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GrantApplication7 chignik
Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 2 of 23 7/1/2013 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) City of Chignik Type of Entity: Second Class City Fiscal Year End: June 30 Tax ID # 92-0094970 Tax Status: For-profit Non-profit X Government ( check one) Date of last financial statement audit: Certified Financial Statement for FY12 – September 8, 2012 Mailing Address PO Box 110, Chignik, AK 99564 Physical Address Anderson Road, Chignik, AK Telephone 907-749-2280 Fax 907-749-2300 Email chignikcityclerk@gmail.com 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Richard Sharpe Title Mayor Mailing Address PO Box 110, Chignik, AK 99564 Telephone 907-749-2280 Fax 907-749-2300 Email chignikcityclerk@gmail.com 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 X 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 identified in the Standard Grant Agreement template at http://www.akenergyauthority.org/veep/Grant-Template.pdf. (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. Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 3 of 23 7/1/2013 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. Chignik Hydroelectric Project Design and Permitting 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. Chignik Bay N56d17'40", W158d24'14" 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. Chignik Bay 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind Biomass or Biofuels (excluding heat-only) X Hydro, Including Run of River Hydrokinetic Geothermal, Excluding Heat Pumps Transmission of Renewable Energy Solar Photovoltaic Storage of Renewable Other (Describe) Small Natural Gas 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Pre-Construction Construction Reconnaissance X Final Design and Permitting Feasibility and Conceptual Design Construction and Commissioning Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 4 of 23 7/1/2013 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of the proposed project. This project will complete the necessary design and permitting for the recommended hydroelectric project in Chignik Bay, AK. The existing hydro project currently only serves as the community's raw source and transmission and does not produce power for the City. The existing project is in imminent danger of failing and a replacement dam and pipeline will be required in the near future. This work will fulfill the design and permitting needs of the replacement project. 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 preliminary feasibility findings indicates that the existing hydroelectric resource in Chignik is significantly underdeveloped and potentially impacts aquatic resources in Indian Creek which is a significant salmon spawning stream. The feasibility findings recommend expanding the resource utilization while at the same time mitigating the existing aquatic impacts. The public benefits of the redevelopment include displacing nearly 100% of the Chignik's diesel electric generation with locally generated hydroelectric power and enhancing the existing pink salmon spawning habitat in Indian Creek. Additional benefits include improved water supply security, electric energy security, additional energy for electric heating (thermal security), significantly reduced diesel fuel use and handling, significantly reduced diesel engine maintenance, overall lower energy costs, and local economic expansion from the new access roads and jobs associated with the constructed project. 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 amount of funds required to proceed with the necessary design and permitting to reconstruct the hydroelectric project are anticipated to be sourced from the State of Alaska if this application is fully awarded. The City will seek alternate funding sources from the USDA and BIA while this application is being reviewed as a supplemental source of funding in the event this application is not fully funded by the state. 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 $1,375,000 Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 5 of 23 7/1/2013 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 $ 2.7.5 Other grant applications not yet approved $ 2.7.6 Total Grant Costs (sum of 2.7.1 through 2.7.4) $1,375,000 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. $ 2.7.8 Additional 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) $ 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. $ 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. The City does not have the resources to manage the work and will solicit project management services from qualified firms. The City has not selected a firm at this time. The selection of firm(s) to manage and execute the grant work will be accomplished by issuing a solicitation seeking proposals from qualified firms to perform the work. The award will be based on the qualifications of responding applicants and, to a certain extent, the ability of applicants to perform the work within the budgeted amounts awarded by the grant. 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 Grant Award Sign grant agreement 6/14 6/14 Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 6 of 23 7/1/2013 RFP Create RFP, issue RFP, select contractor 7/14 8/14 Contract Negotiations Work with AEA to negotiate contract details 8/14 9/14 Final Design and Permitting Complete final design and permitting 9/14 12/15 3.3 Project Resources Describe the personnel, contractors, accounting or bookkeeping 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. The City will follow AEA required procedures for grant compliance, solicitation and award of contracts, and grant accounting and reporting in the selection of firms, personnel, and equipment to perform the work. 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. Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 7 of 23 7/1/2013 The project management firm, not yet determined, will be in contact with AEA and provide the monthly and quarterly reports as necessary. 3.5 Project Risk Discuss potential problems and how you would address them. Permitting and availability of funding represent the biggest project risks. The City intends to identify permit issues early in the execution of work and will seek funding opportunities for the construction of the project. SECTION 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 477 kW hydroelectric project and the amount of energy available has been evaluated as part of the feasibility work the City is currently performing. The proposed project would be able to displace nearly all of the City's diesel electric generation with hydroelectric generation which is a more reliable and lower maintenance energy generation option. The resource consists of utilizing additional flows from Indian Lake for generating power at a new powerhouse location at the upper limit of salmon spawning habitat on Indian Creek. The feasibility Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 8 of 23 7/1/2013 of the project is demonstrated in the attached feasibility determination. 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. The existing electric generation plant consists of two 230 kW and one 117 kW John Deere diesel electric generators installed in 2009. The City owns an existing hydroelectric project with a nameplate capacity of 60 kW that is not producing power and is not connected to the City's distribution system. 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. Diesel generation is the sole source of electricity for the community. The construction of the hydroelectric would have a significant positive impact by enabling the diesel generators to go off- line most of the year, thus reducing the wear and tear on generators and extending their life expectancy. Also, fuel shipping and handling will reduce significantly resulting in savings to the utility. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Existing diesel electric generation is 950,000 kWh per year using 70,262 gallons of diesel fuel. The proposed hydroelectric project could generate 2,733,000 kWh per year and would displace 953,333 kWh of diesel generated energy saving 68,805 gallons of fuel annually (98% penetration). Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 9 of 23 7/1/2013 4.3 Proposed System Include information necessary to 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 description of renewable energy technology specific to project location o Hydroelectric Optimum installed capacity o 477 kW Anticipated capacity factor o 62% Anticipated annual generation o 2,733,333 kWh Anticipated barriers o Permitting, funding Basic integration concept o Hydro to provide prime power, diesel generation supplement as needed. Delivery methods o Transmission connection directly to distribution system 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. No issues - the City owns the lands required for project development. 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 discussion of potential barriers Permits required: FERC, ADF&G, USACOE, AKDNR (water, dam safety), SHPO, ADEC Timeline: 7/1/2014 - 12/31/2015 Potential barriers include impacts to resident aquatic species. Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 10 of 23 7/1/2013 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 Threatened or endangered species o None Habitat issues o Increased aquatic impacts to resident habitat, decreased impacts to anadromous. Wetlands and other protected areas o Minimal impact to wetlands, no protected areas Archaeological and historical resources o Replacement of historical infrastructure Land development constraints o None Telecommunications interference o None Aviation considerations o Eagle nest survey expected Visual, aesthetics impacts o None Identify and discuss other potential barriers o Construction funding a barrier for the City, mitigation to include future grant and other funding applications. 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. 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 Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 11 of 23 7/1/2013 Projected development cost of proposed renewable energy system Total anticipated project cost, and cost for this phase $8,875,000 Requested grant funding $1,375,000 Applicant matching funds – loans, capital contributions, in-kind Identification of other funding sources Projected capital cost of proposed renewable energy system $7,500,000 Projected development cost of proposed renewable energy system $1,375,000 The net present cost over the 50 year life of the project using the capital cost and the O&M cost is 6,666,653 as calculated from the ISER economic spreadsheet (2013_06-R7Prototype chignik.xlsm, 999-AEA tab). 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.) The O&M cost is estimated to be $75,000 per year. The annual cost would be funded by the electric utility customers. 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 The City owns the electric utility in Chignik, the sole customer for the energy from the project. Rates will be set consistent the requirements of the State of Alaska Regulatory Commission and the Alaska Energy Authority policies and grant requirements. The City and utility are not for profit and will not obtain a rate of return. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 12 of 23 7/1/2013 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. 62% capacity factor, 98% displaced diesel generation, and 99.5% availability. Unit depends on project type (e.g. windspeed, hydropower output, biomasss 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 3 generators ii. Rated capacity of generators/boilers/other 577 kW total capacity iii. Generator/boilers/other type Diesel electric iv. Age of generators/boilers/other 5 years v. Efficiency of generators/boilers/other 13 kWh/gal b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $79,840 ii. Annual O&M cost for non-labor $79,840 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] 950,000 ii. Fuel usage Diesel [gal] 70,262 Other iii. Peak Load 210 kW iv. Average Load 109 kW v. Minimum Load NA vi. Efficiency 13.52 kWh/gal vii. Future trends d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] 55,056 gals ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] 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. Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 13 of 23 7/1/2013 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] 477 kW hydro b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 933,333 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 Project Cost a) Total capital cost of new system $7,500,000 b) Development cost $1,375,000 c) Annual O&M cost of new system $75,000 d) Annual fuel cost Project Benefits a) Amount of fuel displaced for i. Electricity 68,805 ii. Heat 9,976 iii. Transportation b) Current price of displaced fuel 3.79 c) Other economic benefits d) Alaska public benefits Power Purchase/Sales Price a) Price for power purchase/sale Project Analysis Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 14 of 23 7/1/2013 a) Basic Economic Analysis Project benefit/cost ratio 1.94 (ISER worksheet) Payback (years) 21 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 discus what the expected impact would be for both pre and post PCE. The electrical rates for residential consumers using less than 500 kWh per month are not expected to change. All other classes of ratepayers will likely see a slight decrease in rates. 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 Project benefits are determined from the preliminary feasibility finding report prepared by Hatch and the ISER economic spreadsheet (2013_06-R7Prototype chignik.xlsm, 999-AEA tab). Potential annual fuel displacement (gallons and dollars) over the lifetime of the evaluated renewable energy project o Lifetime annual fuel displacement over the project lifetime is 3,950,485 gallons valued at $10,906,457. O&M savings over the lifetime of the project yields another $1,993,894 in savings. Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate) o The City does not anticipate generating any revenue from the project. Potential additional annual incentives (i.e. tax credits) o None. Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) o None. Discuss the non-economic public benefits to Alaskans over the lifetime of the project o The proposed hydroelectric project provides 5.1.1 Public Benefit for Projects with Private Sector Sales Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 15 of 23 7/1/2013 Projects that include sales of power to private sector businesses (sawmills, cruise ships, mines, etc.), please provide a brief description of the direct and indirect public benefits derived from the project as well as the private sector benefits and complete the table below. See section 1.6 in the Request for Applications for more information. Renewable energy resource availability (kWh per month) Estimated sales (kWh) Revenue for displacing diesel generation for use at privet sector businesses ($) Estimated sales (kWh) Revenue for displacing diesel generation for use by the Alaskan public ($) 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 The utility structure will remain the same with the addition of the hydro which will not cause any structural changes. Rate payers will continue to finance the O&M of the project as they currently do for the utility. Once the new project is constructed the City does not foresee any operational issues as the hydro structure is straightforward and requires minimal maintenance that can be handled by staff. Reporting the savings is quite easy and can be shown in the monthly PCE reports in the fuel consumption section. 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. The City has rapidly pursued the acquisition of the FERC license, the feasibility study, and application for additional grant funding. If awarded, the City will be ready to begin design and Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 16 of 23 7/1/2013 permitting efforts almost immediately and will pursue and aggressive schedule towards construction of this vital project. 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, 2013. Letters of support to be provided. 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. Provide a narrative summary regarding funding source and your financial commitment to the project The City is seeking $1,375,000 in grant funds. The City has invested significantly in the proposed hydroelectric project by constructing the partially completed access road to the dam. The City is committed to completing the design and permitting of this project and will continue undertaking the necessary work to proceed with construction and bring the project online as soon as possible. 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. Metering of the hydroelectric output will be done with a dedicated meter installed in the powerhouse to monitor project performance. Labor and expenses associated with the hydro operation and maintenance will have a dedicated account to allow for monitoring of costs. Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 17 of 23 7/1/2013 These measures of performance will be reported to the State as required for PCE and AEA grant funding (10 years minimum). Renewable Energy Fund Round VII Grant Application - Standard Form AEA 2014-006 Grant Application Page 18 of 23 7/1/2013 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 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 Grant 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. ) $ $ $ Design and Permitting 12/31/2015 $1,375,000 $ $1,375,000 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ TOTALS $ $ $1,375,000 Budget Categories: Direct Labor & Benefits $ $ $ Travel & Per Diem $ $ $ Equipment $ $ $ Materials & Supplies $ $ $ Contractual Services $1,375,000 $ $1,375,000 Construction Services $ $ $ Other $ $ $ TOTALS $ $ $1,375,000 CE2 - Chignik Hydroelectric Feasibility Study Preliminary Findings 20130923 preliminary findings, Rev. A Page 1 © Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents. Project Report 9/23/2013 CE2 Chignik Hydroelectric Feasibility Study Distribution Brian Aklin, CE2 Mayor Richard Sharpe, City of Chignik Preliminary Findings Table of Contents 1. Introduction ........................................................................................................................................... 2 2. Existing Data ......................................................................................................................................... 2 2.1 Existing Hydroelectric Project ....................................................................................................... 2 2.2 Existing Diesel Generation ........................................................................................................... 3 2.3 Potable Water System .................................................................................................................. 5 2.4 Hydrology ...................................................................................................................................... 5 2.5 Reservoir Modeling ....................................................................................................................... 6 3. Proposed Project .................................................................................................................................. 7 4. Economic Benefits ............................................................................................................................... 8 4.1 Project Benefit ............................................................................................................................... 8 4.2 Preliminary Project Cost Estimate and Economic Summary ...................................................... 10 5. Recommendations ............................................................................................................................. 10 CE2 - Chignik Hydroelectric Feasibility Study Preliminary Findings 20130923 preliminary findings, Rev. A Page 2 © Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents. 1. Introduction The City of Chignik has been awarded a grant from the Alaska Energy Authority (AEA) under the Renewable Energy Fund (REF) program to study the engineering and economics of restoring the antiquated existing hydropower system in Chignik for the purpose of benefitting the residents of Chignik by offsetting the cost of diesel generated electricity. Hatch has been working for the City's project manager, CE2, to perform this study and has completed the analysis of existing data, determined the optimal proposed project, and determined the operational characteristics of the proposed project along with the economic benefits. This preliminary report presents a summary of the feasibility evaluation and economic benefits to assist the City with the planning of project funding and rehabilitation work. Feasibility work continues with further development of conceptual drawings and the estimated cost for the proposed project. The final feasibility report is expected to completed by the end of this year. 2. Existing Data 2.1 Existing Hydroelectric Project Chignik Project, FERC No. 620, is a small hydroelectric project that primarily conveys raw water from Indian Lake to the community of Chignik and formerly produced about 35 kW of power for the NorQuest processing plant (now owned by Trident). The is not producing power currently and is not connected to the distribution system of the City of Chignik (the current project owner). The project consists of an aged timber frame dam at the outlet of Indian Lake (also referred to as Upper Lake) creating a reservoir with a surface area of approximately 21 acres. A wood stave and steel pipeline about 7200 ft long transports 2.7 cfs (nominal) of water to a 60 kW (nominal) turbine located in the former NorQuest processing plant for water pressure regulation and power production. The gross head for the project is around 431 feet, or 190 psi, but the maximum desired operating pressure for the interconnected piping in the community is around 100 psi. When the turbine needles are fully open there is enough frictional loss through the pipeline to maintain the desired pressure of 100 psi. The existing project is shown in Plate 1. The project is FERC licensed primarily because it occupies approximately 58 acres of lands formerly owned by the United States Bureau of Land Management. The BLM conveyed all the lands to the local native corporation (Far West Inc.) which have been subsequently transferred to the current project owner the City of Chignik (FERC License Transfer Order Issued September 6, 2012). Access to the Project is along the pipeline but an ORV trail exists that has been used by tracked vehicles to access the dam in the past. CE2 - Chignik Hydroelectric Feasibility Study Preliminary Findings 20130923 preliminary findings, Rev. A Page 3 © Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents. The existing infrastructure is in a state of failure. FERC has issued an order for the City to repair and/or replace the existing dam and pipeline which are well beyond their useful life and are in a gradual state of failure. It is the City's intention to invest in a more economical project that better utilizes the hydroelectric resource of Indian Creek while at the same time minimizing the impacts to salmon spawning habitat in the lower reaches of Indian Creek. 2.2 Existing Diesel Generation The City of Chignik has a certificate of public convenience and necessity for providing electrical generation and distribution service in the City of Chignik. The city operates under certificate 297 issued by the Regulatory Commission of Alaska (RCA) in 1983. The existing electric generation plant consists of two 230 kW and one 117 kW John Deere diesel electric generators installed in 2009. Historic demand for Chignik, comprised of the entire community except processing facilities, totalled about 55,000 kWh (75 kW average) per month. In 2010, Chignik Electric began providing power for Trident's fish processing support operations. This arrangement is expected to continue in the future. The timing of fish processing activities, and processing support operations, occurs in late May and continue until September 1st which coincides with the peak runoff times from Indian Creek. This base load demand is expected to continue indefinitely. The available diesel generation data for the City of Chignik was obtained from Power Cost Equalization (PCE) reports. The reports provide monthly totalized generation in kWh. The PCE data is shown in the table and figure below. Table 1 - Table of Monthly City of Chignik Diesel Generated Energy Month Year 2006 2007 2008 2009 2010 2011 2012 1 51,170 46,530 65,481 63,263 76,656 2 49,665 47,820 56,574 62,099 59,633 3 55,083 43,950 52,545 52,133 62,342 4 44,520 41,280 56,571 58,615 60,552 5 42,660 50,310 77,971 90,978 108,886 6 54,540 46,470 121,755 119,722 139,332 7 52,230 43,770 67,004 126,236 112,051 111,768 8 55,083 45,510 62,073 107,200 106,321 112,570 9 48,690 43,560 78,142 79,817 78,478 88,521 10 44,247 39,450 54,342 51,495 46,001 51,771 11 56,287 42,540 54,441 61,703 53,679 61,708 12 47,257 36,420 59,203 61,074 57,991 55,583 Total 303,794 548,888 276,360 375,205 918,422 901,331 989,322 A Power Energy Logger was installed at the Chignik Bay diesel generation plant for the purpose of improving the resolution of current demand from monthly to 15 minute intervals. The meter was installed and began recording data on March 29, 2013 at 15:45; the initial data collection period ended on June 19 at 13:30 when the logger was stopped to perform a download of the saved data. The data is recorded in 15 minute intervals and saved to an SD CE2 - Chignik Hydroelectric Feasibility Study Preliminary Findings 20130923 preliminary findings, Rev. A Page 4 © Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents. card in the logger. The recorded data can be seen in the plot below along with the calculated daily average load. Figure 1 - Chignik 15 Minute Demand Meter Graph The measured data was used in conjunction with the PCE data from 2010–2012 to create a synthesized one year set of demand data at Chignik Bay. The plot below shows the full year of measured and synthesized data; both 15 min and daily average data are shown. The total monthly demand is also shown for the average of the past three years obtained from PCE. CE2 - Chignik Hydroelectric Feasibility Study Preliminary Findings 20130923 preliminary findings, Rev. A Page 5 © Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents. Figure 2 - Synthesized Annual Demand for Chignik 2.3 Potable Water System Power generation from the hydroelectric project is a secondary use of the dam and pipeline. The primary use has been the supply of fresh water for potable use and fish processing operations. The City of Chignik is the certificated water utility and supplies potable water primarily from withdrawal of pressurized raw water from the supply pipeline. City of Chignik domestic water rights are 19.8 acre-ft per year (0.03 cfs). It has been reported by the City that domestic water use rises significantly during very cold periods to prevent freezing of lines. 2.4 Hydrology As part of the monitoring requirements for FERC, monitoring of pipeline flows and gauging of stream flows at the dam, pool, and bridge sites in Indian Creek has been required. Analysis of past stream flow monitoring efforts are found in numerous FERC monitoring reports available through the e-library for project P-620. Flow monitoring began in April of 2003 but results over the years have been sporadic because of equipment failures, limited site accessibility, and the general remoteness and harsh conditions at the site. Summarized data collected from the existing dam spillway is shown in the table below. 0 50 100 150 200 250 1/1 1/31 3/2 4/2 5/2 6/2 7/2 8/1 9/1 10/1 11/1 12/1Demand (kW)Date Synthetic Hourly Average Demand (kW) PEL Hourly Average Demand (kW) Average Monthly PCE Demand (kW) CE2 - Chignik Hydroelectric Feasibility Study Preliminary Findings 20130923 preliminary findings, Rev. A Page 6 © Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents. Table 2 - Indian Creek Dam Site Monthly Spill Flows. Month 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Median Average 1 9.2 26.5 22.4 93.4 1.0 22.4 30.5 2 11.1 12.9 9.4 3.2 2.7 9.4 7.9 3 7.0 10.6 14.0 1.1 0.0 7.0 6.6 4 7.7 22.9 33.1 0.4 0.9 7.7 13.0 5 38.6 45.1 61.1 54.6 31.8 45.1 46.3 6 55.0 97.0 89.9 81.5 85.7 80.9 7 49.0 70.4 54.5 70.4 62.5 61.1 8 51.3 49.9 57.7 51.3 53.0 9 171.1 17.5 54.6 11.6 26.8 26.8 56.3 10 83.3 11.5 22.9 59.2 11.6 23.9 23.4 35.4 11 22.1 15.9 11.9 5.0 11.0 8.3 11.5 12.4 12 19.8 22.1 56.4 134.5 6.1 21.7 21.9 43.4 The median daily flow data from the dam site for the calendar years 2009, 2010, and 2012 (with interpolated data added) is used for the analysis and is shown in the figure below. Figure 3 - Indian Creek Annual Hydrograph (at dam) used for analysis 2.5 Reservoir Modeling A bathymetric surface for the bottom of the existing reservoir has been estimated using digitized contours from Plate 6 of the 1983 Corps Report, the existing lake outline digitized from aerial photography (GeoEye-1, 2010) presumed to be at the existing spillway crest elevation of 440', the 500' contour from the USGS 63k elevation map, manual adjustments using photographs, and a presumed historic stream channel running at a constant slope from the base of the dam to the end of the lake and thence a constant slope to the 500' contour. 0 10 20 30 40 50 60 70 80 90 100 1/1 1/31 3/2 4/2 5/2 6/2 7/2 8/1 9/1 10/1 11/1 12/1Stream Flow (cfs)Date CE2 - Chignik Hydroelectric Feasibility Study Preliminary Findings 20130923 preliminary findings, Rev. A Page 7 © Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents. The resulting estimated water surface areas and volumes are shown in the table below. Table 3 - Indian Lake Reservoir Areas and Storage Volumes Indian Lake Reservoir Elevation (ft) Area (acres) Reservoir Volume (acre-ft) 430 2.9 3 435 7.4 28 440 19.5 89 445 24.2 204 450 26.7 331 455 29.5 472 460 32.6 627 465 36.0 798 470 40.3 988 3. Proposed Project The proposed project includes a new rock fill dam just downstream of the existing wood dam. An analysis of the volume of material required to construct the new dam was done using the topographic data generated as part of the reservoir volume analysis. Upstream and downstream slopes of 2:1 were used for the analysis. The table below shows the top of dam elevation, spillway elevation, and net volume of fill required. Table 4 - Replacement Dam Fill Volumes Dam Elevation Reservoir Elevation Dam Volume (cyd) 445 440 1,500 450 445 3,500 455 450 6,200 460 455 10,200 465 460 18,000 470 465 28,533 A dam size based on a reservoir elevation of 450' (dam elevation 455') has been found to provide the optimal size for storage to meet the existing demand. The preliminary pipeline selection for the proposed project consists of 24" diameter HDPE and steel. HDPE pipe would be used for first 6,880' from down from the dam and steel pipe would be required for the remaining 360' to the powerhouse giving a total penstock length of approximately 7,240' with a total material weight of 232,000 lbs. A preliminary project hydraulic capacity of 20 cfs is selected resulting in total frictional head loss of approximately 45'. The proposed powerhouse location differs significantly from the existing location. A site at the upper limit of salmon spawning habitat on Indian Creek was chosen to allow for tail water to return to the creek instead of being completely diverted as is the case with the existing powerhouse location. The new location is at elevation of approximately 70' versus the CE2 - Chignik Hydroelectric Feasibility Study Preliminary Findings 20130923 preliminary findings, Rev. A Page 8 © Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents. existing powerhouse elevation of approximately 20'. Total static head for the proposed project is 380' with the dynamic head equal to 335' at full capacity (12% frictional head loss). The recommended arrangement for the hydroelectric equipment consists of two twin nozzle horizontal Pelton turbines as supplied by Canyon Hydro (or similar). Additional equipment includes two 12” ball type turbine inlet valves with dismantling joint, two 230kW 480VAC 1800 rpm synchronous generators, two gear drive speed increasers with couplings, two hydraulic power units, and one set of controls and switch gear to provide islanded operation. Transmission length to the distribution system is approximately 2,000'. The expected output of the system as described, under design conditions is approximately 477 kW with an annual energy potential of 2,600,000 kWh (62% capacity factor). Plate 2 attached with this report shows the proposed project configuration. 4. Economic Benefits 4.1 Project Benefit The displaced diesel generation based on the following daily hydrology data sets is shown in the table below. Table 5 - Proposed Project Operational Summary Hydrology Data (Year) for Analysis Hydro Potential Energy Generation, kWh Existing Electrical Demand, kWh Displaced Diesel Energy, kWh Displaced Diesel Fuel Savings, gallons 2009 3,400,000 950,000 950,000 70,262 2010 2,300,000 950,000 940,000 68,954 2012 2,500,000 950,000 910,000 67,199 Average 2,733,333 950,000 933,333 68,805 The daily operational chart showing the natural and modified flows in Indian Creek along with the reservoir elevation based on the 2012 hydrology year is shown in the chart below if it is assumed that the project operates at full capacity whenever there is spill and at the capacity required to meet the existing electrical when there is no spill. CE2 - Chignik Hydroelectric Feasibility Study Preliminary Findings 20130923 preliminary findings, Rev. A Page 9 © Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents. Figure 4 - Daily Hydrologic Operational Chart Based on 2012 Hydrology Figure 5 - Daily Project Power Operational Chart Based on 2012 Hydrology 430 435 440 445 450 455 460 0 5 10 15 20 25 30 35 40 45 50 1/1 2/1 3/1 4/1 5/1 6/1 7/1 8/1 9/1 10/1 11/1 12/1 Reservoir Elevation, ftFlow, cfsDate Proposed Flow (Spill) at Dam, cfs Proposed Flow at Powerhouse (Project Flow), cfs Indian Creek Natural Flow at Dam, cfs Reservoir Height, ft 420 425 430 435 440 445 450 455 0 20 40 60 80 100 120 140 160 180 200 1/11/151/292/122/263/123/264/94/235/75/216/46/187/27/167/308/138/279/109/2410/810/2211/511/1912/312/1712/31Reservoir Elevation, ftPower, kWDate Hydropower Diesel Generation Total Demand Reservoir Level CE2 - Chignik Hydroelectric Feasibility Study Preliminary Findings 20130923 preliminary findings, Rev. A Page 10 © Hatch 2013 All rights reserved, including all rights relating to the use of this document or its contents. 4.2 Preliminary Project Cost Estimate and Economic Summary An estimated project capital of $15,750 per kW is presumed at this stage pending the completion of the conceptual design cost estimate. The resulting capital cost for the 477 kW is $7,500,000 with an estimated O&M cost of 1% annually or $75,000. The proposed development cost which includes the project design and permitting is $1,375,000. The design and permitting is expected to begin in 2014 and be completed by the end of 2015. The start of construction would be in 2016 and the project online date is expected to be in 2017. The following table summarizes the benefits and costs of the proposed project using the average hydrology, the ISER Medium fuel price projection for Chignik, a 3% discount rate, and a 50 year project life. Table 6 - Proposed Project Economic Summary Total Demand 950000 kWh Total Fuel Use 70,262 gals Displaced Demand 933,333 kWh Displaced Fuel 68,805 gal Project Capital Cost $7,500,000 Project Development Cost $1,375,000 Total Project Cost $8,875,000 Discount Rate 3.0% Term 50 years NPV Fuel Cost Savings $0 NPV Diesel O&M Savings $0 NPV Benefits $11,760,042 NPV Hydro Capital + O&M Costs $11,515,553 Benefit to Cost Ratio 1.02 5. Recommendations Apply for design and permitting funding from the State of Alaska Renewable Energy Grant fund. Daniel Hertrich DH: Attachment(s)/Enclosure Plate 1 - Existing Project Summary and Maps Plate 2 - Proposed Project Site Map PK PKPK PK PK PK PK PK PK P K P K P K PKPKPKPKP K RWRWRWRWRWRWRWRWRWRWRWRWRWRWRWRWRWRWPK PK PKPKPKPKPKPKPKP K PKPKPKPKPKPKPKPKPKPKPK PK PKPKPKPKPKPKPKP K PKPKPKPKPKPKPKPKPKPKEEE