chugach electric association, inc. … electric association, inc. anchorage, alaska regular board of...

CHUGACH ELECTRIC ASSOCIATION, INC. ANCHORAGE, ALASKA

REGULAR BOARD OF DIRECTORS' MEETING

AGENDA

Janet Reiser, Chair Jim Henderson, Director Susan Reeves, Vice Chair Harry Crawford, Director Sisi Cooper, Treasurer Bettina Chastain, Secretary

January 26, 2017

3:00 p.m.

Chugach Board Room

I. CALL TO ORDER

A. Pledge of Allegiance B. Roll Call C. Safety Minute - “Cold Weather Safety” (Freeman)

II. EXECUTIVE SESSION* (scheduled)

A. Discussion - Selection of a New Board Member

III. NEW BUSINESS* (scheduled)

A. Appointment of a New Board Member*

IV. APPROVAL OF THE AGENDA*

V. PERSONS TO BE HEARD

A. Wholesale Customer and Member Comments

VI. CONSENT AGENDA*

A. Board Calendar B. Training and Conferences

i. 2017 NRECA Legislative Conference, April 23-26, 2017, Washington DC (Deadline for conference and hotel registration is March 20, 2017)

ii. Gettysburg Leadership Experience for Co-Op Leaders, May 9-11, 2017, Gettysburg, PA

C. Minutes i. December 14, 2016, Regular Board of Directors' Meeting (Portades)

ii. December 16, 2016, Special Board of Directors’ Meeting (Quezon-Vicente)

iii. December 19, 2016, Special Board of Directors’ Meeting (Portades) iv. December 29, 2016, Special Board of Directors’ Meeting (Portades)

D. Director Expenses

* Denotes Action Items ** Denotes Possible Action Items 1/25/2017 11:37:50 AM

VII. CEO REPORTS AND CORRESPONDENCE

A. 4th Quarter 2016 Safety Report (Freeman/Andrews) B. Member Attitude Survey (Hasquet/Steyer) C. November 2016 Financial Statements and Variance Report (Harris/Curran) D. Alaska Energy Smart (Hasquet)

VIII. DIRECTOR REPORTS

A. Alaska Railbelt Cooperative Transmission & Electric Company (ARCTEC) Report

B. Board Committee Reports (Audit and Finance, Operations & Governance) C. Other Meeting Reports

IX. UNFINISHED BUSINESS (none)

X. NEW BUSINESS* (continued)

B. Green Pricing Program (Ayers/Horras) C. Project Authorization for DeBarr Substation Rebuild* (Hickey/Sinclair) D. Procurement for Substation Power Transformers* (Hickey/Sinclair) E. Contract Award 115kV Rebuild of Silvertip to Hope Substation*

(Hickey/Sinclair)

XI. EXECUTIVE SESSION* (continued)

B. Strategic Planning i. Fire Island Wind Phase 2 Update

ii. Sustainability/Triple Bottom Line iii. Power Pool with ML&P and MEA iv. Fuel Supply, Storage and Transportation v. Financial Matters

vi. Human Resources Strategic Plan Update vii. Anchorage Integrated Resource Plan

viii. HEA Settlement ix. New Issues/Ideas

C. Strategic Planning Committee Updates i. Business Planning and Economic Development

ii. Communication/Engagement iii. Renewable/Conservation Initiative

XII. NEW BUSINESS* (continued)

F. Financial Matters* (Highers) G. Contract Approvals* (Fouts) H. Unified System Operator (USO) Business Plan Development** (Hickey)

XIII. DIRECTOR COMMENTS

XIV. ADJOURNMENT*

Safety MinuteCold Weather Clothing

1

Moisture Management Not Sexy Cotton Kills Merino Wool, Synthetic

Fabrics(polyesters such as Polartec Dry® or Patagonia Capilene®) or Silk.

The point: To stay dryer when you sweat, and your shirt dries faster afterwards.

Base Layer

2

Natural Fibers: Wool, Goose Down(must be kept dry)

Synthetics: Fleece, Polartec® 100, 200 or Pro polyester and Thinsulate®

Middle Layer: Insulation

3

Waterproof/ Breathable Shell: The most functional and expensive (Gore-Tex)

Water Resistant/ Breathable: Made of tightly woven fabrics, less expensive

Soft Shells Stretchy, Breathable

Shell Layer

4

This page has been excluded from your book.

5

CHUGACH ELECTRIC ASSOCIATION, INC. Anchorage, Alaska

REGULAR BOARD OF DIRECTORS’ MEETING

AGENDA ITEM SUMMARY

January 26, 2017

ACTION REQUIRED AGENDA ITEM NO. III.A. Information Only X Motion Resolution Executive Session Other TOPIC

Appointment of a New Board Member DISCUSSION On September 27, 2016, Chugach Electric Association (Chugach) received notice from Director Bruce Dougherty the he is resigning from the Chugach Electric Association, Inc., Board of Directors effective December 14, 2016, creating a vacancy. Pursuant to Board Policy 603 and Article IV, Section 8 of the bylaws, Chugach will begin the process of soliciting for applicants to fill the vacancy. Schedule to fill the vacancy: September 28, 2016 – Regular Board of Director’s Meeting – Announce Vacancy October 2 – 27, 2016 – Advertise for Candidates November 3 – 10, 2016 – Extended Advertisement for Candidates December 16, 2016 and December 19, 2016 – Interview Candidates December 29, 2016 – Special Board of Directors’ Meeting – Director Candidate Discussion MOTION

Move that the Board of Directors appoint __________________to fill the vacancy on the Chugach Board pursuant to Board Policy 603 and Article IV, Section 8 of Chugach’s bylaws.

6

CHUGACH ELECTRIC ASSOCIATION, INC. ANCHORAGE, ALASKA

REGULAR BOARD OF DIRECTORS' MEETING

AGENDA

Janet Reiser, Chair Jim Henderson, Director Susan Reeves, Vice Chair Harry Crawford, Director Sisi Cooper, Treasurer Bettina Chastain, Secretary

January 26, 2017

3:00 p.m.

Chugach Board Room

I. CALL TO ORDER

A. Pledge of Allegiance B. Roll Call C. Safety Minute - “Cold Weather Safety” (Freeman)

II. EXECUTIVE SESSION* (scheduled)

A. Discussion - Selection of a New Board Member

III. NEW BUSINESS* (scheduled)

A. Appointment of a New Board Member*

IV. APPROVAL OF THE AGENDA*

V. PERSONS TO BE HEARD

A. Wholesale Customer and Member Comments

VI. CONSENT AGENDA*

A. Board Calendar B. Training and Conferences

i. 2017 NRECA Legislative Conference, April 23-26, 2017, Washington DC (Deadline for conference and hotel registration is March 20, 2017)

ii. Gettysburg Leadership Experience for Co-Op Leaders, May 9-11, 2017, Gettysburg, PA

C. Minutes i. December 14, 2016, Regular Board of Directors' Meeting (Portades)

ii. December 16, 2016, Special Board of Directors’ Meeting (Quezon-Vicente)

iii. December 19, 2016, Special Board of Directors’ Meeting (Portades) iv. December 29, 2016, Special Board of Directors’ Meeting (Portades)

D. Director Expenses

7

* Denotes Action Items ** Denotes Possible Action Items 1/25/2017 11:37:50 AM

VII. CEO REPORTS AND CORRESPONDENCE

A. 4th Quarter 2016 Safety Report (Freeman/Andrews) B. Member Attitude Survey (Hasquet/Steyer) C. November 2016 Financial Statements and Variance Report (Harris/Curran) D. Alaska Energy Smart (Hasquet)

VIII. DIRECTOR REPORTS

A. Alaska Railbelt Cooperative Transmission & Electric Company (ARCTEC) Report

B. Board Committee Reports (Audit and Finance, Operations & Governance) C. Other Meeting Reports

IX. UNFINISHED BUSINESS (none)

X. NEW BUSINESS* (continued)

B. Green Pricing Program (Ayers/Horras) C. Project Authorization for DeBarr Substation Rebuild* (Hickey/Sinclair) D. Procurement for Substation Power Transformers* (Hickey/Sinclair) E. Contract Award 115kV Rebuild of Silvertip to Hope Substation*

(Hickey/Sinclair)

XI. EXECUTIVE SESSION* (continued)

B. Strategic Planning i. Fire Island Wind Phase 2 Update

ii. Sustainability/Triple Bottom Line iii. Power Pool with ML&P and MEA iv. Fuel Supply, Storage and Transportation v. Financial Matters

vi. Human Resources Strategic Plan Update vii. Anchorage Integrated Resource Plan

viii. HEA Settlement ix. New Issues/Ideas

C. Strategic Planning Committee Updates i. Business Planning and Economic Development


XII. NEW BUSINESS* (continued)

F. Financial Matters* (Highers) G. Contract Approvals* (Fouts) H. Unified System Operator (USO) Business Plan Development** (Hickey)

XIII. DIRECTOR COMMENTS

XIV. ADJOURNMENT*

8

January 2017

December 2016

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Sunday Monday Tuesday Wednesday Thursday Friday Saturday

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�2:30PM - 4:30PM REAP Finance Committee (Cooper) (REAP Office or Teleconference)

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�11:00AM - 2:00PM REAP Board Meeting (Cooper) (Alaska Communications Business Technology Center (Redoubt Room) 600 E 36th Avenue)

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�1:00PM - 3:00PM ARCTEC Meeting (Reiser/Crawford) (APA)

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�6:00PM - 12:00AM Chugach Holiday Party (O'Malley's on the Green)

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�5:00PM - 6:30PM Election Committee Meeting (Henderson) (BoardroomCR)

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�1:30PM - 3:00PM Mtg w/Reiser (Review Board Materials) (LDT's Office)

�3:00PM - 6:00PM Operations Committee Meeting (BoardroomCR)

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�3:00PM - 6:00PM Regular Board of Directors Meeting (BoardRoomCR)

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�7:30AM - 8:30AM Teleconference -ARCTEC Meeting (Number to be provided)

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�11:30AM - 12:30PM Power Pool News Conference @ Noon (SPP)

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New Year’s Day Holid...

1/25/2017 9:37 AM 1/12 CCBOD

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�11:30AM - 12:30PM Power Pool News Conference @ Noon (SPP)

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�3:00PM - 6:00PM Regular Board of Directors Meeting (Boardroom)

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Board Trip to Juneau 2/6-2/8 � Juneau, AK � CCBOD

NRECA Annual Meeting (Director Education 2/... � San Diego

NRECA Annual Meeting (Director Education 2/23... � San Diego

1/25/2017 9:37 AM 2/12 CCBOD

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March 2017

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�9:00AM - 10:30AM Touchstone Energy -Training (Trainingroom)

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NRECA Annual Meeting (Director Education 2/23... � San Diego

1/25/2017 9:37 AM 3/12 CCBOD

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�4:00PM - 5:30PM Chugach Board Candidate Forum (Training Room)

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Strategic Planning Session (Board & Senior... � Anchorage

2017 NRECA Legislati...

2017 NRECA Legislative Conference � Washington DC � Connie Owens

1/25/2017 9:37 AM 4/12 CCBOD

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�3:00PM - 6:00PM Audit and Finance Committee & Special Board of Directors Meeting (BoardroomCR)

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�6:00PM - 9:00PM Chugach Annual Meeting & Special Board of Directors Meeting (Dena'ina Convention Center)

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Memorial Day

1/25/2017 9:37 AM 5/12 CCBOD

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1/25/2017 9:37 AM 7/12 CCBOD

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Labor Day Holiday Strategic Planning w/Board (9/5-9/8) � Alyeska Resort � Connie Owens

1/25/2017 9:37 AM 9/12 CCBOD

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NRECA Region 9 Meeting - 10/16 - ... � Denver, CO

1/25/2017 9:37 AM 10/12 CCBOD

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DRAFT - Regular Board of Directors’ Meeting Minutes December 14, 2016

Page 1 of 5


December 14, 2016

Wednesday 3:00 P.M.


Recording Secretary: Divina Portades I. CALL TO ORDER

Chair Reiser called the Regular Meeting of the Board of Directors to order at 3:00 p.m. in the boardroom of Chugach Electric Association, Inc., 5601 Electron Drive, Anchorage, Alaska.

A. Pledge of Allegiance Director Dougherty led the Board in the Pledge of Allegiance.

B. Recognition of Service – Bruce Dougherty Chair Reiser thanked Director Dougherty and expressed her appreciation for his service on the Board. Chair Reiser also presented the meter lamp to Director Dougherty and photos were taken with the Board members and Lee Thibert, Chief Executive Officer (CEO).

C. Roll Call Board Members Present: Janet Reiser, Chair Susan Reeves, Vice Chair (joined via teleconference at 3:16 p.m.) Sisi Cooper, Treasurer Bruce Dougherty, Secretary Jim Henderson, Director (via teleconference) Bettina Chastain, Director (arrived at 3:05 p.m.) Harry Crawford, Director

Guests and Staff in Attendance:

Lee Thibert Mark Johnson Bill Bernier Julie Hasquet Paul Risse Connie Owens Sherri Highers Nick Horras

Brian Hickey Arthur Miller Phil Steyer Tom Schulman Tyler Andrews Todd McCarty Mark Fouts Scott Sanner

Renee Curran Ron Vecera Marty Freeman Kathy Harris Lynda Muise Kate Ayers Jody Wolfe Glen Klinkhart, Klinkhart LLC

31


Page 2 of 5

D. Safety Minute Marty Freeman, Manager, Safety discussed “Slip, Trips and Falls” and responded to questions from the Board. Director Chastain arrived at 3:05 p.m. Director Henderson designated Director Dougherty to sign for his expense report.

II. APPROVAL OF THE AGENDA Director Cooper moved and Director Crawford seconded the motion to approve the agenda. The motion passed unanimously. Director Reeves was not present at the time of vote.

III. PERSONS TO BE HEARD A. Wholesale Customer and Member Comments

None

IV. CONSENT AGENDA A. Board Calendar B. Training and Conferences

i. 2017 NRECA Annual Meeting, February 23-March 3, 2017, San Diego, CA (Deadline for conference and hotel registration is January 20, 2017)

ii. 2017 NRECA Legislative Conference, April 23-26, 2017, Washington DC (Deadline for conference and hotel registration is March 20, 2017)

C. Minutes i. November 30, 2016, Regular Board of Directors’ Meeting (Quezon-

Vicente) D. Director Expenses

Director Crawford moved and Director Chastain seconded the motion to approve the consent agenda. The motion passed unanimously. Director Reeves was not present at the time of vote.

V. CEO REPORTS AND CORRESPONDENCE A. October 2016 Financial Statements and Variance Report (Harris/Curran)

The October 2016 Financial Statements and Variance Report were provided in the meeting packet.

B. Write-Off Accounts Receivable – Electric/Other (Kurka/Andrews) The Write-Off Accounts Receivable – Electric/Other was provided in the meeting packet.

C. 2017 Annual Meeting (Andrews) The 2017 Annual Meeting information was provided in the meeting packet.

32


Page 3 of 5

D. 4th Quarter 2016 Railbelt Comparison (Horras/Miller)

The 4th Quarter 2016 Railbelt Comparison was provided in the meeting packet.

VI. DIRECTORS REPORTS A. Alaska Railbelt Cooperative Transmission & Electric Company (ARCTEC)

Report Lee Thibert, CEO reported on the December 2, 2016, ARCTEC meeting and deferred discussion to the Executive Session.

B. Board Committee Reports (Audit and Finance, Operations & Governance) Director Chastain reported on the December 13, 2016, Operations Committee meeting discussion on USO/Transco. The next Operations Committee meeting is scheduled on January 24, 2017. Director Cooper reported on the REAP Holiday Fundraiser scheduled on December 20, 2016 and invited Board members to attend.

C. Other Meeting Reports

VII. UNFINISHED BUSINESS None VIII. NEW BUSINESS

A. Appointment of 2017 NRECA Voting and Alternate Delegates* (Board) Director Chastain moved and Director Cooper seconded the motion that the Board of Directors appoints Director Crawford as the NRECA Voting Delegate and Director Reeves as the Alternate. The motion passed unanimously. Director Reeves joined via teleconference at 3:16 p.m.

B. Chugach Electric Association, Inc., - Member Survey* (Hasquet/Steyer) Julie Hasquet, Manager, Corporate Communication, Phil Steyer, Director, Government Relations and Lee Thibert, CEO discussed the member survey and responded to questions from the Board. Director Chastain moved and Director Crawford seconded the motion that the Board of Directors approves the survey questions as asked in the 2015 survey without any new policy questions. The motion passed unanimously.

C. Vegetation Management Contract* (Bernier)

Bill Bernier, Sr. VP Power Delivery and Ron Vecera, Sr. Manager, Risk & Renewables, discussed the vegetation management contract and responded to questions from the Board. Director Dougherty moved and Director Crawford seconded the motion that the Board of Directors authorizes the Chief Executive Officer to execute an initial three-year contract with two additional three-year contract periods, subject to

33


Page 4 of 5

agreement on pricing, with Carlos Tree Service, Inc. for Vegetation Management Services with annual costs estimated to be $2.4 million per year with price escalation of approximately 1% per year. The estimated right-of-way costs are calculated based upon historical and projected staffing and productivity levels to maintain Chugach’s current operating plan. The motion passed unanimously.

IX. EXECUTIVE SESSION A. Strategic Planning

i. Cyber Security ii. 3rd Quarter 2016 Fire Island Wind Report

iii. Fuel Supply, Storage and Transportation iv. Retirement Security Plan Pre-Pay v. Unified System Operator (USO) Governance Position

vi. Review Board Candidate Questions vii. New Issues/Ideas

B. Strategic Planning Committee Updates i. Business Planning and Economic Development


At 3:35 p.m., Director Chastain moved and Director Cooper seconded the motion that pursuant to Alaska Statute 10.25.175 (c) (1) and (2) the Board of Directors go into executive session to discuss: 1) personnel matters regarding the interview process of applicants for the vacant Board of Director position; and, 2) financial matters, the immediate knowledge of which would clearly have an adverse effect on the finances of the cooperative. The motion passed unanimously. The meeting reconvened in open session at 6:15 p.m. Director Reeves designated Director Chastain to sign for her expense report.

X. NEW BUSINESS D. Retirement Security Plan Pre-Pay* (Andrews)

Director Chastain moved and Director Dougherty seconded the motion that the Board of Directors authorizes the Chief Executive Officer to pre-pay the Retirement Security Plan in exchange for a reduction in pension contribution rate essentially the same as discussed in Executive Session. The motion passed unanimously.

E. Unified System Operator (USO) Governance Position** (Hickey) Director Dougherty moved and Director Chastain seconded the motion that the Board of Directors approve the documents as essentially discussed in executive session. The motion passed unanimously.

F. Appointment of Board Secretary* (Board)

Chair Reiser opened the floor to nominations for Secretary of the Board.

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Page 5 of 5

Director Dougherty nominated Director Chastain for Secretary of the Board and Director Henderson seconded the nomination. No other nominations were made. Chair Reiser called for the vote. The nomination passed unanimously. The result of the vote: Director Chastain was elected Secretary of the Board.

XI. DIRECTOR COMMENTS Director comments were made at this time.

XII. ADJOURNMENT At 6:22 p.m., Director Dougherty moved and Director Crawford seconded the motion to adjourn. The motion passed unanimously. Bettina Chastain, Secretary Date Approved: January 26, 2017

35

DRAFT - Special Board of Directors’ Meeting Minutes December 16, 2016

Page 1 of 2


December 16, 2016

Friday

SPECIAL BOARD OF DIRECTORS’ MEETING

Recording Secretary: Arden Quezon-Vicente I. CALL TO ORDER

Chair Reiser called the Special Board of Directors meeting to order at 3:01 p.m. in the boardroom of Chugach Electric Association, Inc., 5601 Electron Drive, Anchorage, Alaska.

A. Pledge of Allegiance Chair Reiser led the Board in the Pledge of Allegiance.

B. Roll Call Board Members Present: Janet Reiser, Chair Sisi Cooper, Treasurer Bruce Dougherty, Secretary Jim Henderson, Director (joined via teleconference at 3:07 p.m.) Harry Crawford, Director Bettina Chastain, Director

Board Member Absent: Susan Reeves, Vice Chair Guests and Staff in Attendance: Lee Thibert II. APPROVAL OF THE AGENDA

Director Chastain moved and Director Cooper seconded the motion to approve the agenda. The motion passed unanimously. Director Henderson was not present at the time of vote.

III. EXECUTIVE SESSION

A. Strategic Planning i. Discuss Interview Process of Applicants for Vacant Board of Directors

Chair Reiser stated that the Board will not go to Executive Session at this time. No objections were made.

36

DRAFT - Special Board of Directors’ Meeting Minutes December 16, 2016

Page 2 of 2

IV. PERSONS TO BE HEARD A. Wholesale Customer and Member Comments

None V. CEO REPORTS AND CORRESPONDENCE None

VI. DIRECTORS REPORTS

None

VII. UNFINISHED BUSINESS None

VIII. NEW BUSINESS

A. Interviews of Applicants for Vacant Board of Director Position i. Daniel O’Tierney

ii. Paul Dworian iii. Clinton White iv. Stuart Parks v. Matt Moore

vi. Al Tamagni, Sr. vii. Ron Stafford

Director Henderson joined via teleconference at 3:07 p.m.

Interviews commenced at this time. IX. EXECUTIVE SESSION

A. Strategic Planning i. Discuss the Interviews of Applicants for Vacant Board of Director Position

Chair Reiser stated that the Board will not go to Executive Session at this time. No objections

were made. X. DIRECTOR COMMENTS Director comments were made at this time. XI. ADJOURNMENT

At 7:09 p.m., Director Chastain moved and Director Henderson seconded the motion to adjourn. The motion passed unanimously.

Bettina Chastain, Secretary

Date Approved: January 26, 2016

37

DRAFT - Special of Directors’ Meeting Minutes December 19, 2016

Page 1 of 3


December 19, 2016

Monday 3:00 P.M.



Chair Reiser called the Special Board of Directors meeting to order at 3:00 p.m. in the boardroom of Chugach Electric Association, Inc., 5601 Electron Drive, Anchorage, Alaska.

A. Pledge of Allegiance Director Crawford led the Board in the Pledge of Allegiance.

B. Roll Call Board Members Present: Janet Reiser, Chair

Susan Reeves, Vice Chair (joined via teleconference during executive session) Sisi Cooper, Treasurer Bettina Chastain, Secretary

Jim Henderson, Director (via teleconference during executive session) Harry Crawford, Director

Guest and Staff in Attendance: II. APPROVAL OF THE AGENDA

Director Crawford moved and Director Cooper seconded the motion to approve the agenda. Chair Reiser requested to add “Executive Session” prior to “New Business”. No objections were made. The motion passed unanimously, as amended. Directors Henderson and Reeves were not present at the time of vote.


None

IV. CEO REPORTS AND CORRESPONDENCE None V. DIRECTOR REPORTS None

Lee Thibert Connie Owens

38


Page 2 of 3

VI. UNFINISHED BUSINESS None VII. EXECUTIVE SESSION

A. Strategic Planning i. Discuss Interview Process of Applicants for Vacant Board of Directors

At 3:03 p.m., Director Cooper moved and Director Crawford seconded the motion that pursuant to Alaska Statute 10.25.175 (c) (2), the Board of Directors go into executive session to discuss personnel matters regarding the interviews of applicants for the vacant Board of Director position. The motion passed unanimously.

Directors Henderson and Reeves joined via teleconference during executive session.

The meeting reconvened in open session at 3:17 p.m. VIII. NEW BUSINESS

A. Interviews of Applicants for Vacant Board of Director Position i. David Clarke

ii. Jay Hermanson iii. Roger Shaw iv. Nina Bonito Romine v. Grant Yutrzenka

vi. Dominic S.F. Lee – no show

Interviews commenced at this time. Chair Reiser requested to add action items: 1) Close the Interview Session and 2) Create Short List to Five Applicants, as well as adding an Executive Session to discuss Creation of a Short List and Next Steps. No objections were made.

B. Close the Interview Session* (Board) Director Chastain moved and Director Cooper seconded the motion that the Board of Directors closes the interview session. The motion passed unanimously.

C. Create Short List to Five Applicants* (Board) Director Crawford moved and Director Cooper seconded the motion that the Board of Directors creates a short list to five applicants. The motion passed unanimously.

IX. EXECUTIVE SESSION B. Strategic Planning

i. Discussion – Creation of Short List and Next Steps

At 5:20 p.m., Director Chastain moved and Director Cooper seconded the motion that pursuant to Alaska Statute 10.25.175 (c) (2), the Board of Directors go into executive

39


Page 3 of 3

session to discuss creation of short list of applicants and next steps for the vacant Board of Director position. The motion passed unanimously. The meeting reconvened in open session at 7:22 p.m.

X. NEW BUSINESS

D. Approval of Short List of Applicants for the Vacant Board of Director Position and Next Steps* (Board)

Director Chastain moved and Director Crawford seconded the motion that the Board of Directors accepts the short list of applicants and the next steps for the vacant Board of Director position as discussed in the Executive Session. The motion passed unanimously.

XI. DIRECTOR COMMENTS Director comments were made at this time. XII. ADJOURNMENT

At 7:26 p.m., Director Chastain moved and Director Cooper seconded the motion to adjourn. The motion passed unanimously. Director Reeves was not present at the time of vote.

Bettina Chastain, Secretary Date Approved: January 26, 2017

40


Page 1 of 2


December 29, 2016

Thursday 9:30 A.M.



Chair Reiser called the Special Board of Directors meeting to order via telephone at 9:40 a.m. in the boardroom of Chugach Electric Association, Inc., 5601 Electron Drive, Anchorage, Alaska.

A. Pledge of Allegiance The Pledge of Allegiance was waived and no objections were made.

B. Roll Call Board Members Present: Janet Reiser, Chair (via teleconference)

Susan Reeves, Vice Chair (via teleconference) Sisi Cooper, Treasurer (via teleconference) Bettina Chastain, Secretary (via teleconference)

Jim Henderson, Director (via teleconference) Harry Crawford, Director

Guest and Staff in Attendance: II. APPROVAL OF THE AGENDA

Director Reeves moved and Director Crawford seconded the motion to approve the agenda. Director Cooper requested to add 1) REAP Board Election and 2) Appointment of Election Committee Liaison under “Unfinished Business”. No objections were made. The motion passed unanimously, as amended.


None

IV. CEO REPORTS AND CORRESPONDENCE None V. DIRECTOR REPORTS

A. REAP Board Election (Board)

Connie Owens

41


Page 2 of 2

Director Cooper discussed the REAP Board Election and responded to questions from the Board.

VI. UNFINISHED BUSINESS REAP Board Election was moved to “Director Report” and Appointment of Election Committee Liaison was moved to “New Business”. VII. NEW BUSINESS

A. Appointment of Election Committee Liaison (Board) Chair Reiser appointed Director Henderson as the Election Committee Liaison. No objections were made.

VIII. EXECUTIVE SESSION

A. Discuss the Short List of Applicants for the Vacant Board of Director Position At 9:58 a.m., Director Crawford moved and Director Cooper seconded the motion that pursuant to Alaska Statute 10.25.175 (c) (2), the Board of Directors goes into executive session to discuss personnel matters regarding the short list of applicants for the vacant Board of Director position. The motion passed unanimously. The meeting reconvened in open session at 10:43 a.m.

IX. DIRECTOR COMMENTS Director comments were made at this time. X. ADJOURNMENT

At 10:46 a.m., Director Chastain moved and Director Henderson seconded the motion to adjourn. The motion passed unanimously.

Bettina Chastain, Secretary Date Approved: January 26, 2017

42



AGENDA ITEM SUMMARY

January 26, 2017

ACTION REQUIRED AGENDA ITEM NO. IV.D. Information Only X Motion Resolution Executive Session Other TOPIC Director Expenses DISCUSSION The Director’s expenses will be submitted for approval at the board meeting. MOTION (Consent Agenda)

43


TO: Lee Thibert, CEO FROM: Tyler Andrews, Vice President, Member and Employee Services SUBJECT: Fourth Quarter Safety Report 2016 Year End Safety Statistics:

Total Number of Recordable Injuries 8 Number of Lost Work Day Recordable Injuries 3 Lost Work Days 18 Vehicle Incidents 2

Notable Items:

2016 was an especially good year for safety at Chugach Electric Association. Going back to the year 2000, 2016 had the fewest lost-work days in 17 years. . Through our continued efforts, Chugach Electric has also steadily improved its safety performance over the last 6 years. While we always strive for an injury-free year, our injury rate for the past two years is below the five-year national average for the Electric Power sector. This trend supports that Chugach employees are doing the right things to work safely and that these actions continue to be reinforced across the organization. Employees in every division of Chugach contributed to this safety an achievement and we will be recognizing and rewarding their effort this month.

1 of 8 44

In November, Taylor Crocker represented Chugach Electric at the NRECA Safety Leadership Summit. As part of his visit, Taylor had the opportunity to present to NRECA members how Chugach reduced the risk of injury when handling Corflo through use of engineered Corflo reels. This particular conference is held every year and provides a valuable opportunity to engage with safety leaders across the country as well as share innovation and best practices with our peers to reduce risk of injury and accidents.

In October, 3 personnel from Chugach Electric attended a 2-day utility-specific fall protection competent person course put on by 3M Fall protection in Anchorage. At the completion of this course the three employees are able to recognize complex fall protection hazards and recommend mitigations for those hazards based on their advanced training they received at the course.

Safety Training: A primary incident prevention effort from the Safety Department is the delivery of safety training. Safety training topics

contribute to employee knowledge, hazard identification and mitigation, required safe work procedures, and safety regulations. To date 92% of our training plan has been completed, including 1351 class completions and 954 certifications.

2 of 8 45

0.00 0.00

1.422.17

2.612.12 3.70

3.73 3.32 3.00 2.75 2.88

5.00

2.94

6.64

0.001.002.003.004.005.006.007.008.009.00

10.0011.0012.0013.0014.0015.00

Inci

den

t R

ate

(Per

100

Em

plo

yees

)

Recordable Incident Rate

Chugach 5 Year Average (2011 - 2015)

BLS (National 5-Year Average)*

BLS (Alaska

* Based on data reported to the Bureau of Labor Statistics (BLS) under NAICS Code 2211

BLS (Alaska Average)*

3 of 8 46

0.00

4.23 4.59

2.88

7.40

2.50

1.50

7.61

4.755.00

6.64

2.943.20

9.69

7.34

6.45

7.23

3.40

0.00

2.00

4.00

6.00

8.00

10.00

12.00

Admin/CEO/Finance Power Delivery Power Supply Chugach Overall BLS (Alaska) BLS (National)

Inci

den

t R

ate

(per

100

em

plo

yees

)

Recordable Incident Rate 2016by Group

2016

Yea

r-to-

Dat

e

2014

Yea

r-to-

Dat

e

2014

Yea

r-to-

Dat

e

2016

Yea

r-to-

Dat

e

2016

Yea

r-to-

Dat

e

2016

Yea

r-to

-

5-Ye

ar

Ave

rage

5-Ye

ar A

vera

ge

5-Ye

ar A

vera

ge

5-Ye

ar A

vera

ge

5-Ye

ar A

vera

ge

5-Ye

ar A

vera

ge

10-Y

ear A

vera

ge

10-Y

ear A

vera

ge

10-Y

ear A

vera

ge

10-Y

ear A

vera

ge

10-Y

ear A

vera

ge

10-Y

earA

vera

ge

4 of 8 47

0.00 0.00 0.00 0.000.87 0.72

1.26

1.59 1.42 1.28 1.171.04

3.00

0.88

2.88

0.00

1.00

2.00

3.00

4.00

5.00

6.00

7.00

8.00

9.00

10.00In

cid

ent

Rat

e (P

er 1

00 E

mp

loye

es)

Lost Time Rate YTD 2016

BLS (Alaska Average)*

Chugach 5 Year Average (2011 - 2015)

BLS (National Average)*

* Based on data reported to the Bureau of Labor Statistics (BLS) under NAICS Code 2211

5 of 8 48

2.53

1.04

3.60

0.700.49

5.10

2.22

3.02 2.88

0.88

1.89

5.26

3.793.48

2.91

0.99

0.00

1.00

2.00

3.00

4.00

5.00

6.00

Admin/CEO/Finance Power Delivery Power Supply Chugach Overall BLS (Alaska) BLS (National)

Inci

den

t R

ate

(per

100

em

plo

yees

)

Lost Time Rate 2016 YTDby Group

2015

Year‐to‐Date

2015

Yea

r-to-

Dat

e

2016

Yea

r-to-

Dat

e

2016

Yea

r-to-

Dat

e

2016

Yea

r-to-

Dat

e

2016

Yea

r-to-

Dat

e

5-Ye

ar A

vera

ge

5-Ye

ar A

vera

ge

5-Ye

ar A

vera

ge

5-Ye

ar A

vera

ge

5-Ye

ar A

vera

ge

5-Ye

ar A

vera

ge

10-Y

ear A

vera

ge

10-Y

ear A

vera

ge

10-Y

ear A

vera

ge

10-Y

ear A

vera

ge

10-Y

ear A

vera

ge

10-Y

ear A

vera

ge

0.00.0

6 of 8 49

0 0 0 0 1

67

4

00 0 00

10

20

30

40

50

Lost Work Days By Month

7 of 8 50

Vehicle Incidents:

There have been 2 vehicle incidents this year with 1 incident in the fourth quarter.

2011 2012 2013 2014 2015 2016Series1 2 1 3 2 4 2

0.00

1.00

2.00

3.00

4.00

5.00

# of incide

nts

Vehicle Accidents

8 of 8 51


52


53


54


55


56


57


58


59


60


61


62


63


64


65


66


67


68


69


70

CHUGACH ELECTRIC ASSOCIATION | 1

FINANCIAL REPORT NOVEMBER 2016

2016 2016 2016

MTD MTD MTD

CATEGORY ACTUAL BUDGET VARIANCE

Operating Revenue and Patronage Capital 19,500,047$ 18,690,462$ 809,585$

Fuel and Purchased Power Expense 7,572,451 6,520,044 1,052,407

Power Production Expense 1,312,578 1,509,587 (197,009)

Transmission Expense 487,472 602,711 (115,239)

Distribution Expense 1,060,737 1,179,058 (118,321)

Customer Expense 476,259 547,439 (71,180)

Administrative, General and Other 1,679,189 1,851,661 (172,472)

Depreciation & Amortization Expense 3,200,338 3,150,440 49,898

Interest Expense, Net 1,714,531 1,755,261 (40,730)

Total Cost of Electric Service 17,503,555$ 17,116,201$ 387,354$

Patronage Capital & Operating Margins 1,996,492$ 1,574,261$ 422,231$

Non-Operating Margins - Interest 50,894 24,852 26,042

Allowance for Funds Used During Construction 45,954 14,737 31,217

Non-Operating Margins - Other (135,383) 0 (135,383)

Patronage Capital or Margins 1,957,957$ 1,613,850$ 344,107$

STATEMENT OF OPERATIONS

Fuel & Purchased

Power43%

Power

Production7%

Transmission

3%

Distribution

6%

Customer

3%

Admin, General and

Other10%

Depreciation &

Amortization18%

Interest Expense,

Net10%

Total Cost of Electric Service (MTD Actual)

71



ASSETS & OTHER DEBITS 11/30/16 12/31/15

Total Utility Plant in Service 1,185,574,725 1,128,474,292

Construction Work in Progress 28,505,591 15,601,374

Total Utility Plant 1,214,080,316$ 1,144,075,666$

Accum. Prov. for Depreciation/Amortization (495,075,045) (469,199,226)

Net Utility Plant 719,005,271$ 674,876,440$

Nonutility Property - Net 76,889 76,889

Investment in Assoc. Organizations 9,318,321 9,635,519

Special Funds 843,307 763,913

Restricted Cash & Marketable Securities 4,975,569 1,705,760

Total Other Property & Investments 15,214,086$ 12,182,081$

Cash & Marketable Securities 11,930,202 15,626,919

Special Deposits/Restricted Cash 1,022,580 1,217,883

Accounts Receivable - Net 29,414,272 28,232,930

Materials and Supplies, Fuel Stock 34,332,318 34,674,725

Prepayments 1,765,191 1,466,301

Other Current & Accrued Assets 237,287 225,079

Total Current & Accrued Assets 78,701,850$ 81,443,837$

Deferred Debits 18,981,969 16,811,756

Total Assets & Other Debits 831,903,176$ 785,314,114$

LIABILITIES & OTHER CREDITS 11/30/16 12/31/15

Memberships 1,688,999 1,661,744

Pat. Capital, Margins & Equities 180,070,592 179,975,637

Total Margins & Equities 181,759,591$ 181,637,381$

Long-Term Debt - Bonds 405,249,998 426,666,665

Long-Term Debt - Other 40,356,000 22,241,852

Unamortized Debt Issuance Costs (2,736,975) (2,680,897)

Total Long-Term Debt 442,869,023$ 446,227,620$

Notes Payable 86,036,667 44,115,980

Accounts Payable 12,122,792 9,701,088

Consumer Deposits 5,213,918 5,000,684

Other Current & Accrued Liabilities 30,643,051 31,330,344

Total Current & Accrued Liabilities 134,016,428$ 90,148,096$

Deferred Compensation 843,307 763,913

Other Liabilities, Non-Current 1,208,665 1,555,329

Deferred Liabilities 1,342,471 1,802,389

Patronage Capital Payable 12,008,499 11,108,071

Cost of Removal Obligation 57,855,192 52,071,315

Total Liabilities & Other Credits 831,903,176$ 785,314,114$

BALANCE SHEET

Distribution

61%

Generation

3%

General

Plant

29%

Transmission 7%

2016 Construction Work in Progress (YTD)

$28,505,591

Generation

39%

Transmission

25%

Distribution

29%

General &

Other5%

CWIP

2%

2016 Total Utility Plant (YTD)

$1,214,080,316

72



2016 2016 2016

YTD YTD YTD

CATEGORY ACTUAL BUDGET VARIANCE

Operating Revenue and Patronage Capital 177,354,193$ 190,211,267$ (12,857,074)$

Fuel and Purchased Power Expense 63,234,911 71,304,859 (8,069,948)

Power Production Expense 14,652,388 16,267,132 (1,614,744)

Transmission Expense 5,339,968 6,902,112 (1,562,144)

Distribution Expense 12,759,146 12,536,777 222,369

Customer Expense 5,715,895 6,049,925 (334,030)

Administrative, General and Other 20,321,848 22,048,971 (1,727,123)

Depreciation & Amortization Expense 32,853,000 33,493,875 (640,875)

Interest Expense, Net 19,611,901 19,355,638 256,263

Total Cost of Electric Service 174,489,057$ 187,959,289$ (13,470,232)$

Patronage Capital & Operating Margins 2,865,136$ 2,251,978$ 613,158$

Non-Operating Margins - Interest 355,727 273,386 82,341

Allowance Funds Used During Const. 171,356 162,112 9,244

Non-Operating Margins - Other (150,478) - (150,478)

Patronage Capital or Margins 3,241,741$ 2,687,476$ 554,265$

MFI/I 1.16 1.14

TIER 1.17 1.14

COMPARATIVE FINANCIAL REPORT


CURRENT YTD ACTUAL TO BUDGET VARIANCE

Fuel & Purchased

Power

36%

Power Production

9%

Transmission

3%

Distribution

7%

Customer

3%

Admin, General

and Other

12%

Depreciation &

Amortization

19%

Interest

Expense, Net

11%

Total Cost of Electric Service (YTD Actual)

73



2016 2015

YTD YTD

CATEGORY ACTUAL ACTUAL

Operating Revenue and Patronage Capital 177,354,193$ 198,532,344$

Fuel and Purchased Power Expense 63,234,911 79,881,651

Power Production Expense 14,652,388 15,250,048

Transmission Expense 5,339,968 5,756,509

Distribution Expense 12,759,146 13,015,225

Customer Expense 5,715,895 5,662,944

Administrative, General and Other 20,321,848 21,780,111

Depreciation and Amortization Expense 32,853,000 33,189,804

Interest Expense, Net 19,611,901 20,000,434

Total Cost of Electric Service 174,489,057$ 194,536,726$

Patronage Capital & Operating Margins 2,865,136$ 3,995,618$

Non-Operating Margins - Interest 355,727 283,471

Allowance for Funds Used During Construction 171,356 130,182

Non-Operating Margins - Other (150,478) (9,914)

Patronage Capital or Margins 3,241,741$ 4,399,357$

MFI/I 1.16 1.22

TIER 1.17 1.22



CURRENT TO PRIOR YTD ACTUAL

0

10

20

30

40

50

60

70

80

(in m

illions)

Cost of Electric Service (YTD)

2015

2016

74



0.0

20.0

40.0

60.0

80.0

100.0

120.0

Retail Seward

(In

Th

ou

san

ds)

MWh Sales (MTD)

2015 Actual 2016 Actual 2016 Budget

0.0

200.0

400.0

600.0

800.0

1,000.0

1,200.0

Retail

(In

Th

ou

san

ds)

5-Year MWh Retail Sales Comparison (YTD)

2012 2013 2014 2015 2016 2016 Budget

75



1.21

1.15

1.17

1.22

1.16

1.22

1.15

1.17

1.22

1.17

1.10

1.12

1.14

1.16

1.18

1.20

1.22

1.24

2012 2013 2014 2015 2016

MFI/I and TIER (YTD)

MFI/I TIER

24.12%

25.51%

26.97%

28.75%29.10%

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

2012 2013 2014 2015 2016

Equity Ratio (YTD)

76


VARIANCE REPORT NOVEMBER 2016

ENERGY SALES (kWh)

YTD Actual YTD Budget

Retail Energy Sales 1,000,672,261 1,038,088,129

Wholesale Energy Sales 54,002,851 56,004,925

Total Firm Energy Sales 1,054,675,112 1,094,093,054

Economy Energy Sales 18,462,000

0

Total Energy Sales 1,073,137,112

1,094,093,054

Firm energy sales totaled 1,054,675,112 kWh, which were 3.6% under budget. Both retail and

wholesale energy sales were under budget 3.6%, primarily due to warmer than anticipated

weather.

Economy energy sales totaled 18,462,000 kWh which were 100% over budget due to

unanticipated sales to Golden Valley Electric Association (GVEA).

ENERGY REVENUE (in millions)


Retail Revenue $ 162.4 $ 176.0

Wholesale Revenue 4.4 5.1

Total Firm Revenue 166.8 181.1

Economy Energy Revenue 1.0

0.0

Other Operating Revenue 9.6 9.1

Total Revenue $ 177.4 $ 190.2

Revenue from firm sales totaled $166.8 million compared to $181.1 million in the budget. Firm

revenue was lower than expected due to lower retail energy sales and lower fuel costs recovered

in revenue through the fuel and purchased power adjustment process.

Economy energy revenue totaled $1.0 million due to unanticipated sales to GVEA.

Other operating revenue includes late fees, pole rental, wheeling, microwave, BRU sales and

miscellaneous service and other electric revenue. Other operating revenue totaled $9.6 million

compared to $9.1 million in the budget. While not a significant overall variance, lower than

anticipated BRU sales were largely offset by higher than anticipated wheeling revenue.

77



FUEL AND PURCHASED POWER (in millions)


Fuel $ 48.9 $ 57.1

Purchased Power 14.3 14.2

Total $ 63.2 $ 71.3

Fuel expense includes fuel, storage, transportation, and BRU operating costs. Fuel expense was

$48.9 million compared to $57.1 million projected in the budget. Although more fuel was

consumed as a result of the units utilized, the average price per unit of fuel was lower than

projected due to lower fuel and transportation costs. Lower than anticipated storage and BRU

operating costs also contributed to this variance.

Actual fuel purchased for production was 7,704,370 MCF at an average effective delivered price

of $5.57 per MCF, compared to 7,169,587 MCF in the budget at an average effective delivered

price of $6.98 per MCF.

Purchased power expense represents energy purchased from Bradley Lake, Fire Island, and other

utilities as needed, as well as costs associated with dispatching. Purchased power expense was

$14.3 million compared to $14.2 million in the budget. This variance was primarily due to a

higher average effective price as a result of purchasing less energy from Bradley Lake.

Energy purchased was 160,045 MWh at an average effective price of 7.44 cents per kWh

compared to 161,030 MWh budgeted at an average effective price of 7.22 cents per kWh.

POWER PRODUCTION (in millions)


Total Power Production $ 14.7

$ 16.3

Power production operating and maintenance expense was $14.7 million compared to $16.3

million in the budget, primarily due to lower maintenance costs at SPP.

TRANSMISSION OPERATIONS AND MAINTENANCE (in millions)


Total Transmission $ 5.3

$ 6.9

Transmission operations and maintenance expense was $5.3 million compared to $6.9 million in

the budget, primarily due to lower than anticipated labor caused by changes in scheduled

maintenance and a shift from transmission to distribution. Lower than anticipated vegetation

control expenses also contributed to this variance.

78



DISTRIBUTION OPERATIONS AND MAINTENANCE (in millions)


Total Distribution $ 12.8

$ 12.5

Distribution operations and maintenance expense was $12.8 million compared to $12.5 million

in the budget, primarily due to higher than anticipated labor caused by a shift from transmission

to distribution, which was somewhat offset by lower than anticipated Information Services costs

and vegetation control expenses.

CONSUMER ACCOUNTS / CUSTOMER INFORMATION (in millions)


Total Consumer / Customer Information $ 5.7

$ 6.0

Consumer accounts and customer information expense was $5.7 million compared to $6.0

million in the budget, primarily due to lower than anticipated labor and costs associated with the

energy efficiency program.

ADMINISTRATIVE, GENERAL AND OTHER (in millions)


Administrative, General and Other $ 20.3

$ 22.0

Administrative, general and other expense includes tax, donations, other deductions associated

with preliminary survey and investigation charges of projects, and obsolete inventory write-offs

that are not attributable to operating or maintenance accounts. Administrative, general and other

expense was $20.3 million compared to $22.0 million in the budget, primarily due to lower than

anticipated expenses associated with legal, human resource and strategic initiatives and

headquarters maintenance which were somewhat offset by higher than anticipated inventory

adjustments.

79



SUMMARY

Depreciation, interest, and interest during construction expense totaled $52.5 million compared

to $52.8 million in the budget, primarily due to lower than anticipated depreciation expense

associated with the Beluga facilities and the final classification of completed projects.

All of the foregoing expenses resulted in total cost of electric service of $174.5 million compared

to $188.0 million in the budget.

Non-operating margins include allowance for funds used during construction (AFUDC), capital

credit and patronage capital allocations, extraordinary items, and interest income. Non-operating

margins totaled $0.4 million compared to $0.4 million in the budget. Overall there is no

significant variance as the increase in interest and dividend income was offset by the change in

market value of the associated marketable securities.

The net result of revenue and expenses was margins of $3.2 million compared to projected

margins of $2.7 million in the budget. The current forecast projects year-end margins of $5.8

million and an MFI/I of 1.27.

80



2016 2016 2016 2016

APPROVED AMENDED YTD REVISED

CATEGORY BUDGET BUDGET ACTUALS FORECAST

Operating Revenue and Patronage Capital 207,018,295$ 211,248,655$ 177,354,193$ 197,790,222$ 2

Fuel and Purchased Power Expense 77,477,708 79,157,471 63,234,911 71,087,523 1

Power Production Expense 17,795,694 17,795,694 14,652,388 16,079,265 2

Transmission Expense 7,503,845 7,503,845 5,339,968 5,846,198 2

Distribution Expense 13,665,449 13,665,449 12,759,146 13,788,446 2

Customer Expense 6,616,496 6,616,496 5,715,895 6,282,466 1

Administrative, General & Other 23,905,360 23,932,705 20,321,848 22,151,961 2

Depreciation and Amortization Expense 34,329,423 36,650,552 32,853,000 36,009,677 1

Interest Expense, Net 20,602,073 21,105,739 19,611,901 21,362,002 1

Total Cost of Electric Service 201,896,048$ 206,427,951$ 174,489,057$ 192,607,538$

Patronage Capital & Operating Margins 5,122,247$ 4,820,704$ 2,865,136$ 5,182,684$

Non-Operating Margins - Interest 298,238 298,238 355,727 380,579$ 1

Allowance for Funds Used During Construction 176,849 176,849 171,356 186,093$ 1

Non-Operating Margins - Other - - (150,478) (150,478)$ 1

Other Capital Credits and Patronage Dividends 235,915 235,915 - 235,915$ 1

Patronage Capital or Margins 5,833,249$ 5,531,706$ 3,241,741$ 5,834,793$

MFI/I 1.28 1.26 1.16 1.27

TIER 1.28 1.26 1.17 1.281 Forecast based on 11 months actual and 1 months forecast

2 Forecast has been adjusted to reflect known and measurable changes



YEAR-END FORECAST

81

Alaska Energy SmartRegular Board of Directors’ MeetingJanuary 26, 2017

82

Alaska Energy Smart Education Video

83

Green Pricing ProgramIntroduction and Overview

January 2017

84

Agenda

• Green Pricing Program (GPP)• Renewable Energy Certificates (RECs) • Chugach GPP Concept • Next Steps

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What is a Green Pricing Program?A utility‐sponsored program allowing customers/members an opportunity to support renewable energy initiatives, on a voluntary basis, through a premium paid on their monthly bill.

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GPP Background• 1993 First GPP• 850 utility programs nation‐wide as of 2013• 12 states require utilities to offer a Green Pricing Program• 2.1% average level of participation for opt‐in programs

‐ Ranging from 0.03% ‐ 21%

• $0.0033 ‐ $0.05/kWh green pricing rate

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Why do people participate in GPPs?

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Community

Renewables

Recognition

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Third Party Marketers in Alaska

Renewable Energy Certificates (RECs) =Currency for Green Pricing Programs

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What is a REC?Represents the environmental attributes from one megawatt hour (MWh) of electricity produced from a renewable energy source.

REC

RECs are also known as….

• Renewable Electricity Certificates

• Tradable Renewable Certificates

• Green Tags

• Renewable Energy Credits

Claims of: • “Green”, “Clean” and “Renewable” • CO2 offsets• Fossil Fuel offsets

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What can you do with RECs?

REC

BuySell Retain RetireTransfer

• Compliance Markets: ($2 ‐ $320/REC)State Renewable Portfolio Standards

• Voluntary Markets: ($0.27 ‐ $0.38/REC)Corporate / Individual Stewardship

• Currency for Green Programs ($3 ‐$50/REC)

Applications:

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Fire Island Wind RECsSeptember 2012 – December 2015

FIW Production:150,011 MWh Electric Energy & RECs

150,011 MWh ofelectric energy

to Grid

$16,024,506 Paid by Chugach Retail

150,011 RECs Representing claims to:

• CO2 Reduction• “Green”, “Clean” and

“Renewable” Energy• Fossil fuel offsets

• Fortune 500• Universities• Utilities• Other

organizations

$91,207 (net)

Eligible 10

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GREEN UP YOUR BILL! REC

Chugach GPP Concept

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Participation Rates

Average Number of

Residential GPP Participants

PreliminaryAnnual Net Revenue

1% 650 $70,0002% 1,200 $135,0003% 2,500 $300,000

Preliminary Annual Net Revenue

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Projected Project Size Total Projected Project Cost

100 KW $300,000

Example Community Project: Solar for Schools (Concept)

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Chugach Green Pricing Program

Projected annual project and program costs $60,000

Average residential usage per month 600 kWh

GPP premium/kWh $0.015/kWh

Monthly contribution at 100% $9.00

Percent increase to total bill 8%

Needed # of members 556

Needed participation rate 0.78%

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Average Number of GPP Participants Preliminary Annual Net Revenue

650 ‐ 2,500 $70,000 ‐ $300,000

Example Community Projects: Solar/Wind/Education

Utility Example Community Project Overview Size Project Costs

Seattle City Light A 1.2kW solar system at Woodland Park Zoo helps to power the Family Farm’s Discovery Barn.

1.2 kW $6,923

Rocky MountainPower

Girl Scout Council of Wyoming wind turbine at Camp Sacagawea with on‐site education exhibit for campers.

1.8 kW $12,000

Puget Sound Energy Solar array, monitoring software and classroom curriculum at Liberty High School.

2.02 kW $26,700

Rocky Mountain Power

Casper College wind turbine at Rocky Mountain Oilfield Testing Center to provide a live lab for students and provide education.

6 kW $50,000

Chugach Electric Solar for Schools project in Anchorage (concept) 100 kW $300,000

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Indicator CommentsValues

Safety Program can be implemented safelyEthics Program is ethicalReliability Program does not affect reliabilityRates and Efficiency Program does not affect ratesEnvironmental Stewardship Renewable project, reduces carbonCommunity Engages community and local projects

Resources and Risk AnalysisCorporate Resources Heavy staff time initially, then tapers Success Profile High probability of successExit/Alternative Strategies Chugach discontinues program

Evaluation and ViabilityPolitical NeutralRegulatory Small regulatory componentGovernance Internal program onlyTechnical CIS and billing changes neededFinancial Capacity Revenue neutral Risk Profile Low cost, increases competitiveness

Indicator Total12 3 0

Strategic Initiatives Process Check List

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2017 2018Q1 Q2 Q3 Q4 Q1

• Collect market data• Consult with 3 Degrees

• Develop accounting procedures

• CIS System testing

• Identify community partners• Select GPP model • Filing submitted to RCA

• GPP Launch

Next Steps

• Draft marketing materials and identify potential beneficiary projects

Q2

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Questions?

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AGENDA ITEM SUMMARY

January 26, 2017

ACTION REQUIRED AGENDA ITEM NO. X.C Information Only X Motion _X Resolution Executive Session Other

TOPIC

Project Authorization for Debarr Substation Rebuild

DISCUSSION This project will upgrade Debarr Substation. Included in the upgrade will be replacement of the 34.5 kV circuit switchers, 12.5 kV switchgear, 14 MVA transformer, and associated foundations, control, and power cables. Most of the existing facilities are between 30 and 50 years old and have reached the end of their useful life. The new facilities will include 12.5 kV and 34.5 kV switchgear, a 14 MVA transformer, foundations with oil containment for the transformer, and control and power cables. The new facilities will extend the life of the substation and provide a high level of reliability to east Anchorage. The total project cost is estimated at $6,000,000. The project is in the 2017 budget and the 2017 to 2021 Capital Improvements Plan (CIP). MOTION

Move that the Board of Directors authorize the Chief Executive Officer to approve project expenditures for the Debarr Substation Rebuild at an estimated total cost of $6,000,000 with an estimated completion date of December 2018.

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CERTIFICATION

I, Bettina Chastain, do hereby certify that I am the Secretary of Chugach Electric Association, Inc., an electric non-profit cooperative membership corporation organized and existing under the laws of the State of Alaska: that the foregoing is a complete and correct copy of a resolution adopted at a meeting of the Board of Directors of this corporation, duly and properly called and held on the 26th day of January, 2017; that a quorum was present at the meeting; that the resolution is set forth in the minutes of the meeting and has not been rescinded or modified. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of this corporation the 26th day of January, 2017. Secretary

RESOLUTION

Debarr Substation Rebuild Project Authorization WHEREAS, Chugach Electric Association, Inc. (Chugach) has identified the need for a station upgrade at Debarr Substation to increase reliability and extend the life of the substation; WHEREAS, existing facilities in Debarr Substation are thirty to fifty years old, have reached the end of their useful life and require replacement; WHEREAS, Chugach has included the Debarr Substation Rebuild in the 2017-2021 Capital Improvement Plan (CIP); WHEREAS, Chugach has included funding in its 2017 Annual Operating budget for the Debarr Substation Rebuild; WHEREAS, Chugach has estimated the Debarr Substation Rebuild at $6,000,000. NOW, THEREFORE, BE IT RESOLVED, that the Chugach Board of Directors authorize the Chief Executive Officer to approve the project expenditures for the Debarr Substation Rebuild at an estimated total cost of $6,000,000 with an estimated completion date of December 2018.

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Chugach Project Authorization

Page 1 1/24/2017

Project Name: Debarr Substation Rebuild Project Category: Safety Incremental Load Growth New Service R&R T&D

Agency Mandated Reliability X Operating Efficiency R&R Generation

Accountabilities & Approvals Signatures Date Board of Directors: Bettina Chastain, Secretary ________________ ___/___/___

CEO: Lee Thibert, CEO ________________ ___/___/___

Executive Sponsor: Brian Hickey, Sr. VP, System Operations ________________ ___/___/___

Project Manager: Jon Sinclair, Sr. Mgr., Transmission ________________ ___/___/___

Project Engineer: Peyton Reid, Site Engineer ________________ ___/___/___

Purpose and Need:

This project will upgrade the existing facilities at Debarr Substation. The scope will include replacement of the existing power transformer, 12.5kV switchgear, 34.5kV circuit switchers, and associated control and power cables. Most of the existing facilities are between 30 and 50 years old and have reached the end of their useful life and require replacement. The new facilities will extend the life of the substation and provide reliable power to east Anchorage. Project Description:

This project will replace the majority of the facilities at Debarr Substation as noted above. The new facilities will include 12.5kV and 34.5kV switchgear with new relay and control equipment. A new 14 MVA transformer will replace the existing unit. In addition, the substation will be rebuilt to accommodate two power transformers. One transformer will be installed with this project and the second can be installed when needed in the future. The new transformer foundations will meet current seismic requirements and they will include oil containment. Grounding and lighting will also be updated to current code requirements. Approval Amount: $6,000,000 Project included in 2017-2021 CIP @ $6,000,000 and 2017 Budget @ $1,500,000 Labor Contract Materials Total Forecast $1,000,000 $2,000,000 $3,000,000 $6,000,000

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AGENDA ITEM SUMMARY

January 26, 2017

ACTION REQUIRED AGENDA ITEM NO. X.D. Information Only X Motion _X Resolution Executive Session Other TOPIC Procurement for Substation Power Transformers DISCUSSION

In July of 2016, one of the 34.5/12.5 kV, 14 MVA power transformers at Debarr Substation failed and a new unit was pulled out of inventory to replace it. This purchase will replenish the transformer that was taken from inventory. Three additional 14 MVA power transformers are also included in this purchase. The remaining three units will be used as part of planned upgrades at distribution substations, such as the Debarr Substation Upgrade. Chugach publically solicited bids in October for four additional units. Bids were received in November and evaluated in December. Chugach received eleven bids and the low bid came in at $2,135,397 from OTC Services, Inc.

Funding for the procurement of these units is included in the 2017 budget.

MOTION

Move that the Board of Directors’ approve the resolution authorizing the Chief Executive Officer to approve a contract with OTC Services, Inc., for four (4) substation power transformers at an amount not to exceed $2,135,397.

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CERTIFICATION


RESOLUTION

Procurement for Substation Power Transformers

WHEREAS, Chugach Electric Association, Inc. (Chugach) has identified the need to maintain an inventory of 34.5/12.5 kV, 14 MVA transformers (Transformers); WHEREAS, Chugach has identified the need to procure Transformers for the transformer replacement project identified in the 2017-2021 CIP; WHEREAS, Chugach has publicly solicited and received bids for four (4) Transformers from eleven bidders; WHEREAS, Chugach has evaluated the bids and found OTC Services, Inc. to be the lowest, responsive and responsible bidder; WHEREAS, Chugach has included funding in its 2017 Annual Operating budget for the procurement of four (4) transformers. NOW, THEREFORE, BE IT RESOLVED, that the Chugach Board of Directors authorize the Chief Executive Officer to approve a contract with OTC Services, Inc. for four (4) substation power transformers at an amount not to exceed $2,135,397.

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AGENDA ITEM SUMMARY

January 26, 2017

ACTION REQUIRED AGENDA ITEM NO. X.E. Information Only X Motion _X Resolution Executive Session Other TOPIC Contract Award 115kV Rebuild of Silvertip to Hope Substation DISCUSSION

This project will rebuild approximately four miles of the 115 kV transmission line between Anchorage and the Kenai Peninsula. The line is over 50 years old and has reached the end of its useful life. The section that will be rebuilt is located between Silvertip Creek and Hope Substation. Based on field inspections, of the remaining sections, this section has seen the most significant deterioration. The four miles of line to be rebuilt will be insulated to 230 kV standards. The project includes remedial clearing of the existing ROW, retiring the existing structures and wire, and installation of larger structures and wire. The new structures are designed for heavy snow and wind loading. Avalanche mitigation was also incorporated into the design. These design features were included to increase reliability and reduce maintenance on the line.

Funding for the project was included in the 2017 Annual Operating Budget and in November of 2016 the board provided project authorization in the amount of $4.8 million. Chugach received four bids and the low bid came in at $2,165,437.23 from Northern Powerline Constructors, Inc. MOTION Move that the Board of Directors approve the resolution authorizing the Chief Executive Officer to approve a contract with Northern Powerline Constructors, Inc., for the rebuild of four miles of 115 kV transmission line between Silvertip Creek and Hope Substation at the amount not to exceed $2,165,437.23.

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CERTIFICATION I, Bettina Chastain, do hereby certify that I am the Secretary of Chugach Electric Association, Inc., an electric non-profit cooperative membership corporation organized and existing under the laws of the State of Alaska: that the foregoing is a complete and correct copy of a resolution adopted at a meeting of the Board of Directors of this corporation, duly and properly called and held on the 26th day of January, 2017; that a quorum was present at the meeting; that the resolution is set forth in the minutes of the meeting and has not been rescinded or modified. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of this corporation the 26th day of January, 2017. Secretary

RESOLUTION

Contract Award for 115kV Rebuild of Silvertip to Hope Substation

WHEREAS, Chugach Electric Association, Inc. (Chugach) has identified the need to rebuild four miles of 115 kV transmission line between Silvertip Creek and Hope Substation to increase reliability; WHEREAS, Chugach will upgrade four miles of transmission line between Anchorage and the Kenai Peninsula to 230 kV insulation as recommended in the states RIRP; WHEREAS, Chugach has included this project in the 2017-2021 Capital Improvement Plan (CIP); WHEREAS, Chugach has included this project in the 2017 Annual Operating Budget; WHEREAS, Chugach has publicly solicited and received bids for the rebuild of four miles of 115 kV transmission line from four bidders, and WHEREAS, Chugach has evaluated the bids and found Northern Powerline Constructors, Inc., to be the lowest, responsive and responsible bidder. NOW, THEREFORE, BE IT RESOLVED, that the Chugach Board authorize the Chief Executive Officer to approve a contract with Northern Powerline Constructors, Inc. for the rebuild of four miles of 115 kV transmission line between Silvertip Creek and Hope Substation at an amount not to exceed $2,165,437.23.

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AGENDA ITEM SUMMARY

January 26, 2017

ACTION REQUIRED AGENDA ITEM NO. XII.F. Information Only X Motion Resolution Executive Session Other TOPIC Financial Matters DISCUSSION As discussed in Executive Session. MOTION Move that the Board of Directors approve the Financial Matters essentially as discussed in executive session.

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RESOLUTION

Conversion of Commercial Paper to Long-Term Debt

WHEREAS, Chugach Electric Association, Inc., an Alaska electric cooperative (the “Company”), has determined that it is in the best interests of the Company to convert commercial paper to long-term debt; WHEREAS, the Company issued commercial paper to fund its capital improvement program; WHEREAS, the Company intends that proceeds from new long-term debt will repay commercial paper funds drawn not to exceed $40,000,000; WHEREAS, the Company intends to issue the new long-term debt, pursuant to a supplemental indenture (the “Supplemental Indenture”) to its Second Amended and Restated Indenture of Trust dated January 20, 2011 (the “Indenture”) to be entered into by the Company and U.S. Bank Trust National Association, a national banking association, as trustee under the Indenture, by the creation of a new series of obligations thereunder (the “Bonds”) in an aggregate principal amount of up to $40,000,000, with a maturity date of no more than 20 years from the date of issuance thereof and on such other terms and conditions as may be agreed upon by the Chief Executive Officer of the Company, and to issue the Bonds pursuant to an agreement (the “Purchase Agreement”) with one or more lenders and/or institutional investors; WHEREAS, the Company has the power and authority to enter into, deliver and perform its obligations under the Supplemental Indenture, the Purchase Agreement, the Bonds, and any and all other documents, instruments and agreements necessary or desirable to be entered into in connection therewith; and WHEREAS, it is in the best interests of the Company to enter into, deliver and perform its obligations under the Supplement, the Purchase Agreement and the Bonds and any and all other documents, instruments and agreements necessary or desirable to be entered into in connection therewith; NOW THEREFORE, BE IT RESOLVED, that the Board of Directors authorizes the Chief Executive Officer to finalize the terms and conditions and enter into an agreement for long-term debt financing associated with the conversion of commercial paper substantially the same as discussed in executive session on January 26, 2017, Board of Directors meeting;

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The Chief Executive Officer, Chief Financial Officer and Controller of the Company (each a “Particular Officer”) be, and each of them acting alone is, hereby authorized on behalf of the Company to execute and deliver the Supplemental Indenture, the Purchase Agreement, the Bonds, and any and all other documents, instruments and agreements necessary or desirable in connection therewith on the terms negotiated by the Chief Executive Officer, and each Particular Officer and each other officer of the Company (collectively, the “Authorized Officers”) be and each of them acting alone is hereby authorized on behalf of the Company to execute and deliver such other documents, including but not limited to, in the case of the Particular Officers, those specifically described above, in each case in the name and on behalf of the Company, on such terms and conditions and in such form deemed necessary or desirable and approved by such Authorized Officer, and with such changes and modifications thereto as such Authorized Officer may in its discretion approve, which approval shall be conclusively evidenced by the execution of such documents, instruments and agreement; Each Authorized Officer be, and each of them acting alone is, hereby authorized on behalf of the Company to execute and deliver such forms of certificates and other documents as may be necessary or desirable in connection with the transactions contemplated by the Supplemental Indenture, the Purchase Agreement, the Bonds, and any and all other documents, instruments and agreements necessary or desirable in connection therewith, or any opinion of counsel to be provided in connection therewith. Each Authorized Officer be, and each of them acting alone is, hereby authorized and directed to take all such further action, to execute and deliver such further agreements, instruments and documents in writing and to do all such other acts and things as in the Authorized Officer’s opinion may be necessary or desirable in the name and on behalf of the Company to give effect to the foregoing resolutions, which opinion shall be conclusively evidenced by the taking of such further actions, the execution and delivery of such further documents, instruments and agreements and the doing of such other acts and things.

CERTIFICATION


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AGENDA ITEM SUMMARY

January 26, 2017

ACTION REQUIRED AGENDA ITEM NO. XII.G. Information Only X Motion Resolution Executive Session Other TOPIC Gas Sale and Purchase Agreement, Consent to Collateral Assignment and Gas Transaction Confirmations for 2017 DISCUSSION As discussed in Executive Session at the January 26, 2017 Board Meeting. MOTION Move that the Board of Directors authorize the Chief Executive Officer to negotiate and finalize the terms and conditions of a Gas Sales and Purchase Agreement, Consent to Collateral Assignment and Gas Transaction Confirmations for 2017 essentially the same as discussed in Executive Session.

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REGULAR BOARD OF DIRECTORS’ COMMITTEE MEETING

AGENDA ITEM SUMMARY

January 26, 2017

ACTION REQUIRED AGENDA ITEM NO. XII.H. Information Only X Motion X Resolution Executive Session Other TOPIC

Unified System Operator (USO) Business Plan Development

DISCUSSION As discussed in the executive session at the January 25, 2017, Operations Committee meeting. MOTION Move that the Chugach Board of Directors authorize the Chief Executive Officer (CEO) to enter a non-binding MOU and associated confidentiality agreements with ATC and other Railbelt utilities to further the work and collaboratively define the business and organizational structure of a USO/Transco that conforms to our guiding principles. The CEO will inform the Board of any definitive agreements or significant changes. The CEO will report to the Board not later than July 31, 2017 on the status of this effort. And, subsequently, will submit to the Board, for the Board’s approval, any documents or proposed regulatory filings related to the establishment of the USO/Transco.

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RESOLUTION

Unified System Operator (USO) and Transmission-only Utility (Transco) Business Plan Development

WHEREAS, the Chugach Board of Directors supports establishment of an inclusive Railbelt stakeholder-governed entity, or governing board, tasked with the responsibility to plan, condition and coordinate necessary transmission additions and upgrades, and to ensure reliability, non-discriminatory open access, and regional economic dispatch; WHEREAS, Chugach has a large investment in transmission facilities and further investment is needed to upgrade Railbelt transmission infrastructure; and WHEREAS, Chugach supports the establishment of an owner-governed transmission-only utility with responsibility for financing, constructing, operating and maintaining the Railbelt transmission Grid; and WHEREAS, the Chugach Board of Directors desires to be proactive and take a leadership role in developing a Railbelt model that protects Chugach’s investment in transmission and prudently plans for transmission expansion; and WHEREAS, a Railbelt transmission model that would benefit Chugach’s members, the other Railbelt utilities, and other stakeholders would include these attributes:

Non-discriminatory open access.

Maximizing the use of all assets from all transmission providers for joint use with full cost recovery for all providers.

A universal transmission rate based on system load that will encourage the economic transfer of generation across the network.

Regional planning of all future transmission infrastructure investments.

A regulatory compact between the Regulatory Commission of Alaska (RCA), the transmission operator and utilities to enable full cost recovery of transmission investments as long as projects are incorporated in the regional plan.

NOW, THEREFORE, BE IT RESOLVED, that the Chugach Board of Directors authorize the Chief Executive Officer (CEO) to enter a non-binding MOU and associated confidentiality agreements with ATC and other Railbelt utilities to further the work and collaboratively define the business and organizational structure of a USO/Transco that conforms to our guiding principles. The CEO will inform the Board of any definitive agreements or significant changes. The CEO will report to the Board not later than July 31, 2017 on the status of this effort. And, subsequently, will submit to the Board, for the Board’s approval, any documents or proposed regulatory filings

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CERTIFICATION


related to the establishment of the USO/Transco. Guiding Principles In the end, our objective must be to maintain reliability and lower costs to each consumer. Lowering the overall costs to end-consumers, and improving the reliability and resilience of the electric system will sustain and promote economic growth. The following guiding principles have been developed as touchstone for the development and substance of a restructured Railbelt business model.

The governance of Railbelt policy making must be inclusive of, and reflect, all relevant Railbelt stakeholder input.

The bylaws and financial structure of the organization must be structured such that the organization delivers its mission at the lowest practical cost and highest value to the end-use consumer via: An optimal debt to equity structure A reasonable return on equity Functionally appropriate incremental administration costs

The Transco formation must ensure open access and equitable compensation to all transmission owners for usage of the transmission system.

The transmission cost recovery tariff (or mechanism) must not distort economic dispatch decisions and should provide a transition to equitable cost sharing for existing assets.

The policy making governance body of the restructured Railbelt must have authority to monitor and assess the effectiveness of economic dispatch in the Railbelt.

The restructured business model must maximize regional benefit and minimize the incremental costs of restructuring by, as much as practical, using long term service agreements with existing utilities and granting a preference to locally domiciled entities to accomplish its functions.

o Further, the new entities (USO and Transco) must assure the use of existing Railbelt human and technical resources e.g. Use existing control centers as the – USO/Transco control center. Railbelt Project Management and Engineering Railbelt Telecom SCADA and System Protection Railbelt Accounting Finance and HR

For both the USO and the TRANSCO, a minimum of four of the six Railbelt Utilities participating plus 60% of Railbelt load must participate in the initial CPCN filing.

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chugach electric association, inc. … electric association, inc. anchorage, alaska regular board of...

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