HomeMy WebLinkAbout2020-10-23 IMC Agenda and docs
INTERTIE MANAGEMENT COMMITTEE (IMC)
SPECIAL MEETING AGENDA
Friday October 23, 2020, 9:00 AM
Telephonic
To participate dial 1-888-585-9008 and when prompted, enter code 624-926-808#
1. CALL TO ORDER
2. ROLL CALL FOR COMMITTEE MEMBERS
3. PUBLIC ROLL CALL
4. PUBLIC COMMENTS
5. AGENDA APPROVAL
6. NEW BUSINESS
A. IMC Consent to Assignment of Alaska Intertie Agreement and
Attachment– ML&P/Chugach Transaction Gibson
7. MEMBERS COMMENTS
8. NEXT MEETING DATE – DECEMBER 11, 2020
9. ADJOURNMENT
IMC/BPMC 2020 Schedule
November 13, 2020 BPMC Special Meeting
December 11, 2020 IMC approve FY20 refund &
BPMC approve FY20 audit/refund
Public Comment Guidelines
Members of the public who wish to provide written comments, please email your
comments to publiccomment@aidea.org by no later than 4 p.m. one day prior to the board
meeting, so your comments can be shared with board members prior to the board meeting.
On the day of the board meeting when you call in, you will enter the teleconference muted.
After the board roll call and agenda approval, we will ask caller to press *9 on their phones
if they wish to make public comment. 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.
Page 1 of 4 IMC RESOLUTION 20-1 - CONSENT TO THE ASSIGNMENT OF AIA; ALASKA INTERTIE OPERATIONAL
CHANGES; AMENDMENT OF IMC BYLAWS – MANNER OF ACTING
INTERTIE MANAGEMENT COMMITTEE
RESOLUTION NO. 20- 1
CONSENT TO THE ASSIGNMENT OF ALASKA INTERTIE AGREEMENT;
INTERTIE OPERATIONAL CHANGES;
AND
AMENDMENT OF IMC BYLAWS – MANNER OF ACTING
INTRODUCTION
The Intertie Management Committee (IMC) is responsible for the management, operation,
maintenance, and improvement of the Alaska Intertie Project (Alaska Intertie), subject to the non-
delegable duties of the Alaska Energy Authority (AEA). In December 2018, Chugach Electric
Association, Inc. (Chugach) and The Municipality of Anchorage d/b/a Municipal Light & Power
(ML&P) entered into transaction documents for Chugach to purchase and ML&P to sell certain
electric facilities owned and operated by ML&P. ML&P’s interests in the Alaska Intertie Agreement
(AIA) is one of the utility assets being assigned to Chugach as part of the deal.
The IMC must consent to ML&P’s assignment of its interests in the AIA for such an assignment
to be valid. Moreover, operational obligations must be addressed following the Chugach/ML&P
transaction to assure the safe and reliable operation of the Alaska Intertie.
PURPOSE OF IMC RESOLUTION 20-1
This IMC Resolution 20-1 of the IMC provides the consent of the IMC for ML&P to assign its
interests in the AIA to Chugach and addresses Alaska Intertie operational issues that need to be
addressed to assure safe and reliable operation of the Alaska Intertie.
This IMC Resolution 20-1 also accepts Chugach’s proposal to change the Annual System
Demand amounts for purposes of voting and directs the amendment of the IMC Bylaws to change
the Annual System Demand levels for voting purposes on any and all matters considered by the
IMC following closing of the Chugach/ML&P transaction. Attachment 1 to this IMC Resolution 20-
1 sets forth the Annual System Demand levels for purposes of voting and for all other matters
(e.g., MITCR determination and IMC Annual costs). In addition, this IMC Resolution 20-1
addresses two operational issues: 1) the amount of reserve obligation that Chugach must carry
post-transaction so that no additional burden is imposed on the other Participants because of the
assignment of ML&P’s interests; and 2) Chugach’s burden to change the Annual System Demand
after appropriate data is available.
Page 2 of 4 IMC RESOLUTION 20-1 - CONSENT TO THE ASSIGNMENT OF AIA; ALASKA INTERTIE OPERATIONAL
CHANGES; AMENDMENT OF IMC BYLAWS – MANNER OF ACTING
IMC RESOLUTION NO. 20- 1
WHEREAS, the IMC is responsible for the management, operation, maintenance, and
improvement of the Alaska Intertie, subject to the non-delegable duties of the AEA;
WHEREAS, in December 2018, Chugach and ML&P entered into transaction documents for
Chugach to purchase and ML&P to sell certain electric facilities and utility assets owned by ML&P
(“Transaction Documents”);
WHEREAS, ML&P is a Member of the IMC and a Participant under the AIA;
WHEREAS, ML&P’s interest in the AIA is one of the utility assets being assigned to Chugach
under the Transaction Documents.
WHEREAS, the IMC must consent to ML&P’s assignment of its interests in the AIA to Chugach
in accordance with Section 24.1 of the AIA;
WHEREAS, an assignment of a Participant’s interests in the AIA cannot result in the imposition
of any additional burdens on other Participants;
WHEREAS, ML&P has been delegated the responsibility by the IMC for the operation of the
southern assets of the Alaska Intertie.
WHEREAS, the Intertie Operating Committee (IOC) has reviewed and considered the operational
issues raised by the Chugach/ML&P transaction with respect to the operations of the Alaska
Intertie;
WHEREAS, the IOC recommends that Chugach be delegated the responsibility for the operation
of the southern assets of the Alaska Intertie post-transaction;
WHEREAS, the IMC may at any time designate a new operator for the Alaska Intertie as provided
for in Section 10.1.1 of the AIA;
WHEREAS, it is reasonable and prudent for the IMC to designate that Chugach assume the
responsibilities from ML&P for operation of the southern assets of the Alaska Intertie in
accordance with Section 10 of the AIA;
WHEREAS, the majority of the decisions of the IMC requires an affirmative vote of at least 75
percent of the Members of the IMC constituting greater than 66 percent of the Annual System
Demand of all members of the IMC, including the affirmative vote of the Alaska Energy Authority
(AEA);
WHEREAS, Chugach may have an advantageous level of Annual System Demand if it
consummates the transaction and Chugach is assigned ML&P’s interest in the AIA;
WHEREAS, having greater than 50 percent of the total Annual System Demand of all IMC
Members may potentially cause issues with the conduct and control of IMC matters;
WHEREAS, for voting purposes, Chugach has proposed changes to the level of Annual System
Demand held by voting IMC Member having an Annual System Demand to equal levels to
alleviate any concerns with IMC voting post-transaction;
Page 3 of 4 IMC RESOLUTION 20-1 - CONSENT TO THE ASSIGNMENT OF AIA; ALASKA INTERTIE OPERATIONAL
CHANGES; AMENDMENT OF IMC BYLAWS – MANNER OF ACTING
WHEREAS, the respective levels of Annual System Demand to be used for each IMC Member
for voting purposes under the IMC Bylaws being proposed by Chugach for the purpose of
conducting IMC business post-transaction are set forth in Attachment 1 to this IMC Resolution
20-1;
WHEREAS, Chugach is not proposing any changes to the post-transaction levels of Annual
System Demand for determination of other Alaska Intertie-related matters including, but not
limited to such things as determination of MITCR or the cost responsibility for Intertie Costs;
WHEREAS, the respective levels of Annual System Demand to be used for all other purposes
under the AIA and IMC Bylaws (except for voting) are also are set forth in Attachment 1 to this
IMC Resolution 20-1;
WHEREAS, the IMC believes the changes to the Annual System Demand held by each IMC
Member with an Annual System Demand, for voting purposes, under Chugach’s proposal are
appropriate and in the best interests of the IMC;
WHEREAS, it is reasonable and prudent for the IMC to adopt the Annual System Demand levels
set forth in Attachment 1 to this IMC Resolution 20-1 for IMC voting purposes and all other
purposes accordingly;
WHEREAS, the IMC Bylaws will need to be amended to reflect the changes to IMC voting
requirements to reflect Chugach’s proposal to change Annual System Demands for voting
purposes;
WHEREAS, the IOC also reviewed each utility’s reserve obligations under Exhibit H of the AIA;
WHEREAS, Chugach has proposed that after its purchase of ML&P and the assignment of
ML&P’s interest in the AIA, that Chugach will continue to carry its own utility burden for reserve
obligations and also carry ML&P’s burden for reserve obligations as set forth in Exhibit H to the
AIA;
WHEREAS, the IOC believes it is reasonable to conclude that the Chugach proposal to carry both
its own and ML&P’s burden to carry reserves holds all other Participants harmless from the
ML&P/Chugach transaction with respect to reserve obligations;
WHEREAS, the IOC recommends that Chugach’s proposal governing reserve obligations be
accepted by the IMC;
WHEREAS, the IMC believes the IMC Bylaws should be amended to reflect the changes to the
level of Annual System Demand for IMC Members, for voting purposes, as proposed by
Chugach should the transaction between Chugach and ML&P be consummated; and,
WHEREAS, given the changes proposed by Chugach regarding Annual System Demand for
voting purposes, Chugach’s willingness to take over ML&P’s responsibility for operation of the
southern assets of the Alaska Intertie, and Chugach’s assumption of ML&P’s burden of carrying
reserve obligations, IMC believes its consent to ML&P’s assignment of its interests in the AIA to
Chugach is reasonable and in the best interests of the IMC.
THEREFORE, BE IT RESOLVED THAT, the IMC consents to the assignment of ML&P’s interests
in the AIA to Chugach;
Page 4 of 4 IMC RESOLUTION 20-1 - CONSENT TO THE ASSIGNMENT OF AIA; ALASKA INTERTIE OPERATIONAL
CHANGES; AMENDMENT OF IMC BYLAWS – MANNER OF ACTING
BE IT ALSO RESOLVED THAT, in accordance with Section 10 of the AIA the IMC designates
Chugach to be responsible for operation of the southern assets of the Alaska Intertie effective
upon the closing of the ML&P/Chugach transaction;
BE IT ALSO RESOLVED THAT, the Section 5.09 Manner of Acting. of the IMC Bylaws shall be
interpretated effective post-transaction to reflect, for voting purposes only, the use of the level of
Annual System Demand held by each IMC Member as set forth in the column titled “IMC Voting”
in Attachment 1 to this IMC Resolution 20-1 ;
BE IT ALSO RESOLVED THAT, the IMC Bylaws shall be amended in accordance with this IMC
Resolution 20-1 ;
BE IT ALSO RESOLVED THAT, for all other AIA or IMC related-purposes, the level of Annual
System Demand held by each IMC Member shall be established post-transaction as set forth in
the column titled “ All Other Matters” in Attachment 1 to this IMC Resolution 20-1 ;
BE IT ALSO RESOLVED THAT, Chugach can request a review by the IMC of its post-transaction
Annual System Demand when Chugach can support such a change with the appropriate data.
BE IT ALSO RESOLVED THAT, the IMC accepts and hereby adopts Chugach’s proposal to carry
the burden of reserve obligations that ML&P currently has along with Chugach’s burden of reserve
obligations as set forth in Exhibit H of the AIA and the IMC concludes that Exhibit H of the AIA will
be interpreted in that manner until further notice; and,
BE IT ALSO RESOLVED THAT the IMC retains jurisdiction over the matters addressed in this
IMC Resolution 20-1.
BE IT ALSO RESOLVED THAT any dispute or issue of interpretation of this IMC Resolution 20-
1 and how it may affect the Alaska Intertie, or the AIA shall be brought to the IMC for immediate
resolution.
DATED at Anchorage Alaska, this 23rd day of October 2020.
__________________________________________
Chair, Anna C. Henderson
Attest: ______________________________
Secretary, Curtis Thayer