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ALASKA RENEWABLE ENERGY FUND
GRANT APPLICATION
Round VIII – FY 2016
For
PHASE 3 OF ELFIN COVE HYDROPOWER PROJECT
Submitted to
Alaska Energy Authority
813 West Northern Lights Boulevard
Anchorage, Alaska 9503
By
Elfin Cove Utility Commission
Community of Elfin Cove Non-Profit Corporation
PO Box 2
Elfin Cove, Alaska 99825
September 22, 2014
Renewable Energy Fund Round VIII
Grant Application - Standard Form
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Application Forms and Instructions
This instruction page and the following grant application constitutes the Grant Application Form for
Round VIII of the Renewable Energy Fund. A separate application form is available for projects
with a primary purpose of producing heat (see RFA section 1.5). This is the standard form for all
other projects, including projects that will produce heat and electricity. An electronic version of the
Request for Applications (RFA) and both application forms is available online at:
http://www.akenergyauthority.org/REFund8.html.
• If you need technical assistance filling out this application, please contact Shawn Calfa, the
Alaska Energy Authority Grants Administrator at (907) 771-3031 or at scalfa@aidea.org.
• If you are applying for grants for more than one project, provide separate application forms
for each project.
• Multiple phases for the same project may be submitted as one application.
• If you are applying for grant funding for more than one phase of a project, provide
milestones and grant budget for each phase of the project.
• In order to ensure that grants provide sufficient benefit to the public, AEA may limit
recommendations for grants to preliminary development phases in accordance with 3 ACC
107.605(1).
• If some work has already been completed on your project and you are requesting funding
for an advanced phase, submit information sufficient to demonstrate that the preceding
phases are completed and funding for an advanced phase is warranted.
• If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with your
submission or reference a web link where it can be downloaded or reviewed.
• In the sections below, please enter responses in the spaces provided, often under the
section heading. You may add additional rows or space to the form to provide sufficient
space for the information, or attach additional sheets if needed.
REMINDER:
• Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
• All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
• In accordance with 333 (b) Applicants may request trade secrets or proprietary company
data be kept confidential subject to review and approval by the Authority. If you want
information is to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept confidential.
If the Authority determines it is not confidential it will be treated as a public record in
accordance with AS 40.25 or returned to the applicant upon request.
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Community of Elfin Cove Non-Profit Corporation, Elfin Cove Utility Commission
Type of Entity: Fiscal Year End:
Electric Utility, Certificate # 701 June 30
Tax ID #92‐0089934
Tax Status: ☐ For-profit ☐ Non-profit ☒ Government (check one)
Date of last financial statement audit: Audits not required, not applicable.
Mailing Address: Physical Address:
P.O. Box 1 Community Building
Elfin Cove, AK 99825 Elfin Cove, AK 99825
Telephone: Fax: Email:
(907) 239-2226 (907) 239-2226 janedbutton@gmail.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name: Title:
Jane Button Project Administrator
Mailing Address:
P.O. Box 2
Elfin Cove, AK 99825
Telephone: Fax: Email:
(907) 723-8514 (907) 239-2226 janedbutton@gmail.com
1.1.1 APPLICANT ALTERNATE POINTS OF CONTACT
Name Telephone: Fax: Email:
Dennis Meier 907-239-2205 907-2392226 dennis@tanaku.com
Mike Nelson 907-723-0186 907-2392226 ironfishnelson@gmail.com
Mary Crump 801-451-2701 907-2392226 elfincovesecretary@gmail.com
Tod Richards 907-239-2226 907-2392226 todrichards@ymail.com
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1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the
appropriate box)
☒ An electric utility holding a certificate of public convenience and necessity under AS 42.05, or
☐ An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
☐ A local government, or
☐ A governmental entity (which includes tribal councils and housing authorities)
1.2 APPLICANT MINIMUM REQUIREMENTS
(continued)
Please check as appropriate.
☒ 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 by checking the box)
(resolution is on agenda for 10/1/14 board meeting – will be provided to AEA when available).
☒ 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 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
http://www.akenergyauthority.org/REFund8.html. (Any exceptions should be clearly noted
and submitted with the application.) (Indicate 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)
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SECTION 2 – PROJECT SUMMARY
This section is intended to be no more than a 2-3 page overview of your project.
2.1 Project Title – (Provide a 4 to 7 word title for your project). Type in space below.
Elfin Cove Hydroelectric Permitting
2.2 Project Location –
Include the physical location of your project and name(s) of the community or communities that will
benefit from your project in the subsections below.
2.2.1 Location of Project – Latitude and longitude, 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 at 907-771-3031.
The project will be located on Crooked Creek and Jim's Lake, located approximately one mile
south of Elfin Cove at 58.19N, 136.35W
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
Elfin Cove
2.3 PROJECT TYPE
Put X in boxes 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
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2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of the proposed project.
The project will include a run-of-river hydroelectric plant between Crooked Creek and Jim's Lake
(upper project) and a storage hydroelectric project between Jim's Lake and tidewater (lower
project). January 20, 2014 updated sizing analysis from Polarconsult (See Attachment F-1)
recommended a configuration with a 35 kW run-of-river upper project with a 105 kW storage lower
project for a total installed capacity of 140 kW, based on updated hydrology and utility load data.
The recommended project is estimated to displace 89% of the annual diesel fuel consumed by the
electric utility generators.
This funding request supplements the community’s existing funding for project permitting. FERC
declared that the project was not eligible for license exemption in August 2014, so the project will
require a FERC license. Based on recent FERC licensing processes in Southeast Alaska, the
community anticipates more extensive resource studies than expected when the permitting budget
was developed in 2010. The community is requesting this supplemental grant so the FERC
licensing process can be completed without delay arising from funding constraints.
2.5 PROJECT BENEFIT
Briefly discuss the financial and public benefits that will result from this project, (such as reduced
fuel costs, lower energy costs, local jobs created, etc.)
Based on current studies, the communities energy needs will be provided for most of the year from
the hydroelectric project. Analysis of 2009 through 2013 hydrology (see attachment G.2) with an
estimated 300,000 kWh annual demand, indicated the that the hydroelectric project would meet
over 98% of the demand in wetter years, and 77% to 82% in the drier years. On average the
hydroelectric project is estimated to displace 89% of overall electric demand for an estimated
savings of 20,600 gallons of diesel fuel per year. Using projected 2016 fuel price in Elvin Cove of
$5.53/gallon, an annual savings from power plant fuel alone would be $113,918. Over the next 20
years, if fuel prices remained constant, this savings would amount to over $2.2 million.
AEA's economic model projects heating fuel cost in Elfin Cove at $5.53 a gallon in 2016 which is
consistent with current prices for diesel fuel for the power plant of $5.07 last year. AEA's heating
fuel price projections are used for calculating project benefits.
Using these fuel cost projections, the present worth of avoided fuel purchases for the electric utility
over the project's 50 year life is $4.36 million.
Maintenance and repairs savings on the existing diesel generators will be substantially diminished.
Reduced loads on the newly renovated power plant will greatly extend the life of the diesel
generators, thereby reducing replacement costs and extending the time between overhauls.
This green energy source will further benefit the public with cleaner air, less noise pollution,
diminished fuel deliveries to Elfin Cove, and a more pristine environment.
All these factors will help to keep Alaska unspoiled, maintaining its desirability as a tourist
destination. Tourism is important as a fundamental economic engine in much of Alaska, and
contributes considerably to the economy of Elfin Cove.
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2.6 PROJECT BUDGET OVERVIEW
Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and
source of other contributions to the project.
For this Phase of the project, 3B - Project Permitting (proposed here) the total funds needed are
$111,200, which would consist of $102,300 in grant funding, and $8,900 in local match. In
addition, there will in-kind contributions of local labor, grant management, materials, tools, and
logistical support (i.e., boat transport, and other access to the project site.)
The estimated costs for the full project (Phase 3 Design/Permitting and Phase 4 Construction) are
shown in Table 1, on the following page. These estimates are based on the assumption that
Phase 3 and 3B, including the FERC permitting process will take three years, beginning in 2013,
and the Phase 4, construction, can begin in 2016.
2.7 COST AND BENEFIT SUMMARY
Include a summary of grant request and your project’s total costs and benefits below.
Costs for the Current Phase Covered by this Grant
(Summary of funds requested)
2.7.1 Grant Funds Requested in this application $ 102,300
2.7.2 Cash match to be provided $ 8,900
2.7.3 In-kind match to be provided $ 48,000
2.7.4 Other grant funds to be provided $ 347,000
2.7.5 Total Costs for Requested Phase of Project (sum of 2.7.1 through 2.7.4) $506,200
Other items for consideration
2.7.6 Other grant applications not yet approved $ 0
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Project Costs & Benefits
(Summary of total project costs including work to date and future cost estimates to get to a fully
operational project)
2.7.7 Total Project Cost
Summary from Cost Worksheet, Section 4.4.4, including
estimates through construction.
$ 3,380,000
2.7.8 Additional Performance Monitoring Equipment not
covered by the project but required for the Grant
Only applicable to construction phase projects
$ NA
2.7.9 Estimated Direct Financial Benefit (Savings)
The economic model used by AEA is available at
www.akenergyauthority.org/REFund8.html. This
economic model may be used by applicants but is not
required. Other economic models developed by the
applicant may be used, however the final benefit/cost
ratio used will be derived from the AEA model to ensure
a level playing field for all applicants.
$ 4,360,000
2.7.10 Other Public Benefit
If you can calculate the benefit in terms of dollars please
provide that number here and explain how you
calculated that number in Section 5 below.
$
SECTION 3 – PROJECT MANAGEMENT PLAN
Describe who will be responsible for managing the project and provide a plan for successfully
completing the project within the scope, schedule and budget proposed in the application.
3.1 Project Manager
Tell us who will be managing the project for the Grantee and include contact information, a resume
and references for the manager(s). In the electronic submittal, please submit resumes as separate
PDFs if the applicant would like those excluded from the web posting of this application. 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.
The Community of Elfin Cove uses an open process to solicit applications and select personnel for
local project positions, se we cannot say for certain who will be the project manager(s). For the on-
going grant project, and recent electric power related projects in Elfin Cove, Jane Button and Hap
Leon have served as local project administrators. Ms. Button and Mr. Leon both have experience
in project management, most recently including coordinating the diesel power plant replacement,
power distribution system improvements, the hydro reconnaissance and feasibility studies
completed in 2009 – 2011, and Phase 3 of the Community's hydroelectric project currently
underway. Resumes for Ms. Button and Mr. Leon are attached to this grant application.
During these recent projects, we have also benefited from project management support that AEA
provides to rural Alaskan communities, and we would welcome that support in this next phase as
well.
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3.2 Project Schedule and Milestones
Please fill out the schedule below. Be sure to identify key tasks and decision points 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 of your proposed project.
Please fill out form provided below. You may add additional rows as needed.
Follows is project schedule and milestones for all of Phase 3. This grant funding request is for the
additional funds required to meet FERC study and licensing requirements as project is not eligible
for license exemption as a natural water feature project due to revisions to FERC rules. These
increased project costs are associated with milestones in bold below.
Milestones Tasks
Start
Date
End
Date
Independent Review of Project 3rd Party Desktop Study Report
(Already completed)
July
2011
Oct.
2012
Project Scoping and Contractor
Solicitation
Develop RFP, Invitation to Bid, Select Contractor
(Already completed)
Jan.
2013
April
2013
Project Review and Conceptual
Design
Interim Hydrology Report, Conceptual Design Report,
35% design drawings (Already Completed)
May
2013
January
2014
Permit Applications Prepare and File Permit Applications for Project
(Currently 80% Complete)
May
2014
March
2015
Resource Surveys Resources Surveys and Studies July
2013
Nov
2015
Final EA / Mitigation Plans Drafted by Applicant and prepared by FERC as part
of Licensing Process based on results of resource
surveys and studies, with input from resource agencies
through FERC consultation process
Oct
2015
Dec.
2015
Final EA / Mitigation Plans Will be drafted by Applicant and prepared by FERC as
part of Licensing Process, with input from resource
agencies through FERC consultation process
Dec.
2014
Dec.
2015
Resolve Land Use, Right of Way
Issued
Land will be secured by issuance of FERC license, USFS
permit.
Dec.
2014
Dec.
2015
Final System Design 65% design submittals scheduled for June 2015, 95%
submittal in Jan. 2016, and final design submittal and
draft bid documents issued in March 2016.
March
2016
Final Cost Estimate Final cost estimate issued with final designs January
2016
March
2016
Updated Economic and Financial
Analysis
February
2016
March
2016
Final Business and Operational
Plan
Issued with final designs
March
2016
3.3 Project Resources
Describe the personnel, contractors, personnel or firms, equipment, and services you will use to
accomplish the project. Include any partnerships or commitments with other entities you have or
anticipate will be needed to complete your project. Describe any existing contracts and the
selection process you may use for major equipment purchases or contracts. Include brief resumes
and references for known, key personnel, contractors, and suppliers as an attachment to your
application.
The Community of Elfin Cove has contracted with Polarconsult Alaska, Inc., as the engineering firm
to work with us as part of the Phase 3 of this project. One of our criteria for selecting this firm was
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that they will be able to work with us through design, permitting and be available for construction
engineering in Phase 4.
Joel Groves of Polarconsult is the project manager working on Phase 3. A brief resume with
references is attached to this application.
3.4 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status. Please
provide an alternative contact person and their contact information.
Our local project administrators, in collaboration with the engineers, will prepare quarterly reports to
the Alaska Energy Authority. These reports will summarize the progress of the project, as well as
its financial status.
We have been able to work well with Joel Groves of Polarconsult as we continue Phase 3 of the
project. He is readily available by phone or e-mail and is very responsive to requests for
information or assistance. We look forward to a continuation of our working relationship with
Polarconsult on this project.
3.5 Project Risk
Discuss potential problems and how you would address them.
Environmental or cultural resources could be identified in the course of the project that could affect
the project cost. These will be identified and addressed during the Phase 3 permitting process.
The bulk of potential problems arise from natural hazards such as flooding, earthquakes, active
faults, tsunamis, landslides, ice movement, snow avalanches and erosion. The primary natural
hazard risk factor identified to date is the potential for mass wasting events (land slides and rock
falls) that could impact an intake at Crooked Creek or the power line to Elfin Cove. Power line risk
can be mitigated by selecting an alignment that avoids the toe of the mountains to the east of the
site. The risk at the Crooked Creek intake is not as readily mitigated. This is a low probability
event over the life of the project that would require repair to the intake.
3.6 Project Accountant(s)
Tell us who will be performing the accounting of this Project for the Grantee and include contact
information, a resume and references for the project accountant(s). In the electronic submittal,
please submit resumes as separate PDFs if the applicant would like those excluded from the web
posting of this application. If the applicant does not have a project accountant indicate how you
intend to solicit project management support.
Elfin Cove employs a part-time bookkeeper to manage books and Corporation finances. The
project administrator reviews all pay requests to make sure they are consistent with contracts and
grant before forwarding to the bookkeeper with approval to pay.
3.7 Financial Accounting System
Discuss the accounting system that will be used to account for project costs and whom will be the
primary user of the accounting system.
The community uses QuickBooks accounting software and the primary user is the bookkeeper.
Financial reports are generated by the Community corporation Treasurer and reviewed by the
Community Corporation Board. All grant expenditures are reviewed by the Corporation Board.
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3.8 Financial Management Controls
Discuss 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 Renewable Energy Fund Grant Program.
Pay requests, with backup, from the engineering contractor are reviewed by the project
administrator to ensure they are consistent with the contract and RE grant rules. Activities
performed by the community, including in-kind labor, services, equipment usage, transport, etc.,
are reported by the contributing individuals and/or engineer and tracked for accounting purposes.
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SECTION 4 – PROJECT DESCRIPTION AND TASKS
The level of information will vary according to phase(s) of the project you propose to undertake
with grant funds.
If some work has already been completed on your project and you are requesting funding for an
advanced phase, submit information sufficient to demonstrate that the preceding phases are
satisfied and funding for an advanced phase is warranted.
4.1 Proposed Energy Resource
Describe the potential extent/amount of the energy resource that is available.
Discuss 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. 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.
Amount of available renewable energy from the hydroelectric plant was developed as part of
Phase 2 reconnaissance study and updated with new hydrology and load data in Phase 3. There
are roughly 5 years of hydrology data for the project creeks. Project is estimated to offset 89% of
the 290,910 kWh of diesel generation, with approximately 613,800 kWh of total energy available
annually from the hydroelectric plant. January 20, 2014 updated hydrology and load data report is
included as Attachment G.1.
Proposed project pros and cons:
Pros 1. Reduced dependence on costly diesel;
2. Reduced air pollution from diesel exhaust;
3. Reduced noise from the diesel power plant located in the center of the community.
4. Reduced hazardous waste from lubricants and system maintenance;
5. Reduced potential of land or water pollution in the event of fuel spills;
6. Greatly reduced cost for power generation;
7. Completely renewable through Southeast's abundant precipitation; and
8. Proven alternative technology with few integration problems with diesel.
Cons 1. High capital cost for initial project construction;
2. Loss of waste heat from Diesel Generation to community buildings;
Electric boilers are proposed for the two buildings that are currently heated from the diesel plant,
which will utilize surplus power generation available at the hydroelectric plant as an interruptible
load to minimize heating oil requirements and keep the diesel generators at room temperature for
back-up power.
4.2 Existing Energy System
4.2.1 Basic configuration of Existing Energy System
Briefly discuss the basic configuration of the existing energy system. Include information about the
number, size, age, efficiency, and type of generation.
Three new diesel generators were installed as part of the Elfin Cover powerhouse upgrade project
completed in 2007. The diesel generators are sized at 67 kW, 101 kW and 179 kW, for a total
installed capacity of 347 kW. Parallel switchgear, improved ventilation and fire suppression and
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alarm systems were installed as part of the project. Most recent data shows generation efficiencies
of 12 to 13 kW per gallon of diesel burned.
The electric distribution system was upgraded in summer of 2009. The system was expanded,
with most components replaced. Distribution lines to residential and commercial buildings were
replaced, and pedestals installed for power to boats in the Inner Harbor, the dry dock and the
government float.
4.2.2 Existing Energy Resources Used
Briefly discuss your understanding of the existing energy resources. Include a brief discussion of
any impact the project may have on existing energy infrastructure and resources.
The Elfin Cove diesel power plant was upgraded in 2007 and the distribution system was upgraded
in 2009. The bulk fuel facility is also new and in good condition. These assets would be used as a
backup generation source to the hydroelectric project. A hydropower project will significantly
extend the life of the newly installed diesel generators by greatly reducing the number of hours
they run each year.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
Elfin Cove’s electric utility customers currently pay approximately 80 cents per kilowatt-hour for the
energy they consume. Residential and community customers get a significant reduction in that
rate, thanks to the Power Cost Equalization program. Commercial and federal customers get no
relief from the high rates charged. If we were able to cut out the fuel cost for much of the year, the
energy price to all electric power consumers in Elfin Cove could be reduced considerably.
4.3 Proposed System
Describe the system you are intending to develop and address potential system design, land
ownership, permits, and environmental issues.
4.3.1 System Design
Provide the following information for the proposed renewable energy system:
• A description of renewable energy technology specific to project location
• Optimum installed capacity
• Anticipated capacity factor
• Anticipated annual generation
• Anticipated barriers
• Basic integration concept
• Delivery methods
The best current renewable energy technology for our location is hydropower. Phase 2, led the
community to select a project at Crooked Creek and Jim’s Lake. Phase 3, currently underway will
provide more detailed information about this project. The Crooked Creek / Jim’s Lake hydroelectric
facility will include:
- A diversion structure on Crooked Creek at 480’.
- An approximately 1,400-foot long 14-inch penstock from Crooked Creek to Jim's Lake.
- An approximately 35 kW powerhouse on Jim’s Lake at 335’ to recover energy between Crooked
Creek and Jim’s Lake.
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- An approximately 12-foot tall dam at the outlet to Jim’s Lake and a siphon intake to provide 95
acre-feet of storage in Jim’s Lake (regulated elevation from 330 to 350 ft).
- An approximately 2,000-foot long 14-inch penstock from Jim's Lake to tidewater in Port Althorp.
- An approximately 105 kW powerhouse at tidewater (elevation of 25 ft.).
- Approximately 6,600 feet of power line to tie into the existing distribution system.
- Approximately 9,600 feet of communications cable back to the diesel powerhouse.
- Approximately 8,200 feet of access corridors.
The proposed installed capacity will be 140 kW. This estimate is based on reconnaissance
analysis completed by Polarconsult in 2009 and updated additional hydrology and load data for the
project collected through 2013.
Annual estimated generation potential of this project is 613,800 kWh. Of this, 266,300 kWh is
estimated to meet 89% of current system demand, and an additional 347,500 kWh is estimated to
be available for interruptible loads. Based on these estimates, the project would have a capacity
factor of 50%. These estimates will be refined during the project final design and permitting phase.
To maximize the utilization of energy from the project, the run-of-river hydro from Crooked Creek to
Jim’s Lake would be the governing generator, with the storage hydro and any diesels following to
meet load. Excess energy would be dispatched by a load governor to dump loads in the
community. Dedicated electric meters and an interruptible tariff could be used to fully utilize the
excess energy from the hydro plants.
The remote location of the watersheds will likely require that the work be completed mainly with
hand or small power tools after staging of materials by helicopter drop. There is no road access to
either Elfin Cove or the project site along Port Althorp.
Integration of the hydropower into the existing grid will be via an underground transmission line to
the newly renovated distribution system. There will be a communication cable between the
hydroelectric powerhouse and the diesel power plant in Elfin Cove.
4.3.2 Land Ownership
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.
Most of the elements of the proposed project (the proposed diversion, pipeline, penstock,
powerhouse and most of the transmission line) would be on Tongass National Forest land,
managed by the U.S. Forest Service. We expect that, given the close coordination we have
already initiated, we can obtain the necessary permits from the Forest Service to develop this
project. The Community of Elfin Cove has a good working relationship with the USFS Hoonah
Ranger District, having several years ago negotiated with the Forest Service for a transfer of land
in Elfin Cove.
More recently, we procured U.S. Forest Service permits to place stream gages on both Crooked
Creek and Jim’s Lake, under Phase 2 of this project. We have been informed that the USFS is very
interested in cooperating with Elfin Cove to move the project along. The Hoonah District Ranger,
Art Burbank, visited Elfin Cove this summer to discuss the hydro project, and was very pleased
with the local level of support for the project.
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Once it reaches Elfin Cove, the transmission line will tie into the existing distribution system. The
line has been routed through two parcels owned by the State of Alaska, one of which is already a
designated right-of-way.
4.3.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
outstanding permit issues.
• List of applicable permits
• Anticipated permitting timeline
• Identify and discuss potential barriers
The Federal Energy Regulatory Commission (FERC) has informed us that because of the small
size and the Alaska location of this project, our license should come from the Regulatory
Commission of Alaska (RCA) rather than from FERC; however the RCA has not enacted
regulations necessary to assume licensing jurisdiction. Past discussions with FERC indicated the
project would be eligible for a license exemption under the natural water feature provision, but our
attempt to initiate the license exemption process in the summer of 2014 resulted in clarification
from FERC (Attachment G.3) that the project does not qualify for a natural water feature exemption
under current FERC policy. Accordingly, a FERC license will be required for the project. Our
consultant is currently reformatting the exemption Initial Consultation Document (Attachment G.4)
into a license Pre Application Document, and the licensing consultation process will be started in
the 4th quarter 2014.
The FERC process will involve coordination with a number of resource agencies, including, but not
limited to, the following:
U.S. Forest Service
The Forest Service (FS) manages the land at the Crooked Creek/Jim's Lake project site, because
they are located within the Tongass National Forest. We will have to coordinate with the Forest
Service and obtain a special use permit from the FS to develop the project. Our relationship with
the Forest Service was discussed in more detail in the previous section (4.3.2) of this proposal.
We applied for the special use permit in summer 2014 (Attachment G.5), but the FS will not issue
the permit until the FERC license is issued.
Alaska Department of Natural Resources
The State of Alaska owns tidelands and bottomlands, which it manages through the Department of
Natural Resources (DNR). We will need to obtain permits from DNR for structures installed in
creeks or across tidelands. DNR would also need to issue water rights for the project. We applied
for water rights in summer 2014 (Attachment G.6).
Army Corps of Engineers
If we install pilings, a floating dock, or any other structure on the beach or in the waters of Port
Althorp or at the Inner Cove, we would require a permit under Section 404 of the Clean Water Act,
and/or Section 10 of the Rivers and Harbors Act, from the U.S. Army Corps of Engineers.
Obtaining these permits also involves a public review and comment period. The Corps has issued
these permits fairly routinely for docks and similar projects in and around Elfin Cove in recent
years.
The Corps of Engineers also would need to issue permits for wetlands disturbance / fill.
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Alaska Department of Fish and Game
Alaska Statute 16.05.841, the Fishway Act, and Alaska Statute 16.05.871, the Anadromous Fish
Act, both would require that we provide prior notification and obtain permit approval from the
Department of Fish and Game (ADFG) Habitat Division to construct a hydraulic project or to use,
divert, obstruct, or change the natural flow or bed of a body of water.
We completed a fisheries survey of the project waters in 2013. Based on the survey report
(Attachment G.7), ADFG issued a letter that no fish habitat permit is required for this project in May
2014 (Attachment G.8).
4.3.4 Environmental
Address whether the following environmental and land use issues apply, and if so how they will be
addressed:
• 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 discuss other potential barriers
To the best of our knowledge, the hydroelectric project would not impact any threatened or
endangered species. There are no significant habitat issues, designated critical habitat, or
protected areas in the geographic area under consideration. The proposed projects do not
present threats to any fish, plant life, wildlife or marine life. No known archaeological or historical
resources will be disturbed by the project. The only buildings to be constructed are two
powerhouses which will be located within the Tongass National Forest and thus present no land
development issues. There will be no interference to telecommunications. Due to the remote
location of the project, and the small size of the structures, there are no aviation considerations.
The powerhouse and any dock will be visible from the water at close range, but their small size is
not likely to cause significant negative aesthetic impact. Any public concerns will be addressed
during a public meeting process.
We realize, however, that during the permitting process, we will likely be required to conduct
surveys to document the presence or absence of species of concern, and to determine whether
there will be any impact of the project on them. This grant application is being requested to
address the additional resource surveys that may be required as part of the FERC agency
consultation process including botanical, wildlife, recreational, mining, and impacts from regulating
the level of Jim’s Lake to wildlife and plants.
4.4 Proposed New System Costs and Projected Revenues
(Total Estimated Costs and Projected Revenues)
The level of cost information provided will vary according to the phase of funding requested and
any previous work the applicant may have done on the project. Applicants must reference the
source of their cost data. For example: Applicants records or analysis, industry standards,
consultant or manufacturer’s estimates.
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4.4.1 Project Development Cost
Provide detailed project cost information based on your current knowledge and understanding of
the project. Cost information should include the following:
• Total anticipated project cost, and cost for this phase
• Requested grant funding
• Applicant matching funds – loans, capital contributions, in-kind
• Identification of other funding sources
• Projected capital cost of proposed renewable energy system
• Projected development cost of proposed renewable energy system
The total project cost, including Phase 1 and 2 (completed), Phase 3 (which is underway), Phase
3B (which we are proposing here) and Phase 4 (construction) is estimated to be $3,763,000. The
development costs (Phases 1 thorough 3) total $506,200, while the construction cost in the year
2015/6 is estimated to be $3,256,800.
These cost estimates are detailed in Table 1, and are based on the Hydroelectric Reconnaissance
Study for Elfin Cove, completed in 2010 by Polarconsult and updated with information from the
ongoing Phase 3 grant for permitting and design.
It is likely that, over the next four years, actual construction inflation will vary from that used in this
estimate. Costs will also differ as additional information is analyzed to refine the project size and
construction methods. Given the current economic conditions, at this time it is premature to
speculate on the details of construction costs that will not be incurred until at least four years from
now.
4.4.2 Project Operating and Maintenance Costs
Include anticipated O&M costs for new facilities constructed and how these would be funded by the
applicant.
(Note: Operational costs are not eligible for grant funds however grantees are required to meet
ongoing reporting requirements for the purpose of reporting impacts of projects on the communities
they serve.)
AEA’s estimate for O&M costs is $.021/kWh which would amount to about $6,700 annually. There
will also be a savings from displaced diesel O&M costs if the project is built; AEA estimates those
savings to be $.02/kWh. These two figures nearly cancel each other out with virtually no net
change.
Our existing electric utility has a fee structure adequate to finance all of our O&M costs.
4.4.3 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
• Proposed rate of return from grant-funded project
Not applicable. All power will be sold to existing customers of Elfin Cove Utility Commission
(ECUC). Utility rates will be based on utility operating costs with the hydro plant in service.
Existing rates are approximately $0.80/kWh. Projected fuel savings from the hydro project would
support reducing rates to approximately $0.54/kWh. Rates are set by the ECUC.
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4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered in
evaluating the project.
Please fill out the form provided below.
Renewable Energy Source Crooked Creek and Jim’s Lake
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. Run of River and storage, net capacity factor of 50%
Unit depends on project type (e.g. windspeed, hydropower output, biomass fuel)
Existing Energy Generation and Usage
a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank)
i. Number of generators/boilers/other Three
ii. Rated capacity of generators/boilers/other 67 kW, 101 kW, 179 kW
iii. Generator/boilers/other type Diesel Generators
iv. Age of generators/boilers/other All Commissioned in 2007 - ~7 years old.
v. Efficiency of generators/boilers/other 12.1 kW/gal (2012-13 PCE Report)
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor $25,000 (estimated)
ii. Annual O&M cost for non-labor $20,000
c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the
Railbelt grid, leave this section blank)
i. Electricity [kWh] 290,910 kWh (2012-13, PCE report)
ii. Fuel usage
Diesel [gal] 24,119 (2012-13, PCE report)
Other
iii. Peak Load Approx 250 kW (estimated)
iv. Average Load 27 kW (2012-13, PCE report)
v. Minimum Load Approx 20 kW (estimated)
vi. Efficiency 12.1 kWh/gal (2012-13, PCE report)
vii. Future trends Recent trend is for slightly negative growth, future is projected to be flat to
increasing due to lower rates.
d) Annual heating fuel usage (fill in as applicable)
1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric
Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power.
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i. Diesel [gal or MMBtu] 35,000 gal (estimate)
ii. Electricity [kWh] Unknown, any usage is included in utility totals at c.i
iii. Propane [gal or MMBtu] Unknown.
iv. Coal [tons or MMBtu] None.
v. Wood [cords, green tons, dry tons] Unknown.
vi. Other Unknown.
Proposed System Design Capacity and Fuel Usage
(Include any projections for continued use of non-renewable fuels)
a) Proposed renewable capacity
(Wind, Hydro, Biomass, other)
[kW or MMBtu/hr]
140 kW installed capacity
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] Approximately 613,800 kWh annually.
ii. Heat [MMBtu]
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu]
ii. Coal [tons or MMBtu]
iii. Wood or pellets [cords, green tons,
dry tons]
iv. Other
Project Cost
a) Total capital cost of new system $3,380,000 (2013 $)
b) Development cost $506,200 (design and permitting)
c) Annual O&M cost of new system $10,000 (incremental cost of hydro plant operations
and diesel plant operations). Other utility costs
assumed unchanged. $30,000 annual payment into
sinking fund for long-term hydro repair and
replacement costs.
d) Annual fuel cost $0 for water. $19,300 for fuel for diesel generators.
Project Benefits
a) Amount of fuel displaced for
i. Electricity 20,600 gallons
ii. Heat 5,300 gallons
iii. Transportation None
b) Current price of displaced fuel $5.07 gallon (2012-13 average)
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c) Other economic benefits Improved sustainability of community.
d) Alaska public benefits $113,918 annually in avoided utility fuel cost (at projected
2016 price), estimated 25,900 fewer gallons of fuel
products being shipped by barge through the waters of
Southeast Alaska to Elfin Cove. Also projected reduced
annual PCE program expense of $5,000 ($0.08/kWh x
67,200 eligible kWh).
Power Purchase/Sales Price
a) Price for power purchase/sale Estimated at $0.54/kWh, will depend on final project
cost, operations cost, and utility approval of rates.
Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio $4.36M / $3.76M = 1.16
Payback (years) $4.36M / $102,900 = simple payback 42 years at projected 2015 fuel
prices (AEA/ISER model)
4.4.5 Impact on Rates
Briefly explain what if any effect your project will have on electrical rates in the proposed benefit
area. If the is for a PCE eligible utility please discuss what the expected impact would be for both
pre and post PCE.
The project will decrease the utility’s fuel expense by an estimated $103,000 annually (at projected
20,600 gallons x $5.53/gal cost). Impact to non-fuel costs are estimated at an increase of $10,000,
consisting of hydro plant operating costs and reduced diesel plant operating costs. Also setting
aside $30,000 annually for a sinking fund for the hydro plant, the net result is a projected savings
of $63,000 annually. This savings divided by total kWh sales of 290,910 (2012-13) results in
$0.22/kWh of potential rate reduction before PCE is considered, for a projected rate of $0.80 –
0.22 = $0.58/kWh.
With the above assumptions, the PCE subsidy level is projected to decrease from $0.36/kWh to
$0.28/kWh. This is based on the following utility expenses: sinking fund expense of $30,000; other
non-fuel expenses increasing $10,000 to $55,000; and continuing fuel purchase of $19,300; for
total expenses of $104,300. With flat demand of 290,910 kWh sales, these utility expenses are
$0.36/kWh sold. Subtracting the PCE base rate ($0.1482/kWh) and multiplying by 0.95 yields the
projected PCE subsidy level of approximately $0.28/kWh with the hydro project in service. The
eligible PCE rate is thus projected to decrease from $0.44/kWh (2013) to $0.44 – 0.28 =
$0.26/kWh.
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SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings, and
how the people of Alaska will benefit from the project.
The benefits information should include the following:
• Potential annual fuel displacement (gallons and dollars) over the lifetime of the evaluated
renewable energy project
• Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA
tariff, or cost based rate)
• Potential additional annual incentives (i.e. tax credits)
• Potential additional annual revenue streams (i.e. green tag sales or other renewable energy
subsidies or programs that might be available)
• Discuss the non-economic public benefits to Alaskans over the lifetime of the project
The estimated fuel displacement is 20,600 gallons per year. Over a 50-year project lifetime, this
savings would total 1.29 million gallons. At AEA model 2016 fuel prices in Elfin Cove, this
amounts to a savings of $113,918 per year. Using the mid-range EIA energy forecasts developed
by AEA, the net present worth of electric utility fuel savings from the project is over $3 million, and
total fuel savings from the project is over $4 million.
Because the hydro project would be owned by the utility, revenues are not applicable. The hydro
project is expected to allow the utility to decrease rates, reducing total revenues to the utility.
Utility rates will be determined by the continuing fixed costs of the utility (for O&M, G&A, etc.),
the capital cost and financing means used for the hydro (loans, grants, etc.), and the continuing
(much reduced) fuel purchases for diesel generation. If the hydro is 100% grant funded, is it
expected that utility rates could be reduced to the range of $0.40 to 0.55 per kWh.
Elfin Cove Utility Commission is owned by the Community of Elfin Cove Non-Profit Corporation
and is not subject to federal income tax, so tax credits will not be realized by this project. However,
if renewable energy subsidies become available in our region we will be well placed to take
advantage of them to further reduce utility rates.
In addition to the economic benefits, the people of Alaska will benefit from cleaner air (including
reduced emissions of carbon dioxide), reduced noise, and the pride in knowing that we can rely
more on our own locally available renewable resources to support our economy and community.
5.1 Public Benefit for Projects with Private Sector Sales
Projects that include sales of power to private sector businesses (sawmills, cruise ships, mines,
etc.), please provide a brief description of the direct and indirect public benefits derived from the
project as well as the private sector benefits and complete the table below. See section 1.6 in the
Request for Applications for more information.
Renewable energy resource availability (kWh per month) Not applicable.
Estimated sales (kWh) Not applicable.
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Revenue for displacing diesel generation for use at
private sector businesses ($)
Not applicable.
Estimated sales (kWh) Not applicable.
Revenue for displacing diesel generation for use by the
Alaskan public ($)
Not applicable.
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SECTION 6– SUSTAINABILITY
Discuss your plan for operating the completed project so that it will be sustainable.
Include at a minimum:
• Proposed business structure(s) and concepts that may be considered.
• How you propose to finance the maintenance and operations for the life of the project
• Identification of operational issues that could arise.
• A description of operational costs including on-going support for any back-up or existing
systems that may be require to continue operation
• Commitment to reporting the savings and benefits
When the hydroelectric project is completed, it will be integrated into the overall power generation
system for Elfin Cove. The Community of Elfin Cove Non-Profit Corporation, through its subsidiary,
the Elfin Cove Utility Commission (ECUC) already has a system in place for operation and
maintenance of our system, setting price structures, billing and reporting, all of which allow us to
operate our electrical system in a sustainable manner. We already have personnel on staff to
implement our existing system; those personnel are competent to deal with the expanded
responsibility brought on by the addition of a hydroelectric power plant.
ECUC operates in the black and has no debt burden. The addition of the hydroelectric power plant
should allow us to continue operating in that manner, and to save for future infrastructure needs.
By providing for most of our electric power needs for nine months of the year, and a smaller
proportion of those needs for the remaining three months, this project will allow us to reduce our
consumption of diesel fuel, and thereby to reduce the effect of fuel price variability on our
operations. Among other benefits, it will allow us to reduce our electric rates.
As a working business plan, we have the Business Operating Plan of the Elfin Cove Utility
Commission Electric Utility Upgrade Project. The plan, prepared in 2007, is still in review, but it is
a blueprint for sustainable operations and management of our electric utility and we are following it.
This proposed hydroelectric project, when integrated into our Community power system, will
therefore bring increased affordability, stability and predictability to the financial operation of our
electric utility. This will tend to increase the desirability of Elfin Cove as a place to live and work,
improving the community's long term sustainability and security.
Excess energy from the hydro may be used for other economic development activities, such as
installing an ice machine to provide ice to the local commercial fishing fleet or other beneficial
uses.
SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS
Discuss what you have done to prepare for this award and how quickly you intend to proceed with
work once your grant is approved.
Tell us what you may have already accomplished on the project to date and identify other grants
that may have been previously awarded for this project and the degree you have been able to
meet the requirements of previous grants.
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The proposed project is an addition to the third phase of an ongoing effort to develop hydroelectric
power for Elfin Cove. This grant application is a proactive move on the part of the community to
secure additional funds so our permitting and design efforts are not interrupted due to shortage of
funds. The permitting phase is well underway, and we expect to be performing remaining field
studies for this project in the summer of 2015.
The project began over 25 years ago, with a reconnaissance study by the Alaska Power Authority.
In 2008, the Community of Elfin Cove began Phase 2, which focused on stream-gauging to collect
data needed for design and engineering of the project. Under Phase 2, the community produced a
new reconnaissance study to confirm that the Crooked Creek / Jim’s Lake project is still the best
project for the community. In 2011, the Community of Elfin Cove completed the feasibility study for
the project which better defined the proposed project and confirmed that the Crooked Creek / Jim's
Lake project is the best project for the community. These studies are drawing upon continuing
stream gauging efforts and other data collection activities completed under the Phase 2 funding.
In 2013, the Community of Elfin Cove began Phase 3, Permitting and Design, of the Crooked
Creek / Jim's Lake hydroelectric project.
The community is successfully meeting all of the requirements for previous grants for this project.
We have a hydroelectric engineering firm, and stream-gauging expert under contract as part of
Phase 3, and our working relationship with these consultants is a productive one, so we have the
expertise ready to complete the current design/permitting phase of the project. Award of this grant
will insure that we have sufficient funds to complete the design/permitting phase without delay.
Prior to Phase 2 and 3, we have received no other grants or other funding for this hydroelectric
project; however, we have received federal grant funding from the USDA Rural Utilities Service to
upgrade our diesel generator power plant, and portions of the electric distribution system. That
project, which was administered partially on the local level, is substantially complete. The project is
in operation, and is already successful in improving the fuel efficiency of our electric power system.
SECTION 8 – LOCAL SUPPORT AND OPPOSITION
Discuss local support and opposition, known or anticipated, for the project. Include letters of
support or other documentation of local support from the community that would benefit from this
project. The Documentation of support must be dated within one year of the RFA date of July 2,
2014
The community’s on-going efforts to obtain funding for hydroelectric development have met with
enthusiastic support (including unanimously-approved resolutions) from the Community of Elfin
Cove.
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SECTION 9 – GRANT BUDGET
Tell us how much you are seeking in grant funds. Include any investments to date and funding
sources, how much is being requested in grant funds, and additional investments you will make as
an applicant.
9.1 Funding sources and Financial Commitment
Provide a narrative summary regarding funding source and your financial commitment to the
project
For Phase 3B (proposed here), the total funds needed are $111,200, which would consist of
$102,300 in grant funding and $8,800 in local matching funds. In addition, there will be in-kind
contributions of local labor, materials, tools, and logistical support (i.e., transport by boat and other
access to the project site)
For Phase 3, the design and permitting now in progress, we have committed $48,000 in community
funds to match the $347,000 in grant money we were awarded for Jim's Lake and Crooked Creek
Hydro - Final Design and Permitting.
9.2 Cost Estimate for Metering Equipment
Please provide a short narrative, and cost estimate, identifying the metering equipment, and its
related use to comply with the operations reporting requirement identified in Section 3.15 of the
Request for Applications.
Project design specifications for the hydroelectric project switchgear and controls will include the
requirement to generate electronic reports of hydroelectric project output from the two plants and
incorporate generation from the diesel power plant.
Electronic data reports of plant(s) generation and calculation of displaced diesel fired generation
will be combined with monthly operator reports that identify operation and maintenance activities
and issues. An annual report will be prepared and submitted to AEA that meets the requirements
of section 3.15 of the RFA for 10 years after project completion.
It is anticipated that the generation of the annual report will cost $4,000 per year.
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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 and Commissioning). Please use the tables provided
below to detail your proposed project’s budget. Be sure to use one table for each phase of your
project.
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 at 907-771-3031 or by emailing the Grants
Administrator, Shawn Calfa, at scalfa@aidea.org.
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 Milestone list below. )
$ $ $
FERC Licensing Process March 2016 $51,500 $4,450 Cash / in-kind $55,600
Environmental & Technical
Studies Nov 2015 $51,500 $4,450 Cash / in-kind $55,600
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
TOTALS $102,300 $8,900 $111,200
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $102,300 $8,900 $111,200
Construction Services $ $ $
Other $ $ $
TOTALS $102,300 $8,900 $111,200