HomeMy WebLinkAboutAEA REF Round VII Grant-THREA Walker Lake Hydro Feasibility 9-23-13Renewable Energy Fund Round VII
Grant Application -Standard Form I
SECTION 1 -APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
T lingit-Haida Regional Electrical Authority (T HREA)
Type of Entity:
Non-profit political subdivision of the State of Alaska
Mailing Address Physical Address
P.O. Box 210149, Juneau, Alaska, 99821 Auke Bay, Alaska
Telephone Fax Email
907-789-3196 907-790-8517 jmitchell@alaska .com
1.1 APPLICANT POINT OF CONTACT
Name Title
Jodi Mitchell IPEC CEO/ General Manager
Peter Bibb IPEC Operations Manager
Mailing Address
PO Box 210149, Auke Bay, AK 99821
Telephone Fax Email
907-789-3196 Ext. 907-790-8517 jmitchell@alaska.com
24 pbibb@ak.net
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)
X 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);
Yes 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 Yes or No in the box )
Yes 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).
Yes 1.2.4 If awarded the grant, we can comply with all terms and conditions of the award as
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Grant Application-Standard Form
identified in the Standard
I
Grant Agreement temp late at
htt12 ://www .a kenergyauthoritv. org/vee12/Grant-T em12late .12df. (Any exceptions
should be clearly noted and submitted with the application .)
Yes 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.
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~ to 1. word title for your project). Type in space below.
Walker Lake Hydro Project Feasibility
2.2 Project Location -
Include the physical location of y our project and n ame( s) of the c o mmunity or c ommunities that will
b e nefit from your p r oject in the subsections below.
27 miles northeast of Haines, Alaska.
Drive to 25.5 Mile Haines Highway, Klehini River Bridge turnoff, follow the Porcup ine Road
approximately 4-Miles.
USGS maps containing the Project area are shown on both Skagway B-3 and B-4 located in the
Copper River Meridian
Due West of Klukwan, Alaska . The Project is within IPEC 's electric service area.
2.2.1 Location of Project -Latitude and longitude, street address, or community name.
La titude and longitude coordinates may be obtained from Google Ma p s by finding you project's loca tio n on th e map
a nd then righ t clicking with the mouse and s electing "Wh at is here ? The coordin at es will be displayed in th e Googl e
search window above t he map in a format as follows: 61 . 195676.-149. 898663. If you wo uld like assista nce obtaining
this inform ation plea se contact AEA at 907-771 -3031.
59 .395144 Latitude , and -136.144681 Longitude
Due West of Klukwan , Alaska
2 .2 .2 Community benefit ing -Name(s) of the community or communities that will be the
beneficiaries of the project.
Klukwan, Alaska and the Chilkat Valley (10 to 41 Mile Haines Highway)
Uppe r Lynn Canal , including Haines and Skagway, Alaska
2.3 PROJECT TYPE
Put X in box es as appropriate
2.3.1 Renewable Resource Type
W ind Biomass or Biofuels (excluding heat-only)
X Hydro, Including Run of River Hydrokinetic
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Grant Application -Standard Form I
Geothermal, Excluding Heat Pumps Transmission of Renewable Energy
Solar Photovoltaic Storage of Renewable
Other (Describe) Small Natural Gas
2.3.2 Proposed Grant Funded Phase(s} for this Request (Check all that apply)
Pre-Construction Construction
X Reconnaissance Final Design and Permitting
X Feasibility and Conceptual Design Construction and Commissioning
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of the proposed project.
THREA proposes to conduct a Feasibility Study and Conceptual Design in an effort to further
prove the Walker Lake Hydro Project and apply for a FERC license . The Project is expected to
have a 1 megawatt power output, generating 3,615 MWH of energy, using an estimated 780
feet of head and 18 cfs of flow year-round using Walker Lake as a reservoir. Two small earthen
dams will raise the lake elevation from 1,180 ft to 1,195 ft, increasing the reservoir storage
capacity to allow for year-round power production. A penstock will run from two small dam
locations and join together to supply an 11,000 ft long buried penstock that terminates at the
powerhouse next to Little Salmon River. THREA proposes to work with IPEC to provide the
lowest cost power from the project to benefit of IPEC's members in the Chilkat Valley and
Klukwan service areas and the Upper Lynn Canal (ULC) grid .
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.)
Overall Project Benefit: The Upper Lynn Canal (ULC) electrical service area is endeavoring to
develop the next hydro project to maintain and enhance its renewable energy portfolio. This is
confirmed by several Upper Lynn Canal hydro projects currently in the reconnaissance and
feasibility phases . Why not consider another contender? Especially considering the recent
surrendering of the Connelly Lake project. Furthermore , during Fiscal Year 2013 AP& T
(Haines/Skagway) generated 1 ,510,980 Kwh of energy using diesel [PCE Data FY2013]. For
Haines , Chilkat Valley, and Klukwan to sustain their community status and welcome new retail
and supporting residential loads, access to affordable, secure supplies of energy is necessary.
THREA currently holds a FERC Preliminary Permit (P-13324) for Walker Lake Hydro . It will
take 5-years to develop this Project and the Project will have a 30-50 year life .
Financial Benefits: THREA, along with IPEC, plans to develop the Walker Lake hydro project
to ensure there are hydro resources available for future needs and displace the increasing
amount of diesel generated electricity.
As IPEC and AP&T's loads grow within the connected grid, which includes the towns of Haines
and Skagway, IPEC 's share of diesel-generated electricity will continue to grow until another
project is brought online . Between 2010 and 2011, IPEC's kWh purchases from AP&T
increased from 722 ,868 kWh to 759 ,960 kWh. During that period , IPEC's share of diesel
generated kWh grew from 1% to 2.7% of the total purchased. During that same period, the cost
of the diesel-generated electricity rose from $.1956 to $.3357 per kWh, and that doesn't
include AP&T's charges for its facilities , customer or line loss charges. Moreover, AP&T is now
offsetting some of its power needs with IPEC 's hydro power from the 10 Mile project (owned by
IPEC).
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Grant Application -Standard Form
Public Benefits:
I
THREAIIPEC has three public benefit objectives with the Walker Lake Hydro Project:
1. Provide additional hydro for Chilkat Valley/Kiukwan and Upper Lynn Canal Grid .
2 . Reduce amount power/energy generated by diesel.
3 . Assure the least-cost and reliable energy source to its members .
Provide additional hydro for the grid: From Round-6 REF AEA review comments and
recommendations :
''The demand for the Project power will be a fraction of the potential annual energy
available from Walker Lake ... "
Currently this is a true statement. However, the projections for power/energy sh ow an in c rease
and this Project will help meet both power and energy growth .
The existing hydro resources of the Upper Lynn Cana l are meeting the cu rrent energy needs a
majority of the time . However, consider the load growth scenarios identified in the SE IRP for
escalation related to economic growth and development [Table 8-6 & 8-7], current hydro
resources will not meet the projections.
Combined hydro resources in the Upper Lynn Canal output in FY201 3 produced 28,544,429
Kwh [PCE Date FY2013]. Walker Lake Hydro will add an add itional 3,615,000 Kwh to the
renewable energy mix. 32 ,159,429 Kwh total energy output 5-years from now when
construction is complete and the Project is producing.
Community Year
FY201 2 FY2013
Chilkat 1,099 957
Valley/Kiukwan
Haines/Skagway 27,285 27,587
Total 28,384 28,544
Table-1 Upper Lynn Canal (ULC) Hydro Production (MWh)
Community Year
2014 2044 2055
Chilkat Valley 1,267 1,483 1,516
Klukwan 382 409 413
Haines/Skagway 30,505 35 ,299 36,482
Total 32,154 37,191 38,411
Table-2 Southeast AK Integrated Resource Plan Reference Case Annual Energy (MWh)
Community Year
2014 2044 20 55
Chilkat Valley 1,3 93 2 ,151 2,568
Klukwan 410 588 688
Haines/Skagway 32,839 49,628 57,605
Total 34,642 52,367 60 ,861
T able-3 Southeast Alaska Integrated Resource Pl an High Case Annual Ener gy (MWh)
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THREA currently holds a FERC Preliminary Permit for the Walker Lake Hydro Project (P-
14424). The Southeast Integrated Resource Plan (SE IRP) lists Walker Lake Hydro as a
"Refined Screened Potential Hydro Project [10-12]. Not only doSE IRP and THREA believe
this Project is good, a private developer in Haines filed to develop Walker Lake. From Round-6
REF AEA review comments and recommendations :
''There is no updated reconnaissance report available to ascertain if the project can be
economically justified. "
Currently this is a true statement. This Grant request will answer the question. There is an
intense interest in determining if this project is economical for the region. Based on the recent
publishing of a SOA Department of F&G Habitat field studies, past studies (APA 19881 and
Sealaska 2005), THREA's current investment of time and resources , and the dedicated interest
of a private developer makes this project look promising .
The Walker Lake Hydro Project is a solution for future hydro in the Haines and seasonal hydro
in the Chilkat Valley/Kiukwan area. The 2011 SE IRP , stated that
"project economics will favor the development of small hydroelectric projects located
near the communities that have favorable characteristics or that are able to access
transmission lines cost effectively to allow the transmission of hydroelectric power." [16-
15]
Walker Lake Hydro is located 4-miles from existing grid distribution that ties to Chilkat Valley,
Klukwan, Haines and Skagway.
This Project does not require undersea cables to deliver power to where it is needed.
If not for the intertie from Skagway to Haines, Haines would depend on diesel generation. For
this reason , AP& T decided to examine hydro resources closer to Haines. AP& T's Connelly
Lake Hydro Project received a FERC Preliminary Permit in March 2012 and recently
surrendered the Permit. Walker Lake Hydro could be the next best hydro project.
Reduce amount power/energy generated by diesel: From Round-6 REF AEA review
comments and recommendations:
"This Project would displace very little diesel generation. 97% of the power purchased
from APC (the load Walker would satisfy) is generated from the Lutak, Kasiday, Dewey,
and Goat Lake hydropower projects."
Currently this is a true statement. However, this is a "here-and-now" scenario. Both AP& T and
THREA/IPEC are forward thinking energy providers. The energy landscape in the Upper Lynn
Canal is dynamic and ever changing. Consider the diesel requirements from FY2012 and
FY2013.
1 AEA 1988 reconnaissance assessment ranked Walker Lake as marginal/poor. However, at that tim e there was no
electric grid. Its target market was 20 miles away, Haines & Klukwan. Furthermore, diese l generation at that time
was highly competitive with hydro, given that fuel prices were le ss than $1.00 per gallon. A lot ha s changed .
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Grant Application -Standard Form
Community
FY2012
f
FY2013
(July 2011 -July 2012) (July 2012-July 2013)
Chilkat Valley/Kiukwan 0 0
Haines/Skagway 248,661 1,276,020
413% Change
Tabl e-3 Annual D1esel Energy Generated (KWh)
Having the capacity to handle a sudden loss of hydropower is considered a priority. The
undersea cable supplying Haines and Chilkat Valley/Kiukwan is limited, Haines energy use
continues to increase; hydro operations encounter disruptions , run-of-the-river operations at 10-
Mile , Lutak and Kasidaya shut down in the winter; winter diesel operation in Haines will
increase; new development will strain the existing resources . Walker Lake will help meet the
future energy needs of the Upper Lynn Canal grid (ULC).
Skagway and Haines (Upper Lynn Canal) saw a 413% increase in diesel generation between
FY2012 and FY2013. This indicates the area experienced a hydro shortage, exceeding the
available hydropower supply , validating that additional supply is needed. Renewable hydro
power is clearly becoming a economical barrier to the Upper Lynn Canal's sustainability and
growth.
Power generation using diesel generators is not desirable in Haines & Skagway, partly due to
the location of the diesel plants located in the center of town and due to the volatile cost of
diesel fuel. Due to growing loads and limited hydro capacity, AP&T is selling to IPEC an
increasing amount of diesel generated power at a current wholesale diesel rate of $.3357 per
Kwh. THREA plans to design Walker Lake Hydro to maximize winter output, thereby offsetting
diesel generation by AP&T and increasing the availability of winter hydro for IPEC's members ,
freeing up the capacity dedicated by AP& T to meet IPEC 's load .
Assure the least-cost and reliable energy source to its members: The Southeast
Integrated Resource Plan (SE IRP), stated that
"Since the delivered cost of fuel oil is largely driven by volatile crude prices, the cost of
home heating utilizing fuel oil or even electricity produced by diesel generating units will
likely remain volatile and costly based on historical price fluctuations. This means that a
long-term stabilization plan for Southeast Alaska communities must focus on more cost-
effective and stable options ... " [16-17].
IPEC buys approximately 44% of its energy from AP&T, and generates 56 % from its hydro plant
at 1 0 mile Haines Highway. I PEC seeks to displace the power it purchases from AP& T with a
lower cost alternative. The average wholesale price paid in 2011 was $.1273, up from $.1247 in
2010 due to increasing diesel-generation and price from AP&T. IPEC's non-energy costs,
which include debt service, administrative & general expenses , labor, regulatory compliance ,
and billing , increase its retail residential rate to $.63 per kWh . IPEC plans to buy power from
THREA's Walker Lake Project for less than the current wholesale . THREA is basing the
Project's wholesale energy costs on current costs to develop the Gartina Falls Hydro Project in
Hoonah, Alaska. In similar fashion, THREA is pursuing 100% grant funding for this Project once
a successful feasibility, conceptual design , and FERC licensing is complete.
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Grant Application -Standard Form
2.6 PROJECT BUDGET OVERVIEW
I
Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source
of other contributions to the project.
THREA proposes to implement Project Milestones I (Reconnaissance) & II (Feasibility).
REF VII Grant
Recon naissance ............................................. $300 ,000
Feasibility Conceptual Design ............................. $525,000
Total Project Cost. ............................................ $825,000
Matching Funds
Less THREA Cash Match ....................... ($125.000)
Grant Application Amount. ............. $700,000
Reconnaissance will include the following:
• Data collection and review
• Site visit
• Installation of stream gages and development of long-term flow projections
necessary to esti mate the amount of energy available.
• Preliminary geotechnical investigations
• An assessment of fisheries, wild l ife, wetlands , endangered species and cultural
resources within the Project area.
Feasibility & Conceptual Design will include the following:
• Development of pre liminary engineering designs necessary to establish technical
feasibility and develop cost estimates.
• Base mapping and further geotechnical investigation
• Create long term synthetic flow record
• Develop Project energy model
• Conceptual design and comp lete economic analysis
2.7 COST AND BENEFIT SUMARY
Include a summary of grant request and your project's total costs and benefits below.
Grant Costs
(Summary of funds requested)
2.7.1 Grant Funds Requested in this application $ 700,000
2.7.2 Cash match to be provided $
2.7 .3 In-kind match to be provided $ 125,000
2.7.4 Other grant funds to be provided $
2.7.5 Other grant applications not yet approved $
2.7.6 Total Grant Costs (sum of 2.7.1 through 2.7.4) $ 825,000
Project Costs & Benefits
(Summary of total project costs in cluding work to date and future cost estimates to get to a fully
operational project)
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