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HomeMy WebLinkAbout2024-11-08 RTO Meeting Minutes FINAL___________________________________________________________________________ RTO Minutes 11/08/24 Page 1 of 10 RAILBELT TRANSMISSION ORGANIZATION (RTO) REGULAR AGENDA November 8, 2024 Alaska Energy Authority Conference Room 1. CALL TO ORDER Curtis Thayer, AEA, called the Railbelt Transmission Organization Governance Committee meeting to order at 10:00 a.m. A quorum was established. 2. ROLL CALL (for Committee members) Joel Groves (Railbelt Reliability Counsel [RRC]); Daniel Heckman (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) Fernanda Conrad (Accu-Type Depositions); Jennifer Bertolini, Mark Billingsley, Conner Erickson, Jim Mendenhall, William Price (AEA); Matt Clarkson (CEA); Ed Jenkin (MEA); and Tina Grovier (Stoel Rives). 4. AGENDA APPROVAL MOTION: A motion was made by Mr. Miller to approve the agenda as presented. Motion seconded by Mr. Heckman. Mr. Janorschke asked if Tina Grovier, Stoel Rives, is scheduled to provide an update at today’s meeting, per his request at the previous meeting. Mr. Thayer responded that Ms. Grovier is in attendance today. He does not believe she is prepared to provide an update. Mr. Thayer advised that Mr. Heckman is scheduled to provide the RTO Working Group update during today’s meeting. Mr. Heckman commented that his review today will include both Ms. Grovier and Carl Munro’s updates. Mr. Heckman stated that Ms. Grovier is available to answer questions today, however, the intent is for her and for Mr. Munro to be available at the December 6, 2024 meeting when the certificate is before the Committee. Mr. Janorschke expressed appreciation. ___________________________________________________________________________ RTO Minutes 11/08/24 Page 2 of 10 A roll call was taken, and the motion to approve the agenda as presented passed unanimously. 5. PUBLIC COMMENTS - None. 6. APPROVAL OF THE MEETING MINUTES – September 27, 2024 MOTION: A motion was made by Mr. Hickey to approve the Minutes of September 27, 2024. Motion seconded by Mr. Miller. Mr. Janorschke requested that the Minutes be amended under Item 7. Members Comments to replace “Tina Unidentified” and “Carl Unidentified” with their respective last names: Tina Grovier and Carl Munro. Jennifer Bertolini, AEA, agreed. Mr. Thayer apologized, and noted the names will be included. There were no other comments. A roll call was taken, and the motion to approve the Minutes of September 27, 2024, as corrected, passed unanimously. 7. OLD BUSINESS A. Draft Bylaws Mr. Thayer explained that the Draft Bylaws were provided to members and posted online. Comments regarding the Draft Bylaws were received and compiled by Mark Billingsley, AEA General Counsel. Mr. Thayer requested review of the Draft Bylaws, and requested that Mr. Billingsley provide feedback regarding the sections that received comments or concerns. Mr. Thayer indicated there were no comments brought forward for Article 1, Article 2, Article 3, Article 4, Article 10, and Article 11. Mr. Billingsley said that the DRAFT being reviewed accepts all of the changes that were proposed and no specific concerns were received. He said Mr. Groves and the RRC proposed some changes. He said the working group focused on the bigger issues and all of those comments are included in the DRAFT. He explained the referral for arbitration in Article 5.10.4 (c), and again in Article 5.10.6 (d), which addresses how much of a vote is required to refer a matter for dispute resolution, it appears again in Article 9, which deals with dispute resolution, which has not been figured out and that is why the group does not know how to fit it into the voting, 5.10, matter of acting. He said the parties have not figure out Dispute Resolution, but does not believe it would be a big challenge to resolve. Mr. Izzo understood the Bylaws need to be finalized soon and advised that MEA has not yet submitted any of their comments or requests for clarifications regarding the Draft Bylaws, as their meeting to discuss the Draft Bylaws is not scheduled until next week. He said there are ___________________________________________________________________________ RTO Minutes 11/08/24 Page 3 of 10 several items that MEA would like to address like when the authority can act, arbitration versus judicial review, time to appeal, removal of an officer, etc. Mr. Billingsley said some of the items mentioned by Mr. Izzo are part of Dispute Resolution has not been addressed. He said if there is verbiage preferred for Dispute Resolution that would be fine. He confirmed the Bylaws do need to be finalized prior to the submission of the Certificate of Public Convenience and Necessity (CPCN) and Open Action Transmission Tariff (OATT) that are due at the end of the year, but are not being put forward for approval today. Mr. Thayer said another section with comments raised is Article 5.12 regarding Open Meetings. Mr. Billingsley said there have been questions whether the RTO is subject to the Open Meetings Act, He said AEA is confident that the RTO is subject to the Open Meetings Act. He said if there are concerns, please share them. Daniel Heckman stated GVEA’s position is that the RTO, as an entity, is subject to the Open Meetings Act. He clarified it is questionable whether the Open Meetings Act carries down through the working group and committees. He explained the working group is having very open and frank dialogue among the entities, and wants to encourage that continue while recognizing the unique situation of the organization. Mark Billingsley acknowledged the working group is thoroughly reporting to the RTO at the public meetings on the work of the group. He also emphasized there are no decision being made by the working group, only recommendations. He further explained the working group does not have the RTO members on it, but other employees from the utilities. It is important that the working group is providing reports to the RTO, and the RTO is actually making the decisions. Mr. Izzo said MEA is in complete support of the Open Meetings Act. It was discussed throughout the legislative process and has always been the intention. He further said MEA would address 5.10, the requirement of unanimous concurrence, which he does not support. Mr. Billingsley recommended that RTO should consider carefully whether filing of the OATT and the CPCN should be unanimous. He re-emphasized the RTO will make the decision, not the working group. The RTO should also consider whether the adoption of the Bylaws should be unanimous. The other issues like dispute resolution, etc. are not as important. Mr. Thayer said there are many watching the group closely, who are also watching other activities of these organizations like the GRIP, Dixon Diversion, etc. He said the intention is the group show unity going froward as the Railbelt Utilities are asking for hundreds of millions of dollars. He said if the Railbelt Utilities cannot get along, that will be noted. Mr. Billingsley stated the list of issues is not AEA’s list, but it is out there for all to comment. Mr. Izzo said there are already differences in opinions like the definition of backbone and up front that if the issues are not resolved, this will be headed back to the legislature. ___________________________________________________________________________ RTO Minutes 11/08/24 Page 4 of 10 Mr. Billingsley agreed. Mr. Thayer summarized there will need to be additional discussion on Article 5.10.16 will have more discussion. He called attention to 5.12, the Open Meetings Act. He asked if there were any concerns with the Open Meetings Act for the RTO Governance Committee. There were no concerns. MR. Thayer moved onto the next concern, Committees. He reminded the RTO that Bylaws were based on the BPMC Bylaws, which is what the legislature referenced. He understood there are concerns with some of the committees identified in the DRAFT Bylaws. Mr. Billingsley said the there were concerns with the tariff, finance and technical subcommittees. He explained that each member of the RTO is a member of the subcommittees, or your delegate. He clarified the subcommittees are not making recommendations, it is only the RTO Governance Committee that make decisions. He said there was one comment about the power of the sub committees, but did not understand it. He thought there was agreement about Article 6 regarding the subcommittees and asked if are concerns, please comment. Mr. Thayer moved onto Article 7, Officers. He said the one questions was on Article 7.9, the Authority is the permanent Secretary / Treasurer and a question whether the Members of the Board were covered, or needed insurance. Mr. Billingsley said the language is standard regarding the officers. He acknowledged the BPMC is a little bit different because the RTO is a product of statute. He said AEA believes the RTO Governance Committee is covered by the Alaska Tort Claims Act (ATCA). He acknowledged that is arguable and understands the RTO may want protection. He said AEA can secure an Attorney General Opinion, but that will not happen quickly but in the interim, indemnification language could be included and insurance could be purchased. He said once there is clarification from the Attorney General’s office, the insurance and indemnification could be removed. Mr. Thayer called attention to Article 8., Receipt Authority and Budget. He said there were questions raised on 8.2, 8.3, 8.4, 8.5, 8.6 and 8.8. Mr. Billingsley wondered if there was more detail in the Bylaws than necessary since these Bylaws were modeled after the BPMC. He said regarding 8.3, the Authority is to pursue receipt authority from the State of Alaska. He explained that Alaska Energy Authority cannot accept money unless it is approved by the State. He said it is mechanical and does not obligate the RTO. He said it could be removed, but AEA has to do it anyway. He said AEA did not anticipate the Fiscal Year would be controversial. He explained it was anticipated that AEA would serve as the Secretary /Treasurer, which includes maintaining the accounts, similarly to what AEA does for the BPMC. He stated accounts would be subject to audit, which would be done on the State’s Fiscal year. He explained the thought was the RTO would save money if it’s is included in AEA’s annual audit, but if the RTO wants to have a Special Audit that is fine. He said 8.8 is AEA providing details to the RTO on how it is spending money, but it could be taken out. He did not ___________________________________________________________________________ RTO Minutes 11/08/24 Page 5 of 10 understand the objection. He said 8.8 Procurement should be discussed and explained that AEA is subject to State Procurement Law. He speculated the only procurement for the RTO would be expert, legal, and audit. He wondered if the RTO would have objections to using State Procurement. He clarified it is not State Procurement for each utility’s transmission. He said any concerns should be discussed. Mr. Thayer said there have been questions about AEA’s role in the RTO. He said AEA has reviewed the statute, which is administrative purposes housed within AEA. He explained administrative functions would be done by AEA like they are with the BPMC. For example, the audit, state procurement, general counsel, etc. He said just like with the BPMC, AEA has two employees that are dedicated to the BPMC and they charge time to the BPMC, which is them reimbursed by the BPMC. Similarly, the RTO would have the same process. He said the legislation gave the RTO two employees - a program manager and an accountant - which the state would pay for in FY25 and FY26. The legislation also gave AEA ½ million to help pay for the cost of standing up the RTO in FY25 and FY 26. Once the RTO is stood up and the OATT is established, those positions and funding would be rolled into the OATT. He clarified with the BPMC, AEA owns Bradley and has veto power over financial issues, but that is not the case with the RTO. AEA is not asking for that. AEA is an owner of transmission lines, just like the other utilities, and has an equal seat at the table, just as MEA, GVEA, etc. AEA is not asking for any more. Mr. Heckman said Mr. Thayer’s comments provide more clarity on the record exactly the expectations and mind set. He said it seemed like the Authority was given the authority to act on behalf of the RTO. He asked for clarification on 8.2. Mr. Thayer state it is not the intention of AEA. Mr. Billingsley explained the BPMC power sales agreement states that in the event the BPMC fails to act, AEA has the authority to act. He said the Power Sales agreement is different because AEA owns the Bradley Project. He said if there is an OATT passed and the AEA is the clearing house for funds, and the RTO fails to meet or agree, does AEA still distribute funds? It was intended as mechanical, not necessarily make decisions. HE said 8.2 could be clarified, or it could be taken out. AEA;’s intention was to ensure the RTO continues to function. There were no further questions or comments. Mr. Thayer moved onto Article 9, Dispute Resolution. Mr. Billingsley said the working group has not yet addressed. He welcomed anyone to provide the language as he did not think it would be an issue. Mr. Thayer moved onto Article 10, travel and per diem reimbursement and Article 11, on policy like numbering of resolutions, process for amendment of Bylaws. There were no questions on those. He said the attachment to the Bylaws addressed expenses, and wondered if it belongs in the Bylaws. He said for the next 18 months. The RTO needs to share expenses, but then they will ___________________________________________________________________________ RTO Minutes 11/08/24 Page 6 of 10 be rolled into to the OATT. He wondered if it should be in the Bylaws. Mr. Billingsley agreed it might not be the appropriate place as it would be stale once the OATT is passed. He said two other concerns include whether it is the correct cost shares and depending upon the definition of backbone, Seward’s role could change. Mr. Miller stated he would support removing the attachment as it has already created confusion with how the OATT cost would be allocated. Mr. Thayer called attention to the other attachment with the rule of electing officers. He said there did not seem to be issues with that as it was developed by Counsel with experience in corporate bylaws. He emphasized the importance of identifying issues and concerns as the calendar is coming up very quickly. He asked each of the RTO member identify the any issues in the Bylaws and share them with Mark to compile a revised version of the Bylaws in a timely fashion. He further commented the RTO needs to elect a Chair and it would be best if that was done before the December 31, 2024 filing is due. Mr. Heckman agreed that prompt action on the Draft Bylaws is necessary to bring the Draft Bylaws in front of the Committee for adoption at the December 6, 2024 meeting. He highlighted there is now an overall discussion regarding the meaning of administrative purposes for AEA’s role and the utilities’ roles. As a result, a Charter document has been drafted and circulated amongst the entities that sets clear expectation on what this organization is and uses language from House Bill (HB) 307, the uncodified portion of the Bill and includes the modeling after the Bradley Lake Project Management Committee (BPMC). Mr. Heckman urged the members to review and resolve the issues regarding the Charter document with their attorneys as soon as possible. He noted that some members believe that the Charter is driving the Bylaws’ discussion. Mr. Thayer asked Mr. Heckman why the Charter or the Bylaws would govern the actions of the RTO Working Group. Mr. Thayer stated the Committee exists and is here today. He reiterated that the deadline remains December 31, 2024. Mr. Heckman clarified that the Charter documents include items such as Articles of Incorporation. Mr. Thayer asked members if the will of the Committee is to work on the Charter document before completing the Draft Bylaws. Mr. Hickey noted that he has a follow-up question that does not relate to the Charter. He asked Mr. Billingsley to clarify the reference to the changing status of the City of Seward. Mr. Billingsley noted that the comment related to Attachment 1 of the Draft Bylaws, and if the definition of a “backbone transmission system” changes Seward’s role and if Seward has transmission assets in the backbone transmission system or not. The placeholder is not an implication, rather it is a reminder to edit the Draft Bylaws, as necessary. ___________________________________________________________________________ RTO Minutes 11/08/24 Page 7 of 10 Mr. Hickey commented that he does not fully understand Mr. Billingsley’s answer, and that further discussion can occur offline. Mr. Thayer reiterated his question to the members regarding working on the Charter and working on the Draft Bylaws. Mr. Izzo commented that legal advice may be necessary to determine if a Charter is needed. He expressed concern that there is not adequate time to develop and produce another governing document prior to the end-of-year deadline, particularly considering the upcoming end-of-year holidays, and leave-time, which likely decreases the productivity time by two weeks. Mr. Miller requested legal counsel to comment on Mr. Izzo’s question. Mr. Billingsley explained the ambiguity in the statute with the language of “shall form” and the language of “is created.” Mr. Billingsley discussed that he is confident that the RCA will accept the Bylaws or the Charter to show the RTO is operating with governing documents. Mr. Billingsley offered the suggestion to combine the Charter and the Bylaws, and include the preferred sections of the Charter in the Bylaws. Mr. Billingsley noted, however, that he has not heard any comments regarding the Bylaws. Ms. Grovier agreed with Mr. Billingsley that there is ambiguity in the statute. She commented on the RCA Order U-24-026 requesting the Bradley Lake documents. She believes that the RCA will review the issues very closely. Ms. Grovier discussed that the Charter may satisfy Section 26, which specifically refers to using the Bradley Lake Sales Agreement for the Railbelt utilities and AEA to form the Committee and to designate the individuals who serve on the Committee. Ms. Grovier noted the importance of giving effect to all parts of the statutes while construing the statutes. That was the thought behind the document, which could be a very narrow document. Mr. Groves indicated that he does not have any questions now. He discussed that the RRC is an ex officio member, and it is the decision of the voting entities to develop what is needed to formalize their involvement in the RTO. Mr. Janorschke thanked Ms. Grovier for her remarks. He noted his understanding that creating both a Charter and Bylaws would satisfy the RCA requirements. Mr. Janorschke commented that if his understanding is correct, he suggests developing the Charter and the Bylaws concurrently because of the timing concerns. Mr. Janorschke asked Mr. Heckman to comment during his update if the Charter would be developed by the Working Group. Mr. Hickey agreed with Mr. Izzo’s comments regarding the timing challenges in creating two documents. He asked if the Charter was a foundational document and that Bylaws follow on that. He stated there may be more detail in the Charter that was put out that may not be necessary. He suggested that the Bylaws could be created to meet the end-of-year deadline, and if the RCA requires a Charter, then a Charter could be developed later. ___________________________________________________________________________ RTO Minutes 11/08/24 Page 8 of 10 Mr. Heckman believes there is sufficient content between the Draft Charter and the Draft Bylaws so that the two can be merged and developed concurrently by the Working Group and with the assistance of legal counsel in time to bring back to the RTO before the deadline. Mr. Miller agreed. Mr. Thayer confirmed the assignment that Mr. Billingsley and Ms. Grovier will coordinate and work with the members’ attorneys identified in the Draft Bylaws to concurrently develop the Draft Bylaws and the Draft Charter. There was no objection. Mr. Izzo commented that MEA’s meeting review of the Draft Bylaws will be held on Monday to expedite the development process. There were no other comments or questions. 8. NEW BUSINESS A. RTO Working Group Update Mr. Thayer requested Daniel Heckman provide the RTO Working Group update. Mr. Heckman discussed that the RCA issued an order clarifying RCA’s scope and authority to certificate the RTO. The RCA gave clear direction and guidance to the Working Group on the expected format and other materials to include in RTO’s certificate filing. Mr. Heckman reported that Ms. Grovier and Stoel Rives have led the coordination with the entities to compile the information necessary to support the certificate application, as well as drafting the certificate application. Notwithstanding the continued discussion on the Bylaws and the Charter, the majority of the information from the entities has been submitted to Stoel Rives. Mr. Heckman expressed confidence that the current path forward will bring the draft certificate application before the RTO for review and approval at the December 6, 2024 meeting, and that the December 31, 2024 deadline will be met. Mr. Heckman conveyed that the Working Group continues its dialogue on the definition of “backbone transmission system” (BTS). The definition must be finalized when the Open Action Transmission Tariff (OATT) is filed. The Technical Group is facilitating the discussion and driving the technical and financial analysis for the definition. The definition areas that have overwhelming agreement from the entities can be indicated in the certificate application. Likewise, the areas that need resolution can also be indicated in the certificate application, which may result in the RCA issuing a conditional certificate. Mr. Heckman discussed that the Working Group is also focused on the overarching and high- level Alaska transmission revenue requirement components of the OATT. Over the next two months, the Working Group will be shifting from discussions to submittals of recommendations and proposals to the RTO Governance Committee. There were no other questions or comments regarding the Working Group update. ___________________________________________________________________________ RTO Minutes 11/08/24 Page 9 of 10 B. RTO Schedule Mr. Groves suggested that an additional meeting is scheduled in December as a backstop. Mr. Hickey agreed with Mr. Groves. Mr. Thayer noted that the next meeting is scheduled for December 6, 2024. He suggested that two additional meetings should be scheduled in December, one before and one after the December 6th meeting. Discussion occurred, and the two additional meetings were scheduled for December 4, 2024 at 7:30 a.m., and December 16, 2024 at 10:00 a.m. Mr. Thayer recommended that the review of the proposed 2025 RTO meeting schedule included in the packet is postponed. There were no objections. 9. MEMBERS’ COMMENTS Mr. Heckman expressed appreciation to the Working Group and to the entities for their dedication of time and effort. Mr. Izzo echoed Mr. Heckman’s comments of appreciation. Mr. Izzo reiterated that MEA’s responses on the Draft Bylaws are forthcoming. He clarified his previous concern regarding unanimous concurrence in Article 5.10.6 of the Draft Bylaws. Mr. Izzo gave the specific example that two of the BPMC voting entities were opposed to the Battle Creek Diversion project. Had the BPMC required unanimous concurrence for all matters, that beneficial project would not have happened. Mr. Izzo stated that he is not opposed to unanimous concurrence for some of the actions listed, and those comments will be submitted to the group by next week. Mr. Groves highlighted the discussion regarding the Draft Bylaws, and the two critical issues of Article 8.2 and Article 5.10.6. He stated that the goal and the purpose of the RTO set by the State government is the greater benefit for the whole of the Railbelt, above the participating entities. Mr. Groves expressed that his concerns of the language in the Draft Bylaws mirror Mr. Izzo’s concerns. He believes that the requirement for unanimous action on some of the listed matters, including routine filings and the definition of “backbone transmission system”, is problematic for the ability of the RTO to govern and function long-term. Mr. Groves urged members to provide their suggestions and comments as soon as possible. Mr. Miller echoed the previous comments. Mr. Hickey echoed the previous comments. Mr. Janorschke echoed the previous comments. Mr. Thayer expressed appreciation to all for their diligent efforts. He requested that the development of a cost share allocation is placed on the next meeting’s agenda. There were no ___________________________________________________________________________ RTO Minutes 11/08/24 Page 10 of 10 objections. There were no additional comments or questions. 10. NEXT MEETING DATE – December 6, 2024 11. ADJOURNMENT There being no further business for the committee, the meeting adjourned at 11:15 a.m.