HomeMy WebLinkAboutREFAppRD8STANDARD7214Final_CEC_9-8-14Renewable Energy Fund Round VIII
Grant Application - Standard Form
AEA 15003 Page 1 of 27 7/2/14
Application Forms and Instructions
This instruction page and the following grant application constitutes the Grant Application Form for
Round VIII of the Renewable Energy Fund. A separate application form is available for projects
with a primary purpose of producing heat (see RFA section 1.5). This is the standard form for all
other projects, including projects that will produce heat and electricity. An electronic version of the
Request for Applications (RFA) and both application forms is available online at:
http://www.akenergyauthority.org/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 trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept confidential.
If the Authority determines it is not confidential it will be treated as a public record in
accordance with AS 40.25 or returned to the applicant upon request.
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Cordova Electric Cooperative, Inc.
Type of Entity: Fiscal Year End:
Rural Electric Utility December 31
Tax ID #
Tax Status: ☐ For-profit ☒ Non-profit ☐ Government (check one)
Date of last financial statement audit:
Mailing Address: Physical Address:
PO Box 20 705 Second Street
Cordova, AK 99574-0020 Cordova, AK 99574
Telephone: Fax: Email:
(907) 424-5555 (907) 424-5527 ckoplin@cordovaelectric.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name: Clay Koplin Title: Chief Executive Officer (CEO)
Mailing Address:
PO Box 20
Cordova, AK 99574-0020
Telephone: Fax: Email:
(907) 424-5555 (907) 424-5527 ckoplin@cordovaelectric.com
1.1.1 APPLICANT ALTERNATE POINTS OF CONTACT
Name Telephone: Fax: Email:
Valerie Covel 907-424-5555 907-424-5527 vcovel@cordovaelectric.com
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1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 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
☐ An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
☐ A local government, or
☐ A governmental entity (which includes tribal councils and housing authorities)
1.2 APPLICANT MINIMUM REQUIREMENTS (continued)
Please check as appropriate.
☒ 1.2.2 Attached to this application is formal approval and endorsement for the project by the
applicant’s board of directors, executive management, or other governing authority. If the
applicant is a collaborative grouping, a formal approval from each participant’s governing
authority is necessary. (Indicate by checking the box) See Appendix A
☒ 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/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)
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SECTION 2 – PROJECT SUMMARY
This section is intended to be no more than a 2-3 page overview of your project.
2.1 Project Title – (Provide a 4 to 7 word title for your project). Type in space below.
Crater Lake Power and Water Project
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 60.572401N, Longitude 145.699744W
Crater Lake, Cordova Alaska, Township 15S, Range 3W, Copper River Meridian
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
Cordova, Alaska
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
☐ Wind ☐ Biomass or Biofuels (excluding heat-only)
☒ Hydro, Including Run of River ☐ Hydrokinetic
☐ Geothermal, Excluding Heat Pumps ☐ Transmission of Renewable Energy
☐ Solar Photovoltaic ☒ Storage of Renewable
☒ Other - Municipal Water Storage ☐ Small Natural Gas
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Pre-Construction Construction
☐ Reconnaissance ☒ Final Design and Permitting
☐ Feasibility and Conceptual Design ☐ Construction
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2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of the proposed project.
Crater Lake is a perched lake located directly above existing City of Cordova chlorinator building
and water supply line to Cordova, and a CEC transmission line from the Humpback Creek
Hydroelectric Project to Cordova. The reconnaissance study (Appendix B) indicates the project
can deliver 2,000,000 kWh of direct energy, and up to 2,000,000 of additional energy by
eliminating the need for Power Creek Hydroelectric Plant and Orca Diesel Generation Plants to
provide spinning reserve – the most significant waste of hydro and diesel fuel resources on the
CEC system. This makes the project the most attractive opportunity to further reduce diesel fuel
use, consistent with AEA goals and the CEC strategic plan (2014 plan attached for reference,
Appendix C). The Crater Lake Hydroelectric Project represents a relatively low risk, low cost, high
value hydroelectric project with multiple extended public benefits.
2.5 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.)
According to the Energy Information Administration (EIA) the average price of electricity to all
sectors for 2013 was 10.08 cents per kWh as compared to 30.71 cents per kWh in Cordova The
2014 gas station price in Cordova for diesel fuel is currently $5.059 per gallon (Shoreside
Petroleum pricing 9/15/14). This pricing exceeds the EIA retail diesel price of $3.801 per gallon.
With increased hydropower capacity, CEC can continue its migration from diesel fuel dependency
toward supplying 100% of our power from renewable energy sources. This shift results in lowering
hazardous substance precautions and emissions, increasingly stringent air quality regulations,
reduced dependency on fuel and shipping costs and lessening the ever-climbing cost of diesel fuel
itself.
The Crater Lake Hydroelectric project provides multiple benefits, particularly if it can be designed
and constructed to control system frequency. Benefits include the direct offset of diesel fuel
generation by delivery of stored hydro when needed, the storage and delivery of community water
supply, the liberation of 500kW of run-of-river hydro capacity at Power Creek to more highly utilize
that project to reduce diesel fuel use and increase peak output, the operation of our diesel plant in
a high efficiency base-load rather than spinning reserve mode, meeting the growing peak system
demands for growing community needs as existing hydro capacity is exceeded, and community
water and energy security.
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.
Relatively high risk geotechnical and/or modeling requirements for final design $500,000; AEA
match request funding for this high-risk portion.
Crater Lake base hydro and water supply design, permitting, and bid document preparation;
$500,000, 25% and up to 50% CEC if necessary and/or 0 to 25% City of Cordova, Alaska Native
Corporation and other stakeholder funding.
Administrative, Engineering Review, Project Management, and Accounting costs $100,000; CEC
in-kind staff labor contribution.
2.7 COST AND BENEFIT SUMMARY
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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 $ 500,000
2.7.2 Cash match to be provided $ 250,000
2.7.3 In-kind match to be provided $ 100,000
2.7.4 Other grant funds to be provided $ 250,000
2.7.5 Total Costs for Requested Phase of Project (sum of 2.7.1 through 2.7.4) $ 1.1 M
Other items for consideration
2.7.6 Other grant applications not yet approved N/A (pending)
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Project Costs & Benefits
(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
Summary from Cost Worksheet, Section 4.4.4, including
estimates through construction.
$10,000,000
2.7.8 Additional Performance Monitoring Equipment not
covered by the project but required for the Grant
Only applicable to construction phase projects
$ 0
2.7.9 Estimated Direct Financial Benefit (Savings)
The economic model used by AEA is available at
www.akenergyauthority.org/REFund8.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.
$ 527,246 annual diesel
savings from Crater Lake
portion
See Appendix D
2.7.10 Other Public Benefit
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.
$ 62,000 annually
See Appendix E
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.
Internal Project Management will be conducted by Clay Koplin, CEO and Valerie Covel, Manager
of Administration & Finance of CEC (resumes attached see Appendix F). Also see Section 3.3
Project Resources.
External Project Management during construction will be selected per CEC procurement policy
guidelines once CEC completes feasibility study and 20% conceptual work in spring and summer
of 2015. The project manager resume, qualifications, and Alaska project management experience
will be submitted to AEA for approval as a requirement of the grant agreement documents on or
after July 1, 2015. CEC has been successful in selecting and collaborating productively with
contract project managers on both the Power Creek hydroelectric project (1998-2002) and
Humpback Creek restoration project (2008-2011).
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3.2 Project Schedule and Milestones
Please fill out the schedule below. 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.
Please fill out form provided below. You may add additional rows as needed.
Milestones Tasks
Start
Date
End
Date
Reconnaissance Study Evaluate project benefit, estimate project cost, apply
for long-lead time permits including water rights and
FERC non-jurisdictional determination, identify and
engage landholders and stakeholders. The results of
this evaluation were a decision point in determining
whether a feasibility study is warranted. This
milestone is substantially complete.
June 18,
2014
Substant-
ially
complete
as of
9/18/14
Feasibility Study Survey Dam site topography, penstock plan and
profile survey, 20% conceptual design with project
cost estimate and cost-benefit/NPV analysis.
Completion of this milestone will mark a decision
point between 3 options:
1) Don’t proceed to design (low feasibility/high risk)
2) Proceed with base hydro plant/water design
3) Proceed with base hydro plant/water design and
robust controls package to leverage additional hydro
and diesel savings through frequency control/micro
grid integration to derive highest benefit
This milestone is a CEC task preceding design and is
not a direct element of this grant application. 1/1/15 7/1/15
Design 100% Design, Bid Document Preparation, Modeling
for frequency control/micro grid integration,
economic dispatch of water and hydropower for
highest community benefit, specifications for long-
lead time equipment ordering. This is not a decision
point. Unless a fatal flaw is encountered during
design, this is a necessary milestone before
distributing solicitations for construction phase. The
grant application is for this milestone only. 7/1/15 3/1/16
Construction Build, Commission, Evaluate Performance – this is
an estimated construction date, and is not a milestone
included in this grant application. 3/1/17 12/1/17
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. Describe 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.
Key management staff is technically skilled and experienced in the electric utility industry and at
CEC. Clay Koplin, Chief Executive Officer at CEC, currently holds a bachelor’s degree in electrical
engineering and is working on his MBA to be completed spring 2015. He is a registered
professional engineer in the State of Alaska with 16 years of experience at CEC, 23 years total in
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the industry. Valerie Covel is CEC’s Manager of Administration & Finance and has managed
CEC’s accounting and finance for 23 years, including the Power Creek Hydroelectric Project,
Humpback Creek Hydroelectric Project and other large capital projects, 33 years total in the
industry. Andy Gentry is CEC’s Manager of Engineering and Operations and has over 35 years in
the industry as a journeyman lineman, substation manager, and operations manager with Pacific
Power and has worked at Cordova Electric Cooperative for seven years. Participation of these
CEC staff in leadership positions in the National Hydropower Association, Northwest Hydropower
Association, and Northwest Public Power Association has built an extensive professional and
contractor network for CEC, particularly in hydropower development.
Over the past year, CEC has engaged multiple engineering firms (Appendix G), agencies, local
stakeholders, and automation and modeling-capable partners. CEC has a highly efficient and
automated electrical system designed and supported by Electric Power Systems from which a rich
modeling data set over a decade is available for use in optimizing the design of the Crater Lake
Project for maximum efficiency and community benefit. Both Dr. Marc Mueller-Stoffels of ACEP
and DOE technical staff at Sandia National labs recently committed significant resources to
modeling energy storage options on the CEC micro grid system and are in the process of
structuring a collaborative agreement with CEC to focus modeling effort on Crater Lake integration.
It is anticipated that these partners or technical staff of similar capabilities will perform the complex
modeling for which CEC is requesting a portion of the direct AEA grant assistance. CEC has
worked directly with highly competent geological and geotechnical capable firms on the Power
Creek and Humpback Creek hydroelectric projects including Main Street Mining, Apollo Crux
Geophysical, Pacific Blasting, Extreme Access, R&M Consultants and others and anticipate
attracting these or similarly capable firms to the Crater Lake Power and Water project; there has
been significant interest. The geotechnical exploration is the other primary portion of this project
for which CEC is seeking AEA assistance.
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.
CEC and all contractors and subcontractors will establish regular communication procedures
among all project team members. As in previous hydro project construction, we will establish an
email listserv for the Crater Lake project so that all team members receive regular updates both
narrative progress reports and photo documentation of construction progress. We will continue to
use these procedures, modifying them as appropriate for the Crater Lake project during
construction, commissioning and post construction phases of the project. Attached is a sample
report used during our Humpback Creek project construction. (Appendix H)
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3.5 Project Risk
Discuss potential problems and how you would address them.
The Crater Lake site poses substantially lower risk than previous hydroelectric projects in Cordova.
The Power House location will be road accessible from paved roads on the existing Cordova road
system. The high-head project results in smaller pipe and equipment sizes, reducing the logistics
overheads. A multi-helicopter pad from which 3-4 helicopters perform spring heli-skiing operations
from Orca Adventure Lodge, one of the key stakeholders and land owners, provides fortuitous and
immediate helicopter support to the site and provides a lodging opportunity for construction crews.
The proposed dam site is at exposed, visible, solid rock requiring a very small footprint and minimal
excavation and support for a low-height dam. The anticipated utilization of local construction crews
for significant portions of the work will further alleviate the risks of mobilization, demobilization, and
standby time contingencies. Diversion of water away from the dam construction site is significantly
less complex and voluminous than previous CEC hydro projects.
The primary risks for this project are the geotechnical conditions along the penstock route and the
dam footprint. These risks will be mitigated by previous experience and data on the Power Creek
project geotechnical reports and bore logs, and Humpback Creek geotechnical reports, bore logs,
and core samples saved in storage by CEC.
Another risk is loss of key project personnel. To mitigate this risk and facilitate project progress,
the design and construction portions of the project will have both internal CEC and external
contractor familiarity with daily project tasks and progress, which will provide temporary coverage
in the event of loss of a key project personnel.
This project will be structured with an Agile project development structure, which relies on a high
level of collaboration, communication, commitment, and flexibility in the project team. Agile project
structure has been applied to software development and other industries with uncertainties and
risks. This structure will help manage the underlying risks of projects on remote Alaskan sites;
transportation, logistics, weather, and access to adequate human and physical resources.
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.
Valerie Covel, Manager of Administration & Finance, Cordova Electric Cooperative, Inc., P O Box
20, Cordova, Alaska 99574. Phone number (907)424-5555; Fax (907)424-5527 and e-mail
address vcovel@cordovaelectric.com. See attached resume Appendix F.
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 accounting system.
Insight Accounting Package provided by Professional Computer Systems, Inc. of Denison, IA
Valerie Covel, Manager of Administration & Finance, Cordova Electric is primary user.
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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 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.
Requests will be prepared by Manager of Finance and certified by CEO to ensure validity. Costs
in excess of CEO spending authority are also approved by our Board of Directors. Our current
accounting system is a work order/project based system utilized in our two prior hydroelectric
projects/grants. Overhead allocations are easily discernible and will not be included in our
submissions. As in the past, detailed documentation will be submitted as an attachment to each
grant reimbursement request.
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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 an 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 Crater Lake power and water project would consist of a small concrete dam, a 3800
foot long steel penstock, and a tidewater power plant in the 500 KW to 2000 KW range. The water
shed was identified as approximately 167 acres of drainage from a tracement of an ARCGIS
topographic map. Cordova averages 148 inches of annual rainfall. Crater Lake is at 1,560 feet of
elevation. From these parameters it is estimated to produce 2,000,000 kWh annually with an
annual water resource of 540,000,000 gallons. The generation units can be sized to meet up to 16
percent of CEC’s peak KW demand and seven percent of annual kWh use to meet the growing
demand for electricity in Cordova. This will potentially offset up to 30 percent of our existing use of
diesel fuel and could potentially provide up to 100 percent of Cordova’s annual water needs. See
attached Reconnaissance Report (Appendix B).
In addition to the base 2,000,000 kWh hydropower production, an additional 2,000,000 kWh
(500kW of Power Creek deflected spinning reserve for over 4,000 hours each year) is anticipated if
the project is developed for system frequency control. It is estimated that 500,000 kWh (25%) of
this resource would immediately offset diesel, and will grow into the full 2,000,000 kWh resource as
system loads and/or dump heat loads are deployed to utilize the resource. Based on recent power
production trends, 2,500,000 kWh of our annual resource is used in the attached AEA cost/benefit
calculator (Appendix 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.
Cordova Electric currently operates three power generation facilities (18,400 KW) with over 70
miles of underground and submarine power lines serving approximately 1,500 meters year round.
Orca Power Plant (Diesel) 11,150 KW
Power Creek Plant (Hydro) 6,000 KW
Humpback Creek Plant (Hydro) 1,250 KW
See Appendix B Reconnaissance Report Existing Energy System Page 3 for further detail.
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.
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Due to our unique remote location, Cordova has very few options for meeting our energy needs.
Hydroelectricity, diesel fuel, gasoline, propane and wood heat meet the electrical, heating and
transportation needs of the community. CEC was incorporated in 1978 and relied solely on diesel
fuel for power until 1991 when the Humpback Creek Hydroelectric project was commissioned. This
project provided approximately 20 percent of Cordova’s annual power needs. During the next
several years, coal fired generation, tidal power, and wind power were all evaluated and
determined infeasible. In partnership with the State of Alaska CEC evaluated several hydroelectric
sites and Power Creek was selected and successfully developed as the second run-of-river
hydroelectric project. It was commissioned in 2002 and has saved our members over $25,000,000
in fuel surcharges to date. In 2005 the Humpback Creek project became inoperable due to fire and
flood. The plant was restored and put back into service in July 2011. With th e addition of Power
Creek and the upgrade of the Humpback Creek project CEC averages 65% hydro generation
annually. The addition of Crater Lake has the potential to increase this average by seven percent,
and the extended benefits of liberated Power Creek and Diesel plant spinning reserve can
potentially double this contribution into the future (an additional 25% immediate estimated benefit
was assumed).
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
As referenced in Appendix B Reconnaissance Report, over the past decade the community of
Cordova has increased the demand for both electricity and water. Our current hydro plants are
run-of-river and cannot store excess water for winter use and the City of Cordova’s municipal water
supply is inadequate to provide peak use. The proposed Crater Lake project can potentially
address both these needs.
The diesel fuel savings alone may save consumers approximately 1.5 cents per kWh in fuel
surcharges (based on current fuel prices and current kWh sales). The outcome of financing and
debt may diminish this savings if base rates need to be adjusted to meet interest and principal
payments. Reduced O&M costs could offset financing impacts.
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
The basic design is a conventional dam-penstock-pelton wheel high head hydroelectric project.
See attached Reconnaissance Report Page 5 for details regarding dam, penstock, turbine(s) and
power plant.
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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 Crater Lake property is comprised of shared ownership with The Eyak Corporation owning the
north side, State of Alaska and City of Cordova on the south side with penstock route potentially
crossing private lands as well. CEC has enthusiastic support for the project from all four land
owners. See Appendix B Reconnaissance Report Page 8 for details.
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
Alaska Department of Natural Resources—Water rights permitting complete
FERC Non-Jurisdictional Determination—Applied and pending
Office of Project Management Permitting (OPMP)—Permits have been identified to include Division
of Mining, Land & Water, Division of History & Archaeology, Division of Geological and
Geophysical Survey, Department of Environmental Conservation and Department of Fish & Game.
We anticipate execution within 12 months if project proves feasible. There are no anticipated
regulatory barriers identified at this time.
See Appendix B Reconnaissance Report Page 8 Permitting and Appendix K for details.
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
The stocked rainbow trout in the lake may be an environmental concern. Additionally a trail
easement along the lakeshore may need to be relocated. See Appendix B Reconnaissance
Report Page 8 Environmental for details.
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.
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4.4.1 Project Development Cost
Provide detailed project cost information based on your current knowledge and understanding of
the project. Cost information should include the following:
Total anticipated project cost, and cost for this phase
Requested grant funding
Applicant matching funds – loans, capital contributions, in-kind
Identification of other funding sources
Projected capital cost of proposed renewable energy system
Projected development cost of proposed renewable energy system
Total anticipated project cost $5,000,000 to $10,000,000
Cost for this phase $1,100,000
Funding: $500,000 AEA Grant;
$250,000 CEC cash match
$100,000 CEC in-kind engineering, accounting, and project management support
$250,000 City of Cordova or federal cash grants or conventional financing by CEC as
necessary. See CEC Board Resolution Appendix A
See Appendix B Reconnaissance Report Page 7 Project Financing for further detail.
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.)
This project is expected to provide a net reduction of O&M costs as it will replace some of our
existing diesel O&M costs. As previously mentioned reduced fuel use will offset existing fuel
expense. See Reconnaissance Report Page 7 O&M and Fuel Costs and Project Benefits for
details. The project is also intended to reduce City of Cordova O&M costs and defer the need for
aging infrastructure upgrades.
4.4.3 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
Cordova Electric Cooperative is the sole provider of electric energy to the community of Cordova
and the purchasers are existing members of the Cooperative. As a non-profit Cooperative, rates
are adjusted incrementally to minimize margins while providing adequate operating capital. Our
current rate sheets are attached to the Reconnaissance Report attached.
Reference the AEA Cost Benefit Calculator, Appendix I, and attached excel source document in
electronic submittal for details.
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4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered in
evaluating the project.
Please fill out the form provided below.
Renewable Energy Source
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability.
Unit depends on project type (e.g. windspeed, hydropower output, biomass fuel)
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 Railbelt grid, leave this section blank)
i. Annual O&M cost for labor $0.0349/kWh combined labor and non-labor per Appendix L
ii. Annual O&M cost for non-labor N/A (see i)
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] 28,000,000 kWh
ii. Fuel usage
Diesel [gal] 775,000 gallon 2011-2013 average
Other
iii. Peak Load 9,400 kW August 2014
iv. Average Load Approximately 4,000 kW
v. Minimum Load Approximately 1,500 kW
vi. Efficiency 13.58 kW/Gallon avg, varies widely between 12.0 kWh/gal to 14.1 kWh/gal
vii. Future trends Peak demand and kWh growth of 1-3% annually for the next few years
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu]
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
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.
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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]
500-2,000 kW depending upon feasibility study results,
hydro (reservoir)
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] 2,500,000 kWh
ii. Heat [MMBtu]
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu]
ii. Coal [tons or MMBtu]
iii. Wood or pellets [cords, green tons,
dry tons]
iv. Other Water – 500,000,000 gallons
Project Cost
a) Total capital cost of new system $ 10,000,000
b) Development cost $ 250,000 CEC in-kind staff contribution
c) Annual O&M cost of new system $0.0349/kWh see attached Appendix L
d) Annual fuel cost $50 for annual water fee
Project Benefits
a) Amount of fuel displaced for
i. Electricity 527,000 gallons base + 25% estimated extended from spinning reserve
ii. Heat
iii. Transportation
b) Current price of displaced fuel $3.563
c) Other economic benefits Reduced costs to City Water System,
d) Alaska public benefits Stored water/energy, environmental, economic
growth, Agile project and micro grid demonstration
Power Purchase/Sales Price
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a) Price for power purchase/sale Per CEC tariff, Reconnaissance Report Appendix
Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio Appendix I AEA Cost Benefit Calculator and excel source file attached
Payback (years) 13 years per Appendix I AEA Cost Benefit Calculator and source file
4.4.5 Impact on Rates
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.
The diesel fuel savings alone may save consumers approximately 1.5 cents per kWh in fuel
surcharges (based on current fuel prices and current kWh sales). The outcome of financing and
debt may diminish this savings if base rates need to be adjusted to meet interest and principal
payments. Reduced O&M costs may offset financing impacts.
As a private non-profit electric cooperative, any extended savings are ultimately deducted from the
rates or returned to member customers as capital credit equity returns.
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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:
Potential 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
Per the attached AEA calculated cost/benefit, Appendix I, and the Appendix B Reconnaissance
study, immediate base benefits will be 2,000,000 kWh and extended (spinning reserve) benefits
will be 500,000 kWh of diesel fuel offset, totaling 200,000 gallons per year at 12.5 kWh/gallon.
While the AEA 12.5kWh/gallon is less than the CEC average of 13.58 kWh/gallon, this project
would significantly increase diesel fuel efficiency, which is not accounted for in the cost/benefit
analysis or direct benefits and justifies the use of the lower base efficiency. Additional direct
benefits are reduced operating cost and infrastructure needs for the City of Cordova water system,
stored water and energy assets for community emergencies, the optimization of micro grid hydro
diesel systems and Agile project management processes for extended benefits to other
communities and projects in Alaska. For CEC rates See Appendix B—Reconnaissance Report
Tariff attachment.
5.1 Public Benefit for Projects with Private Sector Sales
Projects that include sales of power to private sector businesses (sawmills, cruise ships, mines,
etc.), please provide a brief description of the direct and indirect public benefits derived from the
project as well as the private sector benefits and complete the table below. See section 1.6 in the
Request for Applications for more information.
Renewable energy resource availability (kWh per month) N/A
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 ($)
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SECTION 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 including on-going support for any back-up or existing
systems that may be require to continue operation
Commitment to reporting the savings and benefits
CEC presently owns and operates two FERC licensed hydroelectric projects, which annually
produce between 62% and 68% of the community’s electric needs. We have a robust automation
system that aids in a rigorous predictive and preventative maintenance program. CEC has a
rigorous loss control program that focuses on safety and preventative maintenance. CEC finance
current hydropower project operations from our rate base and will continue to do so. The
development of hydropower has significantly reduced the O&M intensive diesel plant operations to
free resources toward preventative maintenance. Crater Lake Project would further contribute to
that opportunity. CEC is experienced and capable in emergency management and operational
challenges.
CEC has an excellent track record for timely and accurate reporting of project operations during
and after grant administration processes, and as part of our core business strategy to carefully
measure and manage both operational and financial performance of the system. This is supported
by experienced and dedicated staff, world-class automation and data historian, and accounting and
archiving of financial data. CEC freely communicates both successes and disappointments to
better contribute to internal and external decision making for the projects and processes we
deploy.
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.
This grant application is one part of a multi-pronged strategy to develop this project with or without
stakeholder and grant funded assistance if the progressively larger commitments to
reconnaissance, feasibility, design, and construction indicate benefit to CEC members, and the
public and State of Alaska in general. The timing of this grant opportunity required some
adjustment in the sequence of CEC work, but will neither fully enable nor prevent CEC from
following the project plan as presented. The reconnaissance report (Appendix B) is a
contemporary summary of progress to date. Sandia national labs and ACEP are presently
modeling CEC data for insight into CEC system response for optimizing the design of a hydro unit
at Crater Lake, but this work is anticipated to be complete by the July 1, 2015 eligibility window for
including it as a match to the project. CEC has self-funded the reconnaissance study, which
indicates the project has significant potential to be a high value, low-risk, multipurpose asset to
Cordova and all stakeholders including AEA. The return on diesel savings is expected to be high,
similar to the Power Creek project.
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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
There is significant community support for this project as evidenced by the attached letter of
support in Appendix J and general feedback. The primary concerns expressed to date revolve
around recreational use and trail access to the Lake, a popular hiking destination.
SECTION 9 – GRANT BUDGET
Tell us how much you are seeking in grant funds. Include any investments t o date and funding
sources, how much is being requested in grant funds, and additional investments you will make as
an applicant.
9.1 Funding sources and Financial Commitment
Provide a narrative summary regarding funding source and your financial commitment to the
project
CEC is highly committed to building this project to the extent that it can provide the benefits that
are presently anticipated. CEC is investing in an additional $50,000 - $100,000 engineering
feasibility study that will provide an engineering level independent cost/benefit analysis and clarity
on design approach. CEC feels that the project can provide direct benefits to the Renewable
Energy Grant fund by developing more renewable energy projects in Alaska that help small
organizations broach the high initial capital cost of hydro to reduce large volumes of diesel fuel use
and provide long term stability and economic prosperity to communities. The extended benefits to
AEA include demonstration of the value of Agile project development and optimized micro-grid
hybrid systems for application to other communities and projects in Alaska. Funding through the
DOE tribal energy program through the strong partnerships with the Native Village of Eyak, They
Eyak Corporation, and Chugach Alaska Corporation is a strong likelihood. Chugach Alaska has
expresses interest in financing all or a portion of the project. The City of Cordova is a strong
partner in the benefits of the project and are anticipated to be a partner in the financing and cost of
developing the project. ACEP and the national labs are particularly interested in the opportunity of
demonstrating the optimization of hybrid renewable energy micro grids.
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.
CEC has a highly automated SCADA system, and the incremental costs of adding PLCs, controls,
cameras, and communications are embedded in the $5,000,000 - $10,000,000 rough order of
magnitude cost estimate for the project. Cordova Telephone Cooperative is a strong partner with
CEC, and has extended fiber optics to CEC hydro projects and provided significant technical and
infrastructure support through their regular rate base tariff and spirit of partnership and support.
Renewable Energy Fund Round VIII
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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 and Commissioning). Please use the tables pro vided
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.
Milestone or Task
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
(List milestones based on
phase and type of project.
See Milestone list below. )
$ $ $
Reconnaissance (estimate) $ $ 100,000 $ 100,000
Note, this portion of the project $ $ $
Is nearly complete. Not all $ $ $
Invoices have cleared, and $ $ $
15% of the scope remains to $ $ $
Be completed by 12/31/2014 $ $ $
$ $ $
See Reconnaissance Report $ $ $
In Appendix for Details $ $ $
$ $ $
$ $ $
TOTALS $ $ $100,000
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ $ $
Construction Services $ $ $
Other $ $ $
TOTALS $ $ $100,000
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Milestone or Task
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
(List milestones based on
phase and type of project.
See Milestone list below. )
$ $ $
Feasibility Study NLT 7/1/15 $ 0 $ 100,000 $ 100,000
$ $ $
Note: An RFP will be issued $ $ $
In January or February of 2015 $ $ $
With a completion date of NLT $ $ $
July 1, 2015. It will serve as $ $ $
The basis for the detail in the $ $ $
Design phase. It will deliver a $ $ $
Minimum of 20% design and $ $ $
Engineering cost/benefit $ $ $
$ $ $
TOTALS $ $ $ 100,000
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ $ $ 100,000
Construction Services $ $ $
Other $ $ $
TOTALS $ $ $ 100,000
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Milestone or Task
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
(List milestones based on
phase and type of project.
See Milestone list below. )
$ $ $
Design $ 250,000 $ 125,000 125,000 $ 500,000
Modeling $ 125,000 $ 62,500 62,500 $ 250,000
Geotechnical $ 125,000 $ 62,500 62,500 $ 250,000
In-Kind Accounting,
Engineering, and PM (CEC) $ $ 100,000 $ 100,000
$ $ $
NOTE: Scope cannot be $ $ $
Clearly defined until the $ $ $
CEC feasibility study is $ $ $
Complete and provides
guidance and detail $ $ $
In no case will AEA be asked
to exceed $500,000 or 25%. $ $ $
$ $ $
TOTALS $ $ $ 1,100,000
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ $ $
Construction Services $ $ $
Other $ $ $
TOTALS $ $ $ 1,100,000
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Milestone or Task
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
(List milestones based on
phase and type of project.
See Milestone list below. )
$ $ $
Construction $ $ $ 10,000,000
Rough Order of Magnitude $ $ $
Estimate $ $ $
$ $ $
NOTE: This is a rough order of $ $ $
Magnitude estimate vetted $ $ $
Internally & with engineering $ $ $
Firms to develop a best $ $ $
Estimate of costs. The scope $ $ $
And categories will clarify with
feasibility and design work $ $ $
$ $ $
TOTALS $ $ $
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ $ $
Construction Services $ $ $
Other $ $ $
TOTALS $ $ $ 10,000,000