Loading...
HomeMy WebLinkAbout2025-05-02 IMC Meeting MinutesAlaska Intertie Management Committee (IMC) REGULAR MEETING MINUTES Alaska Energy Authority Board Room Friday, May 2, 2025 1. CALL TO ORDER Chair Dan Bishop called the meeting of the Alaska Intertie Management Committee to order on May 2, 2025, at 9:00 a.m. 2. ROLL CALL FOR COMMITTEE MEMBERS Members present: Dan Bishop (Golden Valley Electric Association (GVEA)); Jon Sinclair (Matanuska Electric Association (MEA)); Andrew Laughlin (Chugach Electric Association (CEA)); and Bill Price (Alaska Energy Authority (AEA)). A quorum was established. 3. PUBLIC ROLL CALL Public present: Jennifer Bertolini (AEA); Mark Billingsley (AEA); Patrick Domitrovich (AEA); Pamela Ellis (AEA); Mark Ziesmer (AEA); Joel Paisner (Ascent Law Partners); Mike Miller (CEA); Russell Thornton (CEA); Paul Millwood (CEA); Nathan Minnema (GVEA); Keith Palchikoff (GVEA); Sarah Villalon (GVEA); Lance McKimson (MEA); David Pease (MEA); and Bernie Smith (Public). 4. AGENDA APPROVAL MOTION: A motion was made by Mr. Price to approve the agenda. Motion seconded by Mr. Sinclair. The agenda was approved unanimously. S. PUBLIC COMMENTS There were no public comments. 6. APPROVAL OF PRIOR MINUTES — March 21, 2025 MOTION: A motion was made by Mr. Laughlin to approve the Minutes of March 21, 2025. Motion seconded by Mr. Price. The Minutes of March 21, 2025 were approved unanimously. 7. NEW BUSINESS 7A. FY26 Budget IMC Meeting Minutes — May 2, 2025 1 of 7 MOTION: A motion was made by Mr. Price to approve the Fiscal Year 2026 Preliminary Operating Budget to be posted for the 30-day public comment period, as presented. However, comments are due to the IMC and AEA by 5:00 p.m., June 3, 2025. Motion seconded by Mr. Laughlin. Chair Bishop requested brief discussion on the proposed budget. Mr. Sinclair noted that the information he will provide is also included in the IOC report. He highlighted that the usage is definitely down. The costs per megawatt hour (MWH) being wheeled up the tie is going to be noticeably higher. However, the overall actual operation expenses projected for next year have been lowered, but not lowered enough to counter. Mr. Sinclair advised that there are pending grants that should be released shortly and will have a positive effect. Additionally, the vegetation grant remains pending. Chair Bishop inquired about the Mobile Substation Site for $100,000 under FERC 570. He requested comments from the utilities and AEA on whether that expenditure is appropriate, given that AEA has turned over the distribution assets to GVEA a few years ago, and whether the other utilities in AEA are comfortable with the Intertie Budget contributing to that effort. Chair Bishop indicated that he does not need an immediate response, but would like feedback eventually. There were no comments. Chair Bishop next inquired about the Redesign Healy SVC 138 kV Interconnection line item for $50,000 under FERC 570. He requested that those who proposed the project provide additional information to him over the next month. There were no comments. Chair Bishop next inquired about the Private Line Telephone Service item for $85,000 under FERC 571. He suspects that this may be a typographical error, in that it seems to be in the wrong category. He requested this item be considered over the next month as well. Mr. Price asked if Chair Bishop is proposing to post the budget as -is, and then review these items and potentially make changes in 30 days. Chair Bishop agreed. Mr. Price noted that he neglected to remove the cancelled Cell Phone Comm cellular service line item under FERC 566 for $13,000. The line can either be removed today or after the 30-day period. There were no comments. Mr. Price advised that the grant projects shown are for reference purposes only. The grants are not currently in the IMC budget in any way. There are, however, grant match components that will come out of the utilities' budgets. Mr. Price asked the utilities if that matching component needs to be reflected in the IMC budget. He noted that AEA does not have an opinion either way. Chair Bishop noted his understanding was that the utility who manages the project bills the other utilities directly. Mr. Price agreed that is how the grants will function. He asked for IMC Meeting Minutes —May 2, 2025 2 of 7 discussion purposes if this accounting method was acceptable. Mr. Laughlin believes it is worth having the discussion. His first response would be to account for the grants in the budget. He believes this would be prudent. Chair Bishop asked Mr. Laughlin if he is proposing that the utility grant matching contributions be included in the report. Mr. Laughlin agreed that makes sense, however, he does not know how it would be structurally reflected. Mr. Sinclair commented that since MEA is planning to receive directly from GVEA and then pay directly to GVEA, he thinks those transactions should not be included in the main budget, but rather included as a secondary listing, similar to the way it is shown now. The billing is not going through AEA at all. It would be up to the project manager (PM) to report what was billed and what was received. Mr. Sinclair noted that if that information is tracked by the IMC, it should not be included in the same sheet of direct billings to AEA and direct reimbursements from AEA, rather it could be tracked on a separate grant spreadsheet. Chair Bishop asked Mark Ziesmer, AEA, to provide comments. Mr. Ziesmer noted that there may be similarities to what IMC is trying to accomplish and the way Bradely Lake Project Management Committee (BPMC) addresses the similar issue. Mr. Ziesmer suggested that a task be given to the Budget Subcommittee to review this from a financial officer's perspective and determine how to accurately represent the grants. Chair Bishop agreed to the suggestion. He assigned the Budget Subcommittee the task as outlined. Mr. Price highlighted the PSS/E budget line item at the bottom under FERC 566. Historically, that number has been rolled into the miscellaneous bucket. The past agreement with Siemens was advantageous to pay the amount of $21,000 for one seat and receive multiple seats in return. Recent discussions with Siemens reveal that Siemens is going to increase that budget item every year by 20% to help motivate IMC to renegotiate the contract. In short, Siemens will no longer offer perpetual licensing. He asked that the PSS/E expense is included as a separate line item for tracking purposes. In the coming two or three years, it would be advantageous for the IMC to review renegotiating that contract and determine the actual number of seats that are necessary in the contract. There were no other comments or questions. The motion to approve the Fiscal Year 2026 Preliminary Operating Budget to be posted for the 30-day public comment period, as presented passed unanimously. 8. OLD BUSINESS 8A. Repairs to Structure 616 Chair Bishop requested Nathan Minnema, GVEA, to provide comments. Mr. Minnema indicated IMC Meeting Minutes — May 2, 2025 3 of 7 that there are no updates to the repairs to Structure 616. He is staying in touch with EPS. They are still anticipating the steel tower section to be shipped in July. Communication is ongoing so that the necessary outages will be coordinated and that the work will align with MEA's Douglas work. There were no questions. 9. COMMITTEE REPORTS 9A. Budget to Actuals Mr. Ziesmer presented the Budget to Actuals report for the period of July 1, 2024 through March 31, 2025. Actual revenues were less than budgeted by $350,186 due to lower -than - expected energy usage. The interest earned for the period is $99,441. Actual operating expenses were less than budgeted by $2,207,244. Several categories experienced little to no activity to date, resulting in significant underspending. Mr. Ziesmer noted that the FERC 57000 Maintenance of Station Equipment, Capacitor Spares shows expenses of $38,499 were recorded without an allocated budget. This is mostly due to materials that were ordered in FY24, but not received until the current fiscal year. The FERC 57000 Replace Healy Substation Breaker line is currently over budget by $23,236. Mr. Ziesmer anticipates that this variance will be balanced by the end of the fiscal year. Mr. Ziesmer reviewed FERC 57100 Maintenance of Overhead Lines. The Northern Maintenance is over budget by $50,058, due to aerial patrols expenses that were not allocated. The Special Patrols item exceeded the budget by $8,732, due to emergency line patrols. Barring any additional patrols, Mr. Ziesmer anticipates that this category will end the year at approximately $4,982 over budget. Mr. Ziesmer continued the review, and noted that FERC 58401 Insurance Premiums is over budget by $9,768, due to higher -than -expected property and liability coverage rates. No further costs are expected, leaving a projected overage of $4,218 by year-end. Mr. Ziesmer reviewed Administrative Expenses are over budget by $27,048. This is primarily due to higher than anticipated indirect costs. The current results of revenues and expenses indicate a surplus of $2,560,705. Mr. Ziesmer directed the review of the last page of the report, which summarizes the Intertie's energy usage, operating costs, and usage revenue for the report period. Actual energy usage was 130,168 MWH, which is lower than the budgeted usage of 156,836 MWH. Actual operating costs totaled $677,331, which is significantly lower than the budgeted amount of $2,884,575. Actual billed usage revenue was $2,194,632, which is below the budgeted amount of $2,644,259. Mr. Laughlin noted that the actuals are significantly under the budgeted amount. He asked if it is anticipated that those under budget categories will complete their work and catch up before the end of the fiscal year. Mr. Sinclair commented that there are several projects that they will try to complete. However, he still projects a noticeable delta by the end of the fiscal year. Some of the projects did not materialize. IMC Meeting Minutes — May 2, 2025 4 of 7 Chair Bishop asked if the Structure 616 project was one of the projects stalled. Mr. Price indicated that the Structure 616 project is not in the budget. There is approximately $50,000 in emergency response related to Structure 616, but the $500,000 anticipated repair cost is included in next year's budget. Mr. Laughlin asked if the substantial amount of clearing that has not yet been conducted this year is anticipated to be completed this year. Mr. Sinclair responded that much of the clearing typically is completed near the end of the fiscal year. However, all of the funds were not utilized last year, and he does not anticipate using all of the funds this year. Chair Bishop commented that the IMC previously reviewed the budget and projected that the budget would be on target for the end of the year, but despite that good effort, it looks like there will still be a budget surplus. Mr. Price suggested that the Budget Subcommittee consider a planned budget revision in the November timeframe. A six-month adjustment could occur every year that would help mitigate the swinging budgets. Chair Bishop agreed with the good point. He understands that plan will be followed in the future. Mr. Laughlin believes Mr. Prices suggestion is a good first step to review and adjust the budget. He noted the surplus this year is significant. Mr. Minnema mentioned that there are three large -dollar items that are under contract and still expected to be received in FY25, including the Healy B17 replacement, the Cantwell switches, and the northern clearing with contractor Clear Excavating. The total amount is approximately $1 million that is expected to come through before June 30, 2025. There were no other comments or questions. 9B. IOC Report Mr. Sinclair presented the IOC Report included in the Committee packet. He highlighted additional proposed changes to the draft budget, including funding for the Douglas communication tower upgrade and added administrative costs. He noted that Mr. Minnema previously discussed Structure 616. The Douglas foundation repairs are pending, and bidding for the work is out. The hope is to finalize the bid in May and conduct construction in June. Coordination with the utilities has occurred. The anticipation is that the tie can stay energized, and the distribution side can be deenergized. IMC Meeting Minutes — May 2, 2025 5 of 7 Mr. Sinclair noted the ongoing studies of the System Studies Subcommittee (SSS). More information is forthcoming as the studies progress. The studies include a 230 kV upgrade study and an inverter -based resource study. Mr. Sinclair discussed the request of the Railbelt Reliability Council (RRC) to attend the SSS meetings. The IOC and the SSS are looking for direction from the IMC on how to work with the RRC. Mr. Sinclair discussed the request under the Relay, Protection, & Controls Subcommittee to obtain remote access to Douglas. The Subcommittee will review that request in July or August after the foundation repairs are completed. Mr. Sinclair advised that the proposed FY2026 Budget is attached and has been reviewed. There were no comments or questions. 9C. Operator Report Mike Miller, CEA, presented the Operator Report. Mr. Miller stated the usage on the Intertie continues the trend of using about half as much as the prior year. He noted this topic was discussed during the budget discussion. There were no Intertie trips to report during March or April. Five different events occurred, and the trip of generation at SPP resulted in underfrequency load shed. He reported that there was robust conversation in the IOC meeting about that. A summary report of the event will be produced in coordination with the Railbelt utilities and will be shared at the next IOC meeting. There were no other comments or questions. MOTION: A motion was made by Mr. Sinclair to enter into executive session to discuss confidential matters which by law are required to be confidential. Motion seconded by Mr. Laughlin. The motion to go into executive session passed unanimously. 10. EXECUTIVE SESSION: 9:34 a.m. — (Bylaws Section S.11.3 (a)) To discuss confidential matters which by law are required to be confidential. The Committee reconvened its regular meeting at 9:49 a.m. Chair Bishop advised that no action was taken during executive session. Mr. Sinclair indicated that no motion was made in executive session. After consultation, he will now make a motion. MOTION: A motion was made by Mr. Sinclair that the request by the RRC to attend subcommittee meetings of the IMC be denied. Motion seconded by Mr. Laughlin. Mr. Laughlin noted the discussion in executive session reviewed that too many conflicts would arise in having the RRC participate in subcommittee meetings. IMC Meeting Minutes — May 2, 2025 6 of 7 Chair Bishop commented that the conflicts would arise as a result of RRC being a regulatory organization, rather than an operating organization. The motion that the request by the RRC to attend subcommittee meetings of the IMC be denied passed unanimously. 11. MEMBERS COMMENTS Mr. Laughlin thanked everyone for their participation, excellent reports, and good discussion. He looks forward to the next meeting. Mr. Sinclair echoed Mr. Laughlin`s comments, and expressed appreciation for the effort of everyone. He noted that the IOC Chair will be rotating and that person will present the report. Mr. Price echoed the comments of appreciation. Chair Bishop thanked AEA staff for preparing the budget documents, tracking them, working on the meeting, and facilitating the efforts of the IMC, as well as thanked the employees of the utilities who have contributed much effort into the subcommittee work, the budget, system studies, maintenance of lines, right-of-way clearing, and so forth. 12. NEXT MEETING DATE — June 20. 2025 at 9:00 a.m. 13. ADJOURNMENT There being no further business of the IMC, the meeting adjourned at 9:53 a.m. -n Bishop, C it 4Biice.EA Secretary IMC Meeting Minutes — May 2, 2025 7 of 7