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Home My WebLink AboutGrantApplication6_CarloCreekRecon(NO RESUMES) GRANT APPLICATION – FOR – CARLO CREEK HYDROELECTRIC PROJECT RECONNAISSANCE STUDY SEPTEMBER 2012 – SUBMITTED TO – ALASKA ENERGY AUTHORITY RENEWABLE ENERGY GRANT PROGRAM – ROUND VI RFA #AEA-13-006 – SUBMITTED BY – NATIVE VILLAGE OF CANTWELL P.O. BOX 94 CANTWELL, AK 99729 Renewable Energy Fund Round 6 Grant Application AEA 13-006 Application Page 1 of 21 7/3/2011 Application Forms and Instructions This instruction page and the following grant application constitutes the Grant Application Form for Round 6 of the Renewable Energy Fund. An electronic version of the Request for Applications (RFA) and this form are available online at: http://www.akenergyauthority.org/RE_Fund-6.html  If you need technical assistance filling out this application, please contact Shawn Calfa, the Alaska Energy Authority Grant 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 satisfied 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. 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 3 AAC 107.630 (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. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 2 of 21 7/3//2012 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) NATIVE VILLAGE OF CANTWELL Type of Entity: LOCAL GOVERNMENT (TRIBAL GOVERNMENT) Fiscal Year End SEPTEMBER 30 Tax ID # 92-0046670 Tax Status: For-profit or X non-profit ( check one) Mailing Address P.O. BOX 94 CANTWELL, AK 99729 Physical Address 133.4 DENALI HWY CANTWELL, AK 99729 Telephone 907-768-2591 Fax 907-768-1111 Email HALLVC@MTAONLINE.NET 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name VERONICA NICHOLAS Title PRESIDENT, NATIVE VILLAGE OF CANTWELL Mailing Address P.O. BOX 94 CANTWELL, AK 99729 Telephone 907-768-2591 Fax 907-768-1111 Email HALLVC@MTAONLINE.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) 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 X A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2 Attached to this application is formal approval and endorsement for its project by its 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. Yes 1.2.4 If awarded the grant, we can comply with all terms and conditions of the attached grant form. (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 6 Grant Application AEA13-006 Grant Application Page 3 of 21 7/3//2012 SECTION 2 – PROJECT SUMMARY This is intended to be no more than a 1-2 page overview of your project. 2.1 Project Title – (Provide a 4 to 5 word title for your project) CARLO CREEK HYDROELECTRIC PROJECT RECONNAISSANCE STUDY 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. The project is located on Carlo Creek approximately 10 miles north of Cantwell (approximately MP 219 Parks Hwy). This project is located at approximately 63.57d N, 148.81d W. 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. Communities that will benefit from this project include those communities on the railbelt energy grid - primarily those served by GVEA from Cantwell north. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind Biomass or Biofuels X Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Pre-Construction Construction X Reconnaissance Design and Permitting Feasibility Construction and Commissioning Conceptual Design Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 4 of 21 7/3//2012 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. Cantwell is currently served by GVEA via the power transmission line between MEA and GVEA (Alaska Intertie System). The Native Village of Cantwell wishes to improve the reliability and lower the cost of the community of Cantwell’s power system. To accomplish this we propose to study a run-of-river hydroelectric project on Carlo Creek, approximately 10 miles north of Cantwell along the Parks Highway. 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, etc.) Study of a run-of-river hydroelectric plant is proposed at Carlo Creek. This plant will supply renewable energy into the Alaska Intertie System that runs between Fairbanks and Anchorage. Increasing the supply of renewable energy on the railbelt grid will help to stabilize and lower rates in Fairbanks, which fluctuate with the price of oil on world markets. Increased renewable energy will also reduce dependence on Cook Inlet natural gas, which is increasingly in short supply and more costly than in past decades. This plant will also provide partial local backup generation capability for The Native Village of Cantwell, the Community of Cantwell, Carlo Creek, and McKinley Village. Currently, these communities are served directly from the Alaska Intertie System, and have no local utility generation or backup power supply. In the past, damage to the transmission line from an avalanche caused a two day outage in the dead of the winter; temperatures without wind chill can be –50 F in this area. High winds are constant in the Cantwell area so the wind chill is an important factor. These transmission failures can last for several days or weeks in the worst case, and pose a grave hazard to the local people and infrastructure. In previous years, Cantwell has also experienced outages due to lightening strikes. If lightening damages insulators or other infrastructure, these outages can last a day or more. 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 estimated cost of the reconnaissance study is $70,000. The Native Village of Cantwell requests $66,500 in grant funds and is providing $3,500 in matching funds from its own resources for the study. The Native Village of Cantwell will also provide in-kind labor and equipment support for the project. We have done this on the on-going reconnaissance study at Jack River by helping out with the stream gauge and field work where appropriate. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 5 of 21 7/3//2012 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. $66,500 2.7.2 Cash match to be provided $0 2.7.3 In-kind match to be provided $ 3,500 2.7.4 Other grant applications not yet approved $0 2.7.5 Total Grant Costs (sum of 2.7.1 through 2.7.3) $70,000 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.6 Total Project Cost (Summary from Cost Worksheet including estimates through construction) $7,500,000 2.7.7 Estimated Direct Financial Benefit (Savings) $18,800,000 2.7.8 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 your application (Section 5.) No quantifiable financial benefits, see narrative. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 6 of 21 7/3//2012 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). 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. Mr. Gordon Carlson of Cantwell will be the project manager for the reconnaissance study. He has been successfully managing the reconnaissance study that is currently being concluded at Jack River. The Native Village of Cantwell has been working with Polarconsult Alaska, Inc. for several years to advance a hydro project at Jack River, and contracted with Polarconsult for the current reconnaissance study for Jack River. If funding is secured to do a reconnaissance study for the Carlo Creek Hydro project, the village intends to hire Polarconsult Alaska, Inc. to perform this study. Qualifications of Polarconsult personnel to be assigned to this project are attached to this proposal. 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 1. Project Management, Scoping and Contractor Solicitation Sign Grant Agreement July 2013 Sept. 2013 2. Resource Identification and Analysis Sign Contract Sept. 2013 Aug. 2014 3. Land Use, Permitting and Environmental Analysis Apr. 2014 Jun. 2014 4. Preliminary Design Analysis and Cost Estimate Jul. 2013 Oct. 2014 5. Cost of Energy and Market Analysis Aug. 2013 Oct. 2014 6. Economic Analysis Sept. 2014 Nov. 2014 7. Draft Final Report Oct. 2014 Nov. 2014 8. Final Report Nov. 2014 Dec.2014 Schedule is based on timely signing of grant agreement. Tasks are based on months from grant agreement signing. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 7 of 21 7/3//2012 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. To accomplish this project the Native Village of Cantwell will be using all of its resources. The village administrator has already spent many years to secure funding to do a reconnaissance study for a nearby hydropower resource (Jack River). The village has also used and will continue to use its office, computer, telephone, fax and other office equipment until this project is accomplished. Village members have and will continue to volunteer their time and experience (experience as an electrician, owner of a construction company, etc...) until this project is completed. The Native Village of Cantwell has worked successfully with Polarconsult Alaska, Inc. for several years in efforts to study Jack River’s hydropower potential, including hiring Polarconsult to perform the reconnaissance study that is currently under way. The Native Village of Cantwell intends to hire Polarconsult to perform the reconnaissance study of Carlo Creek. 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. The Village Administrator, Mr. Arnel Hernandez, will be the liaison between the village, Polarconsult, and the Alaska Energy Authority for the duration of this project. The village will be submitting quarterly reports to the Alaska Energy Authority until this project is completed. Mr. Hernandez has successfully served in this capacity for the on-going hydro reconnaissance study of Jack River. 3.5 Project Risk Discuss potential problems and how you would address them. This creek was identified as a favorable resource for Cantwell in the Regional Inventory and Reconnaissance Study of Small Hydropower Projects completed for the U.S. Army Corps of Engineers in 1982. To our knowledge, it has not been investigated since that study. There is limited risk associated with the project at the current level of study. In the event the studies conclude the project does not warrant further study, the village will not pursue the project and there is no risk. Various problems may be encountered in the course of studies and field work for the project. Such problems will be addressed by hiring qualified and experienced individuals to perform these studies and work. Such individuals are capable of recognizing problems early on and properly handling them when they do occur. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 8 of 21 7/3//2012 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. Carlo Creek drains approximately 12 square miles of the Alaska Range north of Cantwell (See map in Attachment E). The proposed project would divert an estimated 50 cfs from Carlo Creek at an elevation of approximately 2,700 feet, divert it through an approximately 6,000 to 10,000 foot long penstock to a powerhouse near the Parks Highway at an elevation of 2,000 to 2,200 feet. Estimated installed capacity is 1.5 MW, and annual energy generation is estimated at 5,256,000 kWh per year. These estimates are based on review of regional hydrology and USGS maps. 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. GVEA currently serves the village of Cantwell and the surrounding area (Carlo Creek and McKinley Village) via a three-phase distribution system. Power is provided through a tap off the MEA-GVEA intertie (Alaska Intertie System). Cantwell and the surrounding area has no local electrical generation capability. When floods, lightening, wind, or avalanches cause an outage on the Intertie, Cantwell cannot be served until the intertie is restored. The combined load in Cantwell and surrounding areas is approximately 500 to 1,000 kW during the summer months and 250 to 600 kW in the winter months. 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. Cantwell and surrounding areas receive electricity from the Alaska Intertie System. This electricity is generated from several energy sources, including coal, naptha, fuel oil, natural gas and hydropower. This project will provide more renewable hydropower to the intertie system and the railbelt communities. Hydropower is more stably priced and less costly than many of the fossil-fuel derived energy sources currently used on the railbelt. In particular, this project will help to reduce the amount of fuel oil and naptha burned by GVEA in Fairbanks and North Pole. The cost of these energy resources on the GVEA system has recently ranged from approximately 20 to 90 cents per kWh. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 9 of 21 7/3//2012 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Energy costs for the communities served off of the Alaska Intertie System are high due to the high costs of fuel. Lower electric costs are expected to increase demand from existing customers, and will encourage new business opportunities in Cantwell and surrounding communities. 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 The specific project design is not yet known. Generally, the project is expected to consist of the following major components: 1. A small diversion structure located at approximately the 2,700-foot elevation of Carlo Creek. The diversion would not impound a significant amount of water. 2. An intake structure to screen water from the creek and admit it to the project penstock. 3. A buried approximately 6,000 to 10,000 foot long penstock that conveys water from the intake to the powerhouse (preliminary 36-inch diameter pipe). 4. A powerhouse fitted with an impulse-type turbine at an elevation of approximately 2,000 to 2,200 feet. The installed capacity is estimated at 1.5 MW. 5. Synchronous generators to allow black-start capability to provide electricity for Cantwell and surrounding areas during intertie outages. These are also expected to be easier to integrate with the intertie and substation operations. 6. A power line extension to the existing three-phase overhead distribution system along the Parks Highway. The project’s installed capacity is estimated at approximately 1,500 kW. The capacity factor is estimated to be between 0.40 to 0.60. Annual energy generation is estimated at 4,000 to 6,000 MWh annually. All of these parameters depend on site-specific reconnaissance which has not been conducted at Carlo Creek. 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. Land where the project would be located is owned by a combination of private parties, Ahtna, Inc., and the federal government. Some of the project could cross highway or power line easements. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 10 of 21 7/3//2012 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 The project is expected to require the following major permits for construction. 1. Potentially a FERC license, or exemption from FERC licensing. Some project configurations may not fall under FERC jurisdiction. 2. Land authorizations from Ahtna, Inc. and other land owners (private owners and possibly the State of Alaska). 3. Fish Habitat Permit. Carlo Creek is not anadromous fish habitat, but some resident fish species may be present. 4. U.S. Department of Army permits for work in waters of the U.S. including wetlands. 5. Alaska Department of Natural Resources Water Rights. 6. RCA authorization. A Utility Certificate from the Regulatory Commission of Alaska may be required depending on how the Native Village of Cantwell proceeds with the Jack River project. Once a decision to develop the project is made (at the conclusion of the Feasibility Study), permits are estimated to take 1.5 to 5 years to obtain. This estimate will be refined once the project resource issues, configuration and land status is refined. The longer timeframe would correlate with more challenging resource issues or FERC jurisdiction for the project due to the increased level of study required. No permitting barriers are known at this time. 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 following assessment is based on currently available information. Threatened or endangered species: None known. Habitat issues: None known. Wetlands and other protected areas: All project configurations would fill some wetlands (diversion footprint, access roads, etc.). Archeological resources: None known. Land development constraints: None known. Telecommunications Interference: None known. Aviation considerations: None known. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 11 of 21 7/3//2012 Visual, aesthetics impacts: Some dam configurations may be briefly visible to travelers from portions of the Parks highway. Most visual or aesthetic impacts are limited to vantage points from the air, remote terrain around Cantwell, or the immediate vicinity of the project. Other potential barriers: None known. 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  Projected development cost of proposed renewable energy system The project configuration and feasibility has not been determined, so total project costs are unknown, but estimated at $7.5 million depending on project configuration, geotechnical site conditions, and other factors. The cost of the reconnaissance study is $70,000. The Native Village of Cantwell requests $66,500 in grant funds and is providing $3,500 in matching funds from its own resources for the study. The Native Village of Cantwell will also provide in-kind labor and equipment support for the project. We have done this on the on-going reconnaissance study for Jack River with project administration and helping out with the stream gauge and field work where appropriate. 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 project concept is not sufficiently developed at this point in time to provide meaningful O&M cost estimates. No factors are currently known that would result in abnormally high or low O&M costs compared to typical costs for small to medium-sized storage hydroelectric projects in Alaska. 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 Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 12 of 21 7/3//2012 Sale of power from a Carlo Creek project could take a number of forms. The most straightforward power sales contract to put in place would be to sell electricity to GVEA on a wholesale basis. GVEA’s power purchase rate for non-firm power (calculated as the average avoided cost of fuel) is currently approximately $0.11 to 0.13 per kWh. Sale to other railbelt utilities is also an option, although GVEA typically has the highest rates on the railbelt. Sale to non-utilities is also a possibility in certain instances, but it can be more difficult to set up these contractual relationships. 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 Carlo Creek Hydroelectric Project The Applicant should demonstrate that the renewable energy resource is available on a Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 13 of 21 7/3//2012 sustainable basis. Annual average resource availability. Estimated capacity factor of 0.40 to 0.60 Configuration used for this sheet: 0.40 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 Railbelt ii. Rated capacity of generators/boilers/other Railbelt iii. Generator/boilers/other type Railbelt iv. Age of generators/boilers/other Railbelt v. Efficiency of generators/boilers/other Railbelt b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor Railbelt ii. Annual O&M cost for non-labor Railbelt 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] Railbelt ii. Fuel usage Diesel [gal] Railbelt Other Railbelt iii. Peak Load Railbelt iv. Average Load Railbelt v. Minimum Load Railbelt vi. Efficiency Railbelt vii. Future trends Railbelt d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] -- ii. Electricity [kWh] 4,150,000 kWh annually (Cantwell and surrounding areas) iii. Propane [gal or MMBtu] -- 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) 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 6 Grant Application AEA13-006 Grant Application Page 14 of 21 7/3//2012 a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kW or MMBtu/hr] Approximately 1,500 kW b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] Approximately 5,256,000 kWh annually ii. Heat [MMBtu] -- c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] -- ii. Coal [tons or MMBtu] -- iii. Wood [cords, green tons, dry tons] -- iv. Other ~350,000 gallons of fuel oil annually. (Assumes GVEA displaces fuel oil for 100% of hydro project output and generation efficiency of 15 kWh/gallon) Project Cost a) Total capital cost of new system $7,050,000 (based on $4700 per kW of capacity) b) Development cost $7,500,000 (total of preconstruction and construction) c) Annual O&M cost of new system $75,000 d) Annual fuel cost $0 Project Benefits a) Amount of fuel displaced for i. Electricity ~350,000 million gallons of fuel oil and equivalents ii. Heat -- iii. Transportation -- b) Current price of displaced fuel $3.00 per gallon c) Other economic benefits -- d) Alaska public benefits $1.05 million annually in avoided fuel cost. Power Purchase/Sales Price a) Price for power purchase/sale $0.15 per kWh (2011 AEA/ISER Price Model) Project Analysis Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 15 of 21 7/3//2012 a) Basic Economic Analysis Project benefit/cost ratio $32.61 million / 6.18 million = 5.27 Payback (years) $6.18 million / $1.05 million = simple payback 5.9 years. 4.4.5 Proposed Biomass System Information Please address the following items, if know. (For Biomass Projects Only)  What woody biomass technology will be installed (cord wood, pellets, chips, briquettes, pucks).  Efficiency of the biomass technology.  Thermal or electric application.  Boiler efficiency.  Displaced fuel type and amount.  Estimated tons of wood pellets or chips (specify) to be used per year, and average moisture percentage.  Estimated cords of wood to be used per year, specify whether dry or green and the moisture percentage.  Ownership/Accessibility. Who owns the land and are their limitations and restrictions to accessing the biomass resource?  Inventory data. How much biomass is available on an annual basis and what types (species) are there, if known? 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 The estimated annual fuel displacement by the project would be approximately 350,000 gallons of fuel oil or equivalents (naptha) burned by GVEA. This is based on 5,256,000 kWh of hydro Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 16 of 21 7/3//2012 generation and a fuel efficiency of 15 kWh per gallon at GVEA. At an assumed fuel cost of $3 per gallon, this is valued at $1.05 million annually. A wholesale power purchase contract with GVEA would likely be at their system average avoided cost. Energy has an assumed value of $0.15 per kWh (based on the 2011 AEA/ISER price model for the northern railbelt). Estimated annual project revenue with these assumptions is $788,000. Several entities have expressed an interest in purchasing the clean energy from hydro projects in the region. This is most easily achieved through the sale of ‘Green Tags’ or selling the environmental attributes of the project separately from the physical electricity. Green Tags on the voluntary market have stabilized at a price of approximately $0.001 per kWh, which would result in incremental revenue of $5,200 per year assuming that all Green Tags from the project were sold. All cities connected to the railbelt grid would benefit from this project. This project would increase the amount of renewable energy available to the railbelt, decreasing dependence on fossil fuels, which in the case of natural gas in Cook Inlet is a diminishing resource and in the case of fuel oils in Fairbanks is very costly. Coal is inexpensive and stably-priced, however the potential for future carbon taxes would increase the cost of electricity from coal. This project would improve the reliability of the electric grid for Cantwell and surrounding communities by creating a local generation source that can help keep the lights on when the Alaska Intertie is out of service. It is unknown if wintertime stream flow would be sufficient to carry local load during winter intertie outages. Flows would likely not be sufficient to serve typical winter loads (250 to 500 kW) on the Cantwell area distribution system. 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 Selection of business structures is premature given the preliminary state of investigations at Carlo Creek. While the Native Village of Cantwell has not begun to evaluate business options, some potential business structures could include: 1. Become an IPP and obtain QF status, exemption, or utility certification from the RCA 2. Joint venture with GVEA 3. Form a new electric utility and assume responsibility for providing electric service in Cantwell and the surrounding area. O&M costs for the project would be funded by revenues from sale of electricity. The market value of the electricity easily exceeds likely O&M costs. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 17 of 21 7/3//2012 No unusual operational issues are known at this time. Operational costs would include periodic scheduled overhauls of the turbines, generators, and ancillary equipment, diversion and intake maintenance (trash rack clearing, etc), and related hydro project operations. The Alaska Intertie System would provide backup for the hydro and also would provide a market for hydro generation in excess of local needs. The Native Village of Cantwell commits to reporting the savings and benefits associated with the Jack River hydroelectric project. 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. Upon signing of the RE Program Round 4 reconnaissance study grant agreement with AEA in 2011, the Native Village of Cantwell promptly entered into a contract with Polarconsult Alaska, Inc. to perform the Jack River hydro reconnaissance study. This included timely mobilization of a drill rig to Cantwell to install a stream gauging station before freeze up. The station was installed in November 2011. The Native Village of Cantwell will be ready to start on this reconnaissance study upon receipt of a grant agreement from AEA in the summer of 2013. SECTION 8– LOCAL SUPORT Discuss what local support or possible opposition there may be regarding your project. Include letters of support from the community that would benefit from this project. Attached to this application are letters of support from H. Keith Waters (V.P. Planning and Budget, Usibelli Coal Mine, Inc.), Todd Hoener (GVEA Energy Efficiency Specialist) and Kathryn Martin (Ahtna, Vice President Land and Resources). The tribe is not aware of any opposition to this project. SECTION 9 – GRANT BUDGET Tell us how much you want 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 sources and your financial commitment to the project. The Native Village of Cantwell is requesting a grant in the amount of $66,500 for a reconnaissance study of the Carlo Creek Hydro Project. Village members will donate their time Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 18 of 21 7/3//2012 and experience to this project until this project is complete. Applications should include a separate worksheet for each project phase that was identified in section 2.3.2 of this application, (Reconnaissance, Feasibility, Conceptual Design, Design and Permitting, and Construction). 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 Grant Agreement with AEA Notice to Proceed = 0 months 1. Project Management, Scoping and Contractor Solicitation End of 2nd month $0 $3,500 Native Village of Cantwell $3,500 2. Resource Identification and Analysis End of 12th month $25,000 $0 $25,000 3. Land Use, Permitting and Environmental Analysis End of 10th month $4,500 $0 $4,500 4. Preliminary Design Analysis and Cost Estimate End of 12th month $10,000 $0 $10,000 5. Cost of Energy and Market Analysis End of 12th month $5,000 $0 $5,000 6. Economic Analysis End of 13th month $5,000 $0 $5,000 7. Draft Final Report End of 13th month $15,000 $0 $15,000 8. Final Report End of 14th month $2,000 $0 $2,000 TOTALS $66,500 $3,500 $70,000 Budget Categories: Direct Labor & Benefits $0 $2,000 Native Village of Cantwell $2,000 Travel & Per Diem $0 $750 Native Village of Cantwell $750 Equipment $0 $500 Native Village of Cantwell $500 Materials & Supplies $0 $250 Native Village of Cantwell $250 Contractual Services $66,500 $0 $66,500 Construction Services $0 $0 $ Other $0 $0 $ TOTALS $66,500 $3,500 $70,000 Project Milestones that should be addressed in Budget Proposal Reconnaissance Feasibility Design and Permitting Construction Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 19 of 21 7/3//2012 1. Project scoping and contractor solicitation. 2. Resource identification and analysis 3. Land use, permitting, and environmental analysis 4. Preliminary design analysis and cost 5. Cost of energy and market analysis 6. Simple economic analysis 7. Final report and recommendations 1. Project scoping and contractor solicitation. 2. Detailed energy resource analysis 3. Identification of land and regulatory issues, 4. Permitting and environmental analysis 5. Detailed analysis of existing and future energy costs and markets 6. Assessment of alternatives 7. Conceptual design analysis and cost estimate 8. Detailed economic and financial analysis 9, Conceptual business and operations plans 10. Final report and recommendations 1. Project scoping and contractor solicitation for planning and design 2. Permit applications (as needed) 3. Final environmental assessment and mitigation plans (as needed) 4. Resolution of land use, right of way issues 5. Permit approvals 6. Final system design 7. Engineers cost estimate 8. Updated economic and financial analysis 9. Negotiated power sales agreements with approved rates 10. Final business and operational plan 1. Confirmation that all design and feasibility requirements are complete. 2. Completion of bid documents 3. Contractor/vendor selection and award 4. Construction Phases – Each project will have unique construction phases, limitations, and schedule constraints which should be identified by the grantee 5. Integration and testing 6. Decommissioning old systems 7. Final Acceptance, Commissioning and Start-up 8. Operations Reporting ATTACHMENT A PROJECT TEAM QUALIFICATIONS ATTACHMENT B LETTERS OF SUPPORT September 05, 2012 Ms. Veronica Nicholas, President Native Village of Cantwell PO Box 94 Cantwell, AK 99729 Re: Carlo Creek Hydro Project Dear Ms. Nicholas, This letter is written in support of the efforts by the Native Village of Cantwell to perform a feasibility study for a hydro power project in Carlo Creek near Cantwell, Alaska. Carlo Creek drains approximately 12 square miles of the Alaska Range. The proposed run-of-river hydro project would divert an estimated 50 cfs from Carlo Creek at an elevation of approximately 2,700 feet, divert it through an approximately 6,000 to 10,000 foot long penstock to a powerhouse near the Parks Highway at an elevation of 2,000 to 2,200 feet. Estimated installed capacity is 1.5 MW, and annual energy generation is estimated at 5,256,000 kWh per year. The Carlo Creek (Project) appears to make good sense from several perspectives. The mega hydro projects currently receiving most of the attention have severe technical and environmental hurdles to overcome and, if feasible, will take a decade or more to permit and build. From my knowledge of the area, Carlo Creek appears to be a site that is technically feasible and environmentally attractive for a small hydro facility. The Project should be able to be brought on line in a relatively short time frame. Usibelli Coal Mine, Inc. is involved in looking at renewable energy resources in the Healy area and supports the concept of s mall distributed renewable generation. I believe there are many similar sites throughout Alaska that could provide good low head power production, with little environmental risk and relatively low cost. Although each unit may be small, they can be built in reasonable cost increments and add up to a significant addition in generating capacity. Good luck in your development of the Project. It will be good for Cantwell, the Denali Borough and the Railbelt and hopefully can lead the way to many future projects of a similar nature in the Railbelt and throughout Alaska. Sincerely. H. Keith Waters P.E. V.P. Planning and Budget Cc: Arnel Hernandez, Joel D, Groves ATTACHMENT C ELECTRONIC VERSION OF ENTIRE APPLICATION ATTACHMENT D GOVERNING BODY RESOLUTION ATTACHMENT E PROJECT MAP