HomeMy WebLinkAbout2015 - Neck Lake Hydro REFRoundIXApplication - FINAL
September 11, 2015
Alaska Energy Authority
Renewable Energy Fund Grant Application
813 West Northern Lights Blvd
Anchorage, AK 99503
RE: REF Round 9 Grant Application
Neck Lake Hydroelectric Project Phase II-III Grant Application
Dear AEA:
Enclosed, on behalf of Alaska Power Company (APC), in response to Requests for
Grant Applications (RFA) AEA 16012, Renewable Energy Fund Grant Program
(ROUND IX) is an application requesting funding for the Neck Lake Hydroelectric
Project for Phase II-III – Feasibility – Permitting and Final Design.
If you have any questions, please call either Glen Martin (Resource Assessment &
Permits) 360-385-1733 x122, Christine Overly (Grant Funds Administrator) 360-385-
1733 x137, or Bob Grimm (President) 360-385-1733 x120.
Sincerely,
Glen D. Martin
Resource Assessment & Permits
Enc. (as stated)
Renewable Energy Fund Round IX
Grant Application - Standard Form
AEA 15003 Page 1 of 44 7/8/14
Application Forms and Instructions
This instruction page and the following grant application constitutes the Grant Application Form for
Round VIII [IX] 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 44 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
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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)
Alaska Power Company (APC) – A subsidiary of Alaska Power & Telephone Company (AP&T)
Type of Entity: Fiscal Year End:
Utility December 31
Tax ID #
Tax Status: ☒ For-profit ☐ Non-profit ☐ Government (check one)
Date of last financial statement audit:
Mailing Address: Physical Address:
Glen Martin [Same]
Alaska Power Company
P.O. Box 3222
Port Townsend, WA 98368
Telephone: Fax: Email:
360-385-1733 x122 360-385-7538 glen.m@aptalaska.com
1.1 Applicant Point of Contact / Grants Manager
Name: Title:
Glen Martin Mgr. Permitting/Licensing/Compliance
Mailing Address:
Alaska Power Company
Attn: Glen Martin
P.O. Box 3222
Port Townsend, WA 98368
Telephone: Fax: Email:
360-385-1733 x122 360-385-7538 glen.m@aptalaska.com
1.1.1 APPLICANT SIGNATORY AUTHORITY CONTACT INFORMATION
Name: Title:
Robert S. Grimm CEO – AP&T
Mailing Address:
Alaska Power & Telephone Company
P.O. Box 3222
Port Townsend, WA 98368
Telephone: Fax: Email:
360-385-1733 x120 360-385-7538 bob.g@aptalaska.com
1.1.2 Applicant Alternate Points of Contact
Name Telephone: Fax: Email:
Renewable Energy Fund Round IX
Grant Application - Standard Form
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Christine Overly – Senior
Accountant – Grant Funds
Administrator
360-385-1733 x128 360-385-7538 christine.o@aptalaska.com
Jason Custer – Bus. Dev. 907-225-1950 x29 jason.c@aptalaska.com
1.2 Applicant Minimum Requirements
Please check as appropriate. If applicants do not meet the minimum requirements, the application
will be rejected.
1.2.1 Applicant Type
☒ An electric utility holding a certificate of public convenience and necessity under AS 42.05, or
☐ An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
☐ A local government, or
☐ A governmental entity (which includes tribal councils and housing authorities)
1.2 APPLICANT MINIMUM REQUIREMENTS (continued)
Please check as appropriate.
☒ 1.2.2 Attached to this application is formal approval and endorsement for the project by the
applicant’s board of directors, executive management, or other governing authority. If the
applicant is a collaborative grouping, a formal approval from each participant’s governing
authority is necessary. (Indicate by checking the box)
☒ 1.2.3 As an applicant, we have administrative and financial management systems and follow
procurement standards that comply with the standards set forth in the grant agreement (Section
3 of the RFA). (Indicate by checking the box)
☒ 1.2.4 If awarded the grant, we can comply with all terms and conditions of the award as
identified in the Standard Grant Agreement template at
http://www.akenergyauthority.org/Programs/Renewable-Energy-Fund/Rounds#round9. (Any
exceptions should be clearly noted and submitted with the application.) (Indicate by checking
the box)
☒ 1.2.5 We intend to own and operate any project that may be constructed with grant funds for
the benefit of the general public. If no please describe the nature of the project and who will
be the primary beneficiaries. (Indicate yes by checking the box)
Renewable Energy Fund Round IX
Grant Application - Standard Form
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SECTION 2 – PROJECT SUMMARY
2.1 Project Title
Provide a 4 to 7 word title for your project. Type in the space below.
Neck Lake Hydropower Project: Phases II-III
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.
Google Maps coordinates: 56.097806.-133.138525
Project is near Whale Pass, Prince of Wales Island
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
The project will benefit the community Whale Pass, Alaska. The most recently available AEA PCE
report identifies $0.62 kWh pricing for this service region, with an average PCE payment of $0.39
per eligible kilowatt hour.1 Approximately 54.8% of kilowatt hours sold are subject to PCE
subsidization.
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
1 Source: Most recently available AEA PCE report:
http://www.akenergyauthority.org/Content/Programs/PCE/Documents/FY14PCEStatisticalRptByComtAmended.pdf
Renewable Energy Fund Round IX
Grant Application - Standard Form
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☒ Feasibility and Conceptual Design ☐ Construction
2.4 Project Description
Provide a brief one paragraph description of the proposed project.
Alaska Power Company (APC), a subsidiary of Alaska Power & Telephone (AP&T), requests
$395,200 in AEA REF Round IX funding for Phase II and Phase III activities for the Neck Lake
hydropower project. Both Phase II and III must be conducted concurrently because of the FERC
licensing process, so both phases need funding at the same time.2 APC will provide $98,800
cash match to AEA funding. The 124 kW Neck Lake Hydroelectric Project will be located below the
outlet of Neck Lake, approximately 1.5 miles southwest of the community of Whale Pass on Prince
of Wales Island, Alaska. The Project will supply as much as 450,000 kilowatt hours of energy per
year to the community of Whale Pass, offsetting diesel generation, which is currently the sole source
of electricity for residents. The relatively high and modulated flows from the lake combined with the
steep drop at the lower end of the outlet stream provide an attractive opportunity for a small run-of-
river hydroelectric project. Project features would include an access road, intake structure, 400 feet
of penstock, a containerized power plant, a tailrace channel, and 4 miles of distribution line upgrades.
The hydroelectric facilities will be designed to avoid interference with the existing salmon rearing and
collection facilities operated at Neck Lake by the Southern Southeast Regional Aquaculture
Association (SSRAA). A letter of support from the SSRAA is enclosed. APC conducted a
reconnaissance study of the site in 2009 and determined that there is sufficient potential to almost
always provide enough generation meeting 100% of current and future Whale Pass loads. This
Project will provide clean, renewable electricity, as well as rate stabilization and lower rates for APC’s
Whale Pass customers. In 2014 and 2015, AP&T conducted financial and economic analysis which
confirmed the economic and financial viability of this project.
The AEA’s econometric workbook calculates a B/C Ratio of 1.75, total NPV benefits of $5.12m, and
NPV net benefit of $2.67m
AEA workbook outputs are displayed below.
2 Considering the current uncertainty regarding funding by AEA under the REF Grant Program, authorizing the budget
for both phases in Round IX will ensure the project gets to the construction phase in a timely manner.
Renewable Energy Fund Round IX
Grant Application - Standard Form
AEA 15003 Page 7 of 44 7/8/14
2.5 Scope of Work
Project Description
Community
Nearest Fuel Community
Region
RE Technology
Project ID
Applicant Name
Project Title
Results
NPV Benefits $5,120,820.30
NPV Capital Costs $2,931,626
B/C Ratio 1.75
NPV Net Benefit $2,665,630
Performance Unit Value
Displaced Electricity kWh per year 450,000
Displaced Electricity total lifetime kWh 22,500,000
Displaced Petroleum Fuel gallons per year 36,000
Displaced Petroleum Fuel total lifetime gallons 1,800,000
Displaced Natural Gas mmBtu per year -
Displaced Natural Gas total lifetime mmBtu -
Avoided CO2 tonnes per year 365
Avoided CO2 total lifetime tonnes 18,270
Proposed System Unit Value
Capital Costs $3,019,575$
Project Start year 2021
Project Life years 50
Displaced Electric kWh per year 450,000
Displaced Heat gallons displaced per year -
Renewable Generation O&M $ per year 30,196
Electric Capacity kW 124
Electric Capacity Factor %40
Heating Capacity Btu/hr 0
Heating Capacity Factor %0
Total Public Benefit 2015$ (Total over the life of the project)
Base System
Size of impacted engines (select from list)$/kWh
Diesel Generator O&M 151-360kW 0.203$
Applicant's Diesel Generator
Efficiency kWh per gallon
Total current annual generation kWh/gallon
Diesel Generation Efficiency 12.50
Whale Pass
Whale Pass
Rural
Hydro (Run of River)
Neck Lake Hydro
Alaska Power Company
Neck Lake Hydropower Project: Phases II-III
Renewable Energy Fund Round IX
Grant Application - Standard Form
AEA 15003 Page 8 of 44 7/8/14
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.
Both Phase II and III must be conducted concurrently because of the FERC licensing process,
so both phases need funding at the same time.3
Phase II of this project requires a total of $171,000 to: complete environmental studies; complete
consultations with SSRAA, FERC, and resource agencies; conduct a feasibility analysis; and finalize
the conceptual design. APC requests $136,800 AEA REF funding for Phase II, and will provide
$34,200 cash match.
Phase II: Resource Assessment/Feasibility Analysis/Conceptual Design: July 2016 –
December 2017
In late 2009 APC had a surveyor develop topographic mapping of the Project. During the summer of
2016, the conceptual design from the Phase I reconnaissance work by APC will be reviewed and
augmented to develop firm information for presenting to permitting agencies. As part of this work,
APC will coordinate extensively with SSRAA regarding the proposed development. As discussed
above, APC and SSRAA have agreed to work cooperatively to develop a hydropower project that
will be junior to all needs of the Neck Lake hatchery, and will assure no adverse impacts to the
hatchery or salmon runs. SSRAA has provided a letter of support, which is enclosed.
In addition, a cost estimate will be prepared for the selected arrangement, and an updated economic
and financial analysis will be conducted. The results will be presented in a feasibility report. At the
same time, APC will initiate the FERC licensing process by submitting the Notice of Intent (NOI) and
the Preliminary Application Document (PAD) to FERC, the resource agencies, and will be available
to the public after a public notice is placed in the areas newspapers. Within 60 days of the notice and
NOI and PAD submittal, APC will hold a public/agency consultation meeting to receive comments,
questions, and concerns to develop the study plan for environmental surveys. This can be
accomplished in the first two months, i.e. July through August 2016. These surveys may include fish
surveys, wildlife assessments, botanical surveys, wetlands surveys, archaeological survey (initial
SHPO review), and water quality testing. The total area of impact, including within the SSRAA facility,
is expected to be approximately 0.25 acres.
Phase III: Permitting and Final Design; January 2018 – December 2019
Phase III of this project requires a total of $323,000 to: develop project final design; write the
environmental assessment; continue agency consultation; complete a FERC license application
filing; respond to FERC’s additional information requests (AIR); finalize agency permitting; and
address any additional field studies needed to satisfy agency requirements. APC requests $258,400
AEA REF funding for Phase III, and will provide $64,600 cash match.
In this phase, the environmental assessment and the FERC license application will be finalized and
submitted to FERC by March 2018. We anticipate having the license by May 1, 2019. Other permits
and land easements will be acquired, and final design documents prepared. Permits will include:
COE Section 404 permit, ADFG fish habitat permit, ADNR land lease or easement, ADNR water
rights (applied for but they won’t issue until after operations have gone on for 5 years), and SHPO
review. Final design will begin in approximately May 2019 and will be completed, including agency
approval, by December 2019. The development of license article plans with agency consultation
after the license is issued will also occur along with final design review by FERC and agencies. If
3 Considering the current uncertainty regarding funding by AEA under the REF Grant Program, authorizing the budget
for both phases in Round IX will ensure the project gets to the construction phase in a timely manner.
Renewable Energy Fund Round IX
Grant Application - Standard Form
AEA 15003 Page 9 of 44 7/8/14
additional field studies are requested by the agencies or FERC takes longer than expected to issue
a license, this timeline may be pushed back.
EXHIBIT 1: SSRAA HATCHERY AND NECK LAKE HYDROPOWER PROJECT LAYOUT
SECTION 3 – Project Management, Development, and Operation
3.1 Schedule and Milestones
Criteria: Stage 2-1.A: The proposed schedule is clear, realistic, and described in adequate detail.
Please fill out the schedule below (or attach a similar sheet) for the work covered by this funding
request. Be sure to identify key tasks and decision points in in your project along with estimated
start and end dates for each of the milestones and tasks. Please clearly identify the beginning and
ending of all phases of your proposed project. Add additional rows as needed.
PHASE II -
Milestones Tasks
Start
Date
End
Date Deliverables
NOI & PAD Issued to
FERC
Completion & Filing of NOI &
PAD; issue Public/Agency
Meeting Notice
07/01/16 08/01/16 FERC Accepts NOI & PAD
Agency Consultation
Meeting
Consultation with FERC and
Agencies; consultation meeting;
start to develop study plan
08/01/16 09/01/16 Filing of NOI with FERC;
Public Notice of NOI;
Draft Study Plan
Issued
Draft Study Plan issued for
comment 12/01/16 12/31/16 Draft Study Plan
Final Study Plan
Issued
Final Study Plan issued so field
studies can begin 01/05/17 02/05/17 Final Study Plan
Fish Survey Final
Report Conduct fish survey – contractor 04/01/17 12/01/17 Final Fish Survey Report
Renewable Energy Fund Round IX
Grant Application - Standard Form
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Wildlife Survey Final
Report
Conduct wildlife survey –
contractor 05/01/17 12/01/17 Final Wildlife Survey Report
TES Botanical Survey
Final Report
Conduct TES botanical survey –
contractor 05/01/17 12/01/17 Final TES Survey Report
Wetland Delineation
Final Report
Conduct wetland delineation –
contractor 05/01/17 12/01/17 Final Wetland Delineation
Report
Cultural Resource
Survey Final Report
Conduct cultural resource survey –
contractor 06/01/17 12/01/17 Final Summary of Cultural
Resources
Water Quality
Sampling Final Report
Conduct water quality sampling –
contractor/APC 07/01/16 12/01/17 Final Water Quality Report
Feasibility &
Conceptual Design
Analysis of data collected;
issuance of draft and final
feasibility and conceptual design
reports
10/01/17 12/31/17
Issuance of Final Feasibility
Report and Conceptual Design
Report
PHASE III -
Milestones Tasks
Start
Date
End
Date Deliverables
Land Easements /
Authorizations / Early
Entry Permit
Applications
Apply to DNR and SSRAA for
land use authorizations, including
an Early Entry Permit
01/06/18 01/30/18 Applications for land use filed
with agencies
Environmental
Assessment Issued Develop and finalize the EA 01/06/18 02/28/18 Final EA completed
File License
Application with
FERC
Develop and finalize the license
application 02/01/18 03/15/18 Final License Application
filed
File for Agency
Permits
Apply for COE, ADFG, ADNR,
ADEC, etc. permits 12/31/17 01/01/19 Applications for permits filed
with agencies
FERC License
Issuance
After submitting license
application, respond to additional
info requests, etc. up to FERC
license issuance
03/15/18 04/30/19 FERC issues license
Final Design Approval Finalize project design and get
FERC / Agency approvals 04/30/19 12/31/19 Final design is approved
License Article Plan
Approvals
Submit draft license articles to
FERC and agencies for
approvals/permits in preparation to
begin construction
04/30/19 12/31/19 License article plans are
approved
Phase IV: Construction: January 2020 – September 2021 [not a part of this application; for
reference only]
Construction would begin after a FERC license is received and the license article plans and final
design are approved by FERC and other agencies. Once funding for this phase is secured, APC will
order generating equipment and begin off-site fabrication of the intake and powerhouse modules.
Onsite construction is anticipated to begin in early 2020 and continue through the third quarter of
2021.
The construction work should not be significantly compromised by weather at this temperate location.
• Award contract for supply of the generating equipment by August 2019
• Completion of access road to intake site by April 2020
• Completion of Diversion Structure by April 2021
• Completion of Powerhouse by July 2021
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• Completion of Generation Equipment Installation by July 2021
• Completion of Penstock Installation by April 2021
• Completion of Distribution Line into Whale Pass by April 2021
• Test and Startup by July-August 2021
• End of Phase IV Construction September 2021
EXHIBIT 2: PROJECT TIMELINE
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.
Grand Total, Phase II and
Phase III Activities $395,200.00 $98,800.00 APC $494,000.00
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
PHASE I: Reconnassaince
Reconnaissance (completed)
PHASE II: Resource Assement/Feasibility Analysis/Conceptual Design
Agency Consultation/Permitting
Resource Assessment (studies)
Feasibility & Conceptual Design
PHASE III: Final Design and Permitting
Permitting & FERC License App
FERC Application Processing
Final Design
Agency Permits Issued
PHASE IV: Construction
Grant processing
Access Road
Diversion & Intake
Penstock
Generating Equipment Procurement
Powerhouse
Install Distribution Line
Test and Start-Up
LEGEND:<-- Procurement and off-site fabrication <-- On-site construction
2021
NECK LAKE HYDROELECTRIC PROJECT
DEVELOPMENT SCHEDULE
2016 2017 2018 2019 2020
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AEA RE- Fund
Grant Funds
Grantee
Matching Funds
Source of
Matching Funds:
Cash/In-
Kind/Federal
Grants/Other
State
Grants/Other
TOTALS
Total Cost - Phase I $3,500.00 APC $3,500.00
Total Cost - Phase II $136,800.00 $34,200.00 APC $171,000.00
Total Cost - Phase III $258,400.00 $64,600.00 APC $323,000.00
Grand Totals - Phase II & Phase III
Activities $395,200.00 $98,800.00 APC $494,000.00
Phase II of this project requires a total of $171,000 to: complete environmental studies; complete
consultations with SSRAA, FERC, and resource agencies; conduct a feasibility analysis; and finalize
the conceptual design. APC requests $136,800 AEA REF funding for Phase II, and will provide
$34,200 cash match.
Phase III of this project requires a total of $323,000 to: develop project final design; write the
environmental assessment; continue agency consultation; complete a FERC license application
filing; respond to FERC’s additional information requests (AIR); finalize agency permitting; and
address any additional field studies needed to satisfy agency requirements. APC requests $258,400
AEA REF funding for Phase III, and will provide $64,600 cash match.
APC’s cumulative Phase II-III request is for a total of $395,200 AEA REF funding, which will
be matched by $98,800 in cash provided by APC out of its normal operating funds. This
represents an 80% grant / 20% cash match ratio.
The construction costs indicated in Section 3.2.5 of this application were developed in August of
2015, based on site reconnaissance conducted in 2009. Construction costs may change by the time
final design is completed, and will be updated upon completion of Phase II and Phase III activities
proposed for AEA REF funding.
In Round II of the REF program, APC was awarded $108,000 for completion of a conceptual design,
environmental surveys, and a feasibility report. Part of these funds were used to develop and submit
a filing for a FERC jurisdictional determination. FERC determined that a license would be required
for this project. Of the total amount of the grant funding, only $22,474.73 was expended. These funds
were used to support activities including surveying and mapping, preparation of the FERC
jurisdictional determination filling, and conceptual design.
FERC’s finding that a license would be required resulted in APC terminating project activities due to
concerns about increased project development costs. However, FERC has recently developed a
small hydropower licensing track that should significantly expedite the licensing process and reduce
the licensing costs associated with a small project such as Neck Lake. The availability of this
licensing track – in conjunction with diesel cost escalation estimates and key findings of the SEIRP
– have lead APC to conclude that it is in the best interest of the ratepayers of Whale Pass to resume
efforts to pursue the Neck Lake hydropower project. This finding is supported by updated
reconnaissance level financial and economic analysis completed by APC in August of 2015.
Phase II and III project activities and budgets have been updated to reflect current conditions.
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3.2.2 Budget Forms
Applications MUST include a separate worksheet for each project phase that was identified in section
2.3.2 of this application, (I. Reconnaissance, II. Feasibility and Conceptual Design, III. Final Design
and Permitting, and IV. Construction. Please use the tables provided below to detail your proposed
project’s total budget. Be sure to use one table for each phase of your project. The milestones and
tasks should match those listed in 3.1 above.
If you have any question regarding how to prepare these tables or if you need assistance preparing
the application please feel free to contact AEA at 907-771-3031 or by emailing the Grants
Administrator, Shawn Calfa, at scalfa@aidea.org.
Phase II
Milestones
RE- Fund Grant
Funds
Grantee
Matching Funds
Source of
Matching Funds:
Cash/In-
Kind/Federal
Grants/Other
State
Grants/Other
TOTALS
Initial FERC Permitting
Process/Agency
Consultation
$17,600.00 $4,400.00 APC $22,000.00
Wildlife Survey $8,000.00 $2,000.00 APC $10,000.00
TES Botanical Survey $8,000.00 $2,000.00 APC $10,000.00
Wetland Delineation $16,000.00 $4,000.00 APC $20,000.00
Cultural Resource Survey $8,000.00 $2,000.00 APC $10,000.00
Consultation /
Coordination with SSRAA $8,000.00 $2,000.00 APC $10,000.00
Water Quality Sampling $7,200.00 $1,800.00 APC $9,000.00
Fish Survey $40,000.00 $10,000.00 APC $50,000.00
Feasibility Analysis $16,000.00 $4,000.00 APC $20,000.00
Conceptual Design $8,000.00 $2,000.00 APC $10,000.00
TOTALS $136,800.00 $34,200.00 APC $171,000.00
Budget Categories:
Direct Labor & Benefits $44,800.00 $11,200.00 APC $56,000.00
Travel & Per Diem $4,800.00 $1,200.00 APC $6,000.00
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $87,200.00 $21,800.00 APC $109,000.00
Construction Services $ $ $
Other $ $ $
TOTALS $136,800.00 $34,200.00 APC $171,000.00
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3.2.3 Cost Justification
Indicate the source(s) of the cost estimates used for the project budget.
The budget is based upon APC’s decades of experience and success in hydropower project
development. APC believes that its experience designing, constructing, and operating similar small
hydropower projects in Alaska; its longstanding vendor, technical service, supply chain relationships
and industry knowledge; and its incumbent project development resources will help minimize risks
and control costs. APC has a strong understanding of risks through development/construction
experience, as well as an understanding of the processes involved in creating a durable hydropower
asset capable of 50+ years of reliable, safe operation.
3.2.4 Funding Sources
Indicate the funding sources for the phase(s) of the project applied for in this funding request.
Phase III Milestones AEA RE- Fund
Grant Funds
Grantee Matching
Funds
Source of
Matching Funds:
Cash/In-
Kind/Federal
Grants/Other State
Grants/Other
TOTALS
Additional Field Studies $50,400.00 $12,600.00 APC $63,000.00
FERC Licensing / Agency
Permitting / EA $48,000.00 $12,000.00 APC $60,000.00
Final Design $160,000.00 $40,000.00 APC $200,000.00
TOTALS $258,400.00 $64,600.00 APC $323,000.00
Budget Categories:
Direct Labor & Benefits $203,200.00 $50,800.00 APC $254,000.00
Travel & Per Diem $4,800.00 $1,200.00 APC $6,000.00
Equipment $$$
Materials & Supplies $$$
Contractual Services $50,400.00 $12,600.00 APC $63,000.00
Construction Services $$$
Other $$$
TOTALS $258,400.00 $64,600.00 APC $323,000.00
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Grant funds requested in this application $395,200.00
Cash match to be provided $98,800.00
In-kind match to be provided $0
Total costs for project phase(s) covered in application (sum of above) $494,000.00
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 $3,500.00
Feasibility and Conceptual Design $193,475.00 4
Final Design and Permitting $323,000.00
Construction $2,500,000.00
Total Project Costs (sum of above) $3,019,975.00
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.
NA
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. AEA workbook estimates $91,314.26
2. Hours diesel OFF/year: 8,716 [99.5%]
3. $25,000
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.
During Phases II and III, APC proposes to provide quarterly reports to AEA regarding the status of
the work. APC has provided similar reports to AEA and other grant funding agencies in the past
several years on other projects, and has established the necessary procedures, timely preparation
and delivery of reports, and responding in a timely manner to questions and requests for information
by the AEA. In addition to providing quarterly reports, at the completion of Phase II, APC will provide
AEA with a summary report including conceptual design drawings and an updated cost estimate. At
4 Includes $22,474.73 from earlier grant funding from AEA Round 2 for Phase II.
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the completion of Phase III, APC will provide AEA with a summary reporting including final design
drawings, specifications, updated cost estimates, and copies of the FERC license and permits.
APC is open to consider any additional/alternative reporting measures which may be desired by the
AEA.
3.4 Operational Logistics
Criteria: Stage 2-1.D: Logistical, business, and financial arrangements for operating and maintaining
the project throughout its lifetime and selling energy from the completed project are reasonable and
described in adequate detail.
Describe the anticipated logistical, business, and financial arrangements for operating and
maintaining the project throughout its lifetime and selling energy from the completed project.
Logistical Arrangements:
The Neck Lake hydropower project will be operated primarily through automation. The project’s
powerhouse will be located adjacent to the SSRAA Hatchery on the existing road system. This will
allow for easy access for scheduled maintenance, and any emergencies. The access road will
allow personnel to access the project’s other facilities as may be needed.
Business Arrangements:
The Neck Lake hydropower project is a self-build project undertaken by the incumbent utility, APC,
which currently provides certificated utilities services in Whale Pass. This eliminates the need for a
power purchase agreement.
Financial Arrangements:
APC will continue its current practice of performing all utility financial and accounting tasks
associated with generation of power in Whale Pass.
Additional details can be provided upon request to the AEA.
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.
Project Management Team:
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Resumes and references are enclosed.
Greg Mickelson – Alaska Power & Telephone Company
Project Manager
greg.m@aptalaska.com
907-755-4822
Vern Neitzer – Alaska Power & Telephone Company
Senior Engineer
Vern.n@aptalaska.com
907-983-2202
Larry Coupe – Alaska Power & Telephone Company
Senior Civil Engineer
Larry.c@aptalaska.com
360-385-1733 x155
Ben Beste – Alaska Power & Telephone Company
Senior Mechanical Engineer
Ben.b@aptalaska.com
360-302-1379
Bob Berreth – Alaska Power & Telephone Company
Senior Electrical Engineer
Bob.b@aptalaska.com
360-385-1733 x 123
Glen Martin – Alaska Power & Telephone Company
Grant Writer, Project Manager
Glen.M@aptalaska.com
360-385-1733 x 122
Jason Custer – Alaska Power & Telephone Company
Business Development Director
Jason.c@aptalaska.com
907-225-1950 x33
Christine Overly – Alaska Power & Telephone Company
Senior Accountant – Grant Funds Administrator
Christine.o@aptalaska.com
360-385-1733 x137
Additional AP&T senior engineers and project managers can be utilized as needed to assist with
management and execution of the project.
Greg Mickelson, APC’s V.P. of Power Operations will be the Project Manager for all phases of
work. Mr. Mickelson is an engineer with extensive experience in project management and electrical
generation, transmission and distribution. Mr. Mickelson has been a part of APCs team for over 30
years and has been an essential part of the company’s success. He has overseen numerous
grant-funded projects and is familiar with following associated guidelines and requirements. Mr.
Mickelson’s resume is enclosed.
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APC’s personnel will conduct all Phase II engineering work and will utilize contractors for the
environmental studies in Phase II. Resumes of key personnel are enclosed.
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
APC will manage the grant. APC has been providing power to Alaskan communities since 1957.
Since then, from only a handful of employees, APC has grown to 134 employee-owners (all of AP&T)
who provide power services to 25 communities. APC has experience with renewable resources after
constructing 4 hydroelectric projects in S.E. Alaska, currently owns and operates 7 hydroelectric
projects in S.E. Alaska, conducted field testing of a pre-commercial hydrokinetic turbine installed in
the Yukon River, and is currently constructing their 8th and 9th hydroelectric projects (Hiilangaay and
Yerrick Creek). APC also has extensive experience with diesel/hydropower system integration and
operations.
APC has personnel certified as electrical, civil, and mechanical engineers who maintain existing
facilities to the highest professional standards. APC has a consistent history of excellent performance
in reliability, customer service, and a long-standing reputation for being a low cost provider of electric
service. Additionally, APC is committed to transitioning from fossil fuel power generation to
renewable energy.
APC’s budgets have included several 50% grant funded projects for installation of transmission lines
on Prince of Wales Island, and three RUS (Rural Utilities Service) 100% grants for the installation of
transmission lines from Tok to Tetlin and Haines to Lutak, and communities along the Haines
Highway.
APC’s engineering staff has been involved in the design, construction and operation of hydroelectric
projects since the 1980’s. APC currently maintains over 250 miles of transmission line and has
seasoned staff to maintain diesel generators and hydro power plants. APC has administrators
responsible for multi-million dollar budgets, including the management of 60+ employees,
equipment, and all generation and distribution resources.
Resumes of key AP&T staff are attached.
Key APC/AP&T personnel and their roles in this project are as follows:
• Greg Mickelson, Project Manager & Construction Superintendent, Engineer
• Vern Neitzer, Senior Engineer
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• Bob Berreth, Electrical Design
• Ben Beste, Mechanical Design
• Larry Coupe, Civil Design
• Glen Martin, Resource Assessment, Permits, FERC License, Compliance
• Jason Custer, Financial and Business Case Analysis, Project Management Tasks, Technical
Writing
• Christine Overly, Senior Accountant – Grant Administrator
Phase I: Reconnaissance
Already completed by APC.
Phase II: Resource Assessment/Feasibility Analysis/Conceptual Design
APC will acquire site control and complete environmental and engineering/conceptual design
studies. APC may use the following contractors for the various surveys:
• Wetlands delineation – HDR Alaska Inc.
• Threatened and endangered plant species survey – HDR Alaska Inc.
• Fish surveys – Fisheye Consulting (or possibly staff from SSRAA Hatchery)
• Water quality sampling – Analytica Group Environmental Laboratories
• Cultural resource surveys – Northern Land Use Research Alaska, LLC
APC permitting specialists will compile environment information into resource assessment
documents as required by the various permitting agencies and FERC. APC engineers will conduct
engineering/conceptual design studies in-house.
Phase III: Final Design & Permitting
APC will complete agency consultation for permitting and filing a FERC license application. An
environmental assessment will be prepared for the license application as well. Final design will be
completed after the FERC license is issued. It is estimated that FERC’s small hydro licensing process
may take only one year before issuance of a license. Along with a FERC license, the following
permits will be acquired:
• 404 Certification / permit (Corps of Engineers)
• 401 Certification (ADEC); ADEC could waive this because of FERC and COE involvement
• Fish habitat permit (ADF&G)
• Land lease or easement (SSRAA)
• Land lease or easement (ADNR)
• Water right (ADNR); will be applied for, but will take minimum of 5 years to obtain because the
water right is only certified after the water is being used for a while (certified based on how much
water is actually used, or maximum daily use).
• SHPO review
APC will prepare the final design documents in-house using its staff civil, mechanical, and electrical
engineers, who all have extensive experience in hydroelectric development. These engineers
designed numerous successfully hydropower projects including Goat Lake, Black Bear Lake,
Kasidaya Creek, Falls Creek, and South Fork.
Phase IV: Construction [Not included with this grant request: for information purposes only.]
Construction activities will be completed by local contractors and APC staff:
• Access road – local contractor(s) or force account
• Intake fabrications – Reynold Grey Machining and Services
• Intake on-site construction – local contractor(s) or force account
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• Penstock materials procurement – APC
• Penstock installation – local contractor(s) or force account
• Generating equipment procurement – APC
• Powerhouse fabrications – Reynold Grey Machining and Services
• Powerhouse construction – local contractor(s) and force account
• Distribution line construction – local contractor(s) and force account
• Testing and start-up – APC
Reynold Grey Machining and Services is a welding and fabrication company in Port Townsend,
Washington that APC has used frequently for similar work, including fabrication of container modules
for diesel powerplants recently installed in Slana and Allakaket. Reynold Grey is located near APCs
engineering staff, who can conveniently oversee the proposed fabrication work.
APC will negotiate purchase orders for materials and equipment from vendors who have performed
work on other, similar APC hydropower projects.
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.
AP&T’s utility finance department will perform project accounting tasks under the leadership of
CFO Chad Haggar.
Chad Haggar, CPA, CFO – Lead Accountant
Christine Overly – Senior Accountant – Grant Funds Administrator
RESUMES OF KEY PERSONNEL 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.
APC is a regulated utility, and is required to track and substantiate expenses in a manner which is
acceptable to the Regulatory Commission of Alaska. APC is also accustomed to maintaining project
records in a manner which is acceptable to the AEA, and the State of Alaska, for grant-funded
projects. Thus, APC is accustomed to maintaining data on utility costs and expenditures which meets
with a very high standard in terms of assuring that expenses are reasonable, ordinary, and
necessary.
APC is a private sector business which is accustomed to managing and controlling costs in order to
maximize value and return on investment while ensuring sustainable benefits.
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.
APC routinely employs local labor as full and part time employees. APC will contract aspects of
Phase II and III activities to the local labor pool if their skills match project needs. Studies to be
conducted may require other Alaskans to come to POW to conduct the work if local skill isn’t
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available. APC has already trained the local POW workforce to be telephone technicians, power
linemen, powerhouse operators, diesel mechanics, and customer service representatives, etc.; and
will continue to do so.
During the construction phase the local labor force will be more extensively utilized.
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SECTION 5 – TECHNICAL FEASIBILITY
5.1 Resource Availability
Criteria: Stage 2-3.A: The renewable energy resource is available on a sustainable basis, and project
permits and other authorizations can reasonably be obtained.
5.1.1 Proposed Energy Resource
Describe the potential extent/amount of the energy resource that is available, including average
resource availability on an annual basis. Describe the pros and cons of your proposed energy
resource vs. other alternatives that may be available for the market to be served by your project. For
pre-construction applications, describe the resource to the extent known. For design and permitting
or construction projects, please provide feasibility documents, design documents, and permitting
documents (if applicable) as attachments to this application.
Amount of Energy Available, and Pros and Cons of Project:
Proposed Energy Resource. The Neck Lake site has the potential to generate 3.2 GWh per year
with an installed capacity of 750 kW, however, that would be much greater than existing community
needs. APC will evaluate the optimum installed capacity during Phase II; at this time an installed
capacity of 124 kW is estimated as being appropriate.
Lowers Energy Costs. It is currently estimated that the project will be able to produce clean energy
for approximately $0.30 less (50% less) than the cost of diesel-fired generation of electricity. Over
time, annual savings will increase as the cost of diesel fuel continues to escalate over stabile
hydropower pricing.
Stabilizes Energy Costs Long Term. The project will stabilize local energy costs by reducing
dependency on diesel fuel – a volatile commodity with costs which escalate faster than the rate of
inflation. Hydropower maintenance and operating costs are extremely low compared to that those
associated with diesel-fired generation.
Long Project Lifespan with Additional Cost-Savings Available Beyond Capital Cost
Repayment. The project has an estimated useful life of over 50 years. Properly constructed
hydropower sites can provide over 100+ years of reliable service. (For example, AP&T’s Dewey
Lakes hydropower project has been operating for 113 years.) After the financing period is complete
and capital costs are paid off, the cost of maintaining and operating a hydropower project drops to
very low levels.
Diesel Fuel Displacement Benefit. The project will displace approximately 99.5% of Whale Pass’s
diesel-fired generation of electricity with clean, renewable hydropower from a local, low-impact
source.
Supports State Renewable Energy Policy Goals. By supplanting diesel-fired generation with
clean, renewable hydropower, the project will help to support the State of Alaska’s goal of 50%
renewable energy by 2025.
No Difficulties with Power Sales Agreements. The project is being proposed by APC, the
incumbent utility, as a self-build project.
Benefits Community which is Still 100% Diesel Dependent. Unlike other communities of Prince
of Wales Island, Whale Pass has not yet had the opportunity to transition from 100% diesel-fired
generation to an energy mix including renewables. The most recently available AEA PCE report
identifies $0.62 kWh pricing for this service region, with an average PCE payment of $0.39 per
eligible kilowatt hour.
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Generates Significant Power Cost Equalization Savings for the State of Alaska. Due to current
100% dependency on diesel-fired generation, the State of Alaska would experience significant
Power Cost Equalization subsidization savings. State PCE statistics indicate the 54.9% of total kWh
sold in Whale Pass in FY14 are PCE-eligible kWh; if this ratio holds true, the State of Alaska would
realize significant PCE subsidization savings, with approximately 45% of cost -savings being realized
by current ratepayers.5
A Reasonable Increment of Hydropower. Economic viability of many hydropower projects in
Alaska is challenged by the difficulty of matching the utility’s incremental load growth to the size of
locally available hydropower resources; this produces the frequently occurring situation in which a
portion of a project’s power and energy from a new hydropower project cannot be sold during initial
years of operation. Neck Lake is a small increment of power and energy, which APC anticipates can
be integrated within the regional utility system without these types of challenges to economic and
financial feasibility.
Experienced Hydropower Developer. APC has significant experience developing, owning, and
operating low impact hydropower projects. APC currently owns and operates 7 hydropower projects,
with its 8th and 9th projects under construction (Hiilangaay and Yerrick Creek). APC’s parent
company, AP&T, has over 50 years of experience as a private sector Alaskan business engaged in
ownership, development, and reliable operation of hydropower projects.
Existing Investment to Date. Reconnaissance phase activities have been completed due to private
investment by both the AEA and APC in which discussions with SSRAA occurred, topographic
survey was completed, and a jurisdictional determination with FERC was completed.
Disadvantage – Large Capital Expenditure Requirement. The major drawback of hydropower
projects is that they are extremely capital intensive. While hydropower projects have very long useful
lifespans (50+ or even 100+ years), commercial financing is typically available for a 30 year period
at most. Whale Pass is a relatively small increment of new hydropower (0.124 MW), which helps
reduce the total capital expenditure required.
Ease of Integration. Hydropower can be readily incorporated alongside diesel-fired generation
within a small utility system, with minimal integration concerns.
Discussion of Energy Technology Alternatives in Whale Pass Region
• No other viable alternative energy sources have been identified in the Whale Pass region.
• Transmission Interconnection to POW Grid. A 25 mile transmission connection would
connect Whale Pass to the existing the Prince of Wales grid, providing access to APC
hydropower assets, however, the transmission connection project would be more costly than
the Neck Lake micro hydropower project, would be less reliable, and would have a shorter
useful lifespan.
• Diesel: A Costly and Unsustainable Energy Source – Whale Pass is currently 100%
dependent on diesel-fired generation. This energy source is very costly, with pricing
escalating faster than inflation due to the rising price of petroleum – a volatile commodity
sensitive to a wide variety of supply risks and geopolitical factors. The high cost of diesel-
fired generation places financial pressure on families and businesses in Whale Pass.
5 Source: Most recently available AEA PCE report:
http://www.akenergyauthority.org/Content/Programs/PCE/Documents/FY14PCEStatisticalRptByComtAmended.pdf
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Continued 100% dependency on diesel-fired generation is not a sustainable way of life
for residents of Whale Pass.
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
Applicable Permits:
• 404 permit (Corps of Engineers)
• FERC License
• Water right (ADNR),
• State land easement (ADNR)
• Fish habitat permit (ADF&G)
• SHPO review
Permitting Timeline: APC expects to complete environmental and design studies in 2017 for
Phase II. Phase III permitting, licensing, and final design are anticipated to be completed by the end
of 2019 due to the FERC licensing process.
Potential Permitting Barriers: There are no known permitting barriers at this time.
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.
This project is located on lands owned by the State of Alaska, and SSRAA. As Phase II and Phase
III activities progress, APC will be applying for a lease or easement from the State of Alaska, and will
negotiate an arrangement with SSRAA. SSRAA has provided the applicant with a letter of support
for this project (enclosed).
The hydroelectric facilities will be designed to avoid interference with the existing salmon rearing and
collection facilities operated at Neck Lake by the SSRAA. APC and SSRAA have agreed to work
cooperatively to develop a hydropower project that will be junior to all needs of the Neck Lake
hatchery, and will assure no adverse impacts to the hatchery or salmon runs. The project will help
support long-term sustainability of hatchery operations by providing affordable hydropower at
approximately half the cost of current diesel-fired generation, with pricing remaining stabile long term.
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EXHIBIT 3: PROJECT DESIGN
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.
APC believes that its experience designing, constructing, and operating similar small hydropower
projects in Alaska; its longstanding vendor, technical service, supply chain relationships and industry
knowledge; and its incumbent project development resources will help minimize risks and control
costs. APC has a strong understanding of risks through development/construction experience, as
well as an understanding of the processes involved in creating a durable hydropower asset capable
of 50+ years of reliable, safe operation. APC’s engineering staff has been involved in the design,
construction and operation of hydroelectric projects since the 1980’s. APC currently owns and
operates 7 hydropower projects in Alaska, with its 8th and 9th projects (Hiilangaay and Yerrick Creek)
currently under construction. APC currently maintains over 250 miles of transmission line and has
seasoned staff to maintain diesel generators and hydro power plants. APC has administrators
responsible for multi-million dollar budgets, including the management of 60+ employees,
equipment, and all generation and distribution resources.
Activities currently proposed for AEA REF Round IX funding support will include predevelopment
activities which assist in identifying and mitigating risks.
Site Control – APC will apply to ADNR for development rights on state lands. APC is confident that
the Neck Lake hydropower facility will not conflict with the SSRAA operation already on the site. APC
and SSRAA have agreed to work cooperatively to develop a hydropower project that will be junior to
all needs of the Neck Lake hatchery, and will assure no adverse impacts to the hatchery or salmon
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runs. SSRAA has also provided a letter of support, which is enclosed. The project will help support
long-term sustainability of hatchery operations by providing affordable hydropower at approximately
half the cost of current diesel-fired generation, with pricing remaining stabile long term.
Seismic – Project components will be designed appropriately for seismic activity, since the Project
will be located in a moderate-risk seismic zone. Structures will be buried as much as possible to
minimize seismic impacts.
Underground Construction – The project does not include underground construction, which can
be fraught with cost overrun potential. Geotechnical investigations will be made at the diversion and
powerhouse areas to provide an adequate level of knowledge about ground conditions at those sites.
Inclement Weather – Working conditions in the project area during the winter could cause brief
interruptions of the construction schedule. If prolonged interruptions occur that could jeopardize the
completion schedule, APC will add contractors or more personnel as necessary to get back on
schedule.
Cost-Overrun – APC believes that its experience constructing similar small hydropower projects in
Alaska and its mature supply chain relationships shall minimize cost-overrun risks, and inform
determination of a reasonable contingency margin.
Environmental Opposition – No environmental opposition to the project is known. However, there
is environmental opposition to continued diesel-fired generation in the Whale Pass region, which will
be addressed through development of the project.
Risks of Non-Development – Failing to develop the renewable energy assets due to lack of interest
or support by the State of Alaska and others will leave the residents of Whale Pass dependent on
the diesel-fired generation of electricity. If diesel-dependency persists, this community can expect
exacerbated socioeconomic distress, continued lack of economic opportunity, and the inability to
respond to emerging commercial opportunities and support new economic development.
Private Sector Investment Helps Mitigate Risks – Alaska Power & Telephone subsidiary APC will
be undertaking development of the project. In addition to providing cash match to predevelopment
activities, AP&T anticipates investing substantially in construction of the project. Because private
sector businesses are motivated by the ability to earn a profit, as well as the adverse financial impacts
of cost-overruns or project failure, AP&T – as an active investor – will be strongly motivated to
mitigate risks, and assure the project is a success.
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
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• Identify and describe other potential barriers
Threatened and Endangered Species: No impacts are anticipated to threatened and endangered
species, due to the project’s location and small size (<0.5 acres). An environmental assessment will
be made in Phase III as part of the FERC licensing process, which includes agency consultation.
Habitat Issues: The Southern Southeast Regional Aquaculture Association (SSRAA) has
established a rearing and trapping facility at the lake and outlet stream. Coho salmon smolts are
reared in pens in the lake, then released into the lake for migration out to tidewater during the spring.
When the adults return, they ascend a ladder into a single raceway, where they are quickly
processed for shipment to markets in the Lower 48. Water for the raceway and ladder is diverted
from the head of the second (middle falls). SSRAA’s existing knowledge of fish usage of the stream
may allow the project to go without additional fish surveys. However, until consultation begins, we
are assuming fish surveys will be required.
The hydroelectric facility will be designed to avoid interference with the existing salmon rearing and
collection facilities. APC and SSRAA have agreed to work cooperatively to develop a hydropower
project that will be junior to all needs of the Neck Lake hatchery, and will assure no adverse impacts
to the hatchery or salmon runs. The project will help support long-term sustainability of hatchery
operations by providing affordable hydropower at approximately half the cost of current diesel-fired
generation, with pricing remaining stabile long term.
Wetlands: There is potential for a small amount of wetlands to be impacted. It is expected that a
wetlands delineation may be necessary to determine what if any impacts may occur.
Archaeological & Historical Resources: A site review by the SHPO is required to determine
necessity of an archaeological survey.
Land Development Constraints: APC will coordinate with SSRAA to make sure their needs and
goals are not affected by construction and operation of the Project.
Telecommunications Interference: The 12 kV distribution line will not create interference with
telecommunications.
Aviation Considerations: There is no significant aviation in the Project area and the project
infrastructure will be within the range of existing tree heights.
Visual, Aesthetic Impacts: The Project will not be in a visually or aesthetically special view shed
that needs protection.
Potential Barriers: None.
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.
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Existing Energy Generation and Usage
a) Basic configuration (if system is part of the Railbelt 6 grid, leave this section blank)
i. Number of generators/boilers/other 3
ii. Rated capacity of generators/boilers/other
Unit #1 = JD4045, 70 kW, Installed 1995, 11.24
kWh/gal. (average from 2013)
Unit #2 = JD4045, 70 kW, Installed 1995, 11.95
kWh/gal. (average from 2013)
Unit #3 = JD6065, 110 kW, Installed 2008, 13.33
kWh/gal. (avg. 2013)
iii. Generator/boilers/other type As noted above
iv. Age of generators/boilers/other As noted above
v. Efficiency of generators/boilers/other 12.16 kWh/gal. of diesel (aggregate for all
generators)*
vi. Is there operational heat recovery? (Y/N) If yes
estimated annual displaced heating fuel (gallons) No
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor $0.22 / kwh non-fuel cost (labor and non-labor)
ii. Annual O&M cost for non-
labor $0.22 / kwh non-fuel cost (labor and non-labor)
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]
300,000 kWh (2014) – This figure does not include "off-grid" residents running
numerous dispersed diesel gensets, who would reconnect in the event more
affordable hydropower becomes available. APC anticipates these connections
could increase the total demand to approximately 450,000 kWh.
ii. Fuel usage
Diesel
[gal] 36,000
Other
iii. Peak Load
34.40 kW – This figure does not include "off-grid" residents running numerous
dispersed diesel gensets, who would reconnect in the event more affordable
hydropower becomes available.
iv. Average Load
34.15 kW – This figure does not include "off-grid" residents running numerous
dispersed diesel gensets, who would reconnect in the event more affordable
hydropower becomes available.
6 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric
Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power.
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v. Minimum Load
26 kW – This figure does not include "off-grid" residents running numerous
dispersed diesel gensets, who would reconnect in the event more affordable
hydropower becomes available.
vi. Efficiency 12.16 kWh/gal.
vii. Future trends Use of electricity likely to increase with more affordable rates and with
reconnection of current "off-grid" residents.
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] NA
ii. Electricity [kWh] NA
iii. Propane [gal or MMBtu] NA
iv. Coal [tons or MMBtu] NA
v. Wood [cords, green tons, dry tons] NA
vi. Other NA
*AEA Report. Power Cost Equalization Program - Statistical Data by Community. 2014
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5.4.2 Future Trends
Describe the anticipated energy demand in the community over the life of the project.
Load is expected to grow as residence switch to hydropower over self-generation methods. The
project will help support long-term sustainability of Neck Lake SSRAA hatchery operations by
providing affordable hydropower at approximately half the cost of current diesel-fired generation, with
pricing remaining stabile long term. This will support and sustain the vitality of commercial and
recreational fishing resources in the region. The project ability to lower electric rates may also
encourage more home building and commercial enterprises in and around Whale Pass.
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.
It is currently estimated that the project will be able to produce clean energy for approximately $0.30-
$0.31 less (50% less) than the cost of diesel-fired generation of electricity. Over time, annual savings
will increase as the cost of diesel fuel continues to escalate over stabile hydropower pricing.
Provides more affordable renewable energy, reducing energy costs from $0.62 to $0.32 / kWh in
year one, increasing over time as the cost of diesel fuel rises. (Estimates based on recon-level
financial and economic modelling.)
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
Renewable energy technology specific to location – The Project will be a conventional run-of-
river hydroelectric project. Project features shall include:
• 400 feet of single lane access road
• Intake with fish screen, 34 cfs diversion capacity
• 350 feet of 30-inch-diameter pipeline
• Powerhouse with four 31-kW generating units, each consisting of a pump-as-turbine and
synchronous generator
• Upgrade of about 4 miles of distribution line from single-phase to three-phase to reach the diesel
plant in Whale Pass.
Hydroelectric technology is well established, with over 100+ years of successful commercial
application in southeast Alaska, British Columbia, and the Pacific Northwest. The Project will utilize
the abundant rainfall and steep topography afforded by the falls on the Neck Lake outlet stream to
generate renewable energy.
Optimum installed capacity – 124 kW (to be confirmed by Phase II studies).
Anticipated capacity factor – TBD. Estimated at 40%.
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Anticipated annual generation – Potentially 450 MWh/yr, providing “off-grid” residents connect to
receive more affordable electricity. As Whale Pass loads grow, consistent with estimates within the
southeast Alaska integrated resource plan, the project would be able to generate as much as 1,000
MWh/yr with the proposed installed capacity of 124 kW.
Anticipated barriers – No technological barriers.
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]
124 kWh run-of-river hydropower
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] 1,000,000 kWh max. (300,000 kWh at current load levels)
ii. Heat [MMBtu] NA
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu] NA
ii. Coal [tons or MMBtu] NA
iii. Wood or pellets [cords, green tons,
dry tons]
NA
iv. Other NA
d) i. Estimate number of hours renewable
will allow powerhouse to turn diesel engines
off (fill in as applicable)
Approximately 8,716 hours annually
5.4.5 Metering Equipment
Please provide a short narrative, and cost estimate, identifying the metering equipment that will be
used to comply with the operations reporting requirement identified in Section 3.15 of the Request
for Applications.
The project will be operated by a SCADA system which will allow for remote viewing and control of
the project. This system will record the amount of kWh generated as well as other data. Customers
in Whale Pass are currently metered to record their usage. Cost of the SCADA system is included
within the project’s construction budget.
A plant log is kept at each powerhouse to document conditions related to daily operations, including
problems, repairs, and maintenance. Calculations are routinely made to determine water use and
electricity generated. Comparisons to how much diesel fuel has been offset by diesel generation
can then be made.
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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.
The AEA’s econometric model calculates a B/C Ratio of 1.75, total NPV benefits of $5.12m, and
NPV net benefit of $2.6m
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Project Description
Community
Nearest Fuel Community
Region
RE Technology
Project ID
Applicant Name
Project Title
Results
NPV Benefits $5,120,820.30
NPV Capital Costs $2,931,626
B/C Ratio 1.75
NPV Net Benefit $2,665,630
Performance Unit Value
Displaced Electricity kWh per year 450,000
Displaced Electricity total lifetime kWh 22,500,000
Displaced Petroleum Fuel gallons per year 36,000
Displaced Petroleum Fuel total lifetime gallons 1,800,000
Displaced Natural Gas mmBtu per year -
Displaced Natural Gas total lifetime mmBtu -
Avoided CO2 tonnes per year 365
Avoided CO2 total lifetime tonnes 18,270
Proposed System Unit Value
Capital Costs $3,019,575$
Project Start year 2021
Project Life years 50
Displaced Electric kWh per year 450,000
Displaced Heat gallons displaced per year -
Renewable Generation O&M $ per year 30,196
Electric Capacity kW 124
Electric Capacity Factor %40
Heating Capacity Btu/hr 0
Heating Capacity Factor %0
Total Public Benefit 2015$ (Total over the life of the project)
Base System
Size of impacted engines (select from list)$/kWh
Diesel Generator O&M 151-360kW 0.203$
Applicant's Diesel Generator
Efficiency kWh per gallon
Total current annual generation kWh/gallon
Diesel Generation Efficiency 12.50
Whale Pass
Whale Pass
Rural
Hydro (Run of River)
Neck Lake Hydro
Alaska Power Company
Neck Lake Hydropower Project: Phases II-III
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Annual fuel displacement = 36,000/gal.
Annual fuel savings = Will depend fuel prices that year. Estimated at $124,200 in 2021, per AEA
fuel pricing dataset.
Lifetime fuel displacement = 1,800,000/gal. over 50 years; hydro is capable of 100+ years of service
Lifetime cost savings = $8,946,000 per AEA fuel pricing dataset
Hours diesel expected to be OFF/year: 8,716 [99.5%]
Public Benefit – The project will help support long-term sustainability of Neck Lake hatchery
operations by providing affordable hydropower at approximately half the cost of current diesel-fired
generation, with pricing remaining stabile long term. This will support and sustain the vitality of
commercial and recreational fishing resources in the region. The project will also significantly reduce
electric rates for the community of Whale Pass and potentially encourage more commercial or
business development.
Produces significant PCE benefits for the State of Alaska.
PCE is a complex calculation with outputs which are a function of a variety of variables, including: 1)
level of legislatively authorized appropriation; 2) the performance of the PCE endowment, and level
of investment income produced during a given period; 3) current power and energy prices in
“benchmark” communities used as a point of comparison, which in turn are determined by their own
unique set of variables; 4) the cost of diesel fuel.7 The extent to which PCE subsidization is deployed
in recipient communities is a function of the level of energy consumed by eligible recipients, and in
the case of “community facilities,” a function of local population. This makes it difficult to forecast
PCE savings. However, State PCE statistics indicate the 54.8% of total kWh sold in Whale Pass in
FY14 are PCE-eligible kWh; if this ratio holds true, the State of Alaska would realize significant PCE
subsidization savings, with approximately 45% of cost-savings being realized by current ratepayers.8
Due to the fact that PCE subsidizes the first 500 kWh per month of residential energy purchases,
and the first 70 kWh per month x the community population of community facility expenses, the State
of Alaska is “at the front of the line” to experience cost savings for PCE-eligible ratepayer classes.
These PCE savings can be used to assist other, less fortunate communities in other parts of Alaska.
Lowers Energy Costs. It is currently estimated that the project will be able to produce clean energy
for approximately $0.30 less than the current cost of diesel-fired generation of electricity. Over time,
annual savings will increase as the cost of diesel fuel continues to escalate over stabile hydropower
pricing.
Stabilizes Energy Costs Long Term. The project will stabilize local energy costs by reducing
dependency on diesel fuel – a volatile commodity with costs which escalate faster than the rate of
inflation. Hydropower maintenance and operating costs are extremely low compared to that those
associated with diesel-fired generation.
Long Project Lifespan with Additional Cost-Savings Available Beyond Capital Cost
Repayment. The project has an estimated useful life of over 50 years. Properly constructed
hydropower sites can provide over 100+ years of reliable service. (For example, APC’s Dewey Lakes
hydropower project has been operating for 113 years.) After the financing period is complete and
7 Source: http://www.akenergyauthority.org/Programs/PCE
8 Source: http://www.akenergyauthority.org/Programs/PCE
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capital costs are paid off, energy costs drop dramatically, reflecting the relatively low level of costs
associated with operating and maintaining a hydropower project.
Generates Significant Power Cost Equalization Savings for the State of Alaska. Due to current
100% dependency on diesel-fired generation, the State of Alaska would experience significant
Power Cost Equalization subsidization savings. State PCE statistics indicate that 54.8% of total kWh
sold in Whale Pass in FY14 are PCE-eligible kWh; if this ratio holds true, the State of Alaska would
realize significant PCE subsidization savings, with approximately 45% of cost-savings being realized
by current ratepayers.9 At present, APC estimates PCE savings to be $3,160,850 over the 50-year
life of the Project.
The AEA’s econometric model provides a B/C Ratio of 1.75.
The project will help support long-term sustainability of Neck Lake hatchery operations by providing
affordable hydropower at approximately half the cost of current diesel-fired generation, with pricing
remaining stabile long term. This will support and sustain the vitality of commercial and recreational
fishing resources in the region.
• Replaces approximately 99.5% of diesel-fired generation of electricity in the Whale Pass
region.
• Provides more affordable renewable energy, reducing energy costs from $0.62 to $0.32 /
kWh in year one, increasing over time as the cost of diesel fuel rises. (Estimates based on
recon-level financial and economic modelling.)
• State PCE statistics indicate that 54.8% of total kWh sold in FY14 are PCE-eligible kWh; if
this ratio holds true, the State of Alaska would realize significant PCE subsidization savings,
with approximately 45% of cost-savings being realized by current ratepayers.2
• Helps to support the State of Alaska’s goal of 50% renewable energy by 2025.
• Will stabilize energy prices long term by reducing dependency upon diesel fuel – a volatile
commodity with pricing which escalates significantly faster than inflation.
• By replacing diesel-fired generation, the project will reduce emissions, avoid “social cost of
carbon” costs, and will reduce ambient noise associated with operation of diesel-fired
generators in Whale Pass. This includes liability, risk, and noise associated with many “off-
grid” residents’ dispersed small generators.
• Leverages private investment in renewables, allowing the private sector to share project
development costs and risks.
• Reduces operating costs for resident businesses, supporting business retention, growth and
expansion.
• Supports new economic development in the northern Prince of Wales region.
• Helps assure long-term sustainability of the Neck Lake hatchery’s operations by providing
affordable hydropower at approximately half the cost of current diesel-fired generation, with
pricing remaining stabile long term. The Neck Lake hatchery is central to many commercial
and recreational opportunities; the long term sustainability of this facility is vital to the region’s
economic well-being. The hydroelectric facilities will be designed to avoid interference with
the existing salmon rearing and collection facilities operated at Neck Lake by the Southern
Southeast Regional Aquaculture Association (SSRAA). APC and SSRAA have agreed to
work cooperatively to develop a hydropower project that will be junior to all needs of the Neck
Lake hatchery, and will assure no adverse impacts to the hatchery or salmon runs. The
SSRAA has provided a letter of support, which is enclosed.
9 Source: http://www.akenergyauthority.org/Programs/PCE
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• Reduces operating expenses for essential community facilities, helping to support long-term
sustainability.
• Allows Whale Pass to “home source” its energy supply from local, renewable sources,
reducing fuel purchases made outside of the community.
• Reduces dependence on foreign oil.
• Project avoids 13,195 tons (29,094,975 lbs) of carbon dioxide placed in the air over a 50 year
operating period. Because hydropower projects last for 100+ years, these figures could
reasonably be doubled.
• Reduces the need to transport fuel to Whale Pass, lowering the potential for leaks and spills.
Transferring fuel to APC’s storage tank would be less frequent, reducing the potential for
spills during fueling, and keeping groundwater safer for the area.
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.
Price for power purchase/sale: Currently estimated at $0.30 less than the cost of diesel-fire
generation, however, this is an early estimate which will be substantiated and revisited following
application of AEA Round VIII funds for Phase II and III tasks.
Buyer of power: APC will sell the power to itself; because APC is the utility for Whale Pass.
Proposed Rate of Return from Grant-Funded Project:
The rate of return for the Neck Lake hydropower project would be regulated by the Regulatory
Commission of Alaska, and would generate a regulated return on private investment consistent with
the rate of return for similar projects. As a regulated utility, APC / AP&T is not permitted to earn a
rate of return on grant funds, or otherwise include grant funds in the rate base. APC would sell power
at a cost-based rate, consistent with AEA requirements.
6.1.3 Public Benefit for Projects with Private Sector Sales
For projects that include sales of power to private sector businesses (sawmills, cruise ships, mines,
etc.), please provide a brief description of the direct and indirect public benefits derived from the
project as well as the private sector benefits and complete the table below. See section 1.6 in the
Request for Applications for more information.
Does not apply.
Renewable energy resource availability (kWh per month) NA
Estimated sales (kWh) NA
Revenue for displacing diesel generation for use at private sector businesses ($) NA
Estimated sales (kWh) NA
Revenue for displacing diesel generation for use by the Alaskan public ($) NA
6.2 Financing Plan
Criteria: Stage 2-4.B: The project has an adequate financing plan for completion of the grant-funded
phase and has considered options for financing subsequent phases of the project.
6.2.1 Additional Funds
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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.
Additional Funds – In the event of an award, APC shall provide $98,800 in funds to match AEA
REF investment.
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?
This application does include Phase III, which has final design within it. APC is capable of funding
the project with a combination of private debt and equity; however, a combination of grant funds and
a low interest rate are also required to make the project financially feasible.
6.2.3 Cost Overruns
Describe the plan to cover potential cost increases or shortfalls in funding.
APC is accustomed to carefully managing project costs to avoid cost overruns, and funding shortfalls.
Because APC’s private capital is at risk, the company is strongly motivated to avoid these situations.
APC has a very strong history of responsible budgeting, and cost-control on utility sector projects.
APC believes its construction cost estimate includes responsible and realistic contingency and cost-
escalation margins. APC will pay out of its general operating fund for cost increases or shortfalls in
funding.
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.
APC anticipates seeking state and federal funds and low interest loans to finance construction of the
project. APC will also utilize private equity. APC believes that because the project has a positive
benefit-cost ratio and healthy NPV benefit stream, it will appeal to funders, and be likely to compete
successfully for funding. Also, due to its small size, the project has a relatively low capital cost for a
hydropower project, which may perhaps make it easier to fund.
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.)
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• 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
Providing less expensive electricity to the salmon hatchery will help to sustain recreational and
commercial fishing opportunities in Southeast Alaska. With less expensive electric rates more,
businesses could operate and provide full time employment within in the community. The project
will reduce air pollution from the diesel generation plant located in Whale Pass and green-house-
gas (GHG) emissions.
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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
Capability – Alaska Power & Telephone Company (AP&T), parent company of Alaska Power
Company (APC) has been in operation since 1957 and has continued to grow its customer base to
40 communities in Alaska, from above the Arctic Circle to southeast Alaska. AP&T has the
administrative, financial, operations, and engineering staff needed to operate and maintain
hydropower projects. AP&T currently owns and operates 7 hydropower projects in Alaska and is
currently constructing its 8th and 9th hydropower assets (Hiilangaay and Yerrick Creek).
Loans and Reporting – APC is current with all loans and required reporting to state and federal
agencies.
Resource – Hydropower is a sustainable, renewable resource. Available hydropower potential at
Neck Lake is significantly in excess of community needs. (Total of 750 kW versus 124 kW community
need.)
Sufficient Market – Installing this hydropower project will lower electric rates for the community of
Whale Pass, which will support community sustainability, and rural business and employment
growth. Community members who are currently generating their own power from small, less efficient
diesel generators are likely to reconnect to receive more affordable service from the Neck Lake
project, increasing the market for the project’s clean energy output.
Proposed business structure(s) and concepts that may be considered – Project would be
developed as an asset owned and operated by the incumbent utility, Alaska Power Company (APC).
Proposed Operations & Maintenance – Project would be owned and operated by APC, an AP&T
subsidiary. APC currently operates 7 hydropower projects in Alaska, and is in the process of
constructing its 8th and 9th hydropower assets (Hiilangaay and Yerrick Creek).
Back-up requirements – There will be no back-up systems installed. APC’s existing diesel power
plant will provide 100% back-up power supply capacity.
Identification of operational issues that could arise
Mechanical – Well designed and constructed hydroelectric projects generally have few major
mechanical operational issues once the inevitable initial bugs have been worked out during the
commissioning period. Mechanical operational issues are typically replacement of worn parts.
Commitment to reporting savings and benefits – In the event of State investment, APC would be
glad to commit to reporting of savings and benefits in a manner consistent with AEA requirements.
As a regulated utility serving PCE-eligible communities, APC is required to keep highly detailed
records of costs. These records can also be used to help identify savings to the AEA.
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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
Neck Lake Hydro was awarded $82,000 for recon and feasibility and $26,000 for final design for a
total of $108,000 in AEA REF Round II funds (#2195455). Part of these funds were used to develop
and submit a filing for a FERC jurisdictional determination. FERC determined that a license would
be required for this project. Only $22,474.73 of total grant funds were expended, supporting activities
including surveying and mapping, preparation of the FERC jurisdictional determination filling, and
conceptual design. The remaining balance of funds was returned to the AEA.
FERC’s finding that a license would be required resulted in APC terminating project activities due to
concerns about project development costs. However, FERC has recently developed a small
hydropower licensing track that should significantly expedite the licensing process and reduce the
licensing costs associated with a small project such as Neck Lake. The availability of this project
licensing track – in conjunction with diesel cost escalation estimates and key findings of the SEIRP
– have lead APC to conclude that it is in the best interest of the ratepayers of Whale Pass to resume
efforts to pursue the Neck Lake hydropower project. This finding is supported by updated
reconnaissance-level financial and economic analysis completed by APC in 2014 and 2015.
APC would complete remaining Phase II activities starting in July 2016, upon awarding of AEA funds.
Contractors for field studies will be contacted prior to the summer of 2016 to ensure their availability.
The phase(s) that must be completed prior to beginning the phase(s) proposed in this
application – No phase must be completed prior to beginning the phases proposed in this
application.
The phase(s) proposed in this application – Phase II and Phase III are proposed in this
application.
Obtaining all necessary permits – Permits will be acquired in Phase III as well as a FERC license.
Securing land access and use for the project – APC has an agreement with SSRAA and their
hatchery for accessing the land to conduct Phase II and Phase III activities.
Procuring all necessary equipment and materials – Procurement of equipment or materials will
not be necessary for Phase II and III.
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.
Renewable Energy Fund Round IX
Grant Application - Standard Form
AEA 15003 Page 41 of 44 7/8/14
No local opposition is anticipated, as the proposed project would decrease electric rates, substitute
clean energy for diesel fuel, and use a waterway which is already developed (for aquaculture).
The hydroelectric facilities will be designed to avoid interference with the existing salmon rearing and
collection facilities operated at Neck Lake by the Southern Southeast Regional Aquaculture
Association (SSRAA). APC and SSRAA have agreed to work cooperatively to develop a hydropower
project that will be junior to all needs of the Neck Lake hatchery, and will assure no adverse impacts
to the hatchery or salmon runs. The SSRAA has provided a letter of support for this project
(07/24/15), which is enclosed. The project will provide significant benefits to the hatchery, helping to
assure long-term sustainability of the Neck Lake hatchery’s operations by providing affordable
hydropower at approximately half the cost of current diesel-fired generation, with pricing remaining
stabile long term. The Neck Lake hatchery is central to many commercial and recreational
opportunities; the long term sustainability of this facility is vital to the region’s economic well-being.
There is significant community opposition to continued reliance upon diesel-fired generation, due to
high and escalating energy costs, and the hardships this produces for businesses and residents.
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.
Neck Lake Hydro was awarded $82,000 for recon and feasibility and $26,000 for final design for a
total of $108,000 in AEA REF Round II funds (#2195455). Part of these funds were used to develop
and submit a filing for a FERC jurisdictional determination. FERC determined that a license would
be required for this project. Only $22,474.73 of total grant funds were expended, supporting activities
including surveying and mapping, preparation of the FERC jurisdictional determination filling, and
conceptual design. The remaining balance of funds was returned to the AEA.
Recent grant-funded projects have included:
• Kasidaya Creek
• Chistochina-Mentasta-Slana Line Extension
• Tok Wind Recon
• South Fork Hydro
• Haines 5-10 Mile Line Extension
• Lutak Line Extension
• Kasaan Broadband
• South Thorn Bay Electrification
• Tetlin Intertie
• Yerrick Creek Hydropower Project
• North Prince of Wales Intertie (Coffman Cove / Naukati)
• Reynolds Creek Hydropower Project
• Mahoney Lake Hydropower Project
• Schubee Lake Hydro Recon
• Connelly Lake Hydro Recon
• Carlson Hydro Recon
• Neck Lake Hydro Recon
• Eagle River Hydrokinetic
• Tok Organic Rankine Cycle Unit
Renewable Energy Fund Round IX
Grant Application - Standard Form
AEA 15003 Page 42 of 44 7/8/14
• Tok Biomass Feasibility Analysis
• Eagle Solar 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.
Project activities completed
• Acquired topographic mapping (by Sentec)
• Developed preliminary arrangement of project features
• Prepared request for FERC jurisdictional determination
• Prepared responses to FERC requests for additional information
• Coordinated with SSRAA regarding preliminary project arrangement and potential impact
mitigation measures
• Received FERC Jurisdictional Determination
SECTION 12 – LIST OF ADDITIONAL DOCUMENTATION SUBMITTED FOR CONSIDERATION
In the space below please provide a list of additional information submitted for consideration.
• Governing Body Resolution
• Certification
• Letters of Support
• Figures
• Project Timeline Chart
• Resumes
• Permitting
• Photos
• Governing Body Resolution [see Appendices]
• Certification [see Appendices]
• Letters of Support [see Appendices]
• Figures [see Appendices]
• Project Activities Completed
• Project Timeline Chart [see Appendices]
• Resumes [see Appendices]
• Permitting [see Appendices]
• Photos [see Appendices]
APPENDICES
Governing Body Resolution
Certification
Letters of Support
Figures
Project Activities Completed
Project Timeline Chart
Resumes
Permitting
Photos
GOVERNING BODY RESOLUTION
CERTIFICATION
LETTERS OF SUPPORT
FIGURES
FIGURE 4
FIGURE 5
PROJECT ACTIVITIES COMPLETED
IN EARLIER PHASES
• Acquired topographic mapping (by Sentec)
• Developed preliminary arrangement of project features
• Prepared request for FERC jurisdictional determination
• Prepared responses to FERC requests for additional information
• Coordinated with SSRAA regarding preliminary project arrangement and potential
impact mitigation measures
• Received FERC Jurisdictional Determination
Topographic Mapping
(by Sentec)
1
:)(235.52')1
:234.18'EFORPDERETSIGERROYEVR
U
S
D
NALLANOISS MICHAEL J. HORNENo. LS-5318SENTECSurveying Engineering2525 Gambell Street, Suite 200, Anchorage, Alaska 99503Tele: (907) 563-3835 Fax: (907) 563-3817
Preliminary Arrangement of Project Features
FIGURE 4
Application to FERC for Jurisdictional Determination
December 23, 2009
Kimberly D. Bose
Office of Secretary
Federal Energy Regulatory Commission
888 First Street, N.E.
Washington, D.C. 20426
Re: Neck Lake Hydro Project
Petition for Declaratory Order
Dear Ms. Bose:
We respectfully submit this original via the Commissions e-filing system of the following
Declaration of Intent and Petition for Declaratory order that the Neck Lake Hydro Project
is not under the Federal Energy Regulatory Commission’s jurisdiction. The Applicant
believes, after reviewing Section 23(b) of the Federal Power Act, that none of the criteria
in Section 23(b) is met by this project. Therefore, this project should not be under the
Commission’s jurisdiction.
Reasons for Jurisdictional Determination:
Project located on State of Alaska land managed by DNR, not federal land.
The lake outlet stream is non-navigable with an anadromous barrier.
The project is not below any government dam nor will it use water from a
government project.
The project will not impact interstate commerce because it will not connect to an
interstate grid, nor will it impact operations by a hatchery on the outlet stream
(extensive consultation will take place to ensure their operations are not impacted
and the Appliant will see how they can benefit from the project as well).
We respectfully request that the Commission evaluate this project for a jurisdictional
determination. We believe this project does not meet any of the guidelines for being
under Commission jurisdiction.
Respectfully Submitted,
Kimberly D. Bose, Secretary-FERC Neck Lake Hydroelectric Project
December 23, 2009 p. 2 Jurisdictional Determination
Glen D. Martin
Project Manager
(360) 385-1733 x122
(360) 385-7538 fax
Enc. (as stated)
Kimberly D. Bose, Secretary-FERC Neck Lake Hydroelectric Project
December 23, 2009 p. 3 Jurisdictional Determination
ALASKA POWER & TELEPHONE COMPANY
DECLARATION OF INTENT
FOR THE
NECK LAKE HYDROELECTRIC PROJECT
Submitted to:
FEDERAL ENERGY REGULATORY COMMISSION
Washington, D.C.
DECEMBER 2009
Kimberly D. Bose, Secretary-FERC Neck Lake Hydroelectric Project
December 23, 2009 p. 4 Jurisdictional Determination
DECLARATION OF INTENT
The location of the project:
State: Alaska
Town: near Whale Pass
Street: N/A
County: (Alaska does not have counties)
Stream: Neck Lake outlet stream
River Basin Name: N/A
Township, Range, and Meridian: T66S, R79E, CRM
Applicant Info:
Alaska Power & Telephone Company (AP&T), an Alaska Corporation
193 Otto Street, P.O. Box 3222
Port Townsend, WA 98368
(360) 385-1733 x122
(360) 385-7538 FAX
glen.m@aptalaska.com
Local Electric Utility Company:
Alaska Power & Telephone Company (AP&T), an Alaska Corporation
P.O. Box 149
Klawock, AK 99925
(907) 755-4822
(907) 755-4823 FAX
Greg Mickelson (greg.m@aptalaska.com)
Kimberly D. Bose, Secretary-FERC Neck Lake Hydroelectric Project
December 23, 2009 p. 5 Jurisdictional Determination
INTRODUCTION
This document is a declaration of intent to develop a 124 kW – 400 kW hydropower
project at Neck Creek, which is approximately 1.5 miles southwest of the community of
Whale Pass, Alaska, as shown in Figure 1. The Project is located in Section 35 within
T66S, R79E, CRM (Copper River Meridian). The Project will utilize the natural flow out
of Neck Lake.
The proposed project is located on lands managed by the State of Alaska and is on a non-
navigable stream. The project will provide hydroelectric power to an area that is 100%
reliant upon diesel generation. The isolated area this project would serve is currently
provided power by AP&T via its diesel generation plant. There would be no
interconnection to an interstate power grid, as none exists.
AP&T, an Alaska Corporation, further petitions the Federal Energy Regulatory
Commission (FERC) for a Declaratory order that the proposed Neck Lake Hydropower
Project is not within the Commission’s jurisdiction. The Applicant has reviewed Section
23(b) of the Federal Power Act (FPA) to determine whether the project falls within the
stated jurisdictional criteria and believe that none of the four stated jurisdictional criteria
are met by the Neck Lake Project.
1. PROJECT DESCRIPTlON
AP&T proposes to construct a small run-of-river hydroelectric project at Neck Lake in
the outfall stream below the lake, which is located 1.5 miles southwest of the community
of Whale Pass on Prince of Wales Island, Alaska. The Project would supply power to the
community of Whale Pass and would offset diesel generation, which is currently the sole
source of electricity. The relatively high and modulated flows from the lake combined
with the steep drop at the lower end of the outlet stream provide a good opportunity for a
small run-of-river hydroelectric development. Facilities would include an access road,
intake structure, 400 feet of penstock, a containerized power plant with generator rated at
124 kW – 400 kW, a tailrace channel, and upgrade of 4 miles of transmission line. The
hydroelectric facilities will be designed to avoid interference with the existing salmon
rearing and collection facilities operated at Neck Lake by the Southern Southeast
Regional Aquaculture Association (SSRAA). AP&T conducted a reconnaissance study
of the site in 2008, and determined that there is sufficient potential to almost always
provide enough generation for Whale Pass loads. The Project will provide clean,
renewable electricity, as well as rate stabilization and lower rates for AP&T’s Whale Pass
customers.
Kimberly D. Bose, Secretary-FERC Neck Lake Hydroelectric Project
December 23, 2009 p. 6 Jurisdictional Determination
2. JURISDICTIONAL ANALYSIS
Section 23(b) of the Federal Power Act would require project licensing of the project
only if:
a. It is located on a “Navigable Water” of the United States:
b. It occupies lands of the United States:
c. It utilizes surplus water or water power from a government dam;
d. There was a “post-1935 construction” at the project and the project affected the
interest of interstate commerce.
The petitioner’s project does not meet any of these criteria.
a. Navigability
Neck Lake is not reachable via its outlet stream as the stream has an anadromous barrier
and many cascades before reaching marine waters.
Above Photo: Neck Lake outlet stream below lake
b. Land Status
The proposed project is located on State of Alaska land. No portion of the project is on
Federal land. See the enclosed land status map and Status Plat map.
Kimberly D. Bose, Secretary-FERC Neck Lake Hydroelectric Project
December 23, 2009 p. 7 Jurisdictional Determination
c. Surplus Water from Government Dam
There are no government (Federal or State) dams near or above the project, nor will the
project use water from a government dam.
d. Affect on Interstate Commerce
Regarding Interstate Commerce, this project is in an isolated, rural Alaskan location and
will not connect with any interstate power grid because none exists in Alaska. This
project is meant to get this one community off of diesel generation. Because this project
is not on a navigable stream, it will not affect shipping or interstate commerce. Though
the Southern Southeast Regional Aquaculture Association (SSRAA) has established a
rearing and trapping facility at the lake and outlet stream for Coho, AP&T believes a
project can be built that will benefit both.
The Neck Lake Hatchery is for the purpose of improving Coho stock in the area. The
Applicant will be working with the SSRAA to design the project so that their operations
will not be impacted. Because this project will be design to have no impact on the
SSRAA Coho salmon smolts rearing pens (which are in the lake) or their out migration
from the lake to tidewater during the spring (by allowing them to flow over the diversion
structure in the outlet stream), and ensuring flow in the summer when they return
(summer Coho), this project will not impact Interstate commerce even if this hatchery is
viewed as critical to interstate commerce. Operations can be set to work around the
SSRAA’s schedule of activity and ensure flow when needed. Additionally, the project
would not impact the SSRAA lake operations as the project would be below the lake
outlet, operating in a run-of-river mode. The diversion structure will be above the
anadromous barrier used by the hatchery to prevent fish from getting back up to the lake.
3. CONCLUSION
In AP&T’s review of the applicable jurisdictional criteria found in Section 23(b) of the
Federal Power Act, there was no evidence found that the Neck Lake Project meets any
one of these criteria. AP&T therefore requests that the Federal Energy Regulatory
Commission issue a Declaratory order finding that the project falls outside of the
Commission’s jurisdiction and does not require a license or permit under the Federal
Power Act.
The facts presented herein are true to the best knowledge of the Applicant.
Sincerely,
Project Manager
Responses to FERCs Additional Information Requests (AIR)
for the Jurisdictional Determination
• January 12, 2010 – AIR Response
• February 4, 2010 – AIR Response
• February 24, 2010 – AIR Response
• March 16, 2010 – AIR Response
• March 23, 2010 – AIR Response
• March 30, 2010 – FERC Public Notice
• November 4, 2010 – FERC Order
From: Glen Martin [mailto:glen.m@aptalaska.com]
Sent: Tuesday, January 12, 2010 10:46 AM
To: Diane Murray
Subject: Neck Lake Hydroelectric Project Addendum
Diane,
Attached is a revised Figure 2 for the jurisdictional determination.In addition,once or twice we
stated the “SSRAA Hatchery”but it is not a hatchery.As stated in the Project Description on
page 5,it is a rearing and collection facility.The SSRAA facility currently diverts water above the
middle falls and returns it just below the lower falls.We intend to divert above the upper falls and
return water just below the lower falls.W e will probably discharge into the bottom of the
SSRAA’s fish ladder to avoid confusing the fish with another discharge point.W e will avoid
interference with SSRAA by only utilizing flow that is in excess of their needs.They only operate
their collection facility for a couple months a year.W e will be working with SSRAA to determine
how much flow they need and how best to interface with their operation,but at minimum we figure
we will discharge into their fish ladder.
The diversion point for the hydroelectric project is shown in the application on page 6.The
diversion structure will be a concrete wall varying in height from 1 to 3 feet,with an estimated
length of 75 feet.The intake will be a prefabricated steel structure with a concrete foundation and
will include a fish screen to prevent SSRAA’s smolts from being entrained or ingested.The
diversion will be about 1300 feet below the lake outlet and as should be evident by the diversion
height,will not hold enough water to back up onto USFS lands.
I’ve included a photo of the powerhouse site.The powerhouse would be placed on the grass at
right (the creek is on the left)and the SSRAA facility is behind the grass area.This site offers
good,existing access and will make coordinating with the SSRAA facility that much easier.
I hope this adequately addresses your questions.Please call me if you need anything further.
Thank you,
Glen
Glen D.Martin
Project Manager
AP&T
(360)385-1733 x122
20091223-4039 FERC PDF (Unofficial) 01/12/2010
20091223-4039 FERC PDF (Unofficial) 01/12/2010
BLANK PAGE
[intentionally left blank]
February 4, 2010
Kimberly D. Bose, Secretary
Federal Energy Regulatory Commission
888 First Street, NE, Room 1-A
Washington, D.C. 20426
Subject: Neck Lake Hydroelectric Project
Jurisdictional Determination – Additional Information
Dear Ms. Bose:
On December 23, 2009, Alaska Power & Telephone Company filed for a Jurisdictional
Determination on the Neck Lake Hydroelectric Project. We would like to provide
additional information to help clarify aspects of the project.
Enclosed is a figure with photographs on a diagram showing various locations of project
features and the environment they will be in. The diversion will raise the creek level in a
small area behind it by 3 feet. The lake is 8 feet above the pool elevation of the diversion
so that this project will not back up into the lake or cross over onto USFS lands. The
distance from the diversion to the lake is approximately 1,300 feet, making the 8-foot-
drop a gradual elevation change. However, at the diversion site, as can be seen in the
enclosed figure, the short falls there indicate the grade of the creek is changing, getting
steeper. The diversion will be at the beginning of these falls, which is the Upper Falls, so
that the pool behind the diversion will be very small.
The tidal area mentioned in the application is approximately 50 feet below the road
bridge shown on the right hand side of the enclosed figure. The SSRAA collection
facility collects returning fish at the base of the first anadromous barrier, or Lower Falls,
which is indicated on the enclosed figure as the SSRAA Outfall. This project will
discharge into the SSRAA collections facility outfall at the base of the anadromous
barrier so that there are not two sources of flow to potentially confuse the returning fish.
The transmission line upgrade will be to place new conductor on the existing wood poles
currently distributing electricity in the area, which is also shown on the enclosed figure
(photo of SSRAA collection facility with pole and transformer in foreground). No new
poles are proposed to be installed. The new conductor will go into our existing diesel
generation plant where switchgear and other controls exist.
If there is any further information we can provide you, please contact us at the
information below.
Kimberly D. Bose, Secretary-FERC 2 Neck Lake Hydroelectric Project
February 4, 2010 Jurisdictional Determination
Respectfully Submitted,
Glen D. Martin
Project Manager
(360) 385-1733 x122
glen.m@aptalaska.com
Enc. (as stated)
BLANK PAGE
[intentionally left blank]
February 24, 2010
Kimberly D. Bose, Secretary
Federal Energy Regulatory Commission
888 First Street, NE, Room 1-A
Washington, D.C. 20426
Subject: Neck Lake Hydroelectric Project
Jurisdictional Determination – Additional Information
Dear Ms. Bose:
On December 23, 2009, Alaska Power & Telephone Company filed for a Jurisdictional
Determination on the Neck Lake Hydroelectric Project. We would like to provide a one-
line diagram for this project as additional information for the determination.
If there is any further information we can provide you, please contact us at the
information below.
Respectfully Submitted,
Glen D. Martin
Project Manager
(360) 385-1733 x122
glen.m@aptalaska.com
Enc. (as stated)
BLANK PAGE
[intentionally left blank]
March 16, 2010
Kimberly D. Bose, Secretary
Federal Energy Regulatory Commission
888 First Street, NE, Room 1-A
Washington, D.C. 20426
Subject: Neck Lake Hydroelectric Project
Jurisdictional Determination – Additional Information
Dear Ms. Bose:
On December 23, 2009, Alaska Power & Telephone Company filed for a Jurisdictional
Determination on the Neck Lake Hydroelectric Project. We would like to provide
additional information to help clarify aspects of the project. Please accept the following
enclosures:
Revised figure with photos over plan view of project
Revised one-line diagram
New Conceptual Design diagram
New Project Boundary diagram
New project description
The Neck Lake Hydroelectric Project (Project) will not place infrastructure on federal
land. Although the FS has jurisdiction over the road system with a 100-foot-wide right-
of-way, the Project is outside this boundary. The Project will also not impact the lake
that is within the FS managed lands, because the FS and State land boundary is between
the lake and above the Projects diversion pool. More detail is provided in the enclosed
Project description.
To provide more clarity on the existing distribution systems on Prince of Wales Island
(POW), though many are still isolated systems, such as that found at Whale Pass, they are
owned, operated, and maintained by Alaska Power Company (APC). APC is a wholly
owned subsidiary of Alaska Power & Telephone Company (AP&T; also the Applicant).
APC also owns and operates all the diesel generation plants on the island, including
Whale Pass. APC already has plans to upgrade their single-phase distribution system
from Whale Pass to its end at the SSRAA Facility to three-phase because of an existing
load imbalance on the line. APC has related to the Applicant that the load imbalance has
been an ongoing problem and that they have a work-order and plan to upgrade the line
this summer, 2010. The Applicant has notified them of plans to develop a small (124-
Kimberly D. Bose, Secretary-FERC 2 Neck Lake Hydroelectric Project
March 16, 2010 Jurisdictional Determination
400 kW) hydroelectric project at the end of their distribution system. Their upgrade will
help accommodate getting hydropower into this area to offset or eliminate the use of
diesel generation. The enclosed diagrams show where the existing distribution system
will meet the proposed hydroelectric project. APC’s existing distribution system goes
along the U.S. Forest Service Road from Whale Pass, but between the second to last pole
and the pole serving the SSRAA Facility the existing distribution system passes onto
State of Alaska lands. It is on State of Alaska lands that the project is located and will
interconnect with the existing distribution grid. Please see the enclosed Project Boundary
diagram for more detail.
A previously supplied figure submitted (e-filed) on February 4, 2010, has been revised
and is enclosed with this letter (figure with photos over plan view of project site). The
one-line diagram submitted (e-filed) on February 24, 2010, has also been revised and is
enclosed with this letter. An additional two figures are enclosed showing the project
features on a recent topographic survey (F-1) the Applicant had conducted as well as a
figure (G-1) with the Project boundary.
A revised project description is enclosed due to the questions posed by the Commission
staff which has provided more clarity about the project. In order to improve the
application before it is public noticed by the Commission, we offer this revised
description.
In addition, photos are enclosed to provide a better understanding of the Project area and
the layout of the SSRAA Facility and where the Project features will go in relation to the
FS road ROW.
If there is any further information we can provide you, please contact us at the
information below.
Respectfully Submitted,
Glen D. Martin
Project Manager
(360) 385-1733 x122
glen.m@aptalaska.com
Enc. (as stated)
NECK LAKE HYDROELECTRIC PROJECT
PROJECT DESCRIPTION
Alaska Power & Telephone Company (AP&T) proposes to construct a small run-of-river
hydroelectric project near Neck Lake in the outfall stream below the lake, which is
located 1.5 miles southwest of the community of Whale Pass on Prince of Wales Island,
Alaska. The Project would sell power to Alaska Power Company (APC), the power
provider to the community of Whale Pass, which would offset diesel generation, their
sole source of electricity. The relatively high and modulated flows from the lake
combined with the steep drop at the lower end of the outlet stream provide a good
opportunity for a small run-of-river hydroelectric development.
Facilities would include an access road, an intake structure that would be approximately
1,300 feet below the lake outlet and would be 1-3 feet tall by 75 feet long across the
creek, 400 feet of penstock, a containerized power plant with generator rated at 124 kW –
400 kW, a tailrace channel that would discharge into the Southern Southeast Regional
Aquaculture Association (SSRAA) Facility discharge channel from its fishway. The
project would be intertied to the existing distribution system operated by APC at the
present service pole to the SSRAA Facility, located within the existing SSRAA property.
All other lands around the project boundary are State of Alaska land, as shown on figure
G-1: Project Boundary. The road is a U.S. Forest Service road that is outside the project
boundary, also shown on figure G-1.
The hydroelectric facilities will be designed to avoid interference with the existing
salmon rearing and collection facilities operated at Neck Lake and the Neck Lake outlet
stream by SSRAA. AP&T conducted a reconnaissance study of the site in 2008, and
determined that there is sufficient potential to almost always provide enough generation
for APC to offset Whale Pass loads. The Project will provide clean, renewable
electricity, as well as rate stabilization and lower rates for APC’s Whale Pass customers.
The Project is located outside any Federal land, is not located on a navigable stream,
there is no government dam above the Project nor will the Project use water from a
government project, and the Project will not impact interstate commerce because it will
not connect to an interstate grid (non exists in Alaska) nor will it impact the nearby fish
rearing and catchment facility operated by SSRAA because the Project would be operated
to avoid any impacts.
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[intentionally left blank]
March 23, 2010
Kimberly D. Bose, Secretary
Federal Energy Regulatory Commission
888 First Street, NE, Room 1-A
Washington, D.C. 20426
Subject: Neck Lake Hydroelectric Project
Jurisdictional Determination – Additional Information
Dear Ms. Bose:
On December 23, 2009, Alaska Power & Telephone Company filed for a Jurisdictional
Determination on the Neck Lake Hydroelectric Project. We would like to provide
additional information to help clarify aspects of the project. Please accept the following
enclosures:
Plan view of lake outlet to the diversion structure
Elevation profile of the lake outlet to the diversion structure
On March 17 Commission staff requested that we provide a plan and profile drawing of
the Neck Lake outlet stream to cover the area from the lake outlet to our proposed
project. Unfortunately, there is no mapping currently available that will provide suitable
detail; USGS mapping in the area has a 100’ contour interval and our project mapping
only covered the area from the USFS road to our proposed diversion, which is several
hundred feet below the lake outlet. There are no roads or trails between the USFS road
and the lake outlet and the terrain is very difficult, so conducting additional topographic
mapping for this purpose is impractical.
As an alternative, please see the attached annotated satellite image and profile. The
satellite image was obtained through the Alaska State Geo-Spacial Data Clearinghouse
website (www.asgdc.state.ak.us), and shows the lake outlet and stream to tidewater, as
well as land ownership boundaries. AP&T has added annotation showing the location of
the three waterfalls on the outlet stream and the proposed location of the project
diversion. Note that the location of the lake outlet is indistinct and subject to
interpretation. There is a distinct shallow area at the head of the outlet stream 1300 feet
upstream from the proposed diversion (as evidenced by the reddish brown color),
however it is likely that water currents would be very low in this area except during
floods. It is not until about 700-800 feet above the diversion that whitewater can be
detected in the satellite image.
Kimberly D. Bose, Secretary-FERC 2 Neck Lake Hydroelectric Project
March 23, 2010 Jurisdictional Determination
In February of this year, AP&T had a surveyor take measurements to determine the
elevation difference between the lake water surface and the proposed diversion. That
difference was determined to be 11.3 feet. After adjusting all elevation information to a
common datum (lake water surface elevation at 89 feet msl per USGS mapping), and
assuming 750 feet as the distance between the lake and our diversion site, we have
developed the attached stream profile. Although this profile is approximate, it does
clearly show that AP&T’s proposed diversion will not cause any change in the lake level;
the length of backwater is estimated to be 200-250 feet for a 3 foot increase in the water
level at the diversion.
If there is any further information we can provide you, please contact us at the
information below.
Respectfully Submitted,
Glen D. Martin
Project Manager
(360) 385-1733 x122
glen.m@aptalaska.com
Enc. (as stated)
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[intentionally left blank]
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Alaska Power &Telephone Company Docket No.DI10-5-000
NOTICE OF DECLARATION OF INTENTION
AND SOLICITING COMMENTS,
PROTESTS,AND/OR MOTIONS TO INTERVENE
(March 30,2010)
Take notice that the following application has been filed with the Commission and is
available for public inspection:
a.Application Type:Declaration of Intention
b.Docket No:DI10-5-000
c.Date Filed:December 23,2009,and supplemented on January 12,February 4,
February 24,March 16,and March 23,2010.
d.Applicant:Alaska Power &Telephone Company
e.Name of Project:Neck Lake Hydroelectric Project
f.Location:The proposed Neck Lake Hydroelectric Project will be located on Neck
Lake outlet stream,near the community of Whale Pass,Alaska,(T.66 S.,R.79 E.,
sec.35.,Copper River Meridian,Alaska).
g.Filed Pursuant to:Section 23(b)(1)of the Federal Power Act,16 USC 817(b).
h. Applicant Contact:Glen D.Martin,193 Otto Street,P.O.Box 3222,Port Townsend,
WA 98368;telephone:(360)385-1733 x122;Fax:(360)385-7538;email:
glen.m@aptalaska.com.
i.FERC Contact:Any questions on this notice should be addressed to Diane M.Murray,
(202)502-8838,or E-mail address:diane.murray@ferc.gov.
j. Deadline for filing comments,protests,and/or motions:April 30,2010.
Comments,Motions to Intervene,and Protests may be filed electronically via the Internet.
See 18 CFR 385.2001(a)(l)(iii)and the instructions on the Commission’s website under
20100330-3014 FERC PDF (Unofficial) 03/30/2010
Docket No.DI10-5-000 2
the “eFiling”link.If unable to be filed electronically,documents may be paper-filed.To
paper-file,an original and eight copies should be mailed to:Secretary,Federal Energy
Regulatory Commission,888 First Street,NE.,Washington,D.C.20426.For more
information on how to submit these types of filings,please go to the Commission’s
website located at http://www.ferc.gov/filing-comments.asp.
Please include the docket number (DI10-5-000)on any comments,protests,and/or
motions filed.
k. Description of Project:The proposed Neck Lake Hydroelectric Project would consist
of:(1)a small reservoir;(2)a three-foot-high,75-foot-long dam,located approximately
1,300 feet below the Neck Lake outlet;(3)a 400-foot-long penstock;(4)a proposed
powerhouse containing a generator with a capacity of 124 kW –400 kW;(5)a
transmission line;(6)an access road;and (7)appurtenant facilities.
When a Declaration of Intention is filed with the Federal Energy Regulatory
Commission,the Federal Power Act requires the Commission to investigate and
determine if the interests of interstate or foreign commerce would be affected by the
project.The Commission also determines whether or not the project:(1)would be
located on a navigable waterway;(2)would occupy or affect public lands or reservations
of the United States;(3)would utilize surplus water or water power from a government
dam;or (4)if applicable,has involved or would involve any construction subsequent to
1935 that may have increased or would increase the project's head or generating capacity,
or have otherwise significantly modified the project's pre-1935 design or operation.
l. Locations of the Application:Copies of this filing are on file with the Commission and
are available for public inspection.This filing may be viewed on the web at
http://www.ferc.gov using the "eLibrary"link.Enter the Docket number excluding the
last three digits in the docket number field to access the document.You may also register
online at http://www.ferc.gov/docs-filing/esubscription.asp to be notified via email of
new filings and issuances related to this or other pending projects.For assistance,call 1-
866-208-3676 or e-mail FERCOnlineSupport@ferc.gov for TTY,call (202)502-8659.A
copy is also available for inspection and reproduction at the address in item (h)above.
m.Individuals desiring to be included on the Commission's mailing list should so
indicate by writing to the Secretary of the Commission.
n.Comments,Protests,or Motions to Intervene --Anyone may submit comments,a
protest,or a motion to intervene in accordance with the requirements of Rules of Practice
and Procedure,18 CFR 385.210,.211,.214.In determining the appropriate action to
20100330-3014 FERC PDF (Unofficial) 03/30/2010
Docket No.DI10-5-000 3
take,the Commission will consider all protests or other comments filed,but only those
who file a motion to intervene in accordance with the Commission's Rules may become a
party to the proceeding.Any comments,protests,or motions to intervene must be
received on or before the specified comment date for the particular application.
o.Filing and Service of Responsive Documents --All filings must bear in all capital
letters the title "COMMENTS","PROTESTS",AND/OR "MOTIONS TO
INTERVENE",as applicable,and the Docket Number of the particular application to
which the filing refers.A copy of any Motion to Intervene must also be served upon each
representative of the Applicant specified in the particular application.
p.Agency Comments --Federal,state,and local agencies are invited to file comments on
the described application.A copy of the application may be obtained by agencies directly
from the Applicant.If an agency does not file comments within the time specified for
filing comments,it will be presumed to have no comments.One copy of an agency's
comments must also be sent to the Applicant's representatives.
Nathaniel J.Davis,Sr.,
Deputy Secretary.
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BLANK PAGE
[intentionally left blank]
133 FERC ¶62,121
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Alaska Power &Telephone Compan y Docket No.DI10-5-000
ORDER RULING ON DECLARATION OF INTENTION
AND FINDING LICENSING IS REQUIRED
(Issued November 04,2010)
1.On December 23,2009,and supplemented on January 12,February 4,
February 24,March 16,and March 23,2010,Alaska Power &Telephone Company
filed a Declaration of Intention (DI)concerning the proposal to develop the Neck Lake
Hydroelectric Project,to be located on Neck Lake outlet stream near the community of
Whale Pass on Prince of Wales Island,Alaska (T.66 S.,R.79 E.,sec.35,Copper River
Meridian,Alaska).
PROJECT DESCRIPTION
2.The proposed Neck Lake Hydroelectric Project would consist of:(1)a small
reservoir;(2)a three-foot-high,75-foot-long dam,located approximately 1,300 feet
below the Neck Lake outlet;(3)a 400-foot-long penstock;(4)a proposed powerhouse
containing a generator with a capacity of 124 kW –400 kW;(5)a transmission line;
(6)an access road;and (7)appurtenant facilities.The proposed project would not be
connected to an interstate grid,and would not occupy any tribal or federal lands.
PUBLIC NOTICE
3.Notice of the DI was published in the Federal Register on April 7,2010.Protests,
comments,and motions to intervene were to be filed by April 30,2010.On April 13,
2010,the U.S.D.A.Forest Service –Region 10 filed a motion to intervene.The Forest
Service stated that the project appears to be adjacent to a Forest Service road reservation,
and therefore,has the potential to affect National Forest System lands.On April 30,
2010,the Southern Southeast Regional Aquaculture Association (SSRAA)filed
comments.In its comments,SSRAA stated that it has concerns regarding the adverse
impact of project operations on its existing fish program.No other protests,comments,
or motions to intervene were received.
20101104-3033 FERC PDF (Unofficial) 11/04/2010
Docket No.DI10-5-000 2
JURISDICTION
4.Pursuant to section 23(b)(1)of the Federal Power Act (FPA),16 U.S.C.§817(1),
a non-federal hydroelectric project must (unless it has a still-valid pre-1920 federal
permit)be licensed if it:
•is located on a navigable water of the United States;
•occupies lands or reservations of the United States;
•utilizes surplus water or waterpower from a government dam;or
•is located on a stream over which Congress has Commerce Clause
jurisdiction,is constructed or modified on or after August 26,1935,and
affects the interests of interstate or foreign commerce.
DISCUSSION
5.Because the licensing requirement is established on other grounds,I do not
address the issue of whether Neck Lake outlet stream is navigable at the project site.The
project would not occupy federal lands.The project would not use surplus water or
waterpower from a federal government dam.The project would be constructed after
August 26,1935,would be located on a Commerce Clause stream,1 and would affect the
interests of interstate or foreign commerce within the meaning of section 23(b(1)of the
Federal Power Act because of its significant effect on anadromous fish in Alaska’s
District 6 fishery.
A.Fish Resource
6.SSRAA operates a raceway and adult collection facilities for summer run coho
salmon (Oncorhynchus kisutch)at the mouth of the outlet stream from Neck Lake.The
adult summer run coho salmon harvested at this facility during June,July,and August are
marketed for sale in the Pacific Northwest as Snow Pass Coho.2 Adult summer run coho
also return to the nearby Burnett Inlet Hatchery,where about 2 million eggs are collected
and fertilized each year.After the fry hatch,1.6-to 1.7-million are transported by plane
to net pens in Neck Lake,where they rear for a year and are then released as yearling
smolts.Upon release from the net pens,these smolts move out of Neck Lake and down
the Neck Lake outlet stream,pass over a barrier falls,and enter salt water in Whale
Pass.After 12 to 14 months at sea,the returning adult fish enter the commercial gillnet
1 Neck Lake outlet stream is a tributary to Whale Pass,a navigable water of the
United States.
2 http://www.ssraa.org/snow_pass_coho.htm This web site provides information
on SSRAA’s collection,rearing and marketing of snow pass summer run coho salmon.
20101104-3033 FERC PDF (Unofficial) 11/04/2010
Docket No.DI10-5-000 3
fishery in Alaska Department of Fish and Game’s salmon District 6 (also referred to as
District 106)in southeast Alaska.
7.Based on ten years of harvest records (2000 –2009)for the District 6 gillnet
fishery,Neck Lake-produced coho salmon contributed an average of 23 percent (with a
range of 6 percent to 40 percent)of the total commercial summer run coho salmon catch
(Alaska Department of Fish and Game,2010).3 The ex-vessel value4 of this catch for the
period 2000-2009 ranged from $12,437 to $186,960 and averaged 20 percent of the total
value of the District 6 ex-vessel harvest.Thus,the contribution and value of Neck Lake-
produced coho salmon represents a significant part of the District 6 summer coho salmon
harvest.For this period,the return from the coho yearling smolts released from Neck
Lake averaged 65,000 adult coho salmon,consisting of commercial and sport fishery
harvest,and those fish that escaped harvest and returned to the collection facilities on the
outlet stream from Neck Lake,for an average survival rate of 4 percent (SSRAA,2010).5
B. Proposed Project Effects
8.The proposed hydro project would use flows from Neck Lake and would consist
of a small diversion dam with an intake structure downstream of Neck Lake,a penstock
that bypasses about 400 feet of stream,and a powerhouse that discharges near the base of
the fish ladder/raceway operated by the SSRAA for capturing returning adult coho
salmon.The proposed project description did not provide any details of project design or
mode of operation that would prevent or minimize impacts to coho smolts passing from
Neck Lake downstream to salt water and return of adults to the collection facilities.
9.Coho smolts moving downstream from Neck Lake could be harmed by:turbine
injur y and mortality resulting from entrainment at the project intake structure with no or
ineffective screens;injury and mortality from passage over the diversion structure with an
inadequate plunge pool;and,inadequate flows in the bypassed reach for passage
downstream.Of these three effects,turbine caused mortality would likely be the most
significant.Mortality of the downstream migrating coho smolts passing through the
project turbine could range from 5 to 20 percent but could reach 100 percent,depending
3 E-mail dated August 6,2010,from Troy Thynes,Alaska Department of Fish and
Game to John Novak of Commission staff.(Filed August 20,2010)
4 Price received b y fishermen for fish,shellfish,and other aquatic animals landed
at the dock.
5 E-mail dated July 29,2010,from Rod Neterer,Southern Southeast Regional
Aquaculture Association to John Novak of Commission staff.(Filed August 4,2010)
20101104-3033 FERC PDF (Unofficial) 11/04/2010
Docket No.DI10-5-000 4
upon the type of turbine installed at this project.6
10.Adult coho salmon returning to SSRAA’s collection facilities could be falsely
attracted to the project discharge that would be adjacent to the discharge from the
collection facilities.Without a tailrace barrier or modified operation,these fish falsely
attracted to the project discharge could enter the draft tube and come in contact with the
turbine runners,causing some level of injur y and mortality to these fish.This would
affect the survival return rate and ultimately the number of coho harvested for sale by the
SSRAA.Further,the SSRAA has expressed the concern that if the penstock were routed
over the top of the fish ladder,adult coho salmon,which are active jumpers,would be
injured while jumping and coming in contact with the penstock.
C. Conclusion
11. Based on available information about the project and its location in a salmon
rearing system that contributes a large number of coho salmon to an important
commercial fisher y,the proposed project has the potential to cause substantial injur y and
mortality to coho smolts passing downstream,thereby significantly affecting the
commercial coho fishery in District 6.As noted above,over the past 10 years Neck Lake
coho salmon have contributed an average of 23 percent of the commercial gillnet harvest
in District 6.This is a significant contribution.Without adequate design and screening
of the project intake and worse case,20 percent or more7 of the downstream migrating
coho smolts would experience turbine mortality and thereby reduce the commercial
fishery in District 6 b y five percent or more.In the Gartina Creek project order,8 the
Commission determined that a potential eight-percent reduction in the commercial
salmon harvest in District 114 was large enough to be considered real and substantial,
therefore requiring licensing of that project.Without adequate fish protection measures,
this proposed project also has the potential to cause either a similar or greater level of
reduction in the coho salmon commercial harvest.Applying the same rationale here,the
impacts of the proposed project on the District 6 commercial gillnet fishery would be real
and substantial.Therefore,the project requires licensing because it would significantly
affect interstate commerce within the meaning of section 23 (b)(1)of the Federal Power
Act.
6 Therrien,J.and Bourgeois,G.2000.Fish passage at small hydro sites.The
International Energ y Agency Technical Report.113 pages +Appendices.
7 Some turbines are reported to cause mortalities reaching 100 percent.
Installation of such a turbine at this project would result in a 23-percent reduction in the
District 6 commercial gillnet fishery for coho salmon.
8 101 FERC ¶61,191 (November 21,2002).
20101104-3033 FERC PDF (Unofficial) 11/04/2010
Docket No.DI10-5-000 5
12. For all the foregoing reasons,I find that the proposed Neck Lake Project would
substantially affect the District 6 commercial fishery,and therefore,would affect the
interests of interstate or foreign commerce.Accordingly,the project must be licensed
pursuant to section 23(b)(1)of the FPA.
The Director orders:
(A)Alaska Power &Telephone Compan y’s proposed Neck Lake H ydroelectric
Project,to be located on Neck Lake outlet stream near the community of Whale Pass on
Prince of Wales Island,Alaska,is required to be licensed pursuant to section 23(b)(1)of
the Federal Power Act.No construction of the project may commence until a license has
been obtained.
(B)This order constitutes final agency action.An y party may file a request for
rehearing of this order within 30 da ys from the date of its issuance,as provided in
section 313(a)of the FPA,16 U.S.C.§825l (2006),and the Commission’s regulations at
18 C.F.R.§385.713 (2010).The filing of a request for rehearing does not operate as a
stay of the effective date of this order,or of any other date specified in this order.The
licensee’s failure to file a request for rehearing shall constitute acceptance of this order.
Edward A.Abrams
Director
Division of Hydropower Administration
and Compliance
20101104-3033 FERC PDF (Unofficial) 11/04/2010
Coordinated with SSRAA regarding Preliminary Project
Arrangement
• September 17, 2014 – SSRAA Letter of Support
FERC JURISDICTIONAL DETERMINATION
133 FERC ¶62,121
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Alaska Power &Telephone Compan y Docket No.DI10-5-000
ORDER RULING ON DECLARATION OF INTENTION
AND FINDING LICENSING IS REQUIRED
(Issued November 04,2010)
1.On December 23,2009,and supplemented on January 12,February 4,
February 24,March 16,and March 23,2010,Alaska Power &Telephone Company
filed a Declaration of Intention (DI)concerning the proposal to develop the Neck Lake
Hydroelectric Project,to be located on Neck Lake outlet stream near the community of
Whale Pass on Prince of Wales Island,Alaska (T.66 S.,R.79 E.,sec.35,Copper River
Meridian,Alaska).
PROJECT DESCRIPTION
2.The proposed Neck Lake Hydroelectric Project would consist of:(1)a small
reservoir;(2)a three-foot-high,75-foot-long dam,located approximately 1,300 feet
below the Neck Lake outlet;(3)a 400-foot-long penstock;(4)a proposed powerhouse
containing a generator with a capacity of 124 kW –400 kW;(5)a transmission line;
(6)an access road;and (7)appurtenant facilities.The proposed project would not be
connected to an interstate grid,and would not occupy any tribal or federal lands.
PUBLIC NOTICE
3.Notice of the DI was published in the Federal Register on April 7,2010.Protests,
comments,and motions to intervene were to be filed by April 30,2010.On April 13,
2010,the U.S.D.A.Forest Service –Region 10 filed a motion to intervene.The Forest
Service stated that the project appears to be adjacent to a Forest Service road reservation,
and therefore,has the potential to affect National Forest System lands.On April 30,
2010,the Southern Southeast Regional Aquaculture Association (SSRAA)filed
comments.In its comments,SSRAA stated that it has concerns regarding the adverse
impact of project operations on its existing fish program.No other protests,comments,
or motions to intervene were received.
20101104-3033 FERC PDF (Unofficial) 11/04/2010
Docket No.DI10-5-000 2
JURISDICTION
4.Pursuant to section 23(b)(1)of the Federal Power Act (FPA),16 U.S.C.§817(1),
a non-federal hydroelectric project must (unless it has a still-valid pre-1920 federal
permit)be licensed if it:
•is located on a navigable water of the United States;
•occupies lands or reservations of the United States;
•utilizes surplus water or waterpower from a government dam;or
•is located on a stream over which Congress has Commerce Clause
jurisdiction,is constructed or modified on or after August 26,1935,and
affects the interests of interstate or foreign commerce.
DISCUSSION
5.Because the licensing requirement is established on other grounds,I do not
address the issue of whether Neck Lake outlet stream is navigable at the project site.The
project would not occupy federal lands.The project would not use surplus water or
waterpower from a federal government dam.The project would be constructed after
August 26,1935,would be located on a Commerce Clause stream,1 and would affect the
interests of interstate or foreign commerce within the meaning of section 23(b(1)of the
Federal Power Act because of its significant effect on anadromous fish in Alaska’s
District 6 fishery.
A.Fish Resource
6.SSRAA operates a raceway and adult collection facilities for summer run coho
salmon (Oncorhynchus kisutch)at the mouth of the outlet stream from Neck Lake.The
adult summer run coho salmon harvested at this facility during June,July,and August are
marketed for sale in the Pacific Northwest as Snow Pass Coho.2 Adult summer run coho
also return to the nearby Burnett Inlet Hatchery,where about 2 million eggs are collected
and fertilized each year.After the fry hatch,1.6-to 1.7-million are transported by plane
to net pens in Neck Lake,where they rear for a year and are then released as yearling
smolts.Upon release from the net pens,these smolts move out of Neck Lake and down
the Neck Lake outlet stream,pass over a barrier falls,and enter salt water in Whale
Pass.After 12 to 14 months at sea,the returning adult fish enter the commercial gillnet
1 Neck Lake outlet stream is a tributary to Whale Pass,a navigable water of the
United States.
2 http://www.ssraa.org/snow_pass_coho.htm This web site provides information
on SSRAA’s collection,rearing and marketing of snow pass summer run coho salmon.
20101104-3033 FERC PDF (Unofficial) 11/04/2010
Docket No.DI10-5-000 3
fishery in Alaska Department of Fish and Game’s salmon District 6 (also referred to as
District 106)in southeast Alaska.
7.Based on ten years of harvest records (2000 –2009)for the District 6 gillnet
fishery,Neck Lake-produced coho salmon contributed an average of 23 percent (with a
range of 6 percent to 40 percent)of the total commercial summer run coho salmon catch
(Alaska Department of Fish and Game,2010).3 The ex-vessel value4 of this catch for the
period 2000-2009 ranged from $12,437 to $186,960 and averaged 20 percent of the total
value of the District 6 ex-vessel harvest.Thus,the contribution and value of Neck Lake-
produced coho salmon represents a significant part of the District 6 summer coho salmon
harvest.For this period,the return from the coho yearling smolts released from Neck
Lake averaged 65,000 adult coho salmon,consisting of commercial and sport fishery
harvest,and those fish that escaped harvest and returned to the collection facilities on the
outlet stream from Neck Lake,for an average survival rate of 4 percent (SSRAA,2010).5
B. Proposed Project Effects
8.The proposed hydro project would use flows from Neck Lake and would consist
of a small diversion dam with an intake structure downstream of Neck Lake,a penstock
that bypasses about 400 feet of stream,and a powerhouse that discharges near the base of
the fish ladder/raceway operated by the SSRAA for capturing returning adult coho
salmon.The proposed project description did not provide any details of project design or
mode of operation that would prevent or minimize impacts to coho smolts passing from
Neck Lake downstream to salt water and return of adults to the collection facilities.
9.Coho smolts moving downstream from Neck Lake could be harmed by:turbine
injur y and mortality resulting from entrainment at the project intake structure with no or
ineffective screens;injury and mortality from passage over the diversion structure with an
inadequate plunge pool;and,inadequate flows in the bypassed reach for passage
downstream.Of these three effects,turbine caused mortality would likely be the most
significant.Mortality of the downstream migrating coho smolts passing through the
project turbine could range from 5 to 20 percent but could reach 100 percent,depending
3 E-mail dated August 6,2010,from Troy Thynes,Alaska Department of Fish and
Game to John Novak of Commission staff.(Filed August 20,2010)
4 Price received b y fishermen for fish,shellfish,and other aquatic animals landed
at the dock.
5 E-mail dated July 29,2010,from Rod Neterer,Southern Southeast Regional
Aquaculture Association to John Novak of Commission staff.(Filed August 4,2010)
20101104-3033 FERC PDF (Unofficial) 11/04/2010
Docket No.DI10-5-000 4
upon the type of turbine installed at this project.6
10.Adult coho salmon returning to SSRAA’s collection facilities could be falsely
attracted to the project discharge that would be adjacent to the discharge from the
collection facilities.Without a tailrace barrier or modified operation,these fish falsely
attracted to the project discharge could enter the draft tube and come in contact with the
turbine runners,causing some level of injur y and mortality to these fish.This would
affect the survival return rate and ultimately the number of coho harvested for sale by the
SSRAA.Further,the SSRAA has expressed the concern that if the penstock were routed
over the top of the fish ladder,adult coho salmon,which are active jumpers,would be
injured while jumping and coming in contact with the penstock.
C. Conclusion
11. Based on available information about the project and its location in a salmon
rearing system that contributes a large number of coho salmon to an important
commercial fisher y,the proposed project has the potential to cause substantial injur y and
mortality to coho smolts passing downstream,thereby significantly affecting the
commercial coho fishery in District 6.As noted above,over the past 10 years Neck Lake
coho salmon have contributed an average of 23 percent of the commercial gillnet harvest
in District 6.This is a significant contribution.Without adequate design and screening
of the project intake and worse case,20 percent or more7 of the downstream migrating
coho smolts would experience turbine mortality and thereby reduce the commercial
fishery in District 6 b y five percent or more.In the Gartina Creek project order,8 the
Commission determined that a potential eight-percent reduction in the commercial
salmon harvest in District 114 was large enough to be considered real and substantial,
therefore requiring licensing of that project.Without adequate fish protection measures,
this proposed project also has the potential to cause either a similar or greater level of
reduction in the coho salmon commercial harvest.Applying the same rationale here,the
impacts of the proposed project on the District 6 commercial gillnet fishery would be real
and substantial.Therefore,the project requires licensing because it would significantly
affect interstate commerce within the meaning of section 23 (b)(1)of the Federal Power
Act.
6 Therrien,J.and Bourgeois,G.2000.Fish passage at small hydro sites.The
International Energ y Agency Technical Report.113 pages +Appendices.
7 Some turbines are reported to cause mortalities reaching 100 percent.
Installation of such a turbine at this project would result in a 23-percent reduction in the
District 6 commercial gillnet fishery for coho salmon.
8 101 FERC ¶61,191 (November 21,2002).
20101104-3033 FERC PDF (Unofficial) 11/04/2010
Docket No.DI10-5-000 5
12. For all the foregoing reasons,I find that the proposed Neck Lake Project would
substantially affect the District 6 commercial fishery,and therefore,would affect the
interests of interstate or foreign commerce.Accordingly,the project must be licensed
pursuant to section 23(b)(1)of the FPA.
The Director orders:
(A)Alaska Power &Telephone Compan y’s proposed Neck Lake H ydroelectric
Project,to be located on Neck Lake outlet stream near the community of Whale Pass on
Prince of Wales Island,Alaska,is required to be licensed pursuant to section 23(b)(1)of
the Federal Power Act.No construction of the project may commence until a license has
been obtained.
(B)This order constitutes final agency action.An y party may file a request for
rehearing of this order within 30 da ys from the date of its issuance,as provided in
section 313(a)of the FPA,16 U.S.C.§825l (2006),and the Commission’s regulations at
18 C.F.R.§385.713 (2010).The filing of a request for rehearing does not operate as a
stay of the effective date of this order,or of any other date specified in this order.The
licensee’s failure to file a request for rehearing shall constitute acceptance of this order.
Edward A.Abrams
Director
Division of Hydropower Administration
and Compliance
20101104-3033 FERC PDF (Unofficial) 11/04/2010
PROJECT TIMELINE CHART
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
PHASE I: Reconnassaince
Reconnaissance (completed)
PHASE II: Resource Assement/Feasibility Analysis/Conceptual Design
Agency Consultation/Permitting
Resource Assessment (studies)
Feasibility & Conceptual Design
PHASE III: Final Design and Permitting
Permitting & FERC License App
FERC Application Processing
Final Design
Agency Permits Issued
PHASE IV: Construction
Grant processing
Access Road
Diversion & Intake
Penstock
Generating Equipment Procurement
Powerhouse
Install Distribution Line
Test and Start-Up
LEGEND:<-- Procurement and off-site fabrication <-- On-site construction
2021
NECK LAKE HYDROELECTRIC PROJECT
DEVELOPMENT SCHEDULE
2016 2017 2018 2019 2020
PERMITTING
133 FERC ¶62,121
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Alaska Power &Telephone Compan y Docket No.DI10-5-000
ORDER RULING ON DECLARATION OF INTENTION
AND FINDING LICENSING IS REQUIRED
(Issued November 04,2010)
1.On December 23,2009,and supplemented on January 12,February 4,
February 24,March 16,and March 23,2010,Alaska Power &Telephone Company
filed a Declaration of Intention (DI)concerning the proposal to develop the Neck Lake
Hydroelectric Project,to be located on Neck Lake outlet stream near the community of
Whale Pass on Prince of Wales Island,Alaska (T.66 S.,R.79 E.,sec.35,Copper River
Meridian,Alaska).
PROJECT DESCRIPTION
2.The proposed Neck Lake Hydroelectric Project would consist of:(1)a small
reservoir;(2)a three-foot-high,75-foot-long dam,located approximately 1,300 feet
below the Neck Lake outlet;(3)a 400-foot-long penstock;(4)a proposed powerhouse
containing a generator with a capacity of 124 kW –400 kW;(5)a transmission line;
(6)an access road;and (7)appurtenant facilities.The proposed project would not be
connected to an interstate grid,and would not occupy any tribal or federal lands.
PUBLIC NOTICE
3.Notice of the DI was published in the Federal Register on April 7,2010.Protests,
comments,and motions to intervene were to be filed by April 30,2010.On April 13,
2010,the U.S.D.A.Forest Service –Region 10 filed a motion to intervene.The Forest
Service stated that the project appears to be adjacent to a Forest Service road reservation,
and therefore,has the potential to affect National Forest System lands.On April 30,
2010,the Southern Southeast Regional Aquaculture Association (SSRAA)filed
comments.In its comments,SSRAA stated that it has concerns regarding the adverse
impact of project operations on its existing fish program.No other protests,comments,
or motions to intervene were received.
20101104-3033 FERC PDF (Unofficial) 11/04/2010
Docket No.DI10-5-000 2
JURISDICTION
4.Pursuant to section 23(b)(1)of the Federal Power Act (FPA),16 U.S.C.§817(1),
a non-federal hydroelectric project must (unless it has a still-valid pre-1920 federal
permit)be licensed if it:
•is located on a navigable water of the United States;
•occupies lands or reservations of the United States;
•utilizes surplus water or waterpower from a government dam;or
•is located on a stream over which Congress has Commerce Clause
jurisdiction,is constructed or modified on or after August 26,1935,and
affects the interests of interstate or foreign commerce.
DISCUSSION
5.Because the licensing requirement is established on other grounds,I do not
address the issue of whether Neck Lake outlet stream is navigable at the project site.The
project would not occupy federal lands.The project would not use surplus water or
waterpower from a federal government dam.The project would be constructed after
August 26,1935,would be located on a Commerce Clause stream,1 and would affect the
interests of interstate or foreign commerce within the meaning of section 23(b(1)of the
Federal Power Act because of its significant effect on anadromous fish in Alaska’s
District 6 fishery.
A.Fish Resource
6.SSRAA operates a raceway and adult collection facilities for summer run coho
salmon (Oncorhynchus kisutch)at the mouth of the outlet stream from Neck Lake.The
adult summer run coho salmon harvested at this facility during June,July,and August are
marketed for sale in the Pacific Northwest as Snow Pass Coho.2 Adult summer run coho
also return to the nearby Burnett Inlet Hatchery,where about 2 million eggs are collected
and fertilized each year.After the fry hatch,1.6-to 1.7-million are transported by plane
to net pens in Neck Lake,where they rear for a year and are then released as yearling
smolts.Upon release from the net pens,these smolts move out of Neck Lake and down
the Neck Lake outlet stream,pass over a barrier falls,and enter salt water in Whale
Pass.After 12 to 14 months at sea,the returning adult fish enter the commercial gillnet
1 Neck Lake outlet stream is a tributary to Whale Pass,a navigable water of the
United States.
2 http://www.ssraa.org/snow_pass_coho.htm This web site provides information
on SSRAA’s collection,rearing and marketing of snow pass summer run coho salmon.
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Docket No.DI10-5-000 3
fishery in Alaska Department of Fish and Game’s salmon District 6 (also referred to as
District 106)in southeast Alaska.
7.Based on ten years of harvest records (2000 –2009)for the District 6 gillnet
fishery,Neck Lake-produced coho salmon contributed an average of 23 percent (with a
range of 6 percent to 40 percent)of the total commercial summer run coho salmon catch
(Alaska Department of Fish and Game,2010).3 The ex-vessel value4 of this catch for the
period 2000-2009 ranged from $12,437 to $186,960 and averaged 20 percent of the total
value of the District 6 ex-vessel harvest.Thus,the contribution and value of Neck Lake-
produced coho salmon represents a significant part of the District 6 summer coho salmon
harvest.For this period,the return from the coho yearling smolts released from Neck
Lake averaged 65,000 adult coho salmon,consisting of commercial and sport fishery
harvest,and those fish that escaped harvest and returned to the collection facilities on the
outlet stream from Neck Lake,for an average survival rate of 4 percent (SSRAA,2010).5
B. Proposed Project Effects
8.The proposed hydro project would use flows from Neck Lake and would consist
of a small diversion dam with an intake structure downstream of Neck Lake,a penstock
that bypasses about 400 feet of stream,and a powerhouse that discharges near the base of
the fish ladder/raceway operated by the SSRAA for capturing returning adult coho
salmon.The proposed project description did not provide any details of project design or
mode of operation that would prevent or minimize impacts to coho smolts passing from
Neck Lake downstream to salt water and return of adults to the collection facilities.
9.Coho smolts moving downstream from Neck Lake could be harmed by:turbine
injur y and mortality resulting from entrainment at the project intake structure with no or
ineffective screens;injury and mortality from passage over the diversion structure with an
inadequate plunge pool;and,inadequate flows in the bypassed reach for passage
downstream.Of these three effects,turbine caused mortality would likely be the most
significant.Mortality of the downstream migrating coho smolts passing through the
project turbine could range from 5 to 20 percent but could reach 100 percent,depending
3 E-mail dated August 6,2010,from Troy Thynes,Alaska Department of Fish and
Game to John Novak of Commission staff.(Filed August 20,2010)
4 Price received b y fishermen for fish,shellfish,and other aquatic animals landed
at the dock.
5 E-mail dated July 29,2010,from Rod Neterer,Southern Southeast Regional
Aquaculture Association to John Novak of Commission staff.(Filed August 4,2010)
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Docket No.DI10-5-000 4
upon the type of turbine installed at this project.6
10.Adult coho salmon returning to SSRAA’s collection facilities could be falsely
attracted to the project discharge that would be adjacent to the discharge from the
collection facilities.Without a tailrace barrier or modified operation,these fish falsely
attracted to the project discharge could enter the draft tube and come in contact with the
turbine runners,causing some level of injur y and mortality to these fish.This would
affect the survival return rate and ultimately the number of coho harvested for sale by the
SSRAA.Further,the SSRAA has expressed the concern that if the penstock were routed
over the top of the fish ladder,adult coho salmon,which are active jumpers,would be
injured while jumping and coming in contact with the penstock.
C. Conclusion
11. Based on available information about the project and its location in a salmon
rearing system that contributes a large number of coho salmon to an important
commercial fisher y,the proposed project has the potential to cause substantial injur y and
mortality to coho smolts passing downstream,thereby significantly affecting the
commercial coho fishery in District 6.As noted above,over the past 10 years Neck Lake
coho salmon have contributed an average of 23 percent of the commercial gillnet harvest
in District 6.This is a significant contribution.Without adequate design and screening
of the project intake and worse case,20 percent or more7 of the downstream migrating
coho smolts would experience turbine mortality and thereby reduce the commercial
fishery in District 6 b y five percent or more.In the Gartina Creek project order,8 the
Commission determined that a potential eight-percent reduction in the commercial
salmon harvest in District 114 was large enough to be considered real and substantial,
therefore requiring licensing of that project.Without adequate fish protection measures,
this proposed project also has the potential to cause either a similar or greater level of
reduction in the coho salmon commercial harvest.Applying the same rationale here,the
impacts of the proposed project on the District 6 commercial gillnet fishery would be real
and substantial.Therefore,the project requires licensing because it would significantly
affect interstate commerce within the meaning of section 23 (b)(1)of the Federal Power
Act.
6 Therrien,J.and Bourgeois,G.2000.Fish passage at small hydro sites.The
International Energ y Agency Technical Report.113 pages +Appendices.
7 Some turbines are reported to cause mortalities reaching 100 percent.
Installation of such a turbine at this project would result in a 23-percent reduction in the
District 6 commercial gillnet fishery for coho salmon.
8 101 FERC ¶61,191 (November 21,2002).
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Docket No.DI10-5-000 5
12. For all the foregoing reasons,I find that the proposed Neck Lake Project would
substantially affect the District 6 commercial fishery,and therefore,would affect the
interests of interstate or foreign commerce.Accordingly,the project must be licensed
pursuant to section 23(b)(1)of the FPA.
The Director orders:
(A)Alaska Power &Telephone Compan y’s proposed Neck Lake H ydroelectric
Project,to be located on Neck Lake outlet stream near the community of Whale Pass on
Prince of Wales Island,Alaska,is required to be licensed pursuant to section 23(b)(1)of
the Federal Power Act.No construction of the project may commence until a license has
been obtained.
(B)This order constitutes final agency action.An y party may file a request for
rehearing of this order within 30 da ys from the date of its issuance,as provided in
section 313(a)of the FPA,16 U.S.C.§825l (2006),and the Commission’s regulations at
18 C.F.R.§385.713 (2010).The filing of a request for rehearing does not operate as a
stay of the effective date of this order,or of any other date specified in this order.The
licensee’s failure to file a request for rehearing shall constitute acceptance of this order.
Edward A.Abrams
Director
Division of Hydropower Administration
and Compliance
20101104-3033 FERC PDF (Unofficial) 11/04/2010
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