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HomeMy WebLinkAbout2025-01-17 IMC Meeting MinutesINTERTIE MANAGEMENT COMMITTEE (IMC) REGULAR MEETING January 17, 2025 Alaska Energy Authority Board Room 1. CALL TO ORDER Bill Price called the meeting of the Alaska Intertie Management Committee to order on January, 17, 2025 at 9:00 a.m. 2. ROLL CALL FOR COMMITTEE MEMBERS Members present: Bill Price (Alaska Energy Authority), Andrew Laughlin (Chugach Electric Association), Gary Meadows (Matanuska Electric Association), Dan Bishop (Golden Valley Electric Association). A quorum was established. 3. PUBLIC ROLL CALL Jennifer Bertolini (AEA); Joel Paisner (Ascent Law Partners); Tamera Lewis (MEA); Lance McKimson (MEA); Rob Wilson (MEA); Gary Meadows (MEA); David Pease (MEA); Brian Carey (AEA); Pam Ellis (AEA); Mark Ziesmer (AEA); Patrick Domitrovich (AEA); Mike Miller (CEA); Russell Thornton (CEA); Tony Zellers (MEA). 4. AGENDA APPROVAL MOTION: A motion was made by Mr. Laughlin to approve the agenda. Motion seconded by Dan Bishop. Mr. Bishop asked to have the EPRI membership on the agenda under 7A. The agenda was approved without objection. S. PUBLIC COMMENTS - None 6. APPROVAL OF PRIOR MINUTES - December 6, 2024 MOTION: A motion was made by Mr. Laughlin to approve the prior minutes. Motion seconded by Mr. Meadows. Mr. Price pointed out the misspelling of old business in the prior minutes. The minutes were approved without objection. 7. NEW BUSINESS 7A. Budget Amendments IMC Meeting Minutes -January 17, 2025 Page 1 of 7 Mark Ziesmer, AEA Owned Assets Controller, provided an overview of the FY25 intertie proposed budget amendment. He said this proposed amendment will increase the FY25 budgeted revenues by $378,905, due to a reduction in usage and a rise in energy capacity rates, which is driven by higher budgeted expense. He said there is an overall next increase in expenses explained there is a net increase in expenses of $354,000 as well as a due to a reduction in usage a rise in energy capacity rates. He said reviewed the changes to the following operating expenses: • FERC 569 Maintenance of structures: o Reduction of $400,000 — planned re -insulation of dead-end and tangent structures being scaled back FERC 570 Maintenance of station equipment: o Cantwell Install Breakers — Increase $344,000 (equipment issues) o SVC Project - Increase $70,000 (GE Harmonics study is more expensive than anticipated) o Douglas Substation — Increase $300,000 (unplanned replacement and/or reinforcement of structure foundation). • FERC 566 — Maintenance of miscellaneous transmission expenses: o EPRI Membership — Increase $40,000 Mr. Ziesmer summarized proposed FY 25 Budget amendment would result in an overall surplus (shortage) increase of $24,905 due to net increase in budgeted revenue over budgeted expenses. Mr. Ziesmer called attention Proposed FY25 Amended Energy Usage Projection, which would result in an overall energy usage reduction of reduction of 29,113 megawatt hours from January 2025 through the end of the fiscal year. Mr. Ziesmer the Proposed Amended FY25 Minimum Intertie Transfer Capability proposes an energy rate of $0.01686 / KWH and a capacity rate of $3.46 / KW compared to the approved FY 25 energy rate of $0.01308 / KWH and capacity rate of $3.13 / KW. He explained the proposed amended transfer capability increase because of (1) operating expenses and (2) energy usage. The proposed budget decreases energy usage, which increases the rate; and the proposed budget increases the operating expenses, which increases proposed rate from $0.01308 / KWH to $0.01686 / KWH. goes down, which causes the He explained the capacity remains the same at 156 MW / year, but the proposed increase in operating expenses will increase the capacity rate from $3.13 KW to proposed $3.46 / KW. He further explained, because the proposed budget increases admin expenses for the EPRI Membership, the amount collected for admin expenses increases. IMC Meeting Minutes —January 17, 2025 Page 2 of 7 He summarized there are three factors: 1. Increase in energy rate 2. Increase in capacity charge 3. Increase in administrative expenses Mr. Ziesmer said there are also two grants that will have an impact to the Intertie: (1) the Snowloading grant; and (2) Synchrophasor grant. He said the proposed amended budget has no change to the Synchrophasor grant, but includes a change to the distribution of cost for the Snowloading grant. He explained the proposed budget amendment will reduce the cost of the Snowloading grant in the first year, and will increase the cost of the Snowloading grant for the next three years to account for the reduction in year one. He said year five budget would remain the same. He said this is caused by a later than expected start of the project. Mr. Ziesmer said if the Committee approves this proposed amended FY25 budget to be posted for a 30-day comment period, and is ultimately approved after public comment, the first invoice to include the revenue increases would be in March including: 1. Increase in energy usage rate 2. Increase in capacity charge — one time in March 3. Increase in admin expenses spread over the remaining months of the fiscal year Mr. Bishop said the only input from Golden Valley is concern whether the projects would actually be completed in the fiscal year. He said Golden Valley expects to successfully complete the switch upgrades and believes that MEA will complete the foundation improvements as planned. Mr. Laughlin asked if the surplus is anticipated to continue throughout the year. Mr. Ziesmer explained the surplus would still exist because the expenses are increasing and the revenues are also increasing. He said proposed changes in this amendment, will actually raise the surplus $24,000. Mr. Laughlin said there is currently a $1.2 million dollar surplus, and asked if it would still be accurate at the end of the fiscal year. Mr. Ziesmer said the proposed budget would retain the estimated surplus, but that would be impacted whether all the projects are completed. Mr. Price explained if everything in the budget is completed, the surplus will be gone. He further stated the majority of the surplus is often due to invoicing lagging behind the work. Mr. Bishop said that Golden Valley has had delays in the review of invoices, but recently submitted over $400,000 worth of invoices for work that was done, which is not reflected in the budget to actuals. IMC Meeting Minutes — January 17, 2025 Page 3 of 7 Mr. Laughlin asked about the intent of the EPRI membership. Keith Palchikoff said the EPRI membership would provide access to a for the IMC utilities to software for planning and optimization of regulation dispatch, and provides access to other EPRI related research, documents, reports. Russell Thornton said there was a meeting with the utilities where the software was presented. He said the software will contribute to the development of a process to regulate large scale renewables in a fairly small system. He said the software will assist in analysis. Mr. Bishop said Golden Valley previously had a membership to EPRI. He said GVEA took advantage of a number of useful documents and research and recommended the membership for the IMC. Bill Price said the said the membership will reside in the IMC administrative budget and be managed by Golden Valley similar to the PSSE software that IMC has used in the past. MOTION: Mr. Bishop made a motion to approve the budget as proposed and post it for the 30-day public comment. Motion seconded by Mr. Laughlin. A roll call was taken, and the motion to approve the budget as proposed passed unanimously. Mr. Price asked Mr. Paisner if the IMC can this budget pending no public comments, or do it is necessary to call a special IMC meeting after the 30-day comment period. Mr. Paisner said the Committee will have to wait for until the 30-day public comment period ends. He explained the final adoption of the budget must be done at a regular or special meeting. 7B. Budget Process Mr. Price explained the FY26 draft budget will need to be ready for approval to post for the 30- day comment period by March 21, 2025 meeting. Mr. Bishop said the process of reviewing the budget, including the progress of all of the projects was valuable and suggested that is continued in the future. 7C. Process for collecting funds for grants Mr. Price said regarding the existing grants for the Snowloading and the Synchrophasor, with Golden Valley as the grantee, Golden Valley will invoice the utilities directly for their match and will report the financial information to AEA for record keeping. IMC Meeting Minutes —January 17, 2025 Page 4 of 7 8. OLD BUSINESS 8A. Primary Frequency Response (to be addressed in the IOC report) 9. COMMITTEE REPORTS 9A. Budget vs. Actuals Mr. Ziesmer reviewed the Budget to Actuals report for the IMC through November 30, 2024. He said revenues were below budget by $172,431 due to (1) lower than expected energy usage and (2) interest income of $69,470 since the start of the fiscal year through November 30, 2024, He said actual operating expenses were $1,284,649 under the budgeted amount primarily due to the timing of invoices compared to the annualized budget. He additionally noted: • Several categories had no expenses. • FERC 57100 — Maintenance of overhead lines (Special Patrols) — Exceeded budget by $13,732 due to emergency line patrols. • For FERC 57102 - Maintenance of overhead lines, (Southern right away clearing) — Exceeded budget by $1,394. • FERC 58401 - Insurance Premiums (AEA) - Exceeded the budget by $5,226, due to higher than anticipated rates for both of the property and liability insurance. • Total actual administrative expenses were $1,130 under the budgeted amount. • Current revenue and expense results show a surplus of $1,770,292. • As of November 30, the actual energy usage was 88,600 megawatt hours, compared to the budgeted 107,094 megawatt hours, which represents a shortfall of 18,494 megawatt hours and the main reason revenues being under budget. 9B. IOC Committee Mr. Price presented the IOC Committee Report on behalf of Mr. Sinclair. He said the EPRI membership has already been discussed. There is a new wild fire mitigation grant that MEA is submitting and the IOC is requesting a letter in support of the grant from the IMC. He said the IOC discussed spinning for the Intertie, and has asked CEA to put together an implementation committee to discuss what spinning for the ties should look like; and the primary frequency response policy implementation. He said the Systems Studies sub -committee continues with the IBR study, and has also proposed a DRAFT 15-year Planning Conditions, which was distributed to the utilities for input of project status. Mr. Price said the Dispatch and System Operations Subcommittee is reviewing the draft wildfire mitigation plan, which has also been circulated for input from the utilities. IMC Meeting Minutes —January 17, 2025 Page 5 of 7 He said the Engineering Subcommittee is reviewing the SVC contract. HE explained the funding for the contract needs to be defined by December 2026 and he has asked for a funding plan for the FY 26 budget. He said the Douglas communication project is proceeding. Mr. Price asked for MEA to provide a synopsis of the Wildfire Mitigation Grant. Anthony Linforce, MEA, said the Wildfire Mitigation Grant is for the segment from Settlers Bay to the south bank of the Talkeetna River. He said it will involves utilizing integrated vegetation management. The request for the match over the 5-year period is roughly $250,000 less than what is projected to spend using current practices. He said the grant would provide three treatments across that segment as opposed to one treatment in the current project. Mr. Price said this is based on the proposed budget, the snow load management cost share. He understood that at this time, there is not a request for hard commitment on exactly how the cost share will be allocated. He said the total request for the IMC isjust shy of a million dollars in the FY26 budget. He said there is a draft letter of support in committee packet, which would be signed by the Chair. Mr. Bishop appreciated the proposal and said he prefers to have the next few weeks to consider the details of the Wildfire Mitigation Grant and address again at the next meeting. Mr. Laughlin agreed. Tamara Lewis, MEA, said the Grant has to be submitted by February 15. Mr. Price said the next meeting is February 14th and asked the members to be prepared to support or not support this endeavor by next meeting. 9C. Operator Report Mr. Thornton said there is not operator's report in the committee packet. He said there was one tie trip since the last meeting that occurred January 12th, at 8:30 pm. He said the trip was between Teeland and Douglas. He said the tie was not heavily loaded at the time but the event was notable because of the subsequent oscillation that happened in the southern island that was created between MEA and Chugach. He said the oscillation was larger than the electrical mechanical system wide oscillation that is typically seen on the Railbelt. He explained steps were taken to eliminate the oscillation including taking SPP out of droop. He said the magnitude was about two tenths of a hertz and did not drive into reportable events. He said CEA has proceeded with the study of this oscillation is in progress, which will provide mitigation steps to be taken. Mr. Laughlin asked if the amplitude of the oscillation was large enough to get outside of the dead band of the BESS for the control system to respond. IMC Meeting Minutes — January 17, 2025 Page 6 of 7 Mr. Thornton said no, there is 150 millihertz dead band on the BESS and the peak magnitude was about a tenth of a hertz (100 millihertz). 10. MEMBERS COMMENTS Mr. Laughlin thanked everyone for their participation, the reports and the hard work of the committees to compile the reports. Mr. Price echoed Mr. Laughlin's comments. 11. NEXT MEETING DATE— February 14, 2025 12. ADJOURNMENT There being no further business of the IMC, the meeting adjourned at 9:58 am. i Dan op, Chair Bill Price /.2. t/Z OZ-4 IMC Meeting Minutes —January 17, 2025 Page 7 of 7