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HomeMy WebLinkAbout2025-06-20_BPMC_Meeting_Minutes___________________________________________________________________________ BPMC Minutes 6/20/25 Page 1 of 13 BRADLEY LAKE PROJECT MANAGEMENT COMMITTEE (BPMC) REGULAR MEETING MINUTES June 20, 2025 1. CALL TO ORDER Chair Million called the meeting of the Bradley Lake Hydroelectric Project Management Committee to order at 10:00 a.m. A quorum was established. 2. ROLL CALL (for Committee members) Travis Million (Golden Valley Electric Association [GVEA]); Tony Izzo (Matanuska Electric Association [MEA]); Brad Janorschke (Homer Electric Association [HEA]); Brian Hickey (City of Seward); Arthur Miller (Chugach Electric Association [CEA]); and Curtis Thayer (Alaska Energy Authority [AEA]). 3. PUBLIC ROLL CALL (for all others present) Jennifer Bertolini, Mark Billingsley, Patrick Domitrovich, Pamela Ellis, Ryan McLaughlin, Jim Mendenhall, William Price (AEA); Joel Paisner (Ascent Law Partners); Matt Clarkson, Josh Crowell, Andrew Laughlin, Mike Miller, Paul Millwood (CEA); Dan Bishop, Sarah Villalon (GVEA); Larry Jorgensen, Sarah Lambe, Martin Law, Andrew Patrick; Jessica Spuhler (HEA); Josh Crowell, David Pease, Matt Reisterer, Jon Sinclair, Tony Zellers (MEA); Brad Zubeck (Public); and Julian Jensen (RT Casey). 4. AGENDA APPROVAL MOTION: A motion was made by Mr. Thayer to approve the agenda. Motion seconded by Mr. Izzo. Mr. Janorschke requested to add Item 8C. Discussion of Renewable Energy Credits (RECs), to the agenda. There were no objections to the friendly amendment. A roll call was taken, and the motion to approve the agenda as amended by adding Item 8C. Discussion of RECs, passed unanimously, with Mr. Thayer not in the room for the vote. 5. PUBLIC COMMENTS - None. 6. APPROVAL OF MEETING MINUTES – May 2, 2025 MOTION: A motion was made by Mr. Thayer to approve the Minutes of May 2, 2025. Motion seconded by Mr. Izzo. ___________________________________________________________________________ BPMC Minutes 6/20/25 Page 2 of 13 A roll call was taken, and the motion to approve the Minutes of May 2, 2025, passed unanimously. 7. NEW BUSINESS A. Battle Creek Bond Subsidies from IRS Curtis Thayer explained the provided memorandum informs the BPMC of an issue regarding the Bond Series 7 debt service payments and IRS subsidies. He discussed that the IRS subsidies are generally received in January for the proceeding year, and in July. During the last 18 months, the IRS has been negligent in issuing the subsidies. The IRS process has also changed from issuance by ACH to issuance by mailing a paper check, which the IRS mailed to the wrong address. Mr. Thayer noted that AEA’s 2023 subsidies were received only a month ago. AEA has not received the subsidies that were due in January 2025. Staff has been working with Senator Dan Sullivan’s office and with the IRS to identify the problem. Mr. Thayer explained the issue that there was not enough funding to cover the bond Series 7 debt service payment and that AEA used its authority to borrow funding from the R&C Fund to cover the debt service. When the IRS subsidy checks are received, AEA will replenish the R&C Fund. Mr. Thayer asked members for guidance on how to address this issue in the future. He noted that a decision does not have to be made at today’s meeting. Mr. Thayer discussed that up until 2022, the subsidies were part of the normal payments. After 2022, the BPMC decided that the subsidies would be used to help pay for the debt service, resulting in a lesser return to the utilities. Mr. Thayer reviewed the chart showing the outstanding subsidy amounts the IRS owes to AEA due January 2025, and due July 2025. Mr. Thayer reiterated that AEA would pay the debt service using R&C Funds, and will inform the BPMC when the IRS check for the January subsidies is received. Mr. Thayer hopes that the IRS will return to using ACH for their payments. Mr. Izzo asked Mr. Thayer for the amount that the IRS currently owes to AEA. Mr. Thayer responded that the two checks that have not been received were equal to approximately $490,000. Chair Million asked Mr. Thayer for the amount of money that is currently within the R&C Fund. Mr. Thayer noted that the R&C Fund has a total of approximately $3.1 million. Chair Million asked Mr. Thayer if staff wants guidance today on the options outlined in the report regarding addressing this issue in the future. Mr. Thayer explained that staff wants to watch and see if the IRS processes will return to using ACH. The BPMC has the ability to pay the debt service using R&C funds with the intent of replenishing those funds when the checks arrive. There was no objection to proceeding as outlined by Mr. Thayer. There were no other comments or questions. B. SS Line Upgrade Update Bill Price, AEA, discussed the SQ Line update first. The 39 miles of line is separated into three phases. Phase 1 has been completed. Phase 2 is approximately $2 million over budget. This is due to the matting issues during the winter. Phase 3 has not commenced. ___________________________________________________________________________ BPMC Minutes 6/20/25 Page 3 of 13 Chair Million asked if this season’s upcoming work is still on schedule to occur within the Q1 timeline. Mr. Price discussed that his understanding is that the schedule has not changed. However, budget discussions may adjust and affect the schedule. There were no other questions. Mr. Price indicated that HEA is better suited to discuss the details regarding the SS Line Upgrade budget increase and overages. Mr. Izzo noted that the BPMC members received a memorandum this morning regarding the SS Line Upgrade construction cost and schedule update. He indicated that the second page of the memorandum is marked confidential. Mr. Izzo asked Mr. Janorschke if the memorandum is an appropriate topic to be discussed during executive session. Mr. Janorschke agreed the discussion should occur during executive session due to the inclusion of pricing information. He noted, however, that the costs are coming in significantly higher than was previously expected. MOTION: A motion was made by Mr. Thayer to enter into executive session to discuss confidential financial matters the immediate knowledge of which may have an adverse effect on the Authority or the Project. Motion seconded by Mr. Miller. Mr. Izzo asked if this issue can be discussed during the regularly scheduled executive session under Item. 11. Mr. Janorschke agreed. Mr. Thayer agreed. Chair Million agreed. Mr. Thayer withdrew his motion. Mr. Miller withdrew his second. Chair Million reiterated that discussion of the SS Line Upgrade will occur later in the meeting during executive session. There were no other comments or questions. 8. OLD BUSINESS A. Updates i. Grip 3, Phase 1 Update Jim Mendenhall, AEA, provided the Grid Resilience and Innovation Partnerships (GRIP) 3 update. Mr. Mendenhall discussed the information included in members’ packets. During the last month, AEA’s primary focus was responding to data requests by Department of Energy (DOE). The supplemental attachment contains the list of questions asked by DOE. Mr. Mendenhall believes the questions are in response to a DOE Inspector General’s report suggesting there was not enough oversight and internal controls to manage the projects. AEA understands there were 179 projects from the Grid Deployment Office (GDO) from which more information was requested. ___________________________________________________________________________ BPMC Minutes 6/20/25 Page 4 of 13 The information was due by June 16, 2025, and AEA submitted the information on June 13, 2025. He noted that Mr. Thayer has the responses and the information that was submitted. Mr. Mendenhall explained that the status of the submittal is unknown, and the timing of a response is unknown. Mr. Thayer commented that the information is available for the BPMC’s review. He complimented AEA’s team for their tremendous job in providing the information. Mr. Thayer emphasized that his conversations with the National Association of State Energy Officials (NASEO) revealed that AEA submitted the information early and are top in the country for providing the information to DOE. Mr. Mendenhall discussed that the initial contract for the Budget Period 1 runs through June 30, 2025. AEA submitted a “Go” recommendation several weeks ago to move to the next phase, based on preliminary engineering and environmental studies. The initial cost for that budget period is approximately $63 million. The majority of that funding is for prepayments for cable, converter stations, and preliminary engineering. The technical folks at the DOE informed Mr. Mendenhall that they are happy with AEA’s submittals, but they have to wait for the feedback from the DOE review. Mr. Mendenhall reviewed that one of AEA’s next main focuses is to submit information to the DOE’s Loan Program Office for the additional funding of the State’s match that has not yet been secured from appropriations or the Bradley bonds. Another focus is the continued activity on the marine environmental permits for work to occur next summer on the crossing for the subsea cable. Mr. Mendenhall reported that approximately $1 million has been spent on the project to date. Mr. Thayer commented that these issues were recently discussed with the Governor and with Secretary of Energy Chris Wright. While Secretary Wright’s comments were not directed at the Cook Inlet Power Link directly, Mr. Thayer indicated that Secretary Wright said that the focus was not on transmission or generation projects in GRIP. However, everyone was requested to provide the same information. Mr. Thayer noted that Secretary Wright had not read the data submitted, and did not necessarily see a concern with Alaska. Mr. Janorschke thanked Mr. Mendenhall for the update. He commented that the original budget for the project was approximately $413 million. Mr. Janorschke noted that the fourth paragraph of the memorandum says that the initial budget was negotiated between DOE and AEA. He asked Mr. Mendenhall for the amount of the initial budget, and secondly, for the amount of the current total projected budget costs. Mr. Mendenhall responded that negotiation was for the initial budget period for the first year of approximately $14 million for potential prepayments and upfront engineering. Mr. Mendenhall explained that the next budget period would be negotiated as more funding is received. The total projected budget costs still remain at approximately $413 million. Value engineering on the project has been suggested to lay all three cables and build half the converter stations at 100 MW capacity, and build the other half of the converter stations as needed, for the ultimate capacity of 200 MW. The goal is to fit the ___________________________________________________________________________ BPMC Minutes 6/20/25 Page 5 of 13 project within the $413 million funding amount and to find additional ways to save money. Most of the spend to date is for AEA’s personnel, Stantec, and HDR’s environmental work. No prepayments were required yet. Mr. Mendenhall expects significant prepayments within the next two years. Mr. Miller asked Mr. Mendenhall if he believes that the eight-year timeline is still realistic. Mr. Mendenhall agreed. He noted that Stantec created a budget and a schedule which targets the cutoff date of August 31, 2032, and a preliminary completion date in early 2031. There were no other comments or questions. ii. Dixon Diversion Update Ryan McLaughlin, AEA, provided the Dixon Diversion Update. Mr. McLaughlin reported that AEA is diligently continuing the engineering and design of the Dixon Diversion. The target is to reach or exceed 30% design for the submittal with the Draft License Amendment Application. Much of the recent effort has focused on the design of the diversion dam. This area has the most constraints with elevation and other factors. The Board of Consultants (BOC) met in February. The scope of work for the Probable Maximum Flood (PMF) study was reviewed. The comments that were provided have been incorporated into the study. The next BOC meeting is targeted for late October. The topics for review include the latest iteration of the design, the PMF study, and the seismic study. Mr. McLaughlin explained that the proposed modifications to Bradley dam call for the evaluation of the seismic stability of the dam. Drilling will occur in the fall to obtain rock characteristics of the dam, the spillway, and the toe of the dam. Installation of piezometers will be used to monitor the phreatic surface through the dam. A detailed drilling plan and program was submitted to Federal Energy Regulatory Commission (FERC) for approval. FERC provided comments and staff is currently reviewing and responding to those comments. Hydrology work is ongoing with stream gauging and continuous monitoring. The information will be used to update the energy forecast in the fall. Mr. McLaughlin noted that the second year of official environmental studies is underway. The study plan is published on the website. This week, a crew is conducting wetland delineation. Many fishery studies have been performed this summer. Mr. McLaughlin noted that the Draft License Amendment Application (DLAA) will include a 14-foot pool raise. He reiterated that the DLAA is on schedule to be submitted in January 2026. The hope is to be able to submit the final License Amendment Application in the fall of 2026. Mr. McLaughlin discussed that the original fiscal year (FY) 2026 budget allocation from the State was $6 million, and was reduced to $4 million. Mr. McLaughlin believes the funding amount is adequate to complete the final License Amendment Application. The helicopter access drilling effort that will occur next summer is one of the big expenses. The depth of the drilling is at least 1,000 feet. Staff has estimates for the drilling, but no quotes have been provided. ___________________________________________________________________________ BPMC Minutes 6/20/25 Page 6 of 13 Mr. McLaughlin noted that staff received the final yearly insurance premiums today. The FY26 premiums are approximately $1,512,000. This was an anticipated increase of approximately $200,000. The current budgeted amount is $1.5 million. Mr. Miller expressed appreciation to Mr. McLaughlin for the update. Mr. Miller asked if the target completion date for commercial operation has been extended to 2031. Mr. McLaughlin explained that the schedule will be updated and reviewed this fall after staff conducts the construction sequencing workshops. The current schedule anticipates completion of the project near the end of 2030, with first water from the project in the summer of 2031. Mr. Miller requested Mr. McLaughlin provide a high-lever overview of the status of the budget, and if there are sufficient funds for the upcoming year. Mr. McLaughlin indicated that he could provide the exact numbers, and believes the total funds equal approximately $10 million. This amount includes the $6 million from Bond Series 11 and the $4 million from the State. Mr. Thayer explained that the $2 million that was removed from the budget this year was removed with the understanding that the request would be included in next year’s budget to be available in July 2027. The $2 million was removed because it was not needed this year. Mr. Janorschke expressed appreciation to Mr. McLaughlin for the update. Mr. Janorschke asked when the drilling plan program is expected to be approved by FERC. Mr. McLaughlin noted that staff hopes to respond to FERC’s comments by next week. Approval of the drilling plan program is expected towards the end of July 2025. Mr. Janorschke asked Mr. McLaughlin who are the members of the Board of Consultants. Mr. McLaughlin noted that the Board of Consultants consists of five world-renown hydro experts. About half of the members are based in Seatle and the others are based worldwide. Mr. McLaughlin indicated that he could provide Mr. Janorschke with names and resumes. Mr. Janorschke responded that he does not need the list of names and resumes of the members of the Board of Consultants. Chair Million requested additional information regarding the turnaround time for responses to the requests regarding the drilling plans. Mr. McLaughlin explained the drilling plans are submitted through FERC, and responses from FERC can take quite a while. Staff tries to submit the requested information well in advance of the needed approval. Mr. Thayer commented that this issue has been the subject of discussion. He noted that there is an executive order on Alaska, and AEA has requested the definition of the wording “expedited review.” Additionally, a FERC Commissioner is scheduled to tour the project later this month. There were no other comments or questions. B. Railbelt Regional Coordination Update Mr. Hickey noted that the Railbelt Regional Coordination written report is included in the Committee packet. Little activity has occurred. There were no comments or questions. ___________________________________________________________________________ BPMC Minutes 6/20/25 Page 7 of 13 C. Discussion of RECs Mr. Janorschke led the RECs discussion. He expressed appreciation for the comments. He received the letter from Mr. Thayer dated June 12, 2025, and another previous letter from Mr. Thayer. Mr. Janorschke inquired about additional information beyond those two letters. Mr. Janorschke commented on a participant meeting that occurred in January. He recalled his understanding that the BPMC was going to direct legal counsel, Joel Paisner, to request an opinion from the Attorney General’s (AG) Office. Mr. Janorschke opined that he may have misheard that direction or he may have missed an update in his emails. Mr. Thayer referenced the BPMC meeting Minutes that occurred on December 6, 2024, during which the RECs were discussed for three pages. Topics included the concept of starting the credits and the methodology for implementation. Mr. Thayer reviewed that AEA asked for a letter from the BPMC regarding the credits, and the Minutes indicate that Chair Million agreed to the suggestion and Mr. Paisner agreed to help Chair Million prepare a draft of the letter. Mr. Thayer indicated that letter was drafted and distributed. Mr. Thayer commented that subsequently, AEA received a legal letter from CEA’s outside counsel. AEA then engaged its outside counsel for an opinion. Mr. Thayer noted that AEA’s outside counsel indicated several points, all of which are attorney/client privileged, and countered the arguments that were made by CEA’s outside counsel. Mr. Thayer informed that after discussion with the Chair, a second legal opinion from Dorsey & Whitney was obtained. That opinion agreed with AEA’s bond counsel Orrick Herrington & Sutcliffe that AEA owns the RECs and that AEA has the ability to sell the RECs. The opinions were given to AEA’s Board of Directors for policy. Mr. Thayer noted that the AEA Board discussed the issue in both public session and in executive session. The AEA Board took the BPMC comments from the December meeting into consideration within their motion. Mr. Thayer indicated that the Minutes and the recording of AEA’s meeting of April 17, 2025 is on AEA’s website. Mr. Thayer read from those Minutes, “the Alaska Energy Authority, through the Executive Director, register the Renewable Energy RECs associated with the Bradley Lake Project. The motion covers Bradley RECs for vintage years up to, but not including the time when the State of Alaska law changes regarding RECs, RPS, or similar matters.” This was a concern of the BPMC in December. The AEA Board took that concern into consideration in their motion. Mr. Thayer continued to read from the Minutes which includes that the Bradley Lake Project is owned by the Alaska Energy Authority, and therefore, the RECs are owned by AEA. RECs proceeds are to be used exclusively to reduce the cost of energy to 550,000 Alaskans living on the Railbelt by putting the money towards the Bradley Lake Hydro Project and capital expenses for the Dixon Diversion Project. Mr. Thayer reiterated that the funding raised from the RECs would go directly to the Bradley Project. He referenced AEA’s Minutes and the motion again that states that this may include, if necessary, advocating for a BPMC budget amendment that adds the expense of the Dixon Project development equal to, but not to exceed the value of the REC proceeds. Mr. Thayer ___________________________________________________________________________ BPMC Minutes 6/20/25 Page 8 of 13 continued reading the Minutes that states, “I applaud the utilities and AEA for collaborating to raise over $20 million over the next 20 years without any negative impact to rate payers for the Dixon Diversion Project.” The motion referenced passed unanimously. Mr. Thayer highlighted that all of the BPMC members commented during the REC discussion at the December 6, 2024 BPMC meeting. There were no member absences that day. Mr. Thayer informed that AEA registered the RECs, with a focus on the vintage credits and the current year credits. He discussed that a review would occur every year in the event that the State establishes a Renewable Portfolio Standard (RPS) or if those credits are needed. Discussions can occur at that time. Mr. Thayer reviewed that the AEA Board directed a letter to be written to the utilities. The intent is that everybody has the same rights to their pooling water. A couple of the utilities communicated that their specific customers may be interested in buying the REC credits. Customers such as a mining company or a large industrial company. Mr. Thayer discussed that the letter gives the utility the first right of refusal, and then gives the option for AEA to sell the RECs to Alaska businesses. Mr. Thayer gave the example that Santos Oil is buying REC credits from around the world to help achieve their renewable strategy. Mr. Miller asked if AEA would respond to CEA’s legal inquiry. Mr. Thayer agreed. He noted that the response will summarize the activities and findings of the March 7, 2025 meeting. Mr. Miller commented that from CEA’s perspective, the outstanding issue is the ownership of the RECs, which is the heart of the question. Mr. Thayer asked if members are to the point of argument and possible litigation regarding this issue that goes into the Bradley budget and benefits the Dixon Diversion Project. Mr. Miller believes that Mr. Thayer is misconstruing the argument. He gave the example scenario that CEA wants to keep the RECs for itself. Under AEA’s cost structure, it will cost CEA a 20% premium to keep the RECs for itself. The effect is an increased cost of Bradley Lake power for CEA’s members and every utility. Mr. Thayer reported that none of the utilities have requested the REC credits over the last 30 years. Mr. Thayer gave the example that CEA is selling community solar panels, and Mr. Thayer rents a solar panel. Mr. Thayer asked if he gets the REC credits from that solar panel. Mr. Miller agreed that Mr. Thayer gets the REC credits. CEA does not get the REC credits. This is similar to the scenario of people having solar at their house, and they get the REC credits. Mr. Thayer indicated that the focus is on vintage credits in 2025. He asked if any of the utilities present today want to purchase the RECs. Mr. Miller responded that from CEA’s perspective, the REC credits already belong to CEA. Therefore, the question is why would CEA want to purchase REC credits that already belong to CEA. Mr. Thayer commented that litigation will cost money. He noted that the Board would like to see the REC money go to the Bradley Lake Dixon Diversion project. The State has already ___________________________________________________________________________ BPMC Minutes 6/20/25 Page 9 of 13 contributed nearly $20 million into the project. Legislators asked if AEA is selling REC credits to contribute those funds to the project. Mr. Thayer summarized his understanding that the group would rather pursue a legal opinion that AEA does not own the REC credits, even though the money goes to Bradley Lake. Mr. Miller believes that it is a good use of the REC funds, but that the decision should be made by each utility so that an additional cost is not incurred if the utility chooses to keep the RECs. He noted the Dixon Diversion will increase the power at Bradley Lake, and that Bradley Lake is a relatively new project from a hydro perspective. These factors contribute to the question regarding the ownership of the RECs. Mr. Thayer explained that the State owns Bradley Lake. The Power Sales Agreement was completed 32 years ago, prior to the existence of RECs within the last 20 years. Mr. Thayer indicated that there is no case law in the State of Alaska on RECs. There is only contractual law on RECs. Nationwide, the owner of the project owns the REC credits. FERC has provided decisions on this issue. Public utilities have offered decisions on this issue. AEA’s attorney reviewed the scenario based on Alaska precedent and nationwide precedent. Mr. Thayer expressed his frustration regarding the situation; that with the ongoing BPMC efforts, such as the Cook Inlet Power Link and Dixon Diversion, the BPMC is arguing over the fact that the money from potentially selling REC credits to utilities and to Alaskan businesses will be directed at Bradley Lake. He reiterated that no utility has asked for REC credits, and no utility has asked for consideration not to pay the 20%. Mr. Miller commented that the letter that was distributed outlined the option that if the utility wanted the RECs, the utility would have to pay for the RECs. Mr. Miller expressed his understanding that the entity that is marketing the RECs takes approximately 20%, which means that the cost for the utilities to keep the RECs would increase. Mr. Miller understands that the REC proceeds will go toward the project, while increasing the costs to utilities keeping the RECs. He asked Mr. Thayer how that scenario makes sense. Mr. Thayer discussed that he does not see that scenario, other than AEA would have a conversation with the utilities on their RECs. Mr. Miller noted that was not an option identified in the letter. He commented the letter indicated the opposite; if the utility wants the RECs, the utility has to pay for the RECs, and has to pay the broker fees. Mr. Thayer asked Mr. Miller why he would buy the RECs if there is no State law that requires CEA to have an RPS. Mr. Miller commented that is a different question than the topic being discussed. Mr. Miller reiterated that it should be the utility’s discretion to make the call. The options listed in the letter indicated that AEA would sell the RECs within 30 days or the utilities can purchase the RECs for the listed prices. Each utility will be allocated a pro rata share, but the net effect is an increased cost to the utility. Mr. Miller explained that this view is encompassing today’s issues and a longer-term perspective. ___________________________________________________________________________ BPMC Minutes 6/20/25 Page 10 of 13 Mr. Thayer reiterated that the REC funding is going into Bradley Lake to defer the cost to the utilities and to the rate payers. Mr. Miller agreed. Mr. Thayer commented that the end goal is to benefit the rate payers. Mr. Miller agreed. He explained that per AEA’s letter, if a utility determines they want to keep the RECs for whatever purpose, the effective cost of Bradley Lake would be higher. That is the heart of the issue, and relates back to the question of the ownership of the RECs. Mr. Miller gave the scenario that assumes that the utilities own the RECs, whereby the utilities could authorize the program to sell the RECs on their behalf and apply those proceeds to lowering the utilities’ contribution share of the Bradley Lake and Dixon costs, or the utilities could decide to keep their RECs and the costs to Bradley Lake would not be reduced. Chair Million commented that CEA wrote a letter, BPMC wrote a letter, and AEA provided a written response. Mr. Thayer noted that the only letter AEA received from the BPMC was in support of the RECs. Mr. Thayer indicated that he does not recall seeing a second BPMC letter. AEA took into consideration the issues addressed in the only BPMC letter provided to AEA. Chair Million noted that it sounds like AEA has received legal opinion that AEA owns the RECs. Mr. Thayer agreed. Chair Million indicated that it would be helpful for AEA to provide a written response to CEA. Mr. Izzo reminded everyone, for disclosure purposes, that he is a member of the AEA Board. Mr. Izzo expressed his 100% support of AEA’s position on this issue. He noted it is clear that the ownership defaults to the project owner, unless there is legislation or a ruling that indicates otherwise. In the State of Alaska, there is no such legislation or ruling. Mr. Izzo commented that he has reviewed the opinions, and maybe other members have not reviewed the opinions. He asked if there is any issue in members reviewing those opinions. Mr. Thayer indicated that decision would have to be discussed at AEA, since the material is internal attorney/client privileged correspondence. Mr. Izzo expressed support for providing the legal opinion to the utilities in a manner necessary to maintain confidentiality, with the intent that the information will assist the utilities in making informed decisions. Mr. Izzo continued his comments, and gave the example that if CEA is viewing this scenario as a rate increase, that is because CEA is creating value on something that is not in law. He discussed that if CEA wants to pay extra for the RECs and raise CEA member rates, that is CEA’s decision, and is not a result of AEA’s actions. Mr. Izzo stated that if there is a Renewable Portfolio Standard (RPS), which seems contrary to most of the actions at the federal level and a farse, he would go on record to seek legislation for an exemption for Bradley Lake. If the Legislature did not provide the requested exemption, then the Legislature would be raising rates. Mr. Hickey expressed that members’ comments have covered the issue very well. Mr. Janorschke expressed appreciation for the comments. He noted that he is not in a position to submit an informed opinion today since he has not seen the legal opinions provided to the AEA Board and since he is not a contract attorney. Mr. Janorschke recognizes that the participants pay 100% of the Bradley Lake costs, even though the participants do not own Bradley Lake. He is cognizant of setting precedents, and understands that the issues regard ___________________________________________________________________________ BPMC Minutes 6/20/25 Page 11 of 13 2025. Mr. Janorschke indicated the only letter he received is the letter that CEA provided to AEA. Mr. Miller believes there is agreement on many issues. However, the fundamental question remains regarding the ownership of the RECs. He commented that utilities may have their own internal goals for decarbonization. CEA’s determination is that the RECs reside with each utility. Mr. Miller does not believe the issue will be resolved at today’s meeting. He looks forward to hearing more about this issue. Mr. Thayer reiterated that he would inquire about the possibility of sharing the legal opinions. Mr. Hickey commented that it would be helpful to understand the legal construct regarding the RECs. He gave the example that a utility can no longer say they are 20% renewable if they do not have the RECs. He asked if the utility could say they are 20% hydro. Mr. Hickey asked for information regarding the construct that creates the problem of not owning the RECs. He noted that there is currently no RPS and currently no legal requirement. Chair Million requested Mark Billingsley, AEA General Counsel, to provide a recap of the comments given at the December meeting. Chair Million asked Mr. Billingsley, through Mr. Thayer, to provide a summary email of the specific verbiage that is allowed as an owner of the RECs or not an owner of the RECs. Mr. Billingsley noted that he cannot remember the exact details at this moment. He referenced a couple of pamphlets written by national standards organizations that clarify what can be said and what cannot be said. The issue is with double claims by utilities. Chair Million agreed it would be helpful to have that information. Joel Paisner commented that the issues relate to possible greenwashing claims against the utilities or CEA, if a mining company purchases the RECs out of the BPMC and CEA still claimed the RECs. There is potential liability. Mr. Paisner expressed interest in reviewing the opinion from AEA’s counsel and other opinions. He believes that BPMC’s contract with AEA allocated the RECs and the revenue back to participants, but he does not have a full understanding of the details. Mr. Thayer stated that the RECs are not in the contract. Mr. Paisner said he understands, and appreciated Mr. Thayer’s clarity in describing the opinions. He noted that today’s information is helpful. He does not have an opinion today, and is looking forward to reviewing the opinion of AEA’s counsel. Mr. Janorschke responded to Mr. Hickey’s question, noting the December 6, 2024 meeting conversation during which Mr. Billingsley discussed that if HEA does not buy the RECs, HEA could say they get 10% of their power from Bradley Lake. HEA cannot say their power is from hydro or renewable. HEA can only cite a specific location. Mr. Janorschke apologized if he misrepresented Mr. Billingsley’s discussion, and requested Mr. Billingsley to correct any errors. Mr. Million noted no objections to Mr. Janorschke’s comments. Mr. Hickey expressed appreciation to Mr. Janorschke for his remarks. He commented that the ___________________________________________________________________________ BPMC Minutes 6/20/25 Page 12 of 13 language seems like a point without a distinction. Mr. Janorschke agreed. There were no other comments or questions. 9. OPERATORS REPORT Martin Law, HEA, provided the Operators Report. Mr. Law noted that Battle Creek was brought online three weeks earlier than last year and the year before. The operators did a great job of getting through the snow and getting the ice floated and melted. The copy of the report is included in the Committee packet. Mr. Miller thanked Mr. Law for his report. Mr. Miller also thanked Mr. Janorschke for keeping members informed about the Bradley Lake hydro levels through his routine emails. Chair Million thanked Mr. Law and his team for the good news of water flowing three weeks early. There were no other comments or questions. 10. COMMITTEE REPORTS A. Budget vs. Actuals Pam Ellis, AEA Controller, stated that she received communication that the BPMC did not want a detailed review of the schedule today. She asked if there were any questions. Chair Million agreed that he requested that only questions regarding the financials are asked during today’s meeting, rather than reviewing the financials line-by-line. He noted that the remaining meeting time is brief, and there is a long Railbelt Transmission Organization (RTO) scheduled today. He asked if Board members have any questions on the financials. There were no comments or questions. B. O&D Report Josh Crowell, MEA, stated the written the Operation and Dispatch (O&D) Committee Report is in the packet and noted he has nothing to add unless there are questions. There were no comments or questions. MOTION: A motion was made by Mr. Thayer to enter into executive session to discuss confidential financial matters the immediate knowledge of which may have an adverse effect on the Authority or the Project. Motion seconded by Mr. Miller. A roll call was taken, and the motion to go into executive session passed unanimously. 11. EXECUTIVE SESSION: 11:07 a.m. - (Bylaws Section 5.11.4(d)) –To discuss confidential financial matters the immediate knowledge of which may have an adverse effect on the Authority or Project. ___________________________________________________________________________ BPMC Minutes 6/20/25 Page 13 of 13 The Committee reconvened its regular meeting at 11:44 a.m. Chair Million advised that the Committee did not take any formal action on matters discussed in executive session. Chair Million asked if the BPMC would like to appoint the O&D Committee to work with the project managers on both the SQ Line and SS Line to reevaluate and potentially rebid some of the materials on those projects and to report the findings to the BPMC. There were no objections. Mr. Izzo asked if a schedule review and impact could be added to that request. Chair Million agreed. There were no objections. 12.MEMBERS COMMENTS Mr. Hickey expressed appreciation for the work by AEA on the financing and design projects, and appreciation to HEA for their work on the southern lines. Mr. Janorschke expressed appreciation for the participation in today’s meeting and for all of the information that was shared. Mr. Miller echoed the previous comments. Mr. Thayer thanked everyone for the meeting, especially the AEA team for providing the hundreds of pages of documents required for the Department of Energy. The hope is that guidance will be revealed by the next meeting. Efforts are proceeding as expected on the Cook Inlet Power Link. Mr. Izzo echoed the previous positive comments. Chair Million echoed the comments of appreciation, and concurred with Mr. Thayer regarding AEA’s great job in compiling the data. He believes the response reflects how well the project was moving forward and the level of organization. 13.NEXT MEETING DATE – July 25, 2025 14.ADJOURNMENT There being no further business for the committee, the meeting adjourned at 11:47 a.m. ______________________________________ Travis Million, Chair _______________________________________ Curtis Thayer, Secretary