercised, and meets specific guidelines set forth by the DOE. The plan DOE has on file for Alaska is from 2004 and does not currently meet the standards. The DOE made $200,000 of the anticipated IIJA SEP funds available for each state to update their Energy Security Plans. AEA received these funds and is working to procure a contractor to assist in developing and drafting the plan. A technical committee is required to provide feedback on the plan; stakeholders identified include the RCA, a utility representative, Alaska Energy Authority Page 2 of 2 ENSTAR Natural Gas and Alyeska Pipeline. The DOE has not provided guidance, and the timeline for the additional $4 million is unknown. Impact to the Agency AEA’s current SEP Program Officer at DOE suggested that state energy offices add staffing to administer these funds. The funding will allow AEA to expand our current efforts and potentially resurrect programs that are not currently funded, for example, the Whole Village Retrofit program. AEA may consider providing energy audits and upgrades to schools or look into expanding heat pumps across the state. This technology has gained much attention over the last few years. Department of Revenue TREASURY DIVISION Po Box 110405 Juneau, Alaska 99811-0405 Main: 907.465.2300 Fax: 907.465.4397 Date: July 1, 2022 To: Curtis Thayer, Executive Director, Alaska Energy Authority Department of Commerce, Community and Economic Development From: Lucinda Mahoney, Commissioner Subject: Power Cost Equalization Endowment Fund FY2024 Budget Information per AS 42.45.080(c) In accordance with AS 42.45.080(c), on July 1 of each year, the Commissioner of Revenue shall determine the monthly average market value of the fund for the previous three closed fiscal years and the earnings of the fund for the previous closed fiscal year. The amounts required to be identified by statute for the Power Cost Equalization Endowment Fund are as follows: Average monthly market value: $ 1,098,002,766 Earnings/(losses) of the fund for the previous closed fiscal year: $ (143,841,594) Per AS 42.45.085(a), five percent of the average monthly market value calculated under AS 42.45.080(c)(1), or $54,900,138, may be appropriated to fund the power cost equalization and rural electric capitalization fund (AS 42.45.100), and to reimburse for costs to manage and administer the fund. Additional amounts may be appropriated under AS 42.45.085(d) when the earnings for the fund for the previous closed fiscal year exceed the five percent of the average monthly market value calculated under AS 42.45.080(c). cc: Alan Weitzner, Executive Director, Alaska Industrial Development & Export Authority Julie Sande, Commissioner, Department of Commerce, Community & Economic Development Jenny McDowell, Finance Officer, Department of Commerce, Community & Economic Development Ciara Meek, Department of Administration, Division of Finance Zachary Hanna, Chief Investment Officer, Department of Revenue Jesse Blackwell, Cash Manager, Department of Revenue Pamela Leary, Director, Treasury Division, Department of Revenue Ryan Kauzlarich, Assistant Comptroller, Treasury Division, Department of Revenue 813 W Northern Lights Blvd, Anchorage, AK 99503  Phone: (907) 771-3000  Fax: (907) 771-3044  Email: info@akenergyauthority.org REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG MEMORANDUM TO: Alaska Energy Authority Board THRU: Curtis. W. Thayer, Executive Director FROM: Conner Erickson, AEA Planning Manager DATE: June 14, 2022 RE: Renewable Energy Fund (REF) Round 14 Update REF Round 14 (FY2023) AEA released its Request for Applications for Round 14 of the REF on November 16, 2021 with a corresponding deadline for applications of January 18, 2022. As of the January deadline for applications, AEA was in receipt of 39 REF applications; totaling a Round 14 grant request of $20.2 million. AEA in its initial stage 1 review of these received applications rejected 10 applications on the basis of ineligible applicants, ineligible projects, late applications, and being substantially incomplete, as summarized in the table below. Upon AEA’s issuance of the rejection letters to those 12 applicants in late January, AEA received appeals from two applicants. AEA’s decision to cease further consideration of such applications, upon further review and agreement from AEA’s Executive Director as allowed per 3 AAC 107.650(b), was upheld. The remaining 27 applications account for a total request of $17.9 million in REF funds, as indicated in the table below. Rd 14 Rejections - Per 3 AAC 107.635 - Eligibility Review Reason for Denial No. of Applications REF Funding Requested ($) Ineligible Applicant 4 532,500$ Ineligible Project 2 727,000$ Late Application 4 735,000$ Substantially Incomplete 2 342,525$ Total 12 2,337,025$ Alaska Energy Authority Page 2 of 5 Having passed the Stage 1 review, these 27 applications progressed onto the REF Stage 2 review, whereby they were evaluated on the basis of their respective technical and economic feasibility, as per 3 AAC 107.645. This stage of the evaluation process included a cost-benefit analyses conducted by a third-party economics consultancy, as well as review by the Department of Natural Resources for an assessment of the impact of such projects on State owned land and resources. At the conclusion of this stage, no further applications were rejected. With no applications being rejected upon conclusion of the Stage 2 review, all 27 applications were then evaluated as per 3 AAC 107.655-107.660, for a determination as to the ranking of the applications for recommendation to the Renewable Energy Fund Advisory Committee (REFAC), and the Legislature. As allowed per 3 AAC 107.655(b), five of the applications were recommended for partial funding relative to the intial grant monies requested. These partial funding recommendations were made on the basis of requests in excess of total project funding limits, ineligibility of certain project costs, and design refinement prior to funding of future construction phases. Such partial recommendations reduced the total grant monies requested by $2.98 million, yielding a total Round 14 grant request for the 27 applications of $14.9 million, as displayed in the tables below. Rd 14 Summary of Applications by Energy Region - Post Stage 1 Review Energy Region No. of Applications REF Funding Requested ($) Aleutians 1 321,000$ Bering Straits 1 2,000,000$ Bristol Bay 2 2,495,500$ Kodiak 1 172,600$ Lower Yukon-Kuskokwim 5 1,238,932$ Northwest Arctic 3 3,192,435$ Railbelt 11 6,334,707$ Southeast 1 62,368$ Yukon-Koyukuk/Upper Tanana 2 2,135,000$ Total 27 17,952,542$ Distribution by Energy Region Energy Region No. of Applications Recommended Funding ($)%, of Total Aleutians 1 321,000$ 2% Bering Straits 1 2,000,000$ 13% Bristol Bay 2 1,423,500$ 10% Kodiak 1 172,600$ 1% Lower Yukon-Kuskokwim 5 1,238,932$ 8% Northwest Arctic 3 3,192,435$ 21% Railbelt 11 4,426,707$ 30% Southeast 1 62,368$ 0% Yukon-Koyukuk/Upper Tanana 2 2,135,000$ 14% Total 27 14,972,542$ Alaska Energy Authority Page 3 of 5 On April 15, 2022 AEA met with the REFAC to present its recommendations for REF Round 14 projects, for inclusion in the FY2023 Capital Budget. At the conclusion the meeting with the REFAC, all members present voted unanimously in support of AEA’s project recommendations as presented by AEA. A list of the recommended projects has been provided as Attachment A to this memo. The Legislature and the Governor have approved an appropriation of $15 million to fund the 27 Round 14 REF projects as recommended. This $15 million is included in the Governor’s amended budget, and the Governor’s office remains in full support of the program. Barring any unforeseen vetos or line item adjustments to the FY2023 enacted budget, the $15 million will be made available to AEA for grant disbursements on July 1, 2022. AEA does not anticipate any changes to the budget which would impact the $15 million made available to REF at this time. AEA is currently assigning project managers for the 27 awarded projects between internal staff as per availability, technological expertise, and other AEA priorities. Once project manager assignments are complete, project charters will then be developed and executed, with subsequent grant agreements to be drafted and signed by mid-July to allow for the distribution of grant monies to awardees. REF Program Extension Update The current sunset date for the REF program is set for June 30, 2023. House Bill (HB) 358 was introduced to the 32nd Legislature for the extension of the REF for another ten years to 2033; the second such extension since the REF’s inception in 2008. The bill was successful in its passage through the House with 38 - 2 yays to nays. The bill was then referred to the Senate. The bill died in the Senate Finance Committee as the clock ran out.The delay in passage of HB 358 was due to Covid-induced delays suffered by the Legislature in the beginning months of the Legislative session. AEA plan to have pursue the REF extension during the next legislative session in January, 2023. Distribution by Technology Type Technology Type No. of Applications Recommended Funding ($) Biomass 2 1,561,107$ Hydro 5 2,462,868$ Solar 7 4,803,500$ Storage 2 2,423,500$ Wind 10 3,019,132$ Wind (to heat)1 702,435$ Total 27 14,972,542$ Alaska Energy Authority Page 4 of 5 Attachment A: AEA Round 14 Recommended and Approved REF Projects List Alaska Energy Authority Page 5 of 5 CommunityApplicant NameProject NameTechnologyRd 14 Approved FundingApplication NumberAkiachakAkiachak Native CommunityAkiachak Wind FeasibilityWind371,000.00$ 14021Ambler; Kiana; Noorvik; SelawikNorthwest Arctic BoroughDesign and Permitting for Solar PV and Battery Storage for Ambler, Kiana, Noorvik, and SelawikSolar590,000.00$ 14007DillinghamNushagak Electric & Telephone CooperativeNuyakuk River Hydroelectric ProjectHydro1,000,000.00$ 14001Fairbanks; Delta Junction; Fort Greely; FoxGolden Valley Electric AssociationInterior Alaska Wind Energy Resource AssessmentWind855,000.00$ 14029False PassCity of False PassUNGA Man Creek Hydroelectric ProjectHydro321,000.00$ 14035GalenaCity of GalenaGalena Community Scale Solar PV and Battery ProjectSolar2,000,000.00$ 14034Holy CrossAlaska Village Electric CooperativeHoly Cross Solar Energy & Battery Storage Feasibility Study ProjectSolar135,000.00$ 14002HomerCity of Homer, Department of Public WorksHomer Energy Recovery ProjectHydro79,500.00$ 14006KakeInside Passage Electric CooperativeJenny Creek Hydro Reconnaissance - Kake IPECHydro62,368.00$ 14027KongiganakPuvurnaq Power CompanyKongiganak Wind Upgrade with Airfoil Blades for TurbinesWind278,716.00$ 14020KotzebueKotzebue Electric Association, Inc.Kotzebue Wind to PV Transition Utilizing Existing Wind InfrastructureSolar1,900,000.00$ 14018KotzebueCity of KotzebueKotzebue Wind to Heat SystemWind (to heat)702,435.00$ 14015KwigillingokKwig Power CompanyKwigillingok Wind Turbine UpgradeWind278,716.00$ 14016Moose PassAlaska Electric & Energy Cooperative, Inc.AEEC Summit Lake WindWind232,000.00$ 14009Native Village of EklutnaNative Village of EklutnaEklutna Village Solar Energy Project - Feasibility StudySolar22,500.00$ 14019NenanaCity of NenanaNenana Biomass District Heat SystemBiomass676,121.00$ 14028NikiskiAlaska Electric & Energy Cooperative, Inc.AEEC East Foreland/Nikiski WindWind200,000.00$ 14010NinilchikAlaska Electric & Energy Cooperative, Inc.AEEC Ninilchik WindWind192,000.00$ 14008Ninilchik/Fox RiverAlaska Electric & Energy Cooperative, Inc.AEEC Caribou Hills WindWind209,600.00$ 14011NomeNome Joint Utility SystemNome Battery Energy Storage SystemStorage2,000,000.00$ 14026OuzinkieCity of OuzinkieOuzinkie Wind Energy Feasibility and Conceptual Design ProjectWind172,600.00$ 14005Pilot PointCity of Pilot PointPilot Point Comprehensive Community Wind/Solar/Storage & Heat ProjectStorage423,500.00$ 14025Pilot StationAlaska Village Electric CooperativePilot Station Wind Energy Feasibility Study & Conceptual Design ProjectWind229,500.00$ 14004Point MackenziePoint MacKenzie SolarPoint MacKenzie SolarSolar75,000.00$ 14003QuinhagakNative Village of KwinhagakKwinhagak Reconnaissance StudySolar81,000.00$ 14017RailbeltChugach Electric Association, Inc. On behalf of the Bradley Lake Management Committee (BPMC)Dixon Diversion Feasibility ProjectHydro1,000,000.00$ 14022SoldotnaAlaska Electric & Energy Cooperative, Inc.AEEC/KPB CPL Landfill Gas CHP Project Biomass884,986.00$ 14012TOTAL14,972,542.00$ Alaska Energy Authority - Renewable Energy Fund - Round 14 - Approved Projects (FY2023) 813 West Northern Lights Boulevard, Anchorage, Alaska 99503 | P 907.771.3000 | Toll Free 888.300.8534 | F 907.771.3044 | WWW.AKENERGYAUTHORITY.ORG REDUCING THE COST OF ENERGY IN ALASKA July 15, 2022 Dear Alaska Energy Authority Board Members, On May 31, 2022 the Power Project Fund (PPF) Loan Committee met to consider a loan refinance application submitted by Southfork Hydro, LLC (Borrower). The committee voted unanimously to approve the Borrower’s request to refinance to a lower interest rate. The Borrower requested the refinance to the lower rate in order to help finance the purchase and installation of a third turbine in the powerhouse. The terms of the approved refinance are as follows:  Revised Loan Balance: $1,809,832.98 (incl. closing fee)  Revised Interest Rate: 2.81% (previously 5.12%)  Revised Semi-annual Payment: $55,518.09 (previously $68,755.20)  All other terms remain unchanged On June 16, 2022 AEA received the Borrower’s payment in the new amount of $55,518.09, satisfying all required loan payments for 2022. The next payment due date is scheduled for January 1, 2023. Completion of the installation of the new turbine is anticipated for December 2024. The addition of the new turbine will increase the nameplate generation capacity of the Borrower’s hydroelectric plant from 1,200 kW to 1,768 kW. Regards, Conner Erickson Manager of Planning, AEA 813 W Northern Lights Blvd, Anchorage, AK 99503  Phone: (907) 771-3000  Fax: (907) 771-3044  Email: info@akenergyauthority.org REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG MEMORANDUM TO: Curtis Thayer, Executive Director THRU: Audrey Alstrom, P.E., AEA Director, Alternative Energy and Energy Efficiency FROM: Josi Hartley, Program Manager DATE: July 13, 2022 SUBJECT: Bi-Annual Alternative Energy and Energy Efficiency (AEEE) Program Update AEEE General Update The AEEE team will be taking on eleven wind projects, two biomass projects, seven solar projects, and two energy storage projects that received funding under Round 14 of the Renewable Energy Fund. These projects will be developed and managed by the AEEE team as the AEEE team is responsible for the oversight of the majority of Renewable Energy Fund projects. Project management plans and grant agreements are currently being developed. Currently, there are six active wind projects, five active biomass projects, and one active heat pump project funded outside of REF Round 14. The AEEE team is also responsible for the program management of each of the technology programs including; Wind, Biomass, Energy Efficiency, Solar, Energy Storage, and Nuclear. Programmatic activity summaries and project updates are included below. Wind Program: The Wind Working Group continued to hold quarterly meetings throughout the first half of 2022. Meetings were well attended with upwards of 70 participants per meeting. The contract for the Wind Working Group ended at the end of June. An IRFP has been issued by AEA to solicit a new working group contractor. The contract scope will include facilitation of the working group meetings, newsletter publications, public outreach and education, funding research and acquisition, and annual wind workshop facilitation. An executed contract is expected to be in place by September 1st, 2022. Wind Project Updates: Akiachak Wind Feasibility (REF Round 14) Funding: $371,000 Grantee: Akichak Native Community Interior Alaska Wind Energy Resource Assessment (REF Round 14) Alaska Energy Authority Page 2 of 8 Funding: $855,000 Grantee: Golden Valley Electric Association Kongiganak Wind Upgrade with Airfoil Blades for Turbines (REF Round 14) The Puvurnaq Power Company will retrofit several exisiting 95 kW wind turbines in Kongiganak with advanced SERI Thin Airfoils. The annual energy output of the wind turbines is expected to increase by 20-30%. Funding: $279,000 Grantee: Puvurnaq Power Company Kwigillinok Wind Upgrade with Airfoil Blades for Turbines (REF Round 14) The Kwigillinok Power Company will retrofit exisiting 95 kW wind turbines in Kongiganak with advanced SERI Thin Airfoils. The annual energy output of the wind turbines is expected to increase by 20-30%. Funding: $279,000 Grantee: Kwigillinok Power Company Alaska Electric and Energy Cooperative, Summit Lake Wind Feasibility (REF Round 14) Funding: $232,000 Grantee: Alaska Electric and Energy Cooperative Alaska Electric and Energy Cooperative, Nikiski Wind Feasibility (REF Round 14) Funding: $200,000 Grantee: Alaska Electric and Energy Cooperative Alaska Electric and Energy Cooperative, Caribou Hills Wind Feasibility (REF Round 14) Funding: $192,000 Grantee: Alaska Electric and Energy Cooperative Alaska Electric and Energy Cooperative, Ninilchik Wind Feasibility (REF Round 14) Funding: $210,000 Grantee: Alaska Electric and Energy Cooperative Ouzinkie Wind Energy Feasibility and Conceptual Design Report (REF Round 14) Funding: $173,000 Grantee: City of Ouzinkie Pilot Station Wind Energy Feasibility Study and Conceptual Design Report (REF Round 14) Funding: $229,500 Grantee: Alaska Village Electric Cooperative (AVEC) Kotzebue Wind to Heat System (REF Round 14) Funding: $702,400 Grantee: City of Kotzebue Alaska Energy Authority Page 3 of 8 City of Unalaska Wind Power Feasibility (REF Round 13) #7013007 Unalaska is the chief center of population in the Aleutian Islands, located on Unalaska Island in the Aleutian Islands. A feasibility and conceptual design study will be conducted to determine the best method to integrate wind power with the planned 30 MW geothermal power project (to be operational in 2024) to meet the electrical and thermal power needs of the community. The wind turbines would likely be installed in lower Pyramid Valley near the community water plant. This project is currently on schedule and on budget. Funding: $139,000 (REF) Grantee: City of Unalaska Naknek Service Area Wind and Solar Power Feasibility and Conceptual Design (REF Round 13) #7013005 Naknek is located in the northeast side of Bristol Bayin Southwest Aalska, with a population of 470 people. Naknek is home to one of the world’s largest sockeye salmon fisheries. Naknek Electric Association proposes to perform a feasibility and conceptual design study to assess the practiciality of constructing a wind farm and expanding their solar PV capacity to create a medium-to-high penetration wind-solar-diesel hybrid power system to meet it’s baseload power demand. This project is currently on schedule and on budget. Funding: $103,500 (REF), $11,500 (Match) Grantee: Naknek Electric Association Goodnews Bay Wind Energy Feasibility and Conceptual Design Project (REF Round 13) #7013002 Goodnews Bay is located on the north shore of Goodnews Bay at the mouth of Goodnews River. It is 116 air miles south of Bethel, 110 miles north of Dillingham, and 400 miles west of Anchorage, with a population of 283 people. Alaska Village Electric Cooperative, Inc. (AVEC) will conduct a wind power feasibility and conceptual design project for the community of Goodnews Bay. AVEC, with the cooperation of the community, proposes to assess the feasibility of wind resources suited to provide power to the community and to prepare a conceptual design of a wind facility. This project is currently on schedule and on budget. Funding: $128,250 (REF), $6,750 (Match) Grantee: AVEC Kotlik Wind Energy Feasibility and Conceptual Design (REF Round 13) #7013003 Kotlik is located on the east bank of the Kotlik Slough, 35 miles north of Emmonak in the Yukon- Kuskokwim Delta. Kotlik is 165 miles northwest of Bethel and 460 air miles from Anchorage. The population of Kotlik is 637 people. Alaska Energy Authority Page 4 of 8 Alaska Village Electric Cooperative, Inc. (AVEC) will conduct a wind power feasibility and conceptual design project for the community of Kotlik. AVEC, with the cooperation of the community, proposes to assess the feasibility of wind resources suited to provide power to the community and to prepare a conceptual design of a wind facility. AVEC proposes to operate a NRG XZX300 Wind LIDAR system to collect wind resource data. This project is currently on schedule and on budget. Funding: $237,500 (REF), $12,500 (Match) Grantee: AVEC Improved Airfoil for Wind Turbines in Kongiganak (REF Round 13) Kongiganak is located in the Bethel Census area, and sits on the eastern shore of the Kongiganak River, two miles away from the Bering Sea. The population of Kongiganak is 439 people. The Puvurnaq Power Company will retrofit two exisiting 95 kW wind turbines in Kongiganak with advanced SERI Thin Airfoils. The annual energy output of the wind turbines is expected to increase by 20 to 30%. Funding: $108,000 (REF), $9,000 (Match) Grantee: Puvurnaq Power Company Shishmaref Wind Energy Feasibility and Conceptual Design (REF Round 9) #7091223 The original scope of the Shishmaref Wind Feasibility Project included funds to procure, transport, assemble and decommission a met tower to collect wind resource data. However, due to geographical constraints in the community, a met tower was not be a feasible method of data collection. AVEC has been utilizing the NRG ZX300 LIDAR system to collect wind resource data. This has been an informative pilot application of LIDAR technology in the REF Wind program. In the past, there have been concerns regarding the efficacy of LIDAR in arctic, rural enviorments. So far, the LIDAR has been performing accurately and reliably. The expected completion date for this project is December 31st, 2023. Alaska Energy Authority Page 5 of 8 Biomass Program: In June of 2022, AEA Was awarded a $225,000 grant through the USDA Wood Innovations Program. This grant will be utilized to support operator training and workshops for existing biomass systems throughout the state. AEA plans to work with Southeast Conference, the Alaska Center for Energy and Power and the Yukon Government to plan the next Wood Energy Conference. AEA is also currently soliciting contractors to conduct biomass feasibility studies. The solicitation closes on July 25. During the last six months, one project was completed. The construction of the woodchip system to heat the Mentasta Traditional Council (MTC) offices and the clinic was commissioned in early 2022. This project was funded through the partnership between US Forest Service, Denali Commission, and AEA; MTC received $245,500. Biomass Project Updates: Alaska Electric and Energy Cooperative CPL Landfill Gas CHP Project (REF Round 14) Funding: $885,000 Grantee: Alaska Electric and Energy Cooperative, Inc. Nenana Biomass District Heating System (REF Round 14) Funding: $676,000 Grantee: City of Nenana Walter Northway School Wood Chip Heating System (REF Round 13) #7013006 Northway is located in the Southeast Fairbanks Census Area, 55 miles south of Tok on the Alaska Highway. The population is 234 people. AEA funded the design of the Walter Northway Biomass project, which was completed in 2019. The school district operates a successful wood chip combined heat and power system at the Tok school. The Construction project will construct a wood chip district heating system to service the Northway school and garage and is expected to displace 23,166 gallons of heating fuel per year. This project is currently on schedule and on budget. Funding: $650,000 Grantee: Alaska Gateway School District Craig High School Biomass Project Craig is located on Prince of Wales Island in Southeast with a population of 1,036. The project includes the construction of a wood-fired boiler at the Craig High School campus. The installed boilers would heat the 53,319 square foot high school using a combination of green and dried wood chips generated by operations at a local lumber mill and is expected to offset 40,000 gallons of heating fuel per year. This project is funded through the partnership between US Forest Service, Denali Commission, and AEA. Due to supply chain issues and increased costs of building materials, this project is under budget and delayed. The school district is working with USDA and SASS for additional funding. Alaska Energy Authority Page 6 of 8 Funding: $845,000 Grantee: Craig City School District Kluti-Kaah The Native Village of Kluti-Kaah is located in the Ahtna region located at Mile 104 on the old Richardson highway. The population is 321 people. This project includes phase 1 of a woodchip district heating system that will heat the Tribal Hall, maintenance shop, Headstart building, and Tribal office/clinic building. The installed boiler is expected to displace 17, 492 gallons of heating fuel annually. The community received $250,000 in FY20 from the United States Forest Service (USFS) Wood Innovations Grant Program for the chip system design and a portion of the purchase of one containerized boiler package. This project is funded through the partnership between US Forest Service, Denali Commission, and AEA. Funding: $390,000 Grantee: Native Village of Kluti-Kaah SISD Biomass Project Updates Southeast Island School District is located on Prince of Wales Island in Southeast Alaska. There are seven schools on the island with 146 students in total. This project will facilitate the tying in the piping from the existing boiler in Kassan to the library building and to the nearby teacher housing unit. The project will also include improving drainage and installing a cement slab floor in the existing wood-fired boiler storage area in Naukati. Construction will be completed this fall. This project is funded through the partnership between US Forest Service, Denali Commission, and AEA. This project is on schedule and on budget. Funding: $157,000 Grantee: Southeast Island School District Alaska Energy Authority Page 7 of 8 Energy Efficiency Program: Much of the Energy Efficiency Program is funded through the State Energy Program. An update was provided at the June meeting on the SEP program. AEA coordinated and hosted the last quarterly Alaska Energy Efficiency Partnership (AEEP) meeting. The group received a presentation from NASEO on K-12 School Efficiency Funding opportunities through IIJA. Additionally, AEA is participating in the annual power pledge challenge.The next meeting is anticipated for late August. The Village Energy Efficiency Program (VEEP) is supported by Wells Fargo, Denali Commission and state funds. AEA has been working with communities to replace outdoor lights with efficiency lights to saving energy and money. To date, thirty-eight communities have completed outdoor lighting projects and report 1,119 light bulbs replaced saving an estimated 582,408 kWh at an average kWh of $0.4429 to $0.6527 (range $0.139 - $1/kWh). Approximately $271,596.64 is being saved annually. AEA went out for another round of VEEP for more traditional projects that included other efficiency measures besides just lighting. Applications were recieved in April 2022 and nearly $2M in efficiency projects were requested, with only $500,000 in funding available. The program team is considering IIJA funding to this gap in funding. Energy Storage Project Updates: Nome Battery Energy Storage System (REF Round 14) Funding: $2,000,000 Grantee: Nome Joint Utility System Pilot Point Comprehensive Community Wind/Solar/Storage/Heat Project (REF Round 14) Funding: $423,500 Grantee: City of Pilot Point Kotzebue Energy Storage System (REF Round 13) #7013018 Kotzebue is located on the Baldwin Peninsula in the Kotzebue Sound, 549 miles from Anchorage, and 26 miles above the Arctic Circle. Kotzubue is by far the Northwest Arctic Borough’s largest community, and the economic and transporation hub of the subregion of Alaska. This project funds final design and permitting for a community scale Battery Energy Storage System (BESS). The proposed BESS will allow for 100% renewable power generation from renewable resources, and maximum use of Kotzebue Electric Association’s wind and solar assets. This project is currently on schedule and on budget. Funding: $325,000 (REF), $100,000 (Match) Grantee: Kotzebue Electric Association Alaska Energy Authority Page 8 of 8 Solar Project Updates: Design and Permitting for Solar PV and Battery Storage for Ambler, Kiana, Noorvik and Selawk (REF Round 14) Funding: $590,000 Grantee: Northwest Arctic Borough Galena Community Scale Solar PV and Battery Project (REF Round 14) Funding: $2,000,000 Grantee: City of Galena Holy Cross Solar Energy and Battery Storage Feasibility Study Project (REF Round 14) Funding: $135,000 Grantee: Alaska Electric Village Cooperative Kotzebue Wind to PV Transition Utilizing Existing Wind Infrastructure (REF Round 14) Funding: $1,900,000 Grantee: Kotzebue Electric Association, Inc. Eklutna Village Solar Energy Project Feasibility Study (REF Round 14) Funding: $22,500 Grantee: Native Village of Eklutna Point MacKenzie Solar Feasibility Study (REF Round 14) Funding: $75,000 Grantee: Point MacKenzie Solar Kwinhagak Solar Reconnaissance Study (REF Round 14) Funding: $81,000 Grantee: Native Village of Kwinhagak Nuclear Program: The AEA team attends monthly Nuclear Energy Working Group meetings with a variety of in-state and out-of-state stakeholders. AEA participates in bi-monthly meetings with the National Reactor Innovation Center to inform stakeholder engagement and nuclear roadmap planning. This group is comprised of stakeholders from ACEP, ADEC, NRIC, and AEA. A stakeholder outreach event was facilitated by this group in conjunction with the Sustainable Energy Conference in May. Alaska Electric Vehicle Infrastructure Implementation Plan AEA Board of DirectorsAugust 3, 2022 ALASKA ENERGY AUTHORITY NEVI Formula Program Implementation plan due August 1 Plan required to receive federal funding 2 Funding must be used to build out Alternative Fuel Corridors (AFCs) first Alaska currently has one AFC (pending) After AFC buildout, funding can be used elsewhere NEVI Requirements Charging infrastructure must be DC fast-charging ⁻4 Combined Charging System Connectors ⁻>150 kW each Chargers must be located no more than 1 driving mile from AFC Charging stations must be located no more than 50 miles apart along designated AFC 3 NEVI Formula Program Timeline RFI for Feedback and Site Hosts NEVI Implementation Plan Due to Joint Office DOT/DOE Joint Office Approves Plan June 27, 2022 AUG. 1, 2022 SEPT. 30, 2022 June 29, 2022 65% Plan Out for Public Comment 4 NEVI Overview Introduction State Agency Coordination Public Engagement Plan, Vision & Goals Contracting Existing & Future Conditions EVSE Deployment Implementation Civil Rights Equity Considerations Labor & Workforce Considerations Cyber Security Discretionary Exceptions Program Evaluation 5 VISION GOALS Plan Vision & Goals Deploy EV charging stations that are reliable and accessible for work, recreation, and tourism to inspire driver confidence Ensure the benefits are distributed and applied equitably for all Alaskans Support the existing and future demand for electrified transportation Develop an outreach and education program to train, retain, and diversify the workforce in support of the electric transportation system. Collect data to measure program performance and make informed deployment decisions. Invest strategically to make Alaska’s infrastructure more resilient and independent. Adapting Alaska’s unique infrastructure system to support reliable, equitable and sustainable electric transportation while meeting community and economic needs. Work with international partners to connect to the continental network. 6 Outlook for Five-Year Program 7 Design-Build Grant Program (preferred method identified in the plan) Public-Private Partnerships Operations & Maintenance Small Business Contracting 8 - 2,000 4,000 6,000 8,000 10,000 12,000 14,000 16,000 2022 2023 2024 2025 2026 Alaska EV Growth Scenarios Continued Growth Aggressive Growth Existing and Future Conditions 10 Existing and Future Conditions Railbelt Utility Grid Capacity 2022 2023 2024 2025 2026 Firm Peak Load (MW)809.2 849.6 892.0 936.6 983.4 Total Capacity (MW)1569.8 1569.8 1519.8 1519.8 1519.8 Reserve Margin (MW)760.6 720.2 627.8 583.2 536.4 Reserve Margin (%)94%85%70%62%55% 11 Existing & Future Conditions Priority AFC Areas 12 Existing and Future Conditions 13 Risks & Challenges 14 Strategies for: O&M Identifying site hosts EVSE data collection & sharing Addressing resilience, emergency evacuation, snow removal/seasonal needs Promote strong labor, safety, training and installation standards Support State fleet transition Implementation 15 Civil Rights & Equity Considerations Title VI Americans with Disabilities Act (ADA) Disadvantaged Communities (DACs) Justice40 16 Labor & Workforce Considerations 17 Cyber Security 18 Discretionary Exceptions 19 813 W Northern Lights Blvd. Anchorage, AK 99503 Main: (907) 771-3000 Fax: (907) 771-3044 akenergyauthority.org @alaskaenergyauthority @alaskaenergyauthority Alaska Energy Authority AEA provides energy solutions to meet the unique needs of Alaska’s rural and urban communities. 20 813 W Northern Lights Blvd, Anchorage, AK 99503  Phone: (907) 771-3000  Fax: (907) 771-3044  Email: info@akenergyauthority.org REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG MEMORANDUM TO: Curtis Thayer, AEA Executive Director FROM: Taryn Perez, Special Projects Manager THRU: Dona B. Keppers, AEA Chief Financial Officer DATE: July 19, 2022 RE: Electric Utility Relief Program Progress Overview Electric Utility Relief Program $6,830,000.00 ROUND 1 October 20, 2021 to November 22, 2021 Closed Number of Grantees: 35 Amount Requested $ 4,862,572.81 Amount Disbursed ($ 2,944,253.87) Balance of Grant Funding $3,885,746.13 ROUND 2 February 14, 2022 to March 15, 2022 Closed Number of Grantees: 5 Amount Requested $ 42,860.14 Amount Disbursed ($ 37,887.23) Balance of Grant Funding $3,847,858.90 ROUND 3 June 13, 2022 to July 15, 2022 Open In Processing Period Number of Grantees: 10 Napakiak $ 3,165.49 Levelock $ 74,134.00 MEA $ 10,295.80 Naterkaq Light Power $ 5,843.00 City of Akiak $ 106,119.59 Pedro Bay $ 3,789.36 Homer Electric $ 78,248.00 AVEC $ 136,872.64 AVEC $ 773.00 Twin Hills Village $ 15,717.16 Amount Requested $ 434,958.04 Amount Disbursed $ 0 Estimated Ending Balance of Grant Funding $3,412,900.86 Black Rapids Training Site - Alaska 1 Point of Contact: Applicant: Alaska Energy Authority (AEA), with Golden Valley Electric Association (GVEA) as a sub-recipient. Name: Rebecca Garrett, Project Manager Phone Number: 907-771-3042 Email Address: Rgarrett@akenergyauthority.org Organization Address: Alaska Energy Authority 813 W. Northern Light Blvd Anchorage, AK. 99503-2407 Installation Need: The Black Rapids Training Site (BRTS) is the Installation, managed by Fort Wainwright. BRTS is part of the U.S. Army Northern Warfare Training Center (NWTC). It consists of more than 4,200 acres in very Alaska. The nearest township is Delta Junction, with a population of 1,182, located thirty miles to the north, at the junction of the Alaska and Richardson highways. BRTS is approximately 134 miles south of Fairbanks via the Richardson Highway. According to U.S. Health Resources and Services Administration (HRSA) Rural Health Policy Data Files, the entire area qualifies as rural. Much of the surrounding land is owned by the military and comprises the Yukon Training Area, Fort Greely, and the Donnelly Training Area. Eielson Air Force base, with a population of 4,500 is also nearby, between BRTS and Fairbanks. BRTS is a primary site for state-of-the-art cold weather and mountain warfare tactics and techniques training for the U.S. military and its allies. It can accommodate one hundred students and thirty cadre at one time. Soldiers participate in mountaineering/glacier training, preparing them for cold weather warfare. Assets include: a land navigation site, high-angle marksmanship range, rock site with permanent protections, small arms range, ski lift, downhill skill runs, and five and 10 km cross-country trails. In addition, BRTS’s strategic plan projects significantly expanding and increasing its training capacity. This expanded training regimen is critical to future military goals. A recent report from the Installation Management Command (IMCOM) reiterated the continuing need to implement a long-term electric supply to BRTS. (IMCOM Black Rapids Northern Warfare Training Center Electric Solution, updated July 2022). The brief specifically referenced the opportunity provided by the DCIP grant as a resource to achieve this goal. IMCOM described that BRTS is solely powered by three diesel generators needed to meet all electrical demand for the site. The brief further explained that “Diesel generator No.1 replacement parts are obsolete. Generator replacement will increase the utility rate base.” Peak usage at BRTS is measured at 140 kilowatts currently, but the demand grows continually to support new high-tech electronics; replace aging equipment with newer, more robust models; and train more soldiers. Replacing the generators with new, higher capacity models is projected to cost more than $25 million over the next 25 years (see letter embedded on page 5 from BRTS Commanding Officer). While still in use, the aging generators require continual upkeep and maintenance. They do not have the capacity to provide redundancy, exacerbating Installation vulnerability to fuel delivery delays or mishap. This circumstance is currently causing grave concern as the Bear Creek Bridge washed away in mid-July, isolating BRTS from the north. The Alaska Department of Transportation & Public Facilities (DOT&PF) is working to repair the damage but for the present, the site has had to cap its energy use in anticipation of Black Rapids Training Site - Alaska 2 delivery delays. In the meantime, BRTS has had to get rushed, priority approval to drive in from the south side as a backup plan. This approach entails 11 hours of drive time, over five hours drive each way, and a minimum of four hours maintenance, creating a significant burden for the contractor who must perform maintenance on generation and water treatment every three days. The lack of an energy source that is reliable, safe, and clean creates significant challenges for the site and accounts for degradation of military value and resilience. Critically, it even negatively impacts the quality of life for military personnel and their families. A major concern is the lack of backup support for the generators. Their reliance on diesel fuel deliveries from outside creates the possibility of a catastrophic failure, potentially stranding the site without electric or water, as the water supply is dependent on electric powered pumps. This very real crisis is threatening with the washout of Bear Creek. The power limitation also curtails the opportunity for needed, strategic expanded training cadres. Without additional, reliable power, BRTS does not meet required standards to expand training. This is a major loss and source of concern for the Installation. The additional training cannot be supported with BRTS’ current training and accommodation space, and the size of the space is severely limited by the site’s electrical capacity. Golden Valley Electric Association (GVEA) is a not-for-profit member-owned cooperative that has operated for 76 years in rural Interior Alaska. They have an existing power line that services the region but terminates about ten miles south of Delta Junction, approximately thirty-four miles north of BRTS. With financial investment from the Defense Community Infrastructure Pilot Program, GVEA can extend existing power to deliver service to BRTS. The extended service will address and eliminate most identified challenges and will rapidly achieve three key goals: 1) enhance military value, 2) improve military resiliency and 3) improve the quality of life for military members and their non-resident families. Table 1 illustrates the key improvements. Table 1: Key enhancements created by the GVEA powerline extension Current Military value degradation Proposed Military value enhancement BRTS cannot support expanded training opportunities. BRTS does not meet the energy standards required to expand training or support Army Joint Pacific Multinational Readiness training (JPMRC). Strategic expansion of cold weather warfare training. JPMRC training is essential to the collaborative strategy for the region and will be conducted at BRTS. The ability to install and deploy sensitive electronic devices. High-tech, high-value electronic devices and programs can be installed for training. Much of the surrounding land is not powered. The power line extension will cover approximately thirty miles of Army training area. Over 633,000 acres of training land is available for future growth. Other, nearby military assets lack or have limited access to electrical power. Eielson Air Force Base can connect mission- critical diesel-powered tower. The new line will add resiliency to their system. The cost of diesel fuel and generator maintenance/repair continues to increase. Diesel generators will still be utilized as backup energy supply. The cost will be substantially because the generators will only need to power mission-critical needs. The generators will require less maintenance and upkeep. Black Rapids Training Site - Alaska 3 Installation resilience challenged Installation resilience enhanced Diesel power is dependent on regular fuel delivery and threatened by incidents such as the Bear Bridge wash out. The generators create a single point of failure. Electrical power is backed up with diesel generators, creating redundancy and reducing the risk of power interruptions during mission critical tasks. There is a risk of fuel spills and environmental damage. Generators create harmful emissions Aligns with the Army’s Energy Resilience Strategy and Executive Order to reduce the Army’s carbon footprint. Using less fuel reduces the risk of spills. Reduced climate-threatening emissions. Water is supplied from a well using an electrical pump. Generator failure or lack of fuel also causes failure of water to the facility. Water pump will have redundant power sources, aligning with the Installation Energy and Water Plans. Military Family Quality of Life Detracted Military Family Quality of Life Enhanced Virtual Communication from BRTS to off-site military families limited by power capacity. Virtual Communication linkages widely available, increasing family connections. Air quality at BRTS negatively affected by diesel emissions. Climate conditions in Alaska restrict dispersal of air pollution Diesel fuel emissions greatly reduced, improving air quality. Running generators continually creates impactful noise pollution. Electric power generates no noise. Limited electrical capacity means that soldiers have fewer personal “luxuries” such as virtual communications with off-site families, opportunity to use personal electronics or participate in electronic games and activities. Vastly improved access to personal and leisure time electronics. The IMCOM brief referenced earlier further noted major disadvantages to Status-Quo, reliance on diesel generators, • “Expensive option for the Army. • Fuel cost and fuel availability issues. • Requires significant oversight from UP contractor: o 45,000-60,000 gallons of diesel a year. o Diesel generators run 24/7, o 180 miles driven weekly to perform inspections, o Generator No.1 is obsolete, $1,169,570 capital cost to replace in the near future, o Generators require costly overhauls every four years, o If generator controls/SCADA fail, there is no redundant electrical source at this time. • Fuel tanks and fuels system will require maintenance and/or replacement due to age, wear, or compliance.” IMCOM lists the risks to maintaining Status-Quo, including “Building freezing, pipe burst without redundant power; Only one electrical source to the remote training facility; Spare parts inventory, proprietary software, and trained personnel required to repair the generators. 270-mile round trip for service calls from the generator maintenance contractor.” (NOTE: The distances listed as disadvantages by INCOM’s report were prior to the Bear Creek Bridge washout, an event that drastically increased the distance to commute). Black Rapids Training Site - Alaska 4 The BRTS Commander’s letter of support describes other specific benefits such as expanding the area available to use for training and expanded training opportunities; improved power quality will allow installation and deployment of sensitive electronic devices and improved energy-efficiency and environmental benefits. One hundred percent of BRTS military service members and soldiers attending military training will benefit from the power line extension. Even though the area is remote, there are other important beneficiaries of this project including public and private sector entities. A strategic military partner is Eielson Air Force Base. The electric extension will enhance their military value by reinforcing two mission-critical assets. The communication site at Donnelly Dome is powered by diesel-fired continuous run generators. The generators burn approximately 40,000 gallons of fuel per year and use hundreds of gallons of motor oil and coolants. Utility electrical power would provide a major economic and environmental advantage. In addition, a threat simulator site on Windy Ridge utilizes diesel generators when supporting training missions. Electrical power will offer economic and environmental advantages. Alaska DOT&PF is responsible for the day-to-day operation and maintenance of the section of Richardson Highway that the electric line extension will parallel. In addition, DOT&PF operates the Trims Maintenance Station, located just a few miles south of BRTS. This maintenance station relies on diesel generators to operate, but with electricity so close by, the option to transition to electric is more realistic. The transition to electric will improve reliability, reduce cost, reduce the need for frequent fuel deliveries and will benefit the environment through reduced emissions and reduced opportunities for fuel spills. Cell and Weather towers. There are cell and weather towers located along the proposed route that will be able to connect to electricity as the primary power source. Connections will be more reliable as the towers will continue to be connected to back up batteries that ensure continued service even in the event of an outage. This will improve safety to the traveling public as cell service, road condition information and weather updates will be more consistent. Trans-Alaska Pipeline. The Trans-Alaska Pipeline, maintained by Alyeska Pipeline Service Company, runs near the Richardson Highway and will be near the extended electric line. The availability of electricity enables Alyeska to connect existing infrastructure to the grid. The Lodge at Black Rapids is a privately-owned luxury lodge. It sits atop a bluff overlooking Black Rapids Glacier and the Delta River. The Lodge is powered by generators and would benefit from available electric power. Installation Endorsement: The BRTS command projects tremendous benefit enhancing military value, resilience, and quality of life as a result of the GVEA line extension. They have enthusiastically supported conversation and planning for this project. The Commander Letter of Endorsement is included in the following pages. Black Rapids Training Site - Alaska 5 Black Rapids Training Site - Alaska 6 Black Rapids Training Site - Alaska 7 Black Rapids Training Site - Alaska 8 Project Description: GVEA will extend an electric power line approximately thirty-four miles to the south, making electrical power available to BRTS. Final details including exact route specifications are in process. The route is expected to transverse DOT&PF easements. The DOT&PF has offered support for the extension, recognizing that they will also benefit from the power extension. Below is a map of the approximated route for the line extension. The project meets all the criteria needed to qualify as a community infrastructure project: • It will be located physically off and entirely separate from the BRTS military installation but will provide key support for their operations. Black Rapids Training Site - Alaska 9 • GVEA is a not-for-profit, member-owned utility service that was formed to bring reliable electricity to the rural areas of Interior Alaska. For this project, they are partnering with the Alaska Energy Authority (AEA), the state’s energy office and lead agency for statewide energy policy and program development. See Attachment 1 AEA/GVEA Partnership Agreement. • As described in Table 1 above, the project will enhance the military value, resilience, and family quality of life at BRTS by running power lines to site, creating an avenue for safe, clean, and reliable energy. • The project is strongly endorsed by the BRTS Commander and supported by the Eielson Air Force Base leadership (See Attachment 2 Eielson AFB Letter of Support). • The work is projected to begin within 12 months of grant announcement. Work has not yet commenced. • The project is construction ready. GVEA’s engineers are working to finalize the route, acquire required permits and easements, and compete all design elements in preparation for a timely project launch, process implementation, and completion within three years’ time. The power line extension fully addresses Installation concerns regarding vulnerability to diesel fuel delivery delays, power capacity for BRTS, environmental hazards and will ensure that the site is fully capable of supporting expanded training. BRTS’ operating expenses will be reduced because the site will be less reliant on diesel fuel generators and high-cost fuel. While some backup generators will still be required, they will only need to provide redundancy for mission-critical items. The electrical lines will easily deliver sufficient power to fully operate BRTS, even with high-tech, high-draw equipment and increased demand. With the addition of electrical power, BRTS will be resilient and able to weather adverse climate conditions and logistic challenges. There will be less likelihood of negative environmental impacts. The additional power will positively affect military members’ quality of life, providing increased connection between military members and their distant families, sustaining leisure activities, and improving the living environment at BRTS. Project Engineering Information: The power line extension is a routine project for GVEA. While few companies are capable of building in Alaska’s terrain and climate conditions, GVEA was created for the purpose of providing power to rural Alaska. The utility company has more than 70 years’ experience developing the technical skill and experience to develop and lead projects like this. During the first three months after grant award, GVEA’s engineers will inventory challenges that may be encountered in the form of weather, cultural resources, archeological resources, terrain, supply chain and logistics to ensure project success. The design of the distribution line will be based on the standards established by the U.S. Department of Agriculture Rural Utilities Service (RUS) Bulletin 1728F-803, the National Electric Safety Code, and requirements of the State of Alaska. The RUS Bulletin is available at <https://www.rd.usda.gov/files/UEP_Bulletin_1728F-803.pdf>. The National Electric Safety Code describes the requirements for strength, ground clearance, and other considerations. It is available at <https://standards.ieee.org/products-programs/nesc/>. The NESC identifies the design strength requirements of the Black Rapids area as “NESC Heavy.” GVEA will apply these strength requirements as a minimum, and supplement them where experience has shown that it is prudent. Black Rapids Training Site - Alaska 10 GVEA uses industry-standard computer-aided design aids and surveying equipment to efficiently design power lines that can withstand the weather extremes identified by the NESC and other sources, but also be built economically. These design aids include AutoCAD, SPIDACalc, and PLS-CAD, LPILE and other specialty software tools. DCIP support is critical to making this project feasible in the near term. Project plans are in process and construction is prepared to launch within 12 months as demonstrated in the project schedule. Based on the completion of similar projects, GVEA confidently predicts completion within 36 months of grant announcement. The power line will be extended for thirty-four miles from Milepost 258.5, its current termination point. It will utilize the industry-standard sixteen utility poles per mile with approximately 20% of the poles being dead-end or turning poles. It will utilize steel-reinforced aluminum conductors (1/0 ACSR), 3-phase construction on 50 feet poles. The installation will comprise 550 poles and 720,000 feet of conductor. The power line will be built to standards of the U.S. Department of Agriculture's Rural Utilities Service, the National Electric Safety Code, and the State of Alaska. GVEA’s more than 75 years’ experience building power lines and delivering power through Interior Alaska ensures that the utility is has strong consistent experience in implementing and managing projects similar to this. Originally tasked with delivering electricity to rural Alaska, GVEA has grown to serve 100,000 interior residents who live in the communities of Delta Junction, Fairbanks, Nenana, Healy, and Cantwell. It already provides service to Fort Greely, Fort Wainwright, Clear Space Force Station, and Eielson Air Force Base. The proposed project is a logical extension of service that GVEA currently provides for the identified rural area. GVEA is unique compared to other electric cooperatives. Most others are responsible for one element of power supply. GVEA is responsible for all three key elements: power generation, transmission, and distribution in some of the most challenging terrain and extreme weather. They are responsible for over 3,000 miles of electric line. Despite the challenges of extreme weather, remote locations, and rough terrain, GVEA had a 99.9% reliability rate in 2021. The project budget is founded on GVEA’s extensive experience in the field and reflects the actual costs recorded for similar projects. GVEA typically builds $2 million worth of distribution line extensions each year, so this project clearly aligns with their expertise and resources. Examples of previous grant- funded projects include the Delta Agriculture Project in 1982 that delivered power to agricultural parcels north of Black Rapids, the project was funded by the state of Alaska. They collaborated with the state to build power lines to the communities of Cantwell and McKinley Village. That project was in mountain pass terrain with weather patterns similar to those in the Black Rapids area. GVEA has the experience and expertise to design, implement and manage this project from initial turning ground to power delivery. Project Parties: The project applicant is AEA, the state’s energy office and lead agency for statewide energy policy and program development. The project will be designed, constructed, and maintained by GVEA, a not-for-profit, member- owned utility, acting as a sub-recipient for AEA. The proposed electrical line will be installed and maintained by the GVEA. Black Rapids Training Site - Alaska 11 Grant Funds and Other Sources of Funds: The affected area is identified by HRSA as rural, so the partners request that matching funds be waived. They will pay for soft costs (planning and design, NEPA documentation, permit applications and pre-construction engineering). They understand that any cost overruns will be their responsibility. The general operating funds that would be used to cover any potential cost overruns are available and unencumbered. DCIP funds will not supplant other federal funds. GVEA requires contractors to provide a surety bond prior to beginning construction activities. The construction contractor will have their own bonding and insurance. Depending on who owns the land the extension line crosses, GVEA might be obligated to provide a performance bond. This will only be realized as the route is finalized. GVEA has the capability to, and will, secure any required bonding before construction commencement. This capability is evidenced by historic projects GVEA has launched and successfully completed. The federal government’s Rural Utilities Service and its lending agency, the Federal Financing Bank (FFB), and the Cooperative Finance Corporation (CFC) have entrusted GVEA with hundreds of millions of dollars in the form of loans used to build power lines and other infrastructure, and routinely monitor the efficacy of GVEA’s operations to ensure the security of their assets. A table explaining the sources and uses of funds is below. A detailed budget is provided in the next section. Uses of Construction Project Funds: A detailed budget is provided on the following page. The Third-Party Cost Estimates are provided by Dryden & LaRue, Inc., Consultant Engineers, and Design Alaska, a full-service architecture and engineering firm. See Attachments 3 and 4 for the Third-Party Cost Estimate. As mentioned previously, DCIP funds will not supplant other federal funds. We are not aware of other federal funding that would apply to this need, including EDA and USDA. Further, the Defense Access Roads and Rebuilding American Infrastructure programs are transportation-focused and not applicable. Sources of Funds Amount Total DCIP Grant Amount Requested (Federal) 12,752,540$ GVEA Internal Funds (Non Federal) 272,328$ TOTAL SOURCES: 13,024,868$ Black Rapids Training Site - Alaska 12 Soft Costs GVEA engineering design & planning 170,000$ GVEA permitting for NEPA process & Alaska DOT easement 102,328$ Subtotal - Soft Costs 272,328$ Hard Costs ADMINISTRATION 608,148$ Grant Administration Costs from AEA $150,000 Executive $10,500 Direct Management $45,000 Grants/Accounting $70,500 AEA Audit $22,500 Travel $2,000 Subtotal $150,500 Consulting for NEPA Permitting 100,000$ Construction Management and Inspection 170,547$ Surveying 187,601$ Administration Costs Total 608,148$ CONSTRUCTION 10,445,496$ Contract Construction Costs 6,991,460$ Performance Bonding 69,915$ Mobilization 1,048,719$ Transport Poles, Insulators, and Other Material to Site 908,890$ Construction Permitting 139,829$ Traffic Control During Construction 139,829$ Assemble Structures Per Assembly Drawings 1,398,292$ Set Structures 1,398,292$ Pull Conductor 1,048,719$ Sag Conductor 699,146$ Switching Operations to Energize Conductor 139,829$ Subtotal 6,991,460$ Cost of Poles, Conductor, Insulators, and Other Material 3,031,164$ Contracted Clearing of Right-of-Way 422,872$ Construction Costs Total 10,445,496$ INSPECTION -$ There are no inspection costs associated with this project UTILITIES -$ There are no utility costs associated with this project Subtotal - Hard Costs 11,053,644$ ALL COSTS (Hard Costs + Soft Costs) 11,325,972$ CONTINGENCY (15%)1,698,896$ TOTAL 13,024,868$ Cost Estimate for Construction of Black Rapids Distribution Line Extension IDTask ModeTask Name Duration Start Finish1Black Rapids Distribution Line872 daysFri 7/1/22Mon 11/3/252Grant Application Process45 daysFri 7/1/22Thu 9/1/223Regulatory Approval176 daysTue 3/1/22Tue 11/1/224Prepare application to expand service territory44 daysThu 9/1/22Tue 11/1/225Obtain Regulatory Approval for expanded service territory1 dayTue 3/1/22Tue 3/1/226Permitting197 daysSat 10/1/22Sat 7/1/237Alaska DOT Easement67 daysSat 10/1/22Sat 12/31/228Provide opportunities for publlic comment24 daysSun 1/1/23Wed 2/1/239NEPA permitting197 daysSat 10/1/22Sat 7/1/2310<New Task>11Hire consultant for NEPA review33 daysSat 10/1/22Tue 11/15/2212Complete NEPA permitting requirements165 daysTue 11/15/22Sat 7/1/2313Final approval of all required NEPA permits0 daysSat 7/1/23Sat 7/1/2314Design480 daysSat 10/1/22Thu 8/1/2415LIDAR survey of likely routes22 daysSat 10/1/22Sun 10/30/2216Identify route alternatives67 daysTue 11/1/22Wed 2/1/2317Determine design wind, ice, siesmic loads for the route alternatives45 daysSat 10/1/22Thu 12/1/2218Quantify appropriate design loads and any unusually extreme weather45 daysThu 12/1/22Wed 2/1/2319Identify road crossings for DOT permitting24 daysSun 1/1/23Wed 2/1/2320Sag & Tension calculations21 daysWed 2/1/23Wed 3/1/2321Basic design manual24 daysWed 3/1/23Sat 4/1/2322Structure spotting22 daysSat 4/1/23Mon 5/1/2323Produce plan and profile drawings24 daysMon 5/1/23Thu 6/1/2324Design modifications to avoid environmental, viewshed, archeological, and cultural resources as needed.44 daysThu 6/1/23Tue 8/1/2325Field work to identify clearing limi329 daysMon 5/1/23Thu 8/1/2426Field work ‐ staking structure locations262 daysSat 7/1/23Mon 7/1/2427Order Materials176 daysSun 1/1/23Fri 9/1/2328Bidding24 daysTue 8/1/23Fri 9/1/2329Right‐of‐Way Clearing306 daysFri 9/1/23Fri 11/1/2430Construction526 daysFri 9/1/23Fri 9/5/2531Final Inspection546 daysFri 9/1/23Fri 10/3/2532Project Closeout24 daysWed 10/1/25Mon 11/3/257/120222023202420252024TaskSplitMilestoneSummaryProject SummaryExternal TasksExternal MilestoneInactive TaskInactive MilestoneInactive SummaryManual TaskDuration‐onlyManual Summary RollupManual SummaryStart‐onlyFinish‐onlyDeadlineProgressManual ProgressPage 1Project: Black Rapids Training Site Line Extension Date: Sun 7/17/22Project Development Schedule Black Rapids Training Site - Alaska 13 Black Rapids Training Site - Alaska 14 Environmental Compliance: In accordance with GVEA and industry best practices, environmental review and permitting will be performed by an experienced environmental contractor when the project design process is initiated to ensure all applicable permits are identified, secured, and complied with during the project. As we finalize the route, the consultant will guide the team to complete the appropriate NEPA permitting and review processes. State and Local Planning: Review and approval by other entities: (if required) Alaska Department of Transportation & Public Facilities (DOT&PF). GVEA is coordinating with DOT&PF to use their right of way easements along the proposed route. DOT&PF have indicated approval and willingness to work with GVEA, the official documentation will be processed as soon as grant funding is approved so the project can move forward. (Attachment 5, letter of support) Regulatory Commission of Alaska (RCA) - GVEA is subject to economic and service-territory regulation by the Regulatory Commission of Alaska. As such, any changes to GVEA's service territory to accommodate the Black Rapids extension will need to be approved by the RCA. This will take shape in the form of a tariff advice filing prepared by GVEA. Such filing will be subject to a 45-day review period and at the end of the review period, the filing will either be approved, denied, or suspended for further investigation. During this time, the public will also have an opportunity to comment on GVEA's filing. The comment period usually is 30 days. Grants Management: AEA, the applicant, is an independent and public corporation of the State of Alaska, est. 1976. AEA is governed by a board of directors with the mission to “reduce the cost of energy in Alaska.” AEA is the State Energy Office and lead agency for statewide energy policy and program development. Whether building modern and code-compliant bulk fuel tank farms, upgrading to high- efficiency generators in rural powerhouse systems or integrating renewable energy projects, AEA emphasizes community-based project management. AEA has the experience, expertise, equipment, and staff ready to achieve the project objectives set out in this application. The AEA has staff specifically designated for grants, compliance, procurement, contracting, and finance. Each of these teams have adequate resources to ensure the project is on budget and on schedule. AEA also manages the Renewable Energy Fund, the Emerging Energy Technology Fund, the Power Cost Equalization Program and various Energy Efficiency and Conservation Programs. AEA provides grants and loans for qualified energy infrastructure projects and owns energy infrastructure for the benefit of Alaskans. They have successfully managed, completed, and closed well over three hundred grants in the last decade from many different agencies as well as private funds from the Volkswagen Settlement and Wells Fargo. AEA has thirty active awards with the Denali Commission. These awards touch on every aspect of what our agency does. There are awards for design and construction of Rural Power System Upgrades (RPSU) and Bulk Fuel Upgrades (BFU), small renewable projects that will be integrated into a remote diesel power system, energy efficiency upgrades, Utility Clerk, Powerhouse Operator, and Bulk Fuel Operator training, small maintenance, and improvements for both power systems and tank farms as well as circuit rider technical assistance and on-site training. Black Rapids Training Site - Alaska 15 Active Projects Award Year Agency Award Amount Project Description Multiple Denali Commission $ 20,000,000 Rural Infrastructure and Training AEA has partnered with Denali Commission from its inception working on Bulk Fuel, Rural Power System, Renewable Energy, Energy Efficiency and Training Programs since 1999. Award amount reflects thirty current active awards 2021 USDA High Energy Cost Award $ 2,974,420 Napaskiak Rural Power System Upgrade New powerhouse module and small distribution upgrades. This project is currently estimated at $4.8 million 2021 EPA $506,679 Diesel Engine Replacement Replace Diesel Engines used for prime power in rural Alaskan communities. Match required under this program from AEA capital and VW Trust is $506,679 2020 US DOT $ 21,000,000 Alaska Cargo and Cold Storage Project Highly efficiency climate-controlled cargo facility at the Ted Stevens Anchorage International Airport 2019/ 2020 EPA $ 964,479 Diesel Engine Replacement Replace diesel engines used for prime power in rural Alaskan communities. Match required under this program from AEA capital and VW Trust is $964,479 Submitting Official The applicant, AEA is a public corporation of the State of Alaska and the designated state energy office. The mission of AEA is to reduce the cost of energy in Alaska. The agency works toward that goal by administering a variety of statewide programs which include the Rural Power System Upgrade program (RPSU), the Bulk Fuel Upgrade program (BFU) and the Renewable Energy Fund (REF) which integrates renewable energy in generation facilities. AEA also administers end use efficiency grants, educational programs and technical assistance programs which train local operators to monitor their local diesel-based power plants and maintain efficient operations. Per the AEA Bylaws and Alaska Statute 44.83.080 subsection ten, AEA has the legal authority to apply for and receive these funds. Executive Director, Curtis Thayer, is authorized to sign legal documents and grant the funds to GVEA. National Security Waiver Attestation (If Appropriate) Not Applicable Attachments: 1.Partnership Letter of Intent with AEA and GVEA 2.Letter of Support from Eielson Air Force base 3.Third-Party Cost Estimate from Dryden & LaRue, Inc. 4.Third-Party Cost Estimate from Design Alaska 5.Letter of Support from Alaska DOT&PF DDEPARTMENT OF THE AIR FORCE 3354th fighter wing 14 JULY 22 TO: Mr. John Burns, CEO Golden Valley Electric Association 758 Illinois Street, Fairbanks, AK 99701 FROM: 354 RANS/CC SUBJECT: USAF interest in access to utility electrical power at Donnelly Dome, Alaska. 1. The 354 th Range Squadron (354 RANS) is responsible for the Joint Pacific Alaska Range Complex (JPARC), the largest air combat training venue in the Department of Defense. JPARC facilitates year round daily training and execution of major exercises such as RED FLAG-Alaska and NORTHERN EDGE. 2. Our Donnelly Dome site, at the end of 6 mile dirt road, is approximately 4 miles directly southwest of milepost 249 the Richardson Highway. This site supports communications to aircraft, threat simulators, weapon scoring, aircraft tracking, and data to other JPARC sites. 3. Currently Donnelly Dome is powered using constant run diesel fired generators. Typical annual fuel usage is approximately 40,000 gallons. We estimate the basic fuel costs in CY 22 to be $200,000 dollars. With the additional costs of delivery, motor oil, coolant, labor, amortized generator replacement, etc. the cost to keep this powered is approximately $350,000 per year. 5. The proposed grant from the Defense Community Infrastructure Program to enable the Alaska Energy Authority and Golden Valley Electric Association to extend utility power from milepost 258.8 of the Richardson Highway to the Black Rapids would increase the availability of power at Donnelly Dome. Having utility electrical power at Donnelly Dome would not only mitigate the annual operating expenses and increase reliability, but would reduce the amount of hazardous materials transported and stored, and emissions produced. 6. Given the outcome of this grant will be a step toward getting unity power to the USAF site at Donnelly Dome, it could benefit the operations of the 354 RANS. As such, I support this grant application. DANIEL C. WYNN, Lt Col, USAF Commander. Digitally signed by WYNN.DANIEL.CARDON.1174 561962 Date: 2022.07.15 15:04:23 -08'00' July 15, 2022 John Burns, CEO Golden Valley Electric Association 758 Illinois Street Fairways, AK, 99701 RE: FY 2022 Defense Community Infrastructure Pilot Program Third Party Cost Estimate Dear Mr. Burns, Golden Valley Electric Association (GVEA) has asked Dryden & LaRue, Inc. to provide a third party cost estimate to validate the proposed project budget for the GVEA Black Rapids Training Site Power Line Extension Project. Our company is a consulting engineering firm experienced with estimating costs for electric utilities in the Alaska terrain for similar projects. Our company has no relation to the GVEA or GVEA contractors. We have reviewed the proposed project budget prepared by GVEA and, based on current labor rates and material costs, we find it to be in reasonable range with similar projects. DRYDEN & LARUE, INC. Matthew S. Williams, P.E. John Burns, CEO  Golden Valley Electric Association  758 Illinois Street  Fairways, AK, 99701  RE: FY 2022 Defense Community Infrastructure Pilot Program Third Party Cost Estimate   Dear Mr. Burns,   Golden Valley Electric Association (GVEA) has asked our company, Design Alaska, to provide a third‐ party cost estimate review of and to validate the proposed project budget for the GVEA Black  Rapids Training Site Power Line Extension Project.   Our company is a full service architectural and engineering firm and experienced with estimating  costs for many facets of commercial construction, electric utilities, including power line  construction in the Alaska terrain for similar projects.   Our company has no relation to the GVEA or GVEA contractors.   We have reviewed the proposed project budget and find it to be reasonable and appropriate.   Sincerely,   Donald L. Hopkins, PE – AELE10582  Insert Signature   “Keep Alaska Moving through service and infrastructure.” Department of Transportation and Public Facilities NORTHERN REGION Design & Engineering Services 2301 Peger Road Fairbanks, AK 99709-5316 Main: 907-451-2273 TDD: 907-451-2363 dot.alaska.gov July 18, 2022 John Burns, CEO Golden Valley Electric Association 758 Illinois Street Fairways, AK, 99701 Dear Mr. Burns, The Alaska Department of Transportation & Public Facilities (DOT&PF) understands that GVEA is exploring an electric line extension from the current terminus near Ft. Greely to the Black Rapids Training Site. While the exact route for this 34-mile line extension will be determined during project design, it seems probable that the majority of the line will follow the Richardson Highway corridor and be placed within the highway right of way. DOT&PF is responsible for managing transportation infrastructure and uses, including permitting utilities, along all of our rights of way. We will work with GVEA as they complete the process to obtain the required utility permits to enable construction of the proposed electric line extension to Black Rapids. Sincerely, Rex Young Regional Permit Officer Grant Application U.S. Department of Transportation Maritime Administration Port Infrastructure Development Program May 16, 2022 Alaska Energy Authority Grant Application U.S. Department of Transportation MARAD PIDP Grant Application May 16, 2022 Contents Introductory Information ................................................................................................................ 1 Project Narrative ............................................................................................................................. 3 Section I: Project Description ......................................................................................................... 3 Section II: Project Location ............................................................................................................ 5 Section III: Grant Funds, Sources and Uses of Project Funds ........................................................ 8 A. Budget ............................................................................................................................ 8 B. Sources and use of funds ................................................................................................ 8 Section IV: Merit Criteria ............................................................................................................... 9 A. Achieving safety, efficiency or reliability improvements .............................................. 9 1. Loading and unloading of goods at a port ................................................................ 9 2. Movement of goods into, out or, around or within a port ........................................ 9 3. Operational improvements, including projects to improve port resilience ............ 11 4. Environmental and emissions mitigation measures ............................................... 11 B. Supporting economic vitality at the regional or national level .................................... 12 1. Large projects ......................................................................................................... 12 2. Small projects at small ports .................................................................................. 12 C. Addressing climate change and environmental justice impacts ................................... 13 D. Advancing equity and opportunity for all .................................................................... 14 E. Leveraging federal funding to attract non-federal sources of infrastructure investment ...................................................................................................................................... 14 Section V: Project Readiness ........................................................................................................ 14 A. Technical capacity ........................................................................................................ 14 1. Project schedule ...................................................................................................... 15 B. Environmental risk ....................................................................................................... 16 Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 1. Information about the NEPA status of the project ................................................. 16 2. Environmental permits and reviews ....................................................................... 17 3. State and local approvals ........................................................................................ 17 4. Information on environmental reviews, approvals, and permits by other agencies 17 C. Risk mitigation ............................................................................................................. 17 Section VI: Domestic Preference .................................................................................................. 18 Section VII: Determinations ......................................................................................................... 18 Unique Entity Identifier and System for Award Management ..................................................... 22 Appendices Memorandum of Understanding Letters of Support Emissions Analysis Alaska Energy Authority Grant Application U.S. Department of Transportation MARAD PIDP Grant Application May 16, 2022 1 Introductory Information Field Name Guidance Name of applicant Alaska Energy Authority (AEA) Is the applicant applying as a lead applicant with any private entity partners or joint applicants? Yes, AEA is applying as lead applicant with Chugach Electric Association, Inc. (Chugach) and Princess Cruise Lines, Ltd. What is the project name?Whittier-Chugach Cruise Terminal Electrification Project Project description The project will provide shore power to a cruise terminal in Whittier, Alaska. It will include upgrade of 5 miles of new power feed line, installation of transformers near the dock, and installation of equipment on dock to allow vessels to utilize shore power when in port. The project will also include installation of an electric vehicle charging station near the dock. Is this a planning project? No. This is not a planning project. Is this a project at a coastal, Great Lakes, or inland river port? The project is at a coastal port. GIS Coordinates (in Latitude and Longitude format) 60°46'42.0"N 148°41'47.9"W Is this project in an urban or rural area? The project is in a rural area Project Zip Code 99693 Is the project located in a Historically Disadvantaged Community or a Community Development Zone? (A CDZ is a Choice Neighborhood, Empowerment Zone, Opportunity Zone, or Promise Zone.) No, the project is not located in a Historically Disadvantaged Community, a Choice Neighborhood, an Empowerment Zone, Promise Zone or Opportunity Zone. Has the same project been previously submitted for PIDP funding? The project has not been submitted previously for PIDP funding. Is the applicant applying for other discretionary grant programs in 2022 for The applicant is not applying for other discretionary grant programs for this or related scopes of work. Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 2 Field Name Guidance the same work or related scopes of work? Has the applicant previously received TIGER, BUILD, RAISE, FASTLANE, INFRA or PIDP funding? The applicant previously received a BUILD grant in 2020. PIDP Grant Amount Requested $10,000,000 Total Future Eligible Project costs $14,100,000 Total Project Cost $14,100,000 Total Federal Funding $10,000,000 Total Non-Federal Funding $4,100,000 Will RRIF or TIFIA funds be used as part of the project financing? No, RRIF or TIFIA funding will not be used for the project. Alaska Energy Authority Grant Application U.S. Department of Transportation MARAD PIDP Grant Application May 16, 2022 3 Project Narrative Section I: Project Description Overview The Whittier-Chugach Cruise Terminal Electrification Project (WCCTEP) will upgrade the passenger cruise vessel dock in the City of Whittier, Alaska, to provide shore power directly to cruise ships. This will enable the ship to not depend solely on its own diesel sources aboard for power generation while in port. The project also involves installation of an electric vehicle charger for surface vehicles. This project is eligible for the FY2022 PIDP grant offering as an emission mitigation measure that provides “for the use of shore power for vessels to which sections 3507 and 3508 of title 46 apply.” It also is eligible for a Small Project at a Small Port set-aside, given the port does less than 8 million short tons of cargo and project applicant is requesting less than $11.25 million. Last, the project location is at a port in a noncontiguous state, making the project eligible for consideration of all funds to this program by the FY2022 omnibus appropriations law. The lead applicant, Alaska Energy Authority (AEA), is a corporation of the State of Alaska and is an eligible applicant for PIDP grants. It has received a USDOT BUILD grant in 2020. Other project partners include Chugach Electric Association, Inc. (Chugach), a regional nonprofit power cooperative; and Princess Cruises, a private cruise vessel operator that leases the cruise dock site. Project details The shore power project is comprised of a single component with independent utility. It will be conducted by completion of two elements, each performed by different project partners, in different locations. The first element involves upland improvements to bring electric power to the dock. The second element is the development of infrastructure at the dock site itself. Both project elements must be completed to effectuate the desired project outcomes. Upland improvements The upland improvements will ensure a seamless and adequate power link from the nearest substation, in Portage, AK, some 14 miles away, to the cruise dock at Whittier. To accomplish this, three sub-elements must be performed: (1) portions of the feeder line outside of the Anton Anderson Memorial Tunnel must be upgraded; (2) voltage step-down equipment must be relocated to a location near the cruise dock; and (3) specific equipment must be installed to support electric vehicle charging station. Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 4 Figure 1. The feeder line between Portage and Whittier requires improvements to handle 35kV. Rebuild feeder: the feeder line consists of 91 structures of varying age and framing along the Portage River with multiple wetland and river crossings. This project shall reconductor the line using new or existing poles and framing insulated at 19.9Y/34.5kV (35kV). Chugach has identified the rough scope of these improvements, as referenced in Figure 1. Relocate step-down location: to supply the required shore power load at 25kV, the existing step-down location (from 25kV to 15kV) will be relocated to a location near the cruise ship dock. Install new transformer: The project shall also include the installation of a turnkey Level 3 Electric Vehicle Supply Equipment (EVSE) station and associated service equipment to be owned and operated by Princess. The EVSE shall be supplied by new padmount transformer connected to the existing medium voltage loop circuit via line extension. Dock upgrades The dock upgrades consist of three sub-elements, including a feeder utility equipment installation, shore power substation and conduit installation. Feeder utility equipment installation: utility feeder equipment will be installed to accept dedicated 26 kV power from local utility infrastructure. This will include metering provisions and circuit isolation for supply to a turnkey cruise ship shore power system and EV charging stations. Shore power substation: the cruise ship shore power system will be installed in an enclosed, climate controlled, structure. It will include 26 kV primary switchgear that feeds a 20 mVA oil- Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 5 filled substation transformer and automatic load tap changer, dual voltage 11/6.6 kV secondary shore power distribution equipment, and 2-stage power factor correction capacitor. Additional systems included in the substation will be DC station power batteries for substation control power, high impedance grounding resistors, patented shore power automation control system, and disconnect /grounding switches for safe handling of cables and circuit isolation. Conduit install: 11/6.6 kV dual voltage secondary feeders will be installed in a conduit system from the substation to two (2) cruise ship shore power service locations positioned on the fixed floating pier. Each service location will incorporate a plug assembly (sawtooth) to be used with a mobile cable positioning device. Current design status Each of the project elements is at a preliminary design stage. Joint applicants have developed information to determine feasibility and estimate costs. Means and methods of project delivery have not been selected and optimized yet. Project partner descriptions The project will be managed by partners skilled in infrastructure project delivery. These include Alaska Energy Authority, a state corporation and WCTSPP joint applicants Chugach Electric Association, Inc., a nonprofit energy cooperative, which owns the power infrastructure; and cruise vessel operator Princess Cruises, which leases the dock and utilizes it for cruise operations. The project partners have formed a documented partnership to conduct this project, as detailed in the Memorandum of Understanding provided in Appendix A. Other stakeholders will benefit from the project, as detailed in Section IV. Section II: Project Location WCCTEP is located in City of Whittier, AK, and at points between Whittier and the Portage substation up to the entrance to the Anton Anderson Memorial Tunnel approximately five miles away from the cruise ship terminal. Whittier is located at the head of Passage Canal, which is on the western edge of Prince William Sound. Whittier is a fairly unique community in Alaska: it is accessible by road, rail, and ferry. Whittier lies 58 miles from Anchorage, Alaska’s largest population center. The roadway route includes passage through the Anton Anderson Memorial Tunnel – the longest highway tunnel in North America. The rail route on the Alaska Railroad from Whittier utilizes the same tunnel. Finally, the City is a deep water coastal port stop on the Alaska Marine Highway. Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 6 Figure 2. Showing Whittier relative to Anchorage. Whittier is 58 miles from Anchorage. Figure 3. Showing Whittier location vis-à-vis the State of Alaska. Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 7 Whittier, Alaska, is in a rural area. Data from the 2020 Census indicates a total population of 272,1 nearly all of whom live the same building—Begich Towers. The City’s cruise dock has been a boon for commerce, as the City’s population doubles during the summer cruise season. Figure 4. The Whittier Cruise Dock is located adjacent to a small boat harbor and the Alaska Railroad line. Figure 5. Summer cruise season brings many tourists and additional economic activity to Whittier. 1 Source: https://data.census.gov/cedsci/profile?g=1600000US0284510 Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 8 The WCTSPP is not located on a Historically Disadvantaged Community, nor any federally designated Community Development Zone. However, USDOT has designated Census Tract 3 as a resilience disadvantaged community. Section III: Grant Funds, Sources and Uses of Project Funds A. Budget Cost category Budget PIDP funds Non-federal match funds Dock electrical improvements $8,900,000 $6,900,000 $3,000,000 Project inspection fees ($134,000) Site work ($55,636) Construction ($2,869,960) Equipment ($3,289,181) Miscellaneous ($5,500) Contingencies ($2,279,320) Upland improvements $4,700,000 $3,600,000 $1,100,000 Project inspection fees ($375,000) Site work ($90,000) Demolition and removal ($450,000) Construction ($1,970,000) Equipment ($790,000) Program management (%) $500,000 $500,000 0 TOTAL $14,100,000 $10,000,000 (71%) $4,100,000 (29%) The budget is based on the following assumptions: Dock improvement design requirements will not require extensive changes to proven designs for shore power systems at other ports Contingency of 34% for dock electrical improvements scope of work B. Sources and use of funds All non-federal matching funds are committed to the project. See MOU provided in Appendix A for details. Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 9 Funding sources Status Amount Cost percentage Non-federal funds: Committed $1,100,000 29% Chugach Electric funds: line extension credit Princess Cruises funds Committed $3,000,000 MARAD PIDP funding Upon grant award, pursuant to this application, submitted on May 16, 2022 $10,000,000 71% TOTAL $14,100,000 100% Section IV: Merit Criteria A. Achieving safety, efficiency or reliability improvements 1. Loading and unloading of goods at a port The project is not expected to directly impact the loading and unloading of goods at a port. However, investments into the shore power infrastructure at the dock could enable cargo vessels to utilize the dock during the winter season when no cruise operations are being conducted at the port. In addition, WCCTEP will facilitate the use by logistics companies of electric vehicles by creating the first EV charging station at the port and in the City of Whittier. Anchorage, some 60 miles away, is reported to have more than a dozen charging stations, and Alyeska, some 25 miles away has one as well. This buildout of a Level 3 commercial-grade fast charging station- capable of supporting electric trucks – can help support greater adoption of EVs in Alaska, including for freight transportation. 2. Movement of goods into, out or, around or within a port WCCTEP will impact the movement of goods into, out or, around or within the port in several ways. Helps improve freight efficiency for operators in Whittier Since cruise operations at Whitter are seasonal, other port stakeholders may take advantage of the new electric infrastructure and benefit from it. For example, Lynden Transportation, one of the largest Alaska transportation operations serving Alaska has indicated the following in a WCCTEP letter of support, provided in Appendix B: Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 10 The electrification of the Whittier dock would allow Lynden to maximize efficiency with use of both electric dock equipment and electric transport vehicles to improve their multi-modal cargo operations at Whittier. As the electrification of transportation becomes more commonplace, having the capability to plug in could make the transition much more efficient. Jim Jansen, Chairman, Lynden, Inc. The Alaska Railroad will also benefit from the new electric power infrastructure provided by the project. These benefits include the dock in infrastructure as well as the strengthened power feeder lines to the Anton Anderson Memorial Tunnel. The upgrades to the tunnel may improve reliability of power to the tunnel itself, thereby reducing the risk of an incident involving the tunnels safety appliances including lighting and ventilation. As the longest tunnel in North America, and the primary route between Whittier and Anchorage, the tunnel’s lighting and ventilation are critical for safe passage. A letter of support from Alaska Railroad is provided in Appendix B. The following is noted in the letter: Dock electrification and an associated increase in power supply would be a boon for Whittier, unlocking opportunities for the railroad and our partners to access more efficient, environmentally friendly means of moving people and goods. Moreover, we understand the project could potentially improve power reliability in the Whittier Tunnel, which is the only land access to Whittier. Whether accommodating electric vehicle use, enhancing passenger and freight operations, or fortifying community access, the Alaska Railroad supports additional infrastructure and power capabilities to the area. Bill O’Leary, President and CEO, Alaska Railroad Helps facilitate EV adoption The project will facilitate the use by logistics companies of electric vehicles by creating the first electric vehicle charging station at the port and in the City of Whittier. Anchorage, some 60 miles away, is reported to have more than a dozen charging stations, and Alyeska, some 25 miles away has one as well. This buildout of a Level 3 commercial-grade fast charging station- capable of supporting electric trucks – can help support greater adoption of EVs in Alaska, including for freight transportation. Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 11 Figure 6. The adoption of electric vehicles, including battery electric and hybrid-electric vehicles, continues to increase in Alaska.2 3. Operational improvements, including projects to improve port resilience Whittier is federally designated as a resilience disadvantaged community, per USDOT mapping tools.3 This is for good reason. On March 28, 1964, Whittier suffered over $10 million 4 worth of damage in what became known as the Good Friday earthquake. According to the USGS,5 this earthquake remains the largest U.S. earthquake and second largest in the world, measuring 9.2 on the moment magnitude scale, and having caused tsunamis along the West Coast of the U.S. The tsunami that hit Whittier reached a height of 13 m (43 feet) and killed 13 people. By diversifying power sources for vessels and equipment, and increasing the power delivery capabilities to the community, WCCTEP helps to create a more resilient infrastructure, less dependent on a single source of energy. This will create a more resilient port, less dependent on traditional energy sources. In addition, as described in more detail in Section 4(C), by enhancing the feeder line from the Portage substation, the project will help seed the potential development of additional electrification projects. 4. Environmental and emissions mitigation measures As a shore power project, WCCETP directly impacts the reduction of greenhouse gas emissions and criteria pollutants from the port. From an operational perspective, the benefits of electrifying the Whittier dock may be higher than other cruise port locations, because most vessel calls at Whittier average around 20 hours, which is longer than other ports in Alaska. 2 Source: https://www.chugachelectric.com/energy-solutions/electric-vehicles 3 Source: https://usdot.maps.arcgis.com/apps/dashboards/d6f90dfcc8b44525b04c7ce748a3674a 4 This is equivalent to $93 million in today’s dollars. 5 Source: https://www.usgs.gov/programs/earthquake-hazards/science/20-largest-earthquakes-world Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 12 Project partner Princess performed an analysis of the impact of shore power systems on their vessel emissions, found in Appendix C. This analysis includes models for 2022 and 2023, for which they have data on expected port calls, vessel types and emissions impacts. The analysis showed an expected reduction of nearly 60% for CO2 emissions due to WCCETP, equivalent to nearly 3,500 metric tons of CO2 annually. Additionally, the study identified potential reductions of 77-80 metric tons per year of NOx, SOx, CO, and Particulate Matter (PM)). The assumptions and models used to calculate these savings are provided. Lastly, the study noted other benefits of the WCCETP, including: the elimination of visible emissions, except on engine startup when departing; reduction in noise from ship’s engines: reduced engine hours, which increase potential maintenance intervals; and improved maintenance flexibility due to long port times with engines offline. B. Supporting economic vitality at the regional or national level 1. Large projects Regarding eligibility for funding under the FY2022 Appropriations Act, this section is not applicable to the WCCTEP, as the project is located in a noncontiguous State. 2. Small projects at small ports WCCTEP qualifies as a small project at a small port. The project will increase the resilience of the region to recover from major incidents. Two notable historic events include: The 1964 Good Friday Earthquake, described in Section A(3) The 1989 Exxon Valdez oil spill The Exxon Valdez spill was one of the largest environmental disasters in U.S. history.6 It resulted in more than 11 million gallons of crude oil being spilled into ecologically sensitive Prince William Sound, affecting more than 1,300 miles of shoreline, with immense impacts for fish and wildlife and their habitats, as well as for local industries and communities. Today, Whittier’s economy largely depends on travel and tourism linked to attractions like Prince William Sound. Another disaster like the Exxon Valdez could set back the local economy, and that of other port cities on Prince William Sound. By providing the infrastructure for electric shore power to large vessels, WCCTEP can be considered a step toward accommodating future vessel power and propulsion technologies that do not require fossil fuels and may rely on shore power for recharging. Finally, Census data 7 indicate the population of Whittier may be more vulnerable to negative impacts of a major incident. For example: 6 Source: https://darrp.noaa.gov/oil-spills/exxon-valdez 7 Source: https://data.census.gov/cedsci/profile?g=1600000US0284510 Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 13 Poverty level Whittier’s poverty level is higher than the Alaska State average by 1.5% (11.8% vs. 10.3%) Employment rate The employment rate is 10% lower in Whittier than the statewide average (49.8% vs. 59.6%) Disability rate Disability rates in population are 6% higher in Whittier than statewide (18.4% vs. 12.3%) Healthcare coverage Whitter’s population without healthcare coverage is 27.1% vs. 12.6% statewide By reducing the potential for disasters, the shore power project will make incremental, but important symbolic steps toward a more resilient future for Whittier. C. Addressing climate change and environmental justice impacts WCCTEP is foremost an electrification project designed to reduce greenhouse gas and other criteria pollutant emissions. It will do this by providing shore power infrastructure to vessels as well as an electric vehicle charging station for use by surface vehicles. The greenhouse gas and criteria pollutant emissions reductions are discussed in Section A(4), above. The secondary impacts are further reaching and help contribute toward the Department’s climate goals. These impacts include: Supporting the shift toward electric vehicle and vessel technologies Creating opportunities for additional electrification projects Increasing the use of renewable energy for shore power Supporting the shift toward electric vehicle and vessel technologies The project contributes toward the long-term shift to cleaner energy, by creating the infrastructure to support vessels with shore power while in port. Maritime industry leaders acknowledge that a long-term trend is toward battery-powered vessels. These will rely on shore power while in port, and charge ship’s power storage units. By creating the infrastructure to support current uses of this shore power, WCCTEP is helping to prepare U.S. port infrastructure for future large-scale industry shifts. Creating opportunities for additional electrification projects By upgrading the feeder line from the Portage substation to the port location, there is additional potential to support more electrification projects. These may include other port equipment or vehicles. Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 14 Increasing the use of renewable energy for shore power While the current power generation for the region consists of 20% renewable energy sources, this figure is expected to grow as the region’s power needs increase. By shifting power demand from ship’s engines to the region’s grid via shore power, the vessels operators will help induce demand to support more energy generation projects, including renewable energy projects. D. Advancing equity and opportunity for all WCCTEP will advance equity in at least two ways: (1) AEA routinely encourages participation of disadvantaged business enterprises (DBEs) in their contracts and conducts outreach to DBEs via state email list when soliciting opportunities; and (2) the project supports sustainability and growth for Princess’ diversity, equity and inclusion initiatives. Princess Cruises’ parent, Carnival Corporation & PLC, has received recognition as America’s Top Employer for Diversity from Forbes media for multiple years. The company continuously strives to ensure that its workforce reflects global diversity. Currently, the company’s shoreside workforce is comprised of 59% women. E. Leveraging federal funding to attract non-federal sources of infrastructure investment The project leverages funding from two different local match sources: Electric utility Private vessel operator leasing the dock This effective partnership among public and private entities will create $3.8 million in leveraged investment. This level of investment exceeds the grant program minimum requirements of 20% by providing 28% of the project funding from leveraged sources. In addition, with the infrastructure in place, vessel operators will be incentivized to ensure their vessels have been modified to accept the shore power WCCTEP will provide at Whittier, should they choose to be able to call on the port. Section V: Project Readiness A. Technical capacity The project partners are all well experienced organizations that have delivered similar projects in the past. AEA is a highly experienced organization when it comes to administering federal and USDOT grants. Below is a snapshot of more than $30 million in grants that the organization has administered since 2018. This list does not include awards from the Denali Commission, the federal cognizant agency for AEA. Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 15 Figure 7. AEA has recent experience administering grants from USDOT and other Departments. Chugach Electric's Engineering Department provides design and construction oversight to all scheduled capital infrastructure work on the 12.5, 25, and 35kV distribution as well as 69kV and above transmission systems located in the Anchorage Bowl, Kenai Peninsula, and the Beluga- Tyonek area. Chugach’s Engineering Department typically manages a $70MM capital budget year over year actualizing 100,000 internal resource labor-hours. In 2021, The Chugach Electric Engineering Department worked on 361 individual capital projects, completing 138 of those through construction during that year. Princess Cruises works closely with vendors who specialize in developing shore power solutions specifically for cruise ships. These larger vessels often have hoteling loads that are higher than many cargo ships. Princess is part of the Carnival Corporation, which has the largest market share of any cruise line in the world. Cost data for this application was developed in 2Q 2022 by experts who regularly estimate costs for shore power projects (dock upgrades scope of work) or power projects (upland improvements scope of work). For the dock upgrade design, costs were based on a zero % completion design, however, costs were compared to similar projects of similar size/scope. For the upland improvements scope of work, costs were based on previous feasibility analysis performed by Chugach. 1. Project schedule The schedule is developed to accommodate the seasonal use of the Whittier cruise dock. This strategy will target installation and commissioning during the 2024 sailing season. In addition, Award Year Agency Award Amount Project Description 2021 USDA High Energy Cost Award 2,974,420$ Napaskiak Rural Power System Upgrade New power house module and small distribution upgrades. This project is currently estimated at $4.8 million 2021 EPA 506,679$ Diesel Engine Replacement Replace Diesel Engines used for prime power in rural Alaskan communities. Match required under this program from AEA capital and VW Trust is $506,679 2020 US DOT 21,000,000$ Alaska Cargo and Cold Storage Project Highly efficiency climate controlled cargo facility at the Ted Stevens Anchorage International Airport 2019/2020 EPA 964,479$ Diesel Engine Replacement Replace Diesel Engines used for prime power in rural Alaskan communities. Match required under this program from AEA capital and VW Trust is $964,479 2018 Volkswagen Settlement 8,125,000$ Multiple AEA has a public Benificiary Mitigation Plan that includes Electric Vehicle Charging Infrastructure, School Bus Replacement, Public Transit Bus Replacement, Replacement of Diesel Engines Used for Prime Power AEA Qualification and Funding Sources Active Projects Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 16 materials with anticipated long delivery lead times will be ordered as soon as possible, when the grant award is announced. WCCTEP Schedule Date (Quarter)Upland Improvements Dock Upgrades 2Q 2022- 3Q 2022 Develop EPC Contract, RFP, and Specifications for the upland improvements Proceed with design work for dock system 4Q 2022- 1Q 2023 PIDP awards announced; decision to proceed with order of long lead- time materials or pause project Complete competitive bidding process PIDP award announced; decision to proceed with order of long lead-time materials or pause project Complete procurement decisions 2Q 2023- 3Q 2023 Proceed with design/permitting work Construct substation building, conduit 4Q 2023- 3Q 2024 Construction: Upgrade feeder line Relocate stepdown terminus Install EV charging station Install equipment when arrives from factory 3Q 2024 System test and commissioning B. Environmental risk 1. Information about the NEPA status of the project Currently, the project is still in the early planning phase. No NEPA course of action has begun. On May 13, 2022, representatives from AEA, Chugach and Princess met with MARAD’s NEPA Coordinator in the Office of Environmental Compliance. After discussion of the project scope, the participants spoke about the likely potential the project would qualify for a categorical exclusion as it primarily involves replacement of existing technology and no in-water work. The participants discussed the factors which might elevate the level of scrutiny, including whether there is work in wetlands areas for the upland improvements. Call participants discussed that the while none of the work is planned to be in the river itself, the Chugach power lines do traverse the river at some points. As the discussion went further, it was noted that the project is still early in the planning process, and that the means and methods of conducting the project need to be developed. There will be several ways to execute the project, some less impactful than Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 17 others. For example, since nearly all of the work on the uplands portion of the project is above ground, much work could be done in the winter, where there is less disturbance of any wetlands areas, by taking advantage of frozen ground. Helicopter-assisted delivery of equipment also may be an option. The MARAD coordinator pointed out that if US Army Corps of Engineers permits are required for the project, MARAD has an agreement with USACE to coordinate reviews of projects that involve both agencies. 2. Environmental permits and reviews The dock upgrade portion of the project may be required a standard trade permit for electric hookups. The upland portions of the project may require state and local permits; project partner Chugach is in the process of researching potential permit requirements. All project participants are motivated to move the project forward rapidly, in compliance with all relevant regulations and standards. No right-of-way acquisition is needed for the project. 3. State and local approvals Project participants expect the timely issuance of permits for this project, consistent with other projects commonly performed to provide power upgrades. Since the project participants are the relevant transportation facility owners/lessees, there is no need to acquire right-of-way. The project is expected to draw broad support, as it engages new demand for power, on an interruptible basis. In short, the project not only reduces air emissions at the port area when cruise vessels are docked there but also helps reduce overhead and ratepayer costs for all electric power consumers in the Chugach Electric region. 4. Information on environmental reviews, approvals, and permits by other agencies At this time, it is unknown what permits might be required, particularly for the upland work. The project is early in the design/planning phase and more specific permitting research and requests will be evaluated as part of the design process. The project does not depend on, nor is it affected by, U.S. Army Corps of Engineers investment or U.S. Army Corps of Engineers planned activities. C. Risk mitigation Project sponsors evaluated the project for risk. For the dock upgrade portion of the project, the key risk is whether additional costs will be incurred due to the requirements for a cable management system appropriate for the site. Since the project is still at an early design stage, there are factors that may increase costs. As mitigation, a 30% contingency was added to the budget for this cost element of the project. Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 18 In addition, long lead times for equipment and materials are worsening, and it is unclear what the supply availability will look like at the time when PIDP awards are announced, or even out when a grant agreement is signed. The primary risk associated with the electric infrastructure upgrade portion of the project is the current worldwide supply chain delays. Some pieces of equipment—including some types of transformers—currently have a lead time between 12- 24 months. This global shortage of electric equipment is impacting all electric utilities construction projects. As a mitigation effort, Chugach will aggressively pursue advanced planning to keep the project on a reasonable schedule and revise delivery estimates once the project has gone through the procurement phase. Section VI: Domestic Preference Project sponsors confirm that all elements of the project will meet domestic sourcing requirements. These include specialized equipment for use at the dock, as well as more general equipment used around the country for the line upgrades in the upland areas. Section VII: Determinations Project determination Guidance 1. The project improves the safety, efficiency, or reliability of the movement of goods through a port or intermodal connection to the port. The project will improve safety, efficiency and reliability of goods movement through a port or intermodal connection to a port in several ways. First, the project will provide an electric vehicle charging station at the port, which will facilitate conversion to electric vehicles for use by the local logistics companies. Lynden Transportation in particular has recognized this benefit in their letter of support found in Appendix B. Second, the project improves the resilience of the power transmission to the Anton Anderson Memorial Tunnel. This upgrade will improve the reliability Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 19 Project determination Guidance of the tunnel as a key piece of infrastructure for goods transiting the port and Anchorage. See the letter provided by Alaska Railroad provided in Appendix B. 2. The project is cost effective. Not applicable to small projects at small ports and projects in noncontiguous states. 3. The eligible applicant has the authority to carry out the project. Pursuant to the Alaska Administrative Code (3 AAC 105.020. “Administration of assistance from other sources”),8 Alaska Energy Authority “may apply for, accept, and administer financial and other assistance from public agencies and private sources for the construction, financing, operation, and maintenance of power projects…” AEA has formed a partnership with the other project participants. This partnership is captured in an MOU that outlines the roles and responsibilities of the parties on the project. 4. The eligible applicant has sufficient funding available to meet the matching requirements. Applicant and project partners have committed sufficient funds to meet matching requirements, 8 Source: http://www.legis.state.ak.us/basis/aac.asp#3.105 Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 20 Project determination Guidance as delineated in the MOU provided in Appendix A. 5. The project will be completed without unreasonable delay. Project partners have consulted with MARAD’s NEPA Coordinator in the Office of the Environment. After discussion, the parties agreed there is a moderate likelihood that the project will qualify for a NEPA Categorical Exclusion. The risks that the project will not are somewhat controllable, as the means and methods of the upland improvements have not been finalized. There may be opportunity, depending on conditions of the existing line, to execute the project in a manner which will not require extensive permitting or analysis. Additionally, Chugach is planning to award Engineering Procurement Contractor (EPC) contract in 2022, in order to allow expedient work on the project should the project be selected for a PIDP grant award in FY2022. Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 21 Project determination Guidance 6. The project cannot be easily and efficiently completed without federal funding or financial assistance available to the project sponsor. The project scope will likely be unaffected by FY2022 PIDP funding. Project sponsors have identified the minimum identifiable scope that provides shore power to the vessels. However, it is possible that the sponsors choose to postpone the scope of the project that involves an EV charging station. Currently there is no other EV charging station in the area, which limits its utility to charging for vehicles involved in drayage movements within a certain distance of the port. Since this would be the first and only such EV infrastructure in Whittier, it may get postponed. If the project is not awarded in FY2022 PIDP, the project schedule may be postponed altogether. It is likely design will be completed in 2022, and the project shelved until capital funds are identified. If federal funds are not received, project costs would likely increase due to inflationary trends and supply chain challenges. Alaska Energy Authority Grant Application U.S. Department of Transportation May 16, 2022 MARAD PIDP Grant 22 Unique Entity Identifier and System for Award Management The Alaska Energy Authority is registered in the System for Award Management as “Alaska Energy Authority (Inc).” The UEI is F3N8ZSHJXUH8, as shown below. Alaska Energy Authority Grant Application U.S. Department of Transportation MARAD PIDP Grant Application May 16, 2022 Appendices A. Memorandum of Understanding B. Letters of Support C. Shore Power Emissions Analysis Alaska Energy Authority Grant Application U.S. Department of Transportation MARAD PIDP Grant Application May 16, 2022 Appendix A Memorandum of Understanding Memorandum of Understanding AEA/Chugach/Princess Page 1 of 4 MEMORANDUM OF UNDERSTANDING 1. Parties. This Memorandum of Understanding (“MOU”), is made and entered into between the Alaska Energy Authority ("AEA"), a corporation of the State of Alaska, Chugach Electric Association, Inc. ("Chugach"), an Alaska not-for-profit cooperative electric utility, and Princess Cruise Lines, Ltd. (“Princess”), a Bermuda company, relating to the proposed conveyance of federal grant funding from AEA to Chugach and Princess to perform electric distribution system improvements between Portage and Whittier and to provide shore-to- ship power facilities on the Princess-owned/operated cruise ship dock in Whittier. AEA, Chugach, and Princess are referred to collectively in this MOU as the “Parties”. The Parties believe this MOU provides mutual benefit and agree to the terms and conditions provided below. 2. Terms and Conditions. a. AEA’s Role and Responsibilities. AEA shall be the lead entity that will submit a timely grant application to the 2022 Port Infrastructure Development Program, administered by the U.S. Maritime Administration, requesting funding for the project in an amount detailed in the grant application. AEA’s application shall designate the requested funds to be used for purpose of providing electric service connections in the Port of Whittier for both ship power and for electric vehicle charging infrastructure. AEA shall notify Chugach of the granting agency’s decision within ten (10) days of receiving such decision. The receipt of such grant funds by AEA is also subject to legislative approval. If awarded, AEA shall negotiate on a commercially reasonable basis and execute grant agreements with Chugach and Princess, including the pass-through of certain federal funding obligations. AEA shall be responsible for compiling and completing any reports required by the granting agency. The amount of funding conveyed from AEA to Chugach and Princess through the grant agreements shall be net of AEA’s grant administration costs, which shall be no more than 5 percent of the total grant award. b. Chugach’s Role and Responsibilities. Chugach shall be a joint applicant and will provide AEA with information—relevant to its portion of the distribution system work— necessary to complete the grant application and/or any reports required by the granting agency. If awarded, Chugach shall negotiate on a commercially reasonable basis and execute a grant agreement with AEA. Chugach shall provide matching funds of $1.1 million primarily or exclusively through a line extension credit. Chugach shall also negotiate on a commercially reasonable basis and execute an appropriate interconnection agreement with Princess. Chugach will own and operate the electric distribution system on the utility side of the meter. Chugach’s obligations under this paragraph shall be expressly conditioned upon and subject to Chugach’s prior receipt of any board, regulatory, or other third-party approvals legally required in connection with this MOU or the agreements referenced herein. c. Princess’s Role and Responsibilities. Princess shall be a joint applicant and will provide AEA with information—relevant to its portion of the shore power system and related dock work—necessary to complete the grant application and/or any reports required by the granting agency. If awarded, Princess shall negotiate on a commercially reasonable Memorandum of Understanding AEA/Chugach/Princess Page 2 of 4 basis and execute a grant agreement with AEA. Princess shall provide matching funds of $3.0 million to the project. Princess owns the dock upon which the shore power equipment will be located and agrees to provide the spaces necessary to complete the grant funded project and to own and operate the equipment on the customer’s side of the electric meter. Princess agrees such terms shall be included in the interconnection agreement negotiated with Chugach. 3. General Provisions. a. Termination.This MOU may be terminated by written notice of any Party at any time without liability to the other Parties. b. Amendments. This MOU may be amended by written mutual agreement of the Parties. c. Governing Law/Jurisdiction/Venue. This MOU, for all purposes, shall be construed in accordance with the laws of Alaska without regard to conflicts of law principles. Any action or proceeding by any of the Parties arising under or relating to this MOU shall be brought only in a state or federal court located in Anchorage, Alaska. The parties hereby irrevocably submit to the exclusive jurisdiction of such courts and waive the defense of inconvenient forum to the maintenance of any such action or proceeding in such venue. d. Reasonable Best Efforts. The Parties will use their reasonable best efforts to effectuate the intent and purpose of this MOU. e. No Third-Party Beneficiaries. Nothing herein is intended or shall be construed to confer upon any person or entity other than the Parties and their successors or assigns, any rights or remedies under or by reason of this MOU. f. No Assignment. Neither this MOU, nor any rights or obligations hereunder may be assigned, delegated or conveyed by any Party without the prior written consent of the other Parties. 4. Costs and Expenses. Except as otherwise agreed herein, each Party shall be responsible for its own costs and expenses associated with pursuing the proposed transactions described in this MOU, including without limitation (i) the performance of its obligations under this MOU, (ii) pursuing any approvals necessary to effectuate this MOU, and/or (iii) resolving any disputes between the Parties that arise out of this MOU. Memorandum of Understanding AEA/Chugach/Princess Page 3 of 4 5. Contact Information Curtis Thayer 813 W Northern Lights Blvd. Anchorage, AK 99503 Tel: (907) 771-3000 cthayer@akenergyauthority.org Arthur Miller Chugach Electric Association, Inc. 5601 Electron Drive Anchorage, AK 99518 Tel: (907) 762-4758 arthur_miller@chugachelectric.com Robert Morgenstern Princess Cruise Lines, Ltd. 24305 Town Center Dr. Santa Clarita, CA 91355 Tel: (206) 295-3967 rmorgenstern@hagroup.com 6. Counterparts. This MOU may be executed manually or by electronic signature in counterparts, each of which shall be deemed an original, but all of which together shall be deemed one and the same agreement. A signed copy of this MOU delivered by fax, email or other means of electronic transmission, shall be deemed to have the same effect as delivery of an original signed copy of this MOU. Signature page follows Alaska Energy Authority Grant Application U.S. Department of Transportation MARAD PIDP Grant Application May 16, 2022 Appendix B Letters of Support Alaska Energy Authority Grant Application U.S. Department of Transportation MARAD PIDP Grant Application May 16, 2022 Appendix C Shore Power Emissions Analysis CO2 Emissions (MT)CO2 Emissions (MT)Emissions (MT) DATE DESCRIPTION AUDIENCE LOCATION TEAM MEMBER July 20-22, 2022 Participant National Renewable Energy Laboratory (NREL): Executive Energy Leadership Program NREL Golden, CO Curtis W. Thayer July 20, 2022 Legislative Inquiry Representative Mike Cronk on Electric Vehicle (EV) Plan and Volkswagen Mitigation Plan Phone Curtis W. Thayer July 18, 2022 Legislative Inquiry Senator Lyman Hoffman on Senate 243: Pwr Cost EQ: Raise, Endow Fund Investment Email Curtis W. Thayer July 15, 2022 Provide Quote Arctic Road Rally for Fairbanks Daily News-Miner Email Curtis W. Thayer July 15, 2022 Provide Quote Power Cost Equalization Kilowatt Increase for Office of Governor Mike Dunleavy Press Release Email Curtis W. Thayer July 15, 2022 Media Interview Alaska’s EV Infrastructure Implementation Plan with KDLL Phone Curtis W. Thayer July 14, 2022 Renewable Energy Alaska Native Science and Engineering Program’s Science, Technology, Engineering, and Math Career Exploration In Person Audrey Alstrom July 13, 2022 Presentation AEA EV Plan Listening and Public Feedback Session #2 to Public In Person and Virtual Audrey Alstrom, Dan Aicher, Taylor Asher, Josi Hartley July 13, 2022 Presentation AEA EV Plan Listening and Public Feedback Session #1 to Alaska EV Working Group In Person and Virtual Audrey Alstrom, Dan Aicher, Taylor Asher, Josi Hartley July 1, 2022 Media Interview Alaska’s EV Infrastructure Implementation Plan with Alaska's News Source In Person Curtis W. Thayer June 23, 2022 Presentation AEA EV Virtual Information Session #4 to Alaska EV Working Group and Public In Person and Virtual Audrey Alstrom, Dan Aicher, Taylor Asher, Josi Hartley June 22-24, 2022 Participant NREL: Executive Energy Leadership Program NREL Golden, CO Curtis W. Thayer June 22, 2022 Presentation AEA EV Virtual Information Session #3 to Alaska EV Working Group and Public In Person and Virtual Audrey Alstrom, Dan Aicher, Taylor Asher, Josi Hartley June 15, 2022 Presentation AEA EV Virtual Information Session #2 to Alaska EV Working Group and Public In Person and Virtual Audrey Alstrom, Dan Aicher, Taylor Asher, Josi Hartley June 14, 2022 Presenter/Attendee Joint Agency and Public Meeting on Dixon Diversion Projects Aspen Suites Hotel Homer, AK Bryan Carey Curtis W. Thayer June 8, 2022 Presentation AEA EV Virtual Information Session #1 to Alaska EV Working Group and Public In Person/Virtual Audrey Alstrom, Dan Aicher, Taylor Asher, Josi Hartley AEA COMMUNITY OUTREACH Updated on July 20, 2022 (6-Month Look Back) 813 W Northern Lights Blvd, Anchorage, AK 99503 • Phone: (907) 771-3000 Fax: (907) 771-3044 • Email: info@akenergyauthority.org • Website: akenergyauthority.org DATE DESCRIPTION AUDIENCE LOCATION TEAM MEMBER June 3, 2022 Media Interview Infrastructure Upgrades/Railbelt Utilities with Tim Bradner Phone Curtis W. Thayer May 27, 2022 Media Interview Transmission Upgrades with Fairbanks Daily News-Miner Phone Curtis W. Thayer May 27, 2022 Media Interview Senate Bill 234 with Alaska's News Source Phone Curtis W. Thayer May 25, 2022 Media Interview Transmission Upgrades with Fairbanks Daily News-Miner Phone Curtis W. Thayer May 25, 2022 Moderator Alaska Sustainable Energy Conference: Uniting the Grid Panel Dena'ina Center Anchorage, AK Curtis W. Thayer May 24-26, 2022 Attendees/Exhibitor Booth Alaska Sustainable Energy Conference Dena'ina Center Anchorage, AK Curtis W. Thayer, Audrey Alstrom, Taylor Asher, Karen Bell, Brandy Dixon, Josi Hartley, Dan Johnston, David Lockard, T.W. Patch May 20, 2022 Exhibitor Booth Chugach Electric Association Member Appreciation Day ChangePoint Alaska Anchorage, AK Dan Aicher, Bryan Carey Brandy Dixon, Conner Erickson May 13, 2022 Media Interview In-State Energy Security Working Group with Anchorage Daily News Phone Curtis W. Thayer May 12, 2022 Media Interview Power Cost Equalization with Alaska's News Source Phone Curtis W. Thayer May 11, 2022 Legislative Hearing House Finance Committee - House Bill 170 Energy Independence Program & Fund: AIDEA Phone Curtis W. Thayer May 10, 2022 Media Interview Dixon Diversion Project with KDLL Phone Curtis W. Thayer May 6, 2022 Legislative Hearing House Finance Committee - House Bill 283 Approp: Cap; Reapprop; Supp Phone Curtis W. Thayer May 6, 2022 Legislative Hearing House Labor & Commerce Committee - House Bill 301: Utilities: Renewable Portfolio Standard Phone Curtis W. Thayer May 4, 2022 Presentation AEA EV Program Update to FAST Planning Technical Committee Virtual Audrey Alstrom May 3, 2022 Legislative Hearing House Finance Committee - House Bill 358: Renewable Energy Grant Fund Phone Curtis W. Thayer May 3, 2022 Brief Remarks Alaska Sustainable Energy Conference: Pre-Event Virtual Workshop Series - Electrify EVERYTHING!?Virtual Curtis W. Thayer May 2, 2022 Legislative Hearing House Labor and Commerce Committee - HB 301: Utilities: Renewable Portfolio Standard Phone Curtis W. Thayer April 28, 2022 Attendee BPMC Special Meeting In Person Curtis W. Thayer April 28, 2022 Legislative Hearing House Energy Committee - HB 301: Utilities: Renewable Portfolio Standard Phone Curtis W. Thayer April 28, 2022 Legislative Hearing House Finance Committee - House Bill 170: Energy Independence Program & Fund: AIDEA Phone Curtis W. Thayer April 27, 2022 Attendee State Energy Office Teams Meeting Alaska/Washington State Phone Curtis W. Thayer AEA Community Outreach Page 2 of 5 DATE DESCRIPTION AUDIENCE LOCATION TEAM MEMBER April 27, 2022 Legislative Hearing Senate Finance Committee - Senate Bill 243: Pwr Cost EQ: Raise, Endow Fund Investment Phone Curtis W. Thayer April 26, 2022 Exhibitor Matanuska Electric Association’s Annual Meeting Menard Center Wasilla, AK Brandy Dixon Dan Johnston April 26, 2022 Legislative Hearing House State Affairs - House Bill 271: AIDEA: Membership; Responsibilities Phone Curtis W. Thayer April 26, 2022 Legislative Hearing House Finance Committee - House Bill 170: Energy Independence Program & Fund: AIDEA Phone Curtis W. Thayer April 26, 2022 Legislative Hearing House Energy Committee - House Bill 301: Utilities: Renewable Portfolio Standard Phone Curtis W. Thayer April 26, 2022 Media Interview Renewable Energy Fund Round 14 with KSRM Radio Phone Curtis W. Thayer April 22, 2022 Media Interview Renewable Energy Fund Round 14 with KDLL 91.9 Radio Station Phone Curtis W. Thayer April 22, 2022 Legislative Hearing House Finance Committee - House Bill 170: Energy Independence Program & Fund: AIDEA Phone Curtis W. Thayer April 20, 2022 Attendee AEA EV Program Update with Alaska EV Working Group In Person/Virtual Curtis W. Thayer April 20, 2022 Presentation AEA EV Program Update to Alaska EV Working Group In Person/Virtual Audrey Alstrom April 20, 2022 Attendee Statewide CEDS Strategy Committee Meeting #2 - Goals, Objectives, & Strategies Phone Curtis W. Thayer April 20, 2022 Legislative Hearing Senate Finance Committee - An Act Relating to Power Cost Equalization Phone Curtis W. Thayer April 19, 2022 Legislative Hearing House Finance Committee - House Bill 414 Approp: Supplemental: Capital Phone Curtis W. Thayer April 19, 2022 Legislative Hearing Senate Finance Committee - Senate Bill 241 Approp: Supplemental: Capital Phone Curtis W. Thayer April 15, 2022 Attendee Renewable Energy Fund Advisory Committee In Person Curtis W. Thayer April 14, 2022 Legislative Hearing House State Affairs - House Bill 412: Perm Fund Corp & AIDEA BD Confirmation Phone Curtis W. Thayer April 13, 2022 Legislative Hearing Senate Finance Committee - Senate Bill 241: Approp: Supplemental; Capital Phone Curtis W. Thayer April 11, 2022 Attendees/Exhibitor Infrastructure Grant Symposium Hosted by Senator Lisa Murkowski In Person AEA Team March 25, 2022 AEA Dixon Overview Bradley Lake Project Management Committee In Person Bryan Carey March 9, 2022 AEA EV Update Presentation to Alaska Municipal League Virtual Curtis W. Thayer Audrey Alstrom March 8, 2022 Presentation House Bill 301 Overview to House Energy Committee Virtual T.W. Patch AEA Community Outreach Page 3 of 5 DATE DESCRIPTION AUDIENCE LOCATION TEAM MEMBER March 7, 2022 Capital Budget Presentation Senate and House Finance Committee Virtual Curtis W. Thayer February 25. 2022 Presentation AEA EV Partnership to Department of Transportation In Person Curtis W. Thayer February 23. 2022 Legislative Hearing Senate Bill 179 Presentation Virtual Curtis W. Thayer February 22, 2022 Legislative Hearing Senate Finance Budget Subcommittee Virtual Curtis W. Thayer February 21, 2022 Legislative Hearing Senate Labor and Commerce Committee - Renewable Portfolio Standards Bill Virtual Curtis W. Thayer February 18, 2022 Presentation Seward Infrastructure Projects to City of Seward Seward, AK Curtis W. Thayer February 15, 2022 Legislative Hearing House Energy Committee - House Bill 247: Power Cost Equalization Virtual Curtis W. Thayer February 11, 2022 Presenter NASEO Regional IIJA Roundtable Washington, DC Curtis W. Thayer February 9, 2022 Attendee Southeast Conference Mid-Session Conference Juneau, AK Tim Sandstrom February 9, 2022 Legislative Hearing Senate Finance Committee - Senate Bill 154: Capital Budget (Supplemental) Virtual Curtis W. Thayer February 9, 2022 Presentation AEA Update to Southeast Conference Mid-Session Conference Virtual Curtis W. Thayer February 9, 2022 Presentation AEA Dixon Overview to Multi-Agency Partners Virtual Bryan Carey February 9, 2022 Media Interview Summer Construction Forecast with Alaska Public Media Phone Tim Sandstrom February 9, 2022 Speaker Alaska Forum on the Environment Virtual David Lockard February 8-11, 2022 Attendee NASEO Energy Policy Outlook Conference Washington, DC Curtis W. Thayer February 7-8, 2022 AEA Update Alaska Congressional Delegation Meeting: Senator Murkowski, Senator Sullivan, and Congressman Young Washington, DC Curtis W. Thayer February 4, 2022 Legislative Hearing Senate Finance Committee Senate Bill 164 - Capital Budget Virtual Curtis W. Thayer February 3, 2022 Legislative Hearing House Finance Committee - Infrastructure Investment and Jobs Act Virtual Curtis W. Thayer February 2, 2022 Presentation AEA Update to Alaska Power Association Legislative Conference Virtual Curtis W. Thayer February 2, 2022 Legislative Hearing House Bill 283 and 285 Virtual Curtis W. Thayer February 1-2, 2022 Moderator Alaska Sustainable Energy Conference: Pre-Event Virtual Workshop Series - Nuclear Energy in Alaska Virtual David Lockard February 1, 2022 Brief Remarks Alaska Sustainable Energy Conference: Pre-Event Virtual Workshop Series - Nuclear Energy in Alaska Virtual Curtis W. Thayer January 26, 2022 Attendee NASEO Regional Board Meeting Virtual Curtis W. Thayer January 19, 2022 Attendee Anchorage C-PACE New Year Reception Cowork by RSD Anchorage, AK Curtis W. Thayer T.W. Patch AEA Community Outreach Page 4 of 5 DATE DESCRIPTION AUDIENCE LOCATION TEAM MEMBER January 20, 2022 Railbelt Meeting Berkshire Hathaway Energy/Utilities Virtual Curtis W. Thayer AEA Community Outreach Page 5 of 5 Gov. Dunleavy signs bill to help alleviate electric bill cost to rural Alaskan https://www.alaskasnewssource.com/2022/07/19/gov-dunleavy-signs-bill-help-alleviate-electric-bill-cost-rural-alaskans/ 1/2 JUNEAU, Alaska (KTUU) - Gov. Mike Dunleavy signed a bill Friday that promises to cut energy costs for rural Alaskans by way of the state’s Power Cost Equalization program. Senate Bill 243, introduced by state Sen. Lyman Hoffman (D-Bethel), expands the maximum kilowatt-hour usage for rural residential customers from 500 kWh to 750 kWh per month. With electric bill costs “three to five times higher” for almost 82,000 Alaska residents in nearly 200 communities across the state, Dunleavy cited skyrocketing inflation rates across the country and within the state as an impetus for signing the bill, which establishes a new ceiling for electricity use that the program is allowed to give residents. Gov. Dunleavy signs bill to help alleviate electric bill cost to rural Alaskan https://www.alaskasnewssource.com/2022/07/19/gov-dunleavy-signs-bill-help-alleviate-electric-bill-cost-rural-alaskans/ 2/2 Governor, legislators propose protecting the Power Cost Equalization Fund “I am pleased to sign HB 243 to assist those who live in rural Alaska and face extremely high utility rates,” Dunleavy said. “Raising the maximum kilowatt hour available for PCE relief will help lessen the burden on our rural residents.” The program was established in 1985, according to the statement, to help alleviate the burden of high energy costs to rural residents. The new bill effectively restores usage levels to those that were used from 1985 to 1993. “The PCE program serves as a crucial lifeline for rural Alaskans as it helps bridge the gap in the cost of energy between urban and rural Alaska,” Alaska Energy Authority Executive Director Curtis W. Thayer said in the release. “This legislation reaffirms the Legislature and Governor’s strong commitment to rural Alaska with this increase in PCE payments by up to 50 percent.” Copyright 2022 KTUU. All rights reserved. Revisions to C-PACE Program Broaden Efficiency, Resiliency Financing https://www.akbizmag.com/industry/government/revisions-to-c-pace-program-broaden-efficiency-resiliency-financing/ 1/5 Revisions to C-PACE Program Broaden Efficiency, Resiliency Financing BY SCOTT RHODE | JUL 7, 2022 | ENERGY, FEATURED, FINANCE, GOVERNMENT, NEWS, REAL ESTATE Governor Mike Dunleavy signed House Bill 227 into law, enacting revisions to the C-PACE program, which helps finance energy efficiency and resilience improvements for businesses. Revisions to C-PACE Program Broaden Efficiency, Resiliency Financing https://www.akbizmag.com/industry/government/revisions-to-c-pace-program-broaden-efficiency-resiliency-financing/ 2/5 Expand the Scope C-PACE stands for Commercial Property Assessed Clean Energy. The model has been used in most other states, and Alaska’s version arrived in 2017. The legislature enacted a law, sponsored by Representative Adam Wool of Fairbanks, to let local governments create and manage C-PACE programs, but it wasn’t until April 2021 that the first one began, backed by the Municipality of Anchorage. The original statute had design flaws, however, which Representative Calvin Schrage learned about at an Anchorage Chamber of Commerce luncheon. “We had some issues,” he says. “A little too narrow in scope, a little too many strings attached, a little too much red tape. So we worked together to clean that up, expand the scope.” Schrage, whose district covers the Abbott Loop neighborhood, shepherded a package of amendments to the original C-PACE statute. Those changes allow C-PACE loans for new construction and for resiliency projects; extend the maximum loan term from twenty years to thirty; add a provision for refinancing; base eligibility on the property’s market value instead of assessed value; and eliminate savings-to-investment ratio as a criterion for loans. The program works by lowering the cost of financing so that commercial property owners can invest in upgrades that save energy. Loan payments are tacked on to property tax assessments, which remain attached to the property even if the owner sells it. As Schrage explains, “The municipality works as a middleman to set up a lien on the property, getting that property owner a lower interest rate and a longer term on that loan.” The loans themselves are serviced by commercial banks, as usual. For example, Northrim Bank supports C-PACE loans for “local commercial building owners, nonprofits, industrial and manufacturing centers, and multifamily property owners,” says Phillip Reid, vice president of commercial loans. Revisions to C-PACE Program Broaden Efficiency, Resiliency Financing https://www.akbizmag.com/industry/government/revisions-to-c-pace-program-broaden-efficiency-resiliency-financing/ 3/5 One business taking advantage of C-PACE to replace decades-old fixtures is the Aviator Hotel, formerly the Holiday Inn in downtown Anchorage. The current owner is Alaska Hotel Group, a venture led by former US senator and Anchorage mayor Mark Begich and his partner, Sheldon Fisher. Begich says the renovation, now underway, is “taking ‘80s technology of energy and converting it into new technology using co-generation, which will help us take surplus heat to heat our sidewalks and use it also for generation of energy in our facility.” He says the project already has $6.5 million Revisions to C-PACE Program Broaden Efficiency, Resiliency Financing https://www.akbizmag.com/industry/government/revisions-to-c-pace-program-broaden-efficiency-resiliency-financing/ 4/5 committed, and HB227 expands the capacity for C-PACE financing to as much as $12 million. “This money comes from other investors from around the country that partner with local banks here, so it brings more money into this economy,” Begich says. “For every dollar we’re paying in debt, we’re saving that in energy costs.” Senator Shelley Hughes of Palmer, who sponsored Schrage’s bill in the Senate, noted at the time of its passage that HB227 enables developers to confidently choose more efficient designs without the traditional economic burden. Recognizing the potential to help his own project, Begich actively urged passage of the bill. In the Alaska House, it had only four votes against, and it passed the Senate with no opposition. When the House concurred with the Senate’s changes, Kenai Peninsula Representatives Ben Carpenter and Ron Gillham switched to “yes” while Wasilla Representatives David Eastman and Christopher Kurka remained opposed. One of Begich’s successors as mayor, Dave Bronson, welcomes the C-PACE revisions as a way for government buildings, too, to take advantage of efficiencies that save taxpayer money. As an example, Mike Robbins, executive director of the Anchorage Community Development Authority, cites the 38 percent drop in electricity costs for city- owned parking garages after installing new and better lighting. “We went through our garages, starting late last year, and we upgraded all of our garages. We changed out all of our fixtures,” Robbins says. “It’s not often in government that you look at a line item on your budget every month and you’re spending less.” Mayor Bronson also notes that C-PACE improvements make facilities more secure and disaster ready. The resiliency provision opens up financing for seismic retrofits, utility microgrids, or other measures that can reduce damage from earthquakes, fires, or windstorms. Revisions to C-PACE Program Broaden Efficiency, Resiliency Financing https://www.akbizmag.com/industry/government/revisions-to-c-pace-program-broaden-efficiency-resiliency-financing/ 5/5 Such things were covered by the 2017 bill, in part, but Shrage says real-world experience showed room for a better law. “When we came back and talked to developers and commercial property owners, it made sense to make these changes,” he says. “We all learn as we work through the system, and I think there were some lessons learned from that original bill.” Calling the new law a “win/win,” Begich says, “The best part is it won’t cost the state government a dime. It doesn’t cost the local government a dime. It’s just creating the vehicle so we can make sure we can do this efficiently.” 813 W Northern Lights Blvd, Anchorage, AK 99503  Phone (907) 771-3000  Fax: (907) 771-3044  Email: info@akenergyauthority.org REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG RGYAUTHORITY.ORG PRESS RELEASE Brandy M. Dixon Communications Director (907) 771-3078 FOR IMMEDIATE RELEASE June 30, 2022 AEA Applauds Passage of Clean Energy Financing Program State expands unique financing tool for local governments (Anchorage) — The Alaska State Legislature passed House Bill 227 during the 32nd Legislative Session, a bill to expand opportunities for commercial property owners to finance clean energy and resilience measures in buildings. The Commercial Property Assessed Clean Energy (C-PACE) program helps commercial and industrial property owners obtain low-cost, long-term financing for clean energy projects. The costs are paid back through a voluntary special assessment alongside the property tax bill. Since the passage of the original statute in 2017, the Alaska Energy Authority (AEA) has led an ad hoc group of stakeholders, the Alaska C-PACE Advisory Group, which works collaboratively to initiate programs in larger jurisdictions. “We applaud Alaska Legislators for passing C-PACE legislation and thank Governor Dunleavy for signing it into law today,” said AEA Executive Director Curtis W. Thayer. “C-PACE aligns with the Governor’s energy vision by helping property owners and developers implement energy efficiency, renewable energy, and climate resiliency measures to lower the cost of energy in Alaska.” To date, 38 states and Washington D.C. have passed legislation that enables PACE to operate. Nationwide, over $2 billion has been invested through over 2,500 commercial projects, creating 24,000 jobs. Anchorage is the first local government in Alaska to create a C-PACE program, though the local program was designed with partners to be easily adopted by other tax assessing jurisdictions in Alaska. HB 227 expands the scope of the original C-PACE legislation with the following changes:  Includes new construction  Allows resiliency projects  Allows C-PACE refinancing with a two-year “look back” period  Considers a property’s “market” value rather than assessed value  Eliminates the Savings-to-Investment Ratio and extends the maximum loan term from 20 to 30 years Alaska Energy Authority Page 2 of 2 The Municipality of Anchorage launched the state’s first C-PACE program in April 2021 to facilitate the financing of clean energy projects in commercial buildings. The financing arrangement attaches the payment obligations to the property as a lien, rather than to the borrower, and reduces collection risks for lenders. “Since launching the Anchorage C-PACE program, property owners have asked us for expanded scope of the program, especially for new construction,” said Municipality of Anchorage Energy and Sustainability Manager Shaina Kilcoyne. “The resounding support from the legislature was very encouraging and we're excited to partner with AEA to execute on the bill.” Visit https://akcpace.wordpress.com for more information, including instructions on how to initiate an application. The Alaska Energy Authority is a public corporation of the state. Its mission is to reduce the cost of energy in Alaska. ### 813 W Northern Lights Blvd, Anchorage, AK 99503  Phone (907) 771-3000  Fax: (907) 771-3044  Email: info@akenergyauthority.org REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG RGYAUTHORITY.ORG PRESS RELEASE Brandy M. Dixon Communications Director (907) 771-3078 FOR IMMEDIATE RELEASE June 29, 2022 AEA Seeks Public Comment on Alaska’s EV Infrastructure Implementation Plan (Anchorage) — The Alaska Energy Authority (AEA) is working with the Alaska Department of Transportation and Public Facilities and diverse stakeholders across the state to develop an Electric Vehicle (EV) Infrastructure Implementation Plan as required by the Infrastructure Investment and Jobs Act’s National Electric Vehicle Infrastructure (NEVI) Formula Program. Through the NEVI program, Alaska will receive more than $50 million over five years. These formula funds will be used to build a statewide EV fast-charging network and community- based charging sites in rural and urban areas across Alaska. This funding will be administered by AEA to strategically deploy publicly accessible EV supply equipment. To receive the allocated funds, AEA must submit an EV infrastructure implementation plan by Monday, August 1, 2022, to the Federal Highway Administration describing AEA’s goals and how it intends to use NEVI funds. The plan will cover areas such as charging infrastructure deployment, existing and future conditions, and public engagement. The plan can be found here. Comments on the NEVI plan can be emailed to electricvehicles@akenergyauthority.org or complete the online form here. The comment period is open until Friday, July 29, 2022, at 5 p.m. AEA also invites the public to participate in listening and public feedback sessions on Wednesday, July 13, 2022, from 11:30 a.m. to 1:30 p.m. or 4 to 6 p.m. AEA will provide a presentation on the implementation plan and facilitate discussion prior to final plan submission. To join, click here. The Alaska Energy Authority is a public corporation of the state. Its mission is to reduce the cost of energy in Alaska. ### 813 W Northern Lights Blvd, Anchorage, AK 99503  Phone (907) 771-3000  Fax: (907) 771-3044  Email: info@akenergyauthority.org REDUCING THE COST OF ENERGY IN ALASKA AKENERGYAUTHORITY.ORG RGYAUTHORITY.ORG PRESS RELEASE Brandy M. Dixon Communications Director (907) 771-3078 FOR IMMEDIATE RELEASE June 30, 2022 AEA Applauds Passage of Clean Energy Financing Program State expands unique financing tool for local governments (Anchorage) — The Alaska State Legislature passed House Bill 227 during the 32nd Legislative Session, a bill to expand opportunities for commercial property owners to finance clean energy and resilience measures in buildings. The Commercial Property Assessed Clean Energy (C-PACE) program helps commercial and industrial property owners obtain low-cost, long-term financing for clean energy projects. The costs are paid back through a voluntary special assessment alongside the property tax bill. Since the passage of the original statute in 2017, the Alaska Energy Authority (AEA) has led an ad hoc group of stakeholders, the Alaska C-PACE Advisory Group, which works collaboratively to initiate programs in larger jurisdictions. “We applaud Alaska Legislators for passing C-PACE legislation and thank Governor Dunleavy for signing it into law,” said AEA Executive Director Curtis W. Thayer. “C-CPACE aligns with the Governor’s energy vision by helping property owners and developers implement energy efficiency, renewable energy, and climate resiliency measures to lower the cost of energy in Alaska.” To date, 38 states and Washington D.C. have passed legislation that enables PACE to operate. Nationwide, over $2 billion has been invested through over 2,500 commercial projects, creating 24,000 jobs. Anchorage is the first local government in Alaska to create a C-PACE program, though the local program was designed with partners to be easily adopted by other tax assessing jurisdictions in Alaska. HB 227 expands the scope of the original C-PACE legislation with the following changes:  Includes new construction  Allows resiliency projects  Allows C-PACE refinancing with a two-year “look back” period  Considers a property’s “market” value rather than assessed value  Eliminates the Savings-to-Investment Ratio and extends the maximum loan term from 20 to 30 years Alaska Energy Authority Page 2 of 2 The Municipality of Anchorage launched the state’s first C-PACE program in April 2021 to facilitate the financing of clean energy projects in commercial buildings. The financing arrangement attaches the payment obligations to the property as a lien, rather than to the borrower, and reduces collection risks for lenders. “Since launching the Anchorage C-PACE program, property owners have asked us for expanded scope of the program, especially for new construction,” said Municipality of Anchorage Energy and Sustainability Manager Shaina Kilcoyne. “The resounding support from the legislature was very encouraging and we're excited to partner with AEA to execute on the bill.” Visit https://akcpace.wordpress.com for more information, including instructions on how to initiate an application. The Alaska Energy Authority is a public corporation of the state. Its mission is to reduce the cost of energy in Alaska. ### Two Southeast communities, one organization receive wood energy awards https://www.kinyradio.com/news/news-of-the-north/two-southeast-communities-one-organization-receive-wood-energy-awards/ 1/1 Juneau, Alaska (KINY) - Two communities and one organization in Southeast have received Wood Innovations and Community Wood Energy grant awards. Wood Innovations and Community Wood Energy grant awards from the USDA will allow six Alaska-based organizations to further the development of wood energy to help with sustainable heat and wood product processing projects. The awardees and projects are Southeast Conference, for its containerized pellet mill pilot project, Tenakee Springs for Corner Bay biomass processing, Icy Strait for the forest-to-furniture sawmill capacity project, Alaska Energy Authority's biomass heat system training and audit program, Ionia, Inc., for expansion of sustainable firewood processing for heat, and the City of Nenana for a community-wide biomass heat system. “From the state’s first small-scale pellet mill to our first community-wide heating system that produces biochar, I continue to be impressed with the creativeness of our communities,” said Dave Schmid, regional forester for the Forest Service’s Alaska Region. “I am eager to see the positive impact these projects make as they begin implementation.” Wood Innovations grants are awarded annually and aim to help increase the use of local wood products while working toward creating sustainable energy solutions for communities. Alaska Legislature passes bill to expand rural power subsidy program https://www.alaskasnewssource.com/2022/06/01/alaska-legislature-passes-bill-expand-rural-power-subsidy-program/ 1/2 JUNEAU, Alaska (KTUU) - The Alaska Legislature passed a bill at the end of the legislative session to expand by 50% the amount of power that could be subsidized each month for over 80,000 rural Alaska residents in close to 200 communities. Gov. Mike Dunleavy will need to decide whether to sign the bill, let it pass into law without his signature, or veto it. His office did not respond to a request for comment on Tuesday about his plans for Senate Bill 243. In the meantime, the Alaska Energy Authority — which manages the power cost equalization program — is acting like SB 243 will come into effect on July 1. There are expected to be “pretty dramatic increases” to energy costs across rural Alaska this year. The idea behind the power cost equalization payments is to help reduce high power bills in the Bush, and to match energy infrastructure investments made on the Railbelt Alaska Legislature passes bill to expand rural power subsidy program https://www.alaskasnewssource.com/2022/06/01/alaska-legislature-passes-bill-expand-rural-power-subsidy-program/ 2/2 that never happened in rural Alaska. The payments come from the $1.1 billion Power Cost Equalization Fund. Currently, eligible households can have 500 kilowatt-hours of electricity subsidized each month, but SB 243 would expand that to a maximum of 750 kilowatt-hours. “This is going to make a huge, dramatic difference in rural Alaska,” said Curtis Thayer, executive director of the AEA. He explained that energy usage differs from community to community across the state, but the expansion would meet some of the current energy demands in rural Alaska. Supporters say it could also allow power usage to grow in these communities in areas like broadband. The power cost equalization program began in the 1980s, using the 750 kilowatt figure. That was cut down to 500 kilowatt-hours in 2000 when the endowment was created over concerns that the higher amount was unaffordable. Thayer says the fund is stable enough to pay out the higher payments for the long term, which are estimated to cost an extra $16 million per year. Part of SB 243 will be to direct the fund’s managers to invest more aggressively in a similar way to the Permanent Fund. The fiscal success of the PCE Fund has meant that it has been used since 2016 to disburse $30 million a year to local governments through the community assistance program. Those payments help pay for services, but they are only made if the fund has earned enough to subsidize rural power bills first. Three years ago, the fund was unable to pay for the community assistance program for the first time. Nils Andreassen, executive director of the Alaska Municipal League, told the House Finance Committee that those payments could be as much as 80% of a small, rural community’s budget. He said he was between “a rock and hard place” in deciding which payment program to prioritize. The Senate Finance Committee heard that legislators would need to put an additional $320 million into the PCE Fund to provide certainty for community assistance in the long-term. The Legislature adjourned without doing that. Page 1 of 5 FOR IMMEDIATE RELEASE May 25, 2022 AEA, Railbelt Utilities Unveil More Than $200 Million in Transmission Upgrades Projects will modernize Alaska’s largest electric grid and allow for more renewable energy (Anchorage) – On Wednesday, May 25, during the Alaska Sustainable Energy Conference the Alaska Energy Authority (AEA) and the Railbelt utilities announced plans to spend more than $200 million on transmission line upgrades. These enhancements will reduce line losses, increase capacity, and improve the delivery of power from the Bradley Lake Hydroelectric Project (Bradley Lake) to Railbelt consumers. These projects will be the initial phase of some of the most significant improvements to the Railbelt electrical grid in Alaska’s history. Funding for the projects is coming from payments by the five Railbelt utilities in excess of those required to retire the Bradley Lake project bonds. These projects include:  Upgrade to Transmission Line between Bradley Junction and Soldotna Substation  Upgrade to Transmission Line between Soldotna Substation and Sterling Substation  Upgrade to Transmission Line between Sterling Substation and Quartz Creek Substation  Battery Energy Storage Systems for Grid Stabilization The “Railbelt” refers to the interconnected electric grid that stretches approximately 700 miles from Fairbanks through Anchorage to the Kenai Peninsula. About 70 percent of Alaska’s population is served by the Railbelt electric system. Four member-owned electric cooperatives and one municipal utility sell power to Railbelt customers. The Railbelt’s energy systems have Page 2 of 5 undergone significant change since they went into service more than 40 years ago. Over this period, loads have increased, transmission assets have aged, and greenhouse gases have become an increasingly important factor. In addition, cost-saving power sales between utilities has increased, demanding more of the system, and soon, regional integrated resource planning will increase the benefits of sharing power throughout the region. The case for transmission upgrades has never been stronger. A resilient Railbelt transmission system is achievable and necessary to allow for better use of Bradley Lake’s potential and the integration of renewable energy projects. Owned by AEA, Bradley Lake is an important generating plant on the Railbelt and the largest hydroelectric plant in Alaska. Located approximately 27 miles northeast of Homer on the Kenai Peninsula, the 120-megawatt facility generates 10 percent of the total annual electrical energy used by Railbelt electric utilities and provides some of the lowest-cost power in the state to about 550,000 Alaskans from Homer to Fairbanks. Owing to the successful completion of the Battle Creek Diversion in 2020, AEA and its partners are now studying the Dixon Diversion, which would divert water from Dixon Glacier and increase the annual energy production of Bradley Lake by almost 50 percent. Bradley Lake is managed by the Bradley Lake Project Management Committee (BPMC), which is comprised of a representative from each of the five Railbelt utilities and AEA. The BPMC has identified a source to fund these projects at no additional cost to ratepayers and with no burden on the State treasury. Each utility has paid a portion of the annual debt service on the original bonds since Bradley Lake was completed. The bonds were paid off in 2021 and under the Power Sales Agreement, the Railbelt utilities continue to make annual payments until 2050. These funds are now available to be used for upgrades related to the Bradley Lake project. The Department of Law has determined that the proposed transmission upgrades are required project work that benefits Bradley Lake and Railbelt ratepayers. These transmission projects will reduce the constraints on the Railbelt grid by improving the Kenai Peninsula’s transmission capacity to export power from Bradley Lake, while also allowing for the integration of additional renewable energy generation. In addition to the needed physical upgrades of the Railbelt grid infrastructure, these planned projects are anticipated to provide jobs and other economic development opportunities from the Kenai Peninsula to Fairbanks. The Railbelt utilities are Chugach Electric Association, Golden Valley Electric Association, Homer Electric Association, Matanuska Electric Association, and Seward Electric System. The Alaska Energy Authority is a public corporation of the state. Its mission is to reduce the cost of energy in Alaska. ### Primary Contact: Brandy Dixon, Alaska Energy Authority, (907) 764-3928 or bdixon@akenergyauthority.org For quotes and contact information, see page three. Page 3 of 5 Perspectives: Office of Governor Mike Dunleavy (Contact: Patty Sullivan, (907) 744-7757) “With this historic upgrade to transmission lines, the Railbelt utilities and AEA are ushering in a new energy future in Alaska,” said Alaska Governor Mike Dunleavy. “By improving the Railbelt’s transmission capacity, more of the power from the Bradley Lake Hydroelectric Project — the lowest cost energy in the state — will power Alaskan's homes and businesses from Homer to Fairbanks. The upgrades are preparing the grid for the coming sustainable energy sources of tidal, geothermal, solar, more hydro, solar, wind and hydrogen. All the investment is with the goal of making Alaska energy independent.” Alaska Energy Authority (Contact: Brandy M. Dixon, (907) 771-3078) “Early in his administration, Governor Dunleavy met with AEA and the utilities and asked them to develop a plan to increase the reliability and resiliency of the Railbelt corridor. Working together this is the cornerstone of those efforts to achieve a more resilient system driven by low or zero- carbon energy that supports a strong economy,” said AEA Executive Director Curtis W. Thayer. Chugach Electric Association (Contact: Julie Hasquet, (907) 717-9619) “As the largest electric utility in Alaska, these investments come at a critical time for our members. These projects increase the value of Bradley Lake to all consumers in the Railbelt from both a cost and reliability perspective, and support the advancement of renewable generation for decades to come,” said Chugach Acting CEO Arthur Miller. Golden Valley Electric Association (Contact: Meadow Bailey, (907) 451-5676) “Golden Valley Electric Association members are positioned at the northern end of the Alaska Intertie and pay some of the highest rates on the Railbelt,” said Golden Valley Electric Association CEO John Burns. “For GVEA members, and the economic viability of the Interior communities we serve, reliable access to lower-cost energy is vital. These upgrades provide resiliency and increase capacity to energy from southcentral, including hydro and additional renewables, and will assist GVEA as we transition to cleaner energy sources in the future.” Homer Electric Association (Contact: Keriann Baker, (907) 235-3302) “Under the leadership of AEA and this administration, the Railbelt utilities are proud that their collective efforts resulted in securing millions of dollars to provide badly needed upgrades to an aging transmission system. These upgrades will provide increased reliability without raising the rates of Homer Electric Association, Inc.’s (HEA) members. HEA is committed to continuing to seek additional opportunities to multiply these successes with its Railbelt partners,” said HEA General Manager Brad Janorschke. Matanuska Electric Association (Contact: Julie Estey, (907) 355-4447) “MEA is proud to be part of this collaboration to secure essential transmission upgrades, free from negative cost impacts, for our members and the entire region', said Tony Izzo, CEO of Matanuska Electric Association and Chair of the Bradley Project Management Committee Page 4 of 5 (BPMC). 'These upgrades are critical to maximize the benefit of our existing renewable energy investments and provide opportunities for further development as we seek to diversify our energy mix,” said MEA CEO and BPMC Chair Tony Izzo. Seward Electric System (Contact: Rob Montgomery, (907) 224-4071) “With approximately 2,900 meters, Seward Electric System is much smaller than those of the other Railbelt utilities but that doesn’t make these transmission projects any less important for the City. We rely on wholesale power from the Railbelt to serve our customers, so these project upgrades will directly impact both our service reliability and the amount of lower-cost electricity available to us. Completing projects of this magnitude — and at no additional cost to ratepayers — will most certainly transform the Railbelt’s energy future,” said Seward Electric System General Manager Rob Montgomery. PETROLEUM NEWS • WEEK OF MAY 22, 2022 9 ADVERTISER PAGE AD APPEARS ADVERTISER PAGE AD APPEARS ADVERTISER PAGE AD APPEARS Companies involved in Alaska’s oil and gas industry Advertiser Index A ABR, Inc. Acuren Ahtna, Inc. Airgas, an Air Liquide Company . . . . . . . . . . . . . . . . . . . . . .3 Airport Equipment Rentals Alaska Dreams Alaska Frontier Constructors (AFC) Alaska Fuel Services Alaska Marine Lines . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Alaska Materials Alaska Railroad Alaska Rubber Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .6 Alaska Steel Co. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4 Alaska Textiles Alaska West Express . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Arctic Controls ARCTOS Alaska, Division of NORTECH Armstrong ASTAC (Arctic Slope Telephone Assn. Coop, Inc) AT&T Automated Laundry Systems & Supply Avalon Development B-F Bombay Deluxe Restaurant Brooks Range Supply C&R Pipe & Steel, Inc. Calista Corp. ChampionX Coffman Engineers Colville Inc. Computing Alternatives CONAM Construction Construction Machinery Industrial (CMI) . . . . . . . . . . . . . .12 Cook Inlet Tug & Barge Cruz Construction Denali Industrial Supply, Inc. . . . . . . . . . . . . . . . . . . . . . . . .10 Denali Universal Services (DUS) Doyon Anvil Doyon Associated Doyon Drilling Doyon, Limited EEIS Consulting Engineers, Inc. EXP Energy Services F. R. Bell & Associates, Inc. Flowline Alaska Frost Engineering Service Co. – NW G-M GCI GeoLog Greer Tank & Welding Guess & Rudd, PC Inspirations Judy Patrick Photography Little Red Services, Inc. (LRS) Lounsbury & Associates Lynden Air Cargo . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Lynden Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Lynden Logistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Lynden Oilfield Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Lynden Transport . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .7 Maritime Helicopters Matson N-P Nabors Alaska Drilling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .8 NANA Worley Nature Conservancy, The NEI Fluid Technology Nordic Calista North Slope Borough North Slope Telecom Northern Air Cargo Northern Solutions Oil Search Owl Ridge Natural Resource Consultants Petroleum Equipment & Services, Inc. PND Engineers, Inc. PRA (Petrotechnical Resources of Alaska) . . . . . . . . . . . . . .2 Price Gregory International Q-Z Resource Development Council SeaTac Marine Services Strategic Action Associates Surepoint Technologies Group US Tanks-A-Lot TorcSill Udelhoven Oilfield System Services Inc. US Ecology Alaska Weston Solutions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3 Wolfpack Land Co. All of the companies listed above advertise on a regular basis with Petroleum News second quarter 2021. Petroleum News sources say the rig is currently undergo- ing annual maintenance but remains under contract to CPAI. “This break in the ERD program,” CPAI said, “will be used to incorporate the lessons learned from CD2-310 execu- tion and make required engineering changes to the ERD well designs going forward.” Also, as of May 2, Doyon Rig 142 completed operations on WD-03, having moved from CD1 pad to the CD4 pad. There it will drill the “CD4-597 oppor- tunity well within the Narwhal PA, contin- gent on equipment and infrastructure availability,” CPAI said. Following the CD4-597 well, Doyon 142 may move back from the CD4 pad to the CD1 pad to drill the WD-04 well (replacement for the WD-03 well) “or may drill another opportunity well.” CPAI is the operator and sole working interest owner of the Colville River unit, which is in both state of Alaska land and in federal land in the National Petroleum Reserve-Alaska. CI gas supplies, more lease sales UTILITIES AND THEIR CUSTOMERS along Alaska’s Railbelt primarily depend on natural gas from Hilcorp’s Cook Inlet basin fields to generate electricity. But according to Homer Electric Association general manager Brad Janorschke’s May 10 monthly report to HEA members, Hilcorp told them in an April 12 stakeholders’ meeting that while Hilcorp has “sufficient gas for their exist- ing fuels contracts, they did not have firm gas available beyond that. Additionally, any future contracts would be dependent on current drilling programs to secure additional reserves.” Janorschke said, “We are following this closely as HEA’s current con- tract terminates at the end of the first quarter of 2024.” For Chugach Electric, which pow- ers Anchorage and parts of the Kenai Peninsula, the termi- nation date is March 31, 2028, the utility’s spokesperson Julie Hasquet, told Petroleum News May 18. “Chugach meets about 50% of our gas supply requirements from Hilcorp, with the remaining 50% from our working interest in the Beluga River unit gas field. Because this is a statewide issue impact- ing multiple entities, the Railbelt utilities are working together (with the State of Alaska) to explore future options. This is a high priority for Chugach, however, with our collaborative approach to addressing the issue, we are confident we have time to find alternative sources of gas along with other energy sources,” Hasquet said. She said options include: “Increased exploration in the Cook Inlet basin and other areas in Southcentral Alaska, impor- tation of LNG, increased renewable gen- eration, development of the North Slope gas line.” What does Hilcorp have to say? Spokesperson Luke Miller told PN May 18: “Since coming to Alaska, Hilcorp has invested nearly a billion dollars on natural gas projects in the Cook Inlet. We antici- pate spending hundreds of millions of dol- lars in the next few years and drilling 17 new wells this year to produce additional natural gas for Alaskan homes and busi- nesses. We are proud of the work we have done to revitalize the Cook Inlet basin and fuel local Alaskan markets over the last decade. Hilcorp is committed to continu- ing our investment into the future and sat- isfying the commitments we have made to local end users.” What does the Alaska Department of Natural Resources have to say about Cook Inlet basin reserves? Here is some of what DNR Deputy Commissioner John Crowther told PN May 18 in response to several emailed questions/statements: “We generally agree with your statement that ‘The numbers I have seen over the last few years suggest there is a great deal of untapped natural gas on state and federal acreage, including offshore in the Cook Inlet basin.’” “There are several fields with large amounts of known natural gas reserves that companies are working on developing — if these projects are successful, they could provide significant additional vol- umes for the utilities to place under con- tract,” Crowther said. “There are quite a few exploration opportunities that exist in the Cook Inlet: some are near infrastructure and others more remote, including both conventional and unconventional gas plays (including, per USGS technical assessments an esti- mated 19 trillion cubic feet of potential resources in place),” he said. “One of the primary reasons why DNR is joining the (Railbelt) utility working group to assess energy supply questions is to provide technical support on the future of Cook Inlet supply,” Crowther said. “DNR and DOR are also evaluating some of the Cook Inlet fiscal terms and regulatory procedures that may be obsta- cles to development,” he said. “DNR is also considering additional Cook Inlet lease sales later this year and in coming years,” Crowther said. Other oil and gas companies currently operating in the Cook Inlet basin, he said, “include Furie/Hex, BlueCrest, Vision/Gardes, Cook Inlet Energy, and Amaroq.” —Oil Patch Insider is compiled by Kay Cashman continued from page 1 INSIDER JOHN CROWTHER To advertise in Petroleum News, contact Susan Crane at 907.250.9769 petroleumnews.com