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HomeMy WebLinkAboutAPP_13010-Water Supply Creek Final Design REF Round 13Renewable Energy Fund Round 13 Grant Application -Standard Form Application Forms and Instructions ALASKA ENERGY AUTHORITY This instruction page and the following grant application constitutes the Grant Application Form for Round 13 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: www.akenergyauthority.org/what-we-do/grants-loans/renewable-energy-fund-ref-grants/2020-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 13 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 Manager Karin St. Clair by email at grants@akenergyauthority.org or by phone at (907) 771-3081. ABA 21010 Page 1 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form REMINDER: ALASKA ENERGY AUTHORITY • 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. AEA21010 Page 2 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form SECTION 1 -APPLICANT INFORMATION ALASKA ENERGY AUTHORITY Please specify the legal grantee that will own, operate, and maintain the project upon completion. I Name (Name of utility, IPP, local government, or other government entity) !Inside Passage Electric Cooperative Tax ID # 43-1964262 Date of last financial statement audit: March 2020 for 2019 calendar year Mailin g Address: Ph ysical Address: P.O. Box 210149 12480 Mendenhall Loo p Road Auke Ba y, AK 99821-0149 Juneau, AK 99801 Telephone: Fax: Email: (907 ) 723-0364 (907 ) 789-8517 J M itchel l@_l nsidePassag eEiectric.ora 1 1.1 Applicant Point of Contact I Grants Manager Name: Title: Jodi Mitchell Chief Executive Officer Mailing Address: P.O. Box 210149 Auke Bay, AK 99821-0149 Telephone: Fax: Email: (907 } 723-0364 (907 } 790-8517 JMitchell @lnsidePassaaeEiectric.ora 1.1.1 Applicant Signatory Authority Contact Information Name: Jodi Mitchell Title: Chief Executive Officer/General Manager Mailing Address: P.O. Box 210149 Auke Bay, AK 99821-0149 Telephone: Fax: Email: (907 ) 723-0364 (907 ) 790-8517 JMitchell@_lnsidePassa_g_eEiectric.org 1.1.2 Applicant Alternate Points of Contact Name Telephone: Fax: Email: Brandon Shaw, (907) 723-8441 (907)790-BShaw@lnsidePassageEiectric.org Operations Mana ger 8517 Roxanne Drake-(907) 364-3022 (907)790-RDrake@l nsidePassageEiectric.org Burkhart, Controller 8517 AEA21010 Page 3 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form ALASKA ENERGY AUTHORITY 1.2 Applicant Minimum Requirements Please check as appropriate. If applicants do not meet the minimum requirements, the application will be rejected. j 1.2.1 Applicant Type ~ An electric utility holding a certificate of public convenience and necessity under AS 42.05 CPCN # 240, or D An independent power producer in accordance with 3 AAC 107.695 (a) (1) CPCN # , or D A local government, or D A governmental entity (which includes tribal councils and housing authorities) Add'f t 1 1ona mm1mum reqUiremen s ~ 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 www.akenerqyauthority.org/what-we- do/q rants-loans/renewable-enerqy-fund-ref-g rants/2020-ref-a QQ iication (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) AEA 21010 Page 4 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form I SECTION 2 -PROJECT SUMMARY 2.1 Project Title Provide a 4 to 7 word title for your project. Type in the space below. Water Supply Creek Hydro Final Design -Hoonah, AK I 2.2 Project Location ALASKA ENERGY AUTHORITY 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 Manager Karin St. Clair by email at grants@akenergyauthority.org or by phone at (907) 771-3081 . Latitude I I Longitude I [Other description of location] Please see figure 1, page 1 of feasibility study. The project is located near Hoonah, AK. 2.2.2 Community benefiting -Name(s) of the community or communities that will be the beneficiaries of the project. Hoonah, Angoon, Kake, Klukwan, and the Chilkat Valley will all benefit from reduced costs and rates. IPEC maintains a "postage-stamp" rate for all of its member-consumers, whereby all communities benefit from cost reductions . The project is near Hoonah, Alaska, and adjacent to IPEC's existing Gartina Falls hydro project and distribution lines. 2.3 Project Type Please check as appropriate. I 2.3.1 Renewable Resource Type D Wind D Biomass or Biofuels (excluding heat-only) ~ Hydro, Including Run of River D Hydrokinetic D Geothermal, Excluding Heat Pumps D Transmission of Renewable Energy D Solar Photovoltaic D Storage of Renewable I D Other (Describe) D Small Natural Gas I 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Pre-Construction Construction D Reconnaissance ~ Final Design and Permitting D Feasibility and Conceptual Design D Construction AEA 2 1010 Page 5 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application-Standard Form AEA21010 Page 6 of38 ALASKA ENERGY AUTHORITY 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form 2.4 Project Description Provide a brief, one-paragraph description of the proposed project. ALASKA ENERGY AUTHORITY IPEC is requesting $461,474 in grant funding to prepare the final design for Water Supply Creek Hydro (WSCH). IPEC plans to hire HDR-Aiaska to do this work. IPEC will provide labor, and labor overhead, travel, meals & lodging, and legal expenses in the amount of $75,000 as in-kind match. IPEC staff regularly provides administrative and technical support for consultants as part of its annual labor budget. HDR prepared a conceptual design report for IPEC in 2011, then in December 2019, a feasibility study specific to WSCH. The December 2019 study is included with this application. The next step is final design and permitting, and once it is complete, the Water Supply Creek Hydro project will be "shovel-ready." 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. IPEC plans to use the grant funds to hire HDR to prepare the final design of the Water Supply Creek Hydro project near Hoonah, Alaska. Please refer to the attached feasibility study/CDR prepared by HDR dated 12/9/2019 for details, as well as a letter dated 4/23/2020 from HDR outlining next steps including a cost estimate for the final design. IPEC, although located in hydro-rich southeast Alaska, is mostly dependent on expensive and polluting diesel generation. IPEC's focus, besides providing safe reliable power, is to reduce rates by displacing diesel with run of river hydro projects. IPEC's gross residential rate per kWh sold in 2019 was $.6285 before PCE (please see IPEC's post-audit 2019 sales review included in this application. While IPEC understands there has been a large amount of Renewable Energy Fund grants allocated to the southeast region, we believe it's simply due to the excellent long-lived projects brought forward. We are submitting this grant in hopes that we can continue in our quest for diesel displacement, rate reduction and stabilization, and a cleaner environment over the 50+ years the WSCH will provide power to Hoonah: 2.6 Previous REF Applications for the Project See Section 1.15 ofthe RFA for the maximum Qer Qroject cumulative grant award amount Round Title of application Application Did you Amount of REF Submitted #,if known receive a grant awarded g rant? Y/N ($) N/A AEA 21010 Page 7 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form I SECTION 3 -Project Management, Development, and Operation I 3.1 Schedule and Milestones ALASKA ENERGY AUTHORITY 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 (1. Reconnaissance, II. Feasibility and Conceptual Design, Ill. 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 Start End # Milestones Tasks Date Date Deliverable& 1 Administration and Updated financial reporting management form Sept Dec Progress Reports with invoices 2021 2022 not less than quarterly 2 Basis ofDesign Sept Dec Basis of Design Report 2021 2021 3 Conceptual Design Sept Dec Short updated Feasibility Report 2021 2021 Stu<b'_ 4 Business operating Sept Dec Business Operating Plan plan 2021 2021 5 Final Design 65% Design Package Jan Sept 65% design drawings and 2022 2022 s pecifications 100% Design Jan Dec 100% design drawings and Package 2022 2022 specifications 6 Permit Applications Sept Dec Permit Applications 2022 2022 7 Land Use June Dec Signed land use agreement Agreement 2022 2022 AEA21010 Page 8 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form ALASKA ENERGY AUTHORITY j 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 a pplication $461,474 Cash match to be p rovideda $ In-kind match to be provideda costs of this in·kind match are part ofiPEC's regular $75,000 operations. No additional costs are anticipated beyond budgeted labor and travel for IPEC staff Energy efficiency match providedb $ Total costs for project phase(s) covered in application (sum of $536,474 above) 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. IPEC is committed to seeing this project through to completion. We have already secured a reconnaissance study (April2011), and a feasibility/conceptual design report {December 2019). These two documents have prepared us for phase 3, final design. Once phase 3 is complete, the project will be construction ready. At that point, IPEC will pursue grants for construction from the USDA High Energy Cost, the DOE-Office of Indian Energy (through tribal partners), and potential funding through a federal infrastructure bill. IPEC has a history of completing small hydro projects. The Gartina Falls Creek hydro project was completed in August 2015, and the Gunnuk Creek Hydro project for Kake is very near completion. These projects were built primarily with grant funds, along with borrowing from the National Rural Utility Cooperative Finance Corporation ("CFC"). 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. IPEC has limited general funds, but could finance cost overruns for the final design with its cash. If the grant request isn't 100% funded, IPEC could finance a portion of the design with its limited general funds. IPEC also has borrowing capacity, for a limited amount, for the construction stage of the project. At some point, too much borrowing leads to increased costs and rates. This must be avoided. In general, the greater the percentage of grant funds for the project, the greater the community benefits. 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 -completed April 2011 Financed by $ federal DOE grant Feasibility and Conceptual Design-completed Actual $47,625 12/9/2019 by HDR for ANTHC ($30,000 grant) and IPEC AEA21010 Page 9 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form Final Desi g n and Permitting Construction Total Proj ect Costs (sum of above) Metering/Tracking Equipment [not included in project cost] 3.2.4 Funding Subsequent Phases Estimated Estimated Estimated Estimated ALASKA ENERGY AUTHORITY $536,474 $5,400,000 $5,984,099 $ 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 • 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) Construction funding will be sought primarily from federal sources: 1. USDA-High Energy Cost Grant program, up to $3 million, likelihood of receipt -80% 2. DOE-Office of Indian Energy (application must be made by Sealaska Corporation or perhaps the Hoonah Indian Association, up to $2 million, likelihood of receipt -75% 3. Federal Infrastructure bill, up to full cost of construction, likelihood of receipt-50% 4. State of Alaska REF, up to $1,538,526, likelihood of receipt-20% 5. Loans from NRUCFC at low interest rates , up to $3 million, likelihood of receipt -100% AEA 21010 Page 10 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form 3.2.3 Budget Forms ALASKA ENERGY AUTHORITY 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, Ill. 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 p hase of your p ro ject. and delete an y unnecessa ry 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 Manager Karin St. Clair by email at grants@akenergvauthority.org or by phone at (907) 771-3081 . Phase 1 -Reconnaissance Source of Matching Anticipated Grantee Funds: RE-Fund Cash/In-Milestone or Task Completion Grant Funds Matching kind/Federal TOTALS Date Funds Grants/Other State Grants/Other (List milestones based on phase and type of project. See $ $ $ Sections 2. 3 thru 2. 6 of the RFA ) N/A-this phase complete $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ TOTALS $ $ $ Budget Categories: Direct Labor & Benefits $ $ $ Travel & Per Diem $ $ $ Equi pment $ $ $ Materials & Su pp lies $ $ $ Contractual Services $ $ $ Construction Services $ $ $ Other $ $ $ TOTALS $ $ $ AEA21010 Page 11 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form Phase 2 -Feasibility and Conceptual Design Source of Matching Anticipated Grantee Funds: RE-Fund Cash/In-Milestone or Task Completion Grant Funds Matching kind/Federal Date Funds Grants/Other State Grants/Other (List milestones based on phase and type of project. $ $ See Sections 2.3 thru 2.6 of the RFA ) $ $ N/A -this phase com plete $ $ $ $ . $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ TOTALS $ $ Budget Categories: Direct Labor & Benefits $ $ Travel & Per Diem $ $ Equi pment $ $ Materials & Su pp lies $ $ Contractual Services $ $ Construction Services $ $ Other $ $ TOTALS $ $ AEA21010 Page 12 of38 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ ALASKA ENERGY AUTHORITY TOTALS - 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form Phase 3 -Final Design and Permitting Anticipated Grantee RE-Fund Milestone or Task Completion Grant Funds Matching Date Funds (List milestones based on phase and type of project. $ $ See Sections 2. 3 thru 2. 6 of the RFA ) Administration and Dec 2022 $ $50,000 mana gement Basis of Design Dec 2021 $30,000 $ Conce ptual Desi gn Re port Dec 2021 $30,000 $ Business o peratinQ plan Dec 2021 $ $15,000 65% Desi gn Packa ge Se pt2022 $245,000 $ 100% Desi gn Packa ge Dec 2022 $140,000 $ Permit A pp lications Dec 2022 $16,474 $ Land Use AQre ements Dec 2022 $ $10,000 $ $ $ $ $ $ TOTALS $461,474 $75,000 Budget Categories: Direct Labor & Benefits $ $75,000 Travel & Per Diem $ $ Equi pment $ $ Materials & Su pplies $ $ Contractual Services $461,474 $ Construction Services $ $ Other $ $ TOTALS $461,474 $75,000 AEA 21010 Page 13 of38 Source of Matching Funds: Cash/In- kind/Federal Grants/Other State Grants/Other In-kind In-kind In-kind $ ALASKA ENERGY AUTHORITY TOTALS $50,000 $30,000 $30,000 $15,000 $245,000 $140,000 $15,000 $10,000 $ $ $ $536,474 $75,000 $ $ $ $461,474 $ $ $536,474 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form Phase 4 -Construction Anticipated Grantee RE-Fund Milestone or Task Completion Grant Funds Matching Date Funds (List milestones based on phase and type of project. $ $ See Sections 2.3 thru 2.6 of the RFA ) $ $ N/A -applying only for phase $ $ 3 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ TOTALS $ $ Budg et Cate gories: Direct Labor & Benefits $ $ Travel & Per Diem $ $ Eo ui oment $ $ Materials & Su pp lies $ $ Contractual Services $ $ Construction Services $ $ Other $ $ TOTALS $ $ AEA21010 Page 14 of38 Source of Matching Funds: Cash/In- kind/Federal Grants/Other State Grants/Other $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ ALASKA ENERGY AUTHORITY TOTALS 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form 3.2.4 Cost Justification ALASKA ENERGY AUTHORITY Indicate the source(s) of the cost estimates used for the project budget, including costs for future phases not included in this application. The cost estimate for the final design was prepared by HDR-Aiaska and delivered to IPEC via a letter dated 4/23/2020. The letter is included with this application, subject line: Water Supply Creek Hydroelectric Project, Final Design Proposal. The cost estimate for the construction phase is also included in the 4/23/2020 letter from HDR. I 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? IPEC has at least 15 years of experience in project progress reporting. IPEC's operations manager has a form he completes with each site visit. These reports are currently being shared with Bryan Carey, Alaska Energy Authority, for the Gunnuk Creek project for Kake. We also provided these reports to AEA during construction of the Gartina Falls Hydro project for Hoonah, 2014-2015. Pictures are always included, as well as next steps, and foreseen issues to be resolved, etc. I 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. The only costs IPEC will seek grant reimbursement for are the invoices from HDR. IPEC will pay for its own labor, legal and travel costs to assist in the design process, estimated to be about $75,000. ABA 21010 Page 15 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form I SECTION 4-QUALIFICATIONS AND EXPERIENCE 4.1 Project Team ALASKA ENERGY AUTHORITY 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. Brandon Shaw, I PEG's operations manager, will be the project manager for IPEC. Resume attached IPEC has a long-standing Master Service Agreement (MSA) with HDR, and we have been working with them for several years. HDR designed both the Gartina Falls hydro project, as well as the Gunnuk Creek hydro project currently under construction. Paul Berkshire will be the lead engineer for HDR (resume attached). 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. Roxanne Drake-Burkhart, I PEG's controller, will be performing the grant accounting for the project. (Resume attached). Jodi Mitchell, I PEG's chief executive officer/general manager, will oversee grant accounting and supervision of the operations manager (resume attached) I 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. See resumes included with this application. Paul Berkshire, engineer for HDR-Aiaska, along with his team, will prepare the Water Supply Creek hydro final design. Paul has decades of experience in hydro design and construction in rural Alaska. AEA 21010 Page 16 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form ALASKA ENERGY AUTHORITY Brandon Shaw, IPEC's operations manager, will assist HDR and oversee the administrative and oversight functions on behalf of IPEC for completion of the final design. Brandon will prepare progress reports for AEA as he does for the Gunnuk Creek hydro project currently in progress. Roxanne Drake-Burkhart, IPEC's controller, will account for the grant funds. Roxanne has been with IPEC since 1995, and has been responsible for the grant accounting for several grants. IPEC is very familiar with state single audit requirements, and is in complete compliance with all grants. IPEC has never failed in its grant accounting compliance. 4.2 Local Workforce Describe how the project will use local labor or train a local labor workforce. IPEC will hire the local labor force as needed. However, for a design project this is expected to be minimal. IPEC hired the local labor force, about five locals, to assist with the construction of the Gartina Falls hydro project when it was under construction 2013-2015. AEA21010 Page 17 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form I SECTION 5 -TECHNICAL FEASIBILITY I 5.1 Resource Availability 5.1.1 Assessment of Proposed Energy Resource ALASKA ENERGY AUTHORITY 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 feasibility conceptual design report produced by HDR-Aiaska is included with this application as an appendix. IPEC has a signed letter of intent to lease the land from Sealaska Corporation, the landowner, for the life of the project including potential for extensions . 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. IPEC, the certificated electric provider for Hoonah, currently provides about 30-33% of Hoonah's electric load with hydro power from the Gartina Falls hydro project, and the other 67-70% with diesel electric generation. Studies have been prepared for alternatives including wind power, and geothermal energy from the head of Tenakee Springs. However, these alternatives were proven infeasible. The wind is not strong or steady enough according to the wind map, and the geothermal project is financially infeasible to develop, although the amount of energy to be produced would be plenty for all of Chichagof Island if there was an existing transmission system to deliver it. 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 See page 7 of the HDR Feasibility Study for detail. The Federal Energy Regulatory Commission (FERC) has previously made a determination that the Water Supply Creek project is not under their jurisdiction (this document can be provided upon request). The WSCH will require a water rights permit from the State of Alaska Department of Natural Resources, as well as a 404 permit from the US Army Corp of Engineers. AEA 2 1010 Page 18 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form ALASKA ENERGY AUTHORITY Due to the low height of the dam, the small impoundment and the low risk potential, it is not expected that the project would be subject to the State of Alaska's Dam Safety division. Since the WSCP will be in the watershed of the City of Hoonah's water supply additional requirements may be placed on the project such as compliance with NFS/ANSI 61. Since the project will not consume water but only use it for power generation and return it, this is not considered a significant barrier. 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. Sealaska Corporation is the land owner. Attached with this application is a "letter of intent to lease" signed by both IPEC's and Sealaska's respective chief executive officers (Jodi Mitchell and Anthony Mallett, respectively). It must be noted that IPEC has a land lease with Sealaska Corporation for the existing Gartina Falls hydro project completed by IPEC in August 2015. The Gartina Falls and the Water Supply Creek projects will use the same distribution line to provide incremental renewable hydroelectric power to the City of Hoonah and its residents and businesses. I 5.3 Project Technical & Environmental Risk 5.3.1 Technical Risk 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. As noted in the HDR Feasibility study of the WSCH, the only risks identified center around fisheries issues (see page 7 of the December 2019 study), and permitting issues. The final design, the focus of this grant, will help de-risk the project so that it can be constructed. 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 • 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 AEA 21010 Page 19 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form ALASKA ENERGY AUTHORITY The only environmental issue to be addressed is fish habitat, which is very typical of small run of river hydro projects. There are known to be small resident Dolly Varden fish in Water Supply Creek. HDR is very familiar with designing hydro projects that maintain more than an adequate bypass reach. The final design will address fish habitat. 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. IPEC is the certificated electric provider for Hoonah. IPEC owns, operates, and maintains the Hoonah generation and distribution system. Hoonah's population is approximately 800 people. A mixture of hydro and diesel generation provides 100% of Hoonah's electric power. IPEC's system is designed for the diesels to supplement the hydro output. When hydro output is low, or decreasing, the controls start up another engine. IPEC has spinning reserves, but the percentage varies depending on the amount of hydro output. For example, if the load is 600 kW and the hydro is carrying 425 kW, that leaves 175 kWh for the diesels to provide. The smallest engine is 455 kW, so in that case we could have about 60% spinning reserve. When the hydro is not producing much power, this changes. IPEC can easily mix and match engines to meet the demand. Outages are rare and well within acceptable limits. Please see Form 12 worksheets for more detailed generation information, attached to this application. 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 ). 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: Caterpillar 3512 DITA, diesel, 1000 kW, installed July 1997 Unit 2: Caterpillar 3512C DITA, diesel, 1000 kW, installed February 2012 Unit 3: Caterpillar 3456 DITA, diesel, 455 kW, installed July 2012 Unit 4: Caterpillar 3456 DITA, diesel, 455 kW, installed July 2012 Unit 5: Gartina Falls run of river hydro, 475 kW, installed August 2015 AEA21010 Page 20 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form I Unit6: Is there operational heat recovery? (Y/N) If yes estimated annual displaced heating fuel (gallons) 5.4.2.2 Existing Distribution System ALASKA ENERGY AUTHORITY Yes. Uncertain. The local Tribe (Hoonah Indian Association, or "HIA") is working on installing a biomass heat loop to help reduce effects of less heat recovery from diesel displacement, if any. 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. IPEC's Hoonah distribution system is made up of two powerhouses. IPEC's diesel plant contains four diesel generators (two 455 kW generators and two 1 MW generators). IPEC's Gartina Falls Hydro plant is powered by a Canyon Hydro crossflow turbine with a generator rated at 425 KW. From the diesel plant, there are two feeders delivering power to the community of Hoonah: Feeder 1 and Feeder 2. The feeders are energized by two 750 kVA 4160 Volt to 12,470 volt step-up transformers. IPEC's distribution system operates at 12,470/7,200 volts. IPEC's Gartina Falls hydro project is connected to Feeder #1 with a 500 kVA 480 volt to 12,470 step- up transformer. IPEC's distribution system operates at 12,470/7200 Volts. IPEC does not have any transmission lines due to the compact size of our system. All the power is transmitted at distribution voltage levels. Since the Water Supply Creek Hydro project is only about 2/3 mile from IPEC's existing distribution system, it will be a short distribution line extension and transmission line to connect to IPEC's current system. 5.4.2.3 Existing Thermal Generation Units (if applicable to your project) Generation Resource/ oesignW Make Model ~verage Year Hours unit Fuel type capacity annual Installed (MMBtu/hr) efficiency HNH#1 Diesel 1000 kW Caterpillar 3512 14.67 July Will DITA kWh/gal 1997 provide HNH#2 Diesel 1000 kW Caterpillar I 3512C 14.67 Feb Will kWh/gal 2012 provide DITA ---• .. HNH#3 Diesel 455 kW Caterpillar 3456 14.67 July Will DITA kWh/gal 2012 1 provide HNH#4 Diesel 455kW Caterpillar 3456 14.6 7 July ]Will DITA kWh/gal 2012 provide 5.4.2.4 O&M and replacement costs for existing units Power Generation Thermal Generation diesel i. Annual O&M cost for labor 2019 Direct costs for Hoonah only not including I PEG's management costs shared with all communities. Labor is not accounted for AEA 21010 Page 21 of38 Hydro $488,365 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form ALASKA ENERGY AUTHORITY separately from costs of overhaul parts, oil changes, etc. ii. Annual O&M cost for non-labor 2019 $82,823 iii. Replacement schedule and cost for Hydro assets are new, Unknown at this time existing units -no immediate plans for installed in 2015 replacement since most units installed 2012 and properly maintained at recommended hour intervals 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 Month Generati Generatio Generatio Fuel Fuel Pea Minimu 2019 Data on Diesel n Gartina n (Type 3) Consumptio Consumptio k m Load (kWh) Falls (kWh) n n Loa (can hydro (Diesel-[Other] d provide (kWh ) Gallons ) -if nee ) January 290659 1 9~027 t 19579 562 - February 322802 50366 21385 577 March 342478 2953 f 25112 613 April 257802 114570 16847 519 May 274738 89656 18953 663 - June 351222 14596 24470 605 l July 361116 33900 25343.5 686 August 398206 22311 27675 646 Septembe 391155 1 32237 28925 727 r I October 258939 118417 14807 608 November 217970 J 164486 15514 598 December 218554 174183 I 14994 581 --- Total 3685641 916602 253604.5 ----- 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. See notes re: existing waste heat system. It may be affected, however, the Hoonah Indian Association is working on development of a biomass heat loop that could take over the current IPEC waste heat project. Month l Diesel -Electricity 1 {Gallons) January February March April May June AEA21010 r Propane (Gallons) Page 22 of38 Coal (Tons) Wood (Cords, green tons, dry tons ) Other 7/20/2020 l Renewable Energy Fund Round 13 Grant Application -Standard Form July August September October T November 4 December Total 5.4.3 Future Trends -, -f- ALASKA ENERGY AUTHORITY 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. Hoonah is a growing community, mostly due to cruise ship tourism. The Icy Strait Point cruise ship destination is in the process of adding two gondola rides to its tourism assets. IPEC is working with Huna Totem Corporation to be sure IPEC's generation and distribution will accommodate them. Furthermore, housing is currently under construction in Hoonah to accommodate seasonal tourism workers, as well as general population growth within the community. The Water Supply Creek hydro project is needed to reduce fuel consumption and rates to Hoonah's businesses to help them be more sustainable into the future. IPEC's other communities also stand to benefit through rate reductions since IPEC charges its members through a postage stamp rate structure. IPEC doesn't have a current load forecast. However, as is the case with most Alaska utilities, demand has fallen due to covid-19, LED lighting, and more efficient household and business appliances. For these reasons, IPEC does not anticipate any large swings in electric demand. In general, IPEC's demand peaks in September in Hoonah. In its other communities demand peaks are experienced in winter. It also must be noted that hydro generation was down in 2019 due to record-breaking drought in southeast Alaska. In 2020, however, we have experienced record rainfall. Hydro and other renewables are needed to reduce C02 emissions and contribute to efforts to reduce climate change into the future. This is an opportunity for IPEC to contribute to this effort since hydro works so efficiently in southeast Alaska's rainforests. 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 AEA21010 Page 23 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form ALASKA ENERGY AUTHORITY See the "Proposed System Design" section of the appropriate Best Practice Checklist for additional guidance. Please see HDR Feasibility Study Dec 2019 for detailed information. IPEC proposes to commission a final design for the Water Supply Creek Hydro (WSCH) project. Many of the questions posed here are answered in the December 2019 feasibility study, as it includes detailed maps, conceptual design, hydrology, and construction details . The final design of the project, which is the focus of this grant application, will answer in detail the questions posed in this section of the grant application. IPEC completed the Gartina Falls Hydro Project in August 2015. The project entailed construction of a new 4-1/2 mile distribution line in addition to the hydro project. The distribution line to Gartina Falls is only about .65 miles from the WSCH project. Thus, the project will require a short distribution line, a .15 mile access road, and construction of the hydro project. At the feasibility study stage, this project is expected to be designed to 300 kW . 5.4.4.1 Proposed Power Generation Units Unit# Resource/ Design Make Model Expected Expected Fuel type capacity capacity life (kW) factor _(years}_. - WSCH Hydro 300 To be To be .51 50 determined determined I + -l 5.4.4.2 Proposed Thermal Generation Units (if applicable) Generation Resource/ Design Make Model Expected Average annual efficiency unit Fuel type capacity (MMBtu/hr) N/A I I I I I 5.4.5 Basic Operation of Proposed Energy System AEA 21010 Page 24 of38 Expected Availability 100% Expected life 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form ALASKA ENERGY AUTHORITY • 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. Please see HDR Feasibility Study Dec 2019. The WSCH will operate in a run-of-river basis. IPEC's existing controls are designed to accommodate hydro power and supplement with diesel as needed. Controls will be in place to fine- tune this practice for hydropower produced from the WSCH. The final design of this system will define details of what is necessary to accommodate the additional hydropower. Much of the infrastructure is already in place. I 5.4.3.1 Expected Capacity Factor % I 5.4.5.2 Annual Electricity Production and Fuel Consumption (Proposed System} -··-- Month Generation Generation Generation Fuel Fuel Secondary See Water (Type 2) (Type 3) Consumption Consumption load Feasibility Supply (kWh) (kWh) (Diesel-[Other] (kWh) Study creek Gallons) attached Hydro January Februa ry March April Ma (kWh ) 86000 75000 82000 135000 180000 -t 125000 62000 June July August September October 60000 130000 160000 November 120000 December . 11 0000 Total 1 ,325,000 --r j i 5.4.5.3 Annual Heating Fuel Consumption (Proposed System} Month Diesel Electricity Propane Coal January February AEA 21010 (Gallons) (Gallons) {Tons) Page 25 of38 - - ---t- Wood (Cords, green tons, dry tons) 1 t Other 7/20/2020 i Storage (kWh) . - l Renewable Energy Fund Round 13 Grant Application -Standard Form ALASKA ENERGY AUTHORITY March April May June July August September October November December Total i- i 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 There may be times with diesels-off when the estimated annual O&M cost associated with WSCH is online, along with the Gartina Falls the proposed renewable project. hydro project. I PEG's experience with hydro operations indicates there is little cost im pact. Option 2: Diesel generation OFF For projects that will result in shuttin g down To be estimated with final design.· Numbers diesel generation please estimate: below are based on 2019 actual Hoonah data 1. Annual non-fuel savings of shutting off diesel generation 1. $150,000 2. Estimated hours that diesel generation will be off per year. 2. Hours diesel OFF/year: to be determined 3. Annual O&M costs associated with the with final design proposed renewable project. 3. $ 10,000 at most 5.4. 7 Fuel Costs Estimate annual cost for all applicable fuel(s) needed to run the proposed system (Year 1 of operation) no new fuel costs are associated with the WSCH project Unit cost ($) Annual Units Total Annual cost($) ABA 21010 Diese l Electricity I Propane I Coal (Gallons) (Gallons) (Tons) Page 26 of38 Wood Other - 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form 5.5 Performance and O&M Reporting For construction projects only 5.5.1 Metering Equipment ALASKA ENERGY AUTHORITY 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. IPEC has existing SCADA and other metering. IPEC is very capable of operating and maintaining, and reporting data required for grant and State of Alaska emissions compliance. IPEC already reports regularly on the Gartina Falls hydro project, and has provided regular construction progress reports for the Gunnuk Creek hydro project for Kake. Costs of data collection will be determined with the final design cost estimates, which is the focus of this grant application. In general, IPEC's existing labor force will provide data collection and is not expected to require additional personnel. 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 See 5.5.1 above. The project is for a final design, not construction. I SECTION 6 -ECONOMIC FEASIBILITY AND BENEFITS I 6.1 Economic Feasibility 6.1.1 Economic Benefit based on 2019 actuals using $2.72/gal for lifetime of project. No increased cost of fuel was included, so the lifetime fuel savings are most likely underestimated. If fuel prices increased even 2%/year, the savings here would be much higher on a lifetime basis. Annual Lifetime Anticipated Diesel Fuel Displaced for Power 84,000 4,200,000 Generation (g allons) Anticipated Fuel Displaced for Heat (g allons ) Total Fuel dis p laced (g allons ) 84,000 4,200,000 Anticipated Diesel Fuel Displaced for Power $228,480 $11,424,000 Generation ($) usin g 2019 diesel costs Anticipated Fuel Displaced for Heat ($) Anticipated Power Generation O&M Cost To be determined with Savin gs final desi g n Anticipated Thermal Generation O&M Cost Savin gs Total Other costs savings (taxes, insurance, To be determined etc.) AEA 21010 Page 27 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form Total Fuel, O&M, and Other Cost Savings $228,400 at minimum (2019 fuel savings Fuel cost savings alone were considered alone) and are subject to refinement with final desi gn 6.1.2 Economic Benefit ALASKA ENERGY AUTHORITY $30,145,786 assuming 2% increase in diesel fuel costs for 50 year lifetime ($11.4 million X {1.02 )"49years } 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 www.akenergyauthority .org/What-We-Do/Grants- Loans/Renewable-Energy-Fund-REF-Grants/2020-REF-Apo lication . 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. The Water Supply Creek Hydro project final design will bring the proposed project to "shovel- ready." IPEC has been leveraging grant funding to construct renewable hydroelectric energy for its diesel-dependent communities. The WSCH, once constructed, will bring Hoonah's electric generation to 60-67% renewable. The projected diesel costs savings alone justify the cost of the final design. IPEC plans to seek grant funding primarily from federal sources to construct the project. Once the project is online it will reduce carbon emissions, electric rates, and will reduce the Power Cost Equalization (PCE) subsidy paid by the State of Alaska, thereby saving the State money. During construction local jobs will be provided. Although PCE savings to the State don't reduce rates to PCE-eligible ratepayers, rates to economic drivers in the community will benefit from reduced and stabilized electric rates. Hoonah is growing its tourism industry, and lower rates will help the local businesses to be more profitable and sustainable. It will also encourage economic growth in Hoonah, and IPEC's other communities. AEA21010 Page 28 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application-Standard Form 6.1.3 Economic Risks ALASKA ENERGY AUTHORITY 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 IPEC has experienced diesel fuel costs as high as $4.25/gallon, and as low as $2.72 in the past 10 years in Hoonah. IPEC doesn't believe fuel prices will be m~.:~ch lower than 2019 over a sustained period. There are no other community-wide energy projects scheduled for development in Hoonah except the biomass heat loop under consideration by the local tribe, Hoonah Indian Association. Hoonah's population has been stable to growing for at least two decades . Even if demand dropped significantly, IPEC expects it would still have to supplement hydro with diesel even after WSCH is constructed. IPEC is well-equipped with several decades of operations and maintenance experience with its generation and distribution systems. This will not change. No other factors are anticipated to provide significant economic risks to IPEC. 6.1.4 Public Benefit for Projects with Direct Private Sector Sales For projects that include direct sales of power to private sector businesses (sawmills, cruise ships, mines, etc.), please provide a brief description of the direct and indirect public benefits derived from the project as well as the private sector benefits and complete the table below. See Section 1.6 in the Request for Applications for more information. N/A. The WSCH will provide benefits to the entire community of Hoonah, as well as IPEC's other service areas by reduced fuel, diesel, and diesel maintenance costs. Renewable energy resource availabilit y (kWh per month ) Estimated direct sales to p rivate sector businesses (kWh ) Revenue for dis p lacin g diesel generation for use at private sector businesses _($j Estimated sales for use by the Alaskan public (kWh ) Revenue for dis p lacin g diesel generation for use by the Alaskan p ublic ($) 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. AEA21010 Page 29 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form Some examples of other public benefits include: ALASKA ENERGY AUTHORITY • 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 Hoonah is currently building new a new waste water treatment plant to supplement the growing tourism industry. The WSCH project will help to provide lower electric rates for the new plant, as well as other assets being constructed within the community. AEA21010 Page 30 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form SECTION 7-SUSTAINABILITY ALASKA ENERGY AUTHORITY 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 IPEC has been generating and selling electricity to its communities since 1977. IPEC has decades of demonstrated experience in operating and maintaining its generation and distribution systems over the four separate micro-grids it serves (Angoon, Hoonah, Kake, and Klukwan/Chilkat Valley . Key personnel are Jodi Mitchell, IPEC's chief executive officer/general manager, employed by IPEC since 1993; Brandon Shaw, IPEC's operations manager employed by IPEC since 2012; Marcus Moulton, IPEC's generation supervisor/mechanic, employed by IPEC since 2015; and Roxanne Drake-Burkhart, IPEC's controller, employed by IPEC since 1995. IPEC regularly provides training to its employees to be sure they are successful, competent, and confident with their duties. IPEC regularly orders and obtains necessary supplies for oil changes, overhauls, distribution supplies including transformers and meters, and other supplies. IPEC maintains impeccable records on its generation units to be sure maintenance is conducted at manufacturer-recommended hourly intervals. In fact, several of our diesel units have operated many years beyond their estimated useful lives due to IPEC's careful maintenance programs. 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. IPEC has accounting systems in place to collect costs and data. IPEC undergoes annual financial and state single audits regularly, and has never been out of compliance with grant reporting or audits. Rates are determined using the RCA's recommended Simplified Rate Filing (SRF) procedure, although IPEC is no longer regulated by the RCA. IPEC uses the SRF model to determine rates on a semiannual basis, then presents the results to its consumer-elected board of directors for approval. Using this procedure, IPEC's rates are adjusted up or down accordingly with SRF AEA21010 Page 31 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form ALASKA ENERGY AUTHORITY results. The idea is to maintain adequate margins while keeping rates as low as we responsibly can. The SRF procedure, as well as IPEC's quarterly Cost of Power Adjustment (COPA) updates, ensure that IPEC charges enough through rates to cover costs of service, while allowing for rate reductions through reductions in costs. IPEC also regularly complies with Power Cost Equalization (PCE) regulations, and is known to be very well-versed in its procedures. 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) Please see answer to 7.1.2 above. IPEC's rates follow costs of service to be sure rates cover IPEC's costs with small margins to satisfy its lenders (USDA-RUS and NRUCFC). IPEC cannot predict what cost savings will be realized since there are too many variables to give an adequate prediction. However, annual fuel cost savings from the WSCH project will more than justify the costs of the project as long as it is constructed primarily with grant funds. 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. IPEC will sell power generated from the WSCH project to its already established member- consumer base in its certificated service areas. Costs of power generation will depend on how much grant funding is awarded for the project. Additional operation and maintenance costs from the WSCH project are expected to be minimal, resulting in significant cost and rate savings to IPEC's consumer base. II SECTION 8-PROJECT READINESS I 8.1 Project Preparation AEA21010 Page 32 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form ALASKA ENERGY AUTHORITY 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. WSCH Reconnaissance Study, completed in 2011 in conjunction with the Gartina Falls hydro study (construction completed 2015). WSCH Feasibility including conceptual design report completed December 2019 (included with this application). The first two phases have already been completed, bringing the project to the final design stage. IPEC seeks to obtain grant funding to pay for the final design based on the HDR April 2020 letter to IPEC estimating costs of the final design project to be $461,474 along with $75,000 in in-kind costs contributed by IPEC through its current operations. IPEC has obtained a letter of intent to lease from Sealaska Corporation, the land-owner, which is included with this application. 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. No specific work has been done with regard to supplementing the WSCH project final design by including energy efficiency measures. However, the Alaska Center for Energy and Power (ACEP) recently completed a study on heat pump usage in IPEC's service areas (September 22, 2020). The study strongly suggests that both IPEC and its member-consumers would benefit financially with heat pump installation and usage in Kake, as well as IPEC's other communities, even when diesel generation is part of the equation. This is exciting news, since it implies that IPEC can leverage lower costs of generation from hydroelectric projects to provide electricity for residential heat pumps. IPEC buys diesel for lower prices than its consumers through negotiated wholesale contracts. We can pass that savings on to our members using heat pumps, thereby increasing IPEC's sales and economies of scale through increased sales. The study can be provided to AEA upon request from either IPEC or ACEP. It may have implications for other areas of rural Alaska. AEA21010 Page 33 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form SECTION 9-LOCAL SUPPORT AND OPPOSITION ALASKA ENERGY AUTHORITY 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 July 20, 2020. Please note that letters of support from legislators will not count toward this criterion. IPEC is providing letters of support from the community of Hoonah. There is no known or anticipated opposition to the project. Further, as mentioned earlier, attached is a letter of intent to lease from the landowner, Sealaska Corporation, the southeast Alaska regional ANCSA Corporation. It is the wish of Sealaska to use its land assets to help provide lower cost power to rural residents as part of its long term strategy of sustainable communities. 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. IPEC is 100% compliant with previously awarded grants not only from AEA, but also from the USDA High Energy Cost Grant program. Projects funded by grants from AEA include Gartina Falls hydro construction, Gunnuk Creek hydro construction, and the Tenakee Springs geothermal reconnaissance study. IPEC's team was given a letter from AEA telling us we are considered a low-risk grant reporter after the Gartina Falls project, but we continue to provide detailed compliance and accounting reports as always. 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. Water Supply Creek Hydro Feasibility Study, December 2019. The reconnaissance study can be provided if requested, but the more recent study is most relevant to this grant application for grant assistance to complete the final design. SECTION 12-LIST OF ADDITIONAL DOCUMENTATION SUBMITTED FOR CONSIDERATION In the space below, please provide a list of additional information submitted for consideration. Resumes for key individuals to see the final design to completion IPEC's 2019 form 12 worksheets for Hoonah's diesel generation, sales review summary to show rates, and Hoonah kWh generation report Sealaska's letter of intent to lease the Water Supply Creek land to IPEC for hydro generation purposes AEA21010 Page 34 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form ALASKA ENERGY AUTHORITY IPEC board resolution authorizing application and administration of grant funds by IPEC's CEO April 23, 2020 letter from HDR in support and documentation of costs of final design and details to be covered Dec 9, 2019 Water Supply Creek Feasibility Study prepared by HDR Letters of Support from Huna Totem Corporation, the City of Hoonah, and Southeast Conference all dated 9/25/2020. II SECTION 13 -AUTHORIZED SIGNERS FORM Community/Grantee Name: Inside Passage Electric Cooperative Regular Election is held: Ma y of each year I Date: September 28, 2020 I Authorized Grant Signer(s): Printed Name Title Term Signature Jodi Mitchell Chief executive Contract, officer/general manager hired by ~~ IPEC Board Brandon Shaw Operations Manager At-will by IPEC Roxanne Drake-Burkhart Controller At-will by IPEC I authorize the above person(s} to sign Grant Documents: Must be authorized by the hi g hest ranking org anization/community/municipal official) Printed Name Title Term Signature See IPEC board Signed by IPEC's Board 3 year resolution 2020-3 Chair/President Larry Beck staggered See board resolution included with this and its terms 2020-3 application Secretary/Treasurer, Christo pher Hatch I Grantee Contact Information: Mailing Address: P.O. Box 210149 Auke Bay, AK 99821-0149 AE A21010 Page 35 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form ALASKA ENERGY AUTHORITY Phone Number: (907) 789-3196 ext. 3024, or CEO cell, (907) 723-0364 (mostly working from home due to coronavirus pandemic) Fax Number: (907) 790-8517 Email Address: JMitchell @ lnsidePassageEiectric.org Federal Tax ID #: 43-1964262 Please submit an updated form whenever there is a change to the above information. AEA21010 Page36 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form SECTION 14-ADDITIONAL DOCUMENTATION AND CERTIFICATION ALASKA ENERGY AUTHORITY SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Contact information and resumes of Applicant's Project Manager, Project Accountant(s), key staff, partners, consultants, and suppliers per application form Section 3.1, 3.4 and 3.6. Applicants are asked to provide resumes submitted with applications in separate electronic documents if the individuals do not want their resumes posted to the project web site. B. Letters or resolutions demonstrating local support per application form Section 9. C. For projects involving heat: Most recent invoice demonstrating the cost of heating fuel for the building(s) impacted by the project. D. Governing Body Resolution or other formal action taken by the applicant's governing body or management per RFA Section 1.4 that: • Commits the organization to provide the matching resources for project at the match amounts indicated in the application. • Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. • Provides as point of contact to represent the applicant for purposes of this application. • Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. E. An electronic version of the entire application on CD or other electronic media, per RFA Section 1. 7. F. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations and that they can indeed commit the entity to these obligations. Print Name Jodi Mitchell Signature ~'}l~ ._, Title Chief executive officer/general manager Date September 28, 2020 ABA 21010 Page 37 of38 7/20/2020 Renewable Energy Fund Round 13 Grant Application -Standard Form AEA21010 Page 38 of38 ALASKA ENERGY AUTHORITY 7/20/2020