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HomeMy WebLinkAbout2021.11.09 REF Round 14 Standard Application Form (Final) FALSE PASS UNGA MAN HYDRORenewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 1 of 36 11/16/2021 Application Forms and Instructions This instruction page and the following grant application constitutes the Grant Application Form for Round 14 of the Renewable Energy Fund (REF). A separate application form is available for projects with a primary purpose of producing heat (see Request for Applications (RFA) Section 1.5). This is the standard form for all other projects, including projects that will produce heat and electricity. An electronic version of the RFA and both application forms is available online at: https://www.akenergyauthority.org/What-We-Do/Grants-Loans/Renewable-Energy-Fund/2021- REF-Application. What follows are some basic information and instructions for this application:  The Alaska Energy Authority (AEA) expects this application to be used as part of a two-year solicitation cycle with an opt-out provision in the second year of the cycle.  If you are applying for grants for more than one project, provide separate application forms for each project.  Multiple phases (e.g. final design, construction) for the same project may be submitted as one application.  If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for each phase of the project (see Sections 3.1 and 3.2.2).  In order to ensure that grants provide sufficient benefit to the public, AEA may limit recommendations for grants to preliminary development phases in accordance with 3 Alaska Administrative Code (ACC) 107.605(1).  If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are completed and funding for an advanced phase is warranted. Supporting documentation may include, but is not limited to, reports, conceptual or final designs, models, photos, maps, proof of site control, utility agreements, business and operation plans, power sale agreements, relevant data sets, and other materials. Please provide a list of supporting documents in Section 11 of this application and attach the documents to your application.  If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. Please provide a list of additional information; including any web links, in Section 12 of this application and attach the documents to your application. For guidance on application best practices please refer to the resource-specific Best Practices Checklists; links to the checklists can be found in the appendices list at the end of the accompanying REF Round 14 RFA.  In the Sections below, please enter responses in the spaces provided. You may add additional rows or space to the form to provide sufficient space for the information, or attach additional sheets if needed.  If you need assistance with your application, please contact AEA’s Grants Coordinator by email at grants@akenergyauthority.org or by phone at (907) 771-3081. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 2 of 36 11/16/2021 REMINDER:  AEA is subject to the Public Records Act AS 40.25, and materials submitted to AEA may be subject to disclosure requirements under the act if no statutory exemptions apply.  All applications received will be posted on the Authority web site after final recommendations are made to the legislature. Please submit resumes as separate PDFs if the applicant would like those excluded from the web posting of this application.  In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by AEA. If you want information to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential, it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 3 of 36 11/16/2021 SECTION 1 – APPLICANT INFORMATION Please specify the legal grantee that will own, operate, and maintain the project upon completion. Name (Name of utility, IPP, local government, or other government entity) CITY OF FALSE PASS Tax ID #92-0135411 Date of last financial statement audit: FY 2017 (FY18, 19, and 20 are in progress) Mailing Address: Physical Address: PO BOX 50 180 UNIMAK DRIVE FALSE PASS, AK 99583 FALSE PASS, AK 99583 Telephone: Fax: Email: 907-548-2319 907-548-2214 CITYOFFALSEPASS@AK.NET 1.1 Applicant Point of Contact / Grants Coordinator Name: Title: NICOLE HOBLET MAYOR Mailing Address: SAME AS CITY ADDRESS Telephone: Fax: Email: SAME AS ABOVE SAME AS ABOVE MAYOR@FALSEPASS.NET 1.1.1 Applicant Signatory Authority Contact Information Name: NICOLE HOBLET Title: MAYOR Mailing Address: SAME AS ABOVE Telephone: Fax: Email: SAME AS ABOVE SAME AS ABOVE SAME AS ABOVE 1.1.2 Applicant Alternate Points of Contact Name Telephone: Fax: Email: WILLIAM SHELLIKOFF JR. 907-548-2319 907-548-2214 BILLYS@FALSEPASS.NET RUTH HOBLET 907-548-2319 907-548-2214 RUTHH@FALSEPASS.NET Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 4 of 36 11/16/2021 1.2 Applicant Minimum Requirements Please check as appropriate. If applicants do not meet the minimum requirements, the application will be rejected. 1.2.1 Applicant Type ☒ An electric utility holding a certificate of public convenience and necessity under AS 42.05 CPCN #442, or ☐ An independent power producer in accordance with 3 AAC 107.695 (a) (1) CPCN #______, or ☒ A local government, or ☐ A governmental entity (which includes tribal councils and housing authorities) Additional minimum requirements ☒ 1.2.2 Attached to this application is formal approval and endorsement for the project by the applicant’s board of directors, executive management, or other governing authority. If the applicant is a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate yes by checking the box) ☒ 1.2.3 As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement (Section 3 of the RFA). (Indicate yes by checking the box) ☒ 1.2.4 If awarded the grant, we can comply with all terms and conditions of the award as identified in the Standard Grant Agreement template at https://www.akenergyauthority.org/What-We-Do/Grants-Loans/Renewable-Energy- Fund/2021-REF-Application (Any exceptions should be clearly noted and submitted with the application.) (Indicate yes by checking the box) ☒ 1.2.5 We intend to own and operate any project that may be constructed with grant funds for the benefit of the general public. If no please describe the nature of the project and who will be the primary beneficiaries. (Indicate yes by checking the box) Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 5 of 36 11/16/2021 SECTION 2 – PROJECT SUMMARY 2.1 Project Title Provide a 4 to 7 word title for your project. Type in the space below. UNGA MAN CREEK HYDROELECTRIC PROJECT 2.2 Project Location 2.2.1 Location of Project – Latitude and longitude (preferred), street address, or community name. Latitude and longitude coordinates may be obtained from Google Maps by finding you project’s location on the map and then right clicking with the mouse and selecting “What is here? The coordinates will be displayed in the Google search window above the map in a format as follows: 61.195676.-149.898663. If you would like assistance obtaining this information, please contact AEA’s Grants Coordinator by email at grants@akenergyauthority.org or by phone at (907) 771- 3081. Latitude 54.8728 NORTH Longitude 163.4157 WEST [Other description of location] UNGA MAN CREEK APPROXIMATELY ONE MILE NORTH OF TOWN NEAR LANDFILL. 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. FALSE PASS, ALASKA 2.3 Project Type Please check as appropriate. 2.3.1 Renewable Resource Type ☐ Wind ☐ Biomass or Biofuels (excluding heat-only) ☒ Hydro, Including Run of River ☐ Hydrokinetic ☐ Geothermal, Excluding Heat Pumps ☐ Transmission of Renewable Energy ☐ Solar Photovoltaic ☐ Storage of Renewable ☐ Other (Describe) ☐ Small Natural Gas 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Pre-Construction Construction ☐ Reconnaissance ☒ Final Design and Permitting ☐ Feasibility and Conceptual Design ☐ Construction Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 6 of 36 11/16/2021 2.4 Project Description Provide a brief, one-paragraph description of the proposed project. Unga Man Creek Hydro Project is a proposed 180 kW run-of-river project on Unga Man Creek north of False Pass. The recommended project configuration would include 4,400 feet of 24-inch HDPE penstock to convey 18 cubic feet per second of water from a diversion structure upstream of the east fork confluence at elevation 260 feet down to a powerhouse at elevation 70 feet, near the existing road bridge. The project would provide 83% of the utility’s electricity at generation or ~588,000 kWh annually based on a typical year. 2.5 Scope of Work Provide a short narrative for the scope of work detailing the tasks to be performed under this funding request. This should include work paid for by grant funds and matching funds or performed as in-kind match. Prior reconnaissance and feasibility study over the past several years has determined that the project is technically, economically, and environmentally feasible. The proposed scope of work is to complete design and permitting for the project. Grant funds would be used to hire engineering and permitting consultant(s) to secure project permits and complete project designs. Matching funds would be used for local support, including continuation of the hydrology and/or fisheries studies to support the permitting process and field work to support the design process. 2.6 Previous REF Applications for the Project See Section 1.15 of the RFA for the maximum per project cumulative grant award amount Round Submitted Title of application Application #, if known Did you receive a grant? Y/N Amount of REF grant awarded ($) N/A N/A N/A N/A $0 Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 7 of 36 11/16/2021 SECTION 3 – Project Management, Development, and Operation 3.1 Schedule and Milestones Please fill out the schedule below (or attach a similar sheet) for the work covered by this funding request. Be sure to identify key tasks and decision points, including go/no go decisions, in your project along with estimated start and end dates for each of the milestones and tasks. Please clearly identify the beginning and ending of all phases (I. Reconnaissance, II. Feasibility and Conceptual Design, III. Final Design and Permitting, and IV. Construction) of your proposed project. See the RFA, Sections 2.3-2.6 for the recommended milestones for each phase. Add additional rows as needed. Task # Milestones Tasks Start Date End Date Deliverables 1 Permit Applications FERC DI 9/1/22 10/1/22 Declaration of Intention ADNR Water Rights 9/1/22 10/1/22 Water Use Permit ADNR Dam Safety 3/1/24 4/1/24 Dam Safety Jurisdiction Form Fire Marshall Plan Review 3/1/24 4/1/24 Application FAA 3/1/24 6/1/24 Permit application ADFG Habitat Permit 2/1/23 3/1/23 Permit application USACE NWP 8/1/23 10/1/23 Permit application 2 Resource Studies Hydrology study 9/1/22 10/31/23 Hydrology Report Wetland Report 9/1/22 12/1/22 Wetland Report Cultural Resources Study 6/1/23 8/1/23 Cultural Resources Survey Report Technical studies 9/1/22 9/1/23 Study reports 3 Site Control Negotiate, execute property documents 9/1/22 9/1/23 Easement/lease agreements w/ Isanotski Corporation. 4 Final Design 65% submittal 9/1/22 9/1/23 65% design submittal 95% submittal 9/1/23 3/1/24 95% design submittal 100% submittal 3/1/24 6/1/24 Final designs and specifications. 5 Final Cost Estimate Review draft, final report 6/1/24 9/1/24 Final business and operations plan 6 Final economic and financial analysis 6/1/24 9/1/24 7 Final business and operations plan 6/1/24 9/1/24 8 Permits FERC 10/1/22 1/1/23 Finding of Non-Jurisdiction ADNR Water Use Permit 10/1/22 9/1/24 Notice of application ready for adjudication, or permit ADNR Dam Safety permit 4/1/24 5/1/24 Finding of Non-Jurisdiction or permit Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 8 of 36 11/16/2021 Fire Marshall Plan Review 4/1/24 8/1/24 Review completion letter FAA 6/1/24 8/1/24 Filing / Finding letter Habitat permit 3/1/23 9/1/24 Permit letter Wetlands NWP 10/1/23 2/1/24 Permit letter 3.2 Budget 3.2.1 Funding Sources Indicate the funding sources for the phase(s) of the project applied for in this funding request. Grant funds requested in this application $321,000 Cash match to be provideda $27,000 In-kind match to be provideda $27,000 Energy efficiency match providedb $N/A Total costs for project phase(s) covered in application (sum of above) $375,000 Describe your financial commitment to the project and the source(s) of match. Indicate whether these matching funds are secured or pending future approvals. Describe the impact, if any, that the timing of additional funds would have on the ability to proceed with the grant. Proposed cash matching funds are existing City funds. Please see council resolution included with application. a Attach documentation for proof (see Section 1.18 of the Request for Applications) b See Section 8.2 of this application and Section 1.18 of the RFA for requirements for Energy Efficiency Match. 3.2.2 Cost Overruns Describe the plan to cover potential cost increases or shortfalls in funding. False Pass has self-funded this project through prior stages of investigation, and is prepared to continue to do so to cover potential cost increases or funding shortfalls through the currently proposed phases of development. 3.2.3 Total Project Costs Indicate the anticipated total cost by phase of the project (including all funding sources). Use actual costs for completed phases. Indicate if the costs were actual or estimated. Reconnaissance [Actual] $20,000 Feasibility and Conceptual Design (to date) [Actual] $67,720 Final Design and Permitting [Proposed] $375,000 Construction [Estimated] $4,705,000 Total Project Costs (sum of above) Estimated $5,167,720 Metering/Tracking Equipment [not included in project cost] Estimated $0 3.2.4 Funding Subsequent Phases If subsequent phases are required beyond the phases being applied for in this application, describe the anticipated sources of funding and the likelihood of receipt of those funds.  State and/or federal grants  Loans, bonds, or other financing options Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 9 of 36 11/16/2021  Additional incentives (i.e. tax credits)  Additional revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) The City has not secured funding for subsequent phases of the project. The City intends to pursue all available funding opportunities include state, federal or private grants, debt instruments or other options to provide the best value to the community and ratepayers. .2.3 Budget Forms Applications MUST include a separate worksheet for each project phase that was identified in Section 2.3.2 of this application — I. Reconnaissance, II. Feasibility and Conceptual Design, III. Final Design and Permitting, and IV. Construction. Please use the tables provided below to detail your proposed project’s total budget. Be sure to use one table for each phase of your project, and delete any unnecessary tables. The milestones and tasks should match those listed in 3.1 above. If you have any question regarding how to prepare these tables or if you need assistance preparing the application please feel free to contact AEA’s Grants Coordinator by email at grants@akenergyauthority.org or by phone at (907) 771-3081. Phase 3 —Final Design and Permitting Milestone or Task Anticipated Completion Date RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In- kind/Federal Grants/Other State Grants/Other TOTALS Permit Applications 6/1/24 $15,000 $0 $15,000 Resource Studies 10/31/23 $101,000 $49,000 Cash/in-kind $150,000 Site Control 9/1/23 $25,000 $5,000 Cash/in-kind $30,000 Final Design 6/1/24 $120,000 $0 $120,000 Cost Estimate 9/1/24 $5,000 $0 $5,000 Final Economic and Energy Analysis 9/1/24 $5,000 $0 $5,000 Business and Operating Plan 9/1/24 $5,000 $0 $5,000 Permits 9/1/24 $45,000 $0 $45,000 TOTALS $321,000 $54,000 $375,000 Budget Categories: Direct Labor & Benefits $ $54,000 Cash/in-kind $54,000 Travel & Per Diem $ $ $ Equipment $ $ $ Materials & Supplies $$ $ Contractual Services $$ $ Construction Services $321,000 $ $321,000 Other $ $ $ TOTALS $321,000 $54,000 $375,000 Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 10 of 36 11/16/2021 3.2.4 Cost Justification Indicate the source(s) of the cost estimates used for the project budget, including costs for future phases not included in this application. Design and permitting phase budget has been developed by Polarconsult Alaska, Inc. based on the type of permits required, expected level of complexity and additional studies required to obtain permits, and design of the project. Polarconsult personnel have been involved in the project for several years, including field reconnaissance of the project site in 2016 and 2017. Construction cost estimates have also been prepared by Polarconsult Alaska, Inc. based on conceptual designs for the proposed project and field reconnaissance of the project site. Construction cost estimates include 25% contingency to reflect current level of project development. 3.3 Project Communications 3.3.1 Project Progress Reporting Describe how you plan to monitor the progress of the project and keep AEA informed of the status. Who will be responsible for tracking the progress? What tools and methods will be used to track progress? The City will rely on our mayor – Nikki Hoblet – and engineering consultant Joel Groves, P.E. at Polarconsult Alaska, Inc. – for progress reporting. Regular reports will be made to AEA on - at a minimum - a quarterly basis during the proposed project phases under this application. Mr. Groves will prepare draft progress reports for review and submittal by Ms. Hoblet. More frequent reporting may be appropriate during some phases of the project to make timely report of notable events. Reports will include status and tracking information for work product, schedule, and budget, allowing recipients to easily stay abreast of current project progress. 3.3.2 Financial Reporting Describe the controls that will be utilized to ensure that only costs that are reasonable, ordinary and necessary will be allocated to this project. Also discuss the controls in place that will ensure that no expenses for overhead, or any other unallowable costs will be requested for reimbursement from the REF Grant Program. Grant-reimbursable costs will be routed through Polarconsult Alaska, Inc. or equally qualified consultant for the proposed project phases under this application. Polarconsult is experienced in managing work and invoicing under REF program grants and is familiar with the program’s grant requirements and allowable costs. Our project manager, bookkeeper, and as needed accountant would all be available for review and approval of all invoices and documentation for in-kind services before payment and submittal to AEA for reimbursement to verify they conform to grant requirements. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 11 of 36 11/16/2021 SECTION 4 – QUALIFICATIONS AND EXPERIENCE 4.1 Project Team Include resumes for known key personnel and contractors, including all functions below, as an attachment to your application. In the electronic submittal, please submit resumes as separate PDFs if the applicant would like those excluded from the web posting of this application. 4.1.1 Project Manager Indicate who will be managing the project for the Grantee and include contact information. If the applicant does not have a project manager indicate how you intend to solicit project management support. If the applicant expects project management assistance from AEA or another government entity, state that in this section. Mayor Nikki Hoblet will be our project manager. Ms. Hoblet’s contact information is provided at Section 1.1 of this application. No management assistance is needed from AEA. 4.1.2 Project Accountant Indicate who will be performing the accounting of this project for the grantee. If the applicant does not have a project accountant indicate how you intend to solicit financial accounting support. The City uses Jason Lee CPA to assist with our accounting needs. Our auditor is Brian Donahue at Beltrami & Associates. 4.1.3 Expertise and Resources Describe the project team including the applicant, partners, and contractors. For each member of the project team, indicate:  the milestones/tasks in 3.1 they will be responsible for;  the knowledge, skills, and experience that will be used to successfully deliver the tasks;  how time and other resource conflicts will be managed to successfully complete the task. If contractors have not been selected to complete the work, provide reviewers with sufficient detail to understand the applicant’s capacity to successfully select contractors and manage complex contracts. Ms. Hoblet will be the overall project manager responsible for tracking and managing the overall budget, scope and schedule of work performed under this grant. Ms. Hoblet has successfully managed several grant projects for the City, including prior funding for the reconnaissance and feasibility phases of this project. Mr. Groves will be the project engineer, and will lead the design and permitting efforts under this grant. 4.2 Local Workforce Describe how the project will use local labor or train a local labor workforce. During the study, permitting, and design phases, the City has successfully used local residents as employees or volunteers wherever appropriate to support subject matter experts. This has typically included activities such as field guides, survey assistants, bear guards, or troubleshooting/fixing malfunctioning stream gauge hardware to avoid the Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 12 of 36 11/16/2021 expense of mobilizing consultants to the village. We have been very successful in having our VPSO lead the hydrology data collection efforts including stream flow measurements and data downloads. Cpl. Stewart’s efforts in particular have saved our community many $1000s by not having to fly consultants in periodically to perform brief field work. Use of local labor during construction will depend on how the project is managed and the availability and willingness of qualified individuals to work on the project. Once the project moves into construction, the City may send one or more people to AVTEC or similar hydro operator training courses before project commissioning so they are familiar with the particulars of operating and maintaining small hydro systems. The community intends to identify plant operators prior to construction and involve them with construction where appropriate so they will be familiar with how the project was built, as we believe this will benefit the utility in the long-term with project familiarity and ability to successfully and efficiently perform operations, maintenance, repair and replacement (OMR&R) activities with local labor, equipment, and materials. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 13 of 36 11/16/2021 SECTION 5 – TECHNICAL FEASIBILITY 5.1 Resource Availability 5.1.1 Assessment of Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available, including average resource availability on an annual basis. For pre-construction applications, describe the resource to the extent known. For design and permitting or construction projects, please provide feasibility documents, design documents, and permitting documents (if applicable) as attachments to this application (See Section 11). Likelihood of the resource being available over the life of the project. See the “Resource Assessment” section of the appropriate Best Practice Checklist for additional guidance. The resource capacity factor for the proposed run-of-river hydro project is approximately 75%. This is the amount of water, up to the 18 cfs project design flow, that is actually available over the course of an average year. This capacity factor is based on 3.5 years of site-specific stream gaging data and an extended hydrology record of 31 years at the USGS station on Russell Creek in Cold Bay. The correlation coefficient between Unga Man Creek and Russell Creek is R2 = 0.68. The hydrology study indicates that flow in Unga Man Creek based on both the site specific and extended records is variable from year-to-year, and can experience periods of low flow year-round. In an average year, the hydro project will supply 83% of total utility energy requirements at generation based on annual load of 710,000 kWh, which is the five year average. Project performance in any given year varies between meeting 63% to 99% of total utility energy requirements. 5.1.2 Alternatives to Proposed Energy Resource Describe the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. Over the years we have considered wind, hydrokinetic, and hydropower resources for False Pass. Our local wind resource was found to be unfavorable. Hydrokinetic technology is still not commercially readily available or economically viable for such a remote location. Several other hydropower options and layouts were considered in the reconnaissance and feasibility studies, and the proposed layout is the most economic and beneficial layout considered. Please see prior studies referenced in Section 11 of this application and included with the electronic copy of the application submittal. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 14 of 36 11/16/2021 5.1.3 Permits Provide the following information as it may relate to permitting and how you intend to address outstanding permit issues. See the “Environmental and Permitting Risks” section of the appropriate Best Practice Checklist for additional guidance.  List of applicable permits  Anticipated permitting timeline  Identify and describe potential barriers including potential permit timing issues, public opposition that may result in difficulty obtaining permits, and other permitting barriers The following permits will be required for the project: - Finding of non-jurisdiction from the Federal Energy Regulatory Commission. Preliminary analysis supports this outcome based on prior FERC actions for similarly situated projects. Typical timeframe is 3 to 6 months, but have taken up to two years for a ruling. - Fish habitat permit from ADFG. Timeframe will depend on Habitat Division review and any additional studies or review comments agency staff may have. Permit may not be issued until final designs are available for agency review. - Water Use Permit / Water Rights from ADNR. ADNR typically does not issue water use permit until the project needs it (pre-construction) due to chronic backlog. ADNR DMLW will issue “ready for adjudication” letter when the application is considered complete. - Dam Safety Review / Permit from ADNR. Review time depends on staff workload and recommended classification of the dam/diversion structure. This structure is expected to be non-jurisdictional. Comparable reviews have typically been completed in a few days. - Fire Marshall’s Office Life Safety Plan Review for Powerhouse. Review duration is seasonally variable and can take 2 to 4 months during the spring pre-construction season ‘rush’. - Wetlands / Waters of U.S. Permit from U.S. Army Corps of Engineers. Project expected to qualify for Nationwide Permit, typically 3 to 6 month timeframe depending on nature of inter- agency review comments. - FAA project notice. Notice to FAA is required 45 days prior to construction. Project is within runway jurisdictional area for False Pass airport but not a hazard to aviation. 5.2 Project Site Describe the availability of the site and its suitability for the proposed energy system. Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. See the “Site control” section of the appropriate Best Practice Checklist for additional guidance. The project site is entirely located on lands controlled by the Isanotski Corporation (IC). The IC is aware of this project, but the City has not initiated formal discussions on obtaining site control for this project. 5.3 Project Technical & Environmental Risk 5.3.1 Technical Risk Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 15 of 36 11/16/2021 Describe potential technical risks and how you would address them.  Which tasks are expected to be most challenging?  How will the project team reduce the risk of these tasks?  What internal controls will be put in place to limit and deal with technical risks? See the “Common Planning Risks” section of the appropriate Best Practice Checklist for additional guidance. Hydropower is a proven technology with limited innate technical risk. As with all complex systems however, attention to detail is key to success. The major technical risks facing the project are: 1. Geotechnical risk. Subsurface geotechnical exploration has not been conducted, so there is increased risk of identifying significant geotechnical issues that could impact design. The project’s geotechnical setting appears to be well understood however, and is alluvium. Bedrock is unlikely to be present at useful depth for the intake or powerhouse structures, and local bedrock exposures indicate a weak formation not conducive to rock bolting or pinning. Conservative design for structures founded in alluvial materials is a prudent design approach given the setting. 2. Flood risk. Unga Man Creek is subject to large flood flows. High water events during construction - in particular during construction of the diversion structure - could result in loss of partially built structures, lost time, or damage to equipment or material. Clear communication of these risks to the contractor and development of contingency plans and accelerated schedules for high-risk phases of construction will help to mitigate this risk. 3. Creek meander risk. Unga Man Creek is known to actively meander. This is also evident from review of former meander traces across the Unga Man valley floor. The project layout and design should avoid active meander areas where practical and armor improvements to withstand future erosion forces where structures must be in the flood plain. 4. Plant integration risk. Integrating the hydro plant to automatically parallel with the diesel plant is entirely proven technology, but successful execution requires proper as-built (or upgrade) of the existing switchgear and controls, proper design of the interconnection, proper installation of the controls and switchgear, proper commissioning, and proper operation and maintenance. This can be difficult to achieve on a remote project. Each of these activities should be carefully scoped and budgeted to help ensure automated paralleling of the projects is realized. 5. Logistic risk. Shipping to False Pass is slow, expensive, or both. Any equipment or material omitted from the main job mobilization will incur additional costs for shipping and/or schedule delays. Careful attention to material lists, verification of seemingly simple items such as pipe bolt-up kits, and mobilization of appropriate reserve / contingency materials and equipment will all help avoid surprise costs / delays. 5.3.2 Environmental Risk Explain whether the following environmental and land use issues apply, and if so which project team members will be involved and how the issues will be addressed. See the “Environmental and Permitting Risks” section of the appropriate Best Practice Checklist for additional guidance.  Threatened or endangered species  Habitat issues Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 16 of 36 11/16/2021  Wetlands and other protected areas  Archaeological and historical resources  Land development constraints  Telecommunications interference  Aviation considerations  Visual, aesthetics impacts  Identify and describe other potential barriers Feasibility level analysis has not identified any unique permitting issues or concerns. Already completed fisheries and hydrology studies have characterized fisheries at Unga Man. Unga Man Creek supports a significant pink salmon run. The project is configured to provide in-stream flow from the east fork to maintain a marginal reach of pink habitat, and the project returns all water to the creek upstream of the prime pink habitat in the ½ mile above tidewater to avoid impacts to that reach. Archeological surveys have not been conducted. Most of the project layout is adaptable to avoid specific sites if they are identified. Wetlands survey in 2017 identified limited wetlands in the project area that can be avoided. No threatened or endangered species critical habitats are known to exist in the project area. The Unga Man valley is already used for the community landfill and industrial fish processing developments. The addition of a hydro project is not expected to be an aesthetic concern. The project is compatible with existing nearby developments. No future development constraints or conflicts are known. The project in unlikely to cause telecommunication or aviation conflicts. No other environmental risks are known or identified. 5.4 Technical Feasibility of Proposed Energy System In this section you will describe and give details of the existing and proposed systems. The information for existing system will be used as the baseline the proposal is compared to and also used to make sure that proposed system can be integrated. Only complete sections applicable to your proposal. If your proposal only generates electricity, you can remove the sections for thermal (heat) generation. 5.4.1 Basic Operation of Existing Energy System Describe the basic operation of the existing energy system including: description of control system; spinning reserve needs and variability in generation (any high loads brought on quickly); and current voltage, frequency, and outage issues across system. See the “Understanding the Existing System” section of the appropriate Best Practice Checklist for additional guidance. Typical three-genset diesel powerhouse with automatic paralleling switchgear. No unusual current, voltage, frequency, or outage issues on system. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 17 of 36 11/16/2021 5.4.2.1 Existing Power Generation Units Include for each unit include: resource/fuel, make/model, design capacity (kW), minimum operational load (kW), RPM, electronic/mechanical fuel injection, make/model of genset controllers, hours on genset Unit 1: John Deere 6068TF150 Diesel, 75 kW, 1800 RPM, 480V, 3-phase. Unit 2: John Deere 6061TF001 Diesel, 125 kW, 1800 RPM, 480V, 3-phase. Unit 3: John Deere 6081AF001 Diesel, 175 kW, 1800 RPM, 480V, 3-phase. 5.4.2.2 Existing Distribution System Describe the basic elements of the distribution system. Include the capacity of the step-up transformer at the powerhouse, the distribution voltage(s) across the community, any transmission voltages, and other elements that will be affected by the proposed project. Distribution system is three phase grounded Y 7.2/12.47 kV underground cable. Existing system between the diesel powerhouse and the proposed interconnection point at the north end of the system is adequate to receive power from the proposed hydro project. 5.4.2.3 Existing Thermal Generation Units (if applicable to your project) Generation unit Resource/ Fuel type Design capacity (MMBtu/hr) Make Model Average annual efficiency Year Installed Hours N/A 5.4.2.5 Annual Electricity Production and Fuel Consumption (Existing System) Use most recent year. Replace the section (Type 1), (Type 2), and (Type 3) with generation sources 5.4.2 Existing Energy Generation Infrastructure and Production In the following tables, only fill in areas below applicable to your project. You can remove extra tables. If you have the data below in other formats, you can attach them to the application (see Section 11). Is there operational heat recovery? (Y/N) If yes estimated annual displaced heating fuel (gallons) Yes existing waste heat loop serves the city shop. Loop extension to the school has been studied but not completed. 5.4.2.4 O&M and replacement costs for existing units Power Generation Thermal Generation i. Annual O&M cost for labor $8,100 N/A ii. Annual O&M cost for non-labor $45,000 iii. Replacement schedule and cost for existing units A genset is rebuilt approximately every year. Cost varies by unit and overhaul scope but ranges from about $35k to $52k. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 18 of 36 11/16/2021 Month Generat ion (Type 1) (kWh) Generatio n (Type 2) (kWh) Generatio n (Type 3) (kWh) Fuel Consumptio n (Diesel- Gallons) Fuel Consumptio n [Other] Pea k Loa d Minimu m Load January 65,856 - - 5,269 - 138 53 February 60,899 - - 4,872 - 130 55 March 65,168 - - 5,213 - 135 54 April 59,071 - - 4,726 - 145 53 May 55,751 - - 4,460 - 120 43 June 49,022 - - 3,922 - 130 36 July 50,373 - - 4,030 - 130 32 August 54,171 - - 4,334 - 120 40 September 55,334 - - 4,427 - 122 41 October 64,229 - - 5,138 - 140 47 November 62,649 - - 5,012 - 120 52 December 67,476 - - 5,398 - 110 56 Total 710,000 - -56,800 - 145 32 5.4.2.6 Annual Heating Fuel Consumption (Existing System) Use most recent year. Include only if your project affects the recovered heat off the diesel genset or will include electric heat loads. Only include heat loads affected by the project. Month Diesel (Gallons) Electricity Propane (Gallons) Coal (Tons) Wood (Cords, green tons, dry tons) Other January 2,344 February 2,075 March 2,227 April 1,914 May 1,577 June 1,154 July 904 August 823 September 1,044 October 1,567 November 1,879 December 2,163 Total 19,668 Above estimates are for community buildings in False Pass not currently served by waste heat. Additionally the combined complexes of Peter Pan, Bering Pacific Seafoods, and Silver Bay Seafoods (main plant, bunkhouse, warehouse, etc.) provide additional opportunities for excess energy utilization that have not yet been quantified but likely significantly exceed the above values. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 19 of 36 11/16/2021 5.4.3 Future Trends Describe the anticipated energy demand in the community, or whatever will be affected by the project, over the life of the project. Explain how the forecast was developed and provide year by year forecasts. As appropriate, include expected changes to energy demand, peak load, seasonal variations, etc. that will affect the project. Future long-term energy trends are assumed to be flat (zero growth) at the most recent available 5-year average load and generation of 710,000 kWh annually. In the past 10 years, actual annual load at generation has varied from 65% to 115% of this base line. The character of annual and seasonal load is assumed to remain constant. 5.4.4 Proposed System Design Provide the following information for the proposed renewable energy system:  A description of renewable energy technology specific to project location  The total proposed capacity and a description of how the capacity was determined  Integration plan, including upgrades needed to existing system(s) to integrate renewable energy system: Include a description of the controls, storage, secondary loads, distribution upgrades that will be included in the project  Civil infrastructure that will be completed as part of the project—buildings, roads, etc.  Include what backup and/or supplemental system will be in place See the “Proposed System Design” section of the appropriate Best Practice Checklist for additional guidance. The proposed system is a conventional run-of-river hydroelectric project. It will consist of the following major features: - 4,400 feet of new access roads and trails to access the project from the village’s existing road system starting on the north side of Unga Man Creek near the landfill. - Diversion structure at RM 1.4 of Unga Man Creek to impound water and direct it into the project penstock. - Approximately 4,400 foot-long 24” penstock to convey up to 18 cfs of water from the diversion to the powerhouse. - Powerhouse above the left bank of Unga Man Creek at RM 0.5, near the existing road bridge. The project develops 190 feet of gross head to drive a single 180 kW crossflow turbine / generator set. Powerhouse will include turbine, generator, switchgear and controls, hydraulic power unit, and associated equipment. - Approximately 50 foot long tailrace to return project water to Unga Man Creek at RM 0.5. - Approximately 3,100 feet of new underground power line to interconnect to the existing electric distribution system and 9,700 feet of communication line between the hydro and diesel powerhouses. The dedicated fiber comm line would support automated parallel operation / dispatch of the two power plants based on resource and gen set availability. The hydro project will normally provide sufficient power to run the utility in “diesels-off” mode for about 75% of the time, and in an average year will provide about 83% of total energy required to meet load. The hydro generator will be governed by an electronic load bank in the hydro powerhouse to maintain system frequency. Some of the governor load (and/or excess generating capacity) can be transferred in blocks to an electric boiler in the diesel power plant to keep the diesel gensets warm and maintain heat in the existing waste heat loop serving the city shop. Additional dispatchable loads can be installed in other community buildings to utilize more of the available hydro capacity. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 20 of 36 11/16/2021 The existing diesel power plant will remain in service to provide backup generation to the hydro plant. A master controller will be installed to coordinate dispatch of hydro and diesel gen sets to meet utility load. 5.4.4.1 Proposed Power Generation Units Unit # Resource/ Fuel type Design capacity (kW) Make Model Expected capacity factor Expected life (years) Expected Availability 1 Hydropower 180 TBD Crossflow 34% electric capacity factor (AEA model calculation) 50 98% unit availability, 75% resource capacity factor (water availability) 5.4.4.2 Proposed Thermal Generation Units (if applicable) Generation unit Resource/ Fuel type Design capacity (MMBtu/hr) Make Model Expected Average annual efficiency Expected life N/A Dispatchable energy systems would utilize electric unit heaters, electric base boards, and/or electric boilers. Building-specific mechanical upgrades have not been developed. 5.4.5 Basic Operation of Proposed Energy System  To the best extent possible, describe how the proposed energy system will operate: When will the system operate, how will the system integrate with the existing system, how will the control systems be used, etc.  When and how will the backup system(s) be expected to be used See the “Proposed System Design” section of the appropriate Best Practice Checklist for additional guidance. The hydro project will operate year-round except for maintenance and unscheduled outages. The utility will operate in “diesels-off” mode approximately 75% of the time, with the hydro supplying all electricity to meet utility demand. The hydro will include an electronic load Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 21 of 36 11/16/2021 governor to match load and supply with reserve for demand fluctuations and maintain a stable grid frequency. Excess hydro generating capacity will be used to power an electric boiler in the diesel power plant to keep the diesel plant and engines warm and also to keep the existing waste heat loops service the community building and school in service. Additional excess hydro generating capacity can be dispatched to other community buildings on an as-available basis. A new master controller installed at the diesel powerhouse will dispatch the four (1 hydro, 3 diesel) generation assets to meet utility load in accordance with programmed economic dispatch protocol and generator operating set points. Hydro will be dispatched first when sufficient water is available for operation (as determined by head level sensor in the intake gallery), and diesels will be turned off. Water flow and turbine output will be regulated by turbine inlet vanes to meet load, which will include dispatchable loads when appropriate as described above. When utility load exceeds available hydro capacity or water availability (plus a deadband margin), a diesel gen set(s) will be activated in “isoc” mode and base loaded to achieve good fuel economy and operating point. If available, the hydro will be operated in “droop” mode and the load bank frequency controller disabled or relegated to secondary control to address hydraulic transients. System modeling indicates the hydro plant can supply 83% of annual utility load in an average year. Hydrology modeling indicates individual yearly performance can be expected to vary from to 63% to 99% of annual utility load. 5.4.3.1 Expected Capacity Factor 34% (Electric capacity factor per AEA model) 5.4.5.2 Annual Electricity Production and Fuel Consumption (Proposed System) Month Generation (Proposed Hydro System) (kWh) Generation (Diesel) (kWh) Generation (Type 3) (kWh) Fuel Consumption (Diesel- Gallons) Fuel Consu mption [Other] Secondary load (Gross excess energy available from hydro) (kWh) Stor age (kWh ) January 43,994 21,862 - 1,749 - 4,503 - February 48,161 12,738 - 1,019 - 17,518 - March 42,851 22,317 - 1,785 - 18,603 - April 58,759 312 - 25 - 47,689 - May 41,549 14,201 - 1,136 - 16,821 - June 49,022 0 - 0 - 65,792 - July 50,373 0 - 0 - 68,534 - Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 22 of 36 11/16/2021 August 54,171 0 - 0 - 63,897 - September 52,897 2,437 - 195 - 47,945 - October 64,229 0 - 0 - 51,556 - November 59,086 3,563 - 285 - 35,160 - December 26,143 41,333 - 3,307 - -1,945 - Total 591,237 118,763 - 9,501 - 436,074 - Data for year 2001 based on hydrology extended record which is an average year at 83% total load met by hydro. Utility load of average 710,000 kWh used. Gross energy column is energy available for dispatch at the hydro plant. It does not include energy routed to load bank / controller for system regulation. Available energy at buildings is lower due to system line losses of ~12%. 5.4.5.3 Annual Heating Fuel Consumption (Proposed System) Month Diesel (Gallons) Electricity (dispatchable kWh) Propane (Gallons) Coal (Tons) Wood (Cords, green tons, dry tons) Other January 1,943 14,975 February 1,176 33,549 March 1,343 32,968 April 210 63,588 May 989 21,922 June 16 42,475 July 13 33,238 August 11 30,286 September 175 32,413 October 23 57,583 November 530 50,322 December 2,138 951 Total 8,568 414,270 For this table dispatchable electricity is being measured at generation, not at point of use. Note December total dispatched energy is positive even though December available excess energy (section 5.4.5.2) is negative because hydro powerhouse station service is a draw on the system when the plant is offline. So some days in December had a negative value and others had a positive value, allowing some dispatchable energy even though the monthly total is negative. 5.4.6 Proposed System Operating and Maintenance (O&M) Costs O&M costs can be estimated in two ways for the standard application. Most proposed renewable energy projects will fall under Option 1 because the new resource will not allow for diesel generation to be turned off. Some projects may allow for diesel generation to be turned off for periods of time; these projects should choose Option 2 for estimating O&M. Option 1: Diesel generation ON For projects that do not result in shutting down diesel generation there is assumed to be no impact on the base case O&M. Please indicate the estimated annual O&M cost associated with the proposed renewable project. $N/A, see option 2. Option 2: Diesel generation OFF Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 23 of 36 11/16/2021 For projects that will result in shutting down diesel generation please estimate: 1. Annual non-fuel savings of shutting off diesel generation 2. Estimated hours that diesel generation will be off per year. 3. Annual O&M costs associated with the proposed renewable project. 1. $20,000 per year estimated. Reduced consumables lube/oil, and increased intervals between overhauls due to 75% reduction in genset run time. 2. Hours diesel OFF/year: 6,570 3. $25,250 per year. Based on 0.5% of capex for the project. This metric is based on review of actual hydro costs for similar rural Alaska projects serving communities such as Chignik Lagoon, Atka, King Cove, and Hoonah. 5.4.7 Fuel Costs Estimate annual cost for all applicable fuel(s) needed to run the proposed system (Year 1 of operation) Diesel (Gallons) Electricity Propane (Gallons) Coal (Tons) Wood Other Unit cost ($) $3.08 - - - - Water Annual Units 9,815 - - - - Up to 18 cfs Total Annual cost ($) $30,230 - - - - None. 5.5 Performance and O&M Reporting For construction projects only 5.5.1 Metering Equipment Please provide a short narrative, and cost estimate, identifying the metering equipment that will be used to comply with the operations reporting requirement identified in Section 3.15 of the Request for Applications. Plant switchgear and controls will include required sensors and logging capability to automatically collect plant generation and performance information. No incremental cost is expected for infrastructure needed to comply with AEA reporting requirements. 5.5.2 O&M reporting Please provide a short narrative about the methods that will be used to gather and store reliable operations and maintenance data, including costs, to comply with the operations reporting requirement identified in Section 3.15 of the Request for Applications The plant operator will maintain maintenance and repair logs. Relevant maintenance and repair activities will be summarized and reported to AEA on an annual basis for the required 10-year period. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 24 of 36 11/16/2021 The labor effort to compile required data, prepare annual reports, and respond to AEA reporting inquiries is estimated at $5,000 annually. SECTION 6 – ECONOMIC FEASIBILITY AND BENEFITS 6.1 Economic Feasibility 6.1.1 Economic Benefit Annual Lifetime Anticipated Diesel Fuel Displaced for Power Generation (gallons) 42,901 2,145,050 Anticipated Fuel Displaced for Heat (gallons) 11,101 555,050 Total Fuel displaced (gallons) 54,002 2,700,100 Anticipated Diesel Fuel Displaced for Power Generation ($) $132,333 $3,394,326 Anticipated Fuel Displaced for Heat ($) $40,194 $886,461 Anticipated Power Generation O&M Cost Savings $78,804 $1,824,353 Anticipated Thermal Generation O&M Cost Savings $0 $0 Total Other costs savings (taxes, insurance, etc.) $0 $0 Total Fuel, O&M, and Other Cost Savings $251,331 $6,105,140 6.1.2 Economic Benefit Explain the economic benefits of your project. Include direct cost savings and other economic benefits, and how the people of Alaska will benefit from the project. Note that additional revenue sources (such as tax credits or green tags) to pay for operations and/or financing, will not be included as economic benefits of the project. Where appropriate, describe the anticipated energy cost in the community, or whatever will be affected by the project, over the life of the project. Explain how the forecast was developed and provide year-by-year forecasts The economic model used by AEA is available at https://www.akenergyauthority.org/What-We- Do/Grants-Loans/Renewable-Energy-Fund/2021-REF-Application. This economic model may be used by applicants but is not required. The final benefit/cost ratio used will be derived from the AEA model to ensure a level playing field for all applicants. If used, please submit the model with the application. Direct economic benefits from this project include long-term reduction in electricity rates for the community and increased stability in electric rates over time as our dependence on volatile fuel prices and fuel delivery prices is significantly reduced with the hydro operational. These benefits would be augmented if the project is able to qualify for and receive additional revenue from green tags / renewable energy credits, tax credits, or other financial incentives. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 25 of 36 11/16/2021 Because of the volatility in their terms, compliance costs, and eligibility thresholds of these various programs, the City does not expect to realize revenue from such programs but will explore them when project financing is finalized to see which – if any – such programs are a good fit for the utility and project. The current AEA economic model shows a benefit-cost ratio of 1.13 for the project based on existing available information and analysis. We note a significant decrease in the calculated benefit-cost ratio due to the downward revision of future fuel cost in AEA’s model. This underscores the significant impacts fuel price volatility has on societal planning efforts. In 2017 this project’s benefit-cost ratio using the then-current AEA model was about 1.35, and the principal change since then is the fuel price projections. The current AEA model with project specific parameters is included with our application. 6.1.3 Economic Risks Discuss potential issues that could make the project uneconomic to operate and how the project team will address the issues. Factors may include:  Low prices for diesel and/or heating oil  Other projects developed in community  Reductions in expected energy demand: Is there a risk of an insufficient market for energy produced over the life of the project.  Deferred and/or inadequate facility maintenance  Other factors Economic risks include: 1. Construction cost overruns. Cost risk will be mitigated by prudent project development sequence, including appropriate contingency in project cost estimates as the project proceeds through feasibility, design, and permitting development phases. 2. Fuel price volatility. It is possible that continuing fuel price volatility will create episodes when the cost of diesel-fired electricity is less than the cost of hydro-electricity. Crude oil prices were briefly negative in 2020. Of course the delivered cost of refined fuels in False Pass did not go negative! Hydro cannot always compete against short-term dips in oil prices, and we have no control over the volatile global energy commodity markets. We take a long term-view in investing in the sustainability of our local economy. 3. No other projects are known that would compete against the hydro for the local energy market. The community’s prior studies have scrutinized wind, hydrokinetic, and other local hydropower resources. 4. Changing utility load. The feasibility study considered positive and negative load trends around the base case of 710,000 annual kWh at generation. Annual load at generation in the past 10 years has been 65% to 115% of this base case. A significant portion of utility load is sales to local Peter Pan, Bering Pacific, and Silver Bay seafood operations, and this increased when Silver Bay opened a few years ago. Analysis shows reductions in utility load have minimal impact on the percentage of load supplied by the hydro. Total kWh decrease of course, but the percentage carried by the hydro is relatively constant. Depending on how the project is financed, decreasing load trends could put upward pressure on rates. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 26 of 36 11/16/2021 5. Proper maintenance. The project, as all generation projects, requires routine and proactive maintenance to realize its full useful life and efficient, cost effective operation. The City will invest in the human resources to keep the project properly maintained and expects to establish financial reserves to fund long-term maintenance and repair activities. These requirements will be defined and quantified in the business and operating plan included in the proposed grant scope of work. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 27 of 36 11/16/2021 6.1.4 Public Benefit for Projects with Direct Private Sector Sales For projects that include direct sales of power to private sector businesses (sawmills, cruise ships, mines, etc.), please provide a brief description of the direct and indirect public benefits derived from the project as well as the private sector benefits and complete the table below. See Section 1.6 in the Request for Applications for more information. Not applicable, the project applicant is a certificated public utility (CPCN #442). See estimated project performance data at Application Section 5.4.5.2 and 6.1.1 for relevant data requested below. Renewable energy resource availability (kWh per month)N/A Estimated direct sales to private sector businesses (kWh)N/A Revenue for displacing diesel generation for use at private sector businesses ($) N/A Estimated sales for use by the Alaskan public (kWh)All Revenue for displacing diesel generation for use by the Alaskan public ($)All 6.2 Other Public Benefit Describe the non-economic public benefits to Alaskans over the lifetime of the project. For the purpose of evaluating this criterion, public benefits are those benefits that would be considered unique to a given project and not generic to any renewable resource. For example, decreased greenhouse gas emission, stable pricing of fuel source, won’t be considered under this category. Some examples of other public benefits include:  The project will result in developing infrastructure (roads, trails, pipes, power lines, etc.) that can be used for other purposes  The project will result in a direct long-term increase in jobs (operating, supplying fuel, etc.)  The project will solve other problems for the community (waste disposal, food security, etc.)  The project will generate useful information that could be used by the public in other parts of the state  The project will promote or sustain long-term commercial economic development for the community The project will provide price security for local rate-payers, who have experienced extreme electric rates and rate shock in recent years due to variable fuel cost compounded with variable premiums for local fuel delivery. Lower prices and price stability will help both residents and businesses, both promoting and sustaining long-term commercial economic development for the community. By reducing the volume of fuel transported to False Pass, the project will incrementally reduce the hazard of fuel spills on-shore or in marine waters in the Gulf of Alaska, North Pacific, and near the community. False Pass’ culture and economy are both highly dependent on the integrity and health of our environment for local subsistence harvest, local sport fish tourism, and local commercial fishing operations. A significant local fuel spill could have devastating short and long-term impacts to multiple facets of our community. With this project the diesel generators would be off-line a majority of the time, therefore noise and air pollution from the diesel power plant would be dramatically reduced. Electric utility expenditures would transition from diesel fuel purchase to hydro plant operations, keeping wealth in our local economy and supporting new jobs. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 28 of 36 11/16/2021 SECTION 7 – SUSTAINABILITY Describe your plan for operating the completed project so that it will be sustainable throughout its economic life. At a minimum for construction projects, a business and operations plan should be attached and the applicant should describe how it will be implemented. See Section 11. 7.1.1 Operation and Maintenance Demonstrate the capacity to provide for the long-term operation and maintenance of the proposed project for its expected life  Provide examples of success with similar or related long-term operations  Describe the key personnel that will be available for operating and maintaining the infrastructure.  Describe the training plan for existing and future employees to become proficient at operating and maintaining the proposed system.  Describe the systems that will be used to track necessary supplies  Describe the system will be used to ensure that scheduled maintenance is performed The City has successfully operated municipal utilities (electric, water, solid waste) for many years. The City has not yet identified specific personnel that would be responsible for hydro plant operations. It is our intent to identify such personnel prior to construction so they can be involved with construction to the extent practical. This will give them greater familiarity with the project which will be invaluable for operations and maintenance. As appropriate, the City will train operators either with formal education at institutions such as AVTEC or by visiting similar local hydro plants in the region or state to become familiar with plant operational requirements, issues, and methods. Operations and Maintenance Plans will be developed concurrent with plant construction to capture final design elements, as-built conditions, and relevant site and equipment information learned during construction. In general, these plans are expected to be developed as follows. Maintenance requirements will be identified in the operations and maintenance manuals furnished by various vendors during the construction phase. These diverse requirements will be captured in a unified concise O&M document specifying by major project element the pertinent O&M activities and intervals, with reference back to the individual O&M manuals for more specific details. The unified O&M manual will include maintenance logs that will be kept current by plant personnel. Critical spare parts requirements will also be pulled from the vendor operations and maintenance manuals, and an integrated list will be developed. Spare parts critical to plant operation and/or with long procurement lead times will be maintained in on-site inventory. In some instances, high-cost items may not be stocked if their cost is greater than the risk-weighted cost of a plant outage in the event of unexpected component failure. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 29 of 36 11/16/2021 7.1.2 Financial Sustainability  Describe the process used (or propose to use) to account for operational and capital costs.  Describe how rates are determined (or will be determined). What process is required to set rates?  Describe how you ensure that revenue is collected.  If you will not be selling energy, explain how you will ensure that the completed project will be financially sustainable for its useful life. The City’s existing accounting and bookkeeping system will be used to account for operational and capital costs. Costs will be categorized in accordance with the USOA and tracked as needed for grant reporting and/or tax purposes. The City’s electricity rates are set by utility and City management. Rates have traditionally been set to cover costs with appropriate margin for long-term costs and unforeseen events consistent with prudent utility financial management practices. Revenue is collected in accordance with our tariff, including provisions for account disconnect or referral to collections in the event of non-payment of utility bills. 7.1.2.1 Revenue Sources Briefly explain what if any effect your project will have on electrical rates in the proposed benefit area over the life of the project. If there is expected to be multiple rates for electricity, such as a separate rate for intermittent heat, explain what the rates will be and how they will be determined Collect sufficient revenue to cover operational and capital costs  What is the expected cost-based rate (as consistent with RFA requirements)  If you expect to have multiple rate classes, such as excess electricity for heat, explain what those rates are expected to be and how those rates account for the costs of delivering the energy (see AEA’s white paper on excess electricity for heat)..  Annual customer revenue sufficient to cover costs  Additional incentives (i.e. tax credits)  Additional revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) Over the long term this project is expected to stabilize and possibly reduce electricity rates in False Pass. The impact on rates will not be known until the project cost and financing plans are finalized at the conclusion of the permitting and design development phase. Grant funding for construction would incrementally support immediate reductions in electric rates. Debt funding for construction would likely retain rates at or near existing levels (currently $0.62 per kWh) until the debt is retired (15 to 30 years). Once the capital debt is paid off, electric rates are expected to be significantly lower than the projected future cost of diesel-fired electricity. The electric utility has rates for Residential, Commercial, and Community Facility classes of electric service. That practice is expected to continue subject to the future decisions of utility management. If dispatchable energy services are implemented as a result of the hydro project, as they should be due to the potential for incremental utility revenue and increased benefit from the hydro project’s excess generating capacity, then there would need to be a special rate for Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 30 of 36 11/16/2021 interruptible electricity service. To be competitive against the cost of operating fuel-fired heating devices, this rate would be significantly lower than that of standard electric service. The estimated rate for interruptible electric service is $0.06 to 0.07 per kWh, based on an avoided cost of heating fuel of $3.10 per gallon and approximate 25% discount to encourage conversion to interruptible electric service. If the project includes building mechanical system upgrades to receive interruptible electric service, the discount rate may be reduced. These issues would be addressed in the business plan finalized near the end of design and permitting phase of the project, and would be subject to future approvals by utility management. 7.1.2.2 Power Purchase/Sale The power purchase/sale information should include the following:  Identification of potential power buyer(s)/customer(s)  Potential power purchase/sales price - at a minimum indicate a price range (consistent with the Section 3.16 of the RFA) Identify the potential power buyer(s)/customer(s) and anticipated power purchase/sales price range. Indicate the proposed rate of return from the grant-funded project. Include letters of support or power purchase agreement from identified customers. The City of False Pass operates the electric utility and would own and operate this project. No power purchase agreement is required and no purchase price for hydro project output is defined. The City already holds CPCN #442 for electric service in False Pass, and is exempt from economic regulation by the Regulatory Commission of Alaska because it is a political subdivision of the state (AS 42.05.711(b)). Project benefits would be reduced fuel and O&M expense at the utility’s diesel power plant and additional revenues from dispatchable energy sales from excess hydro generation capability. Project benefits will flow to utility ratepayers in accordance with actions of utility management and/or city council consistent with prudent utility financial management practices. SECTION 8 – PROJECT READINESS 8.1 Project Preparation Describe what you have done to prepare for this award and how quickly you intend to proceed with work once your grant is approved. Specifically address your progress towards or readiness to begin, at a minimum, the following:  The phase(s) that must be completed prior to beginning the phase(s) proposed in this application  The phase(s) proposed in this application  Obtaining all necessary permits  Securing land access and use for the project  Procuring all necessary equipment and materials Refer to the RFA and/or the pre-requisite checklists for the required activities and deliverables for each project phase. Please describe below and attach any required documentation. Over the past many years the City has taken the initiative with other local, state and federal entities to investigate a variety of energy efficiency and renewable energy opportunities for Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 31 of 36 11/16/2021 False Pass. These prior efforts are described at Section 9 and 11 of this application, and prior reports documenting these efforts are listed in Section 11 and included with this grant application. These studies have progressively converged on Unga Man Creek Hydro as the preferred renewable energy resource for False Pass. Since 2015, we have previously funded reconnaissance and feasibility studies of the Unga Man Creek hydropower resource to better quantify the resource potential, project layout, and the project’s technical, environmental, and economic feasibility. The outcome of these efforts is positive on all fronts. Based on the outcome of prior efforts, the project is ready to move on to design and permitting, and the City will continue to support the project. Please see attached Council Resolution 22-09 passed January 13, 2022 committing the city to matching funds and grant conditions associated with this grant application. The City has contracted with Polarconsult Alaska, Inc. for engineering services and Living Systems Design, LLC for environmental services necessary to advance this project. The City will continue its relationship with these entities, and/or engage other qualified firms as appropriate to continue project development. 8.2 Demand- or Supply-Side Efficiency Upgrades If you have invested in energy efficiency projects that will have a positive impact on the proposed project, and have chosen to not include them in the economic analysis, applicants should provide as much documentation as possible including: 1. Explain how it will improve the success of the RE project 2. Energy efficiency pre and post audit reports, or other appropriate analysis, 3. Invoices for work completed, 4. Photos of the work performed, and/or 5. Any other available verification such as scopes of work, technical drawings, and payroll for work completed internally. Benefits of energy audits and upgrades completed in False Pass in prior years are already included in the utility generation data used for technical and economic analysis of the proposed hydro project. No explicit analysis of these upgrades is undertaken or warranted. Final Report of prior upgrades is included (see application Section 11). SECTION 9 – LOCAL SUPPORT AND OPPOSITION Describe local support and opposition, known or anticipated, for the project. Include letters, resolutions, or other documentation of local support from the community that would benefit from this project. Provide letters of support, memorandum of understandings, cooperative agreements between the applicant, the utility, local government and project partners. The documentation of support must be dated within one year of the RFA date of November 16, 2021. Please note that letters of support from legislators will not count toward this criterion. The City and community have been interested in energy efficiency, sustainability, and renewable energy for many years. Over the years we have completed numerous studies of local wind, hydrokinetic (ocean tidal current) and conventional hydropower resources. These studies have identified hydropower as the best resource for False Pass, and Unga Man Creek as the best of the various local hydropower resources. We have included Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 32 of 36 11/16/2021 several letters of support for this current grant application to continue development of this popular infrastructure addition to our community. We are not aware of any significant local opposition to this project. SECTION 10 – COMPLIANCE WITH OTHER AWARDS Identify other grants that may have been previously awarded to the Applicant by AEA for this or any other project. Describe the degree you have been able to meet the requirements of previous grants including project deadlines, reporting, and information requests. We have not recently received any direct grants from AEA for this or other projects. We have been involved in AEA projects managed by other entities over the years. These include the RACEE analysis / audit in 2016 (see section 11), and also the Village End Use Energy Efficiency Measures Program (AEA Grant #2195225) administered by the Alaska Building Science Network that was completed in 2008. We have also received a variety of grants from other entities in recent years. A summary list follows. 1) AHFC for $10,000 for Energy Efficiency Kickstarter in 2016 2) AEB Community Grant for $27,222 for assistance in acquiring a new septic pumper truck in 2019 3) AEB Community grant for $22,151 for freight costs on a Front End Loader in FY20 4) APICDA CDGP Grant for $442,000 for residential duplex housing in FY19 & FY20 5) AEB Community Grant for $36,250 for assistance in waste backhaul project in FY22 6) AEB Community Grant for $9,790 for City gym equipment in FY22 7) APICDA CDGP Grant for $500,000 for Harbor House Construction in FY22 8) APICDA Infrastructure Grant for $500,000 for Harbor House Construction in FY22 Other high cost projects that we have completed without grant assistance include: purchase of a new fuel truck, front end loader and burn box, design of a harbor house and rehab of our sheetpile dock. We are in the process of design work for an upgrade to our water treatment plant and are in the middle of an electrical system upgrade. SECTION 11 – LIST OF SUPPORTING DOCUMENTATION FOR PRIOR PHASES In the space below, please provide a list of additional documents attached to support completion of prior phases. We have included the following reports from previous phases of study for this project: - 2008 Village End Use Energy Efficiency Measures Program Final Report for False Pass - 2010 Renewable Energy Resource Assessment by YourCleanEnergy, LLC - 2013 False Pass Power System Draft Report, Marsh Creek, LLC - 2015 Reconnaissance Study of False Pass Hydroelectric Potential by Living Systems Design, LLC - 2015 Reconnaissance memos on hydrology, performance by Polarconsult Alaska, Inc. - 2015 desktop study of Unga Man Creek hydro potential by Alaska Energy Authority Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 33 of 36 11/16/2021 - 2016 RACEE Phase II Report by Alaska Energy Authority and USDOE. - 2016 feasibility study progress report of False Pass Hydroelectric Potential by Living Systems Design, LLC and Polarconsult Alaska, Inc. - 2021 Hydrology Study Report by Polarconsult Alaska, Inc. - 2022 Feasibility Study Final Report by Polarconsult Alaska, Inc. (under review, will be provided when finalized in February 2022) SECTION 12 – LIST OF ADDITIONAL DOCUMENTATION SUBMITTED FOR CONSIDERATION In the space below, please provide a list of additional information submitted for consideration. None.