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HomeMy WebLinkAboutREFRoundIXApplicationELV_CrookedCk_JimsLk_Hydro_DesPermRenewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 1 of 30 7/8/14 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/Programs/Renewable-Energy-Fund/Rounds#round9.  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 (e.g. final design, construction) for the same project may be submitted as one application.  If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for each phase of the project.  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. Supporting documentation may include, but is not limited to, reports, conceptual or final designs, models, photos, maps, proof of site control, utility agreements, power sale agreements, relevant data sets, and other materials. Please provide a list of supporting documents in Section 11 of this application and attach the documents to your application.  If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. Please provide a list of additional information; including any web links, in section 12 of this application and attach the documents to your application. For guidance on application best practices please refer to the resource specific Best Practices Checklists; links to the checklists can be found in the appendices list at the end of the accompanying REF Round IX RFA.  In the sections below, please enter responses in the spaces provided. You may add additional rows or space to the form to provide sufficient space for the information, or attach additional sheets if needed. 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. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 2 of 30 7/8/14  In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 3 of 30 7/8/14 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) 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 # Tax Status: ☐ For-profit ☐ Non-profit ☒ Government (check one) Date of last financial statement audit: 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 SIGNATORY AUTHORITY CONTACT INFORMATION Name: Title: Kelly Crump President, CECNPC Mailing Address: P.O. Box 2 Elfin Cove, AK 99825 Telephone: Fax: Email: (907) 239-2226 (907) 239-2226 1.1.2 Applicant Alternate Points of Contact Name Telephone: Fax: Email: Dennis Meier 907-239-2205 907-239-2226 dennis@tanaku.com Mary Crump 801-451-2701 907-239-2226 elfincovesecretary@gmail.com Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 4 of 30 7/8/14 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, 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) ☒ 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/Programs/Renewable-Energy-Fund/Rounds#round9. (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) Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 5 of 30 7/8/14 SECTION 2 – PROJECT SUMMARY 2.1 Project Title Provide a 4 to 7 word title for your project. Type in the space below. Elfin Cove Hydroelectric Permitting 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 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 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 IX Grant Application - Standard Form AEA 15003 Page 6 of 30 7/8/14 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 G-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. 2.5 Scope of Work Provide a 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. 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. Study requests received from the U.S. Forest Service in July 2015 confirmed the community concern that more extensive resource studies will be required 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. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 7 of 30 7/8/14 SECTION 3 – Project Management, Development, and Operation 3.1 Schedule and Milestones Criteria: Stage 2-1.A: The proposed schedule is clear, realistic, and described in adequate detail. 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 in 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. Add additional rows as needed. Milestones Tasks Start Date* End Date Deliverables Task 4d: Environmental and technical studies Botanical survey (rare, sensitive, invasive plants) 7/1/16 10/1/16 Study report(s) “ Geotechnical studies to evaluate impacts of raising Jim’s Lake level, other project features. 7/1/16 10/1/16 Study report(s) “ Wildlife surveys (multiple trips required to quantify requested presence/abundance/utilization by transient and migrating species (birds, etc.) 7/1/16 10/1/16 Study report(s) “ Recreational surveys and studies 7/1/16 10/1/16 Study report(s) “ Study of any mining claims, mineralization and potential mining value of project site 7/1/16 10/1/16 Study report(s) “ Viewshed and aesthetics study 7/1/16 10/1/16 Study report(s) “ Subsistence use surveys and studies 7/1/16 10/1/16 Study report(s) “ Cultural resources studies 7/1/16 10/1/16 Study report(s) * Existing design/permit grant/match funds may be used to accelerate study start dates prior to 7/1/2016 if beneficial to the overall project schedule. Some studies (e.g., wildlife, botanical studies) may need to be started in the spring to observe early vegetation stages or document transient presence of wildlife. ECUC will coordinate with AEA on specific study schedules and budgets once study plans are finalized in fall 2015. 3.2 Budget Criteria: Stage 2-1.B: The cost estimates for project development, operation, maintenance, fuel, and other project items meet industry standards or are otherwise justified. 3.2.1 Budget Overview Describe your financial commitment to the project. List the amount of funds needed for project completion and the anticipated nature and sources of funds. Consider all project phases, including future phases not covered in this funding request. Elfin Cove has demonstrated a consistent and substantial financial commitment to this project. In addition to past matching funds and the in-kind services provided by many of our residents, the community has been allocating the majority of our state revenue sharing receipts to our hydro project fund for many years so that we may one day realize the benefits of this important project. Elfin Cove recognizes the state’s current budget situation and that availability of grant funds will likely be limited for project construction. We have a proven track record of being willing to finance our capital projects through loans. Elfin Cove is one of the few – perhaps the only – rural community in Alaska that financed our new bulk fuel facility through loans. We are still paying off the capital cost of our bulk fuel facility through a fuel surcharge. We understand the financial commitment required to advance capital projects, and we have demonstrated the capability to Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 8 of 30 7/8/14 responsibly manage long term debt associated with important community capital projects. When the time comes, we are prepared to make similar decisions and commitments for the hydro project. For this Phase of the project, 3B - Project Permitting (proposed here) the total funds needed are $110,000, which would consist of $88,000 in grant funding, and $22,000 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). We propose that the match will be cash, at a minimum of $5,000, less the agreed market value of any in-kind services the community is able to provide to advance the project. Based on current information and this grant request, the design / permitting budget is $505,000, and the construction budget is $3,200,000, which includes a 25% contingency of $640,000. 3.2.2 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. 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 at 907-771-3031 or by emailing the Grants Administrator, Shawn Calfa, at scalfa@aidea.org. Milestone or Task RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In-kind/Federal Grants/Other State Grants/Other TOTALS Task 4d: Environmental and technical studies (note 1) 1. - Botanical survey (rare, sensitive, invasive plants) 2. - Geotechnical studies to evaluate impacts of raising Jim’s Lake level, other project features. 3. Wildlife surveys (multiple trips required to quantify requested presence/abundance/utilization by transient and migrating species (birds, etc.) 4. Recreational surveys, study 5. Study of any mining claims, mineralization and potential mining value of project site 6. Viewshed and aesthetics studies 7. Subsistence use study 8. Cultural resources studies $88,000 $22,000 Cash/ in-kind $110,000 TOTALS $88,000 $22,300 $110,000 Budget Categories: Direct Labor & Benefits $ $ $ Travel & Per Diem $ $ $ Equipment $ $ $ Materials & Supplies $ $ $ Contractual Services $88,000 $22,000 Cash/ in-kind $110,000 Construction Services $ $ $ Other $ $ $ TOTALS $88,000 $22,000 $110,000 Note 1: Individual study scopes and budgets are still being finalized and will be presented to AEA when agreed with applicable resource agencies. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 9 of 30 7/8/14 3.2.3 Cost Justification Indicate the source(s) of the cost estimates used for the project budget. Cost for design / permitting phase is based on our existing contract with our engineering consultant and in-progress budgets for study scopes currently being negotiated with resource agencies.\ Cost for construction is based on engineer’s estimate in January 2014 conceptual design report, with construction contingency increased to 25%. 3.2.4 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 $ 88,000 Cash match to be provided (minimum $5,000 cash) $ 22,000 In-kind match to be provided Total costs for project phase(s) covered in application (sum of above) $110,000 3.2.5 Total Project Costs Indicate the anticipated total cost by phase of the project (including all funding sources). Use actual costs for completed phases. Reconnaissance $ 0 Feasibility and Conceptual Design $ 130,000 (approx.) Final Design and Permitting $ 505,000 Construction $3,200,000 Total Project Costs (sum of above) $3,835,000 3.2.6 Operating and Maintenance Costs O&M costs can be estimated in two ways for the standard application. Most proposed RE 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. Options O&M Impact of proposed RE project 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. $not applicable. 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 2. Estimated hours that diesel generation will be off per year. 3. Annual O&M costs associated with the proposed renewable project. 1. Estimated at 266,300 kWh x $0.265/kWh = $70,569. (based on hydro kWh in 1/20/14 design report and AEA standard cost for diesel O&M for small gen-sets). 2. Hours diesel OFF/year: ~7,450 hours 3. $32,000 annually. Based on 1% of project CapEx per AEA guidance, Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 10 of 30 7/8/14 3.3 Project Communications Criteria: Stage 2-1.C: The applicant’s communications plan, including monitoring and reporting, is described in adequate detail. Describe how you plan to monitor the project and keep the Authority informed of the status. 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. 3.4 Operational Logistics Criteria: Stage 2-1.D: Logistical, business, and financial arrangements for operating and maintaining the project throughout its lifetime and selling energy from the completed project are reasonable and described in adequate detail. Describe the anticipated logistical, business, and financial arrangements for operating and maintaining the project throughout its lifetime and selling energy from the completed project. The project will be owned and operated by the electric utility. Power will be fed into the utility grid and to existing ratepayers. The electric utility has existing logistical, financial and business systems in place to manage the utility with the hydro project operational. The hydro will be integrated with the utility’s existing distribution system and hydro electricity will be sold to existing ratepayers exactly like current diesel-fired electricity. The community intends to identify plant operators prior to construction and involve them with construction where appropriate so they will be familiar with how the project was built, as we believe this will benefit the utility in the long-term with project familiarity and ability to successfully and efficiently perform OMR&R activities. Utility rates will be set through our tariff to cover costs, including existing utility expenses, debt service, hydro O&M costs, and a sinking fund to cover long-term repair and replacement costs over the life of the hydro systems. There will be excess energy from the project that can be used for heating buildings on an interruptible basis. Project economics assume that the existing waste heat loop serving the community building and shop off the diesel plant will be fitted with an electric boiler (hydro load bank governor) to replace this heat and keep the diesel plant warm. There is sufficient excess energy to fit additional buildings with interruptible electric services also. Additional revenue from this excess energy will help lower electric rates. Sale of excess energy from the project on an interruptible basis will require revision of the utility’s tariff for a new customer class and rate. Customers utilizing this class and rate will require a separate meter base and customer-owned circuitry to the interruptible loads. Communications will be required between the Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 11 of 30 7/8/14 utility and the meter to regulate availability of excess energy to ratepayers based on system load and available excess hydro capacity. The community understands that this hydro project will present some unique operational and maintenance complexities due to the fact that there are two separate hydro systems operating in series. We deliberated on the selection of this system over other systems during the reconnaissance study, and decided that the benefits of this system (significantly greater energy generation) outweighed the increased complexity. We feel that the complexity can best be managed by first understanding that the community will simply have two hydro systems in series using the same water resource twice. While this introduces additional O&M effort as many of the assets are duplicated (two intakes, two powerhouses, etc.) the overall system is not intrinsically more complicated as a result. Complexity is introduced at the integration and controls level, and we will carefully review the system controls specification to make sure the controls automate and integrate the systems as much as practical, but also allow for manual operational modes to allow the system to stay operational in the event of hardware failure or other problems. We will require the contractor to prepare a detailed O&M manual with extensive troubleshooting resources, possibly including on- call support, so we can methodically troubleshoot and correct problems when they do occur. SECTION 4 – QUALIFICATIONS AND EXPERIENCE 4.1 Project Team Criteria: Stage 2-2.A: The Applicant, partners, and/or contractors have sufficient knowledge and experience to successfully complete and operate the project. If the applicant has not yet chosen a contractor to complete the work, qualifications and experience points will be based on the applicant’s capacity to successfully select contractors and manage complex contracts. Criteria: Stage 2-2.B: The project team has staffing, time, and other resources to successfully complete and operate the project. Criteria: Stage 2-2.C: The project team is able to understand and address technical, economic, and environmental barriers to successful project completion and operation. Criteria: Stage 2-2.D: The project team has positive past grant experience. 4.1.1 Project Manager Indicate who will be managing the project for the Grantee and include contact information, and a resume. 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. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 12 of 30 7/8/14 On an as-needed basis, the community’s project managers are also able to draw on the experience of our consultant, Polarconsult Alaska, Inc. for project management guidance. Polarconsult’s project manager, Joel Groves, is always accessible and often able to provide documents, references or insights to help us respond to issues or understand situations that arise with the project. 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. 4.1.2 Expertise and Resources Describe the project team including the applicant, partners, and contractors. Provide sufficient detail for reviewers to evaluate: • the extent to which the team has sufficient knowledge and experience to successfully complete and operate the project; • whether the project team has staffing, time, and other resources to successfully complete and operate the project; • how well the project team is able to understand and address technical, economic, and environmental barriers to successful project completion and operation. 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. Include brief resumes for known key personnel and contractors 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 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 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. 4.1.3 Project Accountant(s) Indicate who will be performing the accounting of this project for the grantee and include a resume. 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 financial accounting 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. 4.1.4 Financial Accounting System 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 Renewable Energy Fund Grant Program. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 13 of 30 7/8/14 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. 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. 4.2 Local Workforce Criteria: Stage 2-2.E: The project uses local labor and trains a local labor workforce. Describe how the project will use local labor or train a local labor workforce. During the study, permitting, and design phases, the project has used local labor for much of the field work that has been conducted. Local labor has participated in surveying, hydrology studies, transportation and logistics, and related items. Use of local labor during construction will depend on how the project is managed and availability and willingness of qualified individuals to work on the project. The community may elect to send one or more people to AVTEC or similar hydro operator training courses before project commissioning so they are familiar with the particulars of operating and maintaining small hydro systems. The community intends to identify plant operators prior to construction and involve them with construction where appropriate so they will be familiar with how the project was built, as we believe this will benefit the utility in the long-term with project familiarity and ability to successfully and efficiently perform operations, maintenance, repair and replacement (OMR&R) activities. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 14 of 30 7/8/14 SECTION 5 – TECHNICAL FEASIBILITY 5.1 Resource Availability Criteria: Stage 2-3.A: The renewable energy resource is available on a sustainable basis, and project permits and other authorizations can reasonably be obtained. 5.1.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available, including average resource availability on an annual basis. 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. 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 6 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. 5.1.2 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 describe potential barriers A FERC license will be required for the project. We obtained a preliminary permit in 2013, and started the FERC licensing process in early 2015. We are using the traditional Licensing Process, and have completed Stage 1 Consultations with agencies and project stakeholders and are currently finalizing study plans. The FERC process will involve coordination with a number of resource agencies, including, but not limited to, the following: Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 15 of 30 7/8/14 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. 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. The FS estimates their permit will take 6 months to issue after the FERC license is issued. Alaska Department of Natural Resources The State of Alaska owns tidelands and navigable bottomlands, which it manages through the Department of Natural Resources (DNR). We will need to obtain permits from DNR for structures installed in tidelands. DNR would also need to issue water rights for the project. We applied for water rights in summer 2014 (Attachment G.6). State land in Elfin Cove proposed for the access trail and power line is also managed by DNR as a undeveloped public right of way. Rights to develop this corridor will be obtained from DNR. 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. 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). Other state and federal agencies, include ADNR SHPO, NMFS, USFWS, NPS, and EPA will be involved in project permitting in review and comment roles on the above-listed permitting processes. 5.2 Project Site Criteria: Stage 2-3.B: A site is available and suitable for the proposed energy system. 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. The project is located within the Tongass National Forest, except for a portion of the access trail and power line in Elfin Cove which is located on State land. We are working closely with the U.S. Forest Service (FS) as part of the FERC licensing process, and all indications are that the FS will Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 16 of 30 7/8/14 issue a special use permit for the project after the FERC license is issued. The FS is currently finalizing a special use permit for required field studies to support the FERC licensing (and FS permitting) processes. ADNR has indicated that access to develop the right of way for project access and utilities will be allowed upon approval of development plans and necessary permitting is completed. The site is suitable for the project, in that the topography and hydrology of both Crooked Creek and Jim’s Lake are well-defined and will support the proposed hydropower project. 5.3 Project Risk Criteria: Stage 2-3.C: Project technical and environmental risks are reasonable. 5.3.1 Technical Risk Describe potential technical risks and how you would address them. Project technical risks are: 1. Geotechnical risk. Geotechnical conditions in the project area are not expected to be easy, with much of the project site characterized by steep terrain, shallow bedrock, and soils with poor engineering properties. The prohibitive cost of obtaining useful geotechnical data pre-construction (with no equipment access) compounds the problem. These risks will be addressed by conservative design of civil works and careful selection of project contractor for construction of the project access. The contractor will need to demonstrate successful on-budget experience building trails in similar Southeast Alaska terrain. 2. Project complexity. The hydro project consists of two separate hydro systems operating in series. This in itself does not present a technical risk, as the two systems can operate individually and are little different than two diesel gen-sets operating in a powerhouse. The complexity arises in successfully designing, commissioning, operating, and maintaining the supervisory control and data acquisition (SCADA) system that will automate control of the hydro systems and integrate them with the existing diesel plant. The Community will carefully review the system controls specification to make sure the controls automate and integrate the systems as much as practical, but also allow for manual operational modes to allow the system to stay operational in the event of hardware failure or other problems. We will also carefully review the control contractors qualifications, successful projects, and references to select a contractor that can build a robust and appropriate SCADA for our project. We expect to utilize AEA’s expertise as well on this critical task. We will require the contractor to prepare a detailed O&M manual with extensive troubleshooting resources, possibly including on-call support, so we can methodically troubleshoot and correct problems when they do occur. 5.3.2 Environmental Risk Explain 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 Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 17 of 30 7/8/14  Identify and describe 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. Stage 1 Consultation of the FERC licensing process produced a series of study requests from agencies and project stakeholders. Our consultant is working with the agencies and project stakeholders to develop agreed study plans to address outstanding environmental questions on the above topics. These will be completed this year so the studies can be completed next summer. The grant funds requested in this application are to cover the cost of the resource surveys that will 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. 5.4 Existing and Proposed Energy System Criteria: Stage 2-3.D: The proposed energy system can reliably produce and deliver energy as planned. 5.4.1 Basic Configuration of Existing Energy System Describe 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 alarm systems were installed as part of the project. Most recent data shows generation efficiencies of approximately 12 kW per gallon of diesel burned (12.05 kWh/gal in FY 2014). 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. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 18 of 30 7/8/14 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. 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 - ~8 years old. v. Efficiency of generators/boilers/other 12.1 kW/gal (2012-13 PCE Report) vi. Is there operational heat recovery? (Y/N) If yes estimated annual displaced heating fuel (gallons) Y (gallons) 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] 277,540 kWh (FY 2014, PCE report) ii. Fuel usage Diesel [gal] 23,023 (FY 2014, PCE report) Other -- iii. Peak Load Approx. 250 kW (estimated) iv. Average Load 32 kW (FY 2014, PCE report) v. Minimum Load Approx. 20 kW (estimated) vi. Efficiency 12.05 kWh/gal (FY 2014, PCE report) vii. Future trends Up to 5 years ago, utility load was fairly stable. Over the past 5 years load decreased approximately 30% from that stable trend, but has stabilized again in recent years. FY 2014 load increased 10% over FY 2013 generation. Future load is projected to be flat to increasing due to lower rates. d) Annual heating fuel usage (fill in as applicable) 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. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 19 of 30 7/8/14 5.4.2 Future Trends Describe the anticipated energy demand in the community over the life of the project. Utility load was fairly stable and flat up to about 2010. From 2010 to 2012, load decreased approximately 30% due to the dramatic increase in electric rates. Load in FY 2014 was about 10% higher than in FY 2013, indicating our ratepayers have adapted to the new higher rates and load is expected to be stable again for the near future. Future price shocks (good or bad) will likely result in additional changes in utility load. The decline in load from 2010 to 2012 is attributed to conservation and energy efficiency efforts by local ratepayers in response to the extremely high cost of electricity. To the extent that decreased load is due to ratepayers transitioning to newer, more efficient appliances (CFL and LED lighting, etc.) the utility’s load profile will be permanently lower. To the extent that decreased load is due to ratepayers forgoing electricity usage, this decrease in demand will reverse if utility rates go down. The load decrease is likely a combination of both behaviors, but the mix is unknown. We expect that utility demand will increase again if utility rates decrease. The amount of the increase is difficult to predict on such a small system. We feel it is appropriate to plan for flat load growth over the life of the hydro project, and adapt rates and tariffs as needed to respond to changing load patterns in the future. 5.4.3 Impact on Rates Briefly explain what if any effect your project will have on electrical rates in the proposed benefit area over the life of the project. For PCE eligible communities, please describe the expected impact would be for both pre and post PCE. Impact on rates will depend on final project cost and financing means. Greatest rate reduction will occur if the construction is grant-funded. If construction is debt-financed, rates are expected to be comparable to current diesel-based rates and decrease over time as diesel costs continue their long-term escalation. 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 $37,000, consisting of hydro plant operating costs and decrease of $70,500, consisting of reduced diesel plant operating costs. Also setting aside $30,000 annually for a sinking fund for long-term hydro repair/replacement items, the net result is a projected decrease of $106,000 annually in utility expenses. This savings divided by total kWh sales of 225,593 (FY 2014) results in $0.47/kWh of potential rate reduction before PCE is considered, for a projected rate of $0.80 – 0.47 = $0.33/kWh. Debt service payments would reduce this savings. With the above assumptions, the PCE subsidy level is projected to decrease from $0.36/kWh to $0.17/kWh, for an effective PCE rate of approximately $0.16 per kWh. This is based on the same utility expenses above. Debt service would be included in PCE rate calculations, and would increase the PCE subsidy from this assumed level. 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  Optimum installed capacity  Anticipated capacity factor  Anticipated annual generation Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 20 of 30 7/8/14  Anticipated barriers  Integration plan  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. - 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. 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. 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 hydroelectric project. 35 kW run-of-river and 105 kW storage projects. Net capacity factor of 50%. b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] Approximately 613,800 kWh annually. ii. Heat [MMBtu] NA c) Proposed annual fuel usage (fill in as applicable) Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 21 of 30 7/8/14 i. Propane [gal or MMBtu] NA ii. Coal [tons or MMBtu] NA iii. Wood or pellets [cords, green tons, dry tons] NA iv. Other d) i. Estimate number of hours renewable will allow powerhouse to turn diesel engines off (fill in as applicable) 7,450 hours diesel off annually. 5.4.5 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. 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. Normal power plant instrumentation includes the metering necessary to meet AEA’s requirements. Electronic data reports of plant(s) generation and calculation of displaced diesel fired generation (based on kWh and assumed diesel efficiency) 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. Automated data flow to an AEA database is possible at limited incremental cost provided the capability is included when the plant controls and switchgear are originally commissioned. If this has to be added as a future retrofit, the cost would likely be significant, in the $10,000s. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 22 of 30 7/8/14 SECTION 6 – ECONOMIC FEASIBILITY AND BENEFITS 6.1 Economic Feasibility Criteria: Stage 2-4.A: The project is shown to be economically feasible (net positive savings in fuel, operation and maintenance, and capital costs over the life of the proposed project). 6.1.1 Economic Benefit Explain the economic 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:  Anticipated annual and lifetime fuel displacement (gallons and dollars)  Anticipated annual and lifetime revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate)  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 economic model used by AEA is available at http://www.akenergyauthority.org/Programs/Renewable-Energy-Fund/Rounds#round9. 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. Based on current studies, the community’s 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 estimated 2018 fuel price in Elvin Cove of $5.00/gallon, an annual savings from power plant fuel alone would be $103,000. Over the next 20 years, if fuel prices remained constant, this savings would amount to $2.06 million. AEA's economic model projects heating fuel cost in Elfin Cove at $4.05 a gallon in 2018 which is lower than current fuel prices and may not include the surcharge for debt service on the bulk fuel facility. AEA's fuel price projections are used for calculating project benefits. The project’s benefit/cost ratio using AEA’s 2015 model is 1.30. This includes the benefit of displacing 5,300 gallons of heating fuel annually with interruptible electric heat services. The AEA/ISER cost of diesel plant fuel is used as the cost for this heating fuel. 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. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 23 of 30 7/8/14 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. Based on market review, we do not believe green tags present a significant source of revenue for the utility; however we will continue to monitor such market opportunities and would pursue them if they would provide substantial revenue to the utility. Sale of excess energy on an interruptible basis can further reduce the community’s fuel usage and would provide an additional source of revenue to the electric utility. We plan to pursue implementation of metered interruptible loads at a discounted rate to be competitive with fuel oil. 6.1.2 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  Proposed rate of return from grant-funded project 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. The utility will sell electricity from the project to existing utility ratepayers in accordance with its tariff. Rates will be set by utility management to maintain the utility on a solid long-term financial footing. The utility has historically operated on a cost-basis, recovering costs and margin for unforeseen or non-recurring expenses. Accordingly, the utility will not realize a ‘rate of return’ (or a zero rate or return) from the project. 6.1.3 Public Benefit for Projects with Private Sector Sales For 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. ECUC will sell power to ratepayers under our existing tariff. No directed energy sales to private sector businesses is proposed. Renewable energy resource availability (kWh per month) NA Estimated sales (kWh) NA Revenue for displacing diesel generation for use at private sector businesses ($) NA Estimated sales (kWh) NA Revenue for displacing diesel generation for use by the Alaskan public ($) NA 6.2 Financing Plan Criteria: Stage 2-4.B: The project has an adequate financing plan for completion of the grant- funded phase and has considered options for financing subsequent phases of the project. 6.2.1 Additional Funds Identify the source and amount of all additional funds needed to complete the work in the phase(s) for which REF funding is being applied in this application. Indicate whether these 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. 6.2.2 Financing opportunities/limitations Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 24 of 30 7/8/14 If the proposed project includes final design or construction phases, what are your opportunities and/or limitations to fund this project with a loan, bonds, or other financing options? The community is open to financing construction with a combination of grants and loans to see the project completed and start realizing its benefits. While grants will of course provide the greatest immediate rate relief and public benefits, The community has previously debt-financed local infrastructure projects, and would consider debt finance for the hydro project. Our bulk fuel facility was financed with a loan from AEA/AIDEA. We are still paying off this loan and the loan is current. 6.2.3 Cost Overruns Describe the plan to cover potential cost increases or shortfalls in funding. Cost overruns in construction would be managed by providing sufficient contingency in the final construction budget. 6.2.4 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. Upon successful completion of the current phase, the community will be ready to build the project. The current construction cost estimate is $3,200,000, which includes a 25% contingency. This estimate will be updated at the end of the design/permitting process once final designs are available and final permit terms and conditions are known. The community will seek grants for project construction from available state and federal programs, but will also consider bonds or loans to finance the project. A combination of both may be in the best interest and most feasible to see the project completed in a reasonable time horizon. Grant funds for construction are expected to be difficult to obtain from the state in the current fiscal climate. Federal funds availability depends on annual appropriations, program criteria, and national competition for available funds and can be hard to predict. The community believes it has a good credit history and can secure reasonable financing. The community has not started to evaluate specific loan/bond programs at this time as the need for construction funds is still over a year away. 6.3 Other Public Benefit Criteria: Stage 3-4.C: Other benefits to the Alaska public are demonstrated. Avoided costs alone will not be presumed to be in the best interest of the public. Describe the non-economic public benefits to Alaskans over the lifetime of the project. For the purpose of evaluating this criterion, public benefits are those benefits that would be considered unique to a given project and not generic to any renewable resource. For example, decreased greenhouse gas emission, stable pricing of fuel source, won’t be considered under this category. Some examples of other public benefits include:  The project will result in developing infrastructure (roads, trails, pipes, power lines, etc.) that can be used for other purposes  The project will result in a direct long-term increase in jobs (operating, supplying fuel, etc.)  The project will solve other problems for the community (waste disposal, food security, etc.)  The project will generate useful information that could be used by the public in other parts of the state  The project will promote or sustain long-term commercial economic development for the community Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 25 of 30 7/8/14 In consultations with U.S. Forest Service, the project access trail from Elfin Cove to Little Sandy Beach was identified as a potential “overflow” destination for day excursions from small cruise ships that operate in the Cross Sound area and currently offer day excursions at Georges Island. It is possible that the U.S. Forest Service could provide trail maintenance funds for long-term O&M of the trail through this beneficial co-use of the project access trail. Lowering the cost of electricity will directly promote long-term commercial economic development in the community. Elfin Cove is a support center for commercial fishing, and lower-cost electricity will help us provide competitive services to the fleet. Lower cost electricity will also make the sport- fishing lodges in our community stay competitive in attracting clients for world class sport fishing opportunities. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 26 of 30 7/8/14 SECTION 7 – SUSTAINABILITY Describe your plan for operating the completed project so that it will be sustainable throughout its economic life. Include at a minimum:  Capability of the Applicant to demonstrate the capacity, both administratively and financially, to provide for the long-term operation and maintenance of the proposed project  Is the Applicant current on all loans and required reporting to state and federal agencies?  Likelihood of the resource being available over the life of the project  Likelihood of a sufficient market for energy produced over the life of the project 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. We continue to maintain stream gauges on the project creeks that were installed in 2008. All indications are that the water flow in Crooked Creek (the major supply for the project) will continue for the life of the project. SECTION 8 – PROJECT READINESS 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 Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 27 of 30 7/8/14  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 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 2016. 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 further delays. 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 complete. The project is in operation, and is already successful in improving the fuel efficiency of our electric power system. 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. The Documentation of support must be dated within one year of the RFA date of July 8, 2015. 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. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 28 of 30 7/8/14 SECTION 10 – COMPLIANCE WITH OTHER AWARDS Identify other grants that may have been previously awarded to the Applicant by the Authority 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 community has previously completed the following awards for this project: - AEA/Denali Commission Grant for Reconnaissance and Feasibility Studies. - AEA Grant for Design / permitting. (in progress). The community has previously completed the following awards from RUS managed by AEA: - Upgrade of diesel power plant and electric distribution system. - LOAN for new bulk fuel storage facility from AEA/AIDEA. SECTION 11 – LIST OF SUPPORTING DOCUMENTATION FOR PRIOR PHASES In the space below please provide a list additional documents attached to support completion of prior phases. The following documents are included in Attachment G to this application: - Reconnaissance Study - Feasibility Study - Conceptual Design Report - Interim Hydrology Report - FERC Correspondence on License Exemption - FERC PAD, NOI and Request to use TLP - FERC approval of TLP, Notice of Intent and Commencement of Proceeding - USFS Special use permit Application for studies and for project - ADNR water rights application - Letter from ADFG stating fish habitat permit not required for the project - Meeting transcripts from Stage 1 licensing process consultation meetings - Study requests and comments on PAD from agencies and project stakeholders received under Stage 1 consultations for FERC licensing SECTION 12 – LIST OF ADDITIONAL DOCUMENTATION SUBMITTED FOR CONSIDERATION In the space below please provide a list of additional information submitted for consideration.