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HomeMy WebLinkAboutGrant Application Signed - AEA Round VIIIRenewable Energy Fund Round VIII Grant Application -Standard Form Application Forms and Instructions ~~ENERGY AUTHORITY This instruction page and the following grant application constitutes the Grant Application Form for Round VIII of the Renewable Energy Fund. A separate application form is available for projects with a primary purpose of producing heat (see RFA section 1.5). This is the standard form for all other projects, including projects that will produce heat and electricity . An electronic version of the Request for Applications (RFA) and both application forms is available online at: http ://www.akenergyauthority.org/REFund8 .html. • If you need technical assistance filling out this application , please contact Shawn Calfa , the Alaska Energy Authority Grants Administrator at (907) 771-3031 or at scalfa@aidea .org . • If you are applying for grants for more than one project, provide separate application forms for each project. • Multiple phases for the same project may be submitted as one application . • If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for each phase of the project. • In order to ensure that grants provide sufficient benefit to the public, AEA may limit recommendations for grants to preliminary development phases in accordance with 3 ACC 107.605(1 ). • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are completed and funding for an advanced phase is warranted. • If you have additional information or reports you would like the Authority to consider in reviewing your application , either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed . • In the sections below, please enter responses in the spaces provided, often under the section heading . You may add additional rows or space to the form to provide sufficient space for the information , or attach additional sheets if needed . REMINDER : • Alaska Energy Authority is subject to the Public Records Act AS 40 .25, and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority web site after final recommendations are made to the legislature. • In accordance with 333 {b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information is to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trad e secret or proprietary in their application. o Rece ive concurrence from the Authority that the information will be kept confidential. AEA 15003 If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. Page 1 of21 7/2/14 Renewable Energy Fund Round VIII Grant Application -Standard Form ~~ENERGY AUTHORITY II SECTION 1 -APPLICANT INFORMATION I Name (Name of utility, IPP, or government entity submitting proposal) I Chugach Electric Association, Inc. Type of Entity: Fiscal Year End: Electric Cooperative December 31, 2014 Tax ID #92-0014224 Tax Status: D For-profit 181 Non-profit D Government (check one) Date of last financial statement audit: December 31, 2013 Mailing Address: Physical Address: P .O. Box 196300 5601 Electron Drive Anchorage, AK 99519-6300 Anchorage, AK 99519 Telephone: Fax: Email: (907) 762-4759 (907) 762-4699 Ron vecera@chugachelectric.com I 1 .1 APPLICANT POINT OF CONTACT I GRANTS MANAGER Name: Title: Ronald K. Vecera Senior Manager, Risk & Renewables Mailing Address: Same as above. I Telephone: Fax: Email: I (907) 762-4759 (907) 762-4699 Ron vecera@chugachelectric.com 11 .1.1 APPLICANT ALTERNATE POINTS OF CONTACT Name Telephone: Fax: Email: AEA 15003 Page 2 of 21 7/2 /1 4 I Renewable Energy Fund Round VIII Grant Application-Standard Form 1.2 APPLICANT MINIMUM REQUIREMENTS ~~ENERGY AUTHORITY Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. j1.2.1 As an Applicant, we are: (put an X in the appropriate box) ~ An electric utility holding a certificate of public convenience and necessity under AS 42 .05, or D An independent power producer in accordance with 3 AAC 107.695 (a) (1), or D A local government, or D 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 ag reement (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/REFund8.html. (Any exceptions should be clearly noted and submitted with the application .) {Indicate by checking the box) ~ 1.2.5 We intend to own and operate any project that may be constructed with grant funds for the benefit of the general public. If no please describe the nature of the project and who will be the primary beneficiaries . (Indicate yes by checking the box) AEA 15003 Page 3 of21 7/2/14 Renewable Energy Fund Round VIII Grant Application -Standard Form SECTION 2 -PROJECT SUMMARY ~~ENERGY AUTHORITY This section is intended tp be no more th;m a 2-3 page oveNiew of your project. 12.1 Project Title-(Provide a 4 to 7 word title for your project}. Type in space below. Southcentral Small Hydro Assessments 2.2 Project Location - Include the physical location of your project and name(s) of the community or communities that will benefit from your project in the subsections below. 2.2.1 Location of Project-Latitude and longitude, street address, or community name. Latitude and longitude coordinates may be obtained from Google Maps by finding you project's location on the map and then right clicking with the mouse and selecting "What is here? The coordinates will be displayed in the Google search window above the map in a format as follows: 61.195676.-149.898663. If you would like assistance obtaining this information please contact AEA at 907-771-3031 . Chugach is proposing to begin the evaluation of two small hydroelectric resources . The specific hydro resources are Lowell Creek in Seward (60.614 N 149.279 W) and Ship Creek in Anchorage (Center: 61 .2039 N 149.5067 W). 2.2.2 Community benefiting-Name(s) of the community or communities that will be the beneficiaries of the project. Communities served by Chugach include Anchorage , Indian, Bird, Girdwood , Portage , Whittier, Hope , Moose Pass, Cooper Landing, Beluga , Tyonek and Seward . 2.3 PROJECT TYPE Put X in boxes as appropriate I 2.3.1 Renewable Resource Type D Wind D Biomass or Biofuels (excluding heat-only) 181 Hydro, Including Run of River D Hydrokinetic D Geothermal, Excluding Heat Pumps D Transmission of Renewable Energy D Solar Photovoltaic D Storage of Renewable I D Other (Describe) D Small Natural Gas I 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Pre-Construction Construction Reconnaissance D Final Design and Permitting D Feasibility and Conceptual Design D Construction AEA 15003 Page 4 of21 7/2/14 Renewab l e Energy Fund Round VIII Grant Application -Standard Form 2.4 PROJECT DESCRIPTION ~~ENERGY AUTHORITY Provide a brief one paragraph description of the proposed project. The project is to assess the hydroelectric energy potential of Lowell Creek and Ship Creek. The proposed work includes review of the public record, the installation of stream gag ing equipment at each location to measure annual water flow of each of the creeks , site reconnaissance , identification of permit requirements, and concept development. 2.5 PROJECT BENEFIT Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel costs, lower energy costs, local jobs created, etc.) The primary benefit a hydro project is the production of renewable energy each year and the associated benefits of fuel savings, diversification of the generation portfolio and conservation of Cook Inlet gas. Additionally, a project that is developed would also provide jobs and associated economic stimulus during construction, improve reliability and grid stability, provide an alternative to diesel generation by the City of Seward (i.e,. for hydro energy from Lowell Creek) in the event receipt of Chugach supplied energy is d isrupted . 2.6 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. The overall project budget for this reconnaissance work is $150,000, including $80,000 for the Lowell Creek portion and $70,000 for the Ship Creek portion. Chugach is proposing to provide 50% of this amount and is requesting a grant for the remaining $75,000. The details of this budget are on the grant budget worksheet. 2.7 COST AND BENEFIT SUMMARY Include a summary of grant request and your project's total costs and benefits below. Costs for the Current Phase Covered by this Grant (Summary of funds requested) 2.7.1 Grant Funds Requested in this application 2.7.2 Cash match to be provided 2.7.3 In-kind match to be provided 2.7.4 Other grant funds to be provided $ 75,000 $ 75,000 $ 0 $ 0 2.7.5 Total Costs for Requested Phase of Project (sum of 2.7.1 through 2.7.4) $ 150,000 Other items for consideration 2.7.6 Other grant applications not yet approved $ 0 AEA 15003 Page 5 of 21 7/2/14 Renewable E n ergy Fund Round VIII Grant Application -Standard Form Project Costs & Benefits ~~ENERGY AUTHORITY (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.7 Total Project Cost $ Unknown at this time Summary from Cost Worksheet, Section 4.4.4, including estimates through construction. 2.7.8 Addit ional Performance Monitoring Equipment not $ covered by the project but required for the Grant Only applicable to construction phase projects 2.7.9 Estimated Direct Financial Benefit (Savings) $ Unknown at this time The economic model used by AEA is available at www. akenerg_'i_authorit'{ ... or g/REFun dB . html. This economic model may be used by applicants but is not required. Other economic models developed by the applicant may be used, however the final benefit/cost ratio used will be derived from the AEA model to ensure a level playing field for all applicants. 2. 7.10 Other Public Benefit $Unknown at this t i me If you can calculate the benefit in terms of dollars please provide that number here and explain how you calculated that number in Section 5 below. SECTION 3-PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully completing the project within the scope, schedule and budget proposed in the application. 3.1 Project Manager Tell us who will be managing the project for the Grantee and include contact information, a resume and references for the manager(s). In the electronic submittal, please submit resumes as separate PDFs if the applicant would like those excluded from the web posting of this application . If the applicant does not have a project manager indicate how you intend to solicit project management support. If the applicant expects project management assistance from AEA or another government entity, state that in this section . Project Manager: Dustin Highers -Director, Power Supply Techn ical Services D usti n highers@c hug ac helect ric .com 907-762-4775 Grant Mana ge r : Ron Vecera - Se nior Manager, Risk & Renewables Ron vecera@chugachelectric .com 907-76 2-4759 Exe cutive Manag er : Pau l Ri sse - Sen ior Vice Presi dent , Energy Supply Paul risse@c h ugachelectric.com 90 7-762-4532 Re s umes a re attache d . AEA 15003 Page 6 of21 7/2/14 Ren ewabl e Energy Fund Round VIII Grant Application -Standard Form 3.2 Project Schedule and M ilestones ~~ENERGY AUTHORITY Please fill out the schedule below. Be sure to identify key tasks and decision points in in your project along with esti mated 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. Please fill out form provided b elow. You may add additi onal rows as needed. Start End Milestones Tasks Date Date Hydrology assessme nts c omplete Hydrology assessments f or Lowell and Ship Creeks . 7/11 15 6/3 0/16 P ermitting studies comple te P ermitting stud ies for Lowell and Ship Creeks 7/111 5 6/30/16 F inal Reconnaissance R eports Prepare reconna issance studies and re ports for Lowell and Ship Creeks 7/1/15 6/30/16 3.3 Project Resources Describe the personnel, contractors, personnel or firms, equipment, and services you will use to accomplish the project. Include any partnerships or commitments with other entities you have or anticipate will be needed to complete your project. Desc ribe any existing contracts and the selection process you may use for major equipment purchases or contracts. Include brief resumes and references for known , key personnel, contractors, and suppliers as an attachment to your application . In addition to Chugach 's project management staff identified earlier, consulting firm McMillen has assisted Chugach in other hydroelectric evaluations, including recent evaluation of Fourth of July Creek . The McMillen professionals primarily engaged in Chugach work include Kathryn Peltier and Steve Padula . Chugach has e ntered into a Memorandum of Agreement (attached) to work together with the City of Seward to further the development of the Fourth of July Creek project. While Fourth of July Creek does not appea r economically feasible , Lowell Creek is another loca l resource in the Seward Community. Seward 's commitment to renewable resource development is also shown via the letters of local support from various Seward entities that are included with thi s grant application. The overall effort will be bolstered by Chugach 's extensive internal resources shown on the attached organizationa l chart of our Powe r Supply division . If the project proce eds to co nstruction Chugach will use a competitive procurement process to select providers of equipment and construction services. 3.4 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Please provide an alternative contact person and their contact information . AEA 15003 Page 7 of21 7/2/1 4 Renewable Energy Fund Round VIII Grant Application -Standard Form ~~ENERGY AUTHORITY Chugach will manage the project and is well versed in the project and financial reporting requirements for AEA renewable energy fund projects. Communications will be via the Project Manager (Dustin Highers) and the Grant Manager (Ron Vecera). Contact information was provided previously in section 3.1, related to project management. 3.5 Project Risk Discuss potential problems and how you would address them. Potential risk at this stage is minimal as the work is reconnaissance level. Potential risk at a future stage could include poor suitability of the project site fo r a hydro resource , inability to get permits and poor economics due to insufficient energy production to justify the investment. 3.6 Project Accountant(s) Tell us who will be performing the accounting of this Project for the Grantee and include contact information, a resume and references for the project accountant(s). 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 project management support. Chugach has an experienced grant manager (Ron Vecera) who has managed numerous grants administered via the AEA. Mr. Vecera will be supported by Chugach's Finance and Accounting department. Chugach has extensive resources to properly account for capital projects, including grant accounting . There are several individuals who will be responsible for various aspects of accounting and assisting with grant management. In lieu of resumes, an organizational chart is attached . Chugach has a proven track record of responsibly using and accounting for the public money provided by grants . 3.7 Financial Accounting System Discuss the accounting system that will be used to account for project costs and whom will be the primary user of the accounti ng system. Chugach prepares its financial statements in conformance with United States generally accepted accounting principles {GAAP). Further, the accounting records of Chugach conform to the Uniform System of Accounts as prescribed by the Federal Energy Regulatory Commission (FERC). Chugach meets the criteria, and accordingly, follows the accounting and reporting requirements of Financial Accounting Standards Board (FASB) Account ing Standards Codification (ASC) 980 , ''Topic 980 -Regulated Operations ." FASB ASC 980 provides for the recognition of regulatory assets and liabilities as allowed by regulators for costs or credits that are reflected in current rates or are considered probable of being included in future rates. Our regulated rates are established to recover all of our spec ific costs of providing electric service . 3.8 Financial Management Controls Discuss the controls that will be utilized to ensure that only costs that are reasonable, ordinary and necessary will be allocated to th is 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. AEA 15003 Page 8 of21 7/2/14 Renewable Energy Fund Round VIII Grant Application -Standard Form ~~ENERGY AUTHORITY Chugach has vast experience with AEA grants. We have had several Renewable Energy Fund grants, several State of Alaska legislative grants administered by the AEA and a pending Emerging Energy Technology Fund grant. We are very familiar with grant accounting requirements and the types of costs that are eligible for reimbursement. We have a long track record of providing timely and accurate financial reports related to our grants . Chugach uses project costing software designed to segregate costs by project, and has an internal review process that requires the project manager to review all reimbursement requests prior to submission . We have filed annual State of Alaska single audit reports for many years which demonstrate our grant management capabilities and compliance with grant requirements . Chugach is very confident in its ability to manage and account for a grant in the manner AEA requires. ECTION 4-PROJECT DESCRIPTION AND TASKS The level of information will vary according to phase(s) of the project you propose to undertake with grant funds. If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for q_n advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available . Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. For pre-construction applications, describe the resource to the extent known . For design and permitting or construction projects, please provide feasibility documents, design documents, and permitting documents (if applicable) as attachments to this application . The proposed project is to begin the initial assessment of the two small hydro resources . The goal is to determine the potential resource so that the pros and cons can be evaluated versus existing alternatives . The primary alternative energy resources available to this market are the generation provided by Chugach (approximately 90% gas fired) or the use by Seward of its diesel generation when the supply of Chugach power is disrupted . I 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation . Chugach 's existing energy system includes the 183 MW Southcentral Power Project (SPP), which consists of 3 natural gas combustion turbines and a steam turbine. Chugach owns 70% of this plant and Anchorage Municipal Light and Power (ML&P) owns the remaining 30%. This plant is the most efficient in the Railbelt with an average heat rate under 7,500 btu per kWh . The existing energy system also includes gas-fi red plants at Beluga (7 units) and International (3 units). The capacity of Beluga is 385 MW and the capacity at International is 47 MW . All of these units are very old (i.e., 30 to 50 years). With the addition of SPP and the loss of wholesale AEA 15003 Page 9 of21 7/2/14 Renewable Energy Fund Round VIII Grant Application -Standard Form ~~ENERGY AUTHORITY customers Homer and Matanuska, over the next few years many of these units will be retired or only used for peaking and reserves. Chugach's hydro resources include the Cooper Lake power plant with a capacity of 19.2 MW, a 30% ownership interest in the 47 MW Eklutna plant, and a 30% share of the energy generated by the State-owned 120 MW Bradley Lake project. Since September 2012 Chugach has been purchasing approximately 48,000 MWh of wind energy from the 17.6 MW Fire Island Wind Project. In addition to Chugach's existing resources , the City of Seward has an electric system consisting of Diesel generators that are available for its use if the transmission line is down or Chugach needs to interrupt service to Seward . 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources . Successful small hydro developments at Lowell Creek or Ship Creek would be integrated into Chugach 's existing energy system to provide another source of renewable energy that can offset gas-fired generation and provide long term cost savings. A Lowell Creek project would interconnect with the Seward system and be expected to also enhance local reliability and offset local generation when Seward is using its diesel generation due to a transmission outage or other reason that prevents Chugach from supplying Seward 's energy requirements. A Ship Creek project would interconnect with the Chugach system . 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Chugach's energy market will include its retail customers and the City of Seward. There will be no effect on this market other than to use the hydro generation from one or both of the projects to offset natural gas-fired generation . In the event of a power supply disruption to the City of Seward, a Lowell Creek project would be able to serve Seward during most months of the year, which are to be determined by the hydrologic assessment. This would be a significant benefit to Seward if it is able to minimize running its diesel generators . 4.3 Proposed System Describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues. 4.3.1 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 • Basic integration concept • Delivery methods A E A 15003 Page 10 of21 7/2/14 Renewable Energy Fund Round VIII Grant Application -Standard Form ~~ENERGY AUTHORITY The proposed system at each location would be a run-of-river hydroelectric facility . Other than specifying the type of system, it is too early to address the questions above with respect to capacity and energy output. If the projects indicate potential further evaluation will provide the information needed to address the above issues in more detail. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. The land at the locations of the Lowell Creek and Ship Creek sites is very accessible. Lowell Creek appears to be on property that is either owned by the City of Seward or the State of Alaska, which is managed by the Alaska Department of Natural Resources (ADNR). The City of Seward was very supportive of Chugach's evaluation of Fourth of July Creek, which is also on City of Seward and State land . Ship Creek is located on Fort Richardson . 4.3.3 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 discuss potential barriers A permitting assessment is part of the proposed reconnaissance work that is the subject of this grant application. 4.3.4 Environmental Address 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 discuss other potential barriers These issues are not within the scope of the initial reconnaissance work proposed . 4.4 Proposed New System Costs and Projected Revenues (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example : Applicants records or analysis, industry standards, consultant or manufacturer's estimates . AEA 15003 Page 11 of21 7/2/14 Renewable Energy Fund Ro u nd V I I I Grant Application -Standard Form 4.4.1 Project Development Cost ~~ENERGY AUTHORITY Provide detailed project cost information based on your current knowledge and understanding of t he project. Cost information should include the following : • ·Total anticipated project cost, and cost for this phase • Requested grant fund ing • Applicant matching funds -loans, capital contributions, in-kind • Identification of other fund ing sources • Projected capital cost of proposed renewable energy system • Projected development cost of proposed renewable energy system The tota l anticipated project cost for the reconnaissance studies is $150,000, $80 ,000 for Lowell Creek and $70 ,000 for Ship Creek . Chugach is propos ing to provide a match of $75,000 and is requesting a grant of $75,000. Fund i ng is not at issue for Chugach and no other funding sources are required . It is too soon to for Chugach to provide a meaningful estimate of the capital o r development cost of either project. 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. (Note : Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) While it is too soon to meaningfully estimate operations and maintena nce costs, is can safely be said that O&M costs would be incorporated into Chugach 's revenue requirement and recovered through tariffed rates approved by the RCA. 4 .4.3 Power Purchase/Sale The power purchase/sale information should include the following : • Identification of potent ial power buyer( s )/customer( s) • Poten ti al power purchase/sales price -at a minimum indicate a price range • Proposed rate of return from grant-funded project Chugach would use the hydro energy from either or both projects to meet its energy requirements . Costs such as operations and maintenance, depreciation, interest on long term debt, etc. would be included in Chugach 's revenue requirement and recovered via rates approved by the RCA. These costs would be blended with other generat ion costs to determine the rate charged to consumers . An economic proj ect will result in a hydro energy cost that is competitive with the long term expected cost of gas f ired generation . Chugach will not earn any rate of return on the portion of the investment prov ided by grant funding . Chugach earns a return in the form of a margin , which is expected to be 10% of the annual long term interest expense on any loans Chugach uses to fu nd a project. ABA 15003 Page 12 of 2 1 7/2/14 Renewable Energy Fund Round VIII Grant Application -Standard Form 4.4.4 Project Cost Worksheet ~~ENERGY AUTHORITY Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Please fill out the form provided below. I Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. To be determined . Unit depends on project type (e .g. windspeed, hydropower output, biomass fuel) I 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 ii. Rated capacity of generators/boilers/other iii . Generator/boilers/other type iv. Age of generators/boilers/other v . Efficiency of generators/boilers/other b) Annual O&M cost (if system is part of the Rail belt grid, leave this section blank) i. Annual O&M cost for labor ii. Annual O&M cost for non-labor c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid , leave this section blank) i. Electricity [kWh] ii. Fuel usage Diesel [gal] Other ii i. Peak Load iv. Average Load v . Minimum Load vi. Efficiency vii. Future trends d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] ii. Electricity [kWh] iii. Propane [gal or MMBtu] 1 Th e Rail belt grid connects all cus t omers of Chugach Electri c Associati on, Homer Electric Associatio n, Go lden Valley El ectric Association, t h e City of Seward El ectric Dep artment, Matanu sk a Ele ctric Association and Anchorage Municipal Light and Po we r . AEA 15003 Page 13 of21 7/2/14 Renewable Energy Fund Round VIII Grant Application -Standard Form f~ ENERGY AUTHORITY iv. Coal [tons or MMBtu] v. Wood [cords , green tons. dry tons] vi. Other 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] To be determined. b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] ii. Heat [MMBtu] To be determined . c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] ii. Coal [tons or MMBtu) iii. Wood or pellets [cords, green tons, dry tons] iv . Other Project Cost a) Total capital cost of new system b) Development cost c) Annual O&M cost of new system d) Annual fuel cost Project Benefits a) Amount of fuel displaced for i. Electricity ii. Heat iii. Transportation To be determined. $To be determined . $To be determined. $To be determined . $0 b) Current price of displaced fuel Approx. $6/mcf escalating to approx. $8 by 2019 c) Other economic benefits Potential REC sales= approx. $1 per MWh d) Alaska public benefits Power Purchase/Sales Price a) Price for power purchase/sale Sold at cost via RCA cost-based ratemaking process. AEA 15003 Page 14 of 21 7/2/14 Renewable Energy Fund Round VIII Grant Application -Standard Form Project Analysis a) Basic Economic Analysis Project benefit/cost ratio Payback (years) 4.4.5 Impact on Rates To be determined . ~~ENERGY AUTHORITY Briefly explain what if any effect your project will have on electrical rates in the proposed benefit area. If the is for a PCE eligible utility please discuss what the expected impact would be for both pre and post PCE . An economic project is not expected to have any impact on rates . First, either a Lowell Creek or Ship Creek project is not big enough to dramatically affect Chugach's rate structures. Second, a project will not proceed to construction unless its economics are favorable compared to the expected cost of gas fired generation . Ideally, it will provide a lower cost generation resource, as well as provide additional benefits related to conservation of gas resources, lower emissions and improve local reliability. SECTION 5-PROJECT BENEFIT Explain the economic and public 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: • P-otential annual fuel displacement (gallons and dollars) over the lifetime of the evaluated renewable energy project • Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate) • Potential additional annual incentives (i.e. tax credits) • Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) • Discuss the non-economic public benefits to Alaskans over the lifetime of the project A viable hydro project would offset the use of natural gas to generate energy. The amount of fuel displacement will depend on the size of the hydro resource. The anticipated revenue from hydro sales will be cost-based and subject to RCA approval. Revenue will be just enough to pay for actual costs, including a margin . On a total company basis, Chugach 's margin for G&T investments is currently 10% of the long term interest expense associated with the G&T investment. No depreciation or margin is earned on the portions of investments funded with grants. Chugach currently sells Renewable Energy Certificates (REC 's) that are generated from Fire Island wind purchases . If small hydro REC 's are eligible for sale , which Chugach believes they are, Chugach would also sell those and use the proceeds to offset the costs charged to our members . A EA 15 003 Page 15 o f 21 7/2/14 Renewable Energy Fund Round VIII Grant Application -Standard Form ~~ENERGY AUTHORITY In addition to the benefits to Chugach, Seward will benefit from the ability of a local hydro resource such as Lowell Creeks to allow Jess need for the use of its diesel generation in the event Chugach is prevented from meeting its power supply needs . Public benefits include stimulus to the local economy for construction, operations and maintenance, generation diversity, conservation of natural gas and improved reliability and stability of the local grid. 5.1 Public Benefit for Projects with Private Sector Sales Proj ects that include sales of power to private sector businesses (sawmills, cruise ships, mines, etc.), please prov ide a brief descripti o n of the direct and indirect public benefits derived from the project as well as the private sector benefits and complete the table below. See section 1.6 in the Request for Applications for more information. Renewable energy resource availability (kWh per month) Not applicable. Estimated sales (kWh) Revenue for displacing diesel generation for use at private sector businesses ($) Estimated sales (kWh) Revenue for displacing diesel generation for use by the Alaskan public ($) SEeTION 6-SUSTAINABILITY Discuss your plan for operating the completed project so that it will be sustainable. Include at a minimum: • Proposed business structure(s) and concepts that may be considered . • How you propose to finance the maintenance and operations for the life of the project • Identification of operational issues that could arise. • A description of operational costs includililg on-g0ing support for any back-up 0r existing systems that may be require to continue operation • Commitment to reporting the savings and benefits Either hydro project would be very sustainable. The project development sites are accessible as are points of interconnection. New hydro facilities would be incorporated into Chugach's existing generation portfolio and the costs would be part of Chugach's revenue requirement. Chugach has extensive experience in constructing, operating and maintaining power plants, including hydro plants, and would operate and maintain a facility to ensure plant life and operating performance is as expected. Costs of operating and maintaining the project would be recovered via RCA approved tariffed rates. Chugach commits to reporting savings and benefits . SECTION 7 -READINESS & COMPLIANCE WITH OTHER GRANTS Discuss what you have done to prepare for this award and how quickly you intend to proceed with work once your grant is approved. Tell us what you may have already accomplished on the project to date and identify other grants that may have been previously awarded for this project and the degree you have been able to meet the requirements of previous grants. AEA 15003 Page 16 of 21 7/2/14 Renewable Energy Fund Round VIII Grant Application -Standard Form ~~ENERGY AUTHORITY Chugach has been very aggressively pu rsuing renewable energy project development. For example , Chugach has been evaluating the hydro resource potential at Fourth of July Creek for several months . Chugach entered a memorandum of agreement to work with the City of Seward on a Fourth of July Creek project and Seward 's response has been enthusiastic as shown by letters of support. Chugach contracted with McMillen to perform a variety of tasks . McMillen has performed work related to permitting requirements and conceptual design and has documented its work in several Technical Memos. Unfortunately, the estimated capital cost for a Fourth of July Creek project makes it infeasible. Thus, given the broad local support in Seward for a local hydro resource, Chugach is moving its efforts onto Lowell Creek and is proposing to begin the initial reconnaissance work via this grant application . In addition , Chugach is also proposing to include reconnaissance of Ship Creek. Similar to the interests of the Community of Seward, Chugach also has a broad interest in renewable development, including hydroelectric projects, as stated in the attached Board resolution. No other grants have been received by Chugach for this project. If this grant is received, Chugach will move forward immediately. SECTION 8 -LOCAL SUPPORT AND OPPOSITION Discuss local support and opposition, known or anticipated, for the project. Include letters of support 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 2, 2014 Letters of support, included as part of this grant application, have been received from the Seward Mayor, the Seward Electric System, the Alaska Sealife Center, the Seward Chamber of Commerce and a local renewable energy group. While these letters were specifically for Fourth of July Creek, it is clear the Community of Seward is very supportive of a local renewable project, so Chugach is proposing to move forward with the evaluation of Lowell Creek as another possible resource in the Seward community. SECTION 9-GRANT BUDGET Tell us how much you are seeking in grant funds. Include any investments to date and funding sources, how much is being requested in grant funds, and additional investments you will make as an applicant. 9.1 Fundi ng sources and Financial Commitment Provide a narrative summary regarding funding source and your financial commitment to the project Chugach is requesting a grant of $75,000. This is one-half of the estimated cost to perform a reconna issance level assessment of Lowell and Ship Creeks. Chugach will provide a cash match equal to the amount of the grant. The specific tasks to be accomplished are in the budget document. While not for Lowell or Ship Creek, in the past several months Chugach has spent a significant amount of staff time and approximately $60,000 for consulting services for McMillen to perform AEA 15003 Page 17 of21 7/2/14 Renewable Energy Fund Round VIII Grant Application -Standard Form ~~ENERGY AUTHORfTY tasks related to Fourth of July Creek. While this expense was not for the work that is the subject of this grant application, it shows that Chugach is very committed to the identification and development of renewable energy projects. Chugach has more than ample credit capacity to complete this project, including a commercial paper credit facility of $100 million, a line of credit of $50 million, and investment grade credit ratings that facilitate the ability to access the capital markets and convert short-term to long-term financing when desired . Further, Chugach has a track record of completing the projects it starts and honoring all financial commitments. This is one of our greatest strengths as compared to many other applicants. 9.2 Cost Estimate for Metering Equipment Please provide a short narrative, and cost estimate, identifying the metering equipment, and its related use to comply with the operations reporting requirement identified in Section 3. 15 of the Request for Applications. Only temporary stream gaging will be used in the reconnaissance studies. AEA 15003 Page 18 of21 7/2/14 Renewable Energy Fund Round VIII Grant Application -Standard Form ~~ENERGY AUTHORITY 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, Ill. Final Design and Permitting, and IV. Construction and Commissioning). Please use the tables provided below to detail your proposed project's budget. Be sure to use one table for each phase of your project. 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. Source of Matching Anticipated Grantee Funds: RE-Fund Cash/In-Milestone or Task Completion Grant Funds Matching kind/Federal TOTALS Date Funds Grants/Other State Grants/Other (List milestones based on phase and type of project. $ $ $ See Milestone list below. ) Project Management 6/30/2016 $ 5,000 $ 5,000 Cash $10,000 Hydrology Studies-Lowell & 6/30/2016 $32 ,500 $32,500 Cash $65,000 Ship Creeks Permitting Studies -Lowell & 6/30/2016 $10,000 $10,000 Cash $20,000 Ship Creeks Prepare Reconnaissance 6/30/2016 $27 ,500 $27,500 Cash $55,000 Studies and Reports $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ TOTALS $75 ,000 $75,000 $150 ,000 Budget Categories: Direct Labor & Benefits $ 5 ,000 $ 5 ,000 Cash $ 10 ,0 00 T ravel & Per Diem $10,000 $10 ,000 Cash $ 20,000 Equipment $ $ $ Materials & Supplies $ $ $ Contractual Services $60,000 $60 ,000 Cash $120 ,000 Construction Services $ $ $ Other $ $ $ TOTALS $75,000 $75,000 $150,000 AEA 15003 Page 19 of21 7/2/14 Renewabl e Energy Fund Round VII I Grant Application-Standard Form I SECTION 10 -AUTHORIZED SIGNERS FORM Community/Grantee Name: Chugach Electric Association, Inc. Regular Election is held: Annually I Authorized Grant Signer(s): Printed Name Title ~~ENERGY AUTHORITY I Date: Last Thursday in May Term Signature Ronald K. Vecera Senior Manager, Risk & Ongoing -I< (!V~ Renewables Employ_ee Printed Name Title Bradley W. Evans Chief Executive Officer Grantee Contact Information: Mailing Address: P.O. Box 196300 A nchorage, AK 99519-6300 Phone Number: (907) 762-4759 Fax Number: (907) 762-4699 E-mail Address: Ron_ vecera@chugachelectric.com Federal Tax 10 #: 92-0014224 Please submit an updated form whenever there is a change to the above information. AEA 15003 Page 20 of21 7/2/1 4 Renewable Energy Fund Round VIII Grant Application -Standard Form ~~ENERGY AUTHORITY SECTION 11-ADDITIONAI!. DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLIGATION: 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 8. 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 electroni c 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 Bradley W . Evans Signature 8tf1!1/l7/~(~d~ -frt '.../ '-"' Title Chief Executive Officer Date September 22, 2014 AEA 15003 Page 21 of21 7/2/14