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HomeMy WebLinkAboutGrantApplication6_KnutsonCreek - NO RESUMES GRANT APPLICATION – FOR – KNUTSON CREEK HYDROELECTRIC PROJECT PERMITTING AND FINAL DESIGN SEPTEMBER 2012 – SUBMITTED TO – ALASKA ENERGY AUTHORITY RENEWABLE ENERGY GRANT PROGRAM – ROUND VI RFA #AEA-13-006 – SUBMITTED BY – PEDRO BAY VILLAGE COUNCIL P.O. BOX 47020 PEDRO BAY, AK 99647     Renewable Energy Fund Round 6 Grant Application AEA 13-006 Application Page 1 of 20 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 20 9/24/2012 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) PEDRO BAY VILLAGE COUNCIL Type of Entity: LOCAL GOVERNMENT (TRIBAL GOVERNMENT) Fiscal Year End DECEMBER 31 Tax ID # 92-0074409 Tax Status: For-profit or X non-profit ( check one) M ailing Address P.O. BOX 47020 PEDRO BAY, AK 99647 Physical Address COUNCIL BUILDING PEDRO BAY, ALASKA 99647 Telephone 907-850-2225 Fax 907-850-2221 Email JBMOSAIC@HOTMAIL.COM 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name JOHN BAALKE Title VILLAGE ADMINISTRATOR M ailing Address P.O. BOX 47020 PEDRO BAY, AK 99647 Telephone 907-850-2225 Fax 907-850-2221 Email JBMOSAIC@HOTMAIL.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) X An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer in accordance with 3 AAC 107.695 (a) (1), or A local government, or 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 20 9/24/2012 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) KNUTSON CREEK 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. The project is located on Knutson Creek near the Village of Pedro Bay. This project is located at approximately 59.80d N, 154.14d W. 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. The community of Pedro Bay will benefit from this project. 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 Reconnaissance X Design and Permitting Feasibility Construction and Commissioning Conceptual Design Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 4 of 20 9/24/2012 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. The proposed project is an approximately 150 kW run-of-river hydroelectric project on Knutson Creek near Pedro Bay. The hydro project will provide most of the electricity needs of the village, as well as providing a significant amount of interruptible energy to heat the tribal council building, church, school, and potentially other buildings. 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.) This project will significantly reduce the costs of electricity in Pedro Bay, and will also reduce the amount of heating oil needed to heat public buildings that would be heated by interruptible electricity from the hydro project. Pedro Bay has very high costs of fuel, due to the difficulty in delivering fuel to the village. In past years, the council has relied on flying fuel in for electricity generation. 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 design and permitting for the project is $292,500. The Pedro Bay Village Council requests $290,000 in grant funds and is providing $2,500 in match from its own resources for the study. The Pedro Bay Village Council will provide in-kind labor and equipment support for the project. We have done this on the previously completed reconnaissance study and feasibility study that is nearing completion. 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. $290,000 2.7.2 Cash match to be provided $2,500 2.7.3 In-kind match to be provided $0 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) $292,500 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) $3,400,000 2.7.7 Estimated Direct Financial Benefit (Savings) $4,600,000 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 5 of 20 9/24/2012 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. The project manager will be John Baalke, the Village Council’s Administrator. Mr. Baalke’s resume is attached to the application. No management assistance from AEA is needed. 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 Agreement with AEA Notice to Proceed = 0 months July 2013 Sept. 2013 1. Project Management, Scoping and Contractor Solicitation End of 2nd month Sept. 2013 Nov. 2013 2. Permit Applications End of 4th month Nov. 2013 Jan. 2014 3. Final Environmental Assessment and Mitigation Plans End of 14th month Sept. 2013 Oct. 2014 4. Land Use Authorizations End of 12th month Sept. 2013 Sept. 2014 5. Permit Approvals End of 18th month Sept. 2013 Mar. 2015 6. Final System Design End of 20th month March 2014 May 2015 7. Engineer’s Cost Estimate End of 21st month Apr. 2015 June 2015 8. Updated Economic and Financial Analysis End of 22nd month June 2015 July 2015 9. Power Sales Agreement and Rate Approval End of 23rd month July 2015 Aug. 2015 10. Final Business and Operational Plan End of 24th month Aug. 2015 Sept. 2015 Grant Agreement with AEA Notice to Proceed = 0 months 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 6 of 20 9/24/2012 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. The Pedro Bay Village Council will be contributing its available resources to accomplish this project. In addition to the matching funds, the village will contribute in-kind labor and use of equipment when appropriate. The village has contributed similar support on the previously completed reconnaissance study and the on-going feasibility study for the project. The village will use its office, computer, telephone, fax and other office equipment to support this project. The village council has successfully managed similar grants in the past, and has the necessary accounting and management personnel and protocols in place to manage the grant. The Pedro Bay Village Council has worked successfully with Polarconsult Alaska, Inc. for several years in efforts to study Knutson Creek’s hydropower potential, including hiring Polarconsult to perform the completed reconnaissance study and the feasibility study that is currently under way. 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. Mr. Baalke 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. Baalke has successfully served in this capacity for previous hydro studies. 3.5 Project Risk Discuss potential problems and how you would address them. The grant will fund design and permitting for a hydropower project on Knutson Creek. The only risk is that the design cannot be completed, or that permits cannot be obtained for the project and it cannot proceed to construction. The feasibility study now nearing completion has included review of regulatory, environmental, and technical feasibility and has not identified any barriers to successfully completing the project. 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 7 of 20 9/24/2012 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. Knutson Creek above the proposed intake site drains approximately 29.2 square miles of the mountains northwest of Pedro Bay, with a median annual flow of 60 cfs. The proposed project would collect an estimated 15 cfs from Knutson Creek at an elevation of 400 feet, divert it through an approximately 6,000 foot long 24-inch penstock to a powerhouse located at an elevation of 190 feet. Estimated installed capacity is 150 kW at a capacity factor of 83%. The feasibility study may recommend a somewhat larger project (200 or 250 kW) to support local load growth. The village completed a reconnaissance study of nearby hydropower resources in 2009, and Knutson Creek was identified as the most favorable creek in the vicinity for hydropower. This reconnaissance study is included on the application CD as part of Attachment E. 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 village of Pedro Bay is currently served by a diesel power plant fitted with three small John Deere diesel generators (125, 60, 60 kW) installed in 2000 and 2001. The distribution system is a single phase 7.2 kV underground system. In past years, gross utility generation efficiency has been approximately 12 kWh per gallon. 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. Pedro Bay currently relies on diesel for electricity generation, and a combination of wood and fuel oil for heating. This project would replace nearly 100% of the diesel burned for electricity, and a significant amount of fuel oil currently burned to heat public buildings such as the village council building, school, and church. Other buildings could also be heated by the hydro plant. The school is not currently open, but it is heated using waste heat from the diesel power plant. Pedro Bay often has to fly fuel in, as barge service in the Iliamna Lake region is not always reliable or cost effective. As a result, electricity costs in recent years have been very high, approaching $1.00 per kWh. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 8 of 20 9/24/2012 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Total annual energy generation is approximately 250,000 to 280,000 kWh, with average load of approximately 30 kW and peak load of approximately 60 kW. Due to high energy costs, energy use in Pedro Bay has been declining in recent years. This is likely due to both a decrease in local population, energy conservation efforts, and energy sacrifices that residents make due to the high cost of electricity and fuel. This project will both lower and stabilize the cost of electricity, helping to improve the sustainability of Pedro Bay. It is expected that system load will increase appreciably as energy costs decrease when the hydro project becomes operational. 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 proposed project is a run-of-river project with 210 feet of gross head. Knutson Creek has sufficient flow during the winter months that the project will have a high capacity factor of approximately 70 to 85%. The optimum installed capacity to meet the village’s current needs is approximately 150 kW (15 cfs design flow, 83% capacity factor, 1,084 MWh annual generation). A larger system capacity (e.g., 250 kW) may be justified given the availability of the water resource, potential for load growth once electric rates decline, and the modest incremental cost of a larger installation. A 250 kW project would have a capacity factor of approximately 69% and generate approximately 1,521 MWh annually. The project would consist of the following major components: ● A diversion / intake structure on Knutson Creek at the 400-foot elevation. There is a bedrock sill located at the intake site that will serve both as a foundation for the diversion and as a cut-off wall for any subsurface flow. The diversion will be a concrete structure. Special attention will be paid to the intake design to minimize problems for cold weather operation. ● 6,000 feet of buried HDPE penstock. The penstock will have a bridge over Knutson Creek. ● A powerhouse located at the 190-foot elevation near Knutson Creek. The powerhouse will house the turbine / generator(s), controls, switchgear and associated hardware. The turbine may be a turgo, crossflow, or possibly pumps run as turbines. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 9 of 20 9/24/2012 ● An underground 8,500 foot power line to connect with the existing distribution grid. ● A dispatchable energy system capable of providing excess energy to space heating systems in public buildings and possibly other buildings as well. 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 the Pedro Bay Corporation. The Pedro Bay Corporation is aware of and supportive of this project. Project land would be secured via an easement, long-term lease, or other mechanism as agreed with the Corporation. 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. The project is not believed to fall under the jurisdiction of the Federal Energy Regulatory Commission (FERC). FERC jurisdiction will be determined by submitting a Declaration of Intention to the FERC. 2. Land use authorization from the Pedro Bay Corporation. 3. Fish Habitat Permit. Sockeye salmon and resident Dolly Varden occur in the project reach of Knutson Creek. The project site has been reviewed in the field by a qualified fisheries biologist. While a few sockeye (< 40 adults observed in the lower bypass reach in late August 2012) can access the project reach, it is unlikely they successfully spawn due to available spawning gravels being dewatered by low winter flows. Dolly Varden occur throughout the project reach but they are not a commercially significant population. Habitat mitigation or in-stream flow reservations at the intake are expected to address project impacts to these populations. In-stream flow reservations would only affect the project’s generating capacity in the winter months, and have been factored into the capacity factors, energy generation potential, and project benefits cited in this application. 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. Lake and Peninsula Borough Development Permits All permits are estimated to take1 or 2 years to obtain. If FERC determines that the project is jurisdictional, permitting will require 3 or 4 years to complete. Long lead and resource/environmental permits will be filed later this year. Other minor or time-sensitive permit applications would be filed under the design/permitting phase of the project. There are some good prospects for habitat mitigation in the project area for fish habitat and/or wetlands. No permitting barriers are known at this time. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 10 of 20 9/24/2012 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: The project is within anadromous and resident fish habitat. ADFG has been consulted throughout the feasibility study process to coordinate on fishery resources and in-stream flow requirements for the project. There are good sites near the village for construction of compensatory anadromous spawning and rearing habitat for mitigation. W etlands and other protected areas: All project configurations would fill some wetlands (diversion footprint, access roads, etc.). There are good sites near the village for construction of wetlands as mitigation if significant wetlands impacts are identified. Archeological resources: None known. Land development constraints: None known. Telecommunications Interference: None known. Aviation considerations: None known. Visual, aesthetics impacts: The project would only be visible from the air. 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 Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 11 of 20 9/24/2012 Total project development costs (reconnaissance study through construction) are estimated to be $3.4 million. This is based on a 150 kW project as estimated in the feasibility study. The cost for the design and permitting phase of the project is $292,500. This budget is based on the assumption that the project will not be under FERC jurisdiction, or if it does fall under FERC jurisdiction, it will be eligible for an exemption from FERC licensing. If a FERC license is required for the project, permitting costs may exceed this amount. The Pedro Bay Village Council requests $290,000 in grant funds and will provide a $1,000 cash match and $1,500 in in-kind services as labor and use of equipment and facilities. The construction cost of the project is estimated to be $3,000,000. 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.) O&M costs for the project are estimated to be $0.02 per kWh generated, or $0.07 per kWh sold at current utility demand, totaling approximately $19,500 annually. 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 Pedro Bay Village Council will sell power from the hydro project to its customers under its existing Certificate of Public Convenience and Necessity issued by the RCA. Power will be sold in accordance with standard utility business practices. The cost of power will depend on the funding mechanism that is used for project construction. Electricity from a fully grant-funded project would cost approximately $0.20 to 0.35 cents per kWh, while electricity from a fully debt-financed project would cost approximately $0.40 to 0.80 cents per kWh. 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 Fund Round 6 Grant Application AEA13-006 Grant Application Page 12 of 20 9/24/2012 Renewable Energy Source Knutson Creek Hydroelectric Project The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. Estimated capacity factor of 70% to 85% For 250 kW and 150 kW projects, respectively) Configuration used for this sheet: 150 kW, 83% CF 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 Three diesel generators ii. Rated capacity of generators/boilers/other 120, 60, 60 kW iii. Generator/boilers/other type John Deere 6059TFG01, 4045T150 x2 iv. Age of generators/boilers/other 11 to 12 years old. v. Efficiency of generators/boilers/other System efficiency is approx. 12 kWh per gallon. b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $48,500 (labor and non-labor) ii. Annual O&M cost for non-labor c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid, leave this section blank) i. Electricity [kWh] Approx 250,000 to 280,000 kWh ii. Fuel usage Diesel [gal] Approx 21,300 gallons Other -- iii. Peak Load Approx 60 kW iv. Average Load Approx 30 kW v. Minimum Load Approx 15 kW vi. Efficiency System losses past three years have been about 7 to 11% (9% average) vii. Future trends Flat to declining load without hydro or price relief. The Pebble Road could disrupt load trends if built. d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] -- 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 6 Grant Application AEA13-006 Grant Application Page 13 of 20 9/24/2012 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] 150+ kW depending on outcome of feasibility study. (this worksheet assumes a 150 kW project) b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 1,084,000 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 -- Project Cost a) Total capital cost of new system $3,000,000 b) Development cost $3,400,000 (total of preconstruction and construction) c) Annual O&M cost of new system $19,500 d) Annual fuel cost $0 Project Benefits a) Amount of fuel displaced for i. Electricity ~21,300 gallons ii. Heat ~15,000 gallons (for three public buildings) iii. Transportation -- b) Current price of displaced fuel ~ $6.90 per gallon c) Other economic benefits -- d) Alaska public benefits ~$250,500 annually in avoided fuel costs. Power Purchase/Sales Price a) Price for power purchase/sale Electricity will be sold at retail at cost-based rates to be determined by project financing method. Estimated range of $0.20 to 0.80 per kWh depending on grant or debt-based financing. Existing rates are $0.91 per kWh. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 14 of 20 9/24/2012 Project Analysis a) Basic Economic Analysis Project benefit/cost ratio $6.63 million / 2.98 million = 2.23 (using AEA/ISER spreadsheet) Payback (years) $3.4 million / $250,500 = simple payback 13.6 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 project will displace effectively 100% of the fuel oil currently burned by Pedro Bay’s existing power plant. In low water winters, some diesel operation will be required in the late winter or early spring. This is based on nearly two years of hydrology data on Knutson Creek in conjunction with 15 years of hydrology data for nearby Iliamna River. Additional energy from the project can also displace at least 15,000 additional gallons of fuel oil used to heat the council building, church building, and school (The school, which is closed, is currently heated by Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 15 of 20 9/24/2012 waste heat from the diesel power plant, so no fuel savings are assumed for the school). Additional displacement of heating fuel in other buildings is also possible. At an current fuel cost of $6.90 per gallon, estimated annual fuel displacement by the project would be approximately 36,300 gallons of fuel oil or equivalents worth approximately $250,500 annually. Over 50 years (with no load growth), the project would displace 1.82 million gallons (43,200 barrels) of fuel. At an assumed retail rate of $0.40 per kWh for regular electric service and $0.10 for interruptible (heating) electric service, annual utility revenue is estimated at $160,000. Rates would depend on how the hydro capital cost is financed. Green Tags on the voluntary market have stabilized at a price of approximately $0.001 per kWh, which would result in incremental revenue of approximately $800 per year assuming that all Green Tags from the project were sold. Perhaps the greatest benefit of this project is to improve the sustainability of the village of Pedro Bay by providing a stable, affordable, renewable, and local energy supply for the community and its residents. Affordable energy combined with the modern broadband connectivity from GCI’s Terra project will help Pedro Bay to attract younger people to live in the community. 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 Pedro Bay Village Council already operates the electricity utility in Pedro Bay, and is qualified to continue operating the utility with a hydro power house, retaining the existing diesel power house as a backup system. No unusual operational issues are known at this time. Utility rates would be set to provide sufficient revenue to finance hydro and diesel O&M costs for the life of the project. Diesel O&M costs are expected to be very low, as the engines would receive very little use with the hydro in service, reducing the frequency of overhauls, oil and filter changes, etc. Operational costs would include periodic scheduled maintenance of the hydro turbines, generators, and ancillary equipment, diversion and intake maintenance (trash rack clearing, etc), and related hydro project operations. Maintenance of the diesel power plant would continue for back up. Backup capability could be combined with the school’s existing backup generator to eliminate costs and excess redundancy. The Pedro Bay Village Council commits to reporting the savings and benefits associated with the Knutson Creek hydroelectric project. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 16 of 20 9/24/2012 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 Pedro Bay Village Council has already successfully advanced this hydro project through the reconnaissance and feasibility stages of study, and is excited to move forward into permitting and final design. Previous stages of study were funded with a combination of EPA, DOE, and State of Alaska community block grants. Pedro Bay expects to file for permit applications for this project later in 2012, and will be ready to start on the permitting and design of this project upon signing of a grant agreement from AEA in the summer of 2013. The 2009 Reconnaissance Study has been included on the application CD, and a copy of the Feasibility Study will be provided to AEA once it has been accepted by the Village Council later this year. 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 the Lake and Peninsula Borough and the Bristol Bay Native Association. The Village Council 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 Pedro Bay Village Council is requesting the amount of $290,000 to complete permitting and design of the Knutson Creek Hydro Project. The Council commits matching funds of $1,000 and in-kind services valued at $1,500 to complete this important project. The council has made this project a priority for funding and resources since 2009, and is committed to seeing this vital project constructed as soon as possible to provide the residents of Pedro Bay permanent relief from expensive diesel fired-electricity. Applications should include a separate worksheet for each project phase that was identified in Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 17 of 20 9/24/2012 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 $1,000 In-Kind Labor $1,000 2. Permit Applications End of 4th month $8,200 $0 $8,200 3. Final Environmental Assessment and Mitigation Plans End of 14th month $77,000 $1,000 Cash $82,000 4. Land Use Authorizations End of 12th month $6,200 $500 In-Kind Labor $6,700 5. Permit Approvals End of 18th month $36,700 $0 $36,700 6. Final System Design End of 20th month $129,000 $0 $129,000 7. Engineer’s Cost Estimate End of 21st month $11,400 $0 $11,400 8. Updated Economic and Financial Analysis End of 22nd month $5,200 $0 $5,200 9. Power Sales Agreement and Rate Approval End of 23rd month $5,200 $0 $5,700 10. Final Business and Operational Plan End of 24th month $6,100 $0 $6,600 TOTALS $290,000 $2,500 $292,500 Budget Categories: Direct Labor & Benefits $7,500 $1,500 In-Kind Labor $9,000 Travel & Per Diem Equipment $2,500 $2,500 Materials & Supplies $1,000 Cash $1,000 Contractual Services $280,000 $280,000 Construction Services Other TOTALS $290,000 $2,500 $292,500 Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 18 of 20 9/24/2012 Project Milestones that should be addressed in Budget Proposal Reconnaissance Feasibility Design and Permitting Construction 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 20, 2012 To Whom It Concerns, Lake Peninsula Borough P.O. Box 495 King Salmon, Alaska 99613 Telephone: (907) 246-3421 Fax: (907) 246-6602 The Lake and Peninsula Borough supports Pedro Bay's application to the Alaska Energy Authority Round VI for the Knutson Creek Hydro Electric Project. Knutson Creek has the potential to transform the commuriity and sharply reduce their dependence on costly diesel fuel. By continuing their on-going pursuit of hydroelectric energy, the village of Pedro Bay has shown their commitment to creating a sustainable future for the community. The borough recognizes that the high cost of energy places a tremendous burden on our rural communities and is a barrier to economic growth, and, as such, whole- heartedly supports Pedro Bay in their efforts. Borough Manager Chignik Bay • Chignik Lagoon • Chignik Lake • Egegik • Igiugig • !Iliamna • lvanof Bay • Kokhanok • Levelock Newhalen • Nondalton • Pedro Bay • Perryville ·Pilot Point· Pope Vannoy • Port Alsworth • Port Heiden • Ugashik                   ATTACHMENT C    ELECTRONIC VERSION OF ENTIRE APPLICATION                          ATTACHMENT D    GOVERNING BODY RESOLUTION          ATTACHMENT E ADDITIONAL MAPS AND PROJECT INFORMATION (SEE APPLICATION CD FOR 2009 HYDRO RECONNAISSANCE STUDY)             Knutson Creek Hydrology 0 100 200 300 400 500 Jan 1 Feb 1 Mar 3 Apr 3 May 4 Jun 4 Jul 5 Aug 5 Sep 5 Oct 6 Nov 6 Dec 7Knutson Creek Flow at Intake (cfs)Flow at Proposed Intake Site, cfs Proposed Design Flow, cfs (Knutson Creek extended record based on gauged Knutson Creek flow Oct. 2010 - Aug 2012 and correlated Iliamna River flow 1996 - 2012)