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HomeMy WebLinkAbout2025-05-28 RTO Agenda 128868497.1 0084203-00001 RAILBELT TRANSMISSION ORGANIZATION (RTO) GOVERNANCE COMMITTEE AGENDA May 28, 2025 9:00 AM Alaska Energy Authority Conference Room To participate dial 1-888-585-9008 and use code 212-753-619# 1. CALL TO ORDER 2. ROLL CALL (for Committee members) 3. PUBLIC ROLL CALL (for all others present) 4. AGENDA APPROVAL 5. PUBLIC COMMENTS 6. APPROVAL OF THE MEETING MINUTES – May 16, 2025 7. OLD BUSINESS A. Working Group Update – Daniel Heckman B. RTO Certificate Filing and OATT Filing – Tina Grovier 8. NEW BUSINESS A. Legacy Agreements presentation 9. EXECUTIVE SESSION – (Bylaws Section 5.12.3) To discuss matters, the immediate knowledge of which could have an adverse effect on the finances or legal position of the RTO, the Committee or Authority, or that are confidential under state, federal, or local law. 10. MEMBERS COMMENTS 11. NEXT MEETING DATE – June 13, 2025, 9:00 am 12. ADJOURNMENT ___________________________________________________________________________ RTO Minutes 5/16/25 Page 1 of 23 RAILBELT TRANSMISSION ORGANIZATION (RTO) MINUTES May 16, 2025 Alaska Energy Authority Conference Room 1. CALL TO ORDER Chair Million, GVEA, called the Railbelt Transmission Organization Governance Committee meeting to order at 9:00 a.m. A quorum was established. 2. ROLL CALL (for Committee members) Travis Million (Golden Valley Electric Association [GVEA]); Jon Sinclair (Matanuska Electric Association [MEA]); Sarah Lambe (Homer Electric Association [HEA]); Brian Hickey (City of Seward); Arthur Miller (Chugach Electric Association [CEA]); Curtis Thayer (Alaska Energy Authority [AEA]); and Joel Groves (Railbelt Reliability Counsel [RRC]). 3. PUBLIC ROLL CALL (for all others present) Karen Bell, Jennifer Bertolini, Mark Billingsley, William Price (AEA); Matt Clarkson (CEA); Cody George (City of Seward); John Chiles (GDS Associates); Daniel Heckman, Molly Howard (GVEA); Larry Jorgensen, Jessica Spuhler (HEA); Jon Sinclair, Tony Zellers (MEA); Carl Monroe (Munro Advisors, LLC); Andrew Jensen (Office of the Governor); Tina Grovier, Whitney Brown (Stoel Rives, RTO); and Steve Colt (University of Alaska). 4. AGENDA APPROVAL MOTION: A motion was made by Mr. Thayer to approve the agenda. Motion seconded by Mr. Miller. The motion to approve the agenda passed without objection. 5. PUBLIC COMMENTS There were no public comments. 6. APPROVAL OF THE MEETING MINUTES – May 2, 2025 MOTION: A motion was made by Mr. Hickey to approve the Meeting Minutes of May 2, 2025. Motion seconded by Mr. Miller. The motion to approve the Minutes of May 2, 2025 passed unanimously. 7. OLD BUSINESS ___________________________________________________________________________ RTO Minutes 5/16/25 Page 2 of 23 A. Working Group Update Daniel Heckman, GVEA, provided the RTO Working Group update. Mr. Heckman noted that the Working Group has met four times since the RTO Governance Committee’s previous meeting on May 2, 2025. One of the focuses of the Working Group are the deliverables for the Regulatory Commission of Alaska (RCA) filing for the Open Action Transmission Tariff (OATT). Additional information will be provided later in today’s meeting. The Working Group also focused on the revenue mechanism and cost allocation work of the utilities and the entities for the OATT. The Working Group has scheduled a two-day workshop next week that will address takeaways from today’s meeting and will prepare for the RTO’s next meeting on May 28, 2025. The Working Group continues to progress toward the July 1, 2025 filing date. There were no comments or questions. B. RTO Certificate Filing and OATT Filing Whitney Brown, RTO Counsel Stoel Rives, provided the update on the RTO Certificate Filing and the OATT Filing. Ms. Brown advised that Tina Grovier, Stoel Rives, is traveling today and will join the meeting remotely. Ms. Brown discussed that since the previous RTO meeting, the Regulatory Commission of Alaska (RCA) has issued an order that includes the denial of the motion and cross motion for summary disposition. In the same order, the RCA found that the RTO was fit, willing, and able to provide the services required by AS 44.83.700 to 720, accepted the RTO’s stipulation with the Attorney General, and granted the RTO a certificate as a transmission organization for the Alaska Railbelt. The certificate has not yet been received, but the RCA’s order indicated that it would be sent under separate cover. Ms. Brown indicated that she has no information to add to Mr. Heckman’s report regarding the backbone transmission system (BTS) or the OATT. However, she does have related matters to discuss in executive session, the immediate knowledge of which could have an adverse effect on the legal position and/or financial position of the RTO and/or the Committee members. There were no comments or questions. 8. NEW BUSINESS A. Presentation on HB307 Requirements for the Backbone Transmission System Mr. Heckman presented on HB307 requirements for the BTS. Mr. Heckman reiterated that he is presenting on behalf of the RTO Working Group. He acknowledged the efforts of the RTO Working Group as the work progresses. The purpose of the presentation is to prepare the groundwork for discussion of Agenda Items 8B. and 8C. Mr. Heckman explained that HB307 was a House Bill introduced last session at the request of the Governor’s Office. It created the Railbelt Transmission Organization (RTO). One of the core duties of the RTO is to administer a Commission-approved nondiscriminatory open access transmission tariff (OATT) specifically for the backbone transmission system (BTS). The statute defines the BTS as transmission assets in the Railbelt electric system from Fairbanks to Homer that facilitate the transmission of electrical ___________________________________________________________________________ RTO Minutes 5/16/25 Page 3 of 23 power under standards that are established by the Federal Energy Regulatory Commission (FERC). The BTS does not include distribution assets. Mr. Heckman discussed that the Working Group developed a proposed policy in order to help guide the RTO and the Working Group efforts. The purpose of the proposed policy is to describe the standards and their application by the RTO when determining what transmission assets qualify to be included in the BTS that will be used for facilitating the transmission service under the OATT. Mr. Heckman discussed the FERC standards. To identify assets as transmission, there is a 7- Factor Test which is used to determine if an asset can be categorized as distribution. If the asset fails the test for distribution, the asset is technically identified as transmission. The Mansfield Test is a separate analysis to determine if the asset can be integrated with a transmission network. It is a fact-specific test and application. Mr. Heckman explained that Alaska-specific adjustments may be necessary when applying FERC/Lower 48 standards to the Alaska Railbelt. Mr. Heckman reviewed the seven factors used to evaluate if the asset is distribution related or transmission related as listed in the PowerPoint linked to the agenda: 1. Local distribution facilities are normally in close proximity to retail customers; 2. Local distribution facilities are primarily radial in character; 3. Power flows into local distribution systems; it rarely, if ever, flows out; 4. When power enters a local distribution system, it is not recognized or transported onto some other market; 5. Power entering a local distribution system is consumed in a comparatively restricted geographical area; 6. Meters are based at the transmission/local interface to measure flows into the local distribution system; and 7. Local distribution systems will be of reduced voltage. Mr. Heckman explained that if four or more principles of the 7-Factor Test were answered yes, the line segment was classified as distribution, and was then excluded from the BTS recommendation. Mr. Heckman reviewed the Mansfield Test factors: 1. Whether the facilities are radial, or whether they loop back into the transmission system; 2. Whether energy flows only in one direction, from the transmission system to the customer over the facilities, or in both directions, from the transmission system to the customer, and from the customer to the transmission system; 3. Whether the transmission provider is able to provide transmission service to itself or other transmission customers; 4. Whether the facilities provide benefits to the transmission grid in terms of capability or reliability, and whether the facilities can be relied on for coordinated operation of the grid; and 5. Whether an outage on the facilities would affect the transmission system. Mr. Heckman explained that if three or more principles under the Mansfield Test were answered yes, the line segment was deemed to be integrated and included in the BTS recommendation. Mr. Heckman discussed how these standards generally apply. He noted that both FERC standards and Alaska-specific applications of those standards are fact specific and fact intensive. ___________________________________________________________________________ RTO Minutes 5/16/25 Page 4 of 23 The application is for a wide range of lines across multiple Railbelt entities. Mr. Heckman indicated that the standards will allow OATT to meet additional provisions of HB307, such as: Remove impediments to competition in wholesale bulk power market (710(b)); Pool BTS costs and allocate them through certificated load-serving entities on a coincident peak, load ratio share, or combination of both (710(c)(1)); Account for congestion on the BTS (710(c)(2)(B)); Account for disruptions that result in isolation for more than 24 hours (710(c)(2)(C)); Account for costs to own and operate the BTS (710(c)(2)(D)); and Pass BTS costs to directly and transparently to the Railbelt utilities’ customers (710(d)). Mr. Heckman asked for the Committee’s feedback on two high-level considerations; 1. Are there Alaska-specific adjustments that need to be made to the application of the FERC standards related to the BTS in the Alaska Railbelt? 2. Which transmission assets in the Alaska Railbelt qualify to be in the Backbone Transmission System in compliance with HB307? Mr. Heckman reviewed the Working Group’s BTS recommendation process. A subset of the Working Group members was tasked with recommending to the RTO which facilities fit the statutory BTS definition. Mr. Heckman discussed that 127-line segments were evaluated. The 7- Factor Test classified 29 segments as distribution, and therefore excluded from the BTS. The Mansfield Test evaluated 98 segments. Of those, 86 were unanimously recommended for inclusion in the BTS, 11 were recommended for inclusion, but not unanimously recommended, and one was recommended for exclusion. Mr. Heckman showed a chart listing the line segments that were not unanimously recommended. He emphasized that non-line segment assets are not yet at the recommendation stage. Possible recommendations have been discussed, but are not included in today’s deliberations. Mr. Heckman noted that Jon Sinclair, MEA, chaired and led the BTS recommendation process, and is available today to answer questions. Joel Groves expressed appreciation for the presentation. He asked if the criteria thresholds used for the 7-Factor Test and the Mansfield Test are FERC guidance for how the criteria is applied or is this adapted for Alaska. Mr. Heckman noted the criteria thresholds were adapted for Alaska. The policy under discussion gives that clarification. Mr. Hickey asked how the criteria numbers for inclusion or exclusion were determined. Mr. Heckman believes the Technical Working Group discussed the criteria and came to a consensus. The three to five range of criteria seemed like an acceptable medium. Mr. Heckman asked if there was any dissent related to that discussion. Mr. Sinclair agreed there was dissent. He explained the process that began with the range of more than one criterion and less than all of the criteria. The Technical Working Group had to reach a decision as to a middle range of criteria by which to evaluate the 127-line segments. Mr. Sinclair noted there were at least one or two people who did not agree with the final criteria. The Technical Working Group continued the effort with the group’s consensus, albeit not ___________________________________________________________________________ RTO Minutes 5/16/25 Page 5 of 23 unanimous consensus. Mr. Hickey highlighted the terms radial and benefits in the Mansfield Test. He asked how the Working Group addressed the definition of radial, and what is considered a benefit. Mr. Sinclair explained that the Working Group considered the definition of the terms from FERC and around the country. A consensus was reached on how to move forward with each individual line. The consensus was not unanimous. Mr. Miller requested additional information on the technical analysis that was conducted, including power flow analysis and simulation analysis that justifies why the lines should be included. Furthermore, Mr. Miller noted that it is universal that the Mansfield Test requires at least one criterion to meet the test, which is very clear in previous FERC orders. He asked for additional explanation why the Working Group established different criteria from the well- established FERC policy. Mr. Sinclair explained that some of the lines that are highlighted will need to have follow-up information and follow-up studies regarding power flows and other studies. The information is based on the time constraints and the Working Group’s knowledge of the system. The subquestions under each one of the principles helped the Working Group to determine whether the line should be included or excluded. Mr. Sinclair reviewed that the decision to require three or more principles under the Mansfield Test was discussed by the Working Group. There are various cases in the Lower 48, and there is not a consensus in the Lower 48 how to apply the different tests. The intent was to keep the criteria open to the facts of each specific line segment to determine which tests need to be in the affirmative. Mr. Miller commented that he believes there are differences in interpretation of the FERC orders. He has not seen any examples that deviate from the minimum of one factor for the Mansfield Test. He asked if a line segment that originally did not meet the requirements and was upgraded to meet the requirements would then be eligible for consideration. Mr. Sinclair agreed that reassessment needs to occur as the system is modified. Mr. Heckman confirmed that successive opportunities for evaluation will be available to lines after upgrades or modifications, for instance. The policy is expected to provide flexibility to the RTO. Mr. Hickey requested additional information on the process of review for the 11 contested lines compared to the decisions that were made on the 86 unanimous inclusions. Mr. Sinclair explained that the unanimous inclusions were fairly easily determined since each principle had specific yes or no sub-questions to answer. If a member of the Working Group had any concern regarding how a utility answered a question, the line was marked as not unanimous, and further review occurred. After that review, a vote was taken on how the utility answered the question, and the majority vote ruled the decision for either a yes or a no answer ___________________________________________________________________________ RTO Minutes 5/16/25 Page 6 of 23 to that criteria question. If the majority of the principles were in the affirmative, then the line was included. There were no other questions or comments. B. Draft Backbone Transmission System Policy Mr. Heckman discussed that the Backbone Transmission System Policy is brought forward to the RTO Committee as the guiding document for classifying the assets for inclusion into the BTS. He emphasized the purpose of the policy is provide the foundation for the Technical Group to determine recommendations to bring before the RTO Committee. Mr. Heckman highlighted and quoted the policy section that reads, “This Policy is intended to provide flexibility for a transmission owner to argue the appropriate application of the Mansfield test in the Alaska Railbelt. A Transmission Facility will be evaluated when it is added and may be reevaluated for inclusion or exclusion in or from the Backbone Transmission System if significantly upgraded or modified.” Mr. Hickey asked Mr. Heckman if the specific section he read prohibits someone who might disagree with the results of the analysis of the Technical Working Group from addressing the results in front of the Commission. Mr. Heckman discussed his impression is that nothing prohibits any entity of the RTO to avail themselves of going before the RCA to argue the Working Group’s results of new or existing evaluations. Mr. Groves noted that his question relates to the same highlighted sentence. He asked if the usage of the BTS could evolve over time where the usage of an asset would change and that would change the criteria of whether it was considered a backbone asset. Mr. Groves asked if the language should anticipate such scenarios. Additionally, Mr. Groves asked if there was a defined process by which parties can petition for assets to be included in the BTS definition. Mr. Sinclair noted his impression of the language is designed to be flexible, and could trigger evaluation of assets following this process to determine whether that asset would be included in the BTS. Mr. Hickey noted that he understood Mr. Sinclair’s answers today to imply that there was flexibility to modify the number of Mansfield Test factors that had to be passed. He requested clarification. Mr. Sinclair agreed that the policy is flexible. For the current lines evaluated, the Working Group agreed to use three or more factors for the Mansfield Test. He agreed that the Working Group could determine at a later point that it wants to use two factors for consideration of a new asset. The minimum is one factor for consideration. ___________________________________________________________________________ RTO Minutes 5/16/25 Page 7 of 23 Mr. Miller expressed appreciation for the discussion. He asked if the Working Group contemplated the process by which an upgrade to a transmission asset would be incorporated into the OATT. Mr. Heckman explained that issue has been discussed by the Working Group and the legal and regulatory team. Additional discussions are forthcoming. Mr. Heckman believes the RTO Committee would be the proper forum to initially seek inclusion of any new upgrades or modifications of the facilities into the broader BTS. He believes the RTO Committee is charged with those efforts prior to going to the RCA. Mr. Heckman explained that the OATT would then have to be modified appropriately. It will be a living document and filing updates will be provided to the RCA. Mr. Groves commented that his recollection of the RTO’s Bylaws specifically state that the RTO Committee approves the BTS asset list. This is consistent with Mr. Heckman’s comments that the requests for inclusion would come before the RTO Committee and then flow to the OATT, and RCA tariff filings. Mr. Sinclair informed that John Chiles, GDS Associates, is on the Teams Meeting line. He is a consultant for MEA and noted that Mr. Chiles has extensive experience working in the Lower 48, and could provide comments, as well as answer any questions. Mr. Thayer noted that Mr. Chiles has not been attending the meetings. He asked the members of the RTO Committee if comments and participation from the audience are open at this point. He asked Mr. Sinclair as to the subject of Mr. Chiles’ request for comment. Chair Million directed Mr. Sinclair to clarify with Mr. Chiles during the break, and a determination will be made later if comments should be opened. There was no objection. Chair Million asked Mr. Sinclair if there is an additional document that the Technical Working Group would keep as a solidification for future evaluations of lines that delineate the subset of questions for each of the principles. Mr. Sinclair agreed there is a spreadsheet document that includes each of the questions. It also details the dissents and reasons for the dissents. The process is well-documented, and he recommends it is provided to any new members of the Technical Working Group. Mr. Sinclair recommended the removal of Footnote 8 since it references satisfaction of only one of the Mansfield criteria. This is in contrast to today’s discussion and policy. MOTION: A motion was made by Mr. Thayer to accept the Backbone Transmission System Policy. Motion seconded by Mr. Hickey. MOTION: A motion was made by Mr. Sinclair to remove Footnote 8. Motion seconded by Mr. Hickey. ___________________________________________________________________________ RTO Minutes 5/16/25 Page 8 of 23 Mr. Hickey requested additional clarification of the number of criteria necessary for inclusion by the Mansfield Test. Mr. Sinclair explained that an inclusion needs to meet at least one criterion, and as many as all five criteria. However, at least three factors must be met to be included currently. Mr. Hickey asked if there was any intent or implication in removing Footnote 8 that someone could not argue that the case was applicable at a future date. He requested Mr. Sinclair articulate his position further. Mr. Sinclair stated Footnote 8 implies that satisfaction with one of the Mansfield criteria results in inclusion. Mr. Sinclair does not believe the policy implies that position, and noted the policy implies that the number of criteria to meet for inclusion could range from one to four criteria. Mr. Hickey noted that it becomes a case of facts before the Commission. Mr. Sinclair agreed. Mr. Miller discussed his interpretation of Footnote 8 as the definition of any degree of integration. By removing Footnote 8, that leaves open any degree of integration interpretation. Mr. Miller expressed opposition to removing Footnote 8. He believes the legislation is clear, and Footnote 8 reaffirms that the RTO is consistent with the legislation, while defining “any degree of integration.” Chair Million asked Mr. Sinclair if consideration was given to Alaska’s unique factor and not necessarily items that are applicable to the Lower 48. Mr. Sinclair agreed. He noted that Alaska’s grid is unique, and those considerations must be addressed as clearly as possible in the policy while maintaining a balanced flexibility. He believes removing Footnote 8 accomplishes this goal. Mr. Hickey asked Mr. Sinclair to describe the unique circumstances that led to the decision to require three factors for the Mansfield Test. Mr. Sinclair discussed that the preponderance of evidence usually indicates more than 50%. Three factors exceed 50% of the five factors. Mr. Hickey commented that there was no technical justification, besides moving the process forward. Mr. Sinclair explained that based on the preponderance of the language, the Working Group decided on three factors to move forward. Mr. Hickey asked for clarification about the unique circumstances ___________________________________________________________________________ RTO Minutes 5/16/25 Page 9 of 23 Mr. Sinclair referenced as the basis for the deviation from the FERC guidelines. Mr. Sinclair does not believe this indicates a deviation from FERC cases. Mr. Hickey asked Mr. Heckman to reaffirm that an objective of the policy is to give some level of guidance to the Technical Working Group and also to create a level of ambiguity such that individuals who disagreed with interpretations, such as three out of five, one out of five, two out of five, could take those disagreements to the RCA in the public process for a final decision of the case in facts. Mr. Heckman agreed. Mr. Groves asked for the vote threshold for policy approval per the Bylaws. Ms. Grovier explained that the vote threshold for this circumstance is a simple majority. A roll call was taken, and the motion to remove Footnote 8. passed, with Mr. Miller voting no. A roll call was taken, and the motion to accept the Backbone Transmission System Policy as amended passed, with Ms. Lambe voting no. A brief at ease was taken. C. Composition of the Backbone Transmission System for the Alaska Railbelt Mr. Sinclair led the technical aspect of the BTS discussion and composition. Mr. Sinclair noted the recommended list of line segments is included in the Committee’s packet. The Working Group followed the BTS policy during a lengthy discussion process to determine inclusion in the BTS. Mr. Sinclair explained this list will affect the Annual Transmission Revenue Requirement (ATRR) and what actual facilities will be included in the RTO. Mr. Groves asked if there is a reference map showing one color for segments that are included in the BTS and another color for segments that are not included, as well as labeling the line segments that are not included. This will facilitate understanding of the recommendations. Mr. Sinclair agreed there is such a map, and it was not included in public documentation. The map is available for the RTO. Mr. Heckman added to the response, and noted that when the certificate docket and precertificate docket are filed with the RCA, a map of these inclusions will be submitted as part of the OATT filing. The map will eventually become a public document. ___________________________________________________________________________ RTO Minutes 5/16/25 Page 10 of 23 Chair Million asked if there was a listing provided that shows the lines that did not meet the criteria. Mr. Sinclair explained that all, but one, of the contested lines were included in the final recommended lines. There were 98 lines considered. Mr. Hickey asked if his understanding is correct that the document entitled “FERC Seven Factor Test (SFT) Evaluation” identifies the lines that were immediately dropped as distribution. Mr. Heckman agreed, and noted this decision is purely from the technical aspect. Mr. Hickey asked if his understanding is correct that the document entitled “Mansfield Test Evaluation” identifies the lines that were included in the BTS. There was no objection. Mr. Hickey proposed approval of the entire recommendation of the Technical Working Group, or if there is disagreement, he proposes sending the recommendation back to the Technical Working Group for further analysis. Mr. Thayer expressed his preference to discuss the agreed upon lines as a group, and to individually discuss the 11 lines that are outstanding. He noted that he will vote against approving the entire recommendation. Chair Million asked Mr. Thayer if his understanding is correct to move forward with approval of the 86 unanimous line recommendations, and then move to discuss the other lines. Mr. Thayer noted that he will not predict the outcome of the vote, but would like to move forward in that fashion. Mt. Hickey noted a point of order. He discussed that the 11 contested lines are now included in the unanimous line recommendations. Mr. Thayer clarified that he would like to better understand the list of 11 contested lines previously discussed. MOTION: A motion was made by Mr. Hickey to approve the 86 unanimously non- contested line segments. Motion seconded by Mr. Miller. A roll call was taken, and the motion to approve the 86 unanimously non-contested line segments passed, with Ms. Lambe voting no. MOTION: A motion was made by Mr. Hickey to approve the 11 contested line segments as recommended. Motion seconded by Mr. Thayer. Mr. Thayer asked regarding the Seward lines. He requested additional information about how Seward met the Mansfield Test criteria since Seward is a customer of Chugach and rarely moves power, and the power they receive goes to Seward and does not go out of Seward. Mr. Sinclair explained the discussion of the specific SES lines were heavily debated regarding meeting the criteria of the Mansfield Test. He noted the ultimate decisions were challenging, and included consideration of Black Start capability and bidirectional power flow. ___________________________________________________________________________ RTO Minutes 5/16/25 Page 11 of 23 Mr. Thayer asked how often Seward produces power and puts it on the Railbelt. Mr. Sinclair discussed the example for GVEA and their Department of Defense (DOD) facilities that have backup generation and are technically capable of moving onto the grid, but rarely do so. It was considered by the group that once every 10 years is probably not adequate to meet the bidirectional criteria. However, the frequency question remains. Mr. Hickey noted that it may be helpful to view the spreadsheet to understand the decision process regarding each of the subquestions. Mr. Hickey explained that today, for example, Seward is serving Moose Pass load with Chugach. During contingency outages on the transmission line or the distribution lines, Seward feeds Moose Pass. This occurs on a fairly regular basis. In addition, Seward has 15.6 megawatts (MW) of generation on a monthly basis. Sometimes power is pushed into the grid and sometimes it is not. Mr. Hickey explained that the units are Black Start and are available when the system is down for Seward and different islanding scenarios for Kenai. Mr. Thayer asked for the operation of the Seward line. Mr. Hickey explained that Seward is in the process of converting the entire system line to 115 kilovolts (kV) by June of next year. The 115 kV will step down to the 24.9 transformer at different locations. Mr. Miller requested additional background information on the 69 kV line from Cooper Lake Power Plant to the 115 kV line and the determination not to include this line. Mr. Sinclair explained noted that the Cooper Lake line and the two Seward lines were probably the most contested discussions. The Cooper Lake line was excluded. He noted a distinction that the City of Seward has both load and generation, and Cooper Lake was considered only a generation lead, which moved it into the exclusion category. The wholesale and resale activities did not apply. Mr. Sinclair commented that Cooper Lake either did not pass any of the Mansfield Test criteria or only passed one of the criteria. Mr. Miller asked if there were any technical production cost modeling analysis to examine the reliability impacts associated with the Cooper Lake Power Plant being online or not online. Mr. Sinclair stated there were no studies conducted to analyze that information. That option is open for studies in the future, and some of those lines were highlighted for recommendations to study in the future. The Power Plant did get positive marks on some of the questions within the principles, but not enough for ultimate inclusion. Ms. Lambe asked if there is a possible adverse effect for discrimination if studies are required to make future determinations when the initial set of transmission assets did not utilize studies for evaluation. Mr. Hickey discussed that the Railbelt has run multiple contingency studies for these lines. However, the studies were not conducted for the purpose of including recommendations. Mr. Hickey would support the RTO Committee directing the Working Group to run the studies again in order to provide documentation and update the information. This will provide a solid ___________________________________________________________________________ RTO Minutes 5/16/25 Page 12 of 23 foundation when other lines are requesting inclusion. Mr. Miller agreed with Mr. Hickey. Mr. Miller added that given the limited time to evaluate the transmission assets, he believes the Working Group did an outstanding job in advancing a significant amount of the transmission segments, recognizing the isolated areas that additional work may be necessary. Mr. Thayer agreed with Mr. Miller that the RTO is under a very restrictive deadline and the statute HB307 is governing the timeline. He asked if there was a concern that including the contested lines would allow for the RTO to allow generation leads for Independent Power Producers (IPPs) into the system in the future. Mr. Heckman agreed, and noted his understanding is that the consideration of IPPs in the future was part of the discussion. Mr. Sinclair noted that the Technical Working Group reviewed each question specifically and as unbiasedly as possible. Discussions included understanding of historical knowledge and studies. With the questions, the principles that were given, and the analysis conducted, the results tend to lead to excluding generation leads from the BTS. Mr. Hickey clarified that he is not proposing that studies are conducted prior to July 1, 2025. He believes that as an ongoing task for the RTO, it would be worthwhile to validate these findings with the technical studies. Mr. Miller asked that with respect to Seward, the 115 kV line from Dave’s Creek to Seward that is included. Mr. Hickey clarified that currently the line is 115 kV from Dave’s Creek to Lawing, and 69 kV from Dave’s Creek to Fort Raymond. The 115 kV tap to Spring Creek is excluded. By next June, there will be a single 115 kV line from Dave’s Creek to Fort Raymond. Chair Million asked Mr. Sinclair if the CEA0025 line that was excluded did not meet any of the Mansfield criteria. Mr. Sinclair discussed that before the vote was taken, it listed one principle. However, after the vote, the final tally was zero principles. Mr. Hickey asked where in the packet is the list of excluded lines. A member directed him to the pages. Mr. Sinclair explained that the two spreadsheets indicate the yes vote for distribution. The 7- Factor yes votes are distribution, which means it is excluded. The 7-Factor lines are excluded. The Mansfield Test yes means it is included. The only line out of the 127 lines that is not shown in either spreadsheet is the Cooper Line because it was a no for both the 7-Factor Test and the Mansfield Test. ___________________________________________________________________________ RTO Minutes 5/16/25 Page 13 of 23 Ms. Lambe asked for the perspective of Carl Monroe, Munro Advisors, regarding the effect of not moving forward on the 11 lines, and whether that would detrimentally delay the development of the OATT or the ATRR in any way. Mr. Monroe noted the effect will be related to the financial analysis that can be used to determine the rate formula for the RTO rate. It is possible to provide two options, one case would include the 11 lines, and one case would exclude the 11 lines. Ms. Lambe noted that from the Chief Financial Officers (CFO) group perspective regarding the format of miles and capacity and how that will be applied to the ATRR, not knowing the final disposition of the 11 lines is not detrimental to the process. Mr. Miller believes the process needs to move forward to meet the deadline, with the understanding that additional analysis can occur at an appropriate time in the future. He believes the Working Group already has heightened workload and he does not want to increase their workload. Mr. Hickey concurred. He discussed that any challenges to the Working Group’s recommendations can be brought before the Commission as a case of facts. There were no other questions or comments. A roll call was taken, and the motion to approve the 11 contested line segments as recommended passed, with Ms. Lambe voting no. D. Presentation on HB307 OATT Requirements & Proposed Changes to FERC Pro Forma OATT Chair Million requested Mr. Heckman and Mr. Monroe give the HB307 presentation. A brief at ease was taken. Mr. Heckman began the presentation entitled “Intro to OATT, Proposed Deletions, and Other Changes Being Considered.” Alaska HB307 created the RTO for the purpose of establishing an open access transmission tariff. The specific provisions in the legislation indicate the tariff provides for recovery of transmission costs and related ancillary services, and to replace wholesale charges assess by unity by each utility in the Railbelt with the new mechanism that fairly recovers and equitably allocates the costs of operating the BTS. The RTO is charged with holding and administering the open access transmission tariff, and charged with filing the tariff with the RCA that is consistent with FERC standards to remove impediments to competition in the wholesale bulk power marketplace in the state. Mr. Heckman discussed the statutory timeline for filing the OATT is on or before July 1, 2025. If this timeline is not met, the RCA, after notice and opportunity for public comment, shall establish an OATT. Mr. Heckman explained for the record that this tariff must pool backbone transmission system costs and allocate those costs through certificated load-serving entities on a coincident peak or a load ratio shared basis, or a combination of both. Additionally, the OATT must account for ___________________________________________________________________________ RTO Minutes 5/16/25 Page 14 of 23 required backbone transmission system ancillary services, system congestion, any disruptions to the BTS that result in the isolation of one geographical area of that system from one another for more than 24 hours, and account for the costs to own and operate the BTS, as established by the Commission or by contract, including transmission costs associated with the Bradley Lake Hydroelectric Project. Mr. Heckman provided FERC background information, and noted that on April 24, 1996, FERC issued Order No. 888, which serves as the foundation for the FERC approach on OATT. All utilities within their jurisdiction must file an OATT that contains minimum terms and conditions of nondiscriminatory service, and permits those utilities and transmission entities to recover legitimate, prudent, and verifiable costs associated with providing open access and transmission tariff services. The policy goal is to remove impediments to competition in the wholesale bulk power marketplace and to bring more efficient, lower-cost power to consumers. Mr. Heckman continued review of the PowerPoint and explained how HB307 and the FERC OATT work together. Mr. Monroe noted that his section of the PowerPoint presentation will discuss the rationale for the proposed deletions, proposed modifications, and proposed additions under consideration for the OATT. He opened the floor to any questions thus far. Mr. Sinclair asked if FERC’s Order 888 was the basis and foundation for the OATT, and the process now is to refine and modify the OATT. Mr. Monroe agreed. He noted that particularly, it is understood that the OATT needs to fit the Alaska Railbelt system. Not only does the OATT consider what is required by FERC, but it also takes into account how it is congruent with the existing legislation and functions in the Railbelt. Mr. Monroe suggested taking the lunch break before proceeding with the remainder of the PowerPoint presentation. There was no objection. A lunch break was taken. The meeting returned to order. Mr. Monroe continued the PowerPoint presentation reviewing the proposed deletions, proposed modifications, and proposed additions to the OATT. Mr. Monroe discussed the proposed deletion of point to point (Pt-to-Pt) service. He explained that FERC’s purpose for Pt-to-Pt service. He noted that in the Lower 48, the point-to-point service is not used much internally anymore. The Railbelt has no external connections that could use Pt-to-Pt service. Additionally, the Pt-to-Pt service is very intense in administration and provisions. Pt-to-Pt service does not make sense in this regard because all of the load will be served by the Network Integration Transmission Service (NITS) in this construct using the OATT. There is also the ability to conduct economic transactions through secondary service in the NITS. ___________________________________________________________________________ RTO Minutes 5/16/25 Page 15 of 23 Mr. Hickey stated that there are a number of OATTs already on file. CEA has one. GVEA has one. The Alaska Intertie has one. He asked if those OATTs will be withdrawn or rescinded, or if those options have been discussed. Mr. Monroe responded that there have been general discussions about what has to take place in order to implement this OATT. One of the steps requires revisions to the existing OATTs. Since HB307 requires this OATT, those things that “grant transmission service” in some way will probably not be needed in any of the tariffs. Mr. Hickey asked if there would be some process by which the utilities and the Intertie Management Committee (IMC) would have formal action to rescind their tariff and adopt this one. Mr. Monroe commented there is a larger question beyond that as well, which will be discussed during the ancillary services section. Consideration of how to implement this new tariff will be addressed because it changes the way the ATRR costs are recovered as directed in HB307. Filing the tariff now begins the process of developing ways to change the other tariffs. Mr. Groves asked what actions need to be taken regarding the legacy OATTs and the various tariffs before the July 1, 2025 deadline. Mr. Monroe commented that the legal and regulatory group are in discussions to determine those actions and the aspects of the tariffs that have to be considered. Additionally, there are ongoing discussions regarding coordination with Railbelt Reliability Council (RRC) changes. Mr. Monroe continued review of the proposed deletions to the original Order 888 tariff. He explained that originally, FERC could only require the jurisdictional parties to file OATTs. These were primarily investor-owned utilities. At the same time, FERC required reciprocal language in the tariff, which is now proposed for deletion, that other parties who had transmission that wanted to use the OATT transmission had to have an OATT as well. Mr. Monroe explained that the transmission owner’s load is called Native Load. FERC understood that they could not force the transmission owner to take service under that tariff because of the Native Load. Order 888 required that the Native Load would have to follow all the non-rate terms and conditions of the OATT. FERC wanted to ensure that the OATTs were open access, nondiscriminatory, and treated the same. Furthermore, FERC monitored the rates to make sure that the parties who were using the system were paying comparable rates. Mr. Monroe discussed other restrictions that were placed on regional tariffs. He described firm service and economy secondary service. Mr. Monroe indicated that the proposed deletion to Native Load provides all load access because all the loads are under NITS. Mr. Hickey asked if he understood Mr. Monroe to say that all the regional OATTs have gone to Native Load service. Mr. Monroe clarified that all the regional OATTs have gone to NITS. ___________________________________________________________________________ RTO Minutes 5/16/25 Page 16 of 23 Mr. Monroe discussed proposed deletions regarding the requirements for studies, transmission analysis, and planning, including Attachment K and any FERC Order 1920 requirements. He explained that FERC wanted to ensure that the regional tariffs were conducting nondiscriminatory and effective planning process. All of the regional tariffs had these responsibilities. FERC was pushing for the regional tariffs to look at cost allocation methodologies for new facilities. The tariff will address those issues as well and discussions have begun. Mr. Monroe explained that the proposed changes are expected to help the RTO ensure it is nondiscriminatory. There are no interregional aspects that need to be considered. Mr. Monroe explained that this work follows a defined process, and the details to implement the tariffs follows standard business practices. He discussed the proposed deletions for operational requirements. HB307 directs administration of the tariff, and does not direct administration of the operations in the tariff. Those requirements are currently with the Transmission Owners (TO), and are expected to stay with the TOs and the Balancing Authority that FERC agreed to through North American Electric Reliability Corporation (NERC) standards. The RRC will go through those standards and will monitor those to see how the tariffs will be affected. Mr. Monroe explained that FERC assumed that the NERC activities were provided by the tariff operator, who set up operation centers and real-time monitoring systems and calculations. This is not required to meet the HB307 intent of the tariff, and will be removed. Mr. Monroe noted that statements will be included regarding the TO has to coordinate those activities with the NITS customer, and this is not something that the RTO would do. Mr. Monroe discussed that there are regulatory filings that are stated and required within the tariff. At the current time, some of those are not going to be required because some of those sections have been removed. Many of the regulatory filings will be addressed under the modification section. He gave the example of the regulatory filing process to change the RTO tariff rates. Mr. Monroe explained there is a significant set of OATT attachments that are no longer needed based on the current responsibilities of the RTO. Mr. Groves discussed the formatting of the RTO’s OATT, and asked if the FERC numbering outline is being preserved or if the modifications necessary for Alaskan adaptations follow a specific Alaska outline. Mr. Monroe noted that as the deletions were made, they did not see the need to keep the numbering the same. Explanations and references to the FERC 888 sections will be provided in the filing regarding the deletions and modifications. There were no other comments or questions regarding the proposed deletions. Chair Million indicated there is a recommendation from counsel to vote on the deletions. This gives the direction for the Working Group to continue to develop the OATT. Chair Million discussed that after the deletions are voted on, a review of the proposed modifications would occur today. Chair Million recommended that a motion is made to approve the deleted items as presented by Mr. Monroe today. MOTION: A motion was made by Mr. Thayer to approve the proposed section deletions from FERC 888 tariff presented today to be excluded from the Railbelt Transmission ___________________________________________________________________________ RTO Minutes 5/16/25 Page 17 of 23 Organization tariff. Motion seconded by Mr. Hickey. A roll call was taken, and the motion to approve the proposed section deletions from FERC 888 tariff presented today to be excluded from the Railbelt Transmission Organization tariff passed unanimously. Mr. Monroe continued the presentation and provide a high-level overview of the proposed modifications. He said first proposed modification is the customer definition, which must be changed to reflect Alaska and to follow state rules. The second proposed modification relates to ancillary services. The balancing authority is required to provide two ancillary services: Schedule 1 – Scheduling, System Control and Dispatch Service, and Schedule 2 – Reactive Supply and Voltage Control from Generation or Other Sources Service. Mr. Miller requested Mr. Monroe to provide more detail on the scheduling procedures. He noted that each utility would be responsible for their own scheduling and dispatch services. He asked if the hypothetical scenario is correct that no scheduling services would be paid, if HEA transfers power to GVEA, even though it is going through several areas. Mr. Monroe commented that this is an area where a modification has been proposed, but no decision has been made. One of the balancing authorities has to be paid. The question to address is whether both balancing authorities are paid or just one, and if just one, which one gets paid. In many of the regional tariffs, the decision was made that the load paid for transmission service, and the receiving balancing authority paid for scheduling. This is the normal course of business for ancillary services. Discussions are ongoing and no final decisions have been made. Mr. Thayer asked for the timing that recommendation would come before the Governance Committee to vote. Mr. Monroe indicated that he suspects that issue will come before the RTO for a vote at the next meeting. Mr. Monroe discussed the proposed modification to the responsible designee in the OATT. He explained that FERC uses the term Transmission Provider (TP) in the tariff to identify who administers the tariff. HB307 did not assume all the same duties that FERC assumed that the TP would provide. The suggested modification is to change the TP term to Transmission Service Administrator. Mr. Monroe discussed the proposed modification to the posting requirements. He noted that the FERC OATT required an Open Access Same-Time Information System (OASIS) posting system. However, based on the requirements, Mr. Monroe does not believe that the OASIS posting will be required. The current effective tariff needs to be publicly posted. The proposed modification is to replace the OASIS section and 889 requirement with public postings and a list of the items that need to be publicly posted. Mr. Hickey asked if Mr. Monroe envisions any real-time data posting. ___________________________________________________________________________ RTO Minutes 5/16/25 Page 18 of 23 Mr. Monroe does not believe any real-time postings will be required. There may be historical data that needs to be posted. When someone makes a request for a change to their service agreement, he suspects that information will be posted. Mr. Monroe discussed that when the TO completes the planning process, the studies may have to be posted. Mr. Monroe explained that FERC recognized that there were entities that might want to have a tariff, and particularly in regional tariffs, there were parties that might want to put their facilities in the tariff, but were not jurisdictional. The examination was conducted to understand what was required in the tariff, but that the tariff should not change the regulatory environment of the entities, and that includes Seward’s language to protect their tax-exempt bond requirements. There is also a consideration for modifications and provisions in some of the Alaska Energy Authority (AEA) requirements and even some for the co-ops. Mr. Monroe noted that discussion is ongoing regarding whether the RTO will take the additional charge to determine between BTS and non-BTS facilities. Mr. Monroe discussed that the largest section of the tariff is Part I, which consists of primarily definitions. Part II of the tariff in the original 888 was Pt-to-Pt. If Pt-to-Pt is removed as suggested, Part II becomes NITS, which is Part III in the FERC 888 tariff. Mr. Monroe discussed that HB307 requires the OATT to account for BTS congestion. The suggested modifications are to list the existing processes for addressing congestion or system conditions, and that the operating responsibilities will continue to be completed by the existing balancing authorities or transmission operators. Additionally, HB307 requires the OATT to account for disruptions to the BTS that result in isolations for more than 24 hours. However, Mr. Monroe explained that the RTO cannot account for this since the RTO does not have any operational or planning responsibilities. These discussions are ongoing, and one proposal submitted suggests that if somebody is more than 24 hours off, then they only pay their rate during that period. There are many accounting complications to this suggestion. There will have to be a modification for this issue based on HB307. Mr. Monroe continued the presentation reviewing the proposed additions to the order. The Working Group feels that there needs to be an introduction in the OATT that gives the purpose of the tariff. A draft of that introduction is being developed. The Working Group also proposes that the RTO tariff rates and calculations are included. Mr. Monroe discussed the requirements and terminologies from HB307. The proposal for rate calculations will ultimately be brought before the RTO. The intent is for the RTO to redistribute the revenue to the TOs to meet their ATRR requirements. These mechanisms are still being finalized. Mr. Monroe indicated that the RTO includes a section that considers any requirements that may be needed for a transition period. Furthermore, the RTO is discussing new transmission upgrades and modifications to be analyzed for the BTS and non-BTS, and ways to incorporate those in rates. This information will be included to meet the July 1, 2025 deadline, and then can be reviewed in more detail in the future. ___________________________________________________________________________ RTO Minutes 5/16/25 Page 19 of 23 Mr. Monroe commented that the staff has been fantastic, and he enjoys the collaboration and discussion during these efforts. Mr. Thayer expressed appreciation to Mr. Monroe for the presentation. He believes this information is important for the public record. Mr. Thayer commented that these efforts are highly complicated. He expressed appreciation again to the team. Chair Million thanked Mr. Monroe for the good progress and amount of work completed. He commented that there is still a lot of work to get to the finish line. There were no other questions or comments. A brief at ease was taken. E. Presentation on Revenue Mechanism Mr. Heckman reviewed the Presentation on Revenue Mechanism. Mr. Heckman noted that the PowerPoint is a brief overview of the revenue mechanism component of this effort that has been discussed at the Working Group with the CFOs of the various utilities. He noted that AEA and Seward have been working together on a cost allocation methodology that is related to this. Mr. Heckman explained that part of the statutory construct of HB307 requires that the RTO create an open access transmission tariff that provides for recovery of transmission costs and related ancillary services, and replaces wholesale charges assessed by unit by each utility with a new mechanism that fairly recovers and equitably allocates the costs of operating the backbone transmission system. Mr. Heckman noted that other areas of HB307 indicates that the tariff must pool the transmission system costs and allocate those costs through certificated load-serving entities on a coincident peak or load ration share basis, or a combination of both, and must account for various aspects unique to the Railbelt electric system, including ancillary services, congestion, disruptions to the backbone transmission system for more than 24 hours, and costs to own and operate the backbone transmission system as established by the Commission or by contract. Additionally, a Railbelt utility is required to pass the Commission-approved transmission costs directly and transparently to the utility’s customers. Mr. Heckman reviewed the current Alaska statutes that apply to the RTO. There are specific parameters for the revenue mechanism. The open access tariff must be nondiscriminatory. The RTO is subject to the authority of the RCA. Under the RCA standard, rates have to be just and reasonable. The RTO must account for costs of owning and operate the BTS, as established by the Commission or by contract. In pre-filed testimony, the RTO submitted in a previous Commission docket, that states that the RTO will take transmission costs in each Railbelt utility, specifically through expressed annual transmission revenue requirements (ATRRs) and accumulate those into an RTO ATRR. Work is ongoing to create this ATRR for the BTS to comply with this statute. Mr. Heckman discussed that under a separate regulation, AEA collects rates in accordance with established contracts. To account for the BTS ancillary services, the Railbelt ___________________________________________________________________________ RTO Minutes 5/16/25 Page 20 of 23 utilities have existing approved tariff rates for ancillary services. Mr. Heckman highlighted areas that the Committee should consider. 1) Howe should rates established by existing agreements be accounted for in the OATT? 2) How should BTS costs be allocated, by coincident peak, load ratio share, or a combination of both? 3) How should the limited facilities and benefits provided be handled in the revenue mechanism? Limited facilities does not mean a subset group of facilities. Limited facilities refers to the flow of the power from one end of the system to the other end that is currently limited. 4) How will the revenue mechanism address disruptions and congestion? 5) How will the revenue mechanism address the RCA requirements of nondiscriminatory, just, and reasonable rates? 6) How often will the RTO rates need to be updated? Mr. Heckman ended the presentation and paused for questions. Mr. Miller commented that there are no RTO rates. He asked if Mr. Heckman is trying to address how often each Railbelt utility needs to update the transmission revenue requirement that would go to the RTO for allocation of the costs. Mr. Miller requested clarification because the RTO does not have rates. Mr. Heckman agreed, and noted the question would be how often the rates be updated would be based on each utility updating their various ATRRs, and if those ATRRs are touching BTS assets, that would still have to flow through the cost allocation mechanism set up by the RTO. Mr. Heckman understands that the utilities that already have ATRRs, in order to avoid any double recovery through the rates, that the RTO will have to ensure that there is a scrub of the transmission revenue requirements to delineate BTS assets and non- BTS assets. Mr. Monroe commented that on the backend of the RTO, both charging and giving the revenue requirement back to the TOs, if there is a difference between those two in the utility, there needs to be some recovery mechanism. Mr. Miller commented that in that regard, some utilities have a general rate case and other utilities have been operating under the simplified rate evaluation process for a long time. He asked for the thinking of the Working Group regarding ensuring that each utility is treated equitably in the context of the transmission revenue requirement update or frequency of that calculation. Mr. Miller asked if it would be beneficial to wait and implement the transmission rates after each utility submits their transmission revenue requirement and gets regulatory approval. Mr. Miller asked a related question regarding the consideration of establishing a consistent parameter or benchmark for allocating costs. Mr. Miller asked a third question; knowing that the RTO is one integrated transmission system, what is the Working Group’s feedback regarding the different tier levels among the utilities. Mr. Heckman indicated that he would address the second question first. The CFO effort that is underway is intended to address the allocation of costs amongst the various entitles. He agreed that the entities allocate costs differently. In order to have a more consistent approach, the CFO group and their consultants are developing a template based on all of the FERC accounts that relate to the transmission and would constitute an ATRR. Mr. Heckman noted that he does not believe that the Working Group is considering attaching tiers, given the differences amongst the entities. Mr. Heckman believes tier contemplation is premature at the current stage in the ___________________________________________________________________________ RTO Minutes 5/16/25 Page 21 of 23 process. As far as the timing is concerned, Mr. Heckman believes from a broad perspective, the OATT will get filed and then decisions will be made regarding each individual entity. Mr. Miller asked if the Working Group reviewed the FERC allocation manual regarding the functionalization of costs. He believes that the FERC manual specifies the recommended FERC methodology. Ms. Lambe commented that HEA does not have a wheeling rate, and in trying to identify how to develop an ATRR, she reviewed ways other utilities developed ATRRs, and inquired if HEA could consistently follow those efforts with a clear path to regulatory approval. She noted that HEA has begun that process and is requesting feedback from utilities to ensure the approach is in line with the other utilities. HEA is hoping to develop a formulaic rate that HEA could present to the Commission. Mr. Miller indicated that CEA uses the FERC methodology for functionalization. He stated that it works very well, and it is a fairly straightforward calculation. CEA would be happy to share the information. Mr. Hickey asked if the discussion has occurred regarding the development process of the utilities’ individual ATRRs. He asked if the vision is for each utility and AEA to individually go to the Commission for approval or if the vision is for each utility and AEA to get approval from their regulator. Mr. Heckman agreed discussions have occurred on that topic. He noted that one of Mr. Monroe’s documents that he will share later shows the tasks and processes. Ultimately, the Commission has oversight of this entire process and will thoroughly review the approach. Mr. Heckman believes that it would make sense to undertake that process on an individual basis initially. However, the diagram that Mr. Monroe will present later this afternoon will illustrate the nuances involved. Mr. Miller member asked for the status of the Working Group’s discussion regarding BTS costs. Mr. Heckman discussed that examination of various options that include both coincident peak, load ratio, and a combination of both. He noted that HEA developed a worthy proposal that outlined a regional approach versus a local approach. Mr. Heckman indicated that no firm recommendation has been made, as additional options are being reviewed and would be presented to the RTO. Mr. Miller requested more information on the existing agreements, specifically Bradley Lake. Mr. Heckman acknowledged that further discussion on this topic will occur later today. Many discussions have occurred regarding the grandfathered agreements, including, but not limited to the Bradley Lake agreement, the IMC agreement, and the MEA/CEA power pooling agreement. The agreements are complex and there is currently no easy answer regarding how ___________________________________________________________________________ RTO Minutes 5/16/25 Page 22 of 23 the agreements will be treated. The Working Group will continue these deliberations and will likely have a recommendation for a path forward at the next RTO meeting. Mr. Thayer inquired if there is a current direction on how those agreements will be handled. Mr. Heckman stated there is not a current direction at this stage. The Working Group is getting closer to a recommendation. However, the review process and understanding of the nuances of each agreement have resulted in more questions than answers. Mr. Thayer asked if there is any thought that the grandfathered agreements need to be reentered and renegotiated, or is it a matter that the grandfathered agreements will be used and inserted into the OATT. Mr. Heckman agreed that the Working Group is looking at ways to include the grandfathered agreements into the OATT filing. Chair Million expressed appreciation for the presentation. There were no other questions or comments. MOTION: A motion was made by Mr. Hickey to enter into Executive Session to discuss confidential financial matters related to RTO finances and legal strategy. This is consistent with our Bylaws, which allow a Board to consider confidential matters in Executive Session. In this case, the RTO believes that these are subjects that would have an adverse effect on the finances of the RTO, are being discussed with an attorney, the immediate knowledge of which could have an adverse effect on the legal position of the Committee, or are protected by law due to rules protecting privacy and certain business information. Motion seconded by Mr. Miller. A roll call was taken, and the motion to enter into Executive Session passed unanimously. 9. EXECUTIVE SESSION – 1:35 pm. (Bylaws Section 5.12.3) To discuss matters, the immediate knowledge of which could have an adverse effect on the finances or legal position of the RTO, the Committee or Authority, or that are confidential under state, federal, or local law. The RTO Governance Committee reconvened its regular meeting at 3:42 p.m.3:42 pm. Vice- Chair Million advised that the RTO Committee did not take any formal action of the matters discussed while in Executive Session except as authorized by the bylaws in Section 5.12.2, to give direction to an attorney or negotiator regarding the handling of a specific legal matter or pending negotiation. 10. MEMBER COMMENTS Ms. Lambe thanked the working group, technical group and legal group. ___________________________________________________________________________ RTO Minutes 5/16/25 Page 23 of 23 Mr. Sinclair shared the comments of Ms. Lambe. He appreciated all of the work of all of the groups to hit the July 1, 2025 target date. A lot of work has been done, and a lot of work will continue to be done. Mr. Hickey echoed the comments and appreciated the efforts of Carl Munroe and his Sage advice. He thanked Jennifer for making this happen. Mr. Thayer thanked everyone, and appreciated this session and presenting a lot of public information Mr. Miller echoed all of the comments and all of the efforts of the working group. He appreciated Carl Munroe traveling all the way to present. He thanked the Committee members for making the necessary approvals to advance and keep moving the process forward even though the members may not agree on everything and acknowledged that is okay as the process continues to move forward and stay focused to meet the July 1 goal for filing. He thanked everyone for the collaborative nature of these efforts. Chair Million echoed those exact comments and said a lot of work went into today. He Thanked Whitney for attending today, and Carl Munroe. 11. NEXT MEETING DATE – May 28, 2025 Vice Chair Million stated the next meeting date is May 28, 2025. 12. ADJOURNMENT MOTION: A motion to adjourn was made by Mr. Thayer and seconded by Mr. Miller. There being no other business for the committee, the meeting adjourned at 3:48 p.m. _________________________________________ Travis Million, Vice Chair _________________________________________ Curtis W. Thayer, Secretary Legacy Agreements Review Governance Comm –05/28/2025 Carl Monroe –Munro Advisors, LLC Legacy Agreements •FERC 888 did not have a definition or reference to agreements to be grandfathered. •As regional tariffs developed in the lower 48, parties considered how any contractual/legal agreements that provided transmission service prior to the OATT’s implementation would be integrated in the OATT. Issues Related to Grandfathered Agreements •Requirements FERC accepted to Preserve Contract Terms –Non-Rate Terms and Conditions of OATT were required to be observed –Rate •No rate change unless negotiated change •Revenue had to be recognized as a credit in the ATRR used for RTO Rates –Transmission Service capacity granted had to be recognized for the Grandfathered Agreement •(quid pro quo for the rate payment) Alaska-Specific Considerations •Article I, Sec. 15 of the Alaska Constitution provides, in pertinent part: –No law impairing the obligation of contracts[] … shall be passed. •AS 42.05.431(c) exempts certain wholesale agreements for the sale of power and related contracts for the wheeling, storage, regeneration, or wholesale repurchase of power from the “review or approval by” the Commission. Issues Related to Grandfathered Agreements (cont.) •HB307 Language – –AS 44.83.700(a)(2) replaces wholesale charges assessed by unit by each utility in the Railbelt with a new mechanism that fairly recovers and equitably allocates the costs of operating the backbone transmission system. –Sec. 44.83.710(c)(2) account for … (D) costs to own and operate the backbone transmission system, as established by the commission or by contract, including transmission costs associated with the Bradley Lake hydroelectric project. Legacy Agreements Considered 1.AEA_Power_Sales_Agreement.pdf –Bradley Lake Hydroelectric Project, Power Sales Agreement, December 8, 1987 [Implied Transmission Rights] 2.1987-12-08 Services Agreement.pdf -BRADLEY LAKE HYDROELECTRIC PROJECT AMENDMENT TO AGREEMENT FOR SALE OF TRANSMISSION CAPABILITY, March 7, 1989 [Chugach wheeling including rates and Transmission Rights] 3.1989-03-07 Amendment to AGREEMENT for Sale of Transmission Capabilities OCR'ed.pdf –March 7, 1989 [Transmission Rights on Soldotna Segment and Bradley Junction to Fritz Creek] 4.BPMC MasterM_OAgreement.pdf –May 24, 1994 [No apparent Transmission Rights] 5.Bradley Lake Hydroelectric Project Transmission Facilities Maintenance Agreement between Alaska Energy Authority and Homer Electric Association, Inc.-August 26, 1996 [No apparent Transmission Rights] 6.SECOND AMENDED AND RESTATED ALASKA INTERTIE AGREEMENT.pdf –March 11, 2014 [MITCR and Max ITCR Transmission Rights] 7.Transmission ROW Right-of-Way Lease for the Teeland to Hollywood Transmission Line –March 20, 2020 [No apparent Transmission Rights] 8.PURCHASE AND SALE AGREEMENT.pdf –effective December 17, 2020 [No apparent Transmission Rights] 9.First Amendment to the Agreement for the Wheeling of Electrical Power and for Related Services -December 17, 2020 [Amended Chugach Wheeling including Transmission Rights] 10.Second Amendment to Agreement for Sale of Transmission Capability -December 17,2020 [Amended 1989 Amendment w/ Transmission Rights] 11.CEA-MEA 2nd Amended Pooling Agreement Executed w Revised Exhibit E.pdf –December 30, 2024 [Shared Transmission usage Rights] Next Steps •Governance Committee to decide if any legacy agreements should be grandfathered, and, if so, which ones. •Governance Committee to decide how to account for costs related to legacy agreements per AS 44.83.710(c)(2)(D) –Account for revenue credit to ATRR for Tariff Cost of Service –Account for revenue and expenses thru the Tariff?