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HomeMy WebLinkAboutAEA RE Fund Round 9 - UHBD Geotech   Alaska Energy Authority Renewable Energy Fund Round 9    Upper Hidden Basin Diversion  Geotechnical Investigation  Grant Application  Kodiak Electric Association, Inc.  Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 1 of 36 7/8/14 SECTION 1 – APPLICANT INFORMATION Please specify the legal grantee that will own, operate, and maintain the project upon completion. Name (Name of utility, IPP, local government, or other government entity) Kodiak Electric Association, Inc. (KEA) Type of Entity: Fiscal Year End: Rural Electric Cooperative December 31 Tax ID # Tax Status: ☐ For-profit ☒ Non-profit ☐ Government (check one) Date of last financial statement audit: December 2014 Mailing Address: Physical Address: PO Box 787 515 East Marine Way Kodiak, AK 99615 Kodiak, AK 99615 Telephone: Fax: Email: (907) 486-7700 (907) 486-7720 dscott@kodiak.coop 1.1 Applicant Point of Contact / Grants Manager Name: Title: Darron Scott President/CEO Mailing Address: PO Box 787 Kodiak, AK 99615 Telephone: Fax: Email: (907) 486-7707 (907) 486-7720 dscott@kodiak.coop 1.1.1 APPLICANT SIGNATORY AUTHORITY CONTACT INFORMATION Name: Title: Darron Scott President/CEO Mailing Address: PO Box 787 Kodiak, AK 99615 Telephone: Fax: Email: (907) 486-7707 (907) 486-7720 dscott@kodiak.coop 1.1.2 Applicant Alternate Points of Contact Name Telephone: Fax: Email: Alice Job (907) 486-7708 (907) 486-7720 ajob@kodiak.coop Jennifer Richcreek (907) 654-7667 (907) 486-7720 jrichcreek@kodiak.coop Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 2 of 36 7/8/14 1.2 Applicant Minimum Requirements Please check as appropriate. If applicants do not meet the minimum requirements, the application will be rejected. 1.2.1 Applicant Type ☒ An electric utility holding a certificate of public convenience and necessity under AS 42.05, or ☐ An independent power producer in accordance with 3 AAC 107.695 (a) (1), or ☐ A local government, or ☐ A governmental entity (which includes tribal councils and housing authorities) 1.2 APPLICANT MINIMUM REQUIREMENTS (continued) Please check as appropriate. ☒ 1.2.2 Attached to this application is formal approval and endorsement for the project by the applicant’s board of directors, executive management, or other governing authority. If the applicant is a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate by checking the box) ☒ 1.2.3 As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement (Section 3 of the RFA). (Indicate by checking the box) ☒ 1.2.4 If awarded the grant, we can comply with all terms and conditions of the award as identified in the Standard Grant Agreement template at http://www.akenergyauthority.org/Programs/Renewable-Energy-Fund/Rounds#round9. (Any exceptions should be clearly noted and submitted with the application.) (Indicate by checking the box) ☒ 1.2.5 We intend to own and operate any project that may be constructed with grant funds for the benefit of the general public. If no please describe the nature of the project and who will be the primary beneficiaries. (Indicate yes by checking the box) Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 3 of 36 7/8/14 SECTION 2 – PROJECT SUMMARY 2.1 Project Title Provide a 4 to 7 word title for your project. Type in the space below. Upper Hidden Basin Diversion – Geotechnical Investigation 2.2 Project Location 2.2.1 Location of Project – Latitude and longitude (preferred), street address, or community name. The latitude and longitude of the Upper Hidden Basin Diversion (UHBD) is 57˚ 36’ 30” north; 153˚ 0’ 10” west. The area is located above 1,400 foot elevation in the mountainous uplands of Kodiak Island, adjacent to the Terror Lake reservoir. For maps and photographs of the project area, please refer to Appendix A and B of the Preliminary Draft Environmental Assessment (PDEA) document pages 93 – 117, provided in the Federal Energy Regulatory Commission (FERC) Pre-Application Document (PAD), which is filed as a separate supporting document for this grant application. 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. The UHBD project directly benefits the Cooperative members of Kodiak Electric Association, Inc. (KEA) whose service area includes approximately 6,000 meters in and surrounding the City of Kodiak, US Coast Guard Base Kodiak, Chiniak, Pasagshak and Port Lions. A map of KEA’s service area is provided on page 95 of PDEA Appendix A within the separate FERC PAD document. 2.3 Project Type Please check as appropriate. 2.3.1 Renewable Resource Type ☐ Wind ☐ Biomass or Biofuels (excluding heat-only) ☒ Hydro, Including Run of River ☒ Hydrokinetic ☐ Geothermal, Excluding Heat Pumps ☐ Transmission of Renewable Energy ☐ Solar Photovoltaic ☐ Storage of Renewable ☐ Other (Describe) ☐ Small Natural Gas 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Pre-Construction Construction ☐ Reconnaissance ☐ Final Design and Permitting ☒ Feasibility and Conceptual Design ☐ Construction Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 4 of 36 7/8/14 2.4 Project Description Provide a brief one paragraph description of the proposed project. The Upper Hidden Basin Diversion (UHBD) will supplement the available hydro resource supply of KEA’s existing Terror Lake Hydroelectric Facility (FERC Project No. 2743) by an additional 30,000 acre-feet of water. The UHBD will increase hydropower generation by an additional 33 million kilowatt-hours (kWh) annually. Diversion components would be a basic, non-mechanical design intended for un-manned water conveyance. Structural components of the UHBD consist of two concrete-face rockfill dams, a buried conveyance pipe, tunnel and access road. Surface water from the diversion dam on the eastern tributary of the West Fork of Hidden Basin Creek (D-East) will flow through a half-mile long, five foot diameter underground pipe to the diversion dam on the western tributary of the West Fork of Hidden Basin Creek (D-West). The combined flow of water from both diversions will then flow by gravity through a 1.2 mile long, 12 foot diameter tunnel through a mountain ridge to the Terror Lake reservoir. Once the additional energy resource from the UHBD flow into the reservoir, additional hydropower is generated from the existing Terror Lake powerhouse and will feed directly into KEA’s existing electrical grid without any operational or capacity-related changes. The UHBD is the most technically-viable, cost-effective, and minimally- invasive option for adding renewable energy to Kodiak’s electrical grid for the benefit of the Kodiak community. 2.5 Scope of Work Provide a scope of work detailing the tasks to be performed under this funding request. This should include work paid for by grant funds and matching funds or performed as in-kind match. The scope of work for this grant application is the geotechnical investigation task for Phase II Feasibility Analysis and Conceptual Design of the UHBD. The scope of the geotechnical investigation will consist of geologic mapping, land surveying, geophysical surveys, and geotechnical drilling of ten borings. The purpose of this work is to evaluate the characteristics of the ground at the UHBD project features for the engineering design. The cost to conduct the UHBD geotechnical investigation is $1,500,000. KEA is requesting 50% matching funds under this funding request, in the amount of $750,000, to assist KEA in the cost of this early development phase of the project. SECTION 3 – Project Management, Development, and Operation 3.1 Schedule and Milestones Criteria: Stage 2-1.A: The proposed schedule is clear, realistic, and described in adequate detail. Please fill out the schedule below (or attach a similar sheet) for the work covered by this funding request. Be sure to identify key tasks and decision points in in your project along with estimated start and end dates for each of the milestones and tasks. Please clearly identify the beginning and ending of all phases of your proposed project. Add additional rows as needed. Milestones Tasks Start Date End Date Deliverables Field Data Collection  Mobilize Contractor to project site  Contractor conducts geotechnical investigation  Demobilize Contractor Jul 2016 Sept 2016 Geologic and Geotechnical Data Report  Contractor analyzes field data  Contractor presents findings to KEA in a report Sept 2016 Mar 2017 Geologic and Geotechnical Report Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 5 of 36 7/8/14 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. KEA is financially committed to this project and has already expended over $700,000 in the reconnaissance and permitting phases. Since 2013, KEA has conducted field studies for surface water stream gauging; surface water temperature; watershed hydrology; fish presence, absence and distribution; preliminary wetland assessment; cultural resources; and conceptual construction cost estimate. KEA is actively engaged in the permitting process and has filed a Draft Application for Non-Capacity Amendment to FERC License No. 2743 requesting authorization of the UHBD, and held public and agency scoping meetings. The project is proceeding well. The Phase I Reconnaissance Phase is complete and has confirmed that the UHBD is the best option available to meet KEA’s renewable energy vision under conditions of growing electrical load demand. KEA intends to continue developing the project further with the geotechnical investigation in 2016. KEA has not secured any grant funds for this project to date, and is currently funding UHBD project development through cash reserve. Any grant support for this project will help offset the cost borne by the KEA membership. The total cost of the UHBD is estimated at $79,992,000. The cost to conduct the geotechnical investigation is estimated at $1,500,000. KEA is requesting $750,000 in matching grant funds to assist KEA in the cost of this necessary next step for project development. KEA is committed to providing the $750,000 in matching funds for this project task. The KEA Board of Directors is aware of the total UHBD project cost as well as the portion of that total cost to hire contractors to conduct the geotechnical investigation and report the study findings for the UHBD engineering design to proceed. The KEA Board of Directors has expressed their formal endorsement of the UHBD project through Resolution 701-15 Authorization for President/CEO to Represent KEA and apply for a Renewable Energy Fund Grant though the Alaska Energy Authority, dated August 20, 2015, attached as Exhibit C. Further discussion of UHBD project costs, UHBD project value and UHBD financing is provided on pages 18 through 22 of FERC Exhibit D – Statement of Costs and Financing within the FERC PAD, filed as a separate supporting document for this grant application. 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. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 6 of 36 7/8/14 Milestone or Task RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In-kind/Federal Grants/Other State Grants/Other TOTALS Phase II – Feasibility Analysis, Conceptual Design Geotechnical Investigation  Contractor collects data in the field $500,000 $500,000 Cash $1,000,000 Geotechnical Investigation  Contractor presents findings in report $250,000 $250,000 Cash $ 500,000 TOTALS $750,000 $750,000 $1,500,000 Budget Categories: Direct Labor & Benefits $0 $0 N/A $0 Travel & Per Diem $0 $0 N/A $0 Equipment $0 $0 $0 Materials & Supplies $0 $0 $0 Contractual Services $750,000 $750,000 $1,500,000 Construction Services $0 $0 $0 Other $0 $0 $0 TOTALS $750,000 $750,000 $1,500,000 3.2.3 Cost Justification Indicate the source(s) of the cost estimates used for the project budget. The cost estimate for the geotechnical investigation is based on industry standards for conducting this work in remote Alaskan areas, such as the mountainous interior of Kodiak Island where the UHBD is located. The field work estimate is based on two drill rigs conducting the necessary drilling, testing and sampling of soil and rock. One drill rig would drill nine vertical holes, and the other rig would drill one horizontal hole at the upstream portal of the tunnel. Drilling equipment rates were provided by Lachel & Associates in conjunction with Schnabel Engineering (Lachel team), which conducted similar work in Southeast Alaska in 2013. The field work estimate also includes the mobilization and demobilization of the drilling contractor staff and equipment by helicopter. There currently is no road access or existing infrastructure at the UHBD site, and a dedicated helicopter will be required for a period of two months. The reporting costs includes all pre- and post-engineering time for preparation planning, analysis of the geotechnical data collected, and compilation of findings in a final geotechnical report. 3.2.4 Funding Sources Indicate the funding sources for the phase(s) of the project applied for in this funding request. Grant funds requested in this application $750,000 Cash match to be provided $750,000 In-kind match to be provided $0 Total costs for project phase(s) covered in application (sum of above) $1,500,000 Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 7 of 36 7/8/14 3.2.5 Total Project Costs Indicate the anticipated total cost by phase of the project (including all funding sources). Use actual costs for completed phases. Reconnaissance $ 745,000 Feasibility and Conceptual Design $ 1,500,000 Final Design and Permitting $10,605,000 Construction $67,142,000 Total Project Costs (sum of above) $79,992,000 3.2.6 Operating and Maintenance Costs O&M costs can be estimated in two ways for the standard application. Most proposed RE projects will fall under Option 1 because the new resource will not allow for diesel generation to be turned off. Some projects may allow for diesel generation to be turned off for periods of time; these projects should choose Option 2 for estimating O&M. Options O&M Impact of proposed RE project Option 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. $818,825 2. Hours diesel OFF/year: 8,585 3. $150,000 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. As demonstrated by the Renewable Energy Fund (REF) Rounds 1 through 5 funding KEA previously received, KEA will follow all provisions outlined by AEA in the REF Grant Agreement and provide monthly updates on the project’s status. KEA is familiar and proficient with the AEA grant reporting process, and would remain in full compliance with the monitor reporting stipulated in the REF Round 9 grant agreement. KEA utilizes reporting software that tracks and reports information in a timely, accurate and complete manner. As project manager, Darron Scott will provide milestone reports to the Engineering and Technology Committee of the KEA Board of Directors. KEA will also provide updates to the public through KEA’s E-News found on KEA’s website (http://kodiakelectric.wordpress.com/). As for monitoring the amount of water resources provided by the UHBD to the Terror Lake Hydroelectric Facility, KEA will be required to monitor and report the amount of water diverted through this project for the Water Rights permitting process administered by the Alaska Department of Natural Resources (DNR). That data can also be made available to AEA upon request. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 8 of 36 7/8/14 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. Once the UHBD is constructed and operational the additional water resources will flow into the Terror Lake reservoir for additional hydropower to be generated with KEA’s existing infrastructure. This project optimizes existing generation infrastructure. KEA’s current infrastructure is able to utilize the water resources provided by the UHBD to generate the additional hydropower and deliver the renewable electricity to KEA’s service area. The existing infrastructure associated with the Terror Lake Hydroelectric Facility will continue to operate in the same manner without design or engineering changes. No additional KEA staff would be necessary to operate or maintain the UHBD. KEA already operates and maintains three other diversions at the Terror Lake Hydroelectric Facility as part of the existing hydropower system. Operation and maintenance costs on diversion structures are minimal. Annual maintenance activities for the UHBD would consist of an annual or biennial clearing of accumulated rock or silt debris behind the two diversion dams, which is estimated to cost $150,000 in 2020. KEA is familiar with the ground conditions and project operation in this remote area of Kodiak Island. The Upper Hidden Basin watershed area is remote, and is not accessible via the Kodiak road system. Access to the project site is only possible by floatplane, helicopter, or boat. KEA maintains the existing dock/jetty area, located at the head of Kizhuyak Bay for transporting material and personnel to and from the existing facilities. Any material or equipment needed for the UHBD would be offloaded at the dock/jetty area and trucked to the site using the Terror Lake Hydroelectric Facility’s existing access road. The length of existing road from the dock/jetty to the area where a new UHBD spur road would be constructed is approximately 10 miles. A new 4 mile access road spur would connect this existing road to the new D-West and D-East diversion dams of UHBD. In terms of business and financial operation, KEA is the only electric utility in the City of Kodiak and surrounding area, and additional renewable energy is needed to meet growing loads. KEA is a generation, transmission and distribution not-for-profit rural electric cooperative, owned by our community members. The additional water diverted from the UHBD would be used to generate power at the existing Terror Lake Hydroelectric Facility, which goes straight into the KEA grid for the direct benefit of our Cooperative Member-Owners. The community will continue to benefit from a stable cost of power from avoiding reliance on diesel fuel consumption to meet growing loads. A more detailed discussion of UHBD operational logistics is provided in the FERC Exhibit B – Project Operations and Resource Utilization, provided on pages 9 through 15 of the separately provided FERC PAD document. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 9 of 36 7/8/14 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. Resumes for the KEA staff involved in the management of the project are presented below. All KEA employees can be reached at (907) 486-7700. Section 1 Applicant Information contains additional contact information. Darron Scott, President/CEO Darron Scott is the President/CEO of KEA and Project Manager for the UHBD. Darron earned a bachelor’s degree in mechanical engineering from Texas A&M in 1990 and began his career in 1987 as an engineer at Ingersoll-Rand Pump Group. He worked his way up through the ranks and was promoted to production superintendent at a Texas Utilities/TU Electric steam production plant in Monahans, Texas. In 2000, the KEA Board of Directors selected Darron to oversee KEA’s employees and stand-alone generation, transmission and distribution electrical grid. During the past 15 years as KEA’s President/CEO, Darron brought a renewable energy vision to fruition by planning, developing, and building KEA’s innovative hydro-wind micro-grid to effectively eliminate diesel fuel as the community’s primary power supply. He is a recognized leader in the Alaskan utility industry, Chair of the Renewable Energy Alaska Project (REAP) Public Policy Committee, and frequently requested speaker at numerous state, national, and international conferences, sharing information on KEA’s experience with integrating renewable energy on micro-grids. Jennifer Richcreek, Regulatory Specialist Jennifer Richcreek is the Regulatory Specialist for KEA and is an alternate contact for the UHBD project management. Jennifer earned a bachelor’s degree in earth sciences from Johns Hopkins University in 2000, a master’s degree in environmental soil science from Oregon State University in 2005, and the Qualified Environmental Professional certification by the Institute of Professional Environmental Practice in 2013. During her 9 years with KEA, Jennifer has become KEA’s primary contact with the state and federal resource agencies and is responsible for securing KEA’s permits utility-wide environmental compliance programs for facility construction, land use, air quality, spill prevention, and waste handling. She manages the FERC license for the Terror Lake Hydroelectric Facility, including the FERC license amendment process for the UHBD. She Chairs the Northwest Public Power Association’s Environmental Task Force, and serves on the Alaska Power Association’s Environmental Regulatory Committee and Alaska Chapter of Air and Waste Management Association. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 10 of 36 7/8/14 Lloyd Shanley, Manager of Power Generation Lloyd Shanley is the Manager of Power Generation for KEA. Lloyd joined KEA in 2011 from NC Power Systems in Anchorage, Alaska with over 30 years of experience in power generation and equipment maintenance. He is a skilled mechanic and field technician, with expertise in machine product design, installation and operation. Lloyd is responsible for the overall performance and integration of KEA’s power generation facilities and equipment, including the Terror Lake Hydroelectric Facility, Pillar Mountain Wind Project, KEA’s backup diesel generating fleet, and KEA’s battery and flywheel energy storage systems. Alice Job, Manager of Finance and Administration Alice Job is the Manager of Finance and Administration for KEA. Alice earned a bachelor’s degree in business administration from the University of Alaska Southeast in 2009, and numerous NRECA and USDA financial course certifications over her 31 years of career experience with rural electric cooperatives. During her 13 years at KEA, she has established a proven track record with successfully managing and utilizing KEA’s financial and accounting resources for the maximum benefit of KEA’s cooperative member-owners. Alice is an expert the field of accounting, financial planning, risk management, internal auditing, procurement, and resource allocation, and governmental and financial institution compliance. Additional project management support for the UHBD geotechnical investigation task will be provided by the Lachel engineering team. This engineering team has expertise in geotechnical investigations for designing hydropower tunnels and dam embankments in remote areas of Alaska. The Lachel team leader is Steven Brandon; his resume is provided in Exhibit A. KEA is not requesting project management assistance from AEA or other government entity. 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 KEA staff has the knowledge and experience to complete and operate an additional hydropower diversion and provide the benefits of this renewable energy project to the community it serves. As demonstrated in operation and management of the Terror Lake Hydroelectric Facility, KEA is capable of successfully developing, operating and maintaining the UHBD for the benefit of the Kodiak community. The KEA staff is experienced in assessing the technical, economic, and environmental requirements of hydropower development projects, working with stakeholders to develop effective strategies for project completion and operation, and sharing the lessons learned with other Alaskan communities. Additional support for the UHBD geotechnical investigation task will be provided by Lachel & Associates in conjunction with Schnabel Engineering (Lachel team). The Lachel team leader is Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 11 of 36 7/8/14 Steven Brandon; his resume is provided in Exhibit A. The Lachel team will complete the geotechnical investigation report (Milestone 2). This engineering team has expertise in geotechnical investigations for designing hydropower tunnels and dam embankments in remote areas of Alaska. A drilling contractor will be hired in December 2015 to conduct the geotechnical investigation field work (Milestone 1).The drilling contractor bidding package is currently under development; it will be based upon the Geologic and Geotechnical Exploration Plan provided in Exhibit A. 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. Resumes for the KEA staff involved in the accounting of the project are presented below. All KEA employees can be reached at (907) 486-7700. Section 1 Applicant Information contains additional contact information. Dan Menth, Controller Dan Menth is the Controller for KEA, a position he has held for 8 years. Dan earned a bachelor’s degree in management from St. John’s University in 1992, and began his career in finance with Flight Safety Services Corporation in Colorado. Dan has expertise in government accounting processes, proposal writing, and financial analysis and is thoroughly familiar with AEA’s grant expenditure accounting and documentation requirements. He has completed numerous NRECA and USDA financial courses and is a graduate from NRECA’s Management Internship Program at the University of Wisconsin Madison. Arielle van Dorsten, Assistant Controller Arielle van Dorsten is the Assistant Controller for KEA. She earned a bachelor's degree from University of Bridgeport in 2011 with a double major in mass communications and world religions, and has continued her post-graduate studies in accounting. Arielle joined the KEA team in 2014 after working in the accounting sector for several years. She manages the accounting of KEA’s plant assets, tracks costs for grant reimbursement, and updates AEA performance reports quarterly. Since joining KEA, Arielle has also completed numerous courses in USDA and RUS accounting systems. KEA is not requesting accounting assistance from AEA or other government entity. 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. To monitor the project’s budget, KEA’s accounting system assigns tracking numbers to the costs associated to the UHBD project for AEA REF grant reimbursement. KEA’s accounting system utilizes software from National Information Solutions Cooperative (NISC), a well-respected and widely used accounting software for electric utilities. KEA has established a positive track record with AEA in grant accounting processes and will continue to monitor all project costs to ensure that only appropriate grant expenditures are sent in Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 12 of 36 7/8/14 for reimbursement. Grant submittals have been on time, complete, well organized and accurate with few exceptions. As part of KEA’s yearly external audit, our auditing firm (BDO) has performed Federal and State audits on previous grants and found no exceptions or areas of concern. 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. KEA maintains a well-trained, local labor workforce. This project will not require any additional employees to operate and maintain. When selecting contractors and equipment KEA emphasizes the use of local contractors whenever possible. Transportation services required for the geotechnical investigation will be provided by local business. Helicopter services will be provided by Maritime Helicopters, an Alaskan company headquartered in Homer. Floatplane and barge services, if needed, will be provided by Andrew Airways, also an Alaskan company headquartered in Kodiak. SECTION 5 – TECHNICAL FEASIBILITY 5.1 Resource Availability Criteria: Stage 2-3.A: The renewable energy resource is available on a sustainable basis, and project permits and other authorizations can reasonably be obtained. 5.1.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available, including average resource availability on an annual basis. Describe the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. For pre-construction applications, describe the resource to the extent known. For design and permitting or construction projects, please provide feasibility documents, design documents, and permitting documents (if applicable) as attachments to this application. The upper catchment area of the Hidden Basin watershed is estimated to convey 30,000 acre-feet of snow melt and rain annually. The UHBD would add this 30,000 acre-feet of water to the Terror Lake reservoir, equating to 33 million kWh of additional energy production made available to KEA’s electrical grid each year. KEA operates on a remote, completely isolated electric grid unconnected to any other electric system. To meet Kodiak’s growing electrical load, there are only two sources of energy that can be added to KEA’s grid at this time: 1) diesel fuel and 2) hydropower. There are no local sources of natural gas, coal, or nuclear power on Kodiak Island, nor would it be feasible to import any of those fuel sources to Kodiak due to transportation logistics, high cost, pollution controls and safety requirements. KEA is already pushing the technologic edge for variable wind energy penetration on its isolated micro-grid with battery and flywheel energy storage system integration, and cannot practically engineer any more intermittent source energy, such as wind or solar, onto its grid. Tidal and wave energy generation technology remains in the pilot testing phase and is not yet ready for utility-scale deployment and operation. Developing an entirely new hydropower facility separate and redundant to the existing Project is not practical. The only other alternative for obtaining an equivalent amount of power other than the UHBD would be diesel-based generation. However, reverting back to a dependence on barged-in diesel fuel is not reasonable, due to both economic and environmental costs. The UHBD is the most viable option for supplying continuous renewable power to KEA’s remote electrical grid. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 13 of 36 7/8/14 For a more detailed discussion of the water resource availability, utilization and alternative analysis refer to the attached: 1. ERM’s technical report, Hidden Basin Creek Hydrology and Fisheries Report, Technical Report February 2015, provided in Appendix C of the PDEA document, pages 119 through 205 of the separately provided FERC PAD document. 2. The FERC Exhibit B – Project Operations and Resource Utilization, provided on pages 9 through 15 of the separately provided FERC PAD document. 3. UHBD alternative analysis included in the PDEA, provided on pages 53 through 54 and pages 77 through 78 of the separately provided FERC PAD document. 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 This grant request is to assist in the cost of conducting the geotechnical investigation in 2016. The Geologic and Geotechnical Exploration Plan is provided in Exhibit A. KEA is actively engaged in agency consultation regarding the specific permits required the geotechnical investigation activities, including the DNR Land Use Permit, DNR Temporary Use of Water Permit, and USFWS Special Use Permit. Resource agency staff are aware of KEA’s plan to conduct geotechnical investigation work in 2016, and all required permits will be secured prior to conducting the field work. Constructing the UHBD requires an amendment to KEA’s existing FERC License No. 2743 for the Terror Lake Hydroelectric Facility. KEA is actively engaged in this larger permitting process. On June 19, 2015 and on July 7, 2015, KEA filed FERC PAD and Scoping Document No. 1, respectively, and distributed copies to appropriate resource agencies, affected Alaska Natives, and members of the public. The PAD and Scoping Document No. 1 address the FERC regulations governing non-capacity amendments for major construction Projects greater than 5 MW involving a new diversion in a location where there is no existing dam or diversion, and the FERC regulations implementing the requirements of the National Environmental Policy Act (NEPA). Joint Agency/Public Scoping Meetings were held in Kodiak on July 21, 2015 with a site tour provided to resource agency staff. The scoping meetings were well attended, and no statements of opposition were expressed. Transcripts of the meetings will be publically available on the FERC docket. The public review and comment period will continue for 60 days after the Scoping Meeting, concluding on September 21, 2015. The permitting process is proceeding well. Below is a list of permits associated with the entire UHBD project development, including identification of the agencies associated with each requirement and a statement regarding the current status. Detailed discussions of the status of agency consultation currently underway is provided on pages 58 through 74 of the separately provided FERC PAD document. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 14 of 36 7/8/14 Requirement Agency Status FPA – Section 4(e) - FERC is authorized to issue licenses. FERC 02-19-2015 – KEA participated in pre-filing meeting with FERC Portland Regional Office (PRO) staff. 03-04-2015 - KEA participated in pre-filing teleconferences with FERC DHAC staff. Draft Amendment Application is proceeding under three- stage consultation process. Fish & Wildlife FPA – Section 10(j) - State and Federal Fish & Wildlife Agencies are authorized to recommend conditions to protect those resources. Alaska Department of Fish & Game (ADF&G) US Fish & Wildlife Service (USFWS) National Marine Fisheries Service (NMFS) 04-01-2015 – KEA participated in pre-filing meeting with ADF&G staff. 04-22-2015 – KEA participated in pre-filing meeting with USFWS, Kodiak National Wildlife Refuge staff. Draft PDEA provides ADF&G, USFWS and NMFS with information to identify measures to be presented under Section 10(j) of the FPA. FPA – Section 18 – requires FERC to include in a license any fishways prescribed by the USFWS and/or NMFS. USFWS and/or NMFS 04-22-2015 – KEA participated in pre-filing meeting with USFWS, Kodiak National Wildlife Refuge staff. Draft PDEA provides USFWS and NMFS with information to identify measures to be presented under Section 18 of the FPA. Endangered Species Act (ESA) - Section 7 - requires FERC to confer with USFWS and/or NMFS to determine whether a proposed project would affect candidate or listed species. USFWS and/or NMFS 04-17-2015 - FERC issued correspondence to USFWS and NMFS designating KEA as the non-federal representative to conduct informal consultation on the ESA. 06-01-2015- USFWS and NMFS stated there are no listed species or critical habitats identified within the vicinity of the proposed diversion area. Fish and Wildlife Coordination Act (FWCA) requires FERC to consult with the ADF&G, USFWS, & NMFS. See also Section discussion of FPA Section 10(j). ADF&G, USFWS and NMFS 04-01-2015 – KEA participated in pre-filing meeting with ADF&G staff. 04-22-2015 – KEA participated in pre-filing meeting with USFWS, Kodiak National Wildlife Refuge staff. Draft PDEA provides ADF&G, USFWS and NMFS with information to identify measures to be presented under FWCA and/or Section 10(j) of the FPA. Magnuson – Stevens Fishery Conservation and Management Act (MSA) – Section 305 (b)(2) requires FERC to consult with NMFS regarding any adverse effects on essential fish habitat (EFH). NMFS 04-17-2015 - FERC issued correspondence to USFWS and NMFS designating KEA as the non-federal representative to conduct informal consultation on the MSA. Draft PDEA provides NMFS with information to identify measures to be presented under MSA. Other Requirements Clean Water Act (CWA) – Section 401 Water Quality Certification. Alaska Department of Environmental Conservation (ADEC) 05-20-2015 - KEA submitted a request for waiver of 401 Certification. 06-03-2015 – ADEC waived its right to issue Certificate of Reasonable Assurance. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 15 of 36 7/8/14 Requirement Agency Status CWA – Section 404 – Alaska Pollutant Discharge Elimination System (APDES) and Section 404 discharge to navigable waters or wetlands requires applicants to prepare required plans. US Army Corps of Engineers (USACE) regarding construction affecting jurisdictional wetlands. ADEC regarding APDES storm water permitting during construction. There is no proposed construction affecting navigable waters. 04-29-2015 - KEA participated in pre-filing meeting with USACE staff. Additional information regarding wetland delineation and construction design is required prior to filing a wetland and/or APDES permit application. Coastal Zone Management Act (CZMA) – Section 307(c)(3) of the CZMA requires all federally licensed and permitted activities be consistent with approved state Coastal Zone Management Programs. The CZMA authorizes States to review proposed federal action affecting resources within the Coastal Zone and defined in an Alaska Coastal Management Plan. N/A 07-01-2011 - This requirement was removed by operation of Alaska State law. 07-07-2011 – Notice of ACMP removal issued in Federal Register Vol. 76, No. 130, pages 39857-58. No action required. National Historic Preservation Act (NHPA) – Section 106 of the NHPA requires FERC to assess effect of license issuance on cultural, archaeological, and historic properties. Alaska Department of Natural Resources (DNR) State Historic Preservation Officer (SHPO) 04-17-2015 - FERC issued correspondence to SHPO designating KEA as the non-federal representative to conduct informal consultation on the NHPA. 05-28-2015 – SHPO concurs that a finding of no historic properties affected is appropriate for the proposed license amendment. National Wilderness Act N/A There are no candidate or designated wilderness areas in the vicinity of the proposed project. National Wild and Scenic Rivers Act N/A There are no candidate or designated river segments in the vicinity of the proposed project. State of Alaska Alaska Land Act - Section 38.05.850 of Alaska Statute for authorizing land use activities on State land. DNR 04-10-2015 - KEA participated in pre-filing meeting with DNR Division of Land, Mining, Water; Land Section staff. 04-14-2015 - KEA submitted an application for easement to occupy State land. Alaska National Interests Lands Conservation Act (ANILCA) N/A There is potential for no lands selected under ANILCA to be associated with the Project. Alaska Native Claims Settlement Act (ANCSA) N/A No lands selected under ANCSA are associated with the Project. Water Use Act – Section 46.15 of Alaska Statute for authorizing water rights. DNR 04-10-2015 - KEA participated in pre-filing meeting with DNR Division of Land, Mining, Water; Land Section staff. 05-05-2015 - KEA submitted an application for water rights. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 16 of 36 7/8/14 5.2 Project Site Criteria: Stage 2-3.B: A site is available and suitable for the proposed energy system. Describe the availability of the site and its suitability for the proposed energy system. Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. The UHBD area is remote, undeveloped and suitable for the proposed energy system. There are no developments in the Hidden Basin watershed nor are there any towns located within 15 miles of the Project. The only activity in the vicinity is KEA’s operation of the Terror Lake Hydroelectric Facility. Public recreational use of the area is essentially non-existent. The UHBD will expand the FERC licensed boundary of the Terror Lake Hydroelectric Facility by an additional 158.8 acres. The majority of the boundary expansion is located on lands owned by the State of Alaska, managed by DNR. On April 10, 2015, KEA consulted with DNR Division of Land, Mining, and Water, Land Section and Water Section staff regarding the process and application for land access needed for the proposed UHBD. KEA received guidance from DNR staff regarding the process and the application, and on April 14, 2015, filed an Application for Easement as per AS 38.05.850 for the portions of the proposed UHBD located on State land. A copy of the Application for Easement and the Application for Water Rights is provided on pages 285 – 303 in PDEA Appendix D of the separately provided FERC PAD document. DNR also participated in the Agency Scoping Meeting held in Kodiak on July 21, 2015 and is actively engaged in the FERC license amendment process for the UHBD. By necessity of connecting the UHBD water resources to the existing Terror Lake reservoir, some of the new UHBD would need to be constructed on federal land already occupied by the Project and administered by the Kodiak National Wildlife Refuge. A portion of the proposed UHBD tunnel corridor would need to occupy 1.9 additional acres of federal land administered by the Kodiak National Wildlife Refuge outside the current Project boundary. This 1.9 acre corridor of expanded Project boundary on federal land would encompass a subterranean tunnel, completely underneath a mountain ridge. On April 22, 2015, KEA consulted with USFWS Kodiak National Wildlife Refuge staff regarding the process for land access needed for conducting pre-filing geotechnical studies and for constructing the tunnel that would connect the water resource of the proposed UHBD to the Terror Lake reservoir. USFWS Region 7 and Kodiak National Wildlife Refuge staff also participated in the Agency Scoping Meeting held in Kodiak on July 21, 2015 and are actively engaged in the FERC license amendment process for the UHBD. 5.3 Project Risk Criteria: Stage 2-3.C: Project technical and environmental risks are reasonable. 5.3.1 Technical Risk Describe potential technical risks and how you would address them. The purpose of conducting the geotechnical investigation is to collect data necessary to minimize any potential technical risks that may occur during the engineering and construction phases of the project. The geologic and geotechnical site exploration plan is designed to evaluate the characteristics of the ground at each of the UHBD project features so that a solid, site-specific engineering design can be developed. Based on KEA’s familiarity with this region of Kodiak Island and observations from the feasibility analysis phase, KEA does not anticipate any technological barriers to project development. KEA is familiar with the ground conditions in this remote area of Kodiak Island. The proposed diversion Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 17 of 36 7/8/14 area is adjacent to the existing Terror Lake Hydroelectric Facility, east of the Terror Lake reservoir and south of Shotgun Lake Diversion. The proposed diversion tunnel would run though the same stable granitic ridge as the Terror Lake power tunnel. Hydropower is a mature technology for supplying renewable energy. KEA has successfully operated the Terror Lake Hydroelectric Facility for 30 years, including three other diversion structures similar to the UHBD. Operating a new hydropower diversion poses minimal risk from a technological and constructability perspective. 5.3.2 Environmental Risk Explain whether the following environmental and land use issues apply, and if so how they will be addressed:  Threatened or endangered species  Habitat issues  Wetlands and other protected areas  Archaeological and historical resources  Land development constraints  Telecommunications interference  Aviation considerations  Visual, aesthetics impacts  Identify and describe other potential barriers Construction and operation of the UHBD is not anticipated to result in significant environmental impact. The project would divert a relatively small portion of water resources from the fish-free upper reaches of the Hidden Basin watershed for renewable energy production. The UHBD would be similar to existing diversion structures currently in operation at the Project. For the past 30 years, KEA has proven that it can successfully and responsibly construct and operate these types of structures in this environment without adverse effects. KEA is actively engaged in the agency consultation process as part of the FERC license amendment to authorize the UHBD. A complete list of environmental and land use issues is provided in the table below. Detailed discussions of each environmental resource is included on pages 55 through 74 of the separately provided FERC PAD document. Resource/Location Project-Related Effect Proposed Measures Air Quality Positive cumulative effect – reduction in diesel fuel combustion & emissions No effect on air quality classification None required Water Use & Quality:  Hidden Basin Creek Proposal would divert approximately 30,000 acre- feet of water from Hidden Basin watershed; 15% of watershed drainage area No effect on downstream water temperatures Comply with terms and conditions of water rights appropriation, as required Protection of aquatic resources addressed in KEA’s Contract Terms & Conditions Environmental Compliance Monitor (ECM) during construction Water Use & Quality:  Terror Lake Dam & Terror River No effect on Instream Flow Release as per License Article 43 Continue current Project operations ECM during construction Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 18 of 36 7/8/14 Resource/Location Project-Related Effect Proposed Measures Wetland Habitat Filling of wetlands for diversion dam and access road construction Comply with terms and conditions of CWA 404 Permit & ADEC APDES Stormwater Permit, as required Erosion & sedimentation control addressed in KEA’s Contract Terms & Conditions ECM during construction Fish Species – Pink, Chum & Coho Salmon; Dolly Varden, Sculpin  Hidden Basin Creek No fish present at UHBD sites Not likely to have adverse effect on downstream fish habitat Protection of aquatic resources addressed in KEA’s Contract Terms & Conditions ECM during construction Fish Species – Pink, Chum & Coho Salmon; Dolly Varden  Tailrace & Kizhuyak River  Terror River No effect on Tailrace, Kizhuyak or Terror River Continue current Project operations Protection of aquatic resources addressed in KEA’s Contract Terms & Conditions ECM during construction Terrestrial Resources:  Kodiak Brown Bear  Bald Eagle Not likely to have cumulative adverse effect on wildlife Bear Safety Plan Wildlife interactions addressed in KEA’s Contract Terms & Conditions ECM during construction Terrestrial Resources:  Vegetative Cover Not likely to have cumulative adverse effect on vegetation Landscape disturbance addressed in KEA’s Contract Terms & Conditions ECM during construction Threatened & Endangered Species No listed species or critical habitat in vicinity of UHBD site None required Cultural Resources  KOD-190 Site No adverse effect to cultural resources Contractor personnel education Warning signs posted Contractor personnel access restricted Periodic monitoring of KOD-190 site ECM during construction Land Use Proposal would expand FERC-licensed Project boundary by an additional 158.8 acres 156.9 acres of the expanded boundary would extend into state land 1.9 acres of the expanded boundary would extend into federal land for a portion of the subterranean tunnel Comply with terms and conditions of land use agreements, as required Land use activities addressed in KEA’s Contract Terms & Conditions ECM during construction Recreation and Aesthetic Resources No recreation facilities near UHBD area Public use near UHBD is essentially non-existent Continue current Project operations Socioeconomic Factors Positive cumulative effect - enhanced renewable energy supply for benefit of KEA cooperative members Continue current Project operations Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 19 of 36 7/8/14 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. KEA provides electricity to approximately 6,000 meters on Kodiak Island, Alaska in a service area that includes the region in and around the City of Kodiak, Bells Flats, Chiniak, Pasagshak, Port Lions, and the nation’s largest US Coast Guard Base. KEA's system operates in a remote island environment with no interconnections to outside sources of power. KEA’s distribution system consists of over 33 miles of transmission line, 203 miles of overhead distribution line, 140 miles of underground line, and 3 miles of underwater cable. There are six substation facilities: Terror Lake, Swampy Acres, Nyman, High, Airport, and Hartman. The Terror Lake Hydroelectric Facility is the cornerstone to KEA’s renewable wind-hydro energy system. On an annual average, KEA’s electric grid is powered with 80% hydropower and 20% wind energy from the Pillar Mountain Wind Farm. The variability of high penetration wind energy is balanced with stored energy injections from flywheels, battery arrays, and Terror Lake’s hydropower. Four independent diesel generation facilities serve as backup power to KEA’s renewable hydro-wind generation system: Kodiak Generating Station; the Nyman Power Plant; the Swampy Acres Plant and the Port Lions Plant. The table on the following page details KEA’s current generation resources. The capacity numbers listed are high-end nominal values. The efficiency information is for these load points at ideal conditions. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 20 of 36 7/8/14 KEA Energy Generation Type Efficiency Unit Install Date Capacity Hydro 1,100 kWh/A-F Fuji VT1R6N Turbine, Mitsubishi Generator 1984 10.0 MW 1,100 kWh/A-F Fuji VT1R6N Turbine, Mitsubishi Generator 1984 10.0 MW 1,100 kWh/A-F Andritz Turbine, Hyundai Generator 2014 10.0 MW Terror Lake Hydroelectric Facility Total 30.0 MW Wind N/A GE 1.5 sle Wind Turbine 2009 1.5 MW N/A GE 1.5 sle Wind Turbine 2009 1.5 MW N/A GE 1.5 sle Wind Turbine 2009 1.5 MW N/A GE 1.5 sle Wind Turbine 2012 1.5 MW N/A GE 1.5 sle Wind Turbine 2012 1.5 MW N/A GE 1.5 sle Wind Turbine 2012 1.5 MW Pillar Mountain Wind Project Total 9.0 MW Battery N/A Xtreme Power DPR 15-100C 2012 1.5 MW N/A Xtreme Power DPR 15-100C 2012 1.5 MW Battery Energy Storage System 3.0 MW Flywheel N/A ABB PowerStore Grid Stabilization Model PS8 2015 1.0 MW N/A ABB PowerStore Grid Stabilization Model PS8 2015 1.0 MW Flywheel Energy Storage System 2.0 MW Diesel 12.2 kWh/gal DeLaval DSRS-12-3 1976 1.8 MW 15.6 kWh/gal Caterpillar 3616 2005 5.0 MW 15.6 kWh/gal Caterpillar 3616 2005 5.0 MW 14.4 kWh/gal DeLaval DSRS-16-4 1980 5.8 MW Kodiak Generating Station Total 17.6 MW Diesel 13.8 kWh/gal DeLaval DSR-48 1978 2.5 MW 14.2 kWh/gal Solar Taurus 60-T7301S, SoLoNOx 1999 6.5 MW Nyman Power Plant Total 9.0 MW Diesel 13.2 kWh/gal Caterpillar 3516B 2002 1.8 MW 13.2 kWh/gal Caterpillar 3516B 2002 1.8 MW 15.6 kWh/gal Caterpillar C280-16 2015 4.4 MW Swampy Acres Generating Plant Total 8.0 MW Diesel 11.3 kWh/gal Waukesha 28950 1968 0.2 MW 11.5 kWh/gal Waukesha 28950 1979 0.2 MW 11.5 kWh/gal Caterpillar 3406 1970 0.1 MW 11.5 kWh/gal Caterpillar 343 1970 0.1 MW Port Lions Power Plant Total 0.6 MW KEA System-Wide Total Generating Capacity 79.2 MW Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 21 of 36 7/8/14 Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank) i. Number of generators/boilers/other 26 ii. Rated capacity of generators/boilers/other 79.2 MW iii. Generator/boilers/other type See Section 5.4.1 KEA Energy Generation table iv. Age of generators/boilers/other See Section 5.4.1 KEA Energy Generation table v. Efficiency of generators/boilers/other See Section 5.4.1 KEA Energy Generation table vi. Is there operational heat recovery? (Y/N) If yes estimated annual displaced heating fuel (gallons) N/A b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $2,357,924,94 (Wind, Hydro, Diesel, BESS) ii. Annual O&M cost for non-labor $2,653,398.21 (Wind, Hydro, Diesel, BESS) 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] 158,913,412 kWh (2014 Actual) ii. Fuel usage Diesel [gal] 53,756 gallons (2014 Actual) Other N/A iii. Peak Load 27.10 MW iv. Average Load 17 MW v. Minimum Load 11 MW vi. Efficiency 14.2 kWh/gal of diesel fuel vii. Future trends 1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric  Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power.    120,000 130,000 140,000 150,000 160,000 170,000 180,000 190,000 200,000 2008 2010 2012 2014 2016 2018 2020 2022 2024 Year Historical Load Growth Renewable ProductionAnnual MWH Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 22 of 36 7/8/14 d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] N/A ii. Electricity [kWh] N/A iii. Propane [gal or MMBtu] N/A iv. Coal [tons or MMBtu] N/A v. Wood [cords, green tons, dry tons] N/A vi. Other N/A 5.4.2 Future Trends Describe the anticipated energy demand in the community over the life of the project. As depicted in KEA’s Load Forecast future trends graph above, annual energy production requirements for KEA’s grid in 2014 were 159 million kWh. By 2020, KEA’s system-wide load growth demand is projected to surpass 179 million kWh. Kodiak is seeing expansions in the seafood processing sector, the repowering of the City’s shipping port crane, numerous new building construction projects, and an overall community-wide shift of energy sourcing from diesel fuel to renewable electricity. KEA is currently able to supply 161 million kWh of renewably generated electricity annually. Without additional sources of renewable energy to meet the future load demand, KEA will need to revert back to diesel-based generation. Returning to a reliance on expensive, barged-in diesel fuel is not an acceptable option for the future viability of Kodiak’s economy and environment, or KEA’s vision; “Endeavor to maintain 95% of energy sales with cost effective renewable power solutions for the future of our members and the community.” There is a limited amount of water available within the Terror Lake reservoir. The projected kWh sales indicate KEA will exceed available renewable generation by 2017. When that available energy supply is drawn down to low lake levels, more renewable energy is needed to continue powering KEA’s growing loads. Adding water to Terror Lake would be the most cost-effective and minimally-invasive approach for adding more renewable energy onto KEA’s isolated micro-grid. The UHBD would provide additional water resources so that an additional 33 million kWh of annual hydropower production may be added to KEA’s grid. The total 33 million kWh contributed by the UHBD is expected to be fully utilized by 2025. The useful life of the project will more than likely exceed the 50 year depreciation life span utilized for hydro facilities. A more detailed discussion of KEA’s load growth is included in the FERC Exhibit B – Project Operations and Resource Utilization on pages 9 through 15, and in the Need for Action section of the PDEA on pages 37 through 38 of the separately provided FERC PAD document. 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. KEA does not participate in the PCE program. It remains unknown if electrical rates would need to be increased minimally to offset the amount of capital required for UHBD project development and construction. Currently, KEA is operating at a high margin level, which will allow us to absorb a portion of the UHBD costs. KEA intends to apply Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 23 of 36 7/8/14 prudent financial management strategies to avoid rate increases into the foreseeable future. Grant assistance provided by AEA’s REF would help assist KEA in this rate-stabilizing effort. Despite the high capital cost of the UHBD, the additional hydropower production made possible by the UHBD project is cheaper than diesel-based generation. KEA is pursing the UHBD because this hydropower project would result in much lower rates than what otherwise would be required if KEA reverted back to diesel-based generation when load demand surpasses KEA’s available hydro-wind energy supply. Rate increases due to diesel-fuel consumption is exactly the situation KEA strives to avoid with its renewable energy vision and the development of the UHBD. Doing nothing is more expensive than moving forward with the UHBD project. 5.4.4 Proposed System Design Provide the following information for the proposed renewable energy system:  A description of renewable energy technology specific to project location  Optimum installed capacity  Anticipated capacity factor  Anticipated annual generation  Anticipated barriers  Integration plan  Delivery methods KEA proposes to construct two new concrete face rockfill dams approximately 30 feet high and 250 feet wide within an eastern and western tributary branch of the West Fork of Hidden Basin Creek, approximately six miles upstream of Hidden Basin Lagoon and Ugak Bay on the eastern side of Kodiak Island, Alaska. Surface water from the diversion dam on the eastern tributary (D-East) would flow through a half-mile long, five foot diameter underground pipe to the diversion dam on the western tributary (D-West). From there, the combined water would flow by gravity through a 1.2 mile long, 12 foot diameter tunnel through a mountain ridge to Terror Lake. The proposed diversion dams would include broad crested weir sections that would provide adequate spillway capacity during periods of heavy rain and snow melt in excess of the diversion’s conveyance pipe and tunnel hydraulic capacity. Water flow in excess of the UHBD conveyance pipe and tunnel capacity would be spilled downstream over the diversion dam spillways into the West Fork of Hidden Basin Creek. The proposed UHBD would also include a four mile long spur road off of an existing road to provide access for constructing and maintaining the new diversion. Once the additional water resources from the UHBD flow into the Terror Lake reservoir, hydropower would be generated from the existing powerhouse and feed directly into KEA’s existing grid without any operational changes or any other capacity-related modifications. KEA’s current infrastructure is already able to utilize the water resources provided by the UHBD to generate the additional hydropower and deliver the renewable electricity to KEA’s service area. The existing infrastructure will continue to operate in the same manner without design or engineering changes. There would be no changes to the existing powerhouse, turbines, generators, substation or transmission line. The total generating capacity of the Terror Lake Hydroelectric facility remains unchanged at 33.75 MW. Its average generating efficiency is 1,100 kWh per acre-foot of water. This generating efficiency rate will remain unchanged because there would be no changes to the existing powerhouse, turbines and generators. The Terror Lake reservoir, Shotgun Creek Diversion, Falls Creek Diversion, and Rolling Rock Creek Diversion (all to remain unchanged) currently provide on average 123,000 acre-feet of water resources annually for 135 million kWh of energy production annually. The proposed UHBD would provide an additional 30,000 acre-feet of water each year; Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 24 of 36 7/8/14 therefore providing an additional energy resource equivalent to 33,000,000 kWh of annual energy production. A 100% plant capacity factor equates to 296 million kWh, but the Terror Lake Hydroelectric Facility currently only generates 135 million KWh annually, which is a plant capacity factor of 46%. UHBD would add 30,000 acre-feet of new water resources to Terror Lake annually, equating to 33 million kWh of new energy production made available. Therefore, the UHBD boosts the annual plant capacity factor to 56% by making more hydropower resources available to the unchanged powerhouse. With the exception of station service and transmission losses, all power generated by the Terror Lake Hydroelectric Facility is sold directly to KEA’s Cooperative members. The UHBD project is currently under development and proceeding well. There are no anticipated barriers to successfully completing construction and operating the project for the benefit of Alaskans. KEA already operates and maintains three other diversions at the facility as part of the existing hydropower system. Adding more water to the existing facility would be the most cost- effective and minimally-invasive approach for adding more renewable energy onto KEA’s isolated grid. 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] N/A – the UHBD will add water to an existing hydropower facility. There is no change to the existing hydropower generators. b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 33,000,000 kWh ii. Heat [MMBtu] 0 c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] 0 ii. Coal [tons or MMBtu] 0 iii. Wood or pellets [cords, green tons, dry tons] 0 iv. Other 0 d) Estimate number of hours renewable will allow powerhouse to turn diesel engines off (fill in as applicable) 8,585 hours/year Diesels would only run for testing and maintenance purposes. 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. KEA’s current metering and month-end accounting system is capable of providing information on Terror Lake Hydroelectric facility’s performance, including energy output and fuel savings. As for monitoring the amount of water resources provided by the UHBD to the Terror Lake reservoir, KEA will be required to monitor and report the amount of water diverted through this project for the water rights permitting process administered by DNR. Water flow data collected for DNR can also be made available to AEA upon request. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 25 of 36 7/8/14 SECTION 6 – ECONOMIC FEASIBILITY AND BENEFITS 6.1 Economic Feasibility Criteria: Stage 2-4.A: The project is shown to be economically feasible (net positive savings in fuel, operation and maintenance, and capital costs over the life of the proposed project). 6.1.1 Economic Benefit Explain the economic benefits of your project. Include direct cost savings, and how the people of Alaska will benefit from the project. The benefits information should include the following:  Anticipated annual and lifetime fuel displacement (gallons and dollars)  Anticipated annual and lifetime revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate)  Additional incentives (i.e. tax credits)  Additional revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) The economic model used by AEA is available at http://www.akenergyauthority.org/Programs/Renewable-Energy- Fund/Rounds#round9. This economic model may be used by applicants but is not required. The final benefit/cost ratio used will be derived from the AEA model to ensure a level playing field for all applicants. If used, please submit the model with the application. Because the only other feasible alternative to power generation on Kodiak Island is diesel, the value of the UHBD is exceptionally high. KEA proposes to have the UHBD operational by 2020. KEA’s system load demand in 2020 is expected to be 18 million kWh greater than KEA’s currently available hydropower and wind energy supply. Therefore, without the additional water resources provided by the UHBD, the 18 million kWh of additional load demand would require diesel- generated power. Based on the diesel generation efficiency rates and 3% inflation rates on fuel and maintenance costs, as depicted in the Net Present Value (NPV) table, the direct fuel costs for generating that amount of electricity without the UHBD is approximately $4.5 million in Year 1, plus $818,825 in diesel engine maintenance cost. Even with the expenses of constructing this new diversion, including debt and maintenance costs, the first year benefits of the UHBD would be net positive at $676,666 in savings. The cost-saving benefits of hydropower continue to escalate to $5.7 million in Year 5 of UHBD operation. Over the 30-year financing term, a total of 66,947,372 gallons of diesel fuel are expected to be saved from the additional hydropower production made possible by the water resources of the UHBD. The direct savings from the avoided fuel cost for that 30-year period is $380 million, plus the additional $69 million in savings from avoided diesel engine maintenance cost. Compared to the diesel alternative, the 30-year NPV at a 5% discount rate is over $129 million. Simple payback will occur within 15 years of operation. KEA is the sole owner of the Project, and is a generation, transmission and distribution not-for- profit rural electric cooperative owned by local community members. As a 501(c)12 not-for-profit organization, KEA is exempt from local, state, and federal taxes. There are no purchase power agreements involved with this project. KEA allocates Renewable Energy Credits (REC’s) without additional costs because, as a Cooperative, KEA is proud to share all of its value‐added benefits and renewable energy credits with the community of Member-Owners it serves. A more detailed discussion of UHBD project value is provided in the FERC Exhibit D – Statement of Costs and Financing on pages 18 through 22, and in the Development Analysis section of the PDEA on pages 75 through 79 in the separately provided FERC PAD document. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 26 of 36 7/8/14 Hidden Basin Diversion Project ‐ Net Present Value Table  Year  Interest Cost at  3.87% Principal Loan Cost  Hidden Basin O& M  Costs with 3%  Inflation  Fuel Savings with  3% Inflation  Diesel  Maintenance   with 3% Inflation Total  Savings  2020 ‐$3,074,905 ‐$1,443,859 ‐$150,000 $4,526,605 $818,825 $676,666.6  2021 ‐$3,018,211 ‐$1,500,553 ‐$154,500 $5,577,899 $1,008,996 $1,913,630.9  2022 ‐$2,959,291 ‐$1,559,472 ‐$159,135 $6,688,197 $1,209,839 $3,220,137.2  2023 ‐$2,898,058 ‐$1,620,705 ‐$163,909 $7,860,092 $1,421,826 $4,599,244.8  2024 ‐$2,834,421 ‐$1,684,343 ‐$168,826 $8,816,165 $1,594,771 $5,723,346.2  2025 ‐$2,768,285 ‐$1,750,479 ‐$173,891 $9,521,169 $1,722,301 $6,550,814.7  2026 ‐$2,699,552 ‐$1,819,212 ‐$179,108 $9,806,804 $1,773,970 $6,882,902.0  2027 ‐$2,628,120 ‐$1,890,644 ‐$184,481 $10,101,008 $1,827,189 $7,224,952.0  2028 ‐$2,553,883 ‐$1,964,880 ‐$190,016 $10,404,038 $1,882,004 $7,577,263.4  2029 ‐$2,476,732 ‐$2,042,032 ‐$195,716 $10,716,159 $1,938,465 $7,940,144.3  2030 ‐$2,396,551 ‐$2,122,213 ‐$201,587 $11,037,644 $1,996,618 $8,313,911.5  2031 ‐$2,313,222 ‐$2,205,542 ‐$207,635 $11,368,774 $2,056,517 $8,698,891.7  2032 ‐$2,226,620 ‐$2,292,143 ‐$213,864 $11,709,837 $2,118,212 $9,095,421.4  2033 ‐$2,136,619 ‐$2,382,145 ‐$220,280 $12,061,132 $2,181,759 $9,503,847.0  2034 ‐$2,043,083 ‐$2,475,681 ‐$226,888 $12,422,966 $2,247,212 $9,924,525.3  2035 ‐$1,945,875 ‐$2,572,889 ‐$233,695 $12,795,655 $2,314,628 $10,357,823.9  2036 ‐$1,844,850 ‐$2,673,914 ‐$240,706 $13,179,524 $2,384,067 $10,804,121.6  2037 ‐$1,739,858 ‐$2,778,906 ‐$247,927 $13,574,910 $2,455,589 $11,263,808.1  2038 ‐$1,630,743 ‐$2,888,020 ‐$255,365 $13,982,157 $2,529,256 $11,737,285.3  2039 ‐$1,517,344 ‐$3,001,419 ‐$263,026 $14,401,622 $2,605,134 $12,224,966.8  2040 ‐$1,399,493 ‐$3,119,271 ‐$270,917 $14,833,671 $2,683,288 $12,727,278.7  2041 ‐$1,277,014 ‐$3,241,750 ‐$279,044 $15,278,681 $2,763,787 $13,244,659.9  2042 ‐$1,149,726 ‐$3,369,038 ‐$287,416 $15,737,041 $2,846,700 $13,777,562.6  2043 ‐$1,017,440 ‐$3,501,324 ‐$296,038 $16,209,153 $2,932,101 $14,326,452.4  2044 ‐$879,959 ‐$3,638,804 ‐$304,919 $16,695,427 $3,020,065 $14,891,808.9  2045 ‐$737,081 ‐$3,781,683 ‐$314,067 $17,196,290 $3,110,666 $15,474,126.1  2046 ‐$588,592 ‐$3,930,172 ‐$323,489 $17,712,179 $3,203,986 $16,073,912.8  2047 ‐$434,273 ‐$4,084,491 ‐$333,193 $18,243,544 $3,300,106 $16,691,693.1  2048 ‐$273,894 ‐$4,244,870 ‐$343,189 $18,790,850 $3,399,109 $17,328,006.8  2049 ‐$107,218 ‐$4,411,546 ‐$353,484.83 $19,354,576 $3,501,083 $17,983,409.9    ‐$55,570,910 ‐$79,992,000 ‐$7,136,312.36 $380,603,768 $68,848,070              Cost Savings $306,752,616           NPV $129,060,144 Assumptions  Upper Hidden Basin Max Production   33,000,000  Upper Hidden Basin Total Cost $79,992,000  CREB Loan Rate 3.87%  CREB Loan Time (years)30  Inflation 3.00%  Diesel Operation Cost per kWh $0.04  Cost per gallon of fuel $3.14  Discount Rate 5.00%  Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 27 of 36 7/8/14 6.1.2 Power Purchase/Sale The power purchase/sale information should include the following:  Identification of potential power buyer(s)/customer(s)  Potential power purchase/sales price - at a minimum indicate a price range  Proposed rate of return from grant-funded project Identify the potential power buyer(s)/customer(s) and anticipated power purchase/sales price range. Indicate the proposed rate of return from the grant-funded project. KEA is the only electric utility in Kodiak, Alaska. There will be no power purchase agreements associated with the UHBD. KEA is a generation, transmission and distribution not-for-profit rural electric cooperative, owned by our community members. The additional water diverted from the UHBD would be used to generate power at the existing Terror Lake Hydroelectric Facility, which goes straight into the KEA grid for the direct benefit of our Cooperative Member-Owners. The community will continue to experience a stable cost of power from avoiding reliance on diesel fuel consumption to meet growing loads. 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. The completion of the UHBD will provide our system with surplus kWh capacity until 2025 when our predicted load matches the new capacity. Based on our forecasted load growth, we will have a total kWh surplus of 39,347,321 available from the years 2020 to 2025. KEA can maximize this project’s public benefit by creating a heating incentive rate to sell surplus kWh from the Project to industrial users for new electric heating systems, which would effectively replace their present fuel-based heat. For example, we would be able to offer the US Coast Guard Base the option of converting their current steam based heating plant with an electric boiler. KEA would pay for the electric heating systems to be installed at an estimated cost of $350,000. Projected revenue over the five-year period (2020 – 2025) is $1,712,496, which is greater than the $350,000 investment to purchase and install these electric heating systems. This incentive is projected to save participating members $1,166,021 over the five-year period. After 2025 when the five-year incentive rate ends, participating members are expected to continue receiving the benefits of cost-effective heat because they would no longer be diesel-fuel dependent. The public benefits (estimated renewable kWh surplus, sales, cost and revenues) are all beyond and separate from the economic benefits illustrated in Section 6.1.1 Economic Feasibility. The following economic benefit projection is based in the AEA Economic Model’s forecasted fuel cost for oil burning boilers compared to the electric usage needed to accomplish the same BTU. Please reference table below for complete projections and associated assumptions. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 28 of 36 7/8/14 It is important to put into context how much the savings presented above (as well as those in Section 6.1.1 Economic Feasibility) will benefit KEA’s member-owners, both in the industrial and residential sectors. The cost of living in Alaska is one of the most challenging issues that our state has to combat. As an island in a remote area of Alaska, Kodiak is no exception in the struggle to keep the cost of living bearable to residents and businesses. The Council for Community and Economic Research found Kodiak to have a higher total cost of living index than Anchorage, Fairbanks and Juneau in the first quarter of 2015 (Fried, Neal. Alaska’s Cost of Living, Alaska Economic Trends. July 2015). KEA works hard to do its part in keeping the index increase at a minimum, and to alleviate the total cost increases seen by the other utility services on the island (i.e., water, sewer, garbage, fuel). Because Kodiak’s electric rates have been stable and competitive, there are trends of increasing amounts of households and businesses switching over to electric heat pumps, and other energy efficiency measures. This contributes not only to lower monthly utility cost for families and businesses, but also contributes to the local economy of heat system specialists and energy efficiency technicians. As a cooperative, KEA takes pride in being able to offer our membership stable and affordable electric rates that businesses and families can depend on. KEA is committed to investing in our hydro facility with foresight so that we can continue to mitigate Kodiak’s cost of living challenges and contribute to a healthier and more prosperous local economy. The increased load forecast for the Kodiak community has a lot to do with businesses expanding and thriving in Kodiak and this is closely related with the competitive electric rates that KEA has supplied. As the community’s energy needs continue to shift away from diesel oil and electrical loads continue to grow, the UHBD will allow KEA’s grid to remain renewably powered so Alaskans can continue to receive the benefit of affordable and stably-priced energy generated in Kodiak. 2020 2021 2022 2023 2024 Total Proposed 500,000.00$                 500,000.00$                 500,000.00$                 409,814.29$                 152,682.14$              2,062,496.43$      Base Gallons of fuel to be displaced by kWh 142,377                         142,377                         142,377                         116,696                         43,477                        587,305                  Cost of displaced gallons 678,696.87$                 693,595.20$                 709,612.12$                 595,220.75$                 226,930.06$              2,904,055.01$      Metric Tons CO2 (per gallon .01015 ton) 1,445                              1,445                              1,445                              1,184                              441                              5,961                      Social Cost of CO2  (mid) 74,929.99$                   77,177.89$                   79,493.23$                   67,109.57$                   25,752.70$                324,463.38$         Total  Base  Cost to Consumer 753,626.86$                 770,773.09$                 789,105.35$                 662,330.32$                 252,682.76$              3,228,518.38$      253,626.86$                 270,773.09$                 289,105.35$                 252,516.03$                 100,000.62$              1,166,021.95$      Assumptions Cost of Fuel $4.77 $4.87 $4.98 $5.10 $5.22 BTU's produced by surplus kWh 17,060,708,000.00     17,060,708,000.00     17,060,708,000.00     13,983,443,725.60     5,209,730,912.20     Surplus kWh Available for Sale 14,812,107.14             11,240,785.71             7,669,464.29               4,098,142.86               1,526,821.43            39,347,321.43      Surplus kWh predicted to sell 5,000,000.00               5,000,000.00               5,000,000.00               4,098,142.86               1,526,821.43            20,624,964.29      AFUE‐Oil Burning Boilers/Furnaces Efficienc 84% 84% 84% 84% 84% AFUE‐ Electric Heaters efficiency 100% 100% 100% 100% 100% Savings of Switching  20,624,964 kWh worth  of heating fuel to electric  Dollar Savings from Surplus kWh being sold at $.10/kWh Annually for Electric Heating Use (Replacing Oil Burning Boiler Use) Cost of electric heat to consumer @ heat  incentive rate Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 29 of 36 7/8/14 Renewable energy resource availability (kWh per month) 655,788 Estimated sales (kWh) N/A Revenue for displacing diesel generation for use at private sector businesses ($) N/A Estimated sales (kWh) 20,624,964 Revenue for displacing diesel generation for use by the Alaskan public ($) $1,712,496 6.2 Financing Plan Criteria: Stage 2-4.B: The project has an adequate financing plan for completion of the grant-funded phase and has considered options for financing subsequent phases of the project. 6.2.1 Additional Funds Identify the source and amount of all additional funds needed to complete the work in the phase(s) for which REF funding is being applied in this application. Indicate whether these funds are secured or pending future approvals. Describe the impact, if any, that the timing of additional funds would have on the ability to proceed with the grant. 6.2.2 Financing opportunities/limitations 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? We are not in the final design or construction phase. 6.2.3 Cost Overruns Describe the plan to cover potential cost increases or shortfalls in funding. KEA has successfully completed numerous renewable generation projects within budget, and is confident in our ability to effectively complete the UHBD project within, or near budgeted costs. KEA is prepared to take responsibility for the direct financing of the total construction cost. The largest financial risk associated with the UHBD project is the cost of diesel-based generation incurred to power KEA’s growing loads while the UHBD is under construction. KEA is acting now with the development of the UHBD to mitigate the risk of future diesel cost. 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. The total cost of the UHBD is estimated at $79,992,000. As stated above, if KEA does not receive augmented financing or grants from a State or Federal renewable energy initiative program, then KEA is prepared to take responsibility for the direct financing of the total UHBD project cost. The benefits that the UHBD provides to the KEA membership through the reduction in costly diesel-powered generation is the justification and purpose of this project. Once the capital expenditure is paid, the long-term savings provided by the UHBD are expected to reduce KEA’s overall revenue requirements, thus lower costs to the membership A more detailed discussion of UHBD development analysis is presented in the Developmental Analysis Section of the PDEA on pages 75 through 79 in the separately provided FERC PAD document. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 30 of 36 7/8/14 6.3 Other Public Benefit Criteria: Stage 3-4.C: Other benefits to the Alaska public are demonstrated. Avoided costs alone will not be presumed to be in the best interest of the public. Describe the non-economic public benefits to Alaskans over the lifetime of the project. For the purpose of evaluating this criterion, public benefits are those benefits that would be considered unique to a given project and not generic to any renewable resource. For example, decreased greenhouse gas emission, stable pricing of fuel source, won’t be considered under this category. Some examples of other public benefits include:  The project will result in developing infrastructure (roads, trails, pipes, power lines, etc.) that can be used for other purposes  The project will result in a direct long-term increase in jobs (operating, supplying fuel, etc.)  The project will solve other problems for the community (waste disposal, food security, etc.)  The project will generate useful information that could be used by the public in other parts of the state  The project will promote or sustain long-term commercial economic development for the community With KEA’s 99.7% renewable energy portfolio, Alaska is already experiencing the benefits of renewable energy in Kodiak: stabilized cost of power, energy independence, reduction in pollution and greenhouse gasses, and renewable energy marketing opportunities. The UHBD project will help sustain long-term commercial economic development for our community. An additional public benefit supplied by this specific UHBD project is the availability of new data on the Hidden Basin Creek watershed. The UHBD is located in a remote area where data is not easily attainable, and the field work and environmental analysis required for UHBD project development is providing helpful new information about the area’s topography, watershed hydrology, fisheries, and wetlands. This is a new source of relevant environmental and mapping data that otherwise would not be available to Alaskan government resource agencies, including ADEC, ADF&G, DNR, and federal resource agencies with Alaska-based offices including NMFS, USACE, and USFWS. KEA’s surveying and mapping of the UHBD area provides the Kodiak Island Borough with new aerial imagery and LiDAR topographic data that otherwise would not be available for their borough- wide GIS mapping efforts. KEA continues to work in collaboration with federal, state, and local agencies to share data as it becomes available for the benefit of all Alaskans. Due in part to KEA’s stable electric rates, Kodiak is currently experiencing economic development. The City of Kodiak is enhancing its regional port hub with a bigger, faster, more energy-efficient electric crane to allow more local seafood products to be exported to the global market, and better food and building materials to be brought into Kodiak’s remote island communities. Additional ships are choosing Kodiak as their home port. Alaskan seafood companies are choosing Kodiak as their regional processing hub to expand their business operations. KEA is pleased to support the growth of Kodiak’s economy as these expanded facilities bring more jobs and revenue into the local community. KEA is developing the UHBD so that these benefits will continue well into the future for the long-term economic viability of our community. KEA’s grid is also experiencing an increase in load demand because the community is switching its source of energy from fossil fuels to locally- and renewably-generated electricity. The local community is modernizing its energy infrastructure and becoming more self-reliant with locally- generated power. The UHBD is the only alternative available to KEA that would allow this renewable energy vision to continue. Boosting the Terror Lake Hydroelectric Facility’s power production with additional water resources of the UHBD allows the cost of power to remain stable and predictable by keeping Kodiak’s energy needs free of diesel fuel. KEA does not want to fall into the same dilemma other Alaskan utilities have faced when growing loads outpace the supply of renewable energy. It is in Alaska’s best interest to promote KEA’s renewable energy vision and the UHBD as a demonstration of Alaska’s clean energy achievement. Media outlets, academic researchers, other Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 31 of 36 7/8/14 electric utilities, community groups and various interested parties are looking to Alaska because of KEA’s successful implementation of innovative micro-grid technology solutions in Kodiak. Numerous nationwide magazine and news articles have been written about KEA’s leadership and success in laying out a strategy to move the local community away from fossil fuels and toward cost effective renewable energy solutions. Together with AEA, KEA was awarded the 2014 State Leadership in Clean Energy Award by the Clean Energy States Alliance. KEA is the recipient of the 2014 Clean Energy Innovator of the Year Award by the Renewable Energy Alaska Project; the 2009 Wind Cooperative of the Year Award by the National Rural Electric Cooperative Association and US Department of Energy; the 2009 Cornerstone Award by the Kodiak Chamber of Commerce; and was a nominee for the Utility Scale Innovation 2013 Award from Energy Storage North America. KEA’s renewable energy portfolio is a success story for all of Alaska to share. 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 KEA has the administrative and financial capacity to provide for the long-term operation and maintenance of the UHBD. KEA has been operating and maintaining three other similar diversions at the Terror Lake Hydroelectric facility for over 30 years. An additional hydro diversion will not substantially change the operations or maintenance of this facility or KEA’s current business structure. The Terror Lake Hydroelectric Facility has KEA staff onsite continuously and the plant is controlled by the system dispatchers in KEA’s Dispatch Center located within the City. No additional support is required to operate the UHBD. KEA is current on all loan payments and all required reporting to state and federal agencies. The additional water resource made available by the UHBD originates as snow and rain; it is not a glacially-fed water source. As rain and snow continues to fall on Kodiak Island, the additional water resource of the UHBD will continue to be available over the life of the project. A more detailed discussion of the water resource availability is presented in ERM’s technical report, Hidden Basin Creek Hydrology and Fisheries Report, Technical Report February 2015, provided in Appendix C of the PDEA document, pages 119 through 205 of the separately provided FERC PAD document. Kodiak’s electric load demand is growing, additional hydropower production is needed, and the Terror Lake reservoir provides usable storage capacity. The total future inflows to Terror Lake with the new inflows contributed by the proposed UHBD are expected to be fully utilized by 2025. A more detailed discussion of how KEA would utilize this available water resource is provided in the FERC Exhibit B – Project Operations and Resource Utilization, provided on pages 9 through 15 of the separately provided FERC PAD document. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 32 of 36 7/8/14 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 KEA completed the Phase I Reconnaissance Phase and is currently proceeding with the Phase II Feasibility and Conceptual Design Phase and Phase III Permitting Phase without any grant funding support. KEA is seeking 50% matching funds for a specific task within the Phase II Feasibility Phase: Geotechnical Investigation. In preparation of the geotechnical investigation, a tunnel engineer, dam engineer, and an engineering geologist conducted a site visit on July 17 through 20, 2015 to locate the borehole and geophysical survey line locations. The resulting Geologic and Geotechnical Exploration Plan is provided in Exhibit A. A drilling contractor bidding package is currently under development so that a drilling contractor may be hired in December 2015. KEA is actively engaged in agency consultation regarding any specific permits required for the 2016 geotechnical investigation field work that will occur in July and August, 2016 when the UHBD area is snow-free. KEA completed field studies for surface water stream gauging; surface water temperature; watershed hydrology; fish presence, absence and distribution; preliminary wetland assessment; cultural resources; conceptual engineering design; and conceptual construction cost estimate. KEA is also actively engaged in the permitting process and has filed a Draft Application for Non- Capacity Amendment to FERC License No. 2743 requesting authorization of the UHBD, and held public and agency scoping meetings. The scoping meetings were well attended, and no statements of opposition were expressed. The public review and comment period is currently open, and will conclude on September 21, 2015. The FERC PAD, provided as a separate document, contains comprehensive information on the current status of the UHBD project and the future steps necessary to complete the project. A list of all permits associated with the UHBD, including identification of agencies associated with each requirement and a statement regarding the current status is provided in Section 5.1.2 Permits, above. A list of environmental and land use issues is provided in Section 5.3.2 Environmental Risk, above. Detailed discussions of each environmental resource is included on pages 55 through 74 of the separately provided FERC PAD document. SECTION 9 – LOCAL SUPPORT AND OPPOSITION Describe local support and opposition, known or anticipated, for the project. Include letters, resolutions, or other documentation of local support from the community that would benefit from this project. The Documentation of support must be dated within one year of the RFA date of July 8, 2015. The Kodiak community is supportive of KEA’s efforts in developing renewable energy solutions. The continued support provided by the local community of Kodiak and the statewide community of Alaska has been a major component to KEA’s success. Exhibit B includes letters and resolutions of support from the City of Kodiak, Kodiak Island Borough and the Kodiak Chamber of Commerce for the UHBD project. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 33 of 36 7/8/14 KEA is actively engaged in a public scoping process as per FERC regulations implementing the requirements of NEPA. Joint Agency/Public Scoping Meetings were held in Kodiak on July 21, 2015, and the public review and comment period will continue for 60 days after the Scoping Meeting, concluding on September 21, 2015. The scoping meetings were well attended, and no statements of opposition were expressed. Transcripts of the meetings will be publically available on the FERC docket. 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. KEA has not secured any other grant funds for this project. KEA is appreciative of support received from AEA for other renewable energy developments, including: 2008-2009 Pillar Mountain Wind Project $4,000,000 Round 1 – Pillar Mountain Wind Phase II Assessment $100,000 Round 2 – Terror Lake Capacity Feasibility Concept $224,419 Round 3 – Terror Lake Third Turbine Engineering Design $248,160 Round 4 – Terror Lake Third Unit Hydroelectric Project $3,751,840 Round 5 – High Penetration Wind Project $7,800,000 KEA also received a $3,750,000 Legislature allocation (SLA-12) for the Terror Lake Unit 3 Hydroelectric Project that was administered through the REF. KEA has been in full compliance with these previous grant agreements, including project deadlines, reporting and information requests. All projects have been successfully completed and the grants have been closed out. KEA is familiar and proficient with the AEA grant reporting process, and would remain in full compliance with the REF Round 9 grant agreement. 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. A copy of the completed FERC Pre-Application Document (PAD) is provided as a stand-alone document. This supporting document provides detailed information on the project description, project operation and resource utilization, proposed construction schedule, costs and financing, project map and environmental assessment. The Preliminary Draft Environmental Assessment (PDEA) Appendix, included as part of the FERC Pre-Application Document, provides additional maps, photographs, and technical reports, agency consultation letters, and environmental measures and plans. Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 34 of 36 7/8/14 SECTION 12 – LIST OF ADDITIONAL DOCUMENTATION SUBMITTED FOR CONSIDERATION In the space below please provide a list of additional information submitted for consideration. Exhibit A - Geotechnical Investigation Scope of Work Geologic and Geotechnical Exploration Plan Consultant Resume - Steven Brandon, Lachel & Associates, Inc. Exhibit B - Letters and Resolutions Demonstrating Local Support City of Kodiak Kodiak Island Borough Kodiak Chamber of Commerce Exhibit C – Board of Directors’ Resolution of Support KEA Resolution 701-15 Authorization for President/CEO to Represent KEA and Apply for a Renewable Energy Fund Grant through the Alaska Energy Authority Renewable Energy Fund Round IX Grant Application -Standard Form I SECTION 13-AUTHORIZED SIGNERS FORM Community/Grantee Name: Kodiak Electric Association, Inc. (KEA) Regular Election is held: N/A-KEA staff is not elected . J Authorized Grant Signer(s): Printed Name Title Darron Scott PresidenUCEO Alice Job Manager of Finance and Administration Arielle van Dorsten Assistant Controller Jennifer Richcreek Regulatory Specialist I~ ENERGY AUTHORITY I Date: · September 2, 2015 Term N/A N/A N/A N/A \o I authorize the above person(s) to sign Grant Documents: (Must be authorized by the highest ranking organization/community/municipal official) Printed Name Title Term Darron Scott PresidenUCEO N/A I Grantee Contact Information: Mailing Address: PO Box 787, Kodiak AK 99615 Phone Number: (907) 486-7707 Fax Number: (907) 486-7720 E-mail Address: dscott@kodiak .coop - Federal Tax 10 #: 92-0010172 Please submit an updated form whenever there is a change to the above information. AEA 15003 Page 35 of36 7/8/14 Renewable Energy Fund Round IX Grant Application - Standard Form AEA 15003 Page 36 of 36 7/8/14 SECTION 14 – ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Contact information and resumes of Applicant’s Project Manager, Project Accountant(s), key staff, partners, consultants, and suppliers per application form Section 3.1, 3.4 and 3.6. Applicants are asked to provide resumes submitted with applications in separate electronic documents if the individuals do not want their resumes posted to the project web site. B. Letters or resolutions demonstrating local support per application form Section 9. C. For projects involving heat: Most recent invoice demonstrating the cost of heating fuel for the building(s) impacted by the project. D. Governing Body Resolution or other formal action taken by the applicant’s governing body or management per RFA Section 1.4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. - Provides as point of contact to represent the applicant for purposes of this application. - Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. E. An electronic version of the entire application on CD or other electronic media, per RFA Section 1.7. F. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations and that they can indeed commit the entity to these obligations. Print Name Darron Scott Signature Title President/CEO Date September 2, 2015 Kodiak Electric Association, Inc. Renewable Energy Fund Grant – Round 9 List of Exhibits     Exhibit Document Title              A  Geotechnical Investigation Scope of Work   Geologic and Geotechnical Exploration Plan   Consultant Resume ‐ Steven Brandon, Lachel & Associates, Inc.                B  Letters and Resolutions Demonstrating Local Support   City of Kodiak   Kodiak Island Borough   Kodiak Chamber of Commerce           C  Board of Directors’ Resolution of Support   KEA Resolution 701‐15 Authorization for President/CEO to  Represent KEA and Apply for a Renewable Energy Fund Grant  through the Alaska Energy Authority        Exhibit A   Geotechnical Investigation Scope of Work     Geologic and Geotechnical Exploration Plan   Consultant Resume ‐ Steven Brandon, Lachel & Associates, Inc.                                    T/ 571-612-5685 F/ 571-612-5695 3701 Pender Drive, Suite 100 / Fairfax, VA / 22030 August 21, 2015 Transmitted via email: jrichcreek@kodiak.coop Ms. Jennifer Richcreek, QEP Regulatory Specialist Kodiak Electric Association, Inc. P.O. Box 787, Kodiak, AK 99615 Subject: Geologic and Geotechnical Exploration Plan, 14366009.01 Upper Hidden Basin Diversion Project, Terror Lake Hydroelectric Project, FERC No. 2743 Dear Ms. Richcreek: LACHEL & ASSOCIATES, INC. (Lachel) is pleased to submit our geotechnical exploration plan for this project. This document includes attached figures and with relevant data collected for this exploration plan. We appreciate the opportunity to be of service for this project. Please call us if you have any questions regarding this report. Sincerely, LACHEL & ASSOCIATES, INC. Steve Brandon Senior Vice President GDR:SHB: TF Kodiak Electric Association, Inc. Upper Hidden Basin Diversion Project ______________________________________________________________________________________ August 21, 2015 Page 2 Lachel & Associates, Inc. Project 14366009.01 ©2015 All Rights Reserved PLAN OF OPERATIONS FOR GEOLOGIC AND GEOTECHNICAL SITE EXPLORATION TERROR LAKE – UPPER HIDDEN BASIN DIVERSION PROJECT KODIAK ELECTRIC ASSOCIATION, INC. KODIAK, ALASKA I. GENERAL INFORMATION Name of Project: Terror Lake – Upper Hidden Basin Diversion Project Type of Operation: Geologic, geophysical and geotechnical explorations for two diversion dams and spillways, a conveyance pipe, tunnel. Proposed start-up date of operation: July 2016 Expected total duration of operation: Over approximately 2 months Expected date for completion of all required reclamation: September 2016 Figures: Figure 1 Site Location Map Figure 2 Vicinity Map Figure 3 Proposed Boring Locations Figure 4 Proposed Boring and Geophysical Survey Locations – East Dam Figure 5 Proposed Boring and Geophysical Survey – West Dam and Upstream Portal Figure 6 Proposed Boring and Geophysical Survey – Downstream Portal Tables: Table 1 Boring Quantities and Depths Table 2 Boring Location, Purpose, and Field Logistics Details I. PRINCIPALS Name, address, and phone number of operator: Kodiak Electric Association, Inc., P.O. Box 787, Kodiak, AK 99615, phone (907) 654-7667 contact Ms. Jennifer Richcreek, QEP Name, address, and phone number of authorized field representative: Lachel & Associates, 3701 Pender Drive, Suite 100, Fairfax, VA, 22030, (571) 612-5693, contact Steve Brandon Name, address, and phone number of exploration contractors: The selection of the exploration contractor has not been determined as of the date of this plan submittal. III. PROPERTY OR AREA Geotechnical explorations will be conducted in the areas shown on the attached figures. Kodiak Electric Association, Inc. Upper Hidden Basin Diversion Project ______________________________________________________________________________________ August 21, 2015 Page 3 Lachel & Associates, Inc. Project 14366009.01 ©2015 All Rights Reserved IV. DESCRIPTION OF THE OPERATION General The Applicant will conduct a limited geotechnical exploration program to evaluate the characteristics of the ground at the proposed dam and spillway locations, at selected locations along the conveyance pipeline, and at the upstream and downstream portals of the proposed tunnel. The program will consist of geologic mapping, land surveying, geophysical surveys, and geotechnical drilling of ten borings. Land disturbing activities are described in more detail below, including measures that will be taken to minimize the disturbances and restore the disturbed areas. The proposed explorations are planned to be completed in 2016. Access Because of the remote location, all work will be supported by helicopters. There will be no camp during this work. Map, Sketch, or Drawing The area of exploration is in the area of the proposed dams, conveyance pipe, and tunnel portals as shown on Figures 3 to 6 along with proposed locations for the geophysical survey lines and listed in Table 1. Final locations will be selected in the field based on safety, logistics, minimizing disturbance, suitability with respect to obtaining subsurface information, with the intent of locating the work as close as possible to those locations shown in the figures. Project Description Geophysical Surveys Geophysical surveys will be performed along the proposed geophysical survey lines shown on Figures 4, 5, and 6. Survey lines are typically approximately 230 foot length and will include one or more geophysical method (electrical resistivity, seismic refraction and/or Multichannel Analysis of Surface Waves (MASW). The quantity, location, length, geophysical method, and number of lines may be adjusted based on field conditions, or information from borings or geophysical survey lines completed earlier in this field program. The proposed geophysical line locations are placed to obtain information about depth to rock and rock characteristics at the dams, conveyance pipeline and tunnel portals. Land disturbance will be limited to 1) clearing of brush along the geophysical lines and disturbance due to foot traffic along these lines, 2) hand excavation areas around the geophones or resistivity stakes of about 6-inches in diameter to allow for ground contact between the sensor and the ground, 3) hand excavation of areas around the signal source location to allow for temporary placement of a 6 x 6 inch metal plate as the strike plate for a sledge hammer or for hand drilling an 18 to 24 inch deep, 1-inch diameter hole for the “Betsy” seisgun, and 4) material that may be displaced by the Betsy seisgun shot, a hole about 10 to 14 inches in diameter and a 2 to 4 inches deep. Organic and plant materials removed from the ground surface for these activities will be replaced over the disturbed area to the extent practical. Geotechnical Borings Ten geotechnical borings are proposed. Geotechnical borings will be drilled at the approximate locations shown on Figures 3 through 6 and listed in Table 1. The ten borings are planned to Kodiak Electric Association, Inc. Upper Hidden Basin Diversion Project ______________________________________________________________________________________ August 21, 2015 Page 4 Lachel & Associates, Inc. Project 14366009.01 ©2015 All Rights Reserved include approximately 625 feet of drilling, including 324 feet of vertical rock coring and 200 feet of horizontal rock coring, Table 2 provides details on the location and purpose for each of the borings. The location, length, and number of borings may be adjusted during the program based on actual field conditions. The locations have been selected to evaluate the overburden depth and characteristics, and the foundation conditions at the tunnel portals, and the dams, spillways, and energy dissipation structure at the D-West dam. The borings will provide size N rock cores (about 2-inch diameter), and will be made by diesel powered drill rigs set on aluminum or wood platforms. Land disturbances will be limited to 1) clearing of brush and trees in the boring areas, 2) hand excavation of overburden for founding the drill platforms, 3) trampling of the ground in the immediate area of the drill platforms due to drilling activities, and 4) the drill holes themselves. All excavated and stockpiled material will be located out of wetlands. Core borings will be backfilled with cement grout on completion. Organic and plant materials removed from the ground surface for these activities will be replaced over the disturbed area to the extent practical. Testing Limited field testing is anticipated in some of the boreholes included in the geotechnical exploration. Packer Testing will be conducted to estimate the capacity of groundwater flow through the discontinuities (joints, fractures, etc.) in the foundation of the dams. The test is conducted by lowering an assembly of inflatable packers (bladders) down the borehole. The packers are typically spaced 10 feet apart along the assembly and are inflated with water or nitrogen to isolate the test zone. Water is then introduced to the test section of the boring under pressure and a measure of the water loss through the bedrock over the test interval is recorded. The test is repeated along the desired portions of the borehole. In most cases packer testing will be conducted along the entire length of the borehole extending through bedrock. Geologic Mapping Geologists will conduct an aerial and on-the-ground reconnaissance of the project area during 2016, focusing particularly on the dam sites and tunnel portals. Most of this work will be accomplished during the drilling operations when the geologist is not logging soil or rock samples. Activities will be limited to walking over the ground surface and collection, by hand held rock hammer, of rock samples of five pounds or less. Land Surveying Land surveyors will survey the completed boring locations and geophysical lines after completion of drilling and geophysical survey activities. There will be little or no be no land disturbance caused by this surveying activity. Equipment and Vehicles Access A helicopter based out of Kodiak will be the primary support vehicle, moving the drill rig, fuel, small equipment, pumps, and other supplies to and from the various work sites. Personnel and equipment will also be transported from Kodiak by helicopter. A staging area for fuel and supplies will be established at a location along the existing KEA roads to and beyond Terror Lake. Kodiak Electric Association, Inc. Upper Hidden Basin Diversion Project ______________________________________________________________________________________ August 21, 2015 Page 5 Lachel & Associates, Inc. Project 14366009.01 ©2015 All Rights Reserved Geologic Mapping Mapping will be done on foot without the use of power equipment. Equipment used includes a handheld compass, handheld or backpack GPS unit, rock hammer, and sampling and data recording supplies. Land Surveying Surveying will be done on foot without the use of power equipment. Hand carried tripods, rods, and survey equipment will be used and stakes placed at specific points. Schnabel will obtain coordinates of the borings and geophysical lines with GPS and elevations with a surveyor level. Geophysical Surveys Geophysical surveys will be done on foot without the use of power equipment. Hand carried cables, geophones, metal stakes, cables, and computerized control boxes and laptop computers will be used. Marine batteries (12 volt, sealed) will be used to power the equipment electronic and electrical equipment. The vibration source for the seismic refraction and Multichannel Analysis of Surface Waves (MASW) will be sledgehammers striking a metal plate placed on the ground. If the sledgehammer cannot generate sufficient energy then a “Betsy” seisgun will be used. Details of the geophysical methods are presented in Attachment A. Geotechnical Borings Diamond core drills will be the main piece of equipment for the borings. Drill rigs will be operated from portable aluminum or wood platforms. Auxiliary equipment will include a diesel or gasoline powered generator for providing electrical power, gasoline or electrical pumps for providing water from nearby streams or Terror Lake, gasoline powered chain saw, water tanks, fuel tanks, fuel containment materials, and core boxes for storing the retrieved rock cores. Structures Drill pads will be required at each boring location and will require about 600 square feet (about 20 x 30 feet if on level ground). The drill pad will consist of modular metal platforms that will be supported by metal support posts or existing on-site features such as rock outcrop or boulders. Ancillary equipment such as water tanks, racks for drilling rods, and equipment bins will be placed in close proximity to the drill pad and generally supported on posts or platforms. Land disturbance will be limited to 1) clearing of brush and small trees, and 2) hand excavation of overburden for the support posts. The drill rig and ancillary equipment will be lowered by helicopter, typically with up to 15 picks (separate delivery event). One helipad may be installed to provide platforms for loading and unloading passengers. The helipad will be a 16-ft x 16-ft aluminum platform supported approximately 3 feet off the ground by metal or wood posts. The aluminum helipad will be movable from site to site. Land disturbance will be limited to 1) clearing of brush and small trees, and 2) hand excavation of overburden for the platform posts. III. Environmental Protection Measures A. Air Quality No extraordinary measures are planned. All diesel or gasoline powered equipment will be equipped with spark arresters. Fire control tools will be present at each work site. B. Water Quality Kodiak Electric Association, Inc. Upper Hidden Basin Diversion Project ______________________________________________________________________________________ August 21, 2015 Page 6 Lachel & Associates, Inc. Project 14366009.01 ©2015 All Rights Reserved Water sources for core drilling will be selected to minimize pumping requirements. Drill water will be pumped from the nearby stream or Terror Lake (for the downstream portal) directly to the drill rig or to a portable tank that will supply the drill rig. Drill water will be recirculated when drilling conditions allow, with pumping required for the make-up water. Water pumping is estimated to be 1,000 to1,500 gallons per day. A limited amount of water run-off can be expected from the drill collar. The run-off will be visually monitored to avoid significant erosion. No water quality monitoring is planned C. Solid Wastes Solid wastes generated at the work sites may consist of food wastes and containers from meals, plastic containers from petroleum products, and absorbent pads contaminated with petroleum products used during drilling operations. All solid wastes will be collected in trash bags and removed, where they will be disposed of in the public waste systems. D. Scenic Values The scenic values of this area are being protected by limiting the size of the drilling footprint, by utilizing only helicopter-portable drill rigs. E. Fish and Wildlife No extraordinary measures to protect fish and wildlife are planned. All personnel working on the project will be banned from hunting and fishing, whether or not such hunting or fishing is otherwise legal and open to licensed individuals. Firearm use on site will be strictly for bear protection. F. Cultural Resources No measures to identify and evaluate cultural resources in the work areas are planned due to the limited area involved. In the event cultural resources are discovered during the course of the work, personnel will immediately inform the project supervisor and cease all activities in that area. All historical and/or archaeological resources will be left undisturbed if discovered by project personnel. G. Botany No measures to survey the areas for the presence of threatened and endangered or rare plants prior to disturbance, as the areas are limited in extent and within the area of disturbance of the future construction. H. Hazardous Substances The following hazardous substances are expected to be used during the work; also indicated are the volumes expected of each, and proposed methods to prevent and/or clean up any releases. All personnel will be instructed that any release of a hazardous substance is considered a “reportable incident” that should be reported immediately to project management and federal, state, and local regulatory authorities.  Diesel fuel. All diesel fuel stored on-site for drill rig operation will be in standard sealed 55 gallon drums or 5 gallon safety canisters. A maximum of 220 gallons of diesel will be on-site at any time. Secondary fuel containment capable of holding 110% of the fuel capacity will be used. Absorbent materials will be kept on-site at all locations where fuels and lubricants are used. All used absorbent materials will be removed from the site and disposed of in the Kodiak public Kodiak Electric Association, Inc. Upper Hidden Basin Diversion Project ______________________________________________________________________________________ August 21, 2015 Page 7 Lachel & Associates, Inc. Project 14366009.01 ©2015 All Rights Reserved waste system. Upon completion of the work, all fuel drums and related material will be removed from site and disposed of properly.  Gasoline. All gasoline stored on-site for drill pump operation will be in standard sealed containers. A maximum of 55 gallons of gasoline will be on-site at any time. Absorbent materials will be kept on-site at all locations where fuels and lubricants are used. Secondary fuel containment capable of holding 110% of the fuel capacity will be used. All used absorbent materials will be removed from the site and disposed of in the Kodiak public waste system. Upon completion of the work, all fuel drums and related material will be removed from site and disposed of properly.  Lead-acid storage batteries. Batteries for starting drill rigs and pumps and for powering geophysical survey equipment will be housed in standard plastic battery cases while in use or being transported. No more than three batteries are expected to be on-site at any time. Upon completion of the work, all batteries and related material will be removed from site.  8-gauge cartridge with a 90 gram slug. Cartridges, similar to shotgun shells, may be used with the “Betsy” seisgun. The cartridges will be stored in a dry location way from heat sources. I. Reclamation Any excavations or ground disturbances from the helipads and core drilling will be restored to natural conditions as much as possible, so long as the reclamation effort itself does not cause further disturbance. Drill casings will be removed except in extraordinary situations when it may be irretrievable, and drill holes backfilled in accordance with applicable regulations. No re-vegetation is planned to avoid introduction of non-indigenous plant species. Also, natural re-vegetation can be expected to occur quickly. Digital pictures will be taken before any work is performed and again after the site has been reclaimed. Kodiak Electric Association, Inc. Upper Hidden Basin Diversion Project ______________________________________________________________________________________ August 21, 2015 Page 8 Lachel & Associates, Inc. Project 14366009.01 ©2015 All Rights Reserved FIGURES K a rl uk L a rs e n B ay A k hi ok Ol d Ha r b or Pa s a g h a k Ch i n i a k Ko di a k Ou z i n k iePort Li on sShelikof S t r ai t Gu l f o f A l a s k a ³ Source ESRI MediaKit (2009&2010) Projection: NAD 1983 StatePlane Alaska 5 FIPS 5005 Feet 20 0 2010Miles 8/21/2015 G:\2014\Lachel\14366009.00_Terror_Lake_Upper_Hidden_Diversion\03-SE Products\07-GIS\TL_Location.mxdSc ale:1:1,267,200gnuyda FIGURE 1 SITE LOCATIO NMAP PROJECT NO. 14366009.01 KODIAK ELECTRIC A SSOCIATION, INCUPPER HIDDEN BA SIN DIV ER SION PROJECTTERROR LAK E A L A S K AALASKA ^_SiteVicinity KodiakIsland KodiakIsland TerrorLake Conv eyanceAlignment ProposedAccessRoad Tunnel ExistingRoads DownstreamTunnelPortal TerrorLakeDam Proposed D-We stDiversion Dam Ups treamTunnelPortal Proposed D-Eas tDiversion DamWestForkUpperHiddenBasinCreek EastForkUpper HiddenBasi nCreek West Ma terialLaydown a nd M uckDisposal Area East Mat erialLaydown and M uc kDisposal Area ³Source:ESRI Imagery Service (http://goto.arc gisonline.com/maps/World_Imagery) ESRI MediaKit (2009&2010) Projection: NAD 1983 StatePlane Alaska 5 FIPS 5005 Feet 1,900 0 1,900950Feet 8/21/2015 G:\2014\Lachel\14366009.00_Terror_Lake_Upper_Hidden_Diversion\03-SE Products\07-GIS\TL_VICIN3.mxdSc ale:1:24,000gnuyda FIGURE 2 VICINITYMAPPROJECT NO. 14366009.01 KO DIA K ELECTRIC A SSOCIATION, INCUPPER HIDDEN BA SIN DIV ER SION PROJECTTERROR LAK E UPPER HIDDEN BASIN PROPOSED BORING LOCATIONS 7fl:t 1500' ------- SCALE: 1' = 750'-1l" (CONTOURS AT 20' AND 100' INTERVALS) E9 PROPOSED BORING LOCATION AND ELEVATION II Lachel& Associates A SCHIIAIEL ENGINEERING COIIPAMY KODIAK ELECTRIC ASSOCIATION, INC. UPPER HIDDEN BASIN DIVERSION PROJECT TERROR LAKE Project No. 14366009.01 N PROPOSED BORING LOCATIONS FIGURE3 II Lachel& Associates A SCHIIAIEL ENGINEERING COIIPAMY KODIAK ELECTRIC ASSOCIATION, INC. ) /' / --'/ If I I /1 ,-IIII I /,:_! ) ""' ""' I 1-) 1 f 1 1 I I / ~~"" I II I / ~ _,,., ",r ,.-N-I, 1111 , ;/' -r :~r 1 r ...... , ... ~ I I I 1 I I I J Jl I -.1 I I /,' ':\C:::t J I ll .IIJ j /U II, .1 I It I \ J I II ,. \ I II I l ,.--...,.,..-111 ) \ __ , Ill ,-,,,. : II I I I ---•• ./1 1 _,..-I/ I ,.-1 , I' 1\ I ./ ~--1 I ; _., \ I ,. ,- 1 I I > '"' ' ' , \ ' ' \ ' \ f I I 1 I I I I I I I / J I I ,,.. __ I I ~' ' ,.. \ I ' lr" / /J I ~ J ~7 I I ~ I / 1-J I I J I I J I I I I I ,. I ( ~ __ .... UPPER HIDDEN BASIN DIVERSION PROJECT TERROR LAKE PROPOSED BORING AND GEOPHYSICAL SURVEY LOCATIONS-EAST DAM Project No. 14366009.01 FIGURE4 II Lachel& Associates A SCHIIAIEL ENGINEERING COIIPAMY KODIAK ELECTRIC ASSOCIATION, INC. UPPER HIDDEN BASIN DIVERSION PROJECT TERROR LAKE Project No. 14366009.01 PROPOSED BORING AND GEOPHYSICAL SURVEY-WEST DAM AND UPSTREAM PORTAL FIGURES BORING LOCATIONS DOWNSTREAM PORTAL 0 2S lts&•MWJ 50' I 100' I SCALE: 1" =50'.()" (CONTOURS AT 2' AND 10' INTERVALS) I \ I \ l I I I \ I -, I I \ I IJ I (l ~ I ) \. ..) _ ... A SCHIIAIEL ENGINEERING COIIPAMY Project No. 14366009.01 PROPOSED BORING AND GEOPHYSICAL SURVEY-DOWNSTREAM PORTAL FIGURES Kodiak Electric Association, Inc. Upper Hidden Basin Diversion Project ______________________________________________________________________________________ August 21, 2015 Page 9 Lachel & Associates, Inc. Project 14366009.01 ©2015 All Rights Reserved TABLES Table 1 Proposed Boring Quantites and Depths Upper Hidden Basin Diversion Project BORINGS TOTALS # UNIT ITEMS Unit OverallDE-1DE-2DE-SW-1DE-SW-2DW-1DW-2C-1P-US-1P-DS-1P-DS-2Qty Ground Elevation 1790 1794 1813 1814 1531 1520 1571 1509 1492 1468 Selected Total Depth (or Hole Length for Angle Holes)Feet 50 50 35 35 50 50 30 200 50 30 605 1 Mobilization/Demobilization Each 1 1 3 Setup/Teardown at Boring Hour 16 16 16 16 16 16 16 24 16 16 184 4 Site Restoration Hour 4 4 4 4 4 4 4 4 4 4 44 5 Standard Penetration Test and Sample (extra)Each 2 2 2 2 2 2 2 2 2 2 22 6 Rock Coring, NX or NQ triple (split) tube - Vertical Feet 37 41 31 32 49 38 41 40 16 340 7 Rock Coring, NX or NQ triple (split) tube - Horizontal Feet 200 200 8 Temporary Casing During Drilling Feet 5 5 5 5 5 5 5 5 30 40 140 9 Core box, wood or corrugated plastic Each 4 5 4 4 5 4 5 20 4 2 59 10 Permeability Testing Hour 4 5 4 4 5 4 5 4 2 39 11 Grout Boring with cement/bentonite grout by tremie Feet 37 41 31 32 49 38 41 0 40 16 340 12 Standby Time Hour 80 80 13 Per Diem (per day, per crew)Day 57 57 14 Lost tool and excess bit wear budget Each 1.0 1 Page 1 of 1 Table 2 Boring Location, Purpose, and Field Logistics Details Upper Hidden Basin Diversion Project Boring Location of Boring Purpose of Boring Angle Stop Criteria Backfilling DE-1 D-East, east dam, left abutment Overburden thickness, soil type, and soil density. Rock samples and characteristics (Recovery, RQD, field descriptions) for excavation and foundation information. Packer testing for rock hydraulic conductivity. Vertical 15 ft below stream elevation at dam centerline Cement/bentonite grout by tremie pipe in rock, cuttings and bentonite chips in soil interval. DE-2 D-East, east dam, right abutment Overburden thickness, soil type, and soil density. Rock samples and characteristics (Recovery, RQD, field descriptions) for excavation and foundation information. Packer testing for rock hydraulic conductivity. Vertical 15 ft below stream elevation at dam centerline Cement/bentonite grout by tremie pipe in rock, cuttings and bentonite chips in soil interval. DE-SW-1 D-East, east dam, spillway Overburden thickness, soil type, and soil density. Rock samples and characteristics (Recovery, RQD, field descriptions) for excavation, foundation, and erodibility information. Vertical 10 ft below spillway control section elevation Cement/bentonite grout by tremie pipe in rock, cuttings and bentonite chips in soil interval. DE-SW-2 D-East, east dam, spillway Overburden thickness, soil type, and soil density. Rock samples and characteristics (Recovery, RQD, field descriptions) for excavation, foundation, and erodibility information. Vertical 10 ft below spillway control section elevation Cement/bentonite grout by tremie pipe in rock, cuttings and bentonite chips in soil interval. DW-1 D-West, west dam, left abutment Overburden thickness, soil type, and soil density. Rock samples and characteristics (Recovery, RQD, field descriptions) for excavation and foundation information. Packer testing for rock hydraulic conductivity. Vertical 15 ft below stream elevation at dam centerline Cement/bentonite grout by tremie pipe in rock, cuttings and bentonite chips in soil interval. DW-2 D-West, west dam, right abutment Overburden thickness, soil type, and soil density. Rock samples and characteristics (Recovery, RQD, field descriptions) for excavation and foundation information. Packer testing for rock hydraulic conductivity. Vertical 15 ft below stream elevation at dam centerline Cement/bentonite grout by tremie pipe in rock, cuttings and bentonite chips in soil interval. C-1 Impact Basin Overburden thickness, soil type, and soil density. Rock samples and characteristics (Recovery, RQD, field descriptions) for excavation, foundation, and erodibility information. Vertical Drill to 30 ft depth, or 10 ft of rock with RQD >80%, whichever comes first Cement/bentonite grout by tremie pipe in rock, cuttings and bentonite chips in soil interval. P-US-1 Upstream Tunnel Portal Rock samples and characteristics (Recovery, RQD, field descriptions). Information about contact between Kodiak Batholith and Kodiak Formation. Horizontal 200 ft, or 20 ft of Kodiak batholith rock, whichever comes first Cement/bentonite grout by tremie pipe in rock, cuttings and bentonite chips in soil interval. P-DS-1 Downstream Tunnel Portal Rock samples and characteristics (Recovery, RQD, field descriptions) for tunnel.Vertical 10 ft below tunnel invert Cement/bentonite grout by tremie pipe in rock, cuttings and bentonite chips in soil interval. P-DS-2 Downstream Tunnel Portal Outlet Rock samples and characteristics (Recovery, RQD, field descriptions) for tunnel.Vertical 10 ft below invert Cement/bentonite grout by tremie pipe in rock, cuttings and bentonite chips in soil interval. Page 1 of 1 Kodiak Electric Association, Inc. Upper Hidden Basin Diversion Project ______________________________________________________________________________________ August 21, 2015 Page 10 Lachel & Associates, Inc. Project 14366009.01 ©2015 All Rights Reserved ATTACHMENT A GEOPHYSICAL SURVEY PLAN Seismic Methods The seismic methods involve placing vibration sensors, or geophones, on the ground and connecting them to a cable. The cable is then connected to a seismograph, which is connected to a laptop computer. These methods require good coupling of the geophones to the ground in order to maximize the potential for acquiring good data. In addition, the seismic source needs to be sufficient for getting seismic energy into the ground and to the geophones. Both of these issues can be challenging if the shallow subsurface materials are very loose (such as root mat and/or peat), and these materials would likely need to be hand-excavated down to the underlying sandy soils. The seismic source used for shallow rock is typically a sledge hammer that is impacted on a steel plate placed on the ground surface. However, the presence of loose materials and/or gravelly soils may necessitate the use of a “Betsy” seisgun. The Betsy is a 5-ft long pole specifically designed for seismic refraction surveys with a firing mechanism on the lower end, in which an 8-gauge cartridge with a 90 gram slug is mounted. The lower end of the Betsy is placed at the bottom of an 18 to 24 inch deep hole about 1 inch in diameter that is dug using a steel bar. A wooden board is placed over the hole and around the Betsy prior to firing the slug. The top of the Betsy has a firing pin that is activated using a rubber mallet. The firing of the Betsy typically produces a muffled “whoompf” sound originating from the bottom of the 18 to 24 inch hole, and thus usually does not produce a loud report through the air. Once the Betsy is fired, a hole about 10 to 14 inches in diameter may result at the ground surface. This is easily covered by loose materials. The seismic refraction method involves measuring the travel times of compressional waves traveling from the seismic source to each of the geophones that are placed in a straight line. This method requires that these waves refract across boundaries, such as between soil and bedrock. The velocities of subsurface materials must increase with depth in order for this method to be successful. In addition, the presence of large cobbles or boulders beneath the ground surface can negatively impact the data quality of this method. The MASW method involves measuring travel times of seismic surface (Rayleigh) waves traveling from the source to the geophones. This method has two distinct advantages over seismic refraction: the velocities of subsurface layers do not have to increase with depth, and the surface waves have more energy which typically allow for easier measurement. The presence of cobble sized rocks can have less of an effect on the surface wave data than with seismic refraction data, although if the subsurface material is mostly cobble sized rocks (i.e. such as talus or similar), the surface waves may still be attenuated before they can be measured at all geophones. Data collected with either method are processed using commercial computer software, and presented as two-dimensional profiles of seismic velocities with depth. Seismic refraction data is presented as compressional wave velocity profiles, whereas MASW data is presented as shear wave velocity profiles. Based on our site reconnaissance at the proposed dam, conveyance pipe, and tunnel portals, we anticipate that a sufficient contrast in seismic velocities between overlying materials and bedrock will likely Kodiak Electric Association, Inc. Upper Hidden Basin Diversion Project ______________________________________________________________________________________ August 21, 2015 Page 11 Lachel & Associates, Inc. Project 14366009.01 ©2015 All Rights Reserved be present. However, if localized concentrated areas of cobble or boulder sized material are present, this may negatively affect the data quality, even if using the Betsy seisgun as a source. Electrical Resistivity Imaging The electrical resistivity imaging method involves measuring the resistivity of subsurface materials. This method involves driving metal stakes into the ground, and connecting them to a cable. The cable is then West North 20 40 60 80 Compress ional Wave Profile from Se ismic Refraction Method Station(ft) Refraction Scale and General Interpretation Soil , Unconsolidated Material Dense Soil, Highly~~the~eath ared I I Rock I )> < ;>I< ;>I( Rock ~--~~~~8§~~~~-------------g~~~~~~~~~~~~~~~~~~~~§i~~§ 100 Compressional (P) Wave Velocity (ft/sec) Shear Wave Profile From MASW Seismic Method 120 140 160 180 200 220 Station (ft) MASW Scale and General Interpretation Shear (S) Wave Velocity (ft/sec) 240 East South 260 280 300 320 340 Kodiak Electric Association, Inc. Upper Hidden Basin Diversion Project ______________________________________________________________________________________ August 21, 2015 Page 12 Lachel & Associates, Inc. Project 14366009.01 ©2015 All Rights Reserved connected to a resistivity meter that performs the data collection. During data collection, pairs of stakes are used as electric current electrodes, with other pairs of electrodes used for measuring electric potential in the subsurface. This method is less likely to be affected by the presence of cobble or boulder sized rocks, and is typically used to map the extents of such deposits. However, the stakes driven into the ground must make good contact with the subsurface materials, and the resistivity of the uppermost material must be sufficiently low to allow electrical current to travel through the subsurface. This is typically addressed by applying salt water to the ground around the stakes, to increase soil conductivity. Similar to the seismic methods, resistivity data are processed using commercial computer software, and presented as two-dimensional profiles of electrical resistivity with depth. Based on our assessment of the subsurface conditions, we anticipate that a sufficient contrast between resistivity values of the overburden materials and bedrock will likely be present. Geophysical Survey Plan Geophysical surveys can produce non-unique solutions regarding the evaluation of subsurface conditions. Therefore, invasive exploration methods such as borings are usually necessary to provide additional information for constraining the interpretation of geophysical data. In the event that invasive data are not available or cannot be readily obtained, the use of more than one geophysical method typically provides corroborating data that help to refine our evaluation of subsurface conditions. Since invasive data are not available for this site at this time, Schnabel proposes to perform seismic and electrical resistivity imaging surveys along transects at the site. The anticipated purpose of these surveys will be to determine the thickness of overburden on top of bedrock, and general excavation characteristics (e.g. rippability) of the bedrock. These data will be valuable in assessing subsurface conditions at the proposed portals, dams and conveyance pipe with respect to design related decisions related to foundation grade and constructability. Kodiak Electric Association, Inc. Upper Hidden Basin Diversion Project ______________________________________________________________________________________ August 21, 2015 Page 13 Lachel & Associates, Inc. Project 14366009.01 ©2015 All Rights Reserved For the seismic surveys, we anticipate collecting seismic refraction data if actual site conditions indicate that this will be successful. If the seismic refraction data is found to be of low quality, we will change to collecting MASW data. For either scenario, we will use our 24-channel seismic system, with geophones placed 5 to 10 feet apart, for active array lengths of 115 to 230 feet. The electrical resistivity imaging data will be collected along the same transects as the seismic data, provided that the metal stakes can make sufficient contact with the ground at all locations. We will use our 56-channel resistivity system, with stakes placed 3 to 5 feet apart, for active array lengths of 165 to 275 feet. Kodiak Electric Association, Inc. Upper Hidden Basin Diversion Project lachel.com STEVEN H. BRANDON, PE, PG, CPG PROJECT MANAGER Page 1 Mr. Brandon presents more than 27 years of experience on projects throughout the United States and Canada. His areas of expertise include design of ground support and instrumentation for tunnels, shafts, cost estimating, field investigations and testing, geologic mapping, engineering geology, landslide investigations and stabilization, rockfall analyses, rock slope and portal design, and compilation of plans and specifications. RELEVANT EXPERIENCE Sweetheart Lake Hydro, Juneau, Alaska: Mr. Brandon is currently project manager for a new approximately 30 MW hydroelectric facility that is in development southeast of Juneau, Alaska by Juneau Hydropower Incorporated. The project includes raising an existing lake approximately 85 ft; construction of a new, approximately 280-ft long, 100-ft high roller compacted concrete (RCC) dam at the outlet of the lake; an intake structure; an approximate 15-ft horseshoe cross-section, 9,600-ft long power tunnel; and a 10-ft horseshoe cross-section, 600-ft long diversion tunnel. Currently, Lachel and Schnabel are initiating the preliminary design phase of the work including tunnel and portal support design, slope stability and abutment stability analysis, dam design and fish intake structure design. Lake Dorothy Hydro Phase I, Juneau, Alaska: Mr. Brandon served as Project Manager and provided oversight for all geotechnical aspects of the Alaska Electric Power & Light’s Lake Dorothy Hydro project near Juneau, Alaska. He was responsible for design of open cut rock excavation and embankment fill design for an approximate 2-mile long access road, and for the design of permanent pre-split rock slopes approximately 115-ft high for the powerhouse pad site. This work also included developing specifications for dowels, rockbolts, wire mesh for rockfall protection, and presplit blasting. Mr. Brandon was also responsible for design of the lake tap tunnel. The lake tap tunnel was approximately 980-ft long with a 12-ft x 12-ft horseshoe cross-section and two valve chambers each 16-ft x 20-ft in section. The tunnel terminated with a lake tap into Lake Dorothy, where the cross section and the piercing of the lake, (piercing round designed by others) was located approximately 130-ft below lake level. The tunnel and chambers were driven by drill-and-blast method in massive tonalite and granodiorite bedrock. Mr. Brandon was also responsible for the design of a 75-ft long, 16-ft x 16-ft stub tunnel for Phase II of the project. Lachel assisted AEL&P in developing contract documents and advertisement/selection process of the tunnel contractor as well as a resident engineer for the tunnels. Humpback Creek Diversion Tunnel, Alaska: Mr. Brandon served is lead design engineer of the Cordova Electric Cooperative, Inc.’s Humpback Creek EXPERTISE Tunnel Engineering, Engineering Geology, Slope Stability EDUCATION Master of Science in Geologic Engineering, University of Missouri – Rolla / 1986 Bachelor of Science in Geologic Engineering, University of Missouri – Rolla / 1985 REGISTRATIONS Professional Engineer / CA / MD / VA / CO / PA Professional Geologist / GA YEARS WITH LACHEL 15 TOTAL EXPERIENCE 27 lachel.com STEVEN H. BRANDON, PE, PG, CPG PROJECT MANAGER Page 2 Hydro project near Cordova, Alaska. The project included design of an approximate 220-ft long diversion tunnel as part of a rehabilitation of the intake structure for the Humpback Creek hydroelectric facility. The tunnel was driven through mylonitc siltstones and graywacke bedrock which included abundant shear and crushed zones. The project included design of the 10-ft x 10-ft horseshoe cross-section diversion tunnel and design of support for the two portals Additionally Lachel provided pre-construction evaluation as well as periodic inspection of the work as it progressed. Support elements designed for the project included fiber-reinforced shotcrete, steel sets, rockbolts, and wire mesh for rockfall mitigation. Lachel provided all design services and on-site inspection for Mowat Construction Company of Woodinville, Washington. Long Lake Tunnel Inspection, Alaska: Mr. Brandon performed the walk- through and inspection of the Long Lake Hydro Tunnel on the Snettisham Hydroelectric Project in near Juneau, Alaska. Lachel was contracted to provide a detailed inspection of the 8,000-ft long tunnel while it was shut down for maintenance. The tunnel is primarily unlined but portions include cast concrete lining and shotcrete with rock bolt lining. The inspection was performed by Mr. Brandon, as well as representatives of the Owner (Alaska Industrial Development and Economic Authority) and the Operator (Alaska Electric Light & Power). Mr. Brandon’s duties under this contract were to perform a visual inspection of the tunnel facilities for any deterioration or damage. He also prepared a final inspection report documenting the findings of the inspection as well as recommending actions and procedures for correcting any problems found. California High Speed Rail, Los Angeles, California: Mr. Brandon was Senior Engineer for the Los Angeles/Bakersfield High-Speed Ground Transportation System (HSGST) feasibility study for Caltrans. He was responsible for assisting in the preparation of a tunnel design task report for alignment alternatives of the proposed multi-billion-dollar high-speed transit project linking Los Angeles and Bakersfield by rail through the Tehachapi Mountains. The work involved the review and conceptual design of tunnels and portal cuts in rugged and difficult mountain terrain that included a tunnel crossing of a major active fault. Rock Shafts, United States: Mr. Brandon has performed design of deep rock shafts on several mining projects in the United States for contractors and owners under confidentiality agreements. He has provided a full scope of design services from field exploration, geologic interpretation, analytical design and preparation of drawings and specifications. Additionally, Mr. Brandon has provided field construction inspection of support elements, geologic mapping and kinematic analyses as construction progressed.       Exhibit B   Letters Demonstrating Local Support      City of Kodiak   Kodiak Island Borough   Kodiak Chamber of Commerce                                  Office of the City Manager 710 Mill Bay Road, Room 219, Kodiak, Alaska 99615 August 22, 2014 Alaska Energy Authority AEA-15-003 -RE Fund Grant Application Round 8 813 West Northern Lights Blvd Anchorage, AK 99503 Re: Letter of Support for Kodiak Electric Association's Upper Hidden Basin Diversion Project To Whom It May Concern: The City of Kodiak's electrical needs are supplied by Kodiak Electric Association, Inc. (KEA). KEA's success with minimizing their diesel-powered generation through innovative development of cost-effective renewable energy solutions has improved the economic and ecological footprint of Kodiak's municipal operations. KEA's renewable energy vision provides the means for the City of Kodiak to achieve targeted greenhouse gas emission reductions for the municipality, and enhance Kodiak as a more sustainable community. Electricity produced by KEA's renewable wind-hydro system is more a more affordable supply of energy than barged-in diesel fuel, and as a result, the Kodiak community is expected to shift more of its heat and power needs over to electric-based infrastructure . As electricity usage grows in the future, it is crucial for KEA to be able to continue meeting that growing power demand with renewable energy rather than reverting back to diesel-powered generation. Adding more water to the Terror Lake Hydroelectric Project through the development of a new hydropower diversion in the Upper Hidden Basin watershed is a very practical and cost-effective approach for ensuring KEA's future renewable energy supply. Permitting a new hydropower diversion through the FERC licensing process is a lengthy process, and the City of Kodiak appreciates KEA's forward-thinking action with initiating the permitting process now to ensure a viable hydropower resource is available for Terror Lake's power production in the future . The City of Kodiak supports KEA's efforts to finalize the design and permit the Upper Hidden Basin Diversion Project, and encourages the Alaska Energy Authority and the Alaska State Legislature to fully fund KEA's grant request from the Renewable Energy Fund. City Manager Telephone (907) 486-8640 I Fax (907) 486-8600 akniaziowski@city .kodiak.ak.us 1 2 3 4 5 KODIAK ISLAND BOROUGH 6 RESOLUTION NO. FY2015-06 7 8 A RESOLUTION OF THE KODIAK ISLAND BOROUGH ASSEMBLY 9 URGING THE ALASKA ENERGY AUTHORITY AND ALASKA STATE 10 LEGISLATURE TO AWARD GRANT FUNDING FOR KODIAK 11 ELECTRIC ASSOCIATION’S UPPER HIDDEN BASIN DIVERSION 12 PROJECT 13 14 WHEREAS, safe and reliable electric energy is an essential service for residents of the 15 Kodiak Island Borough; and 16 17 WHEREAS, unstable diesel fuel prices create volatile electric rates that hinder economic 18 development in the Kodiak region; and 19 20 WHEREAS, renewable energy provides a sustainable power supply and power cost 21 stability; and 22 23 WHEREAS, renewable power is crucial for the environmental health of Kodiak Island, 24 the state, and the nation; and 25 26 WHEREAS, adding hydropower resources to Terror Lake through the development of a 27 new hydropower diversion in the Upper Hidden Basin watershed will enhance the Terror 28 Lake Hydroelectric Facility’s ability to meet future electrical load in Kodiak with renewable 29 power; and 30 31 WHEREAS, the Upper Hidden Basin Diversion Project is a technically and economically 32 feasible project that Kodiak Electric Association, Inc. is able to complete and operate for 33 the long-term benefit of the Kodiak community; and 34 35 WHEREAS, the final design and permitting of Kodiak Electric Association, Inc.’s Upper 36 Hidden Basin Diversion Project is in need of capital project funding; and 37 38 WHEREAS, the State of Alaska is committed to supporting the development and 39 enhancement of its renewable power through the establishment of the Renewable Energy 40 Grant Fund for the benefit of all Alaskans. 41 42 43 44 45 Introduced by: Borough Manager Requested by: Darron Scott, KEA Drafted by: Darron Scott, KEA Introduced on: 09/04/2014 Adopted on: 09/04/2014 Kodiak Island Borough, Alaska Resolution No. FY2015-06 Page 1 of 2 NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE KODIAK ISLAND 46 BOROUGH THAT the Alaska Energy Authority and the Alaska State Legislature are urged 47 to award a grant from the Renewable Energy Fund to Kodiak Electric Association, Inc. for 48 the final design and permitting of the Upper Hidden Basin Diversion Project. 49 50 ADOPTED BY THE ASSEMBLY OF THE KODIAK ISLAND BOROUGH 51 THIS FOURTH DAY OF SEPTEMBER, 2014 52 53 54 Kodiak Island Borough, Alaska Resolution No. FY2015-06 Page 2 of 2 KODIAK CHAMBER OF COMMERCE RESOLUTION N0.2014-0l A resolution of the Board of Directors of the Kodiak Chamber of Commerce urging the Alaska Energy Authority and Alaska State Legislature to award grant funding for Kodiak Electric Association's Upper Hidden Basin Diversion Project WHEREAS, th.e mission of the KodiakChamberof CQ_Ull11erce is to promote development of a strong and diverse economy :for the Kodiak region; and WHEREAS, safe, reliable and affordable electric energy is a vital service for economic development; and WHEREAS, renewable energy provides a sustainable power supply and power cost stability for local businesses to be more competitive in their markets; and WHEREAS, powering Kodiak's industries with renewable energy provides unique marketing opportunities that would benefit Kodiak's economies; and WHEREAS, high diesel fuel prices are motivating a shift to electric power as a more affordable means to heat and power our local economy; and WHEREAS, adding a new hydropower diversion feature at the Upper Hidden Basin will enhance the existing Terror Lake Hydroelectric Project and allow Kodiak Electric Association, Inc. to continue supplying Kodiak electrical load demand with renewable energy into the future; and WHEREAS, the Upper Hidden Basin Diversion Project is technically and economically feasible project that Kodiak Electric Association, Inc. is able to complete and operate for the long-term benefit of the Kodiak economy; and WHEREAS, the final design and permitting of Kodiak Electric Association's Upper Hidden Basin Diversion Project is in need of capital project funding; and WHEREAS, the State of Alaska is committed to supporting the development and enhancement of its renewable power through the establishment of the Renewable Energy Grant Fund for the benefit of all Alaskans; and Page 1 NOW, THEREFORE, BE IT RESOLVED by the Board of Directors of the Kodiak Chamber of Commerce that the Alaska Energy Authority and the Alaska State Legislature are urged to award a grant from the Renewable Energy Fund to Kodiak Electric Association, Inc. for the Upper Hidden Basin Diversion Project. PASSED AND ADOPTED by the Kodiak Chamber of Commerce's Board of Directors this 18th Day of August, 2014. IN~TO: ~~· Frank Peterson, President Trevor Brown,_E_x:~c_utive Dir~~!or Page 2       Exhibit C    Board of Directors’ Resolution of Support    • KEA Resolution 701‐15 Authorization for President/CEO  to Represent KEA and Apply for a Renewable Energy Fund  Grant through the Alaska Energy Authority                          KODIAK ELECTRIC ASSOCIATION, INC. RESOLUTION 701-15 AUTHORIZATION FOR PRESIDENT/CEO TO REPRESENT KEA AND APPLY FOR A RENEWABLE ENERGY FUND GRANT THROUGH THE ALASKA ENERGY AUTHORITY WHEREAS, Kodiak Electric Association, Inc. (KEA) was organized and exists under the laws of the State of Alaska and is a certificated electric utility holding a certificate of public convenience and necessity under AS 42.05; WHEREAS, KEA is an established not for profit Rural Utilities Service member-owned rural electric cooperative serving members located on Kodiak Island; the City of Kodiak, United States Coast Guard Integrated Support Command Kodiak, Bells Flats/Russian Creek area, Chiniak/Pasagshak, and Port Lions; WHEREAS, KEA is in compliance with all federal, state and local laws including existing credit and federal tax obligations, and will continue to comply with all federal and state laws, including existing credit and federal tax obligations; WHEREAS, KEA is the owner and operator of the Terror Lake Hydroelectric Project with the ability to operate and maintain the facility for its economic life for the benefit of KEA's membership; WHEREAS, it is in the best interest of the Cooperative membership to seek to secure grant funds by applying for funding through the "Renewable Energy Fund Round IX" to assist KEA in the cost of the geotechnical investigation necessary to develop the Upper Hidden Basin Diversion project as an enhancement to the Terror Lake Hydroelectric Project; WHEREAS; KEA endorses the Upper Hidden Basin Diversion Project at its current estimated cost of $79,992,000; WHEREAS; KEA recognizes the obligation of providing matching funds to the "Renewable Energy Fund Round IX" grant funds as set forth in the grant agreement; NOW, THEREFORE, BE IT RESOLVED, that the KEA Board of Directors do publicly, by resolution, authorize President/CEO Darron Scott to submit an application for a $1,500,000.00 Renewable Energy Fund Grant through the Alaska Energy Authority with a commitment by KEA to provide matching funds of $750,000.00; and further appoint Darron Scott as Project Manager and point of contact for KEA with the authority to commit KEA to the obligations under the grant. CERTIFICATION I, Stosh Anderson, do hereby certify that I am elected Secretary of Kodiak Electric Association, Inc., an electrical not for profit cooperative membership corporation organized and existing under laws of the State of Alaska; that the foregoing is a complete and correct copy adopted at a meeting of the Board of Directors of this corporation, duly and properly called and held on the 20th day of August, 2015; that a quorum was present at the meeting; that the resolution is set forth in the minutes of the meeting and has not been rescinded or modified. IN WITNESS WHEREOF, I have hereunto subscribed my name and affixed the seal of this cor oration this 20th day of August, 2015. ,,,••""""'"''''' ,.••' :1: Rl CAs '',,, ....... t".V ·•········ SA.''' .:0 ~"""' •• •• "Y ~ f «;/~\'ORA-,.:;_· •... ~~ .:~:"o ·. ""~ Eor:c:ie; 1\..1" ··.o: § Ci : c. -G 0-).....J ~ . ; :o~ \:>P : 2 ~~.... / "'{"§ \ ··.. *~ ..... 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