Loading...
HomeMy WebLinkAboutCEC_CLPW_REF IX_Application_FinalCK Crater Lake Power & Water Project AEA Grant Application REF Round IX Cordova Electric Cooperative September 2015 Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 1 of 23 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 23 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 23 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) Cordova Electric Cooperative, Inc. Type of Entity: Fiscal Year End: Rural Electric Utility December 31 Tax ID # Tax Status: ☐ For-profit ☒ Non-profit ☐ Government (check one) Date of last financial statement audit: Mailing Address: Physical Address: PO Box 20 705 Second Street Cordova, AK 99574-0020 Cordova, AK 99574 Telephone: Fax: Email: (907) 424-5555 (907) 424-5527 ckoplin@cordovaelectric.com 1.1 Applicant Point of Contact / Grants Manager Name: Clay Koplin Title: Chief Executive Officer (CEO) Mailing Address: PO Box 20 Cordova, AK 99574-0020 Telephone: Fax: Email: (907) 424-5555 (907) 424-5527 ckoplin@cordovaelectric.com 1.1.1 APPLICANT SIGNATORY AUTHORITY CONTACT INFORMATION Name: Clay Koplin Title: Chief Executive Officer (CEO) Mailing Address: PO Box 20 Cordova, AK 99574-0020 Telephone: Fax: Email: (907) 424-5555 (907) 424-5527 ckoplin@cordovaelectric.com 1.1.2 Applicant Alternate Points of Contact Name Telephone: Fax: Email: Valerie Covel 907-424-5555 907-424-5527 vcovel@cordovaelectric.com 1.2 Applicant Minimum Requirements Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 4 of 23 7/8/14 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) See Appendix A (Board will be considering an updated version in October and we will forward upon execution. ☒ 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 23 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. Crater Lake Power and Water Project 2.2 Project Location 2.2.1 Location of Project – Latitude and longitude (preferred), street address, or community name. Latitude and longitude coordinates may be obtained from Google Maps by finding you project’s location on the map and then right clicking with the mouse and selecting “What is here? The coordinates will be displayed in the Google search window above the map in a format as follows: 61.195676.-149.898663. If you would like assistance obtaining this information please contact AEA at 907-771-3031. Latitude 60.572401N, Longitude 145.699744W Crater Lake, Cordova Alaska, Township 15S, Range 3W, Copper River Meridian 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. Cordova, Alaska Eyak Village, Alaska 2.3 Project Type Please check as appropriate. 2.3.1 Renewable Resource Type ☐ Wind ☐ Biomass or Biofuels (excluding heat-only) ☒ Hydro, Including Run of River ☐ Hydrokinetic ☐ Geothermal, Excluding Heat Pumps ☐ Transmission of Renewable Energy ☐ Solar Photovoltaic ☒ Storage of Renewable ☒ Other (Municipal Water Storage) ☐ 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 23 7/8/14 2.4 Project Description Provide a brief one paragraph description of the proposed project. Crater Lake is a perched lake located directly above existing City of Cordova chlorinator building and water supply line to Cordova, and a CEC transmission line from the Humpback Creek Hydroelectric Project to Cordova. The reconnaissance study (Appendix B) indicates the project can deliver 2,000,000 kWh of direct energy. Additional diesel fuel would be conserved by block loading Orca Diesel Generation Plants to sharply improve operating efficiency. This makes the project the most attractive opportunity to further reduce diesel fuel use, consistent with AEA goals and the CEC strategic plan (2014 plan attached for reference, Appendix C). The Crater Lake Hydroelectric Project represents a relatively low risk, low cost, high value hydroelectric project with multiple extended public benefits. 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. The design and permitting phase of the Crater Lake Power and Water Project (CLPWP) will complete a bid-ready design for construction, and construction phase permitting including the following tasks and elements: 1) Dam and Intake Design including geotechnical field reconnaissance/drilling as the first priority 2) Penstock Design including routing, support, and materials based on geotechnical assessment 3) Power Plant Design including building, turbine-generators, switchgear, SCADA, communications 4) Water Plant Design including building, treatment, pumps, motor control center, valves 5) Develop Power and Water dispatch preferences and priorities and integration/resource share 6) Identify project funding through commissioning phase 7) Secure construction permits including field work, studies, fees and authorizations as required 8) Bid Document or Construction Contract Preparation 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 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 Reconnaissance Study Evaluate project benefit, estimate project cost, apply for long-lead time permits including water rights and FERC non-jurisdictional determination, identify and engage landholders and stakeholders. The results of this evaluation were a decision point in determining whether a feasibility study is warranted. This milestone is substantially complete. 6/18/14 9/19/14 (complet ed) CEC Crater Lake Reconnaissance Report, 9/19/14, including high level analysis of energy resource, compatibility with existing energy system, conceptual system design, conceptual system costs, estimated benefits, energy purchase/sale structure, land ownership, permitting, environmental with observations and recommendations. (See Appendix B Reconnaissance Report) Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 7 of 23 7/8/14 Feasibility Study Hydrological analysis, geological analysis, operational model development, cost/benefit analysis, conceptual design, and estimated construction cost. Awarded to McMillen-Jacobs Associates, August 2015. 8/7/15 12/31/15 Deliverables are those specified in the feasibility RFP dated May, 2015 including site visit, conceptual design, project operation and estimated generation, assessment of feasibility factors, project cost estimate, hydroelectric and water system supply project economics and benefit/cost analysis, selection of preferred alternative and final report. See Appendix D Feasibility Analysis RFP) Design Assessment of geologic and geotechnical site conditions for design and fatal flaw analysis consideration. Final design of power and water dam/intake, penstock and supports, power house and water treatment building(s) and associated equipment and gear. Permit preparation including necessary fieldwork and studies. Preparation of bid documents and/or construction contract development. 7/1/16 3/1/17 Construction Bid, Award, Build, Commission, Evaluate Performance – this is an estimated construction date, and is not a milestone included in this grant application. 7/1/17 7/1/19 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. Geotechnical field work, design, and bid: $1,497,680 Construction: $10,000,000* * - rough estimate as a placeholder; the deliverable for feasibility study is a Level 4 construction estimate per ACEC guidelines that provides a anticipated accuracy range of +50% to -30%. 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. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 8 of 23 7/8/14 Milestone or Task Final Design and Permitting RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In-kind/Federal Grants/Other State Grants/Other TOTALS (List milestones based on phase and type of project. See sections 2.3 thru 2.6 of the RFA ) $ $ $ Geotechnical Field Assessment $ 470,000 $ 110,850 $ 100,000 cash $ 10,850 in-kind $ 580,850 Professional Survey $ 40,000 $ 13,480 $ 10,000 cash $ 3,480 in-kind $ 51,340 Dam Design $ 30,000 $ 11,340 $ 10,000 cash $ 1,340 in-kind $ 43,480 Penstock Design $ 50,000 $ 13,480 $ 10,000 cash $ 3,480 in-kind $ 63,480 Access Road Design $ 20,000 $ 8,480 $ 5,000 cash $ 3,480 in-kind $ 28,480 Powerhouse Design $ 200,000 $ 63,960 $ 50,000 cash $ 13,960 in-kind $ 263,960 Water Treatment Plant Design $ 150,000 $ 52,680 $ 50,000 cash $ 2,680 in-kind $ 202,680 Grading Design – Powerhouse and treatment plant footprint $ 20,000 $ 5,470 $ 5,000 cash $ 470 in-kind $ 25,470 Electrical Interconnect Design $ 10,000 $ 10,260 $ 5,000 cash $ 5,260 in-kind $ 20,260 Preconstruction Studies, Permits $ 112,000 $ 36,960 $ 30,000 cash $ 6,960 in-kind $ 148,960 SCADA SYSTEM Design $ 50,000 $ 18,720 $ 10,000 cash $ 8,720 in-kind $ 68,720 Project Management $75,000 $ 75,000 $ 75,000 cash $ 150,000 TOTALS $1,227,000 $ 420,680 $ 360,000 cash $ 60,680 in-kind $ 1,647,680 Budget Categories: Direct Labor & Benefits $ $ $ Travel & Per Diem $ $ $ Equipment $ $ $ Materials & Supplies $ $ $ Contractual Services $ $ $ Construction Services $ $ $ Other $ $ $ TOTALS $ $ $ 3.2.3 Cost Justification Indicate the source(s) of the cost estimates used for the project budget. Primary Design Phases – high level estimate by McMillen-Jacobs based on previous Alaska construction work. Of the high and low price ranges, high was selected to reflect inevitable unforeseen site challenges and design elements during final design. SCADA system estimated were prepared by CEC and a high level Electric Power Systems (EPS) system integrator with extensive remote Alaska plant design and commissioning experience, with a contingency included. 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 $ 1,227,000 Cash match to be provided $ 360,000 In-kind match to be provided $ 60,680 Total costs for project phase(s) covered in application (sum of above) $ 1,647,680 Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 9 of 23 7/8/14 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 $ 100,000 Feasibility and Conceptual Design (* - Estimated through completion) $ 180,000* Final Design and Permitting $ 1,647,680 Construction (** - estimate to be revised at feasibility conclusion) $ 10,000,000** Total Project Costs (sum of above) $ 11,927,680 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. $ 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. $10,800 ($30/hr, 336 hrs) 2. Hours diesel OFF/year: 2 full weeks = 336hrs 3. $63,000 (estimate of 1/3 HBC) 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. CEC and all contractors and subcontractors will establish regular communications procedures among all project team members. As in previous hydro project construction, we will establish an email listserv for the Crater Lake project so that all team members receive regular updates; both narrative progress reports and photo documentation of construction progress. We will continue to use these procedures, modifying them as appropriate for the Crater Lake project during construction, commissioning and post construction phases of the project. Attached is a sample report used during our Humpback Creek project construction. (Appendix E) 3.4 Operational Logistics Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 10 of 23 7/8/14 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 feasibility and design phase will consider the safe and reasonable accessibility of project features, and contingencies for emergency access. An adequate maintenance budget is financed through the annual CEC budget process. As owner/operation of two dynamic and maintenance intensive run-of-river hydro projects with more challenging logistics such as ocean-only access and severe avalanche/snow danger in winter, Crater Lake poses a lesser logistical challenge than existing projects. Features include standardized electrical and mechanical equipment for which CEC already stocks spare parts, high quality video cameras for monitoring and operating sites visually despite remoteness, and SCADA system data collection and storing for maintenance applications. An access path or other means of emergency access and egress are a highly desired design element, and it appears that at least two alternatives may be available for an access trail. 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. CEC representatives Clay Koplin and Valerie Covel will manage the grant administration, contractual requirements of vendors to the design work, and (SCADA) subcontractor for SCADA system and plant operating design. CEC will procure the services of an independent project manager with engineering, quality control and contract administration experience. Based on previous construction projects, CEC estimates these costs to be $150,000 for project management through design and permitting, which can include a complexity of studies and facilitation of efforts. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 11 of 23 7/8/14 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 Key management staff is technically skilled and experienced in the electric utility industry and at CEC. Clay Koplin, Chief Executive Officer at CEC, currently holds a bachelors degree in electrical engineering and an MBA from Kelley School of Business. He is a registered professional engineer in the State of Alaska with 17 years of experience at CEC, 23 years total in the industry. Valerie Covel is CEC’s Manager of Administration & Finance and has managed CEC’s accounting finance for 24 years, including the Power Creek Hydro Project, Humpback Creek Hydro Project and other large capital projects, 34 years total in the industry. Sean Groom, Manager of Power Production at CEC. Although recently hired at CEC, Sean has over 20 years of experience in the field of power plant utilities and power generation maintenance and management, as well as experience in commissioning new power generation projects with General Electric and Alstom Power. Participation of these CEC staff in leadership positions in the National Hydropower Association, Northwest Hydropower Association, and Northwest Public Power Association has built an extensive professional and contractor network for CEC, particularly in hydropower development. Clay, Valerie, and Sean interact regularly and frequently with Federal and State agencies both in permitting and in compliance venues, and have a good performance and compliance record with ADEC, USACOE, US EPA, FEMA, FERC, ADF&G, ADOT, USFW, NMFS, USFS, SHPO, and ADNR. CEC staff has the available staff time and resources to devote the administering and supporting of the Crater Lake Power and Water Project through design and construction phases, much like the successful Power Creek Hydroelectric project and Humpback Creek Hydroelectric project. The CEC project team is a diverse skill set including project management, engineering, business management, project operations and maintenance, and new project construction and commissioning. 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. Valerie Covel, Manager of Administration & Finance, Cordova Electric Cooperative, Inc., P.O. Box 20, Cordova, Alaska 99574. Phone number (907)424-5555; Fax (907)424-5527 and email address vcovel@cordovaelectric.com. See attached resume Appendix E. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 12 of 23 7/8/14 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. Invoices relative to the project will be reviewed by Manager of Finance and then submitted to CEO for certification to ensure validity. Costs in excess of CEO spending authority must also be approved by our Board of Directors. Our current accounting system is a work order/project based system utilized in our two prior hydroelectric projects/grants. Overhead allocations are performed in accordance with RUS utility standards and are easily discernible. These costs and other unallowable costs will be monitored closed and will not be included in our submissions. As in the past, detailed documentation will be submitted as an attached to each grant reimbursement request. 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. As is our tradition and policy, CEC strives to utilize local labor whenever possible. In the past we have used local construction firms, a local environmental/fisheries consultant as well as local suppliers and businesses. It is our intention to encourage project management to utilize residents of Cordova as a labor workforce if the appropriate skill levels are available and/or trainable. 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. The proposed Crater Lake Power and Water Project would consist of a small concrete dam, a 3,800 foot long steel penstock, and a tidewater power plant in the 500KW to 2,000 KW range. The water shed was identified as approximately 167 acres of drainage from a tracement of an ARCGIS topographic map. Cordova averages 148 inches of annual rainfall. Crater Lake is at 1,560 feet of elevation. From these parameters it is estimated to produce 2,000,000 kWh annually with an annual water resource of 540,000,000 gallons. The generation units can be sized to meet up to 16 percent of CEC’s peak KW demand and seven percent of annual kWh use to meet the growing demand for electricity in Cordova. This will potentially offset up to 30 percent of our existing use of diesel fuel and could potentially provide up to 100 percent of Cordova’s annual water needs. See attached Reconnaissance Report (Appendix B). Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 13 of 23 7/8/14 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 Alaska Department of Natural Resources—Water rights permitting complete (Appendix G) FERC Non-Jurisdictional determination—Determination complete (See Appendix H) Office of Project Management Permitting (OPMP)—Permits have been identified to include Division of Mining, Land & Water, Division of History & Archaeology, Division of Geological and Geophysical Survey, Department of Environmental Conservation and Department of Fish & Game. We anticipate execution within 12 months if project proves feasible. A US Army Corp of Engineers wetland permit will also be required, and may require the greatest effort of the required permits. There are no anticipated regulatory barriers identified at this time. See Appendix B Reconnaissance Report Page 8 Permitting and Appendix K Permitting Quote for details. 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 basic design is a conventional dam-penstock-pelton wheel high head hydroelectric project. See Appendix B Reconnaissance Report Page 5 for details regarding dam, penstock, turbine(s) and power plant. The Crater Lake property is comprised of shared ownership with The Eyak Corporation owning the north side, City of Cordova on the south side with penstock route potentially crossing private lands as well. CEC has enthusiastic support for the project from all four land owners. See Appendix B Reconnaissance Report Page 8 for details. 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. The technical and regulatory risks to the project are not trivial. For the project to be technically successful, the hydrology must be of adequate quantity and timing to adequately benefit CEC’s power production needs. The geology must be adequate to 1) hold water at the lake, 2) support a dam structure, and 3) support a penstock. The environmental barrier must be low enough to allow this relatively small project to be feasible. The feasibility phase work is seeking fatal flaws. Surface evaluations of the geology have been positive to date, and have identified areas where the next crucial piece – the geotechnical assessment included as the first step of the design phase – should drill and evaluate sub-surface conditions to prove adequate geology. The Feasibility stage is also developing a hydrologic and operating model to evaluate the water resource magnitude and timing. Significant permit evaluations have occurred in the reconnaissance and feasibility stages. The largest potential concern at this time is Army Corp of Engineers wetlands permits. CEC plans to meet with the ACOE during the feasibility study stage to better assess the timing and cost of securing wetlands permit(s). Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 14 of 23 7/8/14 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  Identify and describe other potential barriers The stocked rainbow trout in the lake may be an environmental concern. Additionally a USFS trail easement along the lake shore may need to be relocated. See Appendix B Reconnaissance Report Page 8 Environmental for details. CEC has discussed both issues with ADF&G, and the USFS and do not anticipate any barriers. CEC has discussed aesthetics with community members and design firms, and believe that most of the visual impacts of the project can be mitigated except for lake level fluctuations, which are likely to meet a level of resistance from some residents. 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. Cordova Electric currently operates three power generation facilities (18,400 KW) with over 70 miles of underground and submarine power lines serving approximately 1,500 meters year round. Orca Power Plant (Diesel) 11,150 KW Power Creek Plant (Hydro) 6,000 KW Humpback Creek Plant (Hydro) 1,250 KW See Appendix B Reconnaissance Report Existing Energy System Page 3 for further detail Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 15 of 23 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 - See Section 5.4.1 for part a) below a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank) See Appendix B Reconnaissance Report Page 3 for details i. Number of generators/boilers/other ii. Rated capacity of generators/boilers/other iii. Generator/boilers/other type iv. Age of generators/boilers/other v. Efficiency of generators/boilers/other vi. Is there operational heat recovery? (Y/N) If yes estimated annual displaced heating fuel (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 $ 883,278 ii. Annual O&M cost for non-labor $ 2,613,637 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] 27,536,790 ii. Fuel usage Diesel [gal] 554,390 (does not include boiler fuel) Other iii. Peak Load 9,400 kW August 2014 iv. Average Load Approximately 4,000 kW v. Minimum Load Approximately 1,500 kW vi. Efficiency 13.91 in 2014 vii. Future trends Peak demand and kWh growth of 1-2% annually for new few years d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 16 of 23 7/8/14 5.4.2 Future Trends Describe the anticipated energy demand in the community over the life of the project. Cordova has experienced significant demand increases averaging 11 percent since 2011 (see Appendix B Reconnaissance Study Exhibit D with the exception of 2014 where demand peaked at 9,074 kW. We anticipate 1-2% increases over the next few years. However, as explained in the Reconnaissance Study, Crater Lake can offset up to 30% of our existing diesel fuel use. The generation units can be sized to help CEC meet up to 16% of our peak kW demands through hydro. 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. The diesel fuel savings alone may save consumers approximately one to 1.5 cents per kWh in fuel surcharges (based on anticipated fuel prices and current kWh sales). The outcome of financing and debt may diminish this savings if base rates need to be adjusted to meet interest and principal payments. Reduced O&M costs may offset financing impacts. As a private non-profit electric cooperative, any extended savings are ultimately deducted from the rates or returned to member customers as capital credit equity payments. 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  Anticipated barriers  Integration plan  Delivery methods The basic design is a conventional dam-penstock-pelton wheel high head hydroelectric project. See attached Appendix B Reconnaissance Report Page 5 for details regarding dam, penstock, turbine(s) and power plant. 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] 500 kW to 2,000 kW hydro capacity depending upon feasibility and hydro reservoir b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 2,500,000 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] Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 17 of 23 7/8/14 iv. Other Water 500,000,000 gallons available for City of Cordova use d) i. Estimate number of hours renewable will allow powerhouse to turn diesel engines off (fill in as applicable) 336 hours 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. CEC has a highly automated SCADA system, and the incremental costs of adding PLCs, controls, cameras and communications are embedded in the rough order of magnitude cost estimate for the project. Cordova Telephone Cooperative is a strong partner with CEC, and has extended fiber optics to CEC hydro projects and provided significant technical and infrastructure support through their regular rate base tariff and spirit of partnership and support. 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. Per the attached AEA calculated cost/benefit, Appendix I, and the Appendix B Reconnaissance study, immediate base benefits will be 2,000,000 kWh and extended (diesel efficiency) benefits will be 500,000 kWh of diesel fuel offset totaling 200,000 gallons per year at 12.5 kWh/gallon. While the AEA 12.5 kWh per gallon is less than the CEC average of 13.91 kWh per gallon in 2014, this project would significantly decrease diesel fuel efficiency, which is not accounted for in the cost/benefit analysis or direct benefits and justifies the use of the lower base efficiency. Additional direct benefits are reduced operating costs and infrastructure needs for the City of Cordova water system, stored water and energy assets for community emergencies, the optimization of micro grid hydro diesel systems and agile project management processes for extended benefits to other communities and projects in Alaska. For CEC rates see Appendix J Tariff Rate Sheets. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 18 of 23 7/8/14 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. Cordova Electric Cooperative is the sole provider of electric energy to the community of Cordova and the purchasers are existing member of the Cooperative. As a non-profit Cooperative, rates are adjusted incrementally to minimize margins while providing adequate operating capital. Our current tariff rate sheets are attached as Appendix J. Reference the AEA Cost Benefit calculator, Appendix I and attached excel source document in electronic submittal for details. 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. Not applicable Renewable energy resource availability (kWh per month) Estimated sales (kWh) Revenue for displacing diesel generation for use at private sector businesses ($) Estimated sales (kWh) Revenue for displacing diesel generation for use by the Alaskan public ($) 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. Due to the intervening time between CEC’s completion of the feasibility study in progress and review and notice for this AEA REF Round IX application, CEC will be actively pursuing additional partners in design phase, including the City of Cordova, and a host of Federal water and power programs. If CEC is successful in these endeavors, both the CEC match portion of this grant and the AEA grant request portion of this grant may diminish by July of 2016. However, CEC is assuming a worst-case scenario in which CEC would be obligated to be the sole co-developer of this project with AEA. Given the City of Cordova’s commitment to date, CEC anticipates full City support for the CEC match portion of this grant once the feasibility work is completed and published this December, and the weighting of project costs and benefits to the City and CEC for the water and power elements of the project are more clearly defined. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 19 of 23 7/8/14 6.2.2 Financing opportunities/limitations 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? CEC is near 50% equity, and recent meetings with CEC’s lenders indicate that CEC can comfortable finance the estimated construction portion of this project. CEC anticipates strong construction-phase partner contributions from the City of Cordova for the water resource element, and the possibility of federal funding assistance from one of the many municipal water system or energy system grant or loan programs. 6.2.3 Cost Overruns Describe the plan to cover potential cost increases or shortfalls in funding. CEC has been very successful in generating necessary funding to complete projects without increasing electric rates to fund capital project construction. However, increasing electrical rates to raise the necessary capital to meet financing obligations in exchange for fuel costs is a low-risk option for generating the necessary capital to fund any project over runs for funding shortfalls. 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. CEC anticipates sharing the cost of construction with the City of Cordova, and seeking grant assistance from a variety of state and federal programs and budgets, including those of stakeholders and landowners (The Eyak Corporation, The Native Village of Eyak, etc.). 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 As previously mentioned, the first tier of value resides in a design that fully utilizes the available water to directly offset the use of diesel fuel and then delivers it to the City of Cordova municipal water system after the energy has been extracted. This could potentially provide 540,000,000 gallons of water to the City of Cordova (estimated to be 100 percent of the annual water needs). This facility may also offset necessary maintenance and upgrades to the City’s aged water infrastructure. Also, past development of hydropower has moved off-shore fish processing in to the City of Cordova increasing the State of Alaska and the City of Cordova’s raw fish tax revenues. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 20 of 23 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 CEC presently owns and operates two FERC licensed hydroelectric projects that annually produce approximately 70% of the community’s electric needs. We have a robust automation system that aids in a rigorous predictive and preventative maintenance program. CEC has an effective loss control program that focuses on safety and preventative maintenance. CEC finances current hydropower project operations from our rate base and will continue to do so. The development of hydropower has significantly reduced the O&M intensive diesel plant operations to free resources toward preventative maintenance. Crater Lake would further contribute to that opportunity. CEC is experienced and capable in emergency management and operational challenges. CEC has an excellent track record for timely and accurate reporting of project operations during and after grant administration processes, and as part of our core business strategy to carefully measure and manage both operational and financial performance of the system. This is supported by experienced and dedicated staff, world-class automation and data historian and accounting and archiving of financial data. CEC freely communicates both successes and failures to better contribute to internal and external decision making for the projects and processes we deploy. 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  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 This grant application is one part of a multi-pronged strategy to develop this project with or without stakeholder and grant funded assistance if the progressively larger commitments to feasibility, design and construction indicate benefit to CEC members, the public, and the State of Alaska in general. CEC has self-funded the reconnaissance study which indicates the project has significant potential to be a high value, low-risk, multi-purpose asset to Cordova and all stakeholders including AEA, not to mention the return on diesel savings to our members. CEC and the City of Cordova have self-funded the Feasibility Study and we anticipate that to be complete by year-end. CEC has also collaborated with ACEP to evaluate the opportunity to control system frequency with Crater Lake, which proved to be high cost, high risk, and marginally feasible. However, that same study evaluated alternatives for providing frequency response and spinning reserve, and discovered some low-hanging fruit on the fuel-efficiency, heating efficiency, and hydro utilization. As a result, the design parameters for Crater Lake will be substantially simplified, reducing project costs during construction and operation. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 21 of 23 7/8/14 CEC has met with nearly all the permitting agencies except the Army Corp of Engineers, which CEC intends to meet with by year-end. CEC has also met with all landowners, and will host another round of “update” meetings with these stakeholders and agencies to keep them abreast of the project progress and feasibility study findings and to identify any fatal flaws long before they impact design or construction parameters as “surprises”. 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. There is significant community support for this project as evidenced by the attached letters of support in Appendix L and general feedback. The primary concerns expressed to date revolve around recreational use and trail access to the Lake, a popular hiking destination. 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. Cordova Electric has received grants for the Power Creek Hydroelectric Project, the Humpback Creek Hydroelectric Project, and Organic Rankine for the Orca Power Plant. CEC received REF Round I and III grants for Humpback Creek, and a Round III grant for Organic Rankine Cycle installation. 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. Reconnaissance Study Appendix B Feasibility Analysis RFP Appendix D FERC Non-jurisdictional SECTION 12 – LIST OF ADDITIONAL DOCUMENTATION SUBMITTED FOR CONSIDERATION In the space below please provide a list of additional information submitted for consideration.