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Gunnuk Creek Hydro Rehabilitation - IPEC Kake Round 9 App
Renewable Energy Fund Round IX ®) ALASKA --- , Grant Application - Standard Form 4001C ENERGY AUTHORITY I ax RJ ff Tax Status: ❑ For -profit ® Non-profit ❑ Government (check one) Date of last financial statement audit: March 2015 for the year ended 12/31/2014 1 Mailing Address: Physical Address: PO Box 210149 12480 Mendenhall Loop Road Auke Bay, AK 99821 Juneau, AK 99801 Telephone: Fax: Email: 907 789-3196 ext. 24 Office 907 790-8517 JMitchell m IPEC.or 907 723-0364 Mobile 1.1 Applicant Point of Contact / Grants Manager Name: Title: Jodi Mitchell Chief Executive Officer/General Manager Mailing Address: PO Box 210149 Auke Bay, AK 99821 Telephone: Fax: I Email: 907 789-3196 ext. 24 907 790-8517 1 JMitchell m IPEC.or 1 1.1.1 APPLICANT y(.i°I L SIGNATORY AUTHORITY CONTACT INFORMATION Name 1 . M 1 "I 11 Title: 01 F L :t 4C! ZV1Y�✓� ►d Mailing Address: PO Box 210149 Auke Bay, AK 99821 Telephone: Fax: I Email: 907 789-3196 ext 24 907 790-8517 1 JMitchell(cDm IPEC.or 1 1.1.2 Applicant Alternate Points of Contact I Fax: I Email: Brandon Shaw AEA 15003 Page 3 of 30 7/8/14 Renewable Energy Fund Round IX �'� ALAS(2` — Grant Application - Standard Form ENERGY AUTHORITY 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 authori is necessary. See draft 9/30/2015 board resolution ® 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 akenerovauthority ora/Programs/Renewable-Energv 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) AEA 15003 Page 4 of 30 7/8/14 Renewable Energy Fund Round IX �4EW Grant Application - Standard Form dWIV ENERGYAUTHORITY SECTION 2 — PROJECT SUMMARY 2.1 Project Title Provide a 4 to 7 word title for your project. Type in the space below. Gunnuk Creek Hydro Rehabilitation — IPEC Kake 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 G000/e 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 Goog/e 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. Kake, Alaska, approximately 560 58' N latitude and 133' 56' W longitude 2.2.2 Community benefiting — Name(s) of the community or communities that will be the beneficiaries of the project. All IPEC communities will benefit from the project due to IPEC's postage stamp rate structure. IPEC is currently planning to phase -in rates based on costs to serve each community, but it is a slow process. Community cost -based rates are now in draft form but need to be presented to and approved by the RCA. IPEC communities are Angoon, Hoonah, Kake, Klukwan, and the Chilkat Valley (10 mile Haines Hwy up to and including US and Canada customs). 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 AEA 15003 Page 5 of 30 7/8/14 Renewable Energy Fund Round IX pL�g1fiA Grant Application - Standard Form IIIIIIIIIND ENERGY AUTHORITY 2.4 Project Description Provide a brief one paragraph description of the proposed proiect. IPEC proposes to expand and rehabilitate an existing 7kW hydro project that makes use of the existing water supply dam and hatchery facilities at Gunnuk Creek in Kake, Alaska. The new project will have installed capacity of 500 kW, and will produce about 1,600 MWh annually, which is about 55% of Kake's average annual requirements. The project is estimated to displace 124,000 gallons of diesel per year from IPEC's current diesel generation at Kake. Costs and construction risks are minimized because the dam and intake facility have already been constructed, and no new transmission lines or access roads are required. 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 full project cost of project construction is estimated to be $5.465 million per HDR's reconnaissance report dated September 2015. IPEC is asking for $3.92 million from the REF for project construction, which is the maximum amount allowed under the new REF high cost community limit. The REF awarded IPEC a grant for $80,000 for Phase I, reconnaissance, and these funds will have been fully expended by the end of September 2015. IPEC will contribute matching funds to complete all remaining Phase II and Phase III activities, including final environmental assessment and mitigation, land use, water rights, permitting, and final design. Because this project is a rehabilitation and expansion of existing infrastructure, the amount of work required to get the project construction ready is greatly reduced. The cost to complete these activities was estimated by HDR to be $250,000. IPEC's Board passed a motion to expend IPEC general funds in order to get the project ready for construction by the time REF Round IX grant awards become available July 1, 2016 (see copy of IPEC Board Minutes 4/3012015). Furthermore, IPEC was able to secure site control from the City of Kake via long term Right to Lease (see copy), and we have already begun consultation with ADF&G, and the State of Alaska DCED (the entity responsible for the hatchery). Thus, this grant application is for Phase IV construction only. If IPEC is able to secure $3.92 million from the REF, the remaining funds will come from other grants and/or loans. IPEC doesn't anticipate any issues with acquiring loans to complete the project. However, if the entire amount were to be borrowed there would be little to no reduction in costs to members. IPEC will use grant funds to construct a 500 kW hydro project using an existing dam and intake structure, and an existing building foundation on which it will construct a power house. IPEC will purchase generating equipment, penstock material, and switchgear. IPEC will hire a general contractor to remove the old water piping and construct a penstock ROW, install a new penstock, build a power house, and install the turbine and generating equipment. IPEC will hire electrical contractors to wire all equipment to integrate it into IPEC's existing electric grid at Kake. The project is estimated to significantly reduce costs and rates to IPEC's members (see below for further explanation of project benefits). IPEC has the expertise, experience, and resources to complete this project. IPEC recently successfully completed the Gartina Falls Hydro at Hoonah, which came online about 8/5/2015. AEA 15003 Page 6 of 30 7/8/14 Renewable Energy Fund Round IX � AL,1aIq12 A Grant Application - Standard Form t ENERGY AUTHORITY SECTION 3 — Project Management, Development, and Operation 3.1 Schedule and Milestones Criteria: Stage 24.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 Construction Procure generating equipment July 1, 2016 June 2017 Equipment on -site Construction Procure penstock material July 2016 Feb 28, 2016 Material on -site Construction Procure switchgear July 2016 June 2017 Switchgear on -site Construction Secure general contractor July 2016 July 2016 Contract Construction Mobilize to site Aug 2016 Aug 2016 Contractor on -site Construction Construct powerhouse Sept 2016 Dec 2016 Powerhouse complete Construction Construct penstock ROW Sept 2016 June 2017 ROW complete Construction Install penstock July 2017 July 2017 Penstock installed Construction Install Equipment July 2017 July 2017 Equipment installed Construction Startup and testing Aug 2017 Sept 2017 Project operational Construction Construction management July 2016 Sept 2017 Progress reports 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. AEA 15003 Page 7 of 30 7/8/14 Renewable Energy Fund Round IX j� AL-_AQJ� 1�__,. Grant Application - Standard Form � ENERGY AUTHORITY Phase I Reconnaissance was recently completed and was paid for by $80,000 REF grant. IPEC will contribute $250,000 in matching funds to complete remaining Phase II and Phase III activities on or before July 1, 2016. 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, Il. 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(a)aidea.orp. Milestone or Task - Phase IV Construction RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In-kind/Federal Grants/Other State Grants/Other TOTALS Procure generating equipment $ 800,000 $ $ 800,000 Procure penstock material $ 800,000 $ $ 800,000 Procure switchgear $ 200,000 $ $ 200,000 Secure general contractor $ 25,000 $ $ 25,000 Mobilize to Kake $ 250,000 $ $ 250,000 Construct power house $ 500,000 $ $ 500,000 Construct penstock ROW $1000,000 $ $1,000,000 Install penstock $ 345,000 $ 555,000 Federal grants or loans $ 900,000 Install equipment $ $ 75,000 Federal grants or loans $ 75,000 Startup and testing $ $ 75,000 Federal grants or loans $ 75,000 Construction management I $ $ 375,000 1 Federal grants or loans $ 375,000 Contingency &Interest During Construction $ $ 465,000 Federal grants or loans $ 465,000 TOTALS 3,920,000 1 $1 545,000 $5.465 000 Budget Categories: Direct Labor & Benefits $ 100,000 $ $ 100,000 Travel & Per Diem $ 25,000 $ $ 25,000 E ui ment 1,000,000 $ $1,000,000 Materials & Supplies $ 800,000 $ $ 800,000 C29I actual Services $ 550,000 $ $ 550,000 Construction Services 1,445,000 $1,080,000 Federal grants or loans $2,525,000 Other $ $ 465,000 Federal grants or loans $ 465,000 TOTALS 3,920,000 $1,545,000 $5,465,000 AEA 15003 Page 8 of 30 7/8/14 Renewable Energy Fund Round IX QJ.Q Grant Application - Standard Form ®© ENERGY AUTHORITY AEA 15003 Page 9 of 30 7/8/14 Renewable Energy Fund Round IX Grant Application - Standard Form �4=V_: ENERGY AUTHORITY 3.2.3 Cost Justification Indicate the source(s) of the cost estimates used for the project budget. HDR prepared all cost estimates based on recent construction cost information. HDR has decades of experience in hydro construction, and also was the contracting engineer for the recently completed Gartina Falls Hydro Project at Hoonah. Kake has similar logistical issues and costs to Hoonah. 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 $3,920,000 Cash match to be provided — other grants and/or loans $1,545,000 In -kind match to be provided — match included in Phases II & III below $ Total costs for project phases covered in application sum of above $5,465,000 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 — REF Round 8 grant $ 80,000 Feasibility and Conceptual Design — IPEC general funds match $ 125,000 Final Design and Permitting — IPEC general funds match $ 125,000 Construction — REF Round 9 request + other grants + loan $5,465,000 Total Project Costs (sum of above) $5,795,000 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. Option 2: Diesel generation OFF For projects that will result in shutting down diesel generation please estimate: 1. $171,707 per REF evaluation model 1. Annual non -fuel savings of shutting off diesel generation @$.107/kWh 2. Estimated hours that diesel generation will be off per year. 2. Hours diesel OFF/year: est'd 4,000 machine 3. Annual O&M costs associated with the hours proposed renewable project. 3. $54,650 AEA 15003 Page 10 of 30 7/8/14 Renewable Energy Fund Round IX ®� 0 Grant Application - Standard Form er ENE THORITY 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 proiect and keep the Authoritv informed of the status. During construction, IPEC will provide weekly progress reports at a minimum, but more likely on a daily basis with pictures similarly to the way IPEC's Gartina Falls Hydro progress reporting was done. IPEC will hire a construction manager to be on -site all or most working days to monitor the project and prepare and transmit reports to stakeholders. After construction, Gunnuk Creek hydro's generation will be separately metered and reported, similarly to the way IPEC's Gartina Falls hydro metering is done. IPEC already has a system in place for monitoring and collecting generation and other operating data for all of its diesel and hydro plants. IPEC's power plant operators collect the data each month and report it to IPEC's controller. The controller then enters the data into spreadsheets used for monthly PCE filings, and quarterly COPA filings with the AEA and RCA. IPEC is fully regulated by the RCA, and is in compliance with all known regulations. Thus, Gunnuk Creek hydro's data will simply be incorporated into IPEC's current accounting and reporting system. IPEC will provide whatever operational data AEA asks for in keeping with AEA's desire to track benefits and will also provide suggestions for future projects if our experience suggests better ways of doing things. 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 sellina enerov from the completed proiect. IPEC is the fully regulated and certificated electric provider for Kake, and is a member -owned and governed utility. IPEC has been in business since 2004, but formerly operated as Tlingit-Haida Regional Electrical Authority, a political subdivision of the state, from about April 1977 to December 31, 2003. IPEC serves the communities of Angoon, Hoonah, Kake, Klukwan, and the Chilkat Valley. IPEC currently operates under a "postage -stamp" rate structure, whereby each member - community pays the same regardless of community -specific costs. IPEC sets rates by pooling all costs of service, regardless of community, into its revenue requirement, and IPEC's rates are set and regulated by the Regulatory Commission of Alaska. IPEC is currently working on implementation of community -cost based rates, but it will be at least a year or more before this process is approved by the RCA, and will likely be phased in over two or three years after it is approved. The main point for this application, however, is to communicate this plan to the REF and to illustrate the fact that IPEC is fully capable of operating the Gunnuk Creek Hydro in a cost - based manner. IPEC's primary goal is to reduce costs and therefore rates to its member -owners. This hydro project will save an estimated 123,077 gallons of diesel, and reduce IPEC's annual fuel costs by about $420,397 per year. There will also be estimated savings from diesel O&M of about $171,707 per year, making a total estimated annual savings of $592,104. These costs will be AEA 15003 Page 11 of 30 7/8/14 Renewable Energy Fund Round IX �� OL�CICO Grant Application - Standard Form 4NED ENERGY AUTHORITY rolled through IPEC's quarterly COPA and semiannual Simplified Rate Filing (SRF filings) to reduce rates gradually over about a year's time. 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 2-2.8: 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. IPEC will hire HDR to manage construction, and IPEC's operations manager, Brandon Shaw, will assist with construction management and procurement. Resumes are attached as a separate file. This is the same team who recently successfully managed construction of the Gartina Falls Hydro Project at Hoonah. 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 IPEC will put together the same project team it had for the recently commissioned and now operating Gartina Falls Hydro Project at Hoonah. The team consisted primarily of Paul Berkshire, PE, Bailey Johnston, PE, both of HDR Engineering of Alaska, Brandon Shaw, IPEC's operations manager, Jodi Mitchell, IPEC's CEO, and Roxanne Drake -Burkhart, IPEC's controller. AEA 15003 Page 12 of30 7/8/14 Renewable Energy Fund Round IX �� Grant Application - Standard Form t ENERGY AUTHORITY Bailey Johnston will be hired to work on -site during all or most of the actual construction, with Paul Berkshire and HDR support staff to assist as needed. HEIR has decades of experience and is well- known in the hydro industry (see resumes). Brandon Shaw, IPEC's operations manager, will represent IPEC by overseeing the project and by handling procurement of major materials and equipment required for the project. He and other IPEC staff will also help handle logistics. Having served the community of Kake for over three decades, IPEC knows the best ways to ship and stage materials for large jobs in the community. IPEC also has knowledge of local talent and is familiar with the workforce to help with local hire. Where possible and practical, IPEC will use its own equipment and workforce in order to help manage costs. Jodi Mitchell and Roxanne Drake -Burkhart of IPEC will handle grant accounting, administration, and reporting during construction and after. IPEC intends to procure the major equipment and materials required for the project. The procurement specifications needed for the turbine, generator, switchgear and penstock are approximately 90% complete and will be finalized by the end of 2015. IPEC intends to competitively bid these items in May 2016 in order to be in a position to issue contracts when funds become available. 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. IPEC will perform all project accounting using its utility -specific accounting system which it acquired from NISC. The system includes separate but integrated work order and fixed asset sub -ledgers. Roxanne Drake -Burkhart is IPEC's controller. Roxanne has been with IPEC since 1995, and she handled the project accounting for the Gartina Falls hydro project, as well as most all other construction projects IPEC has undertaken since about the past 15 years. She is very thorough, and IPEC has had clean, impeccable audits throughout her tenure. Jodi Mitchell, IPEC's CEO/GM, is a certified management accountant and holds a bachelor's degree in business administration. She reports to IPEC's board of directors, and is responsible for all aspects of IPEC's operations and compliance. She will help be ultimately responsible for project construction management, as well as operations, accounting and reporting for the Gunnuk Creek Hydro and IPEC (resume attached). 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. IPEC will seek competitive bids and secure contracts for major materials, equipment and contractors. Furthermore, IPEC will charge only direct expenses to the work order, which is expected to include a relatively small amount of direct labor and expenses. AEA 15003 Page 13 of 30 7/8/14 Renewable Energy Fund Round IX �`, Al pKA Grant Application - Standard Form d=� ENERGYAUTHORITY IPEC has successfully managed several grants over the past decade or more, including some from the REF. We have a tried and true system of controls, which is audited annually by BDO, an independent accounting firm. IPEC has always complied with state single audits, which are tested for and conducted annually. There has never been an issue of unreasonable, improper, or unnecessary spending or accounting of grant funds in IPEC's history. 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. IPEC has one full-time and at least two part-time employees at its Kake power plant. We plan to hire local talent to the extent possible for hydro construction, and will do our best to stipulate this in contracts we enter into for the project. Furthermore, we will always hire and train the local work force to operate and assist in maintaining local generation equipment, and to assist with monitoring and reporting. All of IPEC's lead operators have received power plant operating training, and many of our part-time employees have this training also. We also require safety and oil spill training. AEA 15003 Page 14 of 30 7/8/14 Renewable Energy Fund Round IX �400D Grant Application - Standard Form er>ENERGYAUTHORTY SECTION 5 —TECHNICAL FEASIBILITY 5.1 Resource Availability Criteria: Stage 2-3.A: The renewable energyresource 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. Please see Gunnuk Creek Reconnaissance Report September 2015 (included with this application) for a full discussion of the energy resource. The report considers three alternatives, and identifies alternative 1, which rehabilitates and expands the existing dam and other infrastructure to create a 500 kW run of the river hydro project. The report also describes pros and cons of alternative 1, and of the other alternatives. The proposed project will provide about 1,600 MWh annually, or about 55% of Kake's annual electricity requirements. 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 Because this project is a rehabilitation and expansion of existing infrastructure, the amount of permitting is greatly reduced. Additionally, this project will have nearly identical components (turbine, generator, switchgear, and penstock) as IPEC's recently completed Gartina Falls project. The following is a list of identified permits and agreements required for the project: Hatchery Land Use Agreement IPEC has already been in contact with the State of Alaska Department of Commerce, Community and Economic Development (DCCED) who is responsible for the Gunnuk Creek hatchery. There is mutual agreement between IPEC, DCCED, the City of Kake and the Organized Village of Kake that the community would benefit from the hatchery re -opening and that the hatchery would benefit from the improvements to the water supply that would happen if the hydroelectric project would be developed. IPEC expects to have a land use agreement completed by Feb 28, 2016. ADF&G Title 16 Permit IPEC has already discussed the project with ADF&G and contracted with ADF&G to perform additional field studies. ADF&G's existing instream flow requirements have been used in the feasibility assessment and no adverse changes are expected. IPEC will apply for the permit in the late fall of 2015 and expects that the Title 16 permit could be issued in early 2016. USCOE 404 Permit Since this is an existing project and little excavation and fill will be required, IPEC expects that a nationwide permit would be obtained without much difficulty. IPEC will apply for the permit in the late fall of 2015 and expects the 404 permit could be issued in early 2016. AEA 15003 Page 15 of 30 7/8/14 Renewable Energy Fund Round IX �4 pL&S"w Grant Application - Standard Form t> ENERGY AUTHORITY DNR Water Rights Permit IPEC will apply for a water rights permit in the late fall of 2015 and expects the 404 permit could be issued in early 2016. 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 land is owned by the City of Kake. IPEC secured a right to lease agreement with the City earlier this summer, and a copy of it is included with this application. Since the project is located within the town's electric grid, no new roads or transmission lines will be required. As is noted in the Gunnuk Creek Reconnaissance report (page 9), the land is subject to the South East Alaska Land Trust (SEAL). However, the conservation easement language indicates that electrical utility and hydro project development is allowed, but is subject to review and approval. IPEC plans to initiate this process soon after submitting this application. 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 typical large risk factors in a project this size and scope are already minimized. This is because the dam and intake facility have already been constructed, and no new transmission lines or access roads are required. Any unanticipated technical risks will be identified prior to construction as IPEC proceeds with Phase II and Phase III of the project the remainder of 2015 up until mid -year 2016. These activities include surveying the plan and profile of the pipeline route, soils exploration along the pipeline route, and preparation of design plans and specifications. Unanticipated risks will be addressed as we proceed. If any risks cannot be mitigated, we will cancel the project before construction activities begin. 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 — known known • Habitat issues — anadromous fish, see below • Wetlands and other protected areas — SEAL Trust (see 5.3.1 above) • Archaeological and historical resources — none known • Land development constraints — SEAL Trust (see 5.3.1 above), USCOE (see below), and State DCCED (hatchery — see below) • Telecommunications interference — none anticipated • Aviation considerations — none anticipated • Visual, aesthetics impacts — uses existing infrastructure so no risks anticipated AEA 15003 Page 16 of 30 7/8/14 Renewable Energy Fund Round IX �400r; �I 12�p� Grant Application - Standard Form 4- ENERGY AUTHORITY • Identify and describe other potential barriers See above for a list of anticipated permits/authorizations needed. None of the known and listed hurdles herein is considered a barrier, since all can be overcome in the months ahead. As explained earlier, the project uses an existing dam that was built in 2007 by the US Army Corp of Engineers. Thus, little excavation and fill will be required. IPEC will apply for a nationwide permit this fall and hopes to receive it early 2016. IPEC has already discussed the project with the ADF&G, and we will contract them to perform additional field studies. ADF&G's existing instream flow requirements have been used in the feasibility assessment and no adverse changes are expected. IPEC will apply for a Title 16 permit late this fall and hope to receive it early 2016. As stated earlier, IPEC will apply for a DNR 404 water rights permit this fall with the expectation of receiving it early 2016. IPEC has already been in contact with the State Department of Commerce, Community and Economic Development (DCCED) who is responsible for the Gunnuk Creek hatchery. The hatchery was shut -down in 2013 due to a combination of factors, and is indebted to the State. The State is trying to sell or lease the hatchery to the Northern Southeast Regional Aquaculture Association (NSRAA), but they have so far been unable to reach an agreement. Regardless, there is mutual agreement between IPEC, DCCED, the City of Kake, and the Organized Village of Kake that the community would benefit from the hatchery re -opening and the hatchery would benefit from the improvements to the water supply that would happen if the hydroelectric project were to be developed. IPEC expects to have a land use agreement with DCCED completed by February 28, 2016. 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. IPEC owns and operates three diesel-electric generator sets to provide the electrical energy requirements for Kake: Unit #1: 550 KW DES, installed 2012, approx..13 kWh generated/gallon Unit #2: 1100 KW Caterpillar 3512 DES, installed 1995, approx. 13 kWh generated/gallon Unit #3: 800 KW Caterpillar 3512 DES, installed 1998, approx. 13 kWh generated/gallon Total installed capacity is 2450 KW AEA 15003 Page 17 of30 7/8/14 Renewable Energy Fund Round IX ©� Grant Application - Standard Form dEEND ENERGY AUTHORITY Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt' grid, leave this section blank) 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? (YIN) If yes estimated annual displaced heating fuel (gallons) NO HEAT RECOVERY CURRENTLY b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor Approx. $166,340 (from Form 12) ii. Annual O&M cost for non -labor Approx. $166,340 (from Form 12) 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] 2,838,967 total kWh generated; 2,496,373 kWh sold ii. Fuelusage Diesel [gal] 211,993 Other iii. Peak Load 776 KW, July 2014 iv. Average Load 416 KW, average peak 2014 v. Minimum Load 324 KW, Nov 2014 vi. Efficiency 13.47 kWh generated per gallon; 11.85 kWh sold per gallon vii. Future trends New powerhouse in design now (AEA grant) 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 t 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. AEA 15003 Page 18 of 30 7/8/14 Renewable Energy Fund Round IX WED Grant Application - Standard Form iGNME)ENERGYAUTHORITY 5.4.2 Future Trends Describe the anticipated energy demand in the community over the life of the project. Kake sales tend to peak in the summer when the fish plant is running. However, the plant didn't operate in 2015, and has been running off and on over the past 10 years or more. Logging is complete in Kake for at least a decade, maybe two. The hatchery was shut down in 2013. The main employers are the school, local City and Tribal government, Kake Tribal Corporation, and fishing. Energy demand is predicted to be mostly flat over the next 50 years. Lower electric rates may lead to increased demand, but this has never been modeled for Kake. 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. If the project had been fully grant funded and in place in 2014 it would've saved an estimated net amount of $537,454. This is the equivalent of about $.215 per kWh sold! Of course, this assumes the project is entirely grant funded (no depreciation or debt service). It is difficult to measure reductions in rates and PCE requirements without knowing the completed project costs and financing arrangements. However, it is safe to say there will be significant savings to IPEC's members from the project! 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 Run of the River hydroelectric at existing water dam and intake structure on Gunnuk Creek. Optimum installed capacity is anticipated to be 500 KW, with a 40% capacity factor. The project is estimated to produce about 1,600,000 kWh or about 55% of Kake's energy demand. There are no barriers anticipated that can't be overcome (see full discussion above). The new hydro will be integrated into the Kake electric grid and the diesel generators will be optimized to run efficiently with the hydro as they are in Hoonah. No new access roads or transmission lines will be necessary since the project is within Kake City limits. See reconnaissance report for basic schematics. AEA 15003 Page 19 of 30 7/8/14 Renewable Energy Fund Round IX �� Ah.A-QK Grant Application - Standard Form NNIDENERGYAUTHORITY Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity (Wind, Run of the river hydro, about 500 kW Hydro, Biomass, other) [kW or MMBtu/hr] b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 1,600,000 ii. Heat [MMBtu] c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] ii. Coal [tons or MMBtu] iii. Wood or pellets [cords, green tons, dry tons] iv. Other d) i. Estimate number of hours renewable Estimated to be 4,000 machine hours with current will allow powerhouse to turn diesel engines equipment off (fill in as applicable) 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 ADDlications. Metering will be performed using current transformers and voltage readings from the generator with information being stored within IPEC's SCADA system. The new hydro will be fully integrated into IPEC's existing electric grid within Kake. Costs for metering are included in the cost estimates. AEA 15003 Page 20 of 30 7/8/14 Renewable Energy Fund Round IX J© ALASK Grant Application - Standard Form E ENERGY AUTHORITY 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.orq/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. The project is estimated to save a net $537,454 per year if it is fully grant -funded. This will allow rate reductions to the residents and businesses in Kake, and will result in savings to the State's PCE program. The project is estimated to displace about 123,077 gallons of diesel per year, or 6,153,846 gallons over its 50 year lifetime. It is unknown how much revenue the project will produce over its lifetime, but it will be substantially less than what is required from the existing 100% diesel configuration. Since IPEC is a non-profit, tax-exempt entity there will be no tax credits or green tag sales, or renewable energy subsidies or programs. 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. IPEC will produce and sell the project's power to its member -owners in Kake. If the project is fully -grant funded, it is estimated that the cost per kWh sold will decline by about $.215 per kWh sold using the REF model provided. That would put average rates for Kake in about the $.40 per kWh range if IPEC were using community cost -based rates. But since the benefits will be diluted among all IPEC communities, it will save about $.055 per kWh system -wide. AEA 15003 Page 21 of 30 7/8/14 Renewable Energy Fund Round IX �40MID Grant Application - Standard Form f0MIEDENERGY AUTHORITY This is similar to how the cost reductions for Gartina Falls in Hoonah will be spread amongst all IPEC's member -owners until community cost -based rates are approved by the RCA and implemented. 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. 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. F Financing opportunities/limitations e proposed project includes final design or construction phases, what are your opportunities or limitations to fund this project with a loan, bonds, or other financing options? IPEC will pursue DOE Indian Energy grants over the next several months, and will apply for funds from the next round of RUS' High Energy Cost Grant Program. We believe our chances are fair to good in finding additional grant funding. The economics show that grant funding will provide a much greater economic benefit to IPEC's members. If IPEC's efforts at securing 100% grant funding from the REF and other sources fails over the coming year we will delay the project until we are satisfied we can produce a project with substantial economic benefits to ratepayers. IPEC believes it has the ability to finance projects through NRUCFC loans, if necessary. In fact, IPEC financed a portion of the Gartina Falls project with CFC loans. IPEC didn't borrow any long term funds for about 16 years from 1999-2015. During this period, IPEC worked to pay down debt incurred from the Chilkat Valley Electrification project. IPEC had a high equity ratio of over 56% at 12/31/2014, and is in good financial condition to take on this project. 6.2.3 Cost Overruns AEA 15003 Page 22 of30 7/8/14 Renewable Energy Fund Round IX � j� Grant Application - Standard Form ©© ENERGY AUTHORITY Describe the plan to cover potential cost increases or shortfalls in funding. IPEC has access to a $3 million line of credit with CFC to finance cost overruns and/or shortfalls. We used the LOC to carry the cost overrun during the Gartina Falls project, and it is now being converted to a long term note. The long term instrument has been approved by CFC and is ready for IPEC's board to approve it on September 30, 2015, the next regular board meeting. 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. N/A 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 The Gunnuk Creek project will help to promote and sustain long-term economic development for the community of Kake by indirectly leading to a thriving fish hatchery and fish plant. This will provide much needed jobs for the community. The Gunnuk Creek fish hatchery has had a troubled financial past, and finally closed its doors in 2013. The hatchery provided several good -paying jobs within Kake during its operation, and in fact several of the town's young leaders describe it as being the location of their first jobs! However, the town's water supply dam, which used to be at Gunnuk Creek, failed twice over the past decade. Each time the dam failed, it harmed the creek's fish habitat. Then, the dam was rebuilt about 2006-2007 by the US Army Corp of Engineers, and this time it was built with durable concrete. The problem is that during construction a lot of foreign material was introduced into the creek, again harming the fish habitat and clogging the creek, which led to poor hatchery returns. According to locals, the 2014 season and even the 2015 season has seen great hatchery returns, but alas, the hatchery is now closed. AEA 15003 Page 23 of 30 7/8/14 Renewable Energy Fund Round IX �4MML_ .__ Grant Application - Standard Form GONE) ENERGY AUTHORITY Another issue with the hatchery is the water supply is subpar due to old, deteriorating water piping. IPEC will fix this problem by replacing the piping while it installs new penstock materials for the hydro project. Yet another barrier to the hatchery's success is the high cost of energy in Kake. The hatchery tried its best to alleviate the high costs by building a small 7kW hydro project. However, it didn't provide enough energy due mostly to a design flaw. IPEC will rehabilitate the hatchery's Coho building by using its foundation on which to build a new power house for the Gunnuk Creek hydro project! Since this building isn't currently being used, and isn't necessary to operate the hatchery, it will now be put to good use. The State DCCED is currently responsible for the hatchery, and is seeking a buyer, with little success. The Northern Southeast Regional Aquaculture Association (NSRAA) is the most likely buyer, but they have yet to come to terms acceptable to both parties. The new hydro project will help by reducing power costs and improving the water supply to the hatchery, thereby making the hatchery more economically feasible and increasing the likelihood of future success! A thriving Gunnuk Creek Fish Hatchery, along with lower electric rates, will lead to a thriving Kake fish plant. Kake Tribal Corporation owns a fish cold storage which also used to can and produce value-added fish products over a decade ago. The fishery operation has started up and shut down several times, each time learning from mistakes and making improvements, but ultimately it competes with Petersburg fish processors who have access to the cheapest electricity in Alaska! However, Kake's geographical location makes it a prime spot for fishing boats to deliver to, and from which to buy goods, fuel, and make other positive contributions to the local economy. The fish plant provided at least 40 direct jobs, and several indirect jobs through fishing boats. Cheaper electricity will help all of these economic drivers! Another public benefit is that IPEC will use the existing concrete dam completed in 2007 by the US Army Corp of Engineers. The dam was built with emergency federal funding when the former wood crib dam failed, knocking out Kake's water supply. However, the City of Kake struggled to pay the electric bills for the pumps that pumped water into the water storage tanks, and ultimately repaired and went back to its former gravity fed water supply. Thus, the new dam and intake structure is expensive infrastructure that will now be used to provide clean, renewable hydro power for Kake! Construction of the Gunnuk Creek project has the additional benefit of being a much -needed economic stimulus to the community. A significant portion of the capital cost will be spent on labor, lodging, meals, and fuel within the community. Kake has had a restaurant off and on over the past several years, which has failed several times. However, the combination of a dedicated group of customers during construction, as well as reduced power costs, will likely be a great opportunity for a restaurateur to make it over the long term. AEA 15003 Page 24 of 30 7/8/14 Renewable Energy Fund Round IX �� �11C �.•,r Grant Application - Standard Form t>ENERGY AUTHORITY 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 As stated earlier, IPEC is the non-profit member -owned utility certificated (CPCN) to serve Kake. IPEC has run a sustainable utility since it began generating and selling power within its communities in 1977 (as THREA until 12/31/2013, and as IPEC continuously since 1/1/2004). IPEC is fully regulated by the Regulatory Commission of Alaska, and is a current participant in the Simplified Rate Filing (SRF) program. Regulation and especially the SRF program helps to roll current fuel and non -fuel costs through to rates charged to customers. IPEC envisions rates being gradually reduced over about a year through the COPA and SRF processes, while always recovering its costs of service. As long as we are recovering our costs we will be sustainable, since we don't answer to shareholders requiring a rate of return on investment. IPEC has a strong, motivated and dedicated work force. Many of our employees have spent the majority of their careers at IPEC, and have decades of experience in utility operations. IPEC has a very small staff, and because of that its hiring practices are very deliberate and careful to find the best talent available. Our mission is to provide safe, reliable electric service at the lowest responsible cost, and our goal is to identify and construct power generation technologies and efficiencies that will reduce rates to our member -owners. Everyone in the company is focused on the mission and the goal! IPEC is current on all loans and required reporting to state and federal agencies. As an RUS borrower, we are required to maintain specific operating efficiency and sustainability ratios, and we are in compliance with those requirements as well. Hydro is a long-term tried and proven technology. The life of the project within this application is assumed to be 50 years, but we have reason to believe it will be around more than 100 years after it begins operating (Juneau has several small hydro projects that are over 100 years old). The community of Kake has existed for perhaps 10,000 years or more. There is evidence that the Tlingit, Haida and Tsimpshian people have been living and thriving in southeast Alaska for tens of thousands of years! The recent population of Kake is estimated to be around 560 people, and it has hovered around that number for the past several years. I recently found a file that indicated the population of Kake was 448 in 1971. The Kake School currently has 109 students, so there are plenty of young people to fill the shoes in the future. At a recent meeting I was told there are lots of babies on the way in Kake right now, too! The future is looking bright, and the Gunnuk Creek hydro will provide benefits to the community of Kake for 100 years or more. 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: AEA 15003 Page 25 of 30 7/8/14 Renewable Energy Fund Round IX �� AL�-&WSKA __ Grant Application - Standard Form 4� ENERGYAUTHORITY • 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 As stated previously IPEC recently completed Phase I, Gunnuk Creek Reconnaissance, with an $80,000 REF grant. IPEC will complete Phases II and III by July 1, 2016. The work involved in completing Phases II and III is significantly reduced because IPEC will be rehabilitating existing infrastructure (the dam, intake structure, and Coho Building) to build a hydro project capable of producing up to 55% of Kake's energy requirements. IPEC proposes to use $250,000 of its general funds to complete these two phases over the 10-11 months and be ready to begin construction activities by the time REF grant funds will be available next year. In this fashion, IPEC will not lose a year waiting for funding. Part of what needs to be done with Phases II and III is to obtain a hatchery land use agreement, for which steps have already been taken in that we've already met with Fred Parady, Deputy Commissioner of DCCED, and Britteny Cioni-Haywood, Division Director of the Division of Economic Development. It was discussed that the hydro development would actually improve water supply for the hatchery. We will pursue a land use agreement and expect to have it completed by Feb. 28, 2016. The hydro project will also require an ADF&G Title 16 Permit. We have already consulted with the ADF&G on this, and are contracting them to perform additional field studies. IPEC will apply for the permit later this year and expects that the permit will be available early 2016. According to the Gunnuk Creek Hydro Reconnaissance report dated September 2015, the US Geological Survey operated a continuous streamgage on Gunnuk Creek form September 2005 through September 2008. A lot of information is furnished in the reconnaissance report with regards to Gunnuk Creek's hydrology. This data is being used as the basis for Phases II and III, including design. IPEC will pursue a US Army Corp of Engineers 404 Permit for the project this fall, and expect to receive a permit by early 2016. Since this is an existing project and little excavation and fill will be required, IPEC expects that a nationwide permit could be obtained without much difficulty. Finally, a DNR water rights permit will be required for the project. IPEC will apply for the permit, and expect that we will receive it by spring 2016. The land on which the hydro project will be built belongs to the City of Kake. IPEC has already secured a right to lease from the City, and it has been recorded. The land is also part of the SEAL Trust, but per the terms of the conservation easement a project of this type is allowed. IPEC will follow up with the SEAL Trust to get formal permission for the project well before next summer. IPEC doesn't anticipate any issues with it, given the wording in the easement, the use of existing infrastructure, and the huge local support for this renewable energy project. IPEC has proven that it has or can procure necessary equipment and materials for the project, since it recently did the same for the Gartina Falls hydro project for Hoonah. We have access to short term line of credit if necessary, and we have the best knowledge of local logistics having operated in our member communities and in Juneau for decades. AEA 15003 Page 26 of 30 7/8/14 Renewable Energy Fund Round IX �4=0 WED) Grant Application - Standard Form GENIE) ENERGY AUTHORFY 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 huge local support for the Gunnuk Creek Hydro Project! IPEC has obtained five letters of support from various stakeholders who represent larger groups. Specifically, attached are letters of support from: The City of Kake Kake Tribal Corporation (the ANCSA village corporation for Kake) The Organized Village of Kake (the tribal entity) The Kake City School District, and Southeast Conference IPEC isn't aware of any opposition to the hydro project, nor does it expect any. The voice and support of literally all of the local leadership is represented with the letters of support provided. 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. IPEC has received several other grant awards from AEA, including: 1. Gartina Falls Construction — currently wrapping up, reports current. 2. Gartina Falls design and FERC permitting — completed and closed, no issues 3. Tenakee Inlet Geothermal Reconnaissance — completed and closed, no issues 4. New power house for Hoonah — managed by AEA 5. New power house for Angoon — managed by AEA 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. Attached is the Gunnuk Creek Hydro Reconnaissance report dated September 2015. SECTION 12 — LIST OF ADDITIONAL DOCUMENTATION SUBMITTED FOR CONSIDERATION AEA 15003 Page 27 of 30 7/8/14 Renewable Energy Fund Round IX � q Grant Application - Standard Form ®d!IIIIIIIIIIU' ENERGY AUTHORITY In the space below please provide a list of additional information submitted for consideration. 1. Copy of IPEC's board meeting minutes April 30, 2015 to illustrate IPEC board's commitment to fund phases II and III up to $250,000. 2. Draft resolution for IPEC's September 30, 2015 regular board meeting, authorizing IPEC to apply for REF grant funds for the Gunnuk Creek Hydro Project. 3. Copy of "diesels off' B/C worksheet (Excel spreadsheet and hard copy) 4. Copy of Right to Lease document between the City of Kake and IPEC for IPEC's use of the land to develop the hydro project 5. Resumes for Paul Berkshire, Bailey Johnston, Brandon Shaw, Jodi Mitchell, and Roxanne Drake -Burkhart AEA 15003 Page 28 of 30 7/8/14 Renewable Energy Fund Round IX 01 n I Grant Application - Standard Form t % ENERGY AUTHORITY SECTION 13 — AUTHORIZED SIGNERS FORM Community/Grantee Name: Inside Passage Electric Cooperative Regular Election is held: Date: Annually in the month of May Authorized Grant Signer(s): Printed Name Title Term Signature Johanna "Jodi" Mitchell Chief Executive Officer & General Manager Roxanne Drake -Burkhart Controller Jerry Medina Administrative Officer I authorize the above person(s) to sign Grant Documents: Must be authorized by the highest ranking or anization/communit Printed Name Title Term Grace Villarreal Board President & Chair 3 yrs ending 2018 Grantee Contact Information: Mailing Address: PO Box 210149 Auke Bay, AK 99821 Phone Number: (907) 789-3196 x24 Jodi, x35 Jerry, x22 Roxanne, x25 Accounts Payable Fax Number: (907) 790-8517 E-mail Address: JMitchell@mylPEC.org Federal Tax ID #: 43-1964262 Please submit an updated form whenever there is a change to the above information. AEA 15003 Page 29 of 30 7/8/14 Renewable Energy Fund Round IX ���"—,, Grant Application - Standard Form 400NE-; ENERGY AUTHORITY SECTION 14 — ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Contact information and resumes of Applicant's Project Manager, Project Accountant(s), key staff, partners, consultants, and suppliers per application form Section 3.1, 3.4 and 3.6. Applicants are asked to provide resumes submitted with applications in separate electronic documents if the individuals do not want their resumes posted to the project web site. B. Letters or resolutions demonstrating local support per application form Section 9. C. For projects involving heat: Most recent invoice demonstrating the cost of heating fuel for the building(s) impacted by the project. D. Governing Body Resolution or other formal action taken by the applicant's governing body or management per RFA Section 1.4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. - Provides as point of contact to represent the applicant for purposes of this application. - Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. An electronic version of the entire application on CD or other electronic media, per RFA Section 1.7. F. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations and that they can indeed commit the entity to these obligations. Print Name Johanna ("Jodi") Mitchell Signature Title ief Executive Officer & General Manager Date September 15, 2015 AEA 15003 Page 30 of 30 7/8/14