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APP_13008-City of Chignik REF Application Form - Round 13
Alaska Energy Authority – AEA 21010 Renewable Energy Fund Grant Application City of Chignik Chignik Hydroelectric Dam Chignik, AK City of Chignik Chignik Hydroelectric Dam Application Contents SECTION 1: Applicant Information ................................................................... 1 SECTION 2: Project Summary ........................................................................... 3 SECTION 3: Project Management, Development, and Operation ................... 5 SECTION 4: Qualifications and Experience ................................................... 10 SECTION 5: Technical Feasibility ................................................................... 13 SECTION 6: Economic Feasibility and Benefits ............................................ 23 SECTION 7: Sustainability ............................................................................... 26 SECTION 8: Project Readiness ....................................................................... 28 SECTION 9: Local Support and Opposition ................................................... 29 SECTION 10: Compliance with Other Awards................................................ 30 SECTION 11: List of Supporting Documentation for Prior Phases .............. 31 SECTION 12: List of Additional Documentation for Consideration .............. 31 SECTION 13: Authorized Signers Form.......................................................... 32 SECTION 14: Additional Documentation and Certification ........................... 33 Appendix A ................................................................................................. 35 Final Feasibility Study Report ................................................................. 36 Preliminary Engineering Report ............................................................ 120 Engineering Design Cost Estimate ....................................................... 148 Appendix B ............................................................................................... 149 City of Chignik Resolution .................................................................... 150 ANTHC Letter of Commitment .............................................................. 152 BBAHC Letter of Support ..................................................................... 153 Chignik Bay Tribal Council Letter of Support ........................................ 155 State of Alaska – VSW Approval Letter ................................................ 156 Attachment A ...................................... Submitted Separately with Application Resumes of Key Personnel ........... Submitted Separately with Application Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 1 7/20/2020 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 Chignik Tax ID # 92-0094970 Date of last financial statement audit: Second class city audit exemption under AS 29.20.640. The city’s Certified Financial Statement for FY 2019 and an FY 2021 Operating Budget are on file with the Alaska Dept. of Commerce and are accessible through the Financial Documents Delivery System. Mailing Address: Physical Address: P.O. Box 110 101 Tsunami Drive Chignik, Alaska 99564 Chignik, Alaska 99564 Telephone: Fax: Email: 907-749-2280 907-749-2300 chignikcityclerk@gmail.com 1.1 Applicant Point of Contact / Grants Manager Name: Dan Smith Title: Project Manager Mailing Address: Alaska Native Tribal Health Consortium Division of Environmental Health & Engineering Rural Energy Program 3900 Ambassador Drive, Suite 227 Anchorage, Alaska 99507 Telephone: Fax: Email: (907) 729-3589 (907)729-4090 dlsmith@anthc.org 1.1.1 Applicant Signatory Authority Contact Information Name: Guy Ashby Title: Mayor of the City of Chignik Mailing Address: P.O. Box 110 Chignik, AK 99564 Telephone: Fax: Email: (907)749-2280 (907)749-2300 chignikcitymayor@gmail.com 1.1.2 Applicant Alternate Points of Contact Name Telephone: Fax: Email: Alana Anderson (907)444-1701 (907) 749-2300 chignikcity@gmail.com Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 2 7/20/2020 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 #______, 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 www.akenergyauthority.org/what-we- do/grants-loans/renewable-energy-fund-ref-grants/2020-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 13 Grant Application – Standard Form AEA 21010 3 7/20/2020 SECTION 2 – PROJECT SUMMARY 2.1 Project Title Provide a 4 to 7 word title for your project. Type in the space below. Chignik Hydroelectric Dam 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 Manager Karin St. Clair by email at grants@akenergyauthority.org or by phone at (907) 771-3081. Latitude 56.295280 Longitude -158.402220 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. Chignik, 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 13 Grant Application – Standard Form AEA 21010 4 7/20/2020 2.4 Project Description Provide a brief, one-paragraph description of the proposed project. The City of Chignik is seeking funding to complete final design and permitting for a run of the river hydroelectric dam project that will enable the city to eliminate dependency on diesel fuel for electricity generation. The establishment of the project will supply year round electrical generation for the community. The City, Tribal Council, Borough, CE2 Engineers, and the Alaska Native Tribal Health Consortium are in a collaborative venture to manage the project successfully with ANTHC taking the lead on project management. CE2 Engineers will be continually involved to conduct work on the project following the completion of the feasibility study in September 2014. The final feasibility report recommends the installation of a 385 kW generator with an anticipated capacity factor of 63%. The final report of the feasibility study models this system and it was determined that the City would see an annual reduction in diesel fuel use by 63,500 gallons annually. The study indicates that “based on current electric demand...[this] has potential to displace 184,000 gallons of diesel fuel annually.” The system is projected to run primarily as a diesel-free system with the exception of two periods in the year where water flow is projected to be too low. During FY15, the city spent about $250K on diesel fuel to generate electricity. Through this project, the city will see substantial enhancements in the areas of water supply delivery, reduced dependence on fossil fuels, and reduced maintenance of electric generation infrastructure. The City of Chignik is already a FERC license holder for the hydroelectric project which can significantly reduce the permitting timeline. 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. Under this funding request, the Alaska Native Tribal Health Consortium (ANTHC) and the City of Chignik will engage in a cooperative agreement outlining ANTHC as project managers. Through this arrangement ANTHC will work with the City to manage purchasing, the grant file, and project management. The City of Chignik and ANTHC will stay in close contact with the Borough as the project develops. ANTHC and the City of Chignik will collaborate and delineate work to be conducted on which project to entities such as, CE2 Engineers, The project costs a total of $1,276,656. 2.6 Previous REF Applications for the Project See Section 1.15 of the RFA for the maximum per project cumulative grant award amount Round Submitted Title of application Application #, if known Did you receive a grant? Y/N Amount of REF grant awarded ($) 9 Chignik Hydroelectric Dam Project 1247 N N/A Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 5 7/20/2020 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 Conceptual Design Phase Stream gauging, geotechnical assessment, mapping & survey, biological assessment, cultural/historical survey May 2021 May 2022 Cooperative project agreement between ANTHC and City of Chignik, basic design services such as stream gauging, geotechnical investigation reports, surveys, topo mapping, cultural/historical surveys 2 65% Design Phase Engineering Design Sept 2021 July 2022 Engineering design documents 3 100% Design Phase Complete Engineering design and all necessary Permits obtained July 2022 May 2023 Engineering permits obtained from ADNR, ADF&G, etc. Final Engineering design 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 $1,276,656 Cash match to be provideda $0 In-kind match to be provideda $0 Energy efficiency match providedb $0 Total costs for project phase(s) covered in application (sum of above) $1,276,656 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. While the City of Chignik has not secured matching funding or in-kind resources that will support this project, the city, tribe, borough, regional tribal health organization, and ANTHC are all highly invested and committed to the successful completion of the project. ANTHC has committed to providing direct project management and financial support to the project, and the city has already invested in the completion of a feasibility study. The cost estimates presented in the table below represent anticipated costs of the proposed system with potential unexpected changes in site conditions, unknowns, and logistics incorporated. Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 6 7/20/2020 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. ANTHC will make every effort to keep the project within budget. In previous instances where there were project overruns, ANTHC has successfully tapped into other funding opportunities to make up budget deficits. If there are cost increases or shortfalls in funding, the first option would be to work with community leadership to attempt to secure gap funding using revolving loan programs through Alaska-based institutions, and pay back any loans using savings from the project. Other potential gap funding sources may include the Alaska Department of Environmental Conservation’s State Revolving Fund loan, or the USDA’s Rural Development loan program. ANTHC will work with the City of Chignik to identify additional funding sources on an as-needed basis to see this project through to completion. ANTHC personnel have extensive experience identifying and acquiring supplemental funding in order to complete projects, including a Grants Planning and Development Division that operates the Healthy Alaska Natives Foundation, which serves as the fundraising arm of the ANTHC. 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 $0 Feasibility and Conceptual Design Actual $207,500 Final Design and Permitting Estimated $1,276,656 Construction Estimated $6,161,596 Total Project Costs (sum of above) Estimated $7,438,000 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 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 subsequent construction phase of the project has an estimated direct cost of $6.16M. A number of funding sources will be pursued, and a combination of grant and loan funding will be considered from a variety of sources. Funding sources that the City of Chignik is currently considering pursuing to carry out the construction and commissioning phases of the project include the U.S. Department of Energy and USDA Rural Development program, among others. ANTHC has been successful in supporting communities such as Chignik with securing funding for addressing high energy costs in recent years, recently having been awarded USDA Rural Development High Energy Cost Grant funding for a multi-community project to provide project management for heat recovery efforts in Anvik, Grayling, and Toksook Bay. This is simply one example of many that ANTHC has recently secured, and if this project is able to progress through Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 7 7/20/2020 the design and permitting phase, similar efforts to ensure funding for the construction phase of this project will be made. 3.2.3 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 Manager Karin St. Clair 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 (List milestones based on phase and type of project. See Sections 2.3 thru 2.6 of the RFA ) $ $ $ Task #0 – Project management and contingency May 2023 $278,043 $ $278,043 Task #1 May 2022 $465,070 $ $465,070 Task #2 July 2022 $208,171 $ $208,171 Task #3 May 2023 $325,372 $ $325,372 TOTALS $1,276,656 $ $1,276,656 Budget Categories: Direct Labor & Benefits $165,818 $ $165,818 Travel & Per Diem $12,112 $ $12,112 Equipment $0 $ $ Materials & Supplies $0 $ $ Contractual Services $998,613 $ $998,613 Construction Services $99,861 $ $99,861 Other $252 $ $252 TOTALS $1,276,656 $ $1,276,656 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. Cost estimates are based on projections from the attached 2014 feasibility study (Hatch), previous ANTHC cost estimates, a 2018 PER focused on the drinking water and impoundment structure components of the project, as well as the extensive experience of the ANTHC project manager identified in section 4.1.1 of this application. All costs have been adjusted for inflation. Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 8 7/20/2020 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 of Chignik will enter into a Cooperative Project Agreement (CPA) with ANTHC which will authorize Consortium personnel to provide project and grant management services for the proposed hydroelectric dam project. The Grants Management and Compliance Department is overseen by the Grants and Other Restricted Revenue Manager, with personnel staffed to provide comprehensive grants administration and assistance. The department manages an approximate total of $250 million in grant-funded projects on an annual basis, and ANTHC’s current portfolio includes grants from a variety of federal and state government agencies, as well as a number of nonprofit organizations and foundations from within and outside the State of Alaska. Grant Specialists with ANTHC’s Grants Management and Compliance Department work to coordinate grant reporting activities with project managers, communicate with external funding agencies to ensure goals and objectives are met, grant reports and closeout data are submitted on time, and project managers, supervisors, and accounting staff manage grant-funded projects according to the grantor’s requirements. ANTHC’s Grant Specialists use the Microsoft office suite of software to monitor grant activities and reporting requirements, working closely with project managers and finance staff to continuously review and improve departmental operations. ANTHC prepares quarterly reports on all of the capital projects that it currently manages. This same methodology of reporting will be utilized for this project should grant funds be awarded to the City of Chignik. Reporting for this project will provide quarterly financial and narrative reports. Financial reports with detailed expense information on each community for labor, materials, travel, and indirect will be produced. Narrative reporting will discuss the status of the project as a whole and any problems in carrying out the scope. Quarterly reports will be produced one month after the close of each quarter (April 30, July 31, October 31, January 31). 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 City of Chignik will enter into a CPA with ANTHC to provide comprehensive project and financial management for the proposed hydroelectric dam project. The following information illustrates the organizational capacity and financial controls that are in place to ensure grant funds are managed efficiently: ANTHC is a large organization with over 3,140 employees and a Fiscal Year 2018 operating budget of $651 million. Of that amount, approximately $255 million was grant funded. The Consortium’s Chief Financial Officer has the overall responsibility for the fiscal and administrative oversight of grant awards. In an effort to ensure that ANTHC is compliant with all federal, state and private funding received as well as the Uniform Administrative Requirements, Cost Principles and Audit Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 9 7/20/2020 Requirements for federal awards (2 CFR Part 200), a Grants Management and Compliance Department was created and works in partnership with the ANTHC Finance department. The financial accounting system includes controls to prevent incurring obligations in excess of total funds available for the grant. ANTHC performs in-house financial management and has sufficient internal controls in place to establish proper segregation of time management and segregation of duties. All funds awarded to the City of Chignik and contracted to ANTHC will be maintained and accounted for separately and distinctly from other sources of revenue/funding. Internal controls are in place to ensure that federal and state funds are used solely for the authorized purposes intended by using multiple levels of approval ensuring award funds are managed properly. The Consortium meets all funders requirements and assigns a unique accounting – cost center number to each award received. ANTHC also has an annual independent audit completed. The Procurement and Contracting Department works with program managers to ensure appropriate scopes of work, performance measures, and compliance requirements are incorporated into all contracts. This is completed through a computerized contracts procurement and management software. The Finance Department oversees the implementation and maintenance of internal monetary and accounting controls, follows corporate accounting policies, provides compliance monitoring and enforcement of financial requirements, and performs mandated record retention for the Consortium. ANTHC has a 17-year history of clean audits, conducted by an independent accounting firm in accordance with the Single Audit Act. ANTHC will provide records and accounting records available to state and federal auditors on request. Project finance information will be kept in ANTHC DEHE’s Spectrum, a job cost accounting software that accounts expenditures by phase code and cost types. Procurement and Contracting and Finance staff are the primary users of the system, with information available to project teams on an ongoing basis. Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 10 7/20/2020 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. Dan Smith, CEM Project Manager Dan has extensive experience managing a variety of alternative energy and energy efficiency projects specifically designed for implementation in cold climate communities, including previous experience with the Susitna-Watana hydroelectric project. Dan has developed a firm knowledge of energy project management in his role with ANTHC’s Rural Energy Program, in addition to managing energy projects and collaborating with various tribal, municipal, state, federal, and non- profit organizations with previous employers. Dan has earned a Bachelor’s degree in civil engineering and is a Certified Energy Manager (CEM), which, in combination with his years of experience in energy project development, gives him a strong background for managing projects that encompass mechanical, electrical, and civil engineering principles and adapting them to the numerous challenges present when conducting projects in rural Alaska. Telephone: (907) 729-3589 Email: dlsmith@anthc.org 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. Hansel Mathlaw Grants and Other Restricted Revenue Manager Hansel has more than 15 years of accounting experience, and will be directly overseeing the management of funding received through the City of Chignik’s contract with ANTHC. In his current role, Hansel is responsible for directing the activities associated with grants and project accounting for all ANTHC divisions. As the Grants and Other Restricted Revenue Manager, Hansel works closely with Grant Specialists to ensure grant-funded projects comply with applicable laws and grantor requirements. He is responsible for reviewing and analyzing financial reports for external financial reporting, completing monthly reconciliations of project grant receivables, allocating indirect costs, and tracking matching funds required by funders. 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; Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 11 7/20/2020 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. The ANTHC Rural Energy Program has worked in partnership with rural communities, tribal organizations, funding agencies, and other ANTHC departments over the past 10 years to identify, develop, and implement more than 140 renewable energy and energy efficiency projects that have already saved communities approximately $19 million in energy costs, with more than $3.6 million in savings continuing to accrue annually. ANTHC’s Alaska Rural Utility Collaborative (ARUC) group has experience constructing and optimizing similar heat recovery systems in their member communities and is more than capable of providing the construction portion of the project utilizing local force account labor resources where available. Key personnel includes: DEHE's Tribal Utility Support Program has utility support engineers that will be available to provide training to local workers on operations and maintenance of the heat recovery system, as well as produce materials. ANTHC’s Division of Environmental Health and Engineering (DEHE) has a full service engineering group to utilize for this project to either design the system internally or provide design review if subcontracted. Our projects are focused on the planning, design, construction and operations of public health infrastructure throughout the state of Alaska. Professional engineers at DEHE are involved in all aspects of a project, from planning to design to force account construction. Key personnel for each department include the following: Dustin Madden Rural Energy Program Manager Dustin oversees ANTHC’s Rural Energy Program, which will be responsible for the overall development, reporting, and project management activities of the proposed Chignik Hydroelectric Dam project. He manages a team of eight staff with a portfolio of approximately $15 million in renewable energy and energy efficiency projects. He has extensive background in energy and economic analysis, program evaluation, and energy modeling, all focused on Alaska. Dustin will be involved in providing support throughout all phases of the project. Dan Smith, CEM Project Manager Dan will be responsible for coordinating Project Tasks #1, #2, and #3, with assistance from the ANTHC Contracting Officer. Dan will work directly with the contractors who have been secured for this project to ensure the timely completion of each task, and for communicating progress and requesting support from the City of Chignik on an as-needed basis. Annie Messer Contracting Officer Annie has been with ANTHC for more than a decade, and has over 30 years’ worth of procurement and contracting experience. She oversees all DEHE-related contracting and procurement activities. Annie works with finance to ensure adherence to finance and risk requirements, maintains contractual documentation, provides contracts and acts as the middleman Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 12 7/20/2020 between company employees and customers to ensure timely reviews and approvals of all contractual obligations. Annie will be responsible for working with the Project Manager to identify qualified contractors to complete Tasks #1, #2, and #3. ANTHC will use a contracting method for producing the most cost effective, quality end product, selecting from several contractors who have delivered on similar projects in the past. Additional support for the project will be provided by the Grants Management and Compliance Department by: Heather Hanak Dongoski Grant Specialist Heather has served as a Grant Specialist with ANTHC for over nine years, and has significant experience coordinating with ANTHC project managers and funding agencies on post award requirements, grant objectives, compliance issues, budget revisions, and special terms and conditions for grant-funded activities. She helps facilitate preparation and timely submission of all quarterly, annual, and as needed reports to grantors by monitoring grant reporting requirements and communicating deadlines to, and collecting information from, project managers as needed to fulfill grant obligations. 4.2 Local Workforce Describe how the project will use local labor or train a local labor workforce. To the maximum extent possible, local labor will be utilized during the construction phase of this project. As the phase of the project being proposed in this application primarily focuses on engineering design and technical investigation, it is not anticipated that the local labor force will be necessary to fulfill the majority of the scope of this project at the current phase. When this project advances to the construction stage in the future, ANTHC will utilize Force Account construction methods that maximize the use of local labor, which ANTHC has done successfully for many construction projects in the past. It is the intent of the City of Chignik to send the power plant operator to hydroelectric training put on by the Alaska Energy Authority in conjunction with AVTEC as a portion of the future construction phase of the project. Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 13 7/20/2020 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. Based on the 2014 feasibility assessment final report developed by CE2/Hatch Engineering, an estimated 63,500 gallons of diesel fuel could be replaced by reducing demand on the City’s current power plant. Based on current electric demand, the proposed energy system has the potential to displace 184,000 gallons of diesel fuel annually. A 385 kW generator is recommended for the project. Over the project’s minimum expected life of 50 years, this equates to potentially reducing fuel consumption by nearly 10 million gallons. The existing system has the current energy potential of 470,000 kWh with the proposed system producing 2,140,000 kWh. Other alternatives resources explored by the community include wind power has been tested in the past with unfavorable results. A wind study was conducted on Mud Bay Hill, located 2 ½ miles north-northwest along the western shore of Anchorage Bay in Chignik. It was f ound that the area has volatile winds and turbulence that make it unfavorable for the establishment of wind turbine technology. Upon completion of the feasibility study, it was determined that the project is the lowest costs alternative for electric energy generation for the community. Hydrology data collection, considerations and modeling was conducted during the feasibility study however it was recommended that continued data collection through the final design and permitting phase. As part of the FERC requirements, monitoring of pipeline f lows and gaging of stream flows at the dam, pool, and bridge sites in Indian Creek were performed. Data compiled in the final report, (Hatch, 2013 Monitoring Report) is the most recently collected, analyzed, and reported and reports daily average stream flows for Indian Creek at the dam and bridge sites for all years. Due to the geographic location of the City of Chignik, seasonal fluctuations affect water flow during two periods of the year. The system will operate offline during late winter and spring based periods of low water shown in, Tables 3-2 – 3-5, pages 11-12 of the feasibility study, illustrating monthly flows for various sites with monthly, median, and peak flood data. The months in which the system is expected to operate offline is considered nominal and the project will primarily operate on a diesels off system. 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. As described in Tables 2-1 on the second page of the feasibility study, a no action alternative, and reconstructed retrofits were considered in addition to the project being proposed. The no action alternative formed the base case against which the other alternatives were considered. The reconstructed retrofit project was deemed marginally economic, and the proposed new project would result in a significant energy cost savings to the community. Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 14 7/20/2020 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 Applicable Permits: FERC Licensing, Consultation, and Permitting – approach for project would be to seek capacity related amendment to existing FERC permit est. timeline estimated at 52 weeks ADF&G – additional study and permitting efforts should provide as much characterization of aquatic habitat and species as possible including river survey data and photos. Estimated timeline: 10 weeks ADNR – Application recommended to be submitted as soon as possible. Estimated timeline: 72 weeks. Temporary water use permits can be established for up to 5 year increments. SHPO – Programmatic Agreement with FERC & SHPO developed and signed in 2005 as part of relicensing effort included a requirement to develop a Historic Properties Management Plan put in place, the City of Chignik has developed a draft of this document which has also been reviewed as of April 2012. The City was unable to go further with the process in the earlier stages of the project. This phase would enable the submission and approval of the SHPO for the project. Local Permits – The Lake and Peninsula Borough is closely involved in the project and will review and issue all relevant local permits necessary to conduct the project. If it is identified that additional permits are needed during the final stages of the design and permitting process, ANTHC will work with the City of Chignik and pertinent stakeholders to ensure all necessary permits are obtained prior to initiating the construction phase of the project. 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 needs to undergo geotechnical investigations, surveying and engineering such as LIDAR mapping to determine soil suitability for the proposed relocation of the powerhouse. Final selection of the powerhouse site will be based upon FERC licensing, permitting, detailed topographic (LIDAR) ground surveying, and geotechnical investigations (drilling or machine dug tests pits). The City of Chignik owns surface rights to all property identified in the feasibility study for the proposed site. Completing the recommended mapping will inform the need for further easements. The final report of the feasibility study identifies all property associated with the proposed project in detail, attributing ownership of the surface estate for the parcel. The City of Chignik holds Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 15 7/20/2020 title to all lands outlined in the proposed project subject to a restrictive easement for access to the Indian Creek Quarry. Components of the proposed project, an access road and overhead power transmission lines are not considered actions that unreasonably interfere with the ingress and egress to the Indian Creek Quarry. In 2013, the City of Chignik improved access to the site by pioneering a trail with a tracked excavator from the quarry to the dam. 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. Potential risks not identified in the feasibility study will be outlined in detail during this final phase of design and permitting. As noted in the study, LIDAR mapping of the reservoir and project corridor will be necessary to further inform potential risks associated with the project. Stream gauging and geotechnical investigations may present a risk when evaluating various site conditions for the project. Topographic surveys will delineate project property boundaries and inform future easements. Unknown site conditions for the location of the powerhouse may involve some technical risk which will be addressed by determining the final site through FERC licensing, permitting, detailed topographic (LIDAR) ground surveying, and geotechnical investigations (drilling or machine dug tests pits). Additional risk is associated with the need for geotechnical investigation of the quality of talus slope material for use as rock fill, drain material, and bedding material. The verification of soil depths, and bedrock quality at the dam site, along the access road, and pipeline routes need to be identified along with a source for the material. This risk was addressed by the evaluation of local sources of material. Quarrying currently occurs on the south side of Indian Creek just north of the active bridge and has reached an existing CAT trail used to access the dam and penstock. 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 Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 16 7/20/2020 ANTHC will consider all potential environmental concerns associated with this project as identified by the feasibility study, recommendations from AEA, CE2 and associated agencies for permitting purposes, etc. ANTHC is very experienced in utilizing the Indian Health Service environmental review procedures for conducting environmental analyses of all health and sanitation facility projects in all stages of development, as outlined in the IHS environmental review manual issued in January 2007. Threatened or Endangered Species: A listing of all endangered or threatened plant and animal species for Alaska was obtained through the USFWS. None of the species identified in the area list of endangered or threatened animal or plant species have critical habitat near the project. It was concluded that the project is not likely to impact endangered or threatened species. Habitat Issues: In the resource agency meeting, the Alaska Department of Fish & Game identified that the project will need additional studies to inform permitting and should provide as much characterization of the aquatic habitat and species as possible which was recommended to include river survey data and photos. The feasibility indicated no fish occurring in Indian Lake or immediately below the lake in Indian Creek. The climate change driven changes in hydrology are not expected to significantly impact aquatic productivity. Wetlands and other Protected Areas: No wetlands or protected areas were identified. Archeological and Historical Resources: An archeological and cultural resource assessment will be conducted prior to ground disturbing activities. All water rights associated with the dam are included in the study and are currently certified to the City of Chignik. The City is also the owner of the FERC license for the project. State Historic Preservation Office: The site will need a completed Historic Properties Management Plan which the City has drafted but has yet to finalize and submit. The plan was started in 2009 and reviewed in 2012. The Area of Potential Effect (APE) is defined in the Section 106 regulations as the geographic area or areas within which an undertaking may directly or indirectly cause changes in the character or use of historic properties. During this phase of the project, the City would submit the Historic Properties Management Plan to State Historic Preservation Office. Land Development Constraints: The proposed project requires title or easement to the surface estate. Research conducted during the feasibility study concluded that, all property associated with the proposed site is owned by the City of Chignik subject to a restrictive easement for access to the Indian Creek Quarry. Ingress and egress to the Indian Creek Quarry is not anticipated to interfere. The proposed reservoir may occupy a portion of the un-surveyed section 24 wherein the surface estate is owned by Chignik Lagoon Native Corporation. The plan to mitigate the issue involves topographic surveying in this phase of the project to determine whether a future easement is required. Telecommunications Interference: None anticipated Aviation Considerations: Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 17 7/20/2020 LIDAR and other remote sensing topographic survey work to map the reservoir, the location of property boundary locations for lands occupied by the project, especially the Indian Creek area from the mouth to above the upper end of the proposed reservoir. Visual and Aesthetic Impacts: Visual and aesthetic impacts were not evaluated in the feasibility study; however, it should be noted that after the recent completion of the Chignik Lagoon Hydroelectric Project, the community has cited air quality improvement and noise pollution reduction as two beneficial results that the community has observed since the new system was installed. 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. Three diesel generators comprise the current system and were installed in 2009. The following describes these systems: John Deere 6090, 11 years old, rated 230 kW John Deere 6090, 11 years old, rated 230 kW John Deere 4045, 11 years old, rated 117 kW The current system has the energy potential of 470,000 kW. The City of Chignik currently utilizes diesel electric generation for 100% of its electrical needs. Chignik Electric, owned by the City of Chignik operates the local power utility. The City also owns the existing hydroelectric project, with a nameplate capacity for 60kW, which is currently not connected to the City’s distribution system. The system was constructed in 1947 and primarily conveys raw water from Indian Lake to the community of Chignik for drinking water. 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 6090, 11 years old, rated 230 kW 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). Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 18 7/20/2020 Unit 2: John Deere 6090, 11 years old, rated 230 kW Unit 3: John Deere 4045, 11 years old, rated 117 kW Unit 4: Existing hydroelectric structure (inoperable), 73 years old, rated 60 kW Unit 5: Unit 6: 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. Existing distribution for the diesel electric grid consists of a central power house where 3.1% of the total power generated is consumed on site. The remaining 96.7% is distributed to the rest of the grid with a 0.2% line loss as reported in the FY2019 PCE statistical report. 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 N/A N/A N/A N/A N/A N/A N/A 5.4.2.5 Annual Electricity Production and Fuel Consumption (Existing System) Use most recent year. Replace the section (Diesel), (Type 2), and (Type 3) with generation sources Month Generation (Diesel) (kWh) Fuel Consumption (Diesel-Gallons) Fuel Consumption [Other] Peak Load (kW) Minimum Load (kW) January 60,620 115 80 February 55,158 110 79 March 53,211 97 78 April 52,308 158 60 May 74,161 180 140 June 96,364 176 142 July 85,510 178 136 August 81,460 167 124 September 69,535 161 58 October 47,884 88 60 November 55,060 103 59 Is there operational heat recovery? (Y/N) If yes estimated annual displaced heating fuel (gallons) No 5.4.2.4 O&M and replacement costs for existing units Power Generation Thermal Generation i. Annual O&M cost for labor $37,190 ii. Annual O&M cost for non-labor $18,595 iii. Replacement schedule and cost for existing units Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 19 7/20/2020 December 52,921 100 70 Total 784,191 59,850 180 58 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. Energy demand for the City of Chignik has been projected to increase over the long term, despite recession in recent years. Lake and Peninsula Borough and the City of Chignik have been actively working to implement upgrades and additions to the current marina infrastructure. Both entities are in a joint venture to construct a multi community dock facility and a boat lift which will enable the City to construct a boat haul out facility. The feasibility study final report contains an economic analysis of load growth projected to increase at a rate of 2% a year. To a certain extent, it is likely the high cost of diesel-generated electric energy for commercial customers is a factor in the lack of growth. Trident operates during the summer months, which increases load demand for the city. Currently, Trident only purchases energy from the city utility for the production side and not the supply side of business. The company barges fuel into the city to operate its own generators to run power for the supply side. If cheaper electricity were available, Trident would most likely run the full processing facility via city electricity, and the new proposed system will be able to supply this demand. During this final design and permitting phase, load growth projections will be evaluated with the aforementioned economic development infrastructure considered. 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 project will utilize a run of the river design. The proposed system is 385 kW with a 63% capacity factor displacing 98% of diesel-generated energy with a 99.5% availability rate. The existing hydro project is dated circa 1947 and serves as the community’s raw water source. The project has the potential to provide power to the community; however, the system is not currently connected to the distribution system. Due to the age of the dam, it is in imminent danger of failing and is in dire need of both a replacement dam and new pipeline infrastructure. The work outlined in this phase for which the city is requesting funding will fulfill the design and permitting needs of the replacement project. This proposed project will meet the existing and future electricity demands for the city while also providing improved water quality and overall safety for the community as critical infrastructure improvement projects are being implemented. This phase of the project proposes to confirm findings in the final report of the feasibility study by conducting final design and satisfying outstanding permitting requirements. The City of Chignik owns Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 20 7/20/2020 all lands associated with the proposed site for the project, with many of the environmental issues having been assessed in the feasibility study and necessary permits identified. The project seeks funding to perform remaining environmental assessment work, acquire necessary permits and complete the project’s final design. The anticipated annual generation of the new system is 2,140,000kWh. Optimum installed capacity is 385kW. The anticipated capacity factor is 63%. Final project capacity will be determined during the design and permitting stage. Anticipated barriers for this phase include permitting. The basic integration concept is to provide the City of Chignik with a main power source via a run of the river hydroelectric facility with diesel generation supplemented as needed. Delivery methods for the renewable energy resource will be transmission line connection directly to the distribution system. 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 N/A Hydro 385 Turgo- style turbine 63% 50+ 90% 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. Because the hydroelectric system will displace nearly all diesel generation, it is expected that the labor associated with the diesel generation will be redirected to supporting the hydro system without any changes. Labor is excluded from the operational model and the funding for hydro repairs is limited to parts, which is currently estimated to be 0.25% of the overall construction cost. It is likely that permit compliance monitoring will be required by resource agencies for 5 years following commissioning. The monitoring is presumed to be similar to current requirements which include stream gauging and fish spawning surveys. The first 5 years of hydro O&M is estimated to cost 0.75% of the overall construction cost, which will account for the estimated monitoring work. 5.4.3.1 Expected Capacity Factor 63% 5.4.5.2 Annual Electricity Production and Fuel Consumption (Proposed System) Month Generation (Proposed System) (kWh) Generation (Type 2) (kWh) Fuel Consumption (Diesel- Gallons) Fuel Consumption [Other] Secondary load (kWh) Storage (kWh) January 87,020 7,881 627 February 79,179 7,171 571 Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 21 7/20/2020 March 76,384 6,917 550 April 75,088 6,800 541 May 106,458 9,641 767 June 138,331 12,527 997 July 122,750 11,116 885 August 116,936 10,590 843 September 99,817 9,040 719 October 68,737 6,225 495 November 79,039 7,158 570 December 75,968 6,880 547 Total 1,125,708 101,945 8,112 5.4.5.3 Annual Heating Fuel Consumption (Proposed System) Month Diesel (Gallons) Electricity Propane (Gallons) Coal (Tons) Wood (Cords, green tons, dry tons) Other January N/A N/A N/A N/A N/A N/A February N/A N/A N/A N/A N/A N/A March N/A N/A N/A N/A N/A N/A April N/A N/A N/A N/A N/A N/A May N/A N/A N/A N/A N/A N/A June N/A N/A N/A N/A N/A N/A July N/A N/A N/A N/A N/A N/A August N/A N/A N/A N/A N/A N/A September N/A N/A N/A N/A N/A N/A October N/A N/A N/A N/A N/A N/A November N/A N/A N/A N/A N/A N/A December N/A N/A N/A N/A N/A N/A Total N/A N/A N/A N/A N/A N/A 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. $ 27,543 Option 2: Diesel generation OFF For projects that will result in shutting down diesel generation please estimate: 1. Annual non-fuel savings of shutting off diesel generation 1. $ 234,315 2. Hours diesel OFF/year: 7,884 Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 22 7/20/2020 2. Estimated hours that diesel generation will be off per year. 3. Annual O&M costs associated with the proposed renewable project. 3. $ 18,595 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 (kWh) Propane (Gallons) Coal (Tons) Wood Other Unit cost ($) $3.69 Annual Units 8,112 Total Annual cost ($) $29,933 5.5 Performance and O&M Reporting For construction projects only 5.5.1 Metering Equipment Please provide a short narrative, and cost estimate, identifying the metering equipment that will be used to comply with the operations reporting requirement identified in Section 3.15 of the Request for Applications. It is estimated that metering equipment will be integrated into the new powerhouse systems in the form of common SCADA systems found other power houses in Alaska. 5.5.2 O&M reporting Please provide a short narrative about the methods that will be used to gather and store reliable operations and maintenance data, including costs, to comply with the operations reporting requirement identified in Section 3.15 of the Request for Applications Detailed O&M reporting plans will be developed during the final stages of the design phase and through the construction phase. Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 23 7/20/2020 SECTION 6 – ECONOMIC FEASIBILITY AND BENEFITS 6.1 Economic Feasibility 6.1.1 Economic Benefit Annual Lifetime Anticipated Diesel Fuel Displaced for Power Generation (gallons) 63,500 3,175,000 Anticipated Fuel Displaced for Heat (gallons) 0 0 Total Fuel displaced (gallons) 63,500 3,175,000 Anticipated Diesel Fuel Displaced for Power Generation ($) $234,315 $11,715,750 Anticipated Fuel Displaced for Heat ($) $0 $0 Anticipated Power Generation O&M Cost Savings $8,948 $447,400 Anticipated Thermal Generation O&M Cost Savings $0 $0 Total Other costs savings (taxes, insurance, etc.) Total Fuel, O&M, and Other Cost Savings $243,263 $12,163,150 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 for ecast 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-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. Potential annual fuel displacement (gallons and dollars) over the lifetime of the evaluated renewable energy project is, 3,175,000 gallons saving over $12M during the projected lifetime. Tax credits are not expected to be beneficial to the project due to the City of Chignik’s status as a nonprofit entity. City reliance on diesel fuel and the unpredictable nature of fuel prices is a main motivator for the community and borough to establish alternative and sustainable energy sources. The proposed project will stabilize energy generation and costs, provide long term economic benefits to the City of Chignik, and improve a severely inefficient and outdated system which has the ability to supply the city with both drinking water and energy. Non-economic benefits associated with the project include the improvement of the community’s water supply, promoting community stability and wellness through a reliable and renewable energy Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 24 7/20/2020 resource, and delivering affordable energy that has potential to reduce the outmigration of families unable to afford to live in cities or villages in rural Alaska. 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 The principal economic risk to this project is a reduced demand stemming from a declining population. This could be attributed to declining fishery numbers which are a driving factor in local demand. 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. Reducing the cost of power production will benefit small businesses, public facilities, lodges, the city, Tribe, boat harbor, and residents. Trident is currently the only large private business, but is presently only utilizing city electric for fish processing support operations. Further analysis determining sales to private sector businesses has yet to be determined. Renewable energy resource availability (kWh per month) TBD Estimated direct sales to private sector businesses (kWh) TBD Revenue for displacing diesel generation for use at private sector businesses ($) TBD Estimated sales for use by the Alaskan public (kWh) TBD Revenue for displacing diesel generation for use by the Alaskan public ($) TBD 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 Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 25 7/20/2020 The project will promote or sustain long-term commercial economic development for the community This project (once completely constructed) will ensure a reliable source of electricity for the community. The proposed project will be combined with planned renovations to the Community’s drinking water source. The lower cost of energy in the community will also reduce the cost of delivering basic drinking water and sanitation services to the community, which will in turn improve the community’s capacity to address public health issues and build resiliency for basic infrastructure needs. Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 26 7/20/2020 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 Energy sales established by the city at the current rate will be utilized to fund the costs of operations and maintenance. As the city experiences savings from the new system, excess money from O&M costs will be put into a ‘replacement and repair’ account. The energy market is projected to increase for the City of Chignik as the Lake and Peninsula Borough and the city continue to partner to conduct economic development projects such as the Chignik multi-community dock facility. Excess energy from the new proposed system can be used by commercial businesses in Chignik. Cheaper energy is projected to attract more businesses to the area and create sustainability for the local utility. The run of the river system design means that there is a strong lik elihood that the resource will continue to be available over the life of the project. 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 of Chignik is the owner of the local utility, Chignik Electric. The local electric utility supplies power to the local school, local health clinic, and approximately 60 homes. The buyers/customers for the sale of electricity will be the residents of the Chignik community, school, health clinic, and other local businesses, including the possibility of Trident becoming a new client. The current electric rate for residential customers and community facilities is $.49/kWh. Rates will remain at the current price until the system is in operation for several months to establish an evaluation period that can inform a sound adjustment based on overall energy savings. After a new rate is established, a percentage of the estimated $243,263 in annual savings stemming from an overall reduction in O&M costs and diesel fuel offset experienced through improved efficiency and use of the new system will be placed in an O&M account for replacements and repairs to the system over time, as well as any additional training for operators. Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 27 7/20/2020 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) The current electric rate for residential customers and community facilities is $.49/kWh. Rates will remain at the current price until the system is in operation for several months to establish an evaluation period that can inform a sound adjustment based on overall energy savings. During the final stages of design, various rate scenarios will be developed for consideration. 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. In addition to existing end users, the Lake and Peninsula Borough and the City of Chignik have begun the process of identifying potential customers, including estimates which have included scenarios where the current floating processor reestablishes business on-shore. Economic development initiatives such as the marina development projects in the City of Chignik, as well as a boat lift and boat storage area were also considered. A more detailed energy model reflecting how these buyers/customers will effect energy loads and demand will be necessary to properly size and integrate hydro into the community power production system. Chignik is expected to grow in population as these economic initiatives stimulate job creation. Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 28 7/20/2020 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. In September 2014, the final report from the feasibility study conducted by CE2/Hatch Engineering. The study indicated that the proposed hydro project is the lowest cost option for electric generation for Chignik and has a positive benefit to cost ratio under the expected range of scenarios. A 2018 Preliminary Engineering Report conducted by ANTHC reaffirmed this finding. The next phase recommended for the project is to complete final design and permitting. The project anticipates the Federal Energy Regulation Commission (FERC) licensing to be completed through the application of an amendment to the current FERC permit licensed to the City of Chignik for the existing dam site. Permits will be obtained during this phase from FERC, ADNR, ADF&G and an SHPO will be finalized and submitted. The City of Chignik owns the lands that are associated with the proposed project and is also the owner of the FERC license for the current dam structure. ANTHC, the City of Chignik, and CE2 Engineers are ready to begin work outlined in the detailed budget provided as an appendix. 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. ANTHC is currently assisting the City of Chignik with energy efficiency measures as they pertain to the city’s drinking water and sanitation systems with funding from Denali Commission. Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 29 7/20/2020 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 July 20, 2020. Please note that letters of support from legislators will not count toward this criterion. Letters of support for this project have been included in Appendix B, and are identified in Section 12 of this application. The community of the City of Chignik has advocated for this project from inception until it has reached its current point, and has been supportive of this effort for many years. The city has historically made an effort in past REF funding cycles to obtain funding for the project, which has successfully assisted in funding the development of the project to its current phase. The entire community is in favor of the city’s pursuit of funding for the hydroelectric project. This has been a priority for the community, predating 1986 where city resolutions were established for the development of a hydropower project. The City of Chignik owns the electric utility, Chignik Electric, which is also very supportive of the project. Stakeholders such as Trident Seafoods would benefit greatly from decreased costs in energy in Chignik. The anticipated effects of this project include the reestablishment of an on-shore processor as the community lost the last cannery facility to a fire in 2008. The concept of this proposed design opens the community to the possibility of establishing a hatchery in the future. ANTHC is also in support of this project as it is tied directly to the community’s drinking water source. Additionally, ANTHC has identified and prioritizes alternative energy and energy efficiency as a valid method to increase the viability of water and sanitation services in rural Alaskan communities. Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 30 7/20/2020 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. The City of Chignik was awarded $207,500 from the legislature during the first round of the Renewable Energy Fund Program. These funds were used to complete the feasibility study on the Chignik Hydroelectric Power System on Indian Lake. The project is a FERC-licensed project and occupies approximately 58 acres of lands primarily owned by the United States Bureau of Land Management. The BLM conveyed all lands to the local native corporation, Farwest, Inc. Farwest, Inc. has since transferred all land rights to the current owner, the City of Chignik. The city was issued the FERC license on September 6, 2012 as a transfer order between the local corporation and the City. The final feasibility study report was completed in September 2014 with funds from the initial design and permitting phase of REF. The City of Chignik applied to REF in Round 9 for final design and permitting in 2015. While this application was recommended for full funding, the project was not funded. In addition to the City of Chignik, the Alaska Energy Authority has awarded funding to ANTHC in the past to support seveal projects, including many previously-awarded AEA Renewable Energy Fund grants to rural communities around the state, which have been managed successfully. The Rural Energy Program team has managed installation of heat recovery systems for the communities of Emmonak, Russian Mission, and Chevak through the Renewable Energy Fund program, in addition to many other projects. Currently, ANTHC is managing AEA funding for the Mertarvik-Newtok BFU project, grant agreement #7210026. ANTHC has been successful in these projects through the various divisions and controls that it has in place to successfully manage grant-funded projects. The Consortium is structured in a way that allows for maximum oversight in project management and fiscal reporting. DEHE leadership has extensive experience coordinating grant-funded projects in rural Alaska communities, and will be responsible for managing project tasks to completion, utilizing the various organizational divisions, controls, personnel, and processes it has established for these functions. In addition to the staff identified in Section 4, ANTHC’s DEHE has the benefit of drawing from the expertise of over twenty engineers presently licensed in the State of Alaska across multiple disciplines, with additional staff actively pursuing licensure, several of whom will likely have attained licensure by the beginning of the project period. ANTHC’s DEHE also has multiple Certified Energy Managers (CEM) on staff, with several others working towards that certification. The Grants Management and Compliance department is staffed to ensure that financial management and grant reporting are completed accurately and on time for all restricted sources of funding received, which includes funds received through contracting with entities that ANTHC partners with to complete grant-funded projects. Renewable Energy Fund Round 13 Grant Application – Standard Form AEA 21010 31 7/20/2020 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. Appendix A 1.Final Feasibility Study Report developed by Hatch Engineering in September 2014. 2.Preliminary Engineering Report developed by ANTHC in July 2018. 3.ANTHC 2015 Engineering Design Cost Estimate SECTION 12 – LIST OF ADDITIONAL DOCUMENTATION SUBMITTED FOR CONSIDERATION In the space below, please provide a list of additional information submitted for consideration. Appendix B 1.City of Chignik Resolution 2.ANTHC Letter of Commitment 3.BBAHC Letter of Support 4.Chignik Bay Tribal Council Letter of Support 5.State of Alaska – VSW Approval Letter Attachment A Resumes of Key Personnel 1.Heather Dongoski 2.Dustin Madden 3.Hansel Mathlaw 4.Annie Messer 5.Dan Smith SECTION 13 -AUTHORIZED SIGNERS FORM Community/Grantee Name: City of Chignik Regular Election is held: I Date: 9/25/2020 Authorized Grant Signer(s): Printed Name Title Term Signature ov I authorize the above person(s) to sign Grant Documents: (Must be authorized by the highest ranking organization/community/municipalofficial Printed Name Title Guy Ashby Mayor Grantee Contact Information: Maili�g A�dr�ss� .,,P,.(?o,,1c//OC'-4.r...,,?t-&S •Yt CLl'r,1./�,,,,,.,.,,e-5'';�� Phone Number:4,, • -,n-lff-t......, 'l•)-7£/r•J.l-8''° Fax Number: 9 t,) -°?L/�-"'l__':;Td<J Email Address: d.�,,._,-£��'-IJ ,,,u,,._o# t>r,,, <!._e,-J C,,.;viFederal TaxlD #: 11..-· ;,. '7<1� ?-O Term Signature Please submit an updated form whenever there is a change to the above information. 32 SECTION 14 -ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: •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. •Letters or resolutions demonstrating local support per application form Section 9. •For projects involving heat: Most recent invoice demonstrating the cost of heating fuel for the building(s) impacted by the project. •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. •An electronic version of the entire application on CD or other electronic media, per RFA Section 1. 7. •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 Guy Ashby 33 Signature Title Date 34 Alaska Energy Authority – AEA 21010 Renewable Energy Fund Grant Application Appendix A 35 Chi ik Hd l ti P j t Feasibility Study Chignik Hydroelectric Project September 2014 Prepared for: CE2 Engineers, Inc. 36 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page i © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Project Report September 2014 CE2 Chignik Hydroelectric Project Distribution Brian Aklin, CE2 Feasibility Study Final Report 37 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page i © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Table of Contents 1.Introduction ........................................................................................................................................... 1 2.Alternative Project Arrangements ...................................................................................................... 2 2.1 Alternatives Considered ................................................................................................................ 2 2.2 No Action Alternative – Diesel Electric Plant ................................................................................ 2 2.3 Reconstructed Existing Project ..................................................................................................... 2 2.3.1 Timber Frame Dam ............................................................................................................. 3 2.3.2 Wood Stave and Steel Pipeline .......................................................................................... 3 2.3.3 Turbine ................................................................................................................................ 4 2.4 Proposed New Project .................................................................................................................. 4 2.4.1 Selected Arrangement ........................................................................................................ 4 2.4.2 Environmental Measures .................................................................................................... 5 3.Existing Environment ........................................................................................................................... 7 3.1 Community Overview .................................................................................................................... 7 3.1.1 Population ........................................................................................................................... 7 3.1.2 Location ............................................................................................................................... 7 3.1.3 History ................................................................................................................................. 7 3.2 Climate .......................................................................................................................................... 7 3.3 Climate Change ............................................................................................................................ 8 3.4 Hydrology .................................................................................................................................... 10 3.4.1 Indian Creek Watershed ................................................................................................... 10 3.4.2 Indian Creek Stream Gaging ............................................................................................ 11 3.4.3 Peak Flood ........................................................................................................................ 12 3.5 Water Quality .............................................................................................................................. 12 3.6 Vegetation ................................................................................................................................... 13 3.7 Aquatic Resources ...................................................................................................................... 13 3.8 Terrestrial Resources ................................................................................................................. 15 3.9 Endangered or Threatened Plant and Animal Species .............................................................. 15 3.10 Geology ....................................................................................................................................... 16 3.11 Land Use ..................................................................................................................................... 16 3.12 Site Control ................................................................................................................................. 16 3.13 Recreational Use ........................................................................................................................ 17 3.14 Socioeconomic ............................................................................................................................ 17 3.15 Historical and Archaeological Resources ................................................................................... 18 3.15.1 Historical Resources ......................................................................................................... 18 3.16 Regulatory ................................................................................................................................... 18 3.16.1 FERC License ................................................................................................................... 18 3.16.2 State Historic Preservation Office ..................................................................................... 19 3.16.3 Water Rights ..................................................................................................................... 19 4.Technical Considerations .................................................................................................................. 21 4.1 General Effects of Proposed Action ............................................................................................ 21 4.2 Selected Project Arrangement .................................................................................................... 21 38 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page ii © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 4.2.1 Reservoir ........................................................................................................................... 21 4.2.2 Dam, Spillway, and Intake ................................................................................................ 22 4.2.3 Pipeline ............................................................................................................................. 23 4.2.4 Powerhouse ...................................................................................................................... 24 4.2.5 Turbine and Generator ...................................................................................................... 24 4.2.6 Domestic and Process Raw Water Supply ....................................................................... 25 4.3 Hydrology Analysis ..................................................................................................................... 25 4.3.1 Stream Gaging Data Analysis ........................................................................................... 25 4.3.2 Hydrology Data used for modeling .................................................................................... 27 4.4 Energy Analysis .......................................................................................................................... 27 4.4.1 Diesel Electric Generation ................................................................................................ 27 4.4.2 Diesel Electric Analysis and Modeling .............................................................................. 29 4.4.3 Hydroelectric Generation .................................................................................................. 30 4.4.4 Heating Demand ............................................................................................................... 30 4.4.5 Electric Demand Modeling and Forecasting ..................................................................... 30 4.4.6 Heating Energy ................................................................................................................. 32 4.5 Water Use ................................................................................................................................... 33 4.5.1 Potable Water ................................................................................................................... 33 4.5.2 Fish Processing ................................................................................................................. 33 4.6 Operational Modeling .................................................................................................................. 33 4.6.1 Reservoir Elevation ........................................................................................................... 35 4.6.2 Project Capacity ................................................................................................................ 36 4.7 Proposed Project Scheme Summary .......................................................................................... 38 5.Opinion of Probable Construction Cost and Schedule .................................................................. 39 5.1 No Action Alternative – Diesel Electric Plant .............................................................................. 39 5.2 Reconstructed Existing Project ................................................................................................... 39 5.3 Proposed New Project ................................................................................................................ 39 5.4 Schedule ..................................................................................................................................... 42 6.Economic Analysis ............................................................................................................................. 43 6.1 Annual Costs: No Action Alternative – Diesel Electric Plant ...................................................... 43 6.1.1 Fuel Cost ........................................................................................................................... 43 6.1.2 Diesel Operation and Maintenance Cost .......................................................................... 43 6.2 Annual Costs, Proposed New Project......................................................................................... 44 6.2.1 Time Value ........................................................................................................................ 44 6.2.2 Construction Cost Variance .............................................................................................. 44 6.2.3 Hydro Operation and Maintenance Costs ......................................................................... 44 6.3 Economic Evaluation Method ..................................................................................................... 45 6.4 Economic Results – Proposed New Project ............................................................................... 46 6.4.1 Reconstructed Existing Project Economic Results ........................................................... 47 6.4.2 Environmental Measures Economic Analysis ................................................................... 48 7.Proposed New Project – Environmental / Regulatory Analysis .................................................... 49 7.1.1 Aquatic Resources ............................................................................................................ 49 7.1.2 Socioeconomic Resources ............................................................................................... 50 7.1.3 Historical and Archaeological Resources ......................................................................... 51 7.2 Regulatory Analysis .................................................................................................................... 51 7.3 Consultation ................................................................................................................................ 51 39 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page iii © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 7.3.1 City of Chignik Council Meeting, February 20, 2013 ........................................................ 52 7.3.2 Resource Agency Meeting ................................................................................................ 52 7.3.3 Federal Agency Meeting ................................................................................................... 52 7.3.4 Alaska Energy Authority Review ....................................................................................... 52 8.Conclusions and Recommendations ............................................................................................... 54 8.1 Conclusion .................................................................................................................................. 54 8.2 Recommendations ...................................................................................................................... 54 9.References .......................................................................................................................................... 56 List of Tables Table 2-1 - Development Alternatives ........................................................................................................... 2 Table 2-2 - Summary: Reconstructed Existing and Proposed New Projects ............................................... 5 Table 3-1 - Local Climate Data ..................................................................................................................... 8 Table 3-2 - Median Monthly Flows for Period of Record, Dam Site ............................................................ 11 Table 3-3 - Median Monthly Flows for Period of Record, Bridge Site ......................................................... 11 Table 3-4 - Monthly Flow Cumulative Frequency (2008-2013), Dam Site .................................................. 12 Table 3-5 - Monthly Flow Cumulative Frequency (2011-2013), Bridge Site ............................................... 12 Table 3-6 - Endangered or Threatened Species......................................................................................... 16 Table 3-7 - Land Ownership........................................................................................................................ 17 Table 4-1 - Indian Lake Modeled Reservoir Areas and Storage Volumes ................................................. 22 Table 4-2 - Dam Conceptual Quantities with Varying Reservoir (Spillway Crest) Elevations .................... 23 Table 4-3 - Pipeline Diameter Selection for Various Project Capacities ..................................................... 23 Table 4-4 - Table of Monthly City of Chignik Diesel Generated Energy ..................................................... 28 Table 4-5 – Summary: Reconstructed Existing and Proposed New Projects ............................................. 38 Table 5-1 - Reconstructed Existing Project, Opinion of Probable Total Construction Cost by Category ... 39 Table 5-2 - Proposed New Project, Opinion of Probable Total Construction Cost ..................................... 40 Table 5-3 - Proposed New Project, Opinion of Probable Total Construction Cost by Category ................ 41 Table 6-1 - Diesel O&M Costs .................................................................................................................... 44 Table 6-2 - Economic Results: Proposed New Project (385 kW) ............................................................... 47 40 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page iv © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. List of Figures Figure 3-1 - Average Monthly Temperature for Chignik ............................................................................... 9 Figure 3-2 - Average Monthly Precipitation for Chignik ................................................................................ 9 Figure 3-3 - Indian Creek Approximate Spawning Pink Salmon Count ...................................................... 14 Figure 3-4 - Indian Creek Fish Species Periodicity Chart ........................................................................... 15 Figure 3-5 - ADNR Water Rights Land Case Detail, Water Rights Information .......................................... 20 Figure 4-1 - Dam Spill Flow Duration Curve, Oct 2008 to Oct 2013 ........................................................... 26 Figure 4-2 - Indian Creek Annual Dam Spill Unit Flow Compared with USGS Russel Creek .................... 26 Figure 4-3 - 2010 Indian Creek Annual Hydrograph (at dam) .................................................................... 27 Figure 4-4 - Chart of Monthly City of Chignik Diesel Generated Energy .................................................... 28 Figure 4-5 - FY2013 Electric Generation by Customer Class, kWh ........................................................... 29 Figure 4-6 - FY2013 Electric Payments by Customer Class ...................................................................... 29 Figure 4-7 - Chignik 15 Minute Power Energy Logger, 2013 Measured Demand Data ............................. 31 Figure 4-8 - Synthesized Annual Demand for Chignik ................................................................................ 32 Figure 4-9 - Proposed Hydroelectric Daily Operation - Flow Model ........................................................... 34 Figure 4-10 - Proposed Hydroelectric Daily Operation - Power Model ....................................................... 35 Figure 4-11 - Hydroelectric Generation for Reservoir Elevations 445' and 450' ......................................... 36 Figure 4-12 - Hydroelectric Generation for Project Capacities of 315 kW to 470 kW' ................................ 37 Figure 5-1 - Project Development Schedule ............................................................................................... 42 Figure 7-1 - Existing and Proposed Spill Flow at Dam, 2013 Water Year .................................................. 49 Figure 7-2 - Existing and Proposed Flow at Powerhouse – Bridge Site Flow Data, 2013 Water Year ...... 50 Appendices Appendix A – Exhibit 1, Existing Hydroelectric Project Map Appendix B – October 16, 2013 Resource Agency Meeting Minutes Appendix C – Proposed New Project, Construction Cost Estimate Appendix D – Proposed New Project, Economic Analysis Results Appendix E – Proposed New Project, Conceptual Design Figures Figure 1, Project Location Map Sheet Index Map Figure 2, Penstock, Road, and Transmission Alignments Figure 3, Reservoir Bathymetry and Rim Topography Figure 4, Dam Site Plan and Section Figure 5, Powerhouse Site Plan Figure 6, Powerhouse General Arrangement - Plan 41 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page v © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Disclaimer and Limitations of Use This report was prepared by Hatch Associates Consultants Inc. (“Hatch”), together with certain other third party consultants (the “Third Party Consultants”), for the sole and exclusive benefit of CE2 (the “Owner”) for the purpose of supporting the Owner in its efforts to determine the hydroelectric feasibility in Chignik Bay (the “Project”). This report is meant to be read as a whole, and sections should not be read or relied upon out of context. The report includes information provided by the Third Party Consultants and by certain other parties. Hatch has not verified such information and disclaims any responsibility or liability in connection with such information. This report contains the expression of the professional opinion of Hatch, based upon information available at the time of preparation. The quality of the information, conclusions and estimates contained herein is consistent with the reasonable standard of care governing our services and as set out in this report, as well as the circumstances and constraints under which this report was prepared. However, this report is a pre-feasibility study and, accordingly, all estimates and projections contained herein are based on limited and incomplete data, and Hatch therefore disclaims any liability arising in whole or in part from the review, use or reliance upon this report. While the work, results, estimates and projections herein may be considered to be generally indicative of the nature and quality of the Project, they are by nature preliminary only and are not definitive. As such, Hatch makes no warranty or representation, and disclaims the same to the Owner or any other party in respect of the report, particularly with regard to any investment decision made on the basis of the Report, and use of the Report by the Owner and third parties shall be at their own and sole risk. 42 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page vi © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Acronyms TERM MEANING ADNR Alaska Department of Natural Resources AEA Alaska Energy Authority Avg Average BTU British Thermal Unit cfs Cubic feet per second cyd Cubic yards Dia Diameter DIP Ductile Iron Pipe ea Each FERC Federal Energy Regulatory Commission gal Gallon gpd Gallons per day GPS Global Positioning System gpm Gallons per minute HDPE High density polyethylene ID Inside diameter K Thousand kVA Kilo Volt-Amps kW Kilo Watt (1000 Watts) kWh Kilo Watt-hours lb Pound mgd Million gallons per day M Million mi Mile mmBTU 1 million BTU's mo Month NCDC National Climatic Data Center, http://www.ncdc.noaa.gov/ O&M Operation and Maintenance OD Outside Diameter PCE Power Cost Equalization program, State of Alaska psf Pounds per square foot REF Renewable Energy Fund RTK GPS Real Time Kinematic Global Positioning System SDR Sidewall Diameter Ratio ORV Off road vehicle sq ft Square feet sq mi Square miles sq yd Square yard USBR United States Department of Interior, Bureau of Reclamation USGS United States Geological Survey 43 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 1 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 1. Introduction The City of Chignik (City) has been awarded a grant from the Alaska Energy Authority (AEA) under the Renewable Energy Fund (REF) program to study the engineering and economics of restoring the antiquated hydroelectric generating system for the purpose of benefitting the residents of the City and the State of Alaska by offsetting the cost of diesel generated electricity. Funding was contingent upon a MOU with Trident Seafoods, the owner of NorQuest Seafoods Inc, (NorQuest) to transfer the FERC license for the existing hydro from NorQuest to the City. In 2012 NorQuest transferred the license for the Chignik Bay Hydroelectric (existing project), which consists of an aging dam and pipeline that powers a 60 kW turbine. The project’s primary purpose, located as shown in Appendix A, Exhibit 1, has been to supply potable water for the community and provide base load generation to the former NorQuest facility during the winter months. The City desires to increase the project capacity and connect it to the city’s electrical grid while improving reliability, maintaining potable water service, and reducing maintenance costs. The U.S. Army Corps of Engineers (USACE) evaluated the potential hydroelectric resources in Chignik and other isolated communities throughout Alaska in 1976. A Final Draft Feasibility Report for Chignik was completed by the USACE in March 1983 (USACE, 1983). The report analyzed reconstructing the existing hydroelectric project using a higher dam, larger pipeline, and a powerhouse located at the base of the bluff bordering the existing Chignik wetland. The capacity of the project investigated was 1.4 MW at a design head of 430 ft and a hydraulic capacity of 43.8 cfs with a predicted average annual generation of 6.7 GWh. This was based on a synthetic stream flow record generated using records of precipitation and flow from Myrtle Creek near Kodiak and Spruce Creek near Seward. The selected project size was intended to produce the maximum annual energy and serve the loads of both Chignik Bay and Chignik Lagoon. With a minimum flow 15.9 cfs the project would be offline during the winter and spring. The project envisioned by the USACE is too large to be economical and is not feasible under current environmental standards and regulations due to the impacts on the Indian Creek anadromous fish population. The City’s study of the engineering and economics of restoring the antiquated hydropower system and the findings thereof are presented in this report. The findings show a significant benefit with the proposed hydroelectric development as follows: Lowest cost alternative for electric energy generation. Replaces high maintenance and failing infrastructure. Improved water supply availability and reliability. Promotes economic growth and local employment. Potential improvement in aquatic resource habitat. 44 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 2 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 2. Alternative Project Arrangements 2.1 Alternatives Considered The options considered for hydroelectric development are shown in Table 2-1. Table 2-1 - Development Alternatives Development Scheme Analysis No Action Alternative. The no action alternative includes meeting electrical demand using only diesel electric generators. Base case against which all other alternatives are evaluated. Reconstructed Existing Project. This alternative includes replacing the dam, pipeline, and turbine and generator sized for the existing permitted flow of 2.7 cfs. This 70 kW alternative is marginally economical due to the high cost and low energy output. Proposed New Project. This alternative includes replacing the dam, pipeline, and relocating the power generation to Indian Creek while increasing the capacity. With an approximate capacity of 385 kW as studied herein, this option is shown to be economically superior and has been selected as the preferred project arrangement. 2.2 No Action Alternative – Diesel Electric Plant The City of Chignik has a certificate of public convenience and necessity for providing electrical generation and distribution service in the City of Chignik. The city operates under certificate 297 issued by the Regulatory Commission of Alaska (RCA) in 1983. The existing electric generation plant consists of two 230 kW and one 117 kW John Deere diesel electric generators installed in 2009. The powerhouse is located near the Trident processing facility. 2.3 Reconstructed Existing Project The Chignik Project, FERC No. 620 is a small hydroelectric project that primarily conveys raw water from Indian Lake to the community of Chignik as shown in Appendix A, Exhibit 1. The project consists of a timber frame dam at the outlet of Indian Lake (also referred to as Upper Lake) creating a reservoir with a surface area of approximately 21 acres. The dam includes a wood plank spillway and there is an additional overflow channel spillway cut out of rock next to the dam. A wood stave and steel pipeline about 7200 ft long transports 2.7 cfs (nominal) of water to a 60 kW (nominal) turbine located in the former NorQuest processing plant for water pressure regulation and power production. The gross head for the project is around 431 feet, or 190 psi, but the maximum desired operating pressure for the interconnected piping in the community is around 100 psi. When the turbine needles are fully 45 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 3 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. open there is enough frictional loss through the pipeline to maintain the desired pressure of 100 psi. The project infrastructure is deteriorated and in need of immediate maintenance and repairs. 2.3.1 Timber Frame Dam The Chignik Dam is a timber buttress dam constructed sometime in 1947 and is located at approximately 56° 17' north and 158° 25' west. The dam is approximately 80' long with a primary spillway width of approximately 26' and a secondary (rock cut) spillway width of 20'. It has a height from the toe to the crest of approximately 14.4' and is constructed from 8x10 timbers forming 45-degree triangular supports with face planks running horizontal on the upstream face. Structural connections are accomplished primarily through bearing and friction. Some steel connectors are used on the bracing and face members to hold the members together when not loaded. Steel connectors have been used at the base of the spillway columns as part of past repairs. Also as part of past repairs, 4x8 treated members have been joined onto the existing timbers. The existing dam includes no device to introduce instream flows into the river. Therefore, flows only enter the river at the dam when it is spilling. In the winter, when reservoir levels drop, there is typically no spill for extended periods of time and, thus, little to no flow in the river below the dam site. This is evident in the monthly median stream flows reported in section 3.4.2 Indian Creek Stream Gaging. The most recent dam inspection report filed with FERC shows that the dam is in very poor condition and is in need of replacement. The general condition of the dam is quite deteriorated due to rotting main members, almost complete loss of spillway planking allowing water to spill onto and through the framework, loss of the walkway over the spillway, damage to dam face planks, failing of support structure for the valve operator platform, and malfunctioning outlet controls and screens. The structure has been reinforced with additional framing members and steel connectors over the past two decades. The timber dam has continued to deteriorate and is in such poor condition that a complete replacement is the most practical course of action. 2.3.2 Wood Stave and Steel Pipeline The pipeline consists of 12" diameter wood stave and 10" and 8" diameter steel pipe totaling about 7200 ft long for transporting approximately 2.7 cfs (nominal) of water for both power production and source water for the community drinking water system. Wood stave pipe joints are push on while the steel pipe utilizes Victaulic groove lock bands. Almost all of the penstock is located above ground. The pipeline is also in poor condition with leaks and breaks being a regular occurrence. Not including the boardwalk across the lower wetland, there are five trestles that support the penstock. All of the trestles are constructed of untreated wood and, similar to the dam, show extensive rotting and are slowly failing. 46 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 4 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. During the winter the leaking water will turn to ice and bond to the trestle and pipeline. The increased weight of the ice can cause a structural collapse of the trestle and subsequent pipeline separation. Based on the condition of the pipeline and prevalence of pipe separation/failures in the past it can be expected that leaks and complete service interruption due to pipeline failure/separation will continue to be a problem, particularly in the winter. The most appropriate repair method is to replace the wood stave pipeline with HDPE pipe. 2.3.3 Turbine Power generated from the turbine is utilized by the processing facility and powers maintenance loads such as lights and resistance heating operating either in standalone mode or manually synchronized. Because of the age of the system and pipeline characteristics power output is typically around 35 kW with a peak output of about 40 kW. The turbine has two jet forming nozzles with one being a fixed opening and the other consisting of a manually operated needle valve. The needle valve is operated manually depending on load and is usually fully open. Thus, the typical operational scenario is that water flow through the turbine is almost always equal to the maximum hydraulic capacity of the turbine and pipeline regardless of the power output produced by the generator. The automatic turbine deflector controls the speed of the wheel and generator to match the load and prevent over/under speed. The continuous flow through the turbine reduces the pressure in the raw water piping system and prevents freezing in the winter. If the reservoir is completely drained because of low flows in Indian Creek the manually operated bypass is closed to reduce water use. With the needle in the full open position the factors influencing flow through the turbine include the reservoir elevation, the amount of water withdrawn before the turbine, debris on the trash rack, intake gate position, and pipeline condition. Water withdrawal includes potable use, manual bypass flows into the tailrace receiving water, and leaks in the pipeline. A flow meter was installed on the pipeline in the NorQuest facility with a data logger installed in 2012. Historic readings of the flow meter were consistently about 2.67 cfs. Flows have dropped to about 2.10 cfs as of the end of May, 2013. Access to the project is along the pipeline alignment but an ORV trail exists that has been used by tracked vehicles to access the dam in the past. Recently the City of Chignik has improved access by pioneering a trail from the quarry to the existing ORV trail and in October 2013 reached the dam with a tracked excavator. 2.4 Proposed New Project 2.4.1 Selected Arrangement The new project alternative arrangement as proposed herein would consist of modification and reconstruction of the existing hydro project to include a new dam and pipeline, a new turbine with significantly increased capacity, and a powerhouse relocated to the approximate upper limit of spawning habitat on Indian Creek. The general arrangement of this proposed project is shown in Appendix E, Figure 2. 47 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 5 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. The proposed project includes a 16' wide construction trail beginning from the edge of the existing quarry and extending to the powerhouse and dam site. A new 25' high rock fill dam is to replace the existing wooden dam at the outlet of Indian Lake. The new dam requires widening of the existing bedrock lined spillway located west of the dam. Water will be conveyed through 7,280' of 24" diameter buried HDPE pipe. A 26' x 26' metal building is proposed to house the Turgo impulse turbine and 900 rpm 480 V generator. The proposed building includes a vehicular sized work area and overhead crane. A tailrace will convey water back to Indian Creek at the upper limit of anadromous rearing habitat. Further detail for each for these features is provided in Section 4 and photographs and general details are shown in Appendix E, Figures 3 through 6. The proposed project significantly increases the resource utilization resulting in substantial benefits from reduced diesel electric generation while enhancing water supply delivery and reducing long term electric generation maintenance as shown in Table 2-2, which summarizes the major features of the Reconstructed Existing and Proposed New Projects. Table 2-2 - Summary: Reconstructed Existing and Proposed New Projects Item Existing Proposed Nominal Capacity (kW) 70 385 Static head (ft) 430 380 Design head (ft) 400 340 Hydraulic capacity (cfs) 2.7 18 Reservoir Normal Water Surface (ft) 440 445 Reservoir Area (acres) 21 24 Reservoir Useable Storage Volume (acre-feet) 89 204 Nominal penstock diameter (in) 12,10 & 8 24 Penstock length (ft) 7,280 7,280 Transmission length (ft) 0 1,600 New access road & trail lengths (ft) 0 9,170 Annual energy potential (MWh) 470 2,140 Existing demand (diesel generated) (MWh) 950 950 Annual displaced diesel energy (MWh) 470 900 Annual reduction in diesel fuel use (gal) 33,400 63,500 2.4.2 Environmental Measures The replacement project locates the powerhouse at an elevation higher than optimum for power production and includes a significantly longer tailrace than required in order to convey the tail water to the upper limit of anadromous fish habitat. The optimum powerhouse elevation would be about 15' lower. Therefore, the proposed powerhouse elevation results in a 4% decrease in potential power output for a given flow rate. 48 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 6 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. The existing project diverts 2.7 cfs out of Indian Creek. Locating the powerhouse above the upper limit of anadromous fish habitat will eliminate the need for permanent diversion of water out of Indian Creek. The resulting improvement in fish habitat below the powerhouse is seen as a significant positive environmental measure. Additionally, the increase in flow available for the powerhouse will in turn significantly increase the amount of renewable energy generated. 49 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 7 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 3. Existing Environment 3.1 Community Overview 3.1.1 Population The population in Chignik is approximately 91 according to the State of Alaska Community Profile although the current year round population is less. Population has been declining in Chignik due to a lack of economic opportunity and the high cost of living. There are no longer enough residents to support a school which was closed in 2013. Population fluctuates seasonally with residents leaving the community in the fall after the end of the fishing season and returning in late spring. Land based processing and fishery support historically brought in additional transient residents during the summer fishing season until processing operations were moved offshore in 2009 due to a fire that destroyed the only operational fish processing facility in 2008. 3.1.2 Location The City of Chignik Bay is located on Anchorage Bay on the south shore of the Alaska Peninsula. It lies approximately 450 miles southwest of Alaska’s largest city, Anchorage and 180 miles south southwest of King Salmon. Chignik is located in the Aleutian Islands Recording District, Section 7, T045S, R058W, Seward Meridian. Chignik Bay is accessible by small planes and boats and has state ferry service. 3.1.3 History A Village called “Kalwak” was originally located here, but was destroyed during the Russian fur boom in the late 1700s. Chignik, meaning “big wind”, was established in the late 1800s as a fishing village and cannery. A four-masted sailing ship called the “Star of Alaska” transported workers and supplies between Chignik and San Francisco. Chinese crews from San Francisco traveled to Chignik in the early spring to make tin cans for the cannery. Japanese workers followed in mid June to begin processing. Chignik became an incorporated city in 1983. Currently, two of the historical canneries are still in operation. The federally recognized tribe for the community is the Chignik Bay Tribal Council. The community is presently a mixture of non-natives and Alutiiq. 3.2 Climate The village of Chignik is located on the south side of the Alaska Peninsula. The village is primarily protected from severe southern Pacific storms by a ridge of mountains rising to 3,000 feet. The high frequency of cyclonic storms crossing the Northern Pacific and the Bering Sea are the predominant weather factors. These storms account for the frequent high winds and the frequent occurrence of fog and low visibility1. The climate of Chignik is maritime, due to the nearness of extensive open ocean areas. Temperature extremes, both seasonal and diurnal, are generally confined to fairly narrow limits, with differences between maximum and minimum temperatures for all individual 1 Alaska Community Database Community Information Summaries (CIS) 50 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 8 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. months averaging less than 15° Fahrenheit. Temperatures below 0° Fahrenheit are unusual. However, they do occur in occasional years when the Bering Sea freezes and allows the influx of cold continental air. Precipitation of more than one hundredths of an inch occurs about 170 days per year. The greatest observed precipitation rate is 7.3 inches per 24 hours. The greatest recorded monthly snowfall was 31 inches in February of 19312. The nearest communities with recommended snow loads for design are Cold Bay and Kodiak3. Respective ground snow loads are 25 and 30 psf which is considered low based on past experience, especially in the vicinity of the dam. Recommended roof snow loads should be at least 40 psf for the powerhouse. Structures at the dam should be designed for higher snow loads. Seasonal periods are poorly defined at Chignik due to the moderating effects of the nearby ocean areas. The beginning of spring is late; vegetation begins to grow in late May. August is regarded as midsummer and autumn arrives early in October. The greatest frequency of fog occurs from mid-July to mid-September. Table 3-1 includes a summary temperature and precipitation data. Table 3-1 - Local Climate Data Temperature and Precipitation Data Mean Min January Temperature 18 deg F4 Mean Annual Precipitation (2001-2006)200 inches5 Average Monthly Temperatures Deg F5 1 30.4 2 30.9 3 28.1 4 35.0 5 41.9 6 48.4 7 52.7 8 54.2 9 49.7 10 42.9 11 34.3 12 32.0 Average 40.0 3.3 Climate Change Climate change, a phenomenon that has occurred in the past and is predicted to occur in the future, can result in significant departure from the underlying assumptions and data used to prepare this study. A scenario planning process for Alaska was created by University of 2 USACE, 1983 3 ASCE 7 2010 4 USGS WRI Report 93-4179. Mean min in January for Sand Point is 28.6 which is 100 miles southwest of Chignik (NCDC). 5 Chignik Bay METAR, Station PAJC (Iowa 2014). 51 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 9 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Alaska researchers to understand the current and future trajectories of climate and other variables helps to develop credible projections across Alaska and the Arctic. The charts below, obtained from the Scenarios Network for Alaska & Arctic Planning (SNAP), indicate the projected temperature and precipitation changes resulting from climate change for Chignik (UAF, 2014) as summarized below in Figures 3-1 and 3-2. Figure 3-1 - Average Monthly Temperature for Chignik Figure 3-2 - Average Monthly Precipitation for Chignik The potential impacts of climate change are considered in terms of a vulnerability assessment. The vulnerability assessment is used to determine the degree to which specific resources of interest are susceptible to the effects of climate change. Project and related environmental resources identified as being vulnerable to climate change conditions are the following: 52 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 10 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 1. Hydrology and energy generation Climate driven hydrology changes generally should result in increased runoff due to the increased precipitation although the increase in temperature is likely to lead to additional evapotranspiration thus offsetting the gains. It is expected that the net result will be a slight increase, on average, in storm frequency with possible increases in peak discharges, a slight decrease in summer base flow discharges between storms, an increase in precipitation versus snow events, and an increase in base flow in the winter. 2. Hydrology and aquatic resources The climate change driven changes in hydrology are not expected to have a significant impact in aquatic productivity. Fish in Indian Creek are prevalent under existing conditions that exhibit normally high variability in daily and seasonal stream flows in Indian Creek. 3.4 Hydrology 3.4.1 Indian Creek Watershed The Indian Creek watershed is located immediately south of the City of Chignik, with the mouth of Indian Creek being located at Anchorage Bay at the north end of town. Appendix E, Figure 1 is a map of the Indian Creek watershed and shows its relation to Chignik. The watershed encompasses a total area of approximately 4 mi2, while the proposed intake site at the outlet of Indian Lake has a watershed area of approximately 2.9 mi2. The intake watershed boundary is delineated by steep ridges on the east, south and west sides. These ridges range in elevation from approximately 2,400 ft to 3,200 ft. The ridgelines are generally steep, with slopes in excess of 50 degrees to near vertical. Indian Lake, located at RM 2.4, is situated in the valley between these ridges and has a normal pool elevation of approximately 440 ft, which is set by the existing timber buttress dam built in 1947. The lower watershed, downstream of the intake area, has more gently sloping terrain than the upper watershed, with elevations ranging from sea level to approximately 1,500 ft. Indian creek is approximately 4 miles long and drains in a generally north-northwest direction from an elevation of 1200 ft to sea level. The valley in which the creek is situated is approximately 1.5 miles wide crest to crest along the upper two thirds of the creek and the upper watershed basin is sparsely vegetated and consists predominantly of bedrock and talus slopes. During the winter months precipitation generally falls as snow at the higher elevations of the intake watershed. As the temperature increases in the summer months, this snowpack begins to melt and the snowmelt runoff generates the highest average monthly flows for Indian Creek. The months of June and July have the highest sustained flows due to snow melt. During the late winter and spring flows are at the lowest, primarily in relation to the ambient temperature, with occasional spikes due to brief warm spells with liquid precipitation. 53 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 11 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 3.4.2 Indian Creek Stream Gaging As part of the FERC requirements, monitoring of pipeline flows and gaging of stream flows at the dam, pool, and bridge sites in Indian Creek has been performed. Details of past stream flow monitoring efforts are found in numerous monitoring reports filed with FERC which are available through the e-library for project P-620. Flow monitoring began in April of 2003 but results over the years have been sporadic because of equipment failures, limited site accessibility, and the general remoteness and harsh conditions at the site. The final monitoring report (Hatch, 2013 Monitoring Report) presents the most recent data collected, analyses performed, and reports the revised daily average stream flows for Indian Creek at the dam and bridge sites for all years. The data is summarized in Tables 3-2 thru 3-5. Table 3-2 - Median Monthly Flows for Period of Record, Dam Site Month 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1 10 11 26 45 0 10 2 9 11 17 7 0 4 3 8 9 18 0 0 0 4 8 24 2 0 0 0 5 20 25 75 32 10 29 6 28 81 103 87 122 7 26 64 68 77 59 8 40 45 45 25 9 163 11 62 18 36 24 10 46 5 32 43 18 42 9 47 11 21 15 22 9 13 13 2 12 12 7 40 85 10 24 0 Table 3-3 - Median Monthly Flows for Period of Record, Bridge Site Month 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1 8 63 3 15 2 9 39 7 8 3 5 32 2 5 4 8 10 57 0 6 5 20 118 72 35 6 32 141 161 7 25 105 68 62 8 18 45 40 30 9 19 29 19 33 29 10 51 35 14 10 81 11 22 45 11 6 12 12 26 25 6 54 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 12 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Table 3-4 - Monthly Flow Cumulative Frequency (2008-2013), Dam Site Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0% 564 65 111 366 601 706 881 1728 598 1933 226 2243 10% 65 22 26 11 131 174 127 123 78 70 30 134 20% 39 18 15 7 92 145 87 69 58 48 23 66 30% 26 15 7 2 77 125 77 55 45 38 19 39 40% 19 13 1 0 61 110 71 45 36 30 15 30 50% 12 8 0 0 47 98 66 39 29 25 12 24 60% 6 4 0 0 32 88 63 34 25 21 9 15 70% 3 0 0 0 21 79 58 30 20 16 8 9 80% 0 0 0 0 8 72 53 26 17 8 5 5 90% 0 0 0 0 5 64 44 21 12 4 1 0 100% 0 0 0 0 0 48 21 8 5 0 0 0 Table 3-5 - Monthly Flow Cumulative Frequency (2011-2013), Bridge Site Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0% 171 277 390 37 405 589 400 812 555 627 265 395 10% 46 82 11 19 203 347 134 144 84 117 27 51 20% 18 26 6 14 114 247 81 72 53 56 20 36 30% 12 13 5 10 77 204 73 51 42 38 14 26 40% 9 10 4 6 46 179 68 41 33 22 11 20 50% 6 8 4 5 32 157 64 35 26 14 8 13 60% 4 6 3 5 26 134 59 32 22 11 6 9 70% 4 5 2 5 17 123 55 28 19 9 5 6 80% 3 5 2 4 13 113 51 25 17 8 5 4 90% 2 4 1 0 10 101 36 19 14 6 4 4 100% 1 0 0 0 9 83 20 15 11 4 3 3 3.4.3 Peak Flood For concept design purposes the 500 year recurrence flood determined in accordance with USGS procedures for ungaged streams in Alaska is used. Inputs for the determination include: Basin Area 2.94 sq mi ST, % area of lakes and ponds 1.9% P, mean annual Precip 200 in J, mean min Jan temp 18 deg F The resulting estimated flood flow is approximately 2,000 cfs. 3.5 Water Quality Little data exists on the water quality of Indian Creek. However, use of Indian Creek's water for domestic supply indicates that the water is of good quality. The Corps in their 1984 draft environmental impact statement (EIS), state that the village of Chignik built the project's dam in 1947 to provide a reservoir for the cannery and the village residents and that the water (in 55 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 13 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 1984) was untreated but of good quality. Visual observations suggest that the water of Indian Creek is normally of high clarity and low turbidity. 3.6 Vegetation Vegetative cover consists of dense alder with occasional patches of grasses, berries, and wetlands in the lower elevations. Based on aerial imagery vegetative cover becomes sparser beginning at about elevation 1,000 feet and is mostly absent above 1,500 feet and on steep slopes. 3.7 Aquatic Resources Aquatic and hydrologic resources are a critical concern in Chignik because fish harvesting and processing is the main economy and livelihood for the region. Although the Chignik River hosts the bulk of salmon producing habitat, Indian Creek contributes to some of the harvest, particularly for pink salmon species. Fish do not occur in Indian Lake or immediately below the lake in Indian Creek. The existing dam and priority flow through the pipeline have been in existence since at least 1947 without any significant change in operation throughout that time. Thus, the existing project is an integral component of the existing environment. Monitoring of stream flows and fish presence in Indian Creek has been performed since 2006 as part of the FERC license requirements in order to better understand the existing hydrologic and aquatic environment. Fish are predominantly found in the lower 0.5 mile of Indian Creek where stream flow is much more persistent. The lower reach contrasts significantly with flows in the creek immediately below the dam. Here flows are completely absent for months at a time eliminating the upper drainage as a contributor to habitat. The monitoring results show that the predominant species in Indian Creek are pink salmon. In 2003, locals to the Chignik area reported that the spawning pink salmon population in Indian Creek was estimated to be 2,500 individuals and that their presence was observed up to river mile (RM) 0.5. Using the results of the FERC required fish monitoring, the average usage of Indian Creek spawning habitat over the last 5 years has been 2,000 salmon-days per year. Figure 3-3 includes the approximate salmon-day usage of Indian Creek during the 2006-2013 period. Derivation of this estimate is presented in the Draft Project Operations Report (Hatch, 2014). The chart indicates that there has been a downward shift in numbers since 2007. 56 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 14 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Figure 3-3 - Indian Creek Approximate Spawning Pink Salmon Count Other species of fish are also present in Indian Creek. During fish surveys conducted in October 2003, 55 coho salmon, 99 sockeye salmon, and 222 Dolly Varden were observed. Coho salmon were observed up to RM 0.59, while sockeye salmon were observed as far as RM 0.73. The report also noted the occasional steelhead and chum salmon were found in past years. Figure 3-4 lists the salmonid species that have been identified in Indian Creek and their associated spawning and egg incubation seasons. 57 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 15 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Figure 3-4 - Indian Creek Fish Species Periodicity Chart 3.8 Terrestrial Resources Furbearers and small game animals in the Chignik region include moderate numbers of red foxes, porcupines, lemmings, tundra voles, arctic ground squirrels, weasels, mink, wolverine, and tundra hares. Beaver, muskrat, land otters, snowshoe hares, hoary marmots, and a small number of wolves also inhabit the region. The area supports a small but stable habitat for moose and caribou. Brown bear are common throughout the region. About 250 species of birds occur around Chignik, predominately marine and passerine species. 3.9 Endangered or Threatened Plant and Animal Species Listings and occurrences of endangered or threatened plant and animal species for Alaska was obtained from the USFWS6. Species that are potentially impacted by the project are listed in the Table 3-6. None of the species have critical habitat near the project and it is concluded the project is not likely to impact endangered or threatened species. 6 http://ecos.fws.gov/tess_public/pub/stateListingAndOccurrenceIndividual.jsp?state=AK&s8fid=112761032 792&s8fid=112762573902 58 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 16 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Table 3-6 - Endangered or Threatened Species Status Species Critical Habitat E Albatross, short-tailed Entire (Phoebastria (=Diomedea) albatrus) None E Curlew, Eskimo Entire (Numenius borealis) None T Eider, spectacled Entire (Somateria fischeri) Not near Project T Eider, Steller's AK breeding pop. (Polysticta stelleri) Not near Project E Fern, Aleutian shield (Polystichum aleuticum) None 3.10 Geology The regional geology in the Project area is described in the 1983 USACE report. Local geology at the dam site is described as hard, massive, unyielding hornfels sandstone (Quartzite) and siltstone with a thin residual soil cover. The sedimentary rock has been thermally metamorphosed with the original structural bedding preserved. The depth of the soil cover appears to average 6" to 2' although rock depressions and valleys are filled with 10' or more of soil. A talus slope exists on the west side of Indian Lake with sand and elongated material up to about 24". This material is expected to serve as the main fill for the rockfill dam in its native form and as a drain material although screening may be necessary. The river valley and village area consist of quaternary deposits which are primarily recent alluvium from Indian Creek, clay of fluvial and lacustrine origin, and marine tidal flat and sand spit deposits. Bituminous and lignite coal deposits lie on the west shore of Chignik Bay but these deposits are not currently mined. Current quarrying activities are taking place on the south side of Indian Creek just north of the active bridge. Active quarrying is occurring in a southwest direction and reached the plateau of the bluff nearly connecting to the existing cat trail used to access the dam and penstock. 3.11 Land Use Generalized lands uses in the project area are listed below: Subsistence - Hunting Subsistence - Fishing Subsistence - Gathering Hydroelectric generation using 2.7 cfs water right granted to City of Chignik Domestic water supply Subsurface rock extraction at quarry site Material Disposal Recreation - motorized ATV, hiking, sightseeing, and swimming 3.12 Site Control The proposed project would occupy the lands described in Table 3-7. 59 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 17 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Table 3-7 - Land Ownership Parcel Section Township Range Surface Estate Tract 4A 12 45 S 59 W City of Chignik Far West Addition #1 12, 7, 18 45 S 58-59 W City of Chignik Tract 14 13 45 S 59 W City of Chignik Tract 15 18 45 S 58 W City of Chignik Tract 16 19 45 S 58 W City of Chignik The proposed project requires title or easement to the surface estate. Research of plats and deeds indicates that the City of Chignik holds title to all the lands identified above subject to a restrictive easement for access to the Indian Creek Quarry granted to Far West on Tract 4A. This easement states: “An easement for ingress and egress with respect to the Indian Creek Quarry, situate in tract 4A... This easement shall continue during the entire life of the Indian Creek Quarry and Grantee shall take no action which may unreasonably interfere with the uses and purposes reserved herein.” The components of the proposed project, an access road and overhead power transmission line, are not considered actions that unreasonably interfere with the ingress and egress to the Indian Creek Quarry. The proposed reservoir may also occupy a portion of the unsurveyed section 24 wherein the surface estate is owned by the Chignik Lagoon Native Corporation. Boundary line referenced topographic surveying will determine whether a future easement is required. 3.13 Recreational Use Recreational use of the project area includes hiking and sight seeing, swimming in the reservoir (Indian Lake), hunting, and fishing. Access is most often by foot although some motorized access and recreation has occurred using small four wheelers. Motorized access to the reservoir is likely to increase with the construction of the access trail through the quarry site. 3.14 Socioeconomic Fishing is the mainstay of the economy of Chignik since the early 1900's. Fish processing has occurred almost continuously since then until most recently with the move to offshore processing following the fire at the Trident plant. Beginning around the second week in June residents prepare to fish for red salmon and successive runs of pink, dog (chum), and silver salmon. Fish are taken in purse seiners and delivered to the local processor, floating processor, or tendered to Kodiak. Chignik is the major fishing community in the area, with boats, crews and families from several villages and elsewhere congregating here during the salmon season. Chignik has a long history of fish harvesting and processing. Two processing plants are located in the community although both are presently not operational. The Trident facility, located at the north end of Chignik, was the most recently used processing plant until a fire destroyed it. The former NorQuest facility, also the location for the hydro turbine, was decommissioned several years ago after the purchase by Trident. The facility has been 60 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 18 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. significantly damaged by a roof collapse due to high snow loads. Processing is currently handled by a floating processor. A significant factor affecting the socioeconomic well being in Chignik, like most rural Alaska communities, is the high cost of energy. The high cost of energy has significantly impacted the community with a decline in fishing vessels and local disposable income resulting in a declining population. Coupled with the decline in the local fishing industry, the community has lost a significant number of permanent residents and has seen the closure of the school in recent years. The loss of population and industry is resulting in a general decline of local infrastructure as the community is unable to keep pace with the financing and maintenance needs. 3.15 Historical and Archaeological Resources 3.15.1 Historical Resources The cannery was begun on the Chignik site in 1910 by the Columbia River Packers Association, and the oldest building dates to that era. During the global economic disruptions of the 1930s the Alaska Packers Association leased the plant and eventually bought the facility and operated it until a sale in 1979. The plant was operated under various companies until processing moved across the bay shortly after NorQuest was purchased by Trident Seafoods in 2004. The plant continues to provide processing support for Trident. Chignik’s Norquest facility is probably the oldest continuously used fish processing plant in Alaska. The facility’s dam (completed 1948) and pipeline (1949) are also part of the historic landscape. As part of the FERC license, the hydropower project is subject to provisions of the 1966 National Historic Preservation Act because the water system dates to 1947-49 and belongs to the old Alaska Packers Association cannery that dates older still. An inventory and evaluation was completed by Charles M. Mobley & Associates in 2004 (Mobley 2004). The report concludes that the historic property is eligible to the National Register of Historic Places. The Area of Potential Effect (APE) is defined in the regulations implementing the Section 106 review process as the geographic area or areas within which an undertaking may directly or indirectly cause changes in the character or use of historic properties. The APE for the proposed water system and hydroelectric rehabilitation is limited to the dam, waterline, turbine unit, and existing access road. The dam and most of the wood-stave portion of the pipeline are contributing historic resources that require further consultation with SHPO and FERC as the project approval process moves forward. 3.16 Regulatory 3.16.1 FERC License The Chignik hydroelectric project is currently operating under the fourth FERC license, P-620, which has a term of 30 years and expires on February 1, 2036. The original FERC license was issued in 1925. 61 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 19 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Licensing Timeline: Previous FERC Licenses: - 1925, 1941, 1979 Current FERC License: - License Application – October 2, 2003 - Final Environmental Assessment – March 30, 2005 - License issued – February 8, 2006 (30 years) - Monitoring plans submitted – October 3, 2006 - FERC approval of monitoring plans – August 22, 2007 - Monitoring plans modification 1 – March 18, 2011 - Monitoring plans modification 2 – October 24, 2011 - License expires – February 1, 2036 3.16.2 State Historic Preservation Office A Programmatic Agreement (PA) with FERC and the Alaska State Historic Preservation Office (SHPO) was developed and signed in 2005 as part of the relicensing effort. The PA called for completion of an accompanying Historic Properties Management Plan (HPMP). A HPMP has not been completed although a draft was prepared in 2009 and apparently reviewed in April of 2012 by the SHPO with comments on the draft plan provided to the Licensee. 3.16.3 Water Rights The water rights associated with the dam are certificated to the City of Chignik and are filed with the State of Alaska Department of Natural Resources (ADNR). The state identifies the location of water withdrawal in section 13 township 045S range 058S, of the Seward Meridian. Water rights for processing, formerly owned by NorQuest, have been transferred to the City of Chignik as part of the FERC license transfer. All water rights associated with the dam and included in Figure 3-5 are currently certificated to the City of Chignik. 62 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 20 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Figure 3-5 - ADNR Water Rights Land Case Detail, Water Rights Information 63 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 21 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 4. Technical Considerations 4.1 General Effects of Proposed Action The proposed hydro project will provide significant benefits to the City of Chignik and the State of Alaska by lowering the cost of electric energy production over the long term and reducing the State's payments for diesel fuel from the PCE program over the long term. The proposed hydro project will also result in significant secondary benefits by diverting payments from burning of diesel fuel into local renewable infrastructure with an indefinite useful life. The investment in local renewable generation will stimulate economic growth in the community which in turn will benefit the State and other entities in the region and represents a significant increase in sustainability. Historic access to the dam site and pipeline has been limited to walking and helicopter use for major maintenance. Recently the City has created an access trail to the project area as part of the development of the quarry near the mouth of Indian Creek. The proposed project will continue trail and access improvements reducing long term maintenance and also improving recreational access to Indian Lake. The replacement project will perpetually introduce an additional 2.7 cfs of water to the rearing habitat of Indian Creek by abandoning the existing hydroelectric project that completely diverts water out of the basin and discharges into the tidal zone of the ocean. As a result, it is possible that the proposed hydro project could improve the anadromous habitat in the lower reaches of Indian Creek which could result in improved salmon egg and fry survivability leading to increased commercial salmon harvests and spawning returns. By replacing the dam and pipeline, and increasing the reservoir storage capacity, the project improves the raw water supply availability and reliability of delivery to the City potable water system. The project will also eliminate the burning of 63,500 gallons of diesel fuel annually, based on current electric demand and has the potential to displace 184,000 gallons of diesel fuel annually. Over the project's minimum expected life of 50 years, this equates to potentially reducing fuel consumption by nearly 10 million gallons. 4.2 Selected Project Arrangement 4.2.1 Reservoir Without adequate survey and geotechnical information the analysis of dam height must be accomplished using the best information available on topography. A combination of visual observations and various topographic survey products has been combined to analyze the cost and benefits of various dam heights. The topography and synthesized bathymetric surface is shown in Appendix E, Figure 3. Reservoir surface areas and storage volumes are shown in the Table 4-1. 64 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 22 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Table 4-1 - Indian Lake Modeled Reservoir Areas and Storage Volumes Reservoir Elevation (ft) Area (acres) Volume (acre-ft) 430 2.9 3 435 7.4 28 440 19.5 89 445 24.2 204 450 26.7 331 455 29.5 472 460 32.6 627 465 36.0 798 470 40.3 988 If LIDAR or other remote sensing survey work is undertaken in the future, it is recommended that the reservoir is drained to verify the volume estimates in this report. 4.2.2 Dam, Spillway, and Intake The remote location and the locally available rock sources suggest a rock fill dam will be the most economical structure. A separate spillway cut through rock is required to prevent overtopping and subsequent erosion of the rock fill dam. The location for the proposed dam is confined by the existing dam, local topography, and the area required for the spillway. The existing wooden dam leaks significantly and is situated in the apparent ideal location for the new dam. The cost estimate anticipates the need for a coffer dam and demolition of the existing dam. A rock fill dam with an assumed 8" thick impervious central concrete face with a single outlet tunnel and upstream and downstream slopes of 1.5:1 was selected for the concept design in this report. The conceptual design of the dam is not intended to be definitive and some deviation in location, elevation, and concept are expected during the design phase after collection of topographical and geotechnical data. Final concept determination shall be made in the design phase. The upstream face must be capable of withstanding forces from waves and ice that moves up and down frequently with reservoir changes, forces from wind driven ice, and freezing and thawing effects. Investigations should, to the extent practical, define the locations of competent bedrock that will serve as the foundation for the dam, the structural competency, potential for leakage, fracture evaluation, sealing recommendations, and approximately define the bedrock extent east of the dam site. It is noted that reports from investigations in 1984 state that the rock cut spillway had eroded down and widened since its original construction. The feasibility effort has focused primarily on selecting the desired dam height for storage purposes and for estimating construction costs. Conceptual dam designs for reservoir elevations ranging up to 465' combined with a relocated spillway to the east were analyzed to determine quantities and construction costs. The analysis showed that enlarging the existing spillway and limiting the dam footprint to the main channel was the most economical configuration. Table 4-2 shows final estimated dam quantities based on reservoir elevation. 65 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 23 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Table 4-2 - Dam Conceptual Quantities with Varying Reservoir (Spillway Crest) Elevations Dam Fill Elevation, ft Normal Reservoir Elevation, ft Dam Volume (cyd) Concrete Water Barrier Area, sq ft Spillway Excavation Volume, cyd 445 440 1,800 2,200 3,900 450 445 3,000 3,400 3,360 455 450 4,600 4,600 2,942 The proposed intake and outlet works for the concept follows conventional design consisting of a trash rack, shut off gate, conveyance tunnel, air inlet, a transition, and a rupture control valve. The shutoff gate or valve is recommended to allow for dewatering of the penstock. The use of a penstock over-velocity valve or similar device is also recommended as a safety measure to prevent uncontrolled water release from the reservoir in the event of a penstock failure. An air inlet vent immediately downstream of the shutoff gate or valve is required to prevent penstock collapse in the event of a sudden blockage or valve closure at the dam during project operation. With a rock filled dam the proposed spillway must pass all flows in excess of the project capacity to prevent overtopping of the dam. The conceptual design of the spillway is based on an estimated peak flood using the USGS procedure for a 500 year return event. Additional infrastructure recommended for the dam includes water level monitoring (required), camera, weather instrumentation, a small storage shed, and a communications and low power line. The timing of construction is expected to be limited due to consistent high flows occurring in the summer snow melt and adverse conditions in winter with snow, frozen ground, and limited daylight. Potential problems associated with the fall construction include major rainfall events. 4.2.3 Pipeline For conceptual design and capacity analysis the nominal pipeline size was varied along with the material and shipping cost to determine the most feasible project capacity. The pipeline thickness is based on a preliminary design profile using HDPE pipe. Table 4-3 summarizes the various pipeline concept designs analyzed. The numbers were adopted for comparison purposes and it is expected that actual project capacity and pipeline size will be determined during the design phase. Table 4-3 - Pipeline Diameter Selection for Various Project Capacities Nominal Pipeline Diameter, inches Hydraulic Capacity (cfs) Nominal Capacity (kW) Annual Energy Potential (MWh) 22 15 315 1,860 24 18 385 2,140 26 22 470 2.480 A temporary water supply service from the dam to Lower Indian Lake is included in the hydroelectric cost estimate as a temporary means of water supply during construction. An alternate solution is to use Lower Indian Lake or it's tributary or restore functioning of the existing water wells and incur pumping costs. The temporary service pipeline is required due to the construction of the access road over the existing penstock alignment and removal of 66 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 24 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. the existing dam. The conceptual estimate includes 4" temporary water line from the reservoir connecting to a permanent insulated 4" water line near Lower Indian Lake. 4.2.4 Powerhouse The location for proposed powerhouse represents one of the more significant differences between the proposed hydroelectric project and the existing one. The location was chosen to mitigate the impacts of existing diversion of water associated with the powerhouse site located near tidewater. Alternate locations include the base of the hill at the sharp bend in Indian Creek (referred to as the pool site) and anywhere in the valley from the mouth of the Lower Indian Lake Outlet creek (located at river mile 0.4 of Indian Creek) up to an elevation of approximately 70 feet. Final selection of the powerhouse site to be based on the results of FERC licensing, permitting, detailed topographic (LIDAR) ground surveying, and geotechnical investigations (drilling or machine dug test pits). Early concepts situated the powerhouse at a sharp bend in the creek referred to as the pool site. Indian Creek flows out of a confined valley and into a rock wall where flows have scoured the creek bed against the wall. Opposite the wall is small gravel bar that formed on the inside of the creek bend. This gravel bar abuts against a steep slope that is presumed to have shallow overburden over bedrock that would serve as the powerhouse foundation. Due to cost, geotechnical, and erosion concerns the proposed powerhouse location has been moved downstream although the proposed tailrace discharge point, at the pool site, remains unchanged. The site chosen for the powerhouse is located on a small mound located at the mouth of a small valley that drains Lower Indian Lake. This site appears to be less susceptible to flood related erosion by Indian Creek, has a larger area, and results in less transmission line, access road, and steel penstock construction at the expense of additional tailrace construction. The net effect of the above being an overall lower project cost. 4.2.5 Turbine and Generator With reservoir storage the minimum turbine output is not constrained by the instantaneous flow in Indian Creek as a run of river project would be. Minimum demand averages 50 kW. The proposed turbine type consists of a single Turgo unit configured with twin jets and directly connected to the generator operating at 900 rpm. This configuration will provide efficient power production through the expected operating range. An advantage of a single unit is that the entire rotational mass will be spinning at all times which improves the ability of the unit to follow demand fluctuations. For the demand data collected the maximum load increase was approximately 40kW in 15 minutes. Pelton type units could also be utilized in either a single 5 jet vertical axis machine or two horizontal axis, twin jet machines with or without speed increasers. The cost for these configurations is $100k-$200k more than the Turgo unit depending on the desired efficiency. 67 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 25 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. A combined hydroelectric and generator efficiency of 75% is used for operational modeling. Capacities in excess of about 400 kW may require multiple turbine installations to operate efficiently in the winter at low loads. 4.2.6 Domestic and Process Raw Water Supply The proposed concept includes the cost for a community water supply originating from the main penstock in the vicinity of Lower Indian Lake. Penstock service disruptions are not expected to occur as part of regular maintenance so a separate dedicated water supply line from the dam should not be necessary although the temporary water service for construction could be utilized as a permanent supply line originating from the dam. The new water supply is presumed to be routed from a take off point on the proposed penstock near Lower Indian Lake to the existing water treatment plant following the same route as the existing penstock. The cost estimate assumes this line portion of the water supply line will require insulation with an aluminum jacket because it will be installed above grade. Conceptual water supply requirement is 0.25 cfs which includes 0.05 cfs for domestic water use (certificated amount is 0.03 cfs) and 20,000 gpd (0.2 cfs) used for processing. To account for increased domestic use during cold periods when residents leave taps open to prevent freezing the project modeling assumes a domestic demand of 0.1 cfs when Indian Creek flow drops below 3 cfs. Timing of demand for process water is May 1st through September 30th. 4.3 Hydrology Analysis 4.3.1 Stream Gaging Data Analysis Figure 4-1 shows the flow duration curve for the dam spill. 68 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 26 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Figure 4-1 - Dam Spill Flow Duration Curve, Oct 2008 to Oct 2013 Calendar years with a complete record of dam spill from stream gaging in the reservoir are 2009, 2010, and 2012. There is also a complete record of dam spill and bridge site flows for water-year 2013. The mean unit annual flow (mean flow divided by drainage area) of the dam spill is compared with the USGS Russel Creek flow data in Figure 4-2. Figure 4-2 - Indian Creek Annual Dam Spill Unit Flow Compared with USGS Russel Creek Year 2010, 2012, and 2013 annual mean flows are nearly identical with 2010 considered typical. 0 10 20 30 40 50 60 70 80 90 100 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Dam Spill Flow, cfsPercent Time Flow Exceeded 22 13 12 12 0 5 10 15 20 25 1980 1985 1990 1995 2000 2005 2010 2015Annual Mean Unit Flow, cfs/mi sqYear Russel Creek Annual Mean Unit Flow (cfs/sq mi) Indian Lake Dam Spill Annual Mean Unit Flow (cfs/sq mi) 69 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 27 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 4.3.2 Hydrology Data used for modeling Unless indicated otherwise, the modeling uses the 2010 calendar flow data from the dam as shown in Figure 4-3 for the analysis. Also for modeling purposes, the spill over the reservoir (outflow) is equated to the reservoir inflow. Figure 4-3 - 2010 Indian Creek Annual Hydrograph (at dam) 4.4 Energy Analysis 4.4.1 Diesel Electric Generation Historic demand for Chignik, comprised of the entire community except processing facilities, totalled about 55,000 kWh (75 kW average) per month. In 2010, Chignik Electric began providing power for Trident's fish processing onshore support operations. Fish processing activities occur in late May and continue until September 1st which coincides with the peak runoff times from Indian Creek. This base load demand is expected to continue indefinitely. The available diesel generation data for the City of Chignik was obtained from Power Cost Equalization (PCE) reports. The reports provide monthly totalized generation in kWh. The PCE data is shown in Table 4-4 and Figure 4-4. 0 10 20 30 40 50 60 70 80 90 100 1/1 1/31 3/2 4/2 5/2 6/2 7/2 8/1 9/1 10/1 11/1 12/1Indain Lake Dam Spill ,cfsDate 70 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 28 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Table 4-4 - Table of Monthly City of Chignik Diesel Generated Energy Month 2006 2007 2008 2009 2010 2011 2012 January 51,170 46,530 65,481 63,263 76,656 February 49,665 47,820 56,574 62,099 59,633 March 55,083 43,950 52,545 52,133 62,342 April 44,520 41,280 56,571 58,615 60,552 May 42,660 50,310 77,971 90,978 108,886 June 54,540 46,470 121,755 119,722 139,332 July 52,230 43,770 67,004 126,236 112,051 111,768 August 55,083 45,510 62,073 107,200 106,321 112,570 September 48,690 43,560 78,142 79,817 78,478 88,521 October 44,247 39,450 54,342 51,495 46,001 51,771 November 56,287 42,540 54,441 61,703 53,679 61,708 December 47,257 36,420 59,203 61,074 57,991 55,583 Totals 303,794 548,888 276,360 375,205 918,422 901,331 989,322 Figure 4-4 - Chart of Monthly City of Chignik Diesel Generated Energy The percentage of generation for each customer class is obtained from State of Alaska power cost equalization reports and is shown in Figure 4-5 for FY2013. 0 20,000 40,000 60,000 80,000 100,000 120,000 140,000 160,000 123456789101112Monthly Total Diesel Generation, kWhMonth 2006 2007 2008 2009 2010 2011 2012 2013 (PEL) 2010‐2013 Average 71 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 29 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Figure 4-5 - FY2013 Electric Generation by Customer Class, kWh 4.4.1.1 State of Alaska Power Cost Equalization The State of Alaska funded a portion of the cost of diesel electric generation in Chignik through the Power Cost Equalization (PCE) program. For FY2013, the payments to the City of Chignik electric utility (Chignik Electric) for each customer class is shown in Figure 4-6. Figure 4-6 - FY2013 Electric Payments by Customer Class 4.4.2 Diesel Electric Analysis and Modeling A diesel efficiency curve was developed based on data provided the Alaska Energy Authority. The efficiency curve provides the fuel consumption based on the percentage of peak generator capacity. This is incorporated into the feasibility model along with a minimum loading for a generator of 20% when operating in conjunction with the hydro. Residential Generation 22% Community Facility Generation 9%Commercial Generation 57% Station Service 3%Line loss 9% State of Alaska, PCE 18% Commercial 36% Residential 36% Community 9% 72 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 30 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 4.4.3 Hydroelectric Generation The existing hydroelectric project, now owned by the City, produces about 35 kW almost all year. This energy does not contribute to the City's generation because it has not been connected to the distribution system. It is also reported that for the past several years the project has not been providing power to the NorQuest facility either and that the turbine is idle with water energy wasted through the deflector system. It is assumed in the feasibility modeling that the existing hydroelectric turbine will remain disconnected from the City system. The water flowing through the existing hydroelectric turbine is modeled as being available at the dam for future hydroelectric energy production. 4.4.4 Heating Demand Heating demand in Chignik is met using diesel fired heating units. The AEA 2010 Energy Pathway Report estimated that the amount of diesel fuel required for heating is 55,056 gallons annually (AEA, 2010). The school historically utilized waste heat from the old diesel plant but the current location of the diesel powerhouse is much further away and not connected with the now closed school. 4.4.5 Electric Demand Modeling and Forecasting For the purposes of improving the resolution of electric demand data from monthly to 15 minute intervals and for projecting future loads, a Power Energy Logger (PEL 103) was installed at the Chignik Bay diesel generation plant. The meter was installed and began recording data on March 29, 2013 at 15:45; the initial data collection period ended on June 19 at 13:30 when the logger was stopped to perform a download of the saved data. The data is recorded in 15 minute intervals and saved to an SD card in the logger. The recorded data can be seen in Figure 4-7 along with the calculated daily average load. 73 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 31 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Figure 4-7 - Chignik 15 Minute Power Energy Logger, 2013 Measured Demand Data The measured data was used in conjunction with the PCE data from 2010–2012 to create a synthesized one year set of demand data at Chignik Bay. The data from 2010-2012 was averaged monthly over the past three years, and divided into “high” and “low” demand months, with “high” months coinciding with the demands from the fish processing plant. The measured PEL data was also reduced to a high and a low demand month set of data. Correction factors were determined for each month based on the historical average demand vs. the measured demand for 2013. To create a synthesized year of data the monthly correction factors were applied to either the “high” or “low” data sets and the adjusted data combined to create one year of 15 min data. The correction factors were not applied to the data for the period of March 29 through June 19, 2013 where measured data was available; this data remains true as obtained from the Power Energy Logger. Figure 4-8 shows the full year of combined measured and synthesized data; both 15 min and daily average data are shown. The average monthly demand is also shown for the average PCE reported demand over the past three years. 74 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 32 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Figure 4-8 - Synthesized Annual Demand for Chignik The modeling of both the diesel only option and the proposed hydro utilizes the average hourly demand data shown in the graph above. Load growth is not apparent in PCE data. To a certain extent, it is likely the high cost of diesel generated electric energy for commercial customers is a factor in the lack of growth. Although not exhibited in the past, load growth over the planning horizon resulting from the fixed and/or low price electric energy from hydro generation is a possibility that is considered using low, medium, and high growth rates of 0%, 1%, and 2% for electric demand. 4.4.6 Heating Energy The total annual fuel consumption for heating is assumed to represent the total community equivalent heat demand in Btu's with the distribution throughout the year determined by the daily heating degree day (HDD) demand obtained from the National Climate Data Center. The maximum amount of heat displaced by excess electric or diesel waste heat is assumed to be 50% of the HDD demand. The benefit of heat utilization from the diesel plant is also included in the modeling. Waste heat available from diesel electric generation is calculated as 25% of the electric demand. The diesel waste heat energy is also included when a diesel is required to supplement hydro 0 50 100 150 200 250 1/1 1/31 3/2 4/2 5/2 6/2 7/2 8/1 9/1 10/1 11/1 12/1Demand (kW)Date Synthetic Hourly Average Demand (kW) PEL Hourly Average Demand (kW) Average Monthly PCE Demand (kW) 75 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 33 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. energy. Under this scenario heating benefit from the hydro could be negative when the diesel is able to provide more heat energy than the hydro. Where heating is considered an additional net present capital cost of $250,000 is added to the hydro cost to pay for the addition of a dispatchable remote electric boiler system. No infrastructure costs are added for heat utilization from the diesel power plant. 4.5 Water Use 4.5.1 Potable Water Power generation from the hydroelectric project is a secondary use of the dam and pipeline. The primary use has been the supply of fresh water for potable use and fish processing operations. The City of Chignik is the certificated water utility and supplies potable water by withdrawal of pressurized raw water from the existing hydro penstock near the north end of the boardwalk crossing the wetland area. Treated water is stored in the tank located at about elevation 190 ft. A system of wells has been used as a backup supply when the existing penstock is offline although it has not been operated for several years and it is unknown if the well pumps have enough pressure to overcome the height of the new water tank. The City of Chignik domestic water rights are 19.8 acre-ft per year (0.03 cfs). It has been reported by the City that domestic water use rises significantly during very cold periods to prevent freezing of water lines. 4.5.2 Fish Processing The former NorQuest facility water rights for processing were 911.5 acre-feet per year (1.26 cfs) and an additional 10.8 acre-feet for domestic use. This is representative of historical water needs associated with fish processing. Modern processing methods no longer require such a large volume of fresh water. Trident requested up to 10,000 gpd (0.015 cfs) of potable water for future processing needs at the former NorQuest facility. Process water for the Trident facility was obtained from wells with a permitted use of 73.65 acre-feet per year (0.1 cfs). The wells reportedly had water quality problems and the Trident facility is now connected to the City potable water system. Modern day fresh water demand for fish processing is estimated to be 0.1 cfs for each facility. 4.6 Operational Modeling The following summarizes the modeling assumptions and methods that make up the operational model for the combined diesel hydro system. A one hour interval step model is utilized to simulate the operation of the combined diesel and hydro electric generation for a modeled year. A 20 kW minimum reserve is required to be instantly available to meet rapid demand changes that may occur. If the hydro does not have the water supply or capacity 76 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 34 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. available then it is assumed that a diesel is running at minimum loading with the hydro being curtailed. The operational model only allows for excess energy production for displacement of heat energy when there is spill occurring at the dam. The operational model is used to evaluate the existing electric generation system combined with the proposed hydroelectric system. The following chart shows the results of the hydroelectric operational model with the hydrologic chart and the modified flows based on reservoir regulation and demand requirements. Figures 4-9 and 4-10 present the results of the operational modeling with respect to reservoir and system power operation respectively. Figure 4-9 - Proposed Hydroelectric Daily Operation - Flow Model 430 435 440 445 450 455 460 0 5 10 15 20 25 30 35 40 45 50 1 ‐Jan 1 ‐Feb 1‐Mar 1 ‐Apr 1‐May 1‐Jun 1‐Jul 1 ‐Aug 1‐Sep 1‐Oct 1‐Nov 1 ‐Dec Reservoir Elevation, ftFlow, cfsDay Proposed Flow (Spill) at Dam, cfs Flow Utilized for Power Generation (Project Flow), cfs Existing Flow (Spill) at Dam, cfs Reservoir Elevation, ft 77 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 35 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Figure 4-10 - Proposed Hydroelectric Daily Operation - Power Model 4.6.1 Reservoir Elevation Figure 4-11 shows the results of the reservoir modeling for two reservoir elevations and the proposed project capacity of 340 kW. In the chart, the hydroelectric generation is shown as a function of the selected reservoir elevation and the annual electric system load in MWh. The chart shows the minor difference in hydroelectric generation between reservoir elevations. 420 425 430 435 440 445 450 0 20 40 60 80 100 120 140 160 180 200 1/1 1/31 3/2 4/1 5/1 5/31 6/30 7/30 8/29 9/28 10/28 11/27 12/27 Reservoir Elevation, ftPower, kWDate Hydro Generation Diesel Generation Electric Demand Reservoir Level 78 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 36 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Figure 4-11 - Hydroelectric Generation for Reservoir Elevations 445' and 450' 4.6.2 Project Capacity The selection of the pipeline size and the subsequent project capacity was made after modeling the project using a range of values. Figure 4-12 shows the results of the capacity modeling for two configurations. In the chart, the annual hydroelectric generation is shown as a function of the selected project capacity and the annual electric system load in MWh. 500 1,000 1,500 2,000 2,500 3,000 500 1,000 1,500 2,000 2,500 3,000Annual Hydroelectric Generation, MWhSystem Load, MWh Useable Hydroelectric Generation, Reservoir Elevation 445' Useable Hydroelectric Generation, Reservoir Elevation 450' 79 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 37 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Figure 4-12 - Hydroelectric Generation for Project Capacities of 315 kW to 470 kW' In the chart above it is apparent that demand must increase to twice current levels before increased project capacity provides increased benefits. 500 1,000 1,500 2,000 2,500 3,000 500 1,000 1,500 2,000 2,500 3,000Annual Hydroelectric Generation, MWhSystem Load, MWh Useable Hydroelectric Generation, 315 kW Project Capacity Useable Hydroelectric Generation, 470 kW Project Capacity Useable Hydroelectric Generation, 385 kW Project Capacity 80 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 38 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 4.7 Proposed Project Scheme Summary Table 4-5 summarizes the details of the reconstructed existing and proposed project arrangements. It is expected that the final capacity determination of the general arrangement of the proposed project will be made during the preliminary design and permitting phase. Table 4-5 – Summary: Reconstructed Existing and Proposed New Projects Item Existing Proposed Nominal Capacity (kW) 70 385 Static head (ft) 430 380 Design head (ft) 400 340 Hydraulic capacity (cfs) 2.7 18 Reservoir Normal Water Surface (ft) 440 445 Reservoir Area (acres) 21 24 Reservoir Useable Storage Volume (acre-feet) 89 204 Nominal penstock diameter (in) 12,10 & 8 24 Penstock length (ft) 7,280 7,280 Transmission length (ft) 0 1,600 New access road & trail lengths (ft) 0 9,170 Annual energy potential (MWh) 470 2,140 Existing demand (diesel generated) (MWh) 950 950 Annual displaced diesel energy (MWh) 470 900 Annual reduction in diesel fuel use (gal) 33,400 63,500 81 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 39 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 5. Opinion of Probable Construction Cost and Schedule 5.1 No Action Alternative – Diesel Electric Plant No construction cost is associated with the No Action Alternative. As the base alternative, however, operation (fuel) and maintenance costs will continue. These costs are discussed as included in Sections 6 and 7 that follow. 5.2 Reconstructed Existing Project The cost estimate for reconstruction of the existing project is based on the proposed alternative estimate and includes a replacement dam, 12" diameter pipeline, an access trail, and a new turbine and generator. The results are summarized in the table below. Table 5-1 provides a categorical summary of the Total Construction Cost of a reconstructed existing project as itemized above. Table 5-1 - Reconstructed Existing Project, Opinion of Probable Total Construction Cost by Category Category Cost Labor $916,000 Equip $556,000 Material $1,150,000 Shipping $559,000 Indirect $910,000 Development $912,000 Total $5,003,000 5.3 Proposed New Project Table 5-2 includes a summary of the opinion of probable cost for the construction of the proposed project. A detailed construction cost estimate is included in Appendix C. 82 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 40 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Table 5-2 - Proposed New Project, Opinion of Probable Total Construction Cost Item Labor Hours Material Cost Item Cost Contractor Directs Construction Support 2,263 $469,000 Mobilization $548,000 Access Trail 822 $317,000 $390,000 Powerhouse 1,906 $120,000 $302,000 Dam and Intake 4,462 $336,000 $736,000 Dam Site Construction Acccess 40 $1,000 $5,000 Domestic Water Supply 355 $85,000 $116,000 Demo Existing Dam 160 $14,000 Coffer Dam/Construction Diversion 155 $16,000 $30,000 Foundation and Outlet Conveyance 1,320 $108,000 $224,000 Concrete Face 1,346 $72,000 $198,000 Rockfill Placement 525 $6,000 $53,000 Spillway 374 $8,000 $40,000 Power, Controls, and Communication 186 $39,000 $55,000 Pipeline 1,998 $432,000 $612,000 Turbine and Generator 450 $735,000 $779,000 Tailrace 98 $42,000 $51,000 Transmission 582 $53,000 $104,000 Equipment $692,000 SUBTOTAL, Contractor Direct Costs 12,581 $4,683,000 Contractor Indirects Weather Delay 4% $189,000 Overall Contingency 25% $1,171,,000 Contractor Profit 12% $562,000 Bonding 2% $94,000 SUBTOTAL, Contractor Indirects $6,698,000 Development Costs FERC, aquatic, and gaging work $160,000 Geotech Investigation $175,000 Surveying and Engineering $370,000 Historic Properties $75,000 Inspection and Testing $175,000 Owner Admin $175,000 SUBTOTAL, Development Costs $1,130,000 TOTAL CONSTRUCTION COST $7,828,000 Table 5-3 provides a categorical summary of the Total Construction Cost of the proposed project as itemized above. 83 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 41 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Table 5-3 - Proposed New Project, Opinion of Probable Total Construction Cost by Category Category Cost Labor $1,193,000 Equip $692,000 Material $2,035,000 Shipping $762,000 Indirect $2,015,000 Development $1,130,000 Total $7,830,000 The cost estimate presumes that the work force will consist of an average of 6 crew members and a supervisor. Two of the crew are expected to be local hire which reduces the housing and travel costs. The cost for construction equipment mobilization to and from Chignik is based on a chartered vessel traveling to and from Anchorage. Materials are assumed to be shipped separately from Seattle and are priced on a container basis. Additional mobilization during construction includes chartered round trip air service from Anchorage occurring every 2 weeks during construction. Construction cost for the trail is based on overburden removal followed by hauled in base course using two articulated trucks. Volumes are calculated using a trail width of 16' and an average fill depth of 2'. Material is assumed to be sourced from the local quarry at a cost of $25 per cubic yard. Material for the dam fill is obtained from the lower portions of the spillway excavation. The upper portion of the spillway excavation is expected to be used for the coffer dam construction. The cost assumes that a fusion machine will be onsite. The cost of the pipe is estimated based on the total weight and the number of shipping containers required. The labor and equipment for the pipeline are fixed costs. The cost estimate uses a weather delay contingency of 10% that applies to the labor and equipment cost. An overall contingency of 25% is applied to all direct construction costs. The net overall contingency is approximately 30% which is appropriate at this stage of project development and given the potential for unfavourable geotechnical conditions that can impact the dam construction. 84 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 42 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 5.4 Schedule The proposed schedule shown in Figure 5-1 is used in the economic analysis and assumes that development begins with funding approved in July 2015. On that basis, construction Figure 5-1 - Project Development Schedule 85 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 43 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 6. Economic Analysis Evaluation of the Proposed New Project alternative is made by comparing the net present cost and benefits with the base case of diesel electric generation. 6.1 Annual Costs: No Action Alternative – Diesel Electric Plant 6.1.1 Fuel Cost The net present cost for the base case of diesel generation is primarily fuel dependent. An average (medium) fuel price case is used for the analysis although other fuel cases, termed low and high, are also presented. The fuel price is determined using the University of Alaska Anchorage (UAA) Institute of Social and Economic Research (ISER) fuel price projections for 2013-2035 (ISER, 2013) adjusted using a random sampling of the most recent reporting of fuel prices in 15 communities obtained from the Regulatory Commission of Alaska's (RCA) Power Cost Equalization (PCE) filings. The ISER projected average medium fuel price for 2013 for all Alaska communities is $4.43/gal. The sampling of 15 communities showed an average fuel price of $4.51/gal and an average decrease from ISER projected 2013 pricing of $0.18/gal. Thus, the estimated current average fuel price for all Alaska communities for January 2014 is calculated to be $4.25/gal. The ISER medium fuel price growth rate is then used to determine the projected fuel price for the next 50 years. The current average, or medium, price for fuel in a typical rural Alaska community is approximately $4.25 per gallon. The same fuel price is used for economic evaluation of displaced electric and heating loads. The low and high fuel price projection use the same starting value, the current fuel price, but use different rates of escalation which are derived from the ISER report. Fuel price escalation rates above inflation for the low, medium, and high fuel cases are 0.4%, 1.50%, and 2.08%. 6.1.2 Diesel Operation and Maintenance Cost Diesel O&M costs are determined from City of Chignik electric utility rate filings. In Table 6-1, costs for materials for the past two years are averaged and then used to determine the hourly O&M cost for diesel operation. Labor costs are not included. 86 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 44 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Table 6-1 - Diesel O&M Costs Diesel O&M Cost 2012 filters $9,181 generator repairs $21,999 Total $31,180 2011 filters $12,722 generator repairs $11,183 Total $23,095 Average $27,543 Cost per run hour $3.14 6.2 Annual Costs, Proposed New Project 6.2.1 Time Value The net present cost for hydro generation primarily is dependent on the cost of the project due to a grant funded scenario assumed in this report. Costs are accounted for in the year they occur and then discounted using a time value discount rate of 3% for future investments (discount rate). 2014 real dollar values and term of 50 years are used for the economic evaluation. This allows for constant pricing in today's dollars and eliminates the need to inflate costs. However, the fuel price is subject to a growth rate because it is expected to outpace the average inflation. 6.2.2 Construction Cost Variance Whereas the base case of diesel generation includes a probable cost range from low to high fuel cost, the hydroelectric economic analysis also includes a probable cost range from a low to high scenario. Factors of -10% and +10% are applied to the overall development cost estimate. 6.2.3 Hydro Operation and Maintenance Costs Hydro O&M consists primarily of labor costs and an amount each year for a repair and replacement fund. Labor costs were not included in the diesel O&M. It is expected that, because the hydro will displace nearly all diesel generation, the labor associated with the diesel generation will be redirected to the hydro without any changes. Labor is excluded from the operational model and the funding for hydro repairs is limited to parts estimated to be 0.25% of the construction cost. It is likely that permit compliance monitoring will be required by resource agencies for 5 years following commissioning. The monitoring is presumed to be similar to current requirements which includes stream gaging and fish spawning surveys. The first 5 years of hydro O&M is estimated to cost 0.75% of the construction cost to account for the estimated monitoring work. 87 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 45 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 6.3 Economic Evaluation Method The parameters reported in the results table are the total of annual costs and benefits calculated over the planning horizon and adjusted for year of occurrence using the discount rate. Conclusions are shown in two ways: the net present cost of generation and the benefit/cost ratio. The two methods present two different viewpoints on project benefits. 1. The Net Present Cost of Generation (NPC) presents the results from the viewpoint of a consumer to illustrate which of the projects, including the no hydro alternative of diesel only, provides the lowest cost of power. 2. The Benefit/Cost Ratio (B/C) presents the results from the viewpoint of an investor and illustrates whether the benefits of the proposed development are greater than the cost (i.e., B/C >1). Additional detail on the economic parameters reported include: Net Present Cost Generation - Diesel Electric. The net present cost of electric generation using diesel is the sum of the diesel fuel costs, inflated as indicated, and the generation related O&M fixed costs over the planning horizon with costs discounted based on the year of occurrence. This is the base case from which the benefits of the hydro option are determined. Costs not associated with generation, such as distribution system maintenance and administrative services, are not included in the generation costs. Net Present Cost Generation - Hydroelectric. The net present cost of electric generation with the addition of the hydro. Where the hydro is unable to meet demand the necessary diesel generation expense and O&M expense is included in the annual cost. This includes the cost of generating power from the present year on which is entirely diesel only generation until the hydro is commissioned. The cost to construct the hydro, via loan financing, and the O&M cost of the hydro are also included. The financing of the construction cost via a loan is presented because the Net Present Cost using grant funding is slightly less. When the NPC of hydro generation is less than diesel electric generation the proposed project is superior. Present Value of Hydro Development Cost. Used for B/C calculation, the present value of the of the hydro development cost is the cost component in the B/C Ratio. This is the sum of the costs, over the planning horizon, to develop the hydro discounted by the year the costs occur. Only costs to construct the project are included. Under the financed option, the discounted sum of deflated loan payments is the present value of hydro development cost. Present Value of Hydro Benefits. Used for B/C calculation, the present value of the annual cost savings from the hydro is the benefits component in the B/C Ratio. This is the sum of the benefits, over the planning horizon, to develop the hydro discounted by the year the benefits occur. The benefits of the project are defined as the cost of generation using diesel only minus the cost of hydro generation for each year. The cost of hydro generation includes the fixed O&M cost of the hydro and the cost of diesel fuel and O&M from required diesel generation needed to meet demand. Costs to generate power from present day through hydro development are included (benefits are zero until project is commissioned). 88 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 46 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. B/C Ratio. This is the present value of the hydro benefits divided by the present value of the hydro development cost. When greater than 1.0 the proposed project is superior. Present Value Hydro Heating Benefits. Including heating in the analysis is a measure of the potential benefits for using excess energy to offset diesel fuel used to meet heat demand. In accordance with the assumptions for heat production and utilization, the benefits from hydro heating are defined as the heating value of the hydroelectric generation minus the value from diesel only electric generation heat value. Where positive, the hydro generation has more potential heat utilization than diesel electric only generation. Where the value is negative the hydro project has less potential heat utilization than diesel electric only generation. 6.4 Economic Results – Proposed New Project Table 6-2 shows results for a number of economic parameters. The results are shown for varying load growth rates along with the variable diesel fuel cost and hydro construction cost. For simplicity, the hydro construction cost variability is expected to coincide with the diesel cost variability. Thus the table of results reports the low diesel fuel case combined with the low hydro construction cost case and so on. Detailed results of the economic analysis are included in Appendix D for the electric generation parameters using the 2% demand growth and medium fuel and hydro cost scenario. 89 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 47 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Table 6-2 - Economic Results: Proposed New Project (385 kW) Load Growth Case Avg B/C Hydro Construction Cost and Fuel Cost Scenario 0% 1% 2% Low Net Present Cost Generation - Diesel Electric $8,710,000 $10,490,000 $12,820,000 Net Present Cost Generation - Hydroelectric $8,520,000 $9,000,000 $9,820,000 Present Value of Hydro Development Cost $6,280,000 $6,280,000 $6,280,000 Present Value of Hydro Benefits $6,470,000 $7,770,000 $9,280,000 B/C Ratio 1.0 1.2 1.5 1.3 Present Value Hydro Heating Benefits $840,000 $660,000 $390,000 B/C with Heating Included 1.1 1.3 1.5 1.3 Medium Net Present Cost Generation - Diesel Electric $10,780,000 $13,310,000 $16,640,000 Net Present Cost Generation - Hydroelectric $9,360,000 $10,030,000 $11,200,000 Present Value of Hydro Development Cost $6,980,000 $6,980,000 $6,980,000 Present Value of Hydro Benefits $8,400,000 $10,260,000 $12,420,000 B/C Ratio 1.2 1.5 1.8 1.5 Present Value Hydro Heating Benefits $1,090,000 $840,000 $430,000 B/C with Heating Included 1.3 1.5 1.8 1.5 High Net Present Cost Generation - Diesel Electric $12,130,000 $15,170,000 $19,190,000 Net Present Cost Generation - Hydroelectric $10,150,000 $10,950,000 $12,370,000 Present Value of Hydro Development Cost $7,680,000 $7,680,000 $7,680,000 Present Value of Hydro Benefits $9,660,000 $11,910,000 $14,500,000 B/C Ratio 1.3 1.6 1.9 1.5 Present Value Hydro Heating Benefits $1,260,000 $950,000 $450,000 B/C with Heating Included 1.4 1.6 1.9 1.6 Average of Electric B/C Ratios 1.2 1.4 1.7 1.4 Average of Electric + Heating B/C Ratios 1.3 1.5 1.7 1.5 The proposed project has the lowest cost of generation and is beneficial under all scenarios. For the probable cost cases and if electric demand remains unchanged the B/C is positive at 1.2. While the demand has been constant in the past this is not expected to be the case in the future. Under increasing demand scenarios the benefit of the hydro's additional capacity at a fixed cost is readily apparent with the B/C ratio rising significantly. The overall average B/C ratio of hydroelectric generation is 1.4 for all scenarios. 6.4.1 Reconstructed Existing Project Economic Results For reconstructing the existing project, the analysis concludes the project is not recommended due to lower B/C ratios as expected for the 70 kW project with much less energy generation. 90 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 48 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 6.4.2 Environmental Measures Economic Analysis The replacement project locates the powerhouse at an elevation higher than desired. It is estimated that the ideal powerhouse elevation is about 15' lower which translates to a 4% decrease in power output for a given flow rate. The economic modelling shows that the NPV of lifetime benefits from the hydro project are subsequently reduced by about $135,000 under the high demand growth scenario. The significantly longer tailrace than required in order to convey the tail water to the upper limit of anadromous fish habitat represents an additional cost of approximately $75,000. 91 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 49 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 0 10 20 30 40 50 60 70 80 90 100 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1 10/1 11/1 12/1Spill Flow at Dam, cfsMonth/Day of Year Proposed Spill at Dam, Demand Limited Proposed Spill at Dam, Maximum Output Existing Spill at Dam 7. Proposed New Project – Environmental / Regulatory Analysis The only resources with potential for significant impacts from the proposed project are socioeconomic and fishery resources. 7.1.1 Aquatic Resources The proposed project's alteration of flows at the dam site is very limited. There will be a marginal increase in the duration and frequency of an already regularly occurring condition of having no spill at the dam. From a qualitative perspective it is expected that the marginal change in duration is not significant with respect to aquatic resources. The alteration of flows at the powerhouse is a slightly more significant. The replacement project will result in the addition of 2.7 cfs of water into the rearing habitat of Indian Creek by abandoning the existing hydroelectric project which completely diverts water out of the basin and discharges into the tidal zone of the ocean. The proposed project diverts a significantly regulated flow back to the most habitable reach of Indian Creek. The hydrological impacts from the proposed action are shown in Figures 7-1 and 7-2 using the median daily average hydrology from the 2013 water year where both dam spill and bridge site flows were recorded. The hydrological impacts are shown for partial project output coinciding with the synthesized demand and full project output. Load growth decreases duration of flow additions at the powerhouse but does not have a discernable effect on the spill flow regime at the dam. Figure 7-1 - Existing and Proposed Spill Flow at Dam, 2013 Water Year 92 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 50 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 0 10 20 30 40 50 60 70 80 90 100 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1 10/1 11/1 12/1Flow at Powerhouse, cfsMonth/Day of Year Proposed Flow at Bridge Site Existing Flow at Bridge Site The 2013 water year flows recorded at the bridge site gauge are shown with the addition of the project's tailrace flows in the chart below. The flows recorded at the bridge site are presumed to equal the flows at the powerhouse. The addition of approximately 2.45 cfs (2.7 cfs less assumed potable water flows) of flow from the existing project is apparent in the chart. 7.1.2 Socioeconomic Resources The main factors influencing the socioeconomic environment in Chignik include salmon harvesting and the cost of energy. The proposed project will result in reduced cost of energy in the long term. Additional benefits result from diverting money from the burning of diesel fuel to investing in local infrastructure. Construction costs that remain in the community include approximately $330k for local hire labor, an estimated $100k for housing, and $270k in quarry sales. Additionally, the construction of the hydro would invest in the Alaska economy with approximately $160k for a marine charter, $42k for air service, and over $600k for equipment. Figure 7-2 - Existing and Proposed Flow at Powerhouse – Bridge Site Flow Data, 2013 Water Year 93 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 51 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 7.1.3 Historical and Archaeological Resources The Programmatic Agreement (PA) with FERC and SHPO, developed and signed in 2005 as part of the relicensing effort, called for an accompanying Historic Properties Management Plan. The wood timber dam is one of a number of historic properties (significant cultural resources) associated with the cannery and within the project area that will be affected by the proposed project. With the proposed removal and replacement of the existing historic wood timber dam the proposed development in this study will have an impact on historic properties. It is also likely that the no action plan would result in similar, if not worse, impacts to the historic dam and properties. Continued use of the slowly deteriorating dam is likely to result in the eventual failure without the possible benefits associated with a planned and permitted replacement effort. 7.2 Regulatory Analysis The FERC guidelines for an amendment to a license for a constructed project of two types, “Capacity Related” and “Non-Capacity-Related” (FERC, 2001). The criteria for a capacity- related amendment is a project modification for which additional capacity was not previously authorized which would: increase the project’s actual or proposed total installed capacity; result in an increase in the project’s maximum hydraulic capacity by 15 percent or more; and result in an increase in the installed nameplate capacity of 2 MW or more. Classification as a non-capacity amendment requires that two out of the three above criteria are do not apply. As a capacity-related amendment for a project less that 1,500 kW, the content thereof must include a revised initial statement and Exhibits E, F, and G prepared in accordance with the requirements of 18 CFR 4.61. This report has been prepared to serve as the basis for an initial draft of a modified Exhibit E. The dam design will be subject to review by both FERC and the State of Alaska Dam Safety. Once constructed, monitoring for dam safety may be required by FERC or the State of Alaska. A qualified cultural resource specialist will need to assess the currently-proposed project, what has previously been done with respect to Section 106 and historic properties, and what may need to be done for this new undertaking. 7.3 Consultation During the process of preparing this feasibility study meetings were held with interested parties to review the initial concept designs and solicit comments. The following summarizes meetings scope and minutes. 94 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 52 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 7.3.1 City of Chignik Council Meeting, February 20, 2013 The draft concept with powerhouse situated at, or near, the upper limit of anadromous rearing habitat was preferred by the community. Comments received included the following: The community is interested in a possible hatchery in Chignik in the future. The community desired a higher dam to support improved water supply and winter hydroelectric power production. Trident is expected to move forward with construction of a new cannery facility and resume local fish processing as opposed to the offshore processing for locally caught fish. 7.3.2 Resource Agency Meeting The draft concept along with a power point presentation providing a preliminary project assessment was sent to resource agencies along with an invitation to attend a joint meeting to review and comment on the proposed project. The meeting invite was sent on September 30, 2013 with the meeting held on October 16, 2013. The meeting minutes are attached in the Appendices. The major items of discussion, centered primarily on aquatic resources, are summarized below. The proposed project was described to include a dam raise, capacity increase, and powerhouse relocation that would be expected to improve flows in the anadromous reach while eliminating the need for diesel generated electricity. DNR recommended a new water right application would be required and should be submitted early because there is currently a 2-3 year backlog. A temporary water use permit can be issued for up to 5 years however. ADF&G indicated additional study and permitting efforts should provide as much characterization of aquatic habitat and species as possible including river survey data and photos. A coordinated agency site visit while pinks are spawning is desired with the developer chartering air transportation. The generally agreed upon permitting approach recommended is a capacity related amendment through FERC. 7.3.3 Federal Agency Meeting Federal agencies could not attend the October 16, 2013 because of the government shutdown. A second agency meeting scheduled for December 11, 2013 was held at the USFWS office. USFWS and other federal agency staff requested that the feasibility study include consideration of the effects of climate change on the project. 7.3.4 Alaska Energy Authority Review An interim Preliminary Findings Feasibility Report dated September 23, 2013 was prepared and submitted with an application for grant funding to the Alaska Energy Authority. The interim report recommended a reservoir elevation of 450', a 24" pipeline, and a hydraulic 95 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 53 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. capacity of 20 cfs. The expected direct construction cost was $7.5 million with a total development cost of $8.875 million. The anticipated B/C Ratio was 1.0. As part of the grant review process the AEA provided comments on the report and project in general. These comments are summarized below. Provide support for the recommendation of a proposed rock fill dam with information on the size and volume of material. Provide the basis for the development cost that appeared high for a small project. Provide the basis for the suggested project size of 477 kW hydro with an annual energy potential of 2,600,000 kWh whereas Chignik’s annual demand is approximately 950,000 kWh and provide any potential use/value for the excess energy. Provide better assessment of project costs, impacts to residents and anadromous fish, and the overall economy of the project. Subsequently, a draft of this feasibility study was issued May 2, 2014 (date on report shown as May 2, 2013). The recommended project was revised to 340 kW although a 420 kW project was found to have about the same B/C ratio. The AEA generally concurred with the findings of the draft report. 96 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 54 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 8. Conclusions and Recommendations 8.1 Conclusion Based on the stream gaging effort, it is apparent that the hydroelectric resource is very limited when temperatures drop below freezing for extended periods of time. Flows normally drop to less than 3 cfs through the late winter to early spring. The reservoir storage is sufficient to meet current demand for up to about a month. The height of the dam, and the amount of reservoir storage, should be constructed at the highest elevation considered practical and economical which is approximately 450' (445' spill elevation) or slightly higher. The analysis also shows that the proposed project capacity will provide the same benefits as a larger capacity project up to demand levels about twice current demand. If the electric demand is expected to grow significantly, particularly if a large summer only consumer such as a new processing plant increases demand, then a larger project capacity, or provision for future expansion, should be considered. Final project capacity will be determined during the design and permitting phase. The results of the analysis show that the proposed hydro project is the lowest cost option for electric generation in Chignik and has a positive benefit to cost ratio under the expected range of scenarios analyzed. Overall, the analysis concludes with a finding of no significant adverse impacts and a finding of significant beneficial impacts. 8.2 Recommendations Given the significant benefits of the proposed action it is recommended that the owner, responsible agencies, and other interested parties pursue the development without delay. Specific recommendations include: Pursue funding for the design and permitting of the proposed project and begin work as soon as possible. LIDAR or other remote sensing topographic survey work should be collected when the reservoir is drained. LIDAR and other survey data shall be located relative to property boundary locations for the lands occupied by the project. High resolution data is required along the project corridor. The area of coverage shall include Indian Creek from the mouth to above the upper end of the proposed reservoir. Investigate and report on quality of talus slope material for use as rock fill, drain material, and bedding material. Verify soil depths and bedrock quality at the dam site. Investigate soil depths and conditions along access road and pipeline routes and report on recommended fill depths and identify potential material source areas. Investigate soil depths and bedrock conditions at the powerhouse site. An archaeological and cultural resource assessment may be required prior to ground disturbing activities. 97 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 55 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Consult with a qualified cultural resource specialist to assess the proposed project, what has previously been done with respect to Section 106 and historic properties, and the requirements, if any, for the proposed action. The turbine should be designed for the highest flow capacity practical with reasonably high efficiency in the low flow range around 5-6 cfs. If significantly increased demand is expected the proposed project capacity should be revaluated. Although the existing stream gaging data is sufficient to support the existing demand and proposed project capacity, continued data collection through design and permitting is advised. If significantly increased demand is anticipated then continued collection of stream gaging data is recommended. 98 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 Page 56 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. 9. References AEA PCE, Alaska Energy Authority, Power Cost Equalization program, http://www.akenergyauthority.org/programspce.html. AEA, Alaska Energy Pathway, 2010, ftp://ftp.aidea.org/AlaskaEnergyPathway/2010EnergyPathway8-12Press.pdf FERC, Hydroelectric Project Handbook for Filings Other Than Licenses and Exemptions, April 2001 Hatch, 2013 Monitoring Report, Final Draft, March 17, 2014, http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=13485977 Hatch, 2014. Chignik Hydroelectric Project P-620, FERC Compliance, Draft Project Operations Report, August 7, 2014, http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=13610616 Iowa State University of Science and Technology (Iowa 2014), IEM :: Download ASOS/AWOS/METAR Data, September, 2014, http://mesonet.agron.iastate.edu/request/download.phtml?network=AK_ASOS ISER, 2013. Fuel Price Projections, Alaska Fuel Price Projections 2013-2035, report. Retrieved 02 10, 2014, from University of Anchorage (UAA) Institute of Social and Economic Research: http://www.iser.uaa.alaska.edu/Publications/2013_06- Fuel_price_projection_2013final_06302013.pdf Mobley and Associates, Chignik's Norquest Cannery - A Cultural Resource Inventory & Evaluation, 2004, http://elibrary.ferc.gov/idmws/common/opennat.asp?fileID=10478372. National Climate Data Center, Monthly Heating Degree Days, CHIGNIK, ALASKA. Polarconsult Alaska, Inc. Indian Creek Fish Spawning and Stream Monitoring Annual Report, 2011, Final Report, Review #1. June 12, 2012. UAF, Scenarios Network for Alaska and Arctic Planning, University of Alaska. 2014. Community Charts. Retrieved January 2013 from http://www.snap.uaf.edu/charts.php. USACE, Department of the Army Alaska District Corps of Engineers, Small Hydropower Potential from Indian and Mud Bay Lake Creeks Final Draft Feasibility Report, March 1983. 99 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Appendix A Exhibit 1 Existing Hydroelectric Project Map 100 155400015550001556000155700015580001559000833000 834000 835000 836000 837000 838000 839000 840000 841000 833000 834000 835000 836000 837000 838000 839000 840000 841000PROJECTSITE MAPEXISTINGDAMINTAKEPENSTOCKPOWERHOUSE& PIPELINEGAUGINGPK 1000 450 500500350 10005507 0 0 50150100200500600350250200RM 0.0RM 0.5RM 1.0RM 1.5RM 2.0SEC. 12SEC. 13SEC. 7SEC. 18T. 45 S, R. 59 WT. 45 S, R. 58 WPK PK PK PK PK PKPKPKPKPK1 INCH1 INCH0.50.250.25H340309-G1-MAPALASKA VICINITY MAPANCHORAGEFAIRBANKSJUNEAUCHIGNIK LOCATION MAPSCALE: 1 IN = 1 MIEXISTING PROJECT SITE MAPSCALE: 1"=1000'LEGEND .CHIGNIK BAY HYDROELECTRIC PROJECTFERC Project Number P-620PROJECT OWNER AND FERC LICENSEECity of Chignik, PO Box 110, Chignik, AK 99564RCA Certificate of Public Convenience and NecessityNo. 297PROJECT ENGINEERHatch Associates Consultants Inc.1225 E International Airport Rd, Suite 110Anchorage, AK 99518PROJECT DESCRIPTIONThe project is an existing FERC licensed hydro locatedon Indian Creek in Chignik Bay, AK. The existinginfrastructure consists of a wood timber framed dam, a10" to 12" wood and steel pipeline, and a licensedoutput of 60 kW going to the Trident fish processingplant.PROJECT LOCATIONThe project is located in the community of Chignik Bay,AK, a native Alaskan village on the south side of theAlaska Peninsula located in the Lake and PeninsulaBorough. Lands affected by the project are withinsections 7 and 18 of T45S R58W and sections 12 and13 of T45S, R59W in the Seward Meridian.EXISTING PROJECT DETAILS Capacity40 kW Static Head420' Design Head260' Hydraulic Capacity2.7 cfs Nominal Pipeline diameter 10-12" Pipeline length7,200' Transmission Length NA Annual Energy Potential314,000 kWh(estimated capacity factor of 90%) Annual Useable Energy 0 kWh (Not connected to city grid)MAPPING INFORMATIONMap Projection shown is the State Plane CoordinateSystem, Alaska Zone 6, NAD 83, US Survey FeetExisting Dam location is:Easting, Northing, Elevation = 1556431, 832961, 440'Latitude, Longitude =1 : River mile = 2.42Reservoir Surface Area = 21 acresExisting Powerhouse location is:Easting, Northing, Elevation = 1558392, 838224, 20'Latitude, Longitude = 1 : SOURCE / RECEIVING WATER INFORMATIONSource Water Name: Indian Creek (AWC#71-10-10130)Source Watershed Area 2.94 sq milesReceiving Water Name Chignik SloughLocations of rearing and presence for Pink Salmon andDolly Varden in Indian Creek based on 1983 ADF&Gnomination. Upper limit of rearing located at river mile0.55 (watershed area = 3.99 sq miles) and upper limitof presence at river mile 1.0 (watershed area = 3.80 sqmiles).DATA SOURCES1. Survey by Licensee in 2005 of pipeline using RTKGPS adjusted to monument "Base".2. Survey by Licensee in 2003 Indian Creek using atheodolite, no control.3. DCRA: This map was prepared by the Lake andPeninsula Borough (LPB) in cooperation with theAlaska Department of Commerce, Community, andEconomic Development (Commerce) using fundingfrom the Initiative for Accelerated InfrastructureDevelopment (IAID). The IAID is supported bygrants from the Denali Commission, USDA RuralDevelopment, Alaska Department of Transportationand Public Facilities, and Commerce. The AlaskaNative Tribal Health Consortium provided sanitationfacility records. The LPB contracted with GlobalPositioning Services Incorporated in June of 2002to prepare the map. The original DCRA AutoCADdrawing has been revised as appropriate.4. USGS 63k quad map Chignik B-2 Enhanced DigitalRaster Graphic (DRGE) copyright BeartoothMapping, Inc. - 1999.5. Space shuttle radar topography mission (SRTM) 1arc second resolution elevation data.6. Alaska Department of Fish and Game anadromousnomination, 1983.ROAD (UNIMPROVED)PENSTOCK AND TRESTLEPKCONTOURSRIVER INTERMITTENTRIVER AND CHANNELWATER BODIESBASIN BOUNDARIESBUILDINGSCOASTWETLANDSKODIAKTRAIL101 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Appendix B October 16, 2013 Resource Agency Meeting Minutes 102 If you disagree with any information contained herein, please advise immediately. , Rev. A Page 1 © Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents. Minutes of Meeting H340309 11/8/2013 CE2 Chignik Hydroelectric Feasibility Study Distribution Those present + Brian Aklin, CE2 Resource Agency Invitees Resource Agency Meeting Meeting Date: 10/16/2013 10:00 am Location: Hatch office, Anchorage, AK and via teleconference Present: At Hatch Anchorage Office: Daniel Hertrich, Hatch Monte Miller, ADF&G Jim Ferguson, Hatch Audrey Alstrom, AEA Bradley Dunker, ADF&G Via teleconference: Langley Sears, Hatch Marcelle Lynde, Hatch Henry Brooks, ADNR Melissa Hill, ADNR Shina Duvall, ASHPO Robert Carpenter, City of Chignik Adam Anderson, City of Chignik Alexander Kline, City of Chignik Purpose: Gather comments and recommendations as part of the feasibility assessment for the proposed modification and reconstruction of the Chignik Hydroelectric Project. 1. Introduction Daniel Hertrich of Hatch, on behalf of the City of Chignik, held a resource agency meeting to gather comments and recommendations as part of the feasibility assessment of the modification and reconstruction of the Chignik Hydroelectric Project, FERC no. P-620. The meeting agenda included an introduction to the existing Chignik Hydroelectric Project and an overview of the proposed project, followed by general discussion of resource issues, primarily aquatic. A presentation was prepared and distributed to the meeting invitees. The purpose of the meeting was to obtain comments on the potential effects of the proposed project on aquatic and other resources, and to gather preliminary recommendations for the design and permitting of the proposed project, including additional data collection. Invitations were sent via email to the following recipients after Jim Ferguson made inquiries with agencies about availability. Federal agencies could not attend because of the US government shutdown. 103 , Rev. A Page 2 © Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents. List of Resource Agency Invitees: Bittner, Judith E Bradley Dunker Donn Tracy Drew Harrington Duvall, Shina A Eric Rothwell Frances Mann Henry C Brooks Jeff Conaway Kim Sager Lori Verbrugge Matt Schellekens Melissa E Hill Monte Miller Phil Brna Susan Walker Audrey Alstrom Joseph Klein 2. Summary Daniel Hertrich reviewed the attached description of the proposed project with the main distinguishing features being a dam raise, a significant increase in project capacity, and relocation of the powerhouse resulting in a reduced bypassed reach in Indian Creek thus improving the instream flows in the anadromous reach while nearly eliminating the need for diesel generated electric energy. DNR (Henry Brooks) stated that while it is possible that the increase in the amount of water required for the new hydro project could be handled as an amendment to the existing water right, it is more likely that it will require a new application. There is a considerable backlog of applications (2-3 years), so he recommends filing the application as soon as possible. Should it become necessary, a temporary water use permit (TWUP) could be issued for the increased water withdrawal. The TWUP would be good for five years, and would take around 90 days to issue. Initial study/permitting should provide as much characterization of aquatic habitat and species as possible. Monte Miller and Brian Dunker (ADF&G) both asked for more detailed maps of the existing and proposed projects. In particular, they would like to see detail on the known extent of anadromous habitat, and more details on the powerhouse location. They are also interested in seeing the existing cross-section information, the photos taken at the cross- sections, and stream gradient information. Dan stated that a LIDAR survey of the project area will be done and that Indian River would be included in the survey coverage; Monte and Brian stated that such a survey would be very useful. Brian expressed a strong interest in a site visit, and suggested that it be done while pinks are spawning, and that minnow traps be brought to look for juveniles and Dolly Varden. He asked to be notified as far in advance as possible. He also noted that minnow trapping will require a fish collection permit (see above). A coordinated site visit with the developer chartering air transportation is desired. Agencies have limited budgets and would probably not be able to make such a visit otherwise. A site visit is highly recommended to see the project area, observe and trap fish, and to better characterize aquatic issues, including instream flows. Brian said that Todd Anderson, with ADF&G Commercial Fisheries Division in Kodiak, would be a very good contact and source of information on the area, the stream, and fish presence. The path for permitting and licensing still needs to be determined. As an existing FERC project, the presumed approach at this time is a capacity related amendment or a new 104 , Rev. A Page 3 © Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents. license. The project could possibly be non-jurisdictional, if approved by FERC, but such an approach significantly reduces required involvement of several agencies. The City of Chignik will contact FERC to discuss the feasibility of constructing the project via a capacity-related amendment. With outstanding FERC license compliance work, a capacity related amendment appears to be best approach, both from the City’s and the agencies’ perspective, at this time. Daniel Hertrich DJH: Attachment(s)/Enclosure 131016 Draft Chignik Hydro Agency PP.pdf 105 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Appendix C Proposed New Project Construction Cost Estimate 106 Chignik Hydroelectric ProjectFeasibility StudyEstimated Construction CostBase Labor Rate / hour 85 (includes directs, indirects, allowance for overtime)Super and specialist 105engineer 150Work week 60 hoursOn Site Duration 25 weeksRilFlC475$/ lRetail Fuel Cost4.75$/galCrew size 6Nominal Pipe Size 24 inlbs HDPE 221,385lbs Steel 0Crew Size or # unitsLabor HoursLabor RateLabor Cost Unit Cost Equip Cost Unit Unit Cost Materials Cost Unit Cost Ship CostCttiStLaborEquipmentMaterialMobilizationTotalItemLabor Production and UnitItem CostConstruction SupportProcurement, Submittals 2 1 wks 120 $105 $12,600$12,600SWPP 1 1 wks 60 $105 $6,300$6,300Survey 2 3 wks 360 $150 $54,000$54,000Planning 1 2 wks 120 $105 $12,600$12,600Office Support 0.5 25 wks 741 $105 $77,837$77,837Asbuilt and closeout 1 2 wks 120 $105 $12,600$12,600Mechanic 0.5 5.5 mos 741 $105 $77,837$77,837$$$housing865 Man Days$200 $172,971 $172,971Contractor passenger travel60 trips$700 $42,000 $42,000MobilizationEquipment transportMarine charter, RT to/from Chignik2 ea$80,000 $160,000 $160,000Materials ShippingPipe21 cont$6,000 $126,000 $126,000Building4 cont$6,000 $24,000 $24,000Concrete18 cont$6,000 $108,000 $108,000Dam, piping, vaults, misc5 cont$6,000 $30,000 $30,000Power Poles1 cont$6,000 $6,000 $6,000Wire and Electrical1 cont$6,000 $6,000 $6,000Turbine and Generator2 cont$6,000 $12,000 $12,000Tailrace4 cont$6,000 $24,000 $24,000Transformer, Switchgear1 cont$6,000 $6,000 $6,000Airfreight Support During Construction 13 ea$3,500 $45,500 $45,500gppg,,,Access Trail9173ftclearing and overburden removal 5.1 acres 51 $85 $4,296$4,296Minor culverts 10 80 $85 $6,800 ea $1,200 $12,000 $18,800Large culverts 4 96 $85 $8,160 ea $6,000 $24,000 $32,160Gravel Fill 10872 431 $85 $36,651 cyd $25 $271,793 $308,443fuel 1927gal $4.75 $9,153 $9,153Super 1 164 $105 $17,265$17,265September, 2014Page 1107 Chignik Hydroelectric ProjectFeasibility StudyCrew Size or # unitsLabor HoursLabor RateLabor Cost Unit Cost Equip Cost Unit Unit Cost Materials Cost Unit Cost Ship CostLabor Equipment MaterialMobilizationTotalItemLabor Production and UnitItem CostPowerhouseclearing1170 0.03 man hr32 $85 $2,740sq ft$2,740excavation, disposal, and fill347 0.05 man hr17 $85 $1,473cyd$1,473Powerhouse Plan Area780 sq ftPremix concrete71 15.2 cyd1081 $94 $101,169cyd$590 $41,900$143,069Metal building shell 780sq ft $30 $23,400 $23,400architectural 780sq ft $5 $3,900 $3,900electrical, mechanical 780sq ft $10 $7,800 $7,800doors 780sq ft $10 $7,800 $7,800foreman 1 0.2 crew hr 155 $105 $16,292$16,292Labor 3 0.6 man hr 465 $85 $39,565$39,565Specialty 1 0.2 man hr 155 $105 $16,292$16,292crane 1 60 man hr 60$85$5,100ea$35,000$35,000$40,100$$,$,$,$,Dam and IntakeDam Site Construction AcccessVolume500cydLabor3 0.06 man hr30 $85 $2,550$2,550Super1 0.02 crew hr10 $105 $1,050$1,050Fuel270gal$4.75 $1,283$1,283Domestic Water Supply4"HPDE500'coiledpipeSDR214300ft$3 5$15 050$15 0504 HPDE 500 coiled pipe, SDR 214300ft$3.5$15,050$15,050Labor3 0.012 man hr155 $85 $13,158$13,1584" insulated HDPE pipe, SDR 112000ft$35.0 $70,000$70,000Labor3 0.075 man hr150 $85 $12,750$12,750Super1 0 crew hr50 $105 $5,250$5,250Demo Existing DamLabor3 40 man hr120 $85 $10,200$10,200Super1 40 crew hr40 $105 $4,200$4,200cofferdam/constructiondiversioncoffer dam/construction diversionSpillway Overburden Excavation 500 0.03 man hr 15 $85 $1,275 cyd $1,275Coffer Dam ‐ Place Earth/Rock 1000cyd42" Culvert 140ft $75 $10,500 $10,500Liner 8000sq ft $0.60 $4,800 $4,800Labor 3 man hr 81 $85 $6,913$6,913Removal Labor 3 man hr 20 $85 $1,700$1,700Super 1 crew hr 39 $105 $4,072$4,072Fl120l$4 75$570$570Fuel120gal$4.75$570$570Foundation and Outlet ConveyanceGrout holes 20 60 $85 $5,100$5,100Grouting 20 160 $85 $13,600 cyd $500 $10,000 $23,600Anchors 10 30 $85 $2,550 ea $100 $1,000 $3,550Concrete Footing28338 $85 $28,711cyd$600 $16,889$45,600Precast 4'x4' vaults100400 $85 $34,000lf$610 $60,960$94,960Shutoff Gate/Valve132 $85 $2,720ea$5,500 $5,500$8,220Air Vent140 $85 $3,400ea$3,500 $3,500$6,900Trash Rack148 $85 $4,080ea$3,000 $3,000$7,080Flow Control/Rupture Valve124 $85 $2,040ea$7,500 $7,500$9,540Super189 $105 $19,806$19,806September, 2014Page 2108 Chignik Hydroelectric ProjectFeasibility StudyCrew Size or # unitsLabor HoursLabor RateLabor Cost Unit Cost Equip Cost Unit Unit Cost Materials Cost Unit Cost Ship CostLabor Equipment MaterialMobilizationTotalItemLabor Production and UnitItem CostConcrete FaceArea3400sq ftThickness8inConcrete84 15.5 cyd1305 $94 $122,821cyd$859 $72,081$194,902haul load size12000lbsround trip time 1.9hrhaul labor 1 41 man hr 41 $85 $3,474 hrs $3,474fuel 327gal $4.75 $1,553 $1,553Mix and placecyd $250 $20,988 $20,988laborer 3 5.5 man hr 462 $85 $39,247$39,247foreman 1 1.8 crew hr 154 $128 $19,623$19,623Rebar 12870lbs $2.00 $25,740 $25,740haul labor 1 6.3 man hr 6$85$533hrs$533$$$laborer3 0.02 man hr257 $85 $21,879$21,879foreman1 0.007 crew hr86 $128 $10,940$10,940Reusable Forms3400sq ft$7.00 $23,800$23,800laborer3 0.075 man hr255 $85 $21,675$21,675foreman1 0.025 crew hr85 $105 $8,925$8,925Rockfill PlacementMain Zone 3000 0.038 man hr 450 $85 $38,250 cyd $38,250Super75$105$7 875$7 875Super75$105$7,875$7,875Fuel1350gal$4.75 $6,413$6,413SpillwayRock Excavation3360 0.05 man hr168 $85 $14,280cyd$14,280Weir Wall10 15 man hr153 $85 $12,986cyd$12,986Super53 $105 $5,614$5,614Fuel1604gal$4.75 $7,618$7,618Power, Controls, and Communicationcontrols116manhr16$85$1 360ea$7 500$7 500$8 860controls116man hr16$85$1,360ea$7,500$7,500$8,860equipment/storage shed 1 48 man hr 48 $85 $4,080 ea $10,000 $10,000 $14,080power line, communications7320 0.02 man hr122 $85 $10,370ft$3.00 $21,960$32,330Pipeline7320ftHDPE 7280 971 $85 $82,507 ft $53 $387,423 $469,930Steel 40 80 $85 $6,800 ft $150 $6,000 $12,800flange kits 10 80 $85 $6,800 ea $1,200 $12,000 $18,800drains/air reliefs 20 80 $85 $6,800 ea $250 $5,000 $11,800h/hbl k12288$85$24 480$1 200$14 400$38 880anchors/thrust blocks12288$85$24,480ea$1,200$14,400$38,880Super250 $105 $26,227$26,227Specialty250 $105 $26,227$26,227fuel1498.6667gal$4.75 $7,119$7,119September, 2014Page 3109 Chignik Hydroelectric ProjectFeasibility StudyCrew Size or # unitsLabor HoursLabor RateLabor Cost Unit Cost Equip Cost Unit Unit Cost Materials Cost Unit Cost Ship CostLabor Equipment MaterialMobilizationTotalItemLabor Production and UnitItem CostTurbine and GeneratorTurbine and Generator 1ea $560,000 $560,000 $560,000Controls Integration 1ea $75,000 $75,000 $75,000switchgear 1ea $50,000 $50,000 $50,000transformer 1ea $50,000 $50,000 $50,000Labor1 180 hrs180 $85 $15,300$15,300Super0.5 180 hrs90 $105 $9,450$9,450specialty1 180 hrs180 $105 $18,900$18,900Tailraceturbine bypass 1 40 $85 $3,400 ea $7,500 $7,500 $10,90036" tailrace culvert 580ft $60 $34,800 $34,800Super 1 0.02 wks 11.6 $105 $1,218$1,218Labor 4 0.08 hrs 46.4$85$3,944$3,944$$,$,Transmissionoverhead transmission line 0.30mipoles, foundations, and hardware 11 24 264 $85 $22,440 ea $3,500 $38,500 $60,940wire 4800 0.048 230.4 $85 $19,584 ft $3.00 $14,400 $33,984Super 1 88 $105 $9,240$9,240EquipmentFusion machine 1 3 mo $20,000 $60,000$60,0004"fusionmachine13mo$3 500$10 500$10 5004 fusion machine13mo$3,500$10,500$10,5004 wheelers 2 1 ea $9,000 $18,000$18,0001/3 yard mixer2 6.4 mo$1,000 $12,760$12,760mix truck1 6.4 mo$5,500 $35,090$35,090small generator2 1 ea$2,000 $4,000$4,000large generator1 1 ea$7,500 $7,500$7,500large loader1 6.4 mo$10,000 $63,800$63,800small loader1 6.4 mo$5,500 $35,090$35,090Excavator264mo$12 000$153 121$153 121Excavator26.4mo$12,000$153,121$153,121Articulated Truck 2 6.4 mo $15,000 $191,401$191,401rock hammer 1 6.4 mo $2,500 $15,950$15,950flatbed truck 2 6.4 mo $800 $10,208$10,208dozer 1 6.4 mo $4,000 $25,520$25,520air compressor 1 6.4 mo $800 $5,104$5,104air track drill 1 6.4 mo $3,000 $19,140$19,140miscellaneous tools 1 1 ea $25,000 $25,000$25,000SUBTOTALCDiC12 641$1 193 128$692 185$2 035 010$762 471$4 682 794SUBTOTAL, Contractor Direct Costs12,641$1,193,128$692,185$2,035,010$762,471$4,682,794Contractor IndirectsWeather delay10% (% of Labor and Equip)$188,531overall contingency25%$1,170,699contractor profit12%$561,935bonding2.0%$93,656SUBTOTAL, Construction Contract$6,697,615FERC license amendment1.3%$85,000geotech investigation3.7%$250,000engineering5.5%$370,000historic properties1.1%$75,000inspection and testing2.6%$175,000owner admin2.6%$175,000TOTAL PROJECT$7,827,615September, 2014Page 4110 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Appendix D Proposed New Project Economic Analysis Results 111 Economic Analysis ResultsChignik Hydroelectric ProjectFeasibility StudySUM 50$37,970,000 $1,380,000 $39,340,000 $7,830,000 $1,210,000$7,600,000 $1,500,000 $16,930,000 $22,410,000 $30,240,000NPV 50$15,930,000 $710,000 $16,640,000 $6,980,000 $690,000$3,410,000 $810,000 $11,200,000 $5,430,000 $12,420,000Year Fuel Price Demand, kWhDiesel Fuel Used, gal Diesel Fuel Cost Diesel O&MTotal Diesel Cost Hydro Cost Hydro O&MHydroelectric Generation, kWhHydro Diesel Fuel Used, galHydro Diesel Fuel CostHydro Diesel O&MTotal Hydro Diesel Cost Total Savings Project Benefits2014425952 75668 374$290 588$27 543$318 131$0$27 543068 374$290 588$27 543$318 131$0$0Economic Analysis, 2% load growthHydro plus DieselBase Diesel CostSeptember 2014Page 120144.25952,75668,374$290,588$27,543$318,131$0$27,543068,374$290,588$27,543$318,131$0$020154.31 971,811 69,733 $300,811 $27,543 $328,353 $390,000 $27,5430 69,733 $300,811 $27,543 $718,353‐$390,000$020164.38 991,247 71,120 $311,394 $27,543 $338,936 $390,000 $27,5430 71,120 $311,394 $27,543 $728,936‐$390,000$020174.44 1,011,072 72,534 $322,350 $27,543 $349,892 $6,872,615 $27,5430 72,534 $322,350 $27,543 $7,222,507‐$6,872,615$020184.51 1,031,294 73,976 $333,692 $27,543 $361,235 $175,000 $58,707 956,004 5,417 $24,434 $58,707 $258,141 $103,094 $278,09420194.58 1,051,920 75,448 $345,434 $27,543 $372,977$58,707 971,738 5,769 $26,414 $61,612 $88,026 $284,951 $284,95120204.65 1,072,958 76,949 $357,590 $27,543 $385,133$58,707 987,787 6,129 $28,481 $61,732 $90,212 $294,920 $294,92020214.72 1,094,417 78,479 $370,175 $27,543 $397,717$58,707 1,004,156 6,495 $30,637 $61,854 $92,492 $305,226 $305,22620224.79 1,116,306 80,041 $383,203 $27,543 $410,746$58,707 1,020,854 6,869 $32,888 $61,979 $94,866 $315,879 $315,87920234861 138 63281 634$396 691$27 543$424 233$19 5691 037 8857 251$35 235$22 968$58 203$366 030$366 03020234.86 1,138,632 81,634 $396,691 $27,543 $424,233$19,569 1,037,885 7,251 $35,235 $22,968 $58,203 $366,030 $366,03020244.93 1,161,404 83,258 $410,654 $27,543 $438,196$19,569 1,055,256 7,640 $37,682 $23,098 $60,780 $377,416 $377,41620255.01 1,184,632 84,915 $425,109 $27,543 $452,652$19,569 1,072,976 8,037 $40,235 $23,231 $63,465 $389,187 $389,18720265.08 1,208,325 86,642 $440,259 $27,543 $467,801$19,569 1,090,506 8,480 $43,089 $23,341 $66,430 $401,371 $401,37120275.16 1,232,492 88,416 $456,015 $27,543 $483,558$19,569 1,108,186 8,946 $46,139 $23,445 $69,584 $413,973 $413,97320285.23 1,257,141 90,226 $472,331 $27,543 $499,873$19,569 1,126,219 9,421 $49,319 $23,551 $72,871 $427,003 $427,00320295.31 1,282,284 92,072 $489,226 $27,543 $516,768$19,569 1,144,613 9,906 $52,635 $23,660 $76,295 $440,473 $440,47320305.39 1,307,930 93,956 $506,720 $27,543 $534,263$19,569 1,163,375 10,400 $56,092 $23,770 $79,862 $454,401 $454,40120315.47 1,334,088 95,876 $524,836 $27,543 $552,378$19,569 1,182,512 10,905 $59,694 $23,883 $83,577 $468,801 $468,801,,,$,$,$,$,,,,$,$,$,$,$,20325.56 1,360,770 97,836 $543,594 $27,543 $571,136$19,569 1,202,032 11,419 $63,448 $23,997 $87,446 $483,691 $483,69120335.64 1,387,986 99,834 $563,018 $27,543 $590,560$19,569 1,221,942 11,944 $67,360 $24,114 $91,474 $499,086 $499,08620345.72 1,415,745 101,872 $583,131 $27,543 $610,674$19,569 1,242,251 12,479 $71,434 $24,234 $95,668 $515,006 $515,00620355.81 1,444,060 103,917 $603,758 $27,543 $631,300$19,569 1,262,294 13,061 $75,886 $24,356 $100,242 $531,058 $531,05820365.90 1,472,941 105,971 $624,927 $27,543 $652,469$19,569 1,282,123 13,688 $80,718 $24,481 $105,198 $547,271 $547,27120375.99 1,502,400 108,066 $646,841 $27,543 $674,383$19,569 1,302,349 14,326 $85,752 $24,608 $110,360 $564,023 $564,02320386.08 1,532,448 110,203 $669,527 $27,543 $697,069$19,569 1,322,979 14,978 $90,997 $24,737 $115,735 $581,334 $581,33420396.17 1,563,097 112,383 $693,011 $27,543 $720,553$19,569 1,344,022 15,643 $96,461 $24,870 $121,330 $599,223 $599,22320406261 594 359114 606$717 322$27 543$744 864$19 5691 365 48616 321$102 151$25 005$127 155$617 709$617 70920406.261,594,359114,606$717,322$27,543$744,864$19,5691,365,48616,321$102,151$25,005$127,155$617,709$617,70920416.35 1,626,246 116,874 $742,489 $27,543 $770,031$19,569 1,387,380 17,012 $108,076 $25,142 $133,218 $636,813 $636,81320426.45 1,658,771 119,187 $768,541 $27,543 $796,084$19,569 1,409,711 17,717 $114,245 $25,283 $139,528 $656,556 $656,55620436.54 1,691,947 121,546 $795,512 $27,543 $823,054$19,569 1,432,488 18,437 $120,667 $25,426 $146,093 $676,961 $676,96120446.64 1,725,786 123,953 $823,432 $27,543 $850,974$19,569 1,455,722 19,171 $127,352 $25,572 $152,924 $698,050 $698,05020456.74 1,760,301 126,408 $852,335 $27,543 $879,877$19,569 1,479,420 19,919 $134,309 $25,721 $160,030 $719,847 $719,84720466.84 1,795,507 128,912 $882,255 $27,543 $909,798$19,569 1,503,592 20,682 $141,548 $25,873 $167,421 $742,377 $742,37720476.95 1,831,418 131,466 $913,230 $27,543 $940,772$19,569 1,528,247 21,461 $149,081 $26,028 $175,109 $765,664 $765,66420487.05 1,868,046 134,070 $945,295 $27,543 $972,838$19,569 1,553,395 22,255 $156,917 $26,186 $183,103 $789,735 $789,735$$$$$$$$$20497.16 1,905,407 136,728 $978,490 $27,543 $1,006,033$19,569 1,579,047 23,066 $165,069 $26,347 $191,416 $814,616 $814,61620507.26 1,943,515 138,977 $1,009,504 $27,543 $1,037,046$19,569 1,595,100 24,403 $177,259 $26,833 $204,092 $832,954 $832,95420517.37 1,982,385 141,269 $1,041,549 $27,543 $1,069,092$19,569 1,611,447 25,768 $189,986 $27,330 $217,315 $851,776 $851,77620527.48 2,022,033 143,608 $1,074,672 $27,543 $1,102,215$19,569 1,628,120 27,161 $203,258 $27,836 $231,095 $871,120 $871,12020537.60 2,062,474 145,993 $1,108,910 $27,543 $1,136,452$19,569 1,645,126 28,582 $217,098 $28,353 $245,451 $891,001 $891,00120547.71 2,103,723 148,426 $1,144,300 $27,543 $1,171,843$19,569 1,662,473 30,031 $231,526 $28,880 $260,406 $911,437 $911,43720557.83 2,145,798 150,907 $1,180,884 $27,543 $1,208,427$19,569 1,680,166 31,509 $246,566 $29,417 $275,983 $932,444 $932,44420567.94 2,188,714 153,439 $1,218,702 $27,543 $1,246,245$19,569 1,698,214 33,017 $262,239 $29,965 $292,204 $954,041 $954,04120578.06 2,232,488 156,021$1,257,797$27,543$1,285,340$19,569 1,716,622 34,554$278,569$30,525$309,094$976,246$976,24620578.062,232,488156,021$1,257,797$27,543$1,285,340$19,5691,716,62234,554$278,569$30,525$309,094$976,246$976,24620588.18 2,277,138 158,654 $1,298,213 $27,543 $1,325,756$19,569 1,735,399 36,123 $295,583 $31,095 $326,678 $999,078 $999,07820598.31 2,322,680 161,340 $1,339,996 $27,543 $1,367,539$19,569 1,754,551 37,723 $313,304 $31,677 $344,981 $1,022,558 $1,022,55820608.43 2,369,134 164,080 $1,383,193 $27,543 $1,410,736$19,569 1,774,086 39,355 $331,761 $32,270 $364,031 $1,046,705 $1,046,70520618.56 2,416,517 166,875 $1,427,854 $27,543 $1,455,396$19,569 1,794,012 41,019 $350,980 $32,876 $383,855 $1,071,541 $1,071,54120628.68 2,464,847 169,725 $1,474,029 $27,543 $1,501,571$19,569 1,814,336 42,717 $370,990 $33,493 $404,483 $1,097,088 $1,097,08820638.82 2,514,144 172,633 $1,521,770 $27,543 $1,549,312$19,569 1,835,067 44,449 $391,820 $34,123 $425,943 $1,123,369 $1,123,369September 2014Page 1112 CE2 - Chignik Hydroelectric Project Feasibility Study – Final Report September 2014 © Hatch 2014 All rights reserved, including all rights relating to the use of this document or its contents. Appendix E Proposed New Project Conceptual Design Figures Figure 1, Project Location Map Sheet Index Map Figure 2, Penstock, Road, and Transmission Alignments Figure 3, Reservoir Bathymetry and Rim Topography Figure 4, Dam Site Plan and Section Figure 5, Powerhouse Site Plan Figure 6, Powerhouse General Arrangement - Plan 113 SEC. 12 SEC. 13 SEC. 24 SEC. 25 SEC. 7 SEC. 18 SEC. 19 SEC. 30 SEC. 8 SEC. 17 T. 45 S, R. 59 W T. 45 S, R. 58 W SEC. 20 RM 0 . 0 RM 0.5 RM 1.0RM 1.5 R M 2 . 0 FIGURE 2 FIGURE 3 CITY WATER TREATMENT PLANT PROPOSED ACCESS TRAIL AND PENSTOCK PROPOSED DAM PROPOSED ACCESS ROAD AND POWER TRANSMISSION LINE RAW WATER SUPPLY LINE FIGURE 5 RW RWOE 1 INCH 1 INCH0.50.25 0.25 TITLE PROJECT LOCATION MAP FIGURE INDEX PROJECT GENERAL ARRANGMENT RESERVOIR BATHYMETRY AND RIM TOPOGRAPHY DAM SITE PLAN, ELEVATION, AND SECTION POWERHOUSE VICINITY SITE PLAN POWERHOUSE GENERAL ARRANGEMENT - PLAN FIGURE 1 2 3 4 5 6 CHIGNIK HYDROELECTRIC FEASIBILITY STUDY PROPOSED PROJECT DESCRIPTION The Proposed project is replacement of an existing FERC licensed hydro located on Indian Creek in Chignik Bay, AK. The Proposed project consists of a 25' high rock fill dam, 24" HDPE and steel pipeline, producing 425 kW. The existing infrastructure consists of a wood timber framed dam, a 10" to 12" wood and steel pipeline, and a licensed output of 60 kW located in the NorQuest fish processing plant. PROJECT LOCATION Lands affected by the project are within sections 7 and 18 of T45S R58W and sections 12 and 13 of T45S, R59W in the Seward Meridian. PROPOSED PROJECT DETAILS Nominal capacity 385 kW Static head 380 ft Design head 340 ft Hydraulic capacity 18 cfs Reservoir Area 24 acres Reservoir Useable Storage Volume 204 acre-ft Nominal penstock diameter 24 in Penstock length 7,280 ft Transmission length 1,600 ft New access road & trail lengths 9,170 ft Annual energy potential 2,140 MWh Existing demand (diesel generated) 950 MWh Annual displaced diesel energy 900 MWh Annual reduction in diesel fuel use 63,500 gal SOURCE WATER INFORMATION Water Body Name: Indian Creek (AWC #71-10-10130) Watershed Area at Intake2.94 sq miles Locations of rearing and presence for Pink Salmon and Dolly Varden in Indian Creek based on 1983 ADF&G nomination. Upper limit of rearing located at river mile 0.55 (watershed area = 3.99 sq miles) and upper limit of presence at river mile 1.0 (watershed area = 3.80 sq miles). MAPPING INFORMATION USGS Quad Chignik B-2 Projection State Plane Coordinate System, Alaska Zone 6, NAD 83, US Survey Feet DATA SOURCES 1. Survey by Licensee in 2005 of pipeline using RTK GPS adjusted to monument "Base". 2. Survey by Licensee in 2003 Indian Creek using a theodolite, no control. 3. DCRA: This map was prepared by the Lake and Peninsula Borough (LPB) in cooperation with the Alaska Department of Commerce, Community, and Economic Development (Commerce) using funding from the Initiative for Accelerated Infrastructure Development (IAID). The IAID is supported by grants from the Denali Commission, USDA Rural Development, Alaska Department of Transportation and Public Facilities, and Commerce. The Alaska Native Tribal Health Consortium provided sanitation facility records. The LPB contracted with Global Positioning Services Incorporated in June of 2002 to prepare the map. The original DCRA AutoCAD drawing has been revised as appropriate. 4. USGS 63k quad map Chignik B-2 Enhanced Digital Raster Graphic (DRGE) copyright Beartooth Mapping, Inc. - 1999. 5. Space shuttle radar topography mission (SRTM) 1 arc second resolution elevation data. 6. Alaska Department of Fish and Game anadromous nomination, 1983. 114 1555000155600015570001558000835000 836000 837000 838000 839000 840000 1000 450 5005009 0 0 350 10005507 0 0 501501002005006003502502005010050501001502 0 0 50100 150 501001502002002001 0 0 1505060 501 0 0 1 5 0 RM 0.0RM 0.1RM 0.2 R M 0 . 3RM 0.4RM 0.5R M 0 . 6RM 0 . 7RM 0 .8 RM 0.9 RM 1.0 RM 1.1RM 1.2RM 1.3RM 1.4RM 1.5RM 1.6RM 1.7 RM 1.8RM 1.9 RM 2.0RM 2.1 RM 2.2RM 2.3RM 2.3RWRWRWRWRWRWOEO E O E OEPK PK+T PK+T PK+T PK+T PK+T PK+T PK+T P K + T PK+TPK PKTWPK+T PK+T PK PK T45S R59W SEC 12 T45S R58W SEC 7 T45S R59W SEC 13 T45S R58W SEC 18 FARWEST ADD NO. 1 FARWEST ADD NO. 1 TRACT 5UNSUBD SEC 7 TRACT 4ATRACT 14 UNSUBD SEC 18TRACT 15 TRACT 14 TRACT 13 TRACT 4AFARWEST ADD NO. 1 TRACT 4A FARWEST ADD NO. 1 1 INCH 1 INCH0.50.25 0.25 115 10004505350 T. 45 S, R. 59 W T. 45 S, R. 58 W TRACT 15 TRACT 16 UNSUBDIVIDED SEC 24 PKPKPK+TPK+TPK+T116 SPILL EL 445'FLOOD EL 450'LOW LEVEL EL 430'1 INCH1 INCH0.50.250.25117 501006070809011050607080403020102030102020205 0 30406070801009011015012013014020016017018019021022023050406070100150501001502002002001001505060 5010015020060708090110120130140160170180190RM 0.0RM 0.1RM 0 .2RM 0.3RM 0.4RM 0.5RM 0.6OEOEOEOEOEOEOEOEOEOEOEPK PK PK PKPK PK TWTWTWTWPROPOSED TRANSMISSION LINEPROPOSEDPENSTOCK ANDTRAILPROPOSED POWERHOUSEPROPOSED TAILRACEPROPOSED TAILRACE DISCHARGE TO INDIAN CREEKLOCATION OF POOL SITE GAGING STATIONLOCATION OF BRIDGESITE GAGINGSTATIONAPPROXIMATE EXTENT OF QUARRY, CONTOURS ARE OUTDATED IN QUARRY AREABEGIN ACCESS TRAIL CONSTRUCTIONAPPROXIMATE ELECTRIC TRANSMISSION CONNECTION POINTCOMMUNITY WATER TANK, ELEV 190.2LOWER INDIAN LAKE OUTLETCULVERT1 INCH1 INCH0.50.250.25118 26'26'CRANE RAIL900 RPM, 500 KVA,480/3/60 SYNCHRONOUSGENERATORCLASS 150 BALL VALVERESTRAINED COUPLINGNEEDLE NOZZLECANYONCUSTOM TURGOTURBINESWITCHGEARTURBINE PIT AND TAILRACE WITH ACCESS HATCHTAILRACE CULVERTPENSTOCK10'1 INCH1 INCH0.50.250.25119 120 p E R AnANTHC Division of Environmental Health and Engineering Final Preliminary Engineering Report for Chignik Bay's Raw Water Source and Transmission Line ProjectAN 16-U90 Prepared By: Leigh Miller, E.I.T. Lead Reviewer: Michael Soltis, P.E. Approved By: Charissa Williar, P .E. Final PER Chignik Bay Source and Transmission July 2018 ii CONTENTS TABLE OF APPENDICES ...................................................................................................................................... IV TABLE OF FIGURES ............................................................................................................................................. IV TABLE OF TABLES ............................................................................................................................................... IV ABBREVIATIONS ................................................................................................................................................... IV REFERENCES ........................................................................................................................................................... V EXECUTIVE SUMMARY ......................................................................................................................................... 1 INTRODUCTION ....................................................................................................................................................... 2 1.0 PROJECT PLANNING ................................................................................................................................. 2 A) LOCATION ......................................................................................................................................................... 2 B) ENVIRONMENTAL RESOURCES PRESENT ........................................................................................................... 2 C) POPULATION TRENDS ........................................................................................................................................ 3 D) COMMUNITY ENGAGEMENT .............................................................................................................................. 3 2.0 EXISTING FACILITIES............................................................................................................................... 4 A) LOCATION MAP ................................................................................................................................................. 4 B) HISTORY............................................................................................................................................................ 4 i. Source and Transmission Line ..................................................................................................................... 4 ii. Wells ............................................................................................................................................................. 4 C) CONDITION OF EXISTING FACILITIES ................................................................................................................. 8 D) FINANCIAL STATUS OF EXISTING FACILITIES .................................................................................................. 10 E) WATER/ENERGY/WASTE AUDITS .................................................................................................................... 10 3.0 NEED FOR PROJECT ................................................................................................................................ 10 A) HEALTH, SANITATION, AND SECURITY ............................................................................................................ 10 B) AGING INFRASTRUCTURE ................................................................................................................................ 10 C) REASONABLE GROWTH ................................................................................................................................... 10 4.0 ALTERNATIVES CONSIDERED ............................................................................................................. 11 4.1 NO ACTION ................................................................................................................................................. 11 A) DESCRIPTION ................................................................................................................................................... 11 B) DESIGN CRITERIA ............................................................................................................................................ 12 i. Quality and Quantity .................................................................................................................................. 12 ii. Water Security ............................................................................................................................................ 12 C) MAP ................................................................................................................................................................ 12 D) ENVIRONMENTAL IMPACTS ............................................................................................................................. 12 E) LAND REQUIREMENTS ..................................................................................................................................... 12 F) POTENTIAL CONSTRUCTION PROBLEMS .......................................................................................................... 12 G) SUSTAINABILITY CONSIDERATIONS ................................................................................................................ 12 i. Water and Energy Efficiency ...................................................................................................................... 12 ii. Green Infrastructure .................................................................................................................................. 12 iii. Other .......................................................................................................................................................... 12 H) COST ESTIMATES ............................................................................................................................................ 13 4.2 REPLACE DAM AND TRANSMISSION LINE (FOR DRINKING WATER ONLY) ........................ 14 121 Final PER Chignik Bay Source and Transmission July 2018 iii A) DESCRIPTION ................................................................................................................................................... 14 B) DESIGN CRITERIA ............................................................................................................................................ 15 i. Quality and Quantity .................................................................................................................................. 15 ii. Water Security ............................................................................................................................................ 15 C) MAP ................................................................................................................................................................ 15 D) ENVIRONMENTAL IMPACTS ............................................................................................................................. 15 E) LAND REQUIREMENTS ..................................................................................................................................... 15 F) POTENTIAL CONSTRUCTION PROBLEMS .......................................................................................................... 15 G) SUSTAINABILITY CONSIDERATIONS ................................................................................................................ 15 i. Water and Energy Efficiency ...................................................................................................................... 15 ii. Green Infrastructure .................................................................................................................................. 16 iii. Other .......................................................................................................................................................... 16 H) COST ESTIMATES ............................................................................................................................................ 16 4.3 COMBINE DAM AND TRANSMISSION LINE REPLACEMENT WITH HYDROELECTRIC PROJECT .................................................................................................................................................................. 16 A) DESCRIPTION ................................................................................................................................................... 16 B) DESIGN CRITERIA ............................................................................................................................................ 17 i. Quality and Quantity .................................................................................................................................. 17 ii. Security ...................................................................................................................................................... 17 C) MAP ................................................................................................................................................................ 17 D) ENVIRONMENTAL IMPACTS ............................................................................................................................. 17 E) LAND REQUIREMENTS ..................................................................................................................................... 18 F) POTENTIAL CONSTRUCTION PROBLEMS .......................................................................................................... 18 G) SUSTAINABILITY CONSIDERATIONS ................................................................................................................ 19 i. Water and Energy Efficiency ...................................................................................................................... 19 ii. Green Infrastructure .................................................................................................................................. 19 iii. Other .......................................................................................................................................................... 19 H) COST ESTIMATES ............................................................................................................................................ 19 5.0 SELECTION OF AN ALTERNATIVE ..................................................................................................... 19 A) LIFE CYCLE ANALYSIS .................................................................................................................................... 20 B) NON-MONETARY FACTORS .............................................................................................................................. 21 6.0 PROPOSED PROJECT ............................................................................................................................... 21 A) PRELIMINARY PROJECT DESIGN ...................................................................................................................... 22 B) PROJECT SCHEDULE ........................................................................................................................................ 22 C) PERMIT REQUIREMENTS .................................................................................................................................. 22 D) SUSTAINABILITY CONSIDERATIONS ................................................................................................................ 22 E) TOTAL PROJECT COST ESTIMATE .................................................................................................................... 22 F) ANNUAL OPERATING BUDGET ........................................................................................................................ 22 i. Income ........................................................................................................................................................ 22 ii. Annual O&M Costs .................................................................................................................................... 23 iii. Debt Repayments ........................................................................................................................................ 23 iv. Reserves ..................................................................................................................................................... 23 7.0 CONCLUSIONS AND RECOMMENDATIONS ...................................................................................... 23 122 Final PER Chignik Bay Source and Transmission July 2018 iv TABLE OF APPENDICES Appendix A Vicinity Maps and Site Plans Appendix B NEPA Environmental Review and NHPA Cultural Resources Review Appendix C HITS Housing Data Appendix D Alternative Source Documentation Appendix E Cost Estimates Appendix F Chignik Bay Hydroelectric Project Feasibility Study (Hatch) TABLE OF FIGURES FIGURE 1-1. CHIGNIK BAY VICINITY MAP ..................................................................................................................... 2 FIGURE 2-1. WATER SOURCE SITE PLAN (ADAPTED FROM ANTHC PLAN SET CKB-17-006) ........................................ 5 FIGURE 2-2. COMMUNITY SITE PLAN (ADAPTED FROM ANTHC PLAN SET CKB-17-006) ............................................. 6 FIGURE 2-3. SYSTEM SCHEMATIC (ADAPTED FROM ANTHC PLAN SET CKB-17-006)................................................... 7 FIGURE 2-4. BRACING (LEFT) AND DECAY (RIGHT) ON INDIAN CREEK DAM (PHOTOS BY CHRIS CLARK) ...................... 8 FIGURE 2-5. RAW WATER TRANSMISSION MAIN LEAKS (PHOTOS BY CHRIS CLARK) .................................................... 9 FIGURE 3-1. STEEP DESCENT OF TRANSMISSION MAIN INTO CHIGNIK BAY (PHOTO BY CHRIS CLARK) ....................... 11 FIGURE 4-1. EXISTING DAM AND TRANSMISSION LINE SITE PLAN (ADAPTED FROM HATCH REPORT, PK – PENSTOCK) ............................................................................................................................................................................ 13 FIGURE 4-2. SITE PLAN, HYDROELECTRIC PROJECT (FROM FIGURE 1 IN APPENDIX F) ................................................. 18 TABLE OF TABLES TABLE 1-1: TRANSPORTATION SUMMARY ...................................................................................................................... 2 TABLE 1-2: HISTORICAL POPULATION DATA ................................................................................................................. 3 TABLE 1-3: POPULATION PROJECTION ............................................................................................................................ 3 TABLE 4-1: OPERATIONS AND MAINTENANCE COST ESTIMATE – NO ACTION ............................................................. 14 TABLE 4-2: OPERATIONS AND MAINTENANCE COST ESTIMATE – REPLACE DAM AND TRANSMISSION LINE ............... 16 TABLE 4-3: CAPITAL AND OPERATIONS AND MAINTENANCE COST ESTIMATES – HYDROELECTRIC PROJECT .............. 19 TABLE 5-1: LIFE-CYCLE COST COMPARISON ............................................................................................................... 20 TABLE 5-2: SCOPE-COST COMPARISON OF DAM ALTERNATIVES ................................................................................. 21 ABBREVIATIONS % percent ANTHC Alaska Native Tribal Health Consortium cfs cubic feet per second City City of Chignik Bay CDBG Community Development Block Grant CKB Chignik Bay DCCED Alaska Department of Commerce, Community and Economic Development E1 Existing Homes 123 Final PER Chignik Bay Source and Transmission July 2018 v FERC Federal Energy Regulatory Commission FY fiscal year H1 HUD homes HDPE high density polyethylene HITS Home Inventory Tracking System HUD Housing and Urban Development IHS Indian Health Service kW kilowatt MCLs Maximum contaminant levels MWh Megawatt-hours NEPA National Environmental Policy Act NHPA National Historic Preservation Act O&M operation and maintenance PCE power cost equalization PER Preliminary Engineering Report WST water storage tank WTP water treatment plant REFERENCES Hatch. Chignik Bay Hydroelectric Project Feasibility Study. September 2014. Nana/Dowl Engineers. Technical Memorandum Water and Sewer Improvements. September 2000. Alaska Native Tribal Health Consortium. Chignik Bay Water and Sewer Master Plan Update. May 2007. Alaska Native Tribal Health Consortium. Chignik Bay WTP Upgrades Preliminary Engineering Report. March 2016. Alaska Native Tribal Health Consortium. Chignik Bay Acknowledgement of Project Completion & Final Report. February 2010. Golder Associates. Final Report on Hydrogeological Assessment of Water Wells and Susceptibility to Saltwater Intrusion. July 2003. 124 EXECUTIVE SUMMARY Chignik Bay’s raw water source dam and sections of the transmission line have been in service for over 70 years and are failing. This Preliminary Engineering Report evaluates alternatives to address the water source infrastructure deficiencies. The alternatives considered were, “No action” Replacing the dam and sections of the transmission line as required for drinking water service Combining the dam and transmission line replacement with a hydroelectric project The recommended alternative is to pursue a combined sanitation system and hydroelectric project with a total estimated capital cost of $7,440,000. 125 INTRODUCTION The objective of this Preliminary Engineering Report (PER) is to assess the need, evaluate alternatives, and recommend a preferred project to address raw water source and raw water transmission line deficiencies in Chignik Bay, Alaska. 1.0 PROJECT PLANNING a) Location Chignik Bay is located within Anchorage Bay on the southern shoreline of the Alaska Peninsula (see Figure 1-1). It lies 450 miles southwest of Anchorage and 260 miles southwest of Kodiak. Additional maps and site plans are available in Appendix A Vicinity Maps and Site Plans. Chignik Bay is accessible by air and sea but is not connected to a road system. The Alaska Marine Highway System serves the community with bi-monthly sailings from Kodiak between May and October. Monthly or bi-monthly cargo vessels from Seattle deliver freight. There is a state-owned gravel runway maintained by the City of Chignik Bay. Regular flights from King Salmon and Anchorage are available. Table 1-1: summarizes transportation infrastructure supporting Chignik Bay. Figure 1-1. Chignik Bay Vicinity Map Table 1-1: Transportation Summary Harbor Yes State Ferry Yes Cargo Barge Yes Road Connection No Airport Yes Source: Alaska Department of Commerce, Community, and Economic Development (DCCED) b) Environmental Resources Present Fishing is an important industry for the community of Chignik Bay. Several species of migratory birds are present in the area. There are wetlands and floodplains inside the city limits. An 126 environmental review of the recommended alternative is provided in Appendix B NEPA Environmental Review and NHPA Cultural Resources Review. c) Population Trends According to a 2017 Indian Health Service (IHS) Home Inventory Tracking System (HITS) report, Chignik Bay has 20 existing homes (E1) and 10 Housing and Urban Development (HUD) homes (H1). See Appendix C HITS Housing Data for a map of the homes and tabulated descriptions. The 2010 United States Census found that there were 105 housing units in the community with 41 occupied and 64 vacant housing units. Historical population data is provided in Table 1-2. Table 1-2: Historical Population Data Year Population 1940 224 1950 253 1960 99 1970 83 1980 178 1990 188 2000 79 2010 91 2016 961 Source: Alaska DCCED The population has fluctuated widely since 1940, likely due to the variability associated with the fishing industry. A 50-year planning period is used for this project, which will provide infrastructure with at least a 50-year useful life. An annual growth percentage2 of 0.2% yields the following 50-year population estimate: Table 1-3: Population Projection Year Population 2018 96 2068 106 d) Community Engagement The community is actively pursuing funding for a hydroelectric dam and has succeeded in securing a grant to improve access to the site. As part of the PER planning process, the ANTHC design team completed a site visit and attended meetings with community leaders and operators. During the draft PER review phase, the community reviewed the alternatives, analysis, and the proposed preferred alternative. 1 2016 State of Alaska Department of Labor estimate 2 Alaska Department of Labor and Workforce Development’s population projections for the Lake and Peninsula Borough (Alaska Population Projections – 2012 to 2042; Table 10). http://laborstats.alaska.gov/trends/jun14art1.pdf. For the Lake and Peninsula Borough area the growth rate between 2012 and 2042 is anticipated to be + 0.2%. 127 2.0 EXISTING FACILITIES a) Location Map A community site plans and a system schematic are provided in Figure 2-1, Figure 2-2, and Figure 2-3. b) History i. Source and Transmission Line Chignik Bay’s raw water source is Indian Lake, an approximately 21-acre, pristine reservoir impounded by a timber buttress dam. The dam is 80 feet long and 14.4 feet from toe to crest. Source water flows by gravity through a 7,260-foot transmission line to a surface water treatment plant (WTP) and into a 400,000-gallon potable water storage tank (WST). Water then flows by gravity from the WST to the water distribution system. The Indian Lake dam and a wood-stave water transmission line were constructed in 1947 by the Columbia River Packers Association (now NorQuest) to support cannery operations. In addition to serving as the town water source, flow from Indian Lake powered a 60 kW turbine at the cannery. The turbine is not currently in service. Portions of the original wood-stave transmission line were replaced with steel pipe in the mid- 1980s. The dam, transmission line, and water rights are currently owned by the City. ii. Wells Two wells (Well #1 and Well #2), installed in 1986, are considered to be back-up sources by the Alaska Department of Environmental Conservation. The wells are not in currently in use and are likely vulnerable to salt water intrusion if used extensively. Groundwater is not a viable primary source for Chignik Bay. In 2003, after an extensive exploration effort and capital expenditures of approximately $300,0003, the project engineer determined that “…the wells were either of insufficient quantity, poor quality, or deemed susceptible to either salt water intrusion or groundwater contamination.” The rationale for the determination is summarized in a master plan update accepted by a resolution of the Chignik Bay city council. Although several wells had high short-term yields, the long-term aquifer recharge was low. Many test wells were dry, and some yielded brackish water. A hydrogeological study performed by Golder and Associates characterized the local aquifer as vulnerable to saltwater intrusion, and estimated that sustainable yields were one quarter of the short-term test flows. The report stated that developing a groundwater source would require an extensive well field or engineered structures to augment groundwater recharge. Water quality was also a concern. At least one well exceeded primary maximum contaminant levels (MCLs) of arsenic and several wells exceeded secondary MCLs for iron or aluminum levels. Additional treatment would be required to resolve these quality issues. The community perceives groundwater as inferior to their pristine surface water source. 3 ANTHC Project Cost Records, AN 00-P68. 128 Figure 2-1. Water Source Site Plan (Adapted from ANTHC plan set CKB-17-006) 129 Figure 2-2. Community Site Plan (Adapted from ANTHC plan set CKB-17-006) 130 @ COMMUNITY SITE PLAN ANCHORAGE BAY PRESSURE lOt-:E 2 ______ L~~SSURE ZONE 1 I I 1 r------- 1 I I I I I I I I I I __________ j I ~-------~ EXISTI NG 6-HOPE WATER r----------------' ( I TR..~oNSMlSSION LlNE FRQI.1 W1P TO 'liST I I I I 0 I 1 I , I L-------------------------------------J • l EXIS!Tlt.:G WP.~~ WEll #3 I I I I I I I I I r----------------------------------___ j I I I I I I I ---- Figure 2-3. 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" COWl,IIJHJ'JY '3€miMG TAHKS ......... 1 ••• ~.-~ •• l ...... l ......................... .. lS 15 c) Condition of Existing Facilities Dam The existing dam at the mouth of Indian Lake is a timber buttress structure. It is approximately 80 feet long, with a 26-foot wide primary spillway and a 20-foot wide secondary rock-cut spillway. Height from the toe to the crest is approximately 14.4 feet. “The most recent dam inspection report filed with the Federal Energy Regulatory Commission (FERC) shows that the dam is in very poor condition and is in need of replacement. The general condition of the dam is quite deteriorated due to rotting main members, almost complete loss of spillway planking allowing water to spill onto and through the framework, loss of the walkway over the spillway, damage to dam face planks, failing of support structure for the valve operator platform, and malfunctioning outlet controls and screens. The structure has been reinforced with additional framing members and steel connectors over the past two decades. The timber dam has continued to deteriorate and is in such poor condition that a complete replacement is the most practical course of action.” -Chignik Bay Hydroelectric Project Feasibility Study, Hatch (see Appendix F) Decay and the bracing required by FERC inspectors4 are shown in Figure 2-4. Figure 2-4. Bracing (left) and Decay (right) on Indian Creek Dam (Photos by Chris Clark) Water Transmission Main The raw water transmission line between the Indian Lake dam and the WTP consists of both wood-stave and steel piping. Sections of wood and steel pipe alternate on the line. The steepest section of pipe, accessible only by ladder, is all steel pipe. Most of the piping is above-grade but some portions are buried. There are eight elevated wood trestle crossings along the alignment that 4 FERC records for the Indian Lake Dam (P 620) can be accessed online at the e-Library (https://www.ferc.gov/docs-filing/elibrary.asp) 132 bridge creeks, drainages, and other terrain features, including a wetland estuary area near the WTP. Except for the boardwalk near the WTP, the trestles are constructed of untreated wood. A summary of the raw-water transmission line sections follows: 3,800 linear feet of 12-inch wood stave pipe (installed 1947) 1,160 linear feet of 12-inch steel pipe (installed mid-1980’s) 2,300 linear feet of 10-inch steel pipe (installed mid-1980’s) In general, the wood-stave sections of the transmission line are in poor condition and leaking (see Figure 2-5). Over 23 leaks were identified along the water transmission pipeline during a site visit in May 2017. The leaks located along the trestle supports are accelerating damage to the pipeline in those areas. During winter, leaking water freezes on the trestles, which then settle or deform under the additional weight of ice. The settlement then causes the pipes to de-couple or crack, resulting in major leaks that shut down the drinking water system. Both the piping and trestles are damaged at these locations. The steep, rocky terrain and icing issues along the pipeline alignment make repairs challenging and dangerous. Understandably, the system operators do not like the existing configuration. The steel pipeline sections appear to be in good condition (not leaking and minor surface corrosion). Buried sections of steel could not be evaluated. The 10-inch steel pipe along the steepest portion of the alignment, directly uphill from the estuary, is anchored to the rock face with bolts and cables. No exterior pipe coating or cathodic protection was observed along the pipeline. Steel pipelines under normal conditions can have expected service lifetime of over 100 years. Figure 2-5. Raw Water Transmission Main Leaks (Photos by Chris Clark) 133 d) Financial Status of Existing Facilities The financial status of the water and sewer facilities is reflected in the fiscal year (FY) 2018 annual budget presented to the State of Alaska in June 2017. Although the FY 2017 water and sewer utility budget was projected at $67,000, actual expenditures were approximately $63,000. Water and sewer revenues are from a utility service charge, and both are billed at a flat monthly rate of $37.50 per user ($75.00 for water and sewer). FY 2017 revenues were $63,306 and FY 2016 revenues were $57,350. e) Water/Energy/Waste Audits The Village Energy Efficiency Program completed efficiency retrofits to eight community buildings in 2012 using grant funding. An analysis of community energy use and demand was performed as part of a hydroelectric feasibility study. Hatch prepared a feasibility study of hydroelectric power generation at Indian Lake, which is available in Appendix F Chignik Bay Hydroelectric Project Feasibility Study (Hatch) of this report. No recent water or waste audits have been completed. 3.0 NEED FOR PROJECT a) Health, Sanitation, and Security The dam and portions of the water transmission line are failing and require replacement. Complete failure would disrupt the community’s primary water supply. The back-up well sources are considered “emergency sources,” and are not adequate to support sustained community needs. While some recent repairs have been made to the dam’s wood truss framing, the overall structure is highly deteriorated and at imminent risk of failure. Sections of the transmission line are in poor condition and cannot be safely accessed for repairs in the winter (see Figure 3-1). b) Aging Infrastructure The dam is over 70 years old and extremely deteriorated. The wood-stave sections of the transmission line are over 70 years old and failing. c) Reasonable Growth The capacity of the current infrastructure is adequate for the design population. 134 Figure 3-1. Steep Descent of Transmission Main into Chignik Bay (Photo by Chris Clark) 4.0 ALTERNATIVES CONSIDERED This PER evaluated viable alternatives to address deficiencies with Chignik Bay’s water source infrastructure. Using wells as a primary community water source was investigated. However, based on the results of previous studies and investigations, wells are not considered a viable long-term water source for Chignik Bay. Three alternatives were considered, 1) No action 2) Replacing the dam and transmission line to the minimum requirements needed for a drinking water source 3) Combining dam and transmission line replacement with a hydroelectric project. In addition to the criteria dictated by the interagency template, alternatives were evaluated on their ability to provide water of adequate quality and quantity from a dependable and sustainable source. Design criteria also included the system data summarized in Figure G-003 in Appendix A. 4.1 NO ACTION a) Description The “no action” alternative is presented as a baseline for comparison. The existing dam and raw water transmission line would remain in their present condition. Pros Cons No capital costs Risk of catastrophic failure, jeopardizing the community’s supply of potable water Safety concerns for performing repairs on sections of piping located on the steeper slopes 135 Continued high O&M costs b) Design Criteria i. Quality and Quantity No change is proposed to the source quality or quantity under this alternative. The existing raw water source provides an adequate quantity of water. Furthermore, the Indian Lake source is considered pristine and has minimal treatment requirements. ii. Water Security The aging dam and transmission line are failing and currently jeopardize the community’s water security. c) Map See Figure 4-1. Additional maps are available in Appendix A. d) Environmental Impacts While a dam failure would likely cause erosion in upper Indian Creek, no impacts to sensitive habitats or species are anticipated. e) Land Requirements No land is required under this alternative. f) Potential Construction Problems This alternative would not include any new construction. g) Sustainability Considerations i. Water and Energy Efficiency The current water source configuration provides gravity-flow from the source, through the treatment system, and into the distribution system. A gravity flow source eliminates the need for pumps. A portion of the water flowing through the existing raw water transmission line is discharged to waste during the colder winter months to prevent freezing. There is adequate water recharge and storage capacity in Indian Lake to support waste flows without jeopardizing the water supply. ii. Green Infrastructure No impact on stormwater is anticipated under this alternative. iii. Other This alternative is not sustainable from a water security perspective. In addition, transmission line leaks and the resulting ice formations accelerate deterioration and make winter maintenance dangerous and untenable. More repairs will likely be required as the pipeline continues to deteriorate. Under this alternative, water system operational complexity is anticipated to increase proportionally to the efforts required to keep the system operational. 136 Figure 4-1. Existing Dam and Transmission Line Site Plan (Adapted from Hatch Report, PK – Penstock) h) Cost Estimates No capital costs are incurred by this alternative. However, a dam failure and emergency water-source project are the potentially expensive risks of taking no action. 137 The current O&M expenditures, as well as the projected O&M budget, including WTP upgrades, are provided in the table below. Subsequent operations and maintenance estimates for the other alternatives are compared to the predicted expenditures presented in Table 4-1. Table 4-1: Operations and Maintenance Cost Estimate – No Action Line Item Water and Sewer Actual Expenditures Predicted Expenditures After WTP Upgrades* Payroll $29,796 $41,116 Insurance $2,034 $3,034 Travel $1,628 $1,628 Equipment Rental $1,050 $1,050 Equipment Purchase $1,430 $1,430 Equipment Maintenance $2,000 $2,000 Training $1,090 $1,090 Freight $700 $700 Parts $3,125 $3,125 Supplies** $4,335 $7,835 Postage $12 $12 Water Tests $3,694 $3,694 Mayors Fund $75 $75 Electricity $11,283 $11,783 Fuel $1,340 $1,340 Fees and Penalties $2,610 $2,610 Total: $66,202 $82,522 *Upgrades to be completed in summer 2018 **Polymer costs are included as well as an annual equivalent of the costs associated with repairing the transmission line and dam 4.2 REPLACE DAM AND TRANSMISSION LINE (FOR DRINKING WATER ONLY) a) Description This alternative includes replacing the dam and sections of the transmission line with facilities designed for the sole purpose of providing drinking water. The scope of the alternative includes, 3,800 feet of 8-inch SDR 11 high density polypropylene (HDPE) raw water transmission line to replace wood transmission line 14.4-foot high by 80-foot long, 1:1.5 rock-fill dam with a concrete face and a 45-foot wide concrete spillway The wood sections of the transmission line would be replaced. The new dam would replace the old dam at the same location. 138 Pros Cons Provides a secure water source Eliminates transmission line leaks Provides safer access for maintenance Lowers O&M costs High capital cost No hydropower benefit b) Design Criteria i. Quality and Quantity Neither the dam height nor the transmission capacity would not be altered under this alternative. The existing raw water source provides an adequate quantity of water. Furthermore, the Indian Lake source is considered pristine, and has minimal treatment requirements. ii. Water Security The new infrastructure provided under this alternative would significantly improve water security. The new infrastructure would have a minimum expected service life of 50 years. c) Map See Figure 4-1, additional maps are available in Appendix A. d) Environmental Impacts This alternative is not anticipated to impact environmental resources. Construction would be scheduled to avoid impacts to fish and wildlife. e) Land Requirements New easements or permissions will be required for the Far West Addition No. 1 parcel, as well as ingress and egress for the Indian Creek Quarry through Tract 4A parcels. The City of Chignik Bay holds title to the parcels required for the proposed project. Rock for the dam would be obtained near the dam site located on city property. The dam and transmission line are subject to the National Historic Preservation Act. Design and construction activities would be coordinated with the State Historic Preservation Office. f) Potential Construction Problems Potential construction problems for this alternative include a lack of geotechnical investigation, unreliable flights due to extreme weather conditions, flow control at the lake to protect the site from flooding, and constraints related to environmental concerns (see Appendix B for details). Fall protection equipment will most likely be required to install the transmission line section on the steep descent near town. The dam operates under a FERC license that expires on February 1, 2036. The planning, design, and construction would be coordinated with FERC regulators. g) Sustainability Considerations i. Water and Energy Efficiency This alternative would continue to provide a gravity-flow water source for the existing pressurized water treatment system. Gravity flow is energy efficient, eliminating the need 139 for pumps. A portion of the flows in the raw water transmission line would go to waste during the colder winter months to prevent freezing. There is adequate water recharge and storage capacity in Indian Lake to support waste flows without jeopardizing the water supply. ii. Green Infrastructure No impact on stormwater is anticipated under this alternative. iii. Other This alternative provides long-term drinking water security. The proposed infrastructure improvement would improve overall operability of the water system by reducing the current level of emergency repairs and providing better access for maintenance. h) Cost Estimates The engineer’s opinion of probable capital cost is $5 million. See Appendix E for a detailed cost estimate. The estimated annual O&M expenses for this alternative are in the table below. Table 4-2: Operations and Maintenance Cost Estimate – Replace Dam and Transmission Line Line Item Base O&M Alternative 2 Estimate Payroll $41,116 $41,116 Insurance $3,034 $3,034 Travel $1,628 $1,628 Equipment Rental $1,050 $1,050 Equipment Purchase $1,430 $1,430 Equipment Maintenance $2,000 $2,250 Training $1,090 $1,090 Freight $700 $700 Parts $3,125 $3,195 Supplies $7,835 $5,235 Postage $12 $12 Water Tests $3,694 $3,694 Mayors Fund $75 $75 Electricity $11,783 $11,783 Fuel $1,340 $1,905 Fees and Penalties $2,610 $2,610 Total: $82,522 $80,807 Note: Base O&M costs assume WTP upgrade 4.3 COMBINE DAM AND TRANSMISSION LINE REPLACEMENT WITH HYDROELECTRIC PROJECT a) Description This alternative would combine sanitation funding for the dam and transmission line with energy- project funding for a hydroelectric power plant. The proposed project is described in the Appendix F Chignik Bay Hydroelectric Feasibility Study, prepared by Hatch in 2014. This alternative includes construction of four principle elements: 140 Access road to the existing dam site – the access road is funded by a Community Development Block Grant (CDBG) and planned for construction in 2018 25-foot high rock-fill dam 26-foot by 26-foot powerhouse for an impulse turbine Approximately 7,300 feet of 24-inch HDPE penstock from new dam to the powerhouse and approximately 1,800 feet of insulated 6-inch HDPE raw water main to the existing WTP The hydroelectric plant would produce 900 megawatt-hours (MWh) of the 950 MWh annual energy demand, which is currently served by a diesel generator. Pros Cons Provides a secure water source High capital cost Eliminates transmission leaks and provides safe access for maintenance Net positive benefit due to fuel savings Funding is leveraged to address multiple community priorities b) Design Criteria i. Quality and Quantity The existing raw water source provides an adequate quantity of water. Furthermore, the Indian Lake source is considered pristine, and has minimal treatment requirements. The dam would be 25 feet high under this alternative in order to increase storage and electrical generation potential, providing 204 acre-feet of storage. See Appendix F Chignik Bay Hydroelectric Project Feasibility Study (Hatch) for additional design information. ii. Security The new infrastructure provided under this alternative would significantly improve water security. The new infrastructure would have a minimum expected service life of 50 years. c) Map See Figure 4-2, additional maps and figures are available in Appendix F Chignik Bay Hydroelectric Project Feasibility Study (Hatch). d) Environmental Impacts This alternative will benefit the environment by reducing annual diesel use by 63,500 gallons. Emissions will be reduced for both electrical generation and the transport of fuel to the community. The facility design includes provisions to protect fish and wildlife habitat. As a result, no adverse environmental impacts are anticipated. See Appendix F for additional information. 141 e) Land Requirements New easements or permissions will be required for the Far West Addition No. 1 parcel, as well as ingress and egress for the Indian Creek Quarry through Tract 4A parcels. The City of Chignik Bay holds title to the parcels required for the proposed project. Rock for the dam would be obtained near the dam site located on city property. The dam and transmission line are subject to the National Historic Preservation Act, design and construction activities would be coordinated with the State Historic Preservation Office. See Appendix F for additional information. Figure 4-2. Site Plan, Hydroelectric Project (from Figure 1 in Appendix F) f) Potential Construction Problems Potential construction problems for this alternative include a lack of geotechnical assessment, flow control at the lake to protect the site from flooding, unreliable flights due to extreme weather conditions, and constraints related to environmental concerns (see Appendix B for details). Fall protection equipment will most likely be required to install the transmission line section on the steep descent near town. 142 The dam operates under a FERC license that expires on February 1, 2036. The planning, design, and construction would be coordinated with FERC and state dam regulators. See Appendix F for additional information. g) Sustainability Considerations i. Water and Energy Efficiency This alternative provides long-term water security through low-cost water supply, treatment, and distribution, as well as a low cost source of electricity. The hatch report estimates that operating the hydroelectric dam will save 10 million gallons of diesel fuel over the life of the project. See Appendix F for additional information. The penstock itself would be protected from freezing by the high flows used for electrical generation. This alternative would install several hundred feet of insulated transmission line between the penstock and the existing WTP. The insulated transmission line would eliminate the need to waste water to prevent the line from freezing. ii. Green Infrastructure No impact on stormwater is anticipated under this alternative. iii. Other Water system operational complexity would not change under this alternative. For comparison’s sake, operational complexity of the power generation infrastructure are not considered. The proposed infrastructure improvement would improve overall operability of the water system by reducing the current level of emergency repairs and improving access for maintenance. h) Cost Estimates The total capital cost for this alternative is $7,440,000. O&M costs are not strictly comparable to other alternatives in this report since they include energy infrastructure maintenance. The Hatch report estimates for capital cost and O&M costs for this alternative are summarized in the table below. For purposes of comparison, this report assumes the water utility would cover a percentage of the estimated O&M costs proportional to its water use. Hatch estimates average flows to the water utility would be 0.25 cubic feet per second (cfs) out of the total 18 cfs. Converting to hydroelectric provides cost savings under various load growth and fuel cost scenarios due to the high cost of diesel electricity. Water infrastructure cost savings were not considered in the feasibility study. See Appendix F for additional information. Table 4-3: Capital and Operations and Maintenance Cost Estimates – Hydroelectric Project Item Estimate (by Hatch) Estimated Cost Borne by Water Utility Water Utility O&M Capital Cost $7,438,000 - - O&M (First 5 years, 0.75% of Capital) $55,785 $775 $81,582 O&M (After 5 years, 0.25% of Capital) $18,595 $258 $81,065 Note: Water utility O&M includes base rate that assumes WTP upgrade 5.0 SELECTION OF AN ALTERNATIVE The alternatives were evaluated based on cost, as well as non-monetary concerns. That analysis is provided in the following sections, 143 a) Life Cycle Analysis A life cycle present worth cost analysis over a 50-year period of the alternatives presented in this report is summarized in Table 5-1. Detailed capital and operation cost estimates for Alternatives 1 and 2 can be found in Appendix E. Detailed capital and operation cost estimates for Alternative 3 can be found in Appendix F. The life cycle cost analysis is based on the criteria below, Table 5-1: Life-Cycle Cost Comparison Input Present Cost Alternatives Capital Cost Annual O&M cost Lifetime O&M Total Cost No Action $0 $82,522 $3,471,300 $3,471,300 Replace Dam and Transmission Line $5,000,000 $80,807 $3,399,200 $8,399,200 Hydroelectric Project $7,438,000 $81,065 +$517 (for 5 years) $3,410,000 $10,850,700 Notes: 1. Salvage value is assumed to be $0 for all scenarios. 2. All capital costs presented in 2019 dollars. 3. All costs rounded to the nearest 100. 4. The life-cycle cost analysis does not include costs or revenues from the electrical utility. The hydroelectric project is the lowest cost option for electrical generation according to a cost- benefit analysis under a range of growth and fuel cost scenarios provided in Table 6-2, Appendix F Chignik Bay Hydroelectric Project Feasibility Study (Hatch). 5. See 6. 7. Appendix E Cost Estimates for a complete cost estimate and life-cycle cost assumptions and calculations. Input Conversion Factors Interest Rates: 0.7% (50 years), 0.3% (5 years) (Appendix C, OMB circular A-94) 𝑀𝑀𝐶=𝐶+𝑈𝑆𝑀𝑈 (𝑀&𝑀)−𝑆𝑀𝑀𝑈 (𝑆) 𝑈𝑙�ℎ𝑒𝑙𝑟𝑙 𝑆𝑒𝑟�ℎ𝑒𝑟 𝑀𝑟𝑒𝑟𝑒𝑙𝑟 𝑈𝑙𝑟𝑟�; 𝑀&𝑀 (𝑈𝑆𝑀𝑈 𝑀&𝑀) =𝐴𝑙𝑙𝑟𝑎𝑙 𝑀𝑙𝑒𝑟𝑎𝑟�ℎ𝑙𝑒 𝐶𝑙𝑟𝑟 𝑥 ((1 +�ℎ)𝑛−1) (�ℎ(1 +�ℎ)𝑛) 𝑆�ℎ𝑙𝑒𝑙𝑒 𝑀𝑎𝑥𝑙𝑒𝑙𝑟 𝑀𝑟𝑒𝑟𝑒𝑙𝑟 𝑈𝑙𝑟𝑟�; 𝑆𝑎𝑙𝑟𝑎𝑒𝑒 (𝑆𝑀𝑀𝑈 𝑆) =𝐹𝑟𝑟𝑟𝑟𝑒 𝑆𝑎𝑙𝑟𝑎𝑒𝑒 𝑈𝑎𝑙𝑟𝑒 / (1 +�ℎ)𝑛 144 The difference in capital cost between the two dam alternatives is driven by the scope. A table breaking out the capital costs of the two alternatives is presented below. Materials and labor were totaled for each scope item. General conditions such as equipment rental, design, and office support were considered as a separate item. More detailed cost estimates are available in Appendix E Cost Estimates and Appendix F Chignik Bay Hydroelectric Project Feasibility Study (Hatch). Table 5-2: Scope-Cost Comparison of Dam Alternatives Item Drinking Water Only Hydroelectric and Drinking Water Dimensions Estimated Cost (by ANTHC) Dimensions Estimated Cost (by Hatch) Scope Items Dam 14 feet high $266,879 25 feet high $736,000 Pipeline/Penstock 8” HDPE $147,099 24” HDPE/6” Arctic Pipe $612,000 Powerhouse, Turbine and Generator, Tailrace, Electrical Transmission $- $1,236,000 Subtotal $413,978 $2,584,000 Other Capital Costs Mobilization $514,967 $548,000 General Conditions, Construction Support, Equipment Rental, Design, Insurance, etc. $3,982,275 $4,306,000 Total $4,911,219 $7,438,000 b) Non-monetary Factors Non-monetary considerations strongly favor the combined sanitation and hydroelectric project alternative. The hydroelectric project can provide multiple benefits to the community, including a secure source of drinking water, environmental benefits, economic stimulus, and the opportunity to serve multiple community needs with one piece of infrastructure. Electricity generation is the most significant consumer of diesel in the community. Converting to hydroelectric power would reduce diesel use by an estimated 63,500 gallons annually. This reduction would reduce local air pollution and fuel spill risk, while saving approximately 1.42 million pounds of greenhouse gas emissions annually (equivalent to annual emissions from 140 cars or sequestration by 760 acres of forest). Savings in electrical generation can be passed on to commercial users to stimulate economic growth in the community. Lower state subsidies would be required for residential users. 6.0 PROPOSED PROJECT The recommended project is the combined sanitation and hydroelectric project alternative. 145 a) Preliminary Project Design A detailed description of the project design and methodology is available in Appendix F Chignik Bay Hydroelectric Project Feasibility Study (Hatch). b) Project Schedule The proposed schedule provided in the feasibility study is summarized below. See Figure 5-1 in Appendix F for more detail. 18.5 months Engineering and Permitting LIDAR Survey Stream Gauge Geotechnical Investigation FERC Licensing Consultation and Permitting Design Construction Contract Bidding 16 months Construction Planning Turbine Procurement Mobilization Transmission Powerhouse Pipeline Dam Demobilization Turbine and Generator Commissioning and Closeout c) Permit Requirements An environmental and regulatory analysis is provided in Section 7 (page 49) of Appendix F Chignik Bay Hydroelectric Project Feasibility Study (Hatch). d) Sustainability Considerations Detailed sustainability considerations are discussed in section 4.3g) Sustainability Considerations. e) Total Project Cost Estimate The total capital cost of the project is estimated at $7,440,000. An itemized project cost estimate is provided in Section 5 (page 39) of Appendix F Chignik Bay Hydroelectric Project Feasibility Study (Hatch). f) Annual Operating Budget The operating budget enacted by the council of the City of Chignik Bay for FY 2018 is $1,142,149.50. i. Income Income sources include utility service fees for the water system (monthly user fees are $37.50) and electrical utilities. Electricity comes from a combination of user fees and contributions from the State of Alaska Power Cost Equalization (PCE) program 146 ($0.17/kWh paid by users, $0.26/kWh PCE). Income from electrical generation is budgeted at $250,052.50 for FY18. ii. Annual O&M Costs An economic analysis of the operations and maintenance costs is provided in Section 6 (page 43) of Appendix F Chignik Bay Hydroelectric Project Feasibility Study (Hatch) O&M costs are estimated at 0.75% of the capital cost for the first five years of operation, and 0.25% after five years. The majority of O&M costs will be borne by the electrical utility. iii. Debt Repayments Debt service is included in the cost-benefit analysis of the hydroelectric project provided in Appendix F Chignik Bay Hydroelectric Project Feasibility Study (Hatch). iv. Reserves Debt Service Reserve: This project will most likely be funded by a mix of loans and grants. Consultation on feasible funding sources must be performed before detailed estimates of debt service reserve can be prepared. Short-Lived Asset Reserve: With respect to the water system facilities, no short-lived assets are included in the project (the dam and transmission line are considered long-term assets). Cataloging the reserves required for short-lived assets associated with the hydropower plant is outside the scope of this PER. 7.0 CONCLUSIONS AND RECOMMENDATIONS The recommended course of action is to pursue the combined sanitation and hydroelectric project alternative. 147 Estimated by: Joe HessDate: 9/10/2015STAGEMan-Hrs Labor Costs Expenses A/E Subconts. Total Costs Schedule DateProject Work Plan0-$ -$ -$ enter dateConceptual Design Phase 740 87,065.19$ 13,900.00$ 100,965.19$ enter date35% Design Phase0-$ -$ -$ -$ enter date65% Design Phase903 107,773.42$ 6,600.00$ -$ 114,373.42$ enter date95% Design Phase10 1,331.52$ -$ -$ 1,331.52$ enter date100% Design (Stamped Plans) 750 86,951.79$ 200.00$ -$ 87,151.79$ enter dateEngineering Permits255 30,207.41$ 45,800.00$ 76,007.41$ enter dateTotal 2,403 313,329.33$ 66,500.00$ -$ 379,829.33$ Design and Construction ScheduleProject design activities are expected to begin as soon as funding is available. No target dates have been set. Chignik Bay Dam, Water Supply, and Hydro-electricDesign Scope of Work This project includes the design of a new concrete face, rock fill dam, access upgrades, a new water supply pipe, and a new hydro-electric turbine. Scope of Work and Design BudgetDesign Budget148 Alaska Energy Authority – AEA 21010 Renewable Energy Fund Grant Application Appendix B 149 150 City of Chignik Resolution 20-10 POBox llG Ciugnik, AK ~9564 Phone (907) 749-2280 Fa' (907) 749-2300 A Resolution Requesting Funding from the Alaska Energy Authority Renewable Energy Fund, Round 13, and Commitment WHEREAS: The City of Chignik is established as a municipal government and primary operator of community facilities which stand to benefit from the proposed project; and WHEREAS: The City of Chignik is the primary operator of the hydroelectric and diesel power plants that will benefit from facilities enhancements and reduced operating costs resulting from the proposed project; and WHEREAS: The Alaska Native Tribal Health Consortium (ANTHC) is a statewide tribal health consortium; and, WHEREAS: The Council authorizes the Alaska Native Tribal Health Consortium (ANTHC) to work with the council to develop, implement and manage the project for with the City is seeking fi.mding from the AEA. WHEREAS: These facilities are managed by the City of Chignik to provide power, water, and sanitation services to and for the benefit of Tribal members and residents of the City of Chignik; and WHEREAS: The City of Chignik recognizes that this project will benefit the community and all residents there within by improving access to affordable energy, clean water, sanitation, and other services necessary for maintaining the health and wellbeing of the whole community; and WHEREAS: The Alaska Energy Authority, Renewable Energy Fund is soliciting applications to support projects that will reduce the cost of energy and improve community energy efficiency; and 151 ;health services more affordable through diverse energy projects; and WHEREAS: The City of Chignik is committed to working with ANTHC toward the completion of this project. NOW THEREFORE BE IT RESOLVED; that the City of Chignik grants authority to the individuals signing this resolution to commit ANTHC to act as a point of contact and administer grant funds in support of the proposed project; and FURTHER BE IT RESOLVED; that the City of Chignik authorizes the submittal of an application for funding assistance under the Alaska Energy Authority, Renewable Energy Fund, Round 13 announcement. FURTHER BE IT RESOLVED; that the City of Chignik is in compliance with applicable federal, state and local taws including existing credit and federal tax obligations; and I, the undersigned, hereby certify that the City of Chignik is composed of _____6_members of whom _s£_, constituting a QUORUM, were present and that the foregoing resolution was PASS ED AND APPROVED by the Council this J day of ..s-.;. ,, -r~ .._.. i" ,/ 2020. ' Vote: SYeas_L_Nays 152 CHAIRMAN & PRESIDENT September 21, 2020 Mr. Curtis Thayer Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 RE: Letter of Commitment for City of Chignik application for Alaska Energy Authority, Renewable Energy Fund Grant Program, Round 13 funding opportunity Dear Mr. Thayer, Please accept this letter of commitment on behalf of the Alaska Native Tribal Health Consortium (ANTHC) in support of the City of Chignik's application for the Alaska Energy Authority, Renewable Energy Fund Grant Program, Round 13 funding opportunity. If awarded, the funds will be used to modify and reconstruct the existing hydroelectric system to include a new dam and pipeline, a new turbine with increased capacity, and a powerhouse relocated above the upper limit of the salmon spawning habitat on Indian Creek. As part of ANTHC's Division of Environmental Health and Engineering (DEHE), the Rural Energy Program works with communities to make public health services more affordable through diverse energy projects. The cost of energy in rural communities across our state often poses a challenge to local governments responsible for maintaining reliable public health infrastructure. This project will produce direct benefits to community facilities throughout the City of Chignik, resulting in an overall reduction to the community's energy costs. If the City of Chignik is awarded funding under this proposal, ANTHC's Rural Energy Program is committed to providing comprehensive project management services to the community in pursuit of our shared goals. ANTHC is prepared to commit the resources identified in the City of Chignik's grant application to ensure the project is implemented successfully for the benefit ofthe community. The ANTHC Rural Energy Program is pleased to commit these resources to the project through partnership and collaboration with the City of Chignik's project team. Sincerely, ~/~· ~/~~'-'--- Andy Teuber Chairman and President Our ViSIOI! Aldska Nat•V(' people iHP! ho:' hPalth!c s t rwopli' '"the >'IOrid ALASKA NATIVE TRIBAL HEALTH CONSORTIUM '1001) An•ba;sddor Dr1ve I Anchorage 1\l<1ska 99S08 9117 9~) l()(,·\ 153Bristol Bay Area Heallh Corporation 6000 Kanakanak Road P.O. Box 130 Dillingham, AK 99576 (907) 842·520 1 (800) 478·5201 FAX (907) 842·9354 www.bbahc.org Bristol Ba.1 tlrea Ilea/til Corpora/lou u a tribal orgmri:tlliou r~presentlug J/1 •·illnges In Soulln•·est Alaska -Aleknagik -Chignik Bay -Chignik Lagoon -Chignik Lake -Clark's Point -Dillingham -Egegik Ekuk -Ekwok Goodnews Bay -lvanofBay -Kanatak -King Salmon Knugank Koliganek -Levelock Manokotak -Naknek -New Stuyahok -Perryville -Pilot Point Platinum Port Heiden -Portage Creek South Naknek -Togiak -Twin Hills -Ugashik Our minion is to prot·ide quality health care ll'ith competence, compassion, and sensitirity September 24, 2020 Curtis W. Thayer Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 Re: Letter of Support, City of Chignik, Alaska Energy Authority, Renewable Energy Fund Grant Program, Round 13 Application Dear Mr. Thayer: Please accept this letter on behalf of Bristol Bay Area Health Corporation (BBAHC) in support ofthe City of Chignik's application under the Alaska Energy Authority, Renewable Energy Fund Grant Program, Round 13 funding opportunity. The proposed project will produce significant energy savings for the community by enhancing the community's existing hydroelectric power system. BBAHC is a regional Tribal Health Organization responsible for providing health, tribal, and social services to residents of the Bristol Bay Region, including those residing in the City of Chignik. Our organization is also a governing member of the Alaska Native Tribal Health Consortium (ANTHC), which has demonstrated its commitment to finding solutions to issues that are critically important to the health and sustainability of Alaska Native communities throughout our region. If awarded funding, the City of Chignik will partner with ANTHC to address high energy costs, an ongoing challenge for maintaining and improving the community's public health infrastructure. One of the core values that guides our organization is accessible quality health care for all, including access to affordable sanitation and clean drinking water. BBAHC is pleased to see collaboration between the City of Chignik and ANTHC. We realize the potential that this project has in addressing the energy cost barrier to public health service delivery for the people we serve. Funding from the Alaska Energy Authority will help the community reduce its annual energy costs and improve long-term public health outcomes for its residents, helping BBAHC achieve its vision to be a model of quality and financial sustainability. 154I am glad to offer this letter expressing BBAHC's support for the hydroelectric project being proposed by the City of Chignik, in partnership with ANTHC. Sincerely, BRISTOL BAY AREA HEALTH CORPORATION Robert J. Clark President/Chief Executive Officer 155 Chignik Bay Tribal Council P.O. Bo\ 50 September 21. 2020 Mr. Curtis W. Thayer Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage. AK 99503 Chignik, AK 9956-t Phone: (907)7-J9--W IS Email: eba~'tda aol.com Re: Letter of Support, City of Chignik ·s Renewable En erg) Fund Grant Program application Dear Mr. Thayer. I am \Vriting to express the Chignik Bay Tribal Council"s support lew the City of Chignik's application under the Alaska Energy Authority. Renewable Energy Fund Grant Program. Round 13 funding oppotiunit-y. Our council understands that the proposed project \Viii result in substantial energy savings for our community through enhancements to the community's existing hydroelectric pO\\·er system. The Chignik Bay Tribal Council represents the health and economic interests of all Alaska Native people living in our community. The high cost of energ) in our region has been an ongoing challenge for our people, and our council welcomes any effort to address this issue. If awarded runding. we understand that the proposed project will help significantly reduce the high energy costs in our comnnmit)'. freeing up resources needed to maintain local utilities and expand public health services. As a Tribe. we strongly approve of this em1rt, and I am very pleased to offer this letter expressing our council"s support for the hydroelectric project being proposed by the City of Chignik. '{l~fW~ Roderick Carlson President. Chignik Bay Tribal Council 156 THE STATE 01ALASKA GOVERNOR BILL WALKER April 9, 2018 Charissa Williar, P.E. Alaska Native Tribal Health Consortium Division of uvirorunental Health and Engineering 4500 Diplomacy Drive, Suite 454, Anchorage, AK 99 508 Dear Ms. Williar: Department of Environmental Conservation DIVISION OF WATER Village Safe Water (VSW) 555 Cordova Street Anchorage. Alaska 99501 Main: 907.269.7502 Fax: 907.269.7509 We have reviewed the "Chignik Bay's Raw Water Source and Transmission Line Preliminary Engineering Report (PER)" dated March 2018 for use in project AN 16-U90. The PER evaluates alternatives to address the water source infrastructure deficiencies. The alternatives considered were, 1) "No action" 2) Replacing the dam and sections of the transmission line as required for drinking water service and 3) Combining the dam and transmission line replacement with a hydroelectric project. The recommended alternative is to pursue a combined sanitation system and hydroelectric project with a total estimated capital cost of $7,440,000 . We approve the recommended alternative up to a total capital cost of $2 million in drinking water-related expenses. We will consider a related application for capital funding when other capital project funding has been secured for hydroelectric-related expenses ($5.44 million). The Department of Environmental Conservation reserves the right to rescind this approval if costs increase beyond those included in the report. If you have any questions or would like to discuss this review in more detail, please let me know. Facility Programs Manager