HomeMy WebLinkAboutBlack Bear Lake Hydro 1993Memorandum
To: Dennis McCrohan-AIDA
From: Bob Grimm-Apat fa
Subject: Tax-exempt financing under Section 142 (f)
Date: 10-6-93
The spolignnt ries to build a hydroelectric project FERC Project No. 10440-000. The estimated cost_as shown in the Financial Feasibility Report prepared by R.W. Beck is $10.7 million in 1990 dollars. It is expected that construction will begin in the pprng of 1994 and the project will be producing power by the Fall of 1995 The applicant wishes to determine the feasibility of issuing tax- exempt bonds through the Alaska Industrial Development and Export Authority.
Project Status:
Licensing, Permits and Land Rights:
The issuance of the FERC license should (i.e., prior to 12-31-93). All state and federal permits pertaining to the projects have been approved and will go into effect when the FERC license is issued. e applicant has secured from the underlying property owner __ (Sealaska) a lease which allows the applicant to operate the facility on Sealaska property for a term of 50 years. A similar lease is _ being finalized with Klawock Heenya for a 2.7 mile portion of right of way that is needed for the transmission line. The transmission route will follow the State Highway between Klawock and Big Salt and the applicant has filed an application with Department of Transportation to coordinate the location of the transmission facilities. However, this permit application remains outstanding and the permit has not yet been issued.
Engineering and Design:
Several qualified engineering firms have made proposals to the applicant to provide outside engineering services. Once the FERC license is issued selection of an outside engineering firm will be made by the applicant.
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Hydroelectric Development Plan:
Attached is the proposed organization for AP&T hydroelectric development. Names or methods on the chart illustrate our present plan of executing, delegating and completing the work.
The organizational structure (attached) begins with the Board of Directors and descends respectively through the Hydro Review Committee, President, Director of Hydroelectric Development, and Project Manager of the Black Bear Lake Project. At the project level, there are four general areas of responsibility x Sroye Design, | Construction and Operation). These general areas are further divided into additional general headings by jurisdiction or function.
John Klontz is the Black Bear Lake Project Mansger responsible for overall coordination, budgeting and scheduling. John also will be ) responsible for all licensing and permitting throughout the project. (This includes land status.) Once the project is on-line, John also will do the on-going regulatory compliance and reporting.
Vern Neitzer has been assigned responsibility for the engineering and design of the project. Vern will be assisted by a civil vod. Egg firm, local contractors and AP&T personnel including Bob Berreth, P.E.
The preliminary design plan is to use a civil engineering firm to engineer and design the power plant building (foundation) and the penstock (intake to turbine). Bob Berreth will assist with the engineering and design of the turbines, generators & switchgear, station electrical, transmission, substations, SCADA system and communications. We | plan to use local firms for the eet and engineering of site access, site preparation, road building and road improvements.
Our preliminary construction plan is to use AP&T resources whenever possible. We anticipate that the roads and other similar work will be constructed using a local contractor from the area supervised by Vern. The foundations (building and substation), penstock (intake to turbine) and the building erection will hopefully be similarly contracted. We plan to install the turbine, generator & switchgear, station electrical, substation, transmission lines, SCADA system and communications utilizing AP&T personnel supervised by Bob Berreth and Vern.
The preliminary operational plan is to ses a the new generation plant into our existing electrical, operational and other systems before commissioning the plant. This task will require coordination of key AP&T personnel including Vern, Bob B., Alan See, VP_, John K. and Greg Mickelson, VP to insure successful operation. Bob B, under _ Vern's supervision, will be responsible for electrical system integration,
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operational training and commissioning. Alan and Greg will work out
any changes in operational procedures or staffing. John K. will be
responsible for integrating on-going regulatory compliance and reporting requirements into our systems and procedures.
The financing, revenue requirement and administrative issues of the praect will be handled at the corporate level by Howard Garner, Vice resident and Chief Financial Officer.
Project Schedule:
Attached is a project schedule showing the major tasks and the _ anticipated time frames and the percentage of completion pertaining to each of the tasks.
Project Overview:
Alaska Power & Telephone Company is an Investor-Owned public utility providing electric and communication services in certain areas of Alaska, under Certificates of Public Convience and Necessity issued by the Alaska Public Utilities Commission. Each of its electric system operations is isolated electrically from all other electrical systems. In all locations AP&T generates 100% of the electric power that is necessary to serve the residents in that area and does not export any power to other systems.
The hydroelectric project will constructed, owned and maintained by a new subsidiary named BBL Hydro Inc. This subsidiary will hold the FERC License and will construct, finance and operate the hydroelectric facility. It is our hope that tax-exempt financing will be available. BBL Hydro, Inc. will by virtue of a wholesale power contract (approved by the APUC), sell power to Alaska Power. Alaska Power will then re- market the power over transmission lines to its electric distribution system or to the electrical distribution system of other retail utilities oo on the Prince of Wales Island. Please review the attached “Contractual Power Flow" chart.
We expect that BBL Hydro Inc. will suppy 100% of the electrical
output of the Hydro project to Alaska Power under a "Take or Pay"
contract which will generate the cash flow needed to support the debt and interest payments of the bonds. Alaska Power will then re-market wholesale power to THREA in Klawock and supply power directly to its retail customers in the Craig and Klawock area using the transmission lines and the existing electrical distribution system.
In the future, it iy dl be feasible to construct additional transmission
lines to serve the electrical loads in Thorne Bay (either directly through
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an acquisition of the city owned electric system or through a wholesale power purchase agreement). Alaska Power already provides retail electric service using isolated diesel generators in Hollis, Hydaburg and Coffman Cove. At some point in time it may become more cost effective to construct transmission lines to supply power from the__ yer project to these isolated and other communities located on Prince of Wales Island.
The possibility of an electrical transmission system developing which links the major communities on the Island should be considered ey determination pertaining to tax-exempt financing that may be available. However, significant uncertainty exists pone to the economic likelihood and timing of the expansion of the electrical transmission facilities on the island.
Although there may eventually be the technology available to economically link the electrical transmission system on Prince of Wales island with the electrical system between Ketchikan (Swan Lake Hydro) and ae (Tyee Lake Hydro) via submarine cable. We are operating on the eee that 100% of the power generated at the Black Bear Lake Hydroelectric Project will be consumed on Prince of Wales Island.
Attachments:
. Organizational Chart for Hydro Development
. Black Bear Lake Hydro Project Schedule
. Contractual Power Flow Chart
. License Application and Supplements filed with FERC
. The Environmental Assessment prepared by FERC Staff.
. Map of Prince of Wales Island
. One-line electrical diagram and map of transmission features AN OTP WN = . Economic Profile and Forecast for Prince of Wales Island.
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Black Bear Lake Hydroelectric Project
Prince of Wales Island, Alaska
Alaska Power and Telephone Company
1992 1993 1994 1995 1996
ID_|Name Qtrt [atr2 Tatr3 [ars Qtr2 Tatrs | atr4 [atrs [atr2 [atrs Tatr4 [tri | atr2 [atr3 | atr ~ Qtret [atr2 Tatr3s Tatra | atri
1 License App. Acceptance | |
2 | FERC Review |
7 |Land rights & permits |
4 | Engineering & Design |
3 | FERC LICENSE Granted |
5 | Cost Analysis |
6 | FERC Design Review
8 | Construction
9 | Project On-line Q
10 | Project Sign-off A |
Project: Black Bear L
Date: 10/6/93
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