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Home My WebLink About092112_AEA-Neck Lake Hydro Project September 21, 2012 Alaska Energy Authority AEA 13-006 Renewable Energy Grant Application 813 West Northern Lights Blvd Anchorage, AK 99503 RE: Neck Lake Hydroelectric Project Grant Application AEA 13-006 Renewable Energy Grant Application Dear AEA: Enclosed in response to RFA AEA 13-006 Renewable Energy Grant Application program, is an application requesting funding for the Neck Lake Hydroelectric Project. Enclosed with this letter are two hard copies and one CD with the document in PDF format. Enclosed as per the RFA, o Grant Application Form o Cost Worksheet (included in the body of application) o Grant Budget (included in the body of application) o Other pertinent information in Section 11 If you have any questions, please call either Glen Martin (Resource Assessment & Permits) 360-385-1733 x122, or Bob Grimm (President) 360-385-1733 x120. Sincerely, Glen D. Martin Resource Assessment & Permits Enc. (as stated) Renewable Energy Fund Round 6 Grant Application AEA 13-006 Application Page 1 of 27 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 27 7/3//2012 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Alaska Power Company (APC) Type of Entity: Utility Fiscal Year End: December 31 Tax ID # 92-0153693 Tax Status: X For-profit or non-profit ( check one) Mailing Address P.O. Box 3222, Port Townsend, WA 98368 Physical Address 193 Otto Street, Port Townsend, WA 98368 Telephone 360-385-1733 Fax 360-385-7538 Email glen.m@aptalaska.com 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Glen Martin Title Permitting, Licensing, & Environmental Review Manager Mailing Address P.O. Box 3222, Port Townsend, WA 98368 Telephone 360-385-1733 Fax 360-385-7538 Email glen.m@aptalaska.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 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 27 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) NECK LAKE HYDRO PROJECT 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project in the subsections below. 2.2.1 Location of Project – Latitude and longitude, street address, or community name. Latitude 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. This project is located 1.5 miles southwest of the community of Whale Pass on Prince of Wales Island, Alaska. The Project would supply power to the community of Whale Pass. 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. Whale Pass, Prince of Wales Island, Alaska 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 Design and Permitting X Feasibility Construction and Commissioning X Conceptual Design Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 4 of 27 7/3//2012 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. APC proposes to construct a small run-of-river hydroelectric project at Neck Lake, a 1,000 acre lake located 1.5 miles southwest of the community of Whale Pass on Prince of Wales Island. The Project would supply power to the community of Whale Pass, and would offset diesel generation, which is currently the sole source of electricity. The relatively high and modulated flows from the lake combined with the steep drop at the lower end of the outlet stream provide a good opportunity for a small run-of-river hydroelectric development. Facilities would include an access road, intake structure, 400 feet of penstock, a containerized power plant, a tailrace channel, and upgrade of 4 miles of transmission line. The hydroelectric facilities will be designed to avoid interference with the existing salmon rearing and collection facilities operated at Neck Lake by the Southern Southeast Regional Aquaculture Association (SSRAA). APC conducted a reconnaissance study of the site in 2008, and determined that there is sufficient potential to almost always provide enough generation for Whale Pass loads (see Section 11 for a copy of the reconnaissance report). The Project will provide clean, renewable electricity, as well as rate stabilization and lower rates for APC’s Whale Pass customers. 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 reduce the cost of electricity to the residents of Whale Pass who presently pay $0.6067/kWh (excluding PCE subsidy). APC estimates that diesel generation would decrease by about 95% at current load levels, with some diesel required occasionally when flow in the stream is low. This would decrease fuel costs for APC, and those savings would be passed on to APC’s customers. APC estimates the annual savings at current rates would be approximately $40,000 in the first year of operation (equivalent to about 15¢/kWh), and the savings would increase as the cost of diesel fuel increases. Residential customers using less than 500 kWh/month would see only a small decrease in their bill, assuming that APC’s savings result in a comparable decrease in the PCE COPA rate. Commercial customers and residential customers using over 500 kWh/month would see greater savings. The State of Alaska would benefit from reduced draw on the PCE program. Currently, about 49% of APC’s Whale Pass retail sales are subject to COPA. The total savings to the State is estimated to be about $20,000/year at current rates. Lower energy costs could help stimulate economic development in Whale Pass. Customers who have discontinued APC service because of the high cost of power would likely reconnect if the Project is built. Other benefits to the Alaskan public would be a decrease in the environmental impacts of diesel generation by APC or self-generation by Whale Pass residents (e.g. air pollution, noise pollution, fuel spills, etc.). Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 5 of 27 7/3//2012 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 total cost of the Project through construction is estimated to be $2,777,885. With this application, APC is requesting grant funding to complete the Phase II feasibility studies as well at the Phase III design and permitting. APC is requesting funding of both phases at this time to avoid the REF funding cycle from delaying the Project development. APC proposes an REF grant in the amount of $297,600, which is 80% of the Phase II and III costs ($372,000), with APC providing a 20% match ($74,400) out of its normal operating funds. The estimated funding by Phase is as follows: Phase AEA Grant Funds APC Matching Funds Total I – Reconnaissance (1) $0 $3,500 $3,500 II – Feasibility/Assessment Completed work (2) Proposed work (3) $22,385 $96,000 $0 $24,000 $22,385 $120,000 III - Design and Permitting $201,600 $50,400 $252,000 IV – Construction $1,904,000 $476,000 $2,380,000 Total $2,223,985 $553,900 $2,777,885 (1) AP&T conducted a site reconnaissance in 2008. (2) Phase II work that was funded by a Round 2 grant (3) Completion of Phase II work The construction costs indicated in this application are based on the 2008 site reconnaissance. They are somewhat higher than shown in previous grant applications due to escalation and the need to obtain a FERC license or exemption. The proposed Phase II work could result in an optimum project arrangement with a cost significantly different than that shown. APC was awarded $108,000 for conceptual design, environmental surveys, and a feasibility report in Round 2 of the REF grant program. Only a small amount of work was conducted before FERC determined on November 4, 2010, that a federal license would be necessary to construct this project because it could impact interstate commerce via impacts to salmon; FERC letter enclosed. At that point, APC canceled the Project due to the expected costs associated with the FERC licensing process and returned approximately $85,500 of the $108,000 Round 2 grant. Since then, FERC now instituted a small/low impact hydro licensing program that is expected to be less expensive. The process is front loaded with land acquisition, permitting, environmental studies, design, and agency approval prior to FERC receiving a licensing request. Although APC has not used this process in the past, we are willing to try in order to lower the high cost of electricity for our Whale Pass customers. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 6 of 27 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. $297,600 2.7.2 Cash match to be provided $74,400 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) $372,000 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) $2,777,885 2.7.7 Estimated Direct Financial Benefit (Savings) $8,560,000 (APC savings) 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.) $4,194,000 (PCE savings) Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 7 of 27 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. Greg Mickelson, APC’s V.P. of Power Operations will be the Project Manager for all phases of work. Mr. Mickelson is located in Klawock on POW, and is an engineer with extensive experience in project management and electrical generation, transmission and distribution. Mr. Mickelson has been a part of APC’s team for over 30 years and has been an essential part of their success. He has overseen numerous projects on POW, having been there since 1983, that have also had grant funding and is familiar with procedures put in place for their use. Please see Mr. Mickelson’s resume in Section 11. APC’s personnel will conduct all Phase II engineering work and will utilize contractors for the environmental studies in Phase II. Phase III final design and permitting will be conducted by APC’s experienced staff. Resumes of key personnel are included in Section 11. Phase IV construction would be either by APC using personnel hired from the local communities, or by experienced contractors from the local communities with APC supervision. 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. A bar schedule of the expected design and construction sequence is provided in Figure 1. The following summarizes key activities and dates of the schedule. Note that this schedule is for the entire development sequence; activities funded by this grant will be in Phases II and III. Phase I: Reconnaissance: Completed 2008 Phase II: Resource Assessment/Feasibility Analysis/Conceptual Design: 2013-2014 In late 2009 APC had a surveyor develop topographic mapping of the Project area, and in the spring of 2010 APC began developing the conceptual design. Once grant funding is received in 2013, APC will complete development of the design concept. Also in 2013, geotechnical investigations will be conducted at the intake and powerhouse areas. As part of this work, APC will coordinate extensively with SSRAA regarding the proposed development. In addition, a cost estimate will be prepared for the selected arrangement and an economic analysis conducted. The results will be presented in a feasibility report. At the same time, APC will work with the permitting agencies to develop study plans for environmental surveys to be conducted later in 2013 and possibly 2014. These surveys may include fish surveys, wildlife assessments, botanical surveys, wetlands surveys, archaeological survey (initial SHPO review), and water quality testing. APC believes that environmental field surveys for this Project will be very limited, since the impact area is quite small, and there should be a wealth of information already available from permitting and operation of the SSRAA facilities. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 8 of 27 7/3//2012 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 PHASE II: Feasiblity/Assessment Geotechnical Investigations Conceptual Design Environmental Surveys Economic analysis and report PHASE III: Final Design and Permitting Permit Applications (excluding FERC) Permit Processing (excluding FERC) FERC Scoping FERC Draft Application FERC Final Application Final Design PHASE IV: Construction FERC processing, final funding Mobilization Access Road Intake Penstock Generating Equipment Procurement Powerhouse Upgrade Transmission Line Testing and Start-Up LEGEND: <-- Procurement and off-site fabrication FIGURE 1 2013 20172014 2015 2016 NECK LAKE HYDROELECTRIC PROJECT DESIGN AND CONSTRUCTION SCHEDULE Phase III: Permitting and Final Design: 2014 –2015 In this phase, permits and land easements will be acquired, and final design documents prepared. Permits will include: FERC license or exemption, COE Section 404 permit, ADFG fish habitat permit, ADNR land lease or easement, ADNR water rights, and SHPO review. In accordance with the FERC small/low-impact licensing program, the FERC application will not be submitted until the other permits have been obtained. At that time, the environmental issues should be resolved, and final design can be safely started so that it occurs concurrently with FERC processing of the application. Submittal of the FERC application is expected to be in the spring of 2015, with the license or exemption issued in late spring of 2016. Phase IV: Construction: 2016-2017 Once the FERC license or exemption is issued and funding for this phase is secured, APC will place the order for generating equipment and begin off-site fabrication of the intake and powerhouse modules. Construction will take less than two year and will be completed by the end of 2017. The construction work should not be significantly compromised by weather at this temperate location. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 9 of 27 7/3//2012 The following milestones are anticipated for the proposed Phases II and III work: Task Milestone Start Date End Date Phase II: Geotechnical investigations Phase II: Receipt of contractor report by APC July 2013 Sept. 2013 Phase II: Conceptual design Phase II: SSRAA concurrence with conceptual design July 2013 Dec. 2013 Phase II: Environmental studies Phase II: Submittal of contractor study reports to APC Oct. 2013 Sept. 2014 Phase II: Economic analysis and report Phase II: Submittal of feasibility report to AEA Jan. 2014 March 2014 Phase III: Permit applications (excluding FERC) Submittal of all necessary permit applications to the agencies (excluding FERC application) April 2014 June 2014 Phase III: Permit processing (excluding FERC) Receipt of all necessary permits (excluding FERC license or exemption) July 2014 Dec. 2014 Phase III: FERC scoping Issue final scoping documentation per FERC NEPA requirements Oct. 2013 March 2014 Phase III: FERC draft application Submittal of draft license or exemption application to agencies for review July 2014 Dec. 2014 Phase III: FERC final application Submittal of final license or exemption application to FERC Jan. 2015 March 2015 Phase III: Final design Submittal of design drawings, specifications, and report to FERC and AEA. Jan. 2015 June 2015 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. Key APC personnel involved in the project and their roles will be:  Greg Mickelson, Project Manager  Bob Berreth, Electrical Design  Ben Beste, Mechanical Design  Larry Coupe, Civil Design  Glen Martin, Resource Assessment and Permits  Karl Wood, Grant Funds Administrator Resumes can be found in Section 11. Phase I: Reconnaissance Already completed by APC. Phase II: Resource Assessment/Feasibility Analysis/Conceptual Design In this phase APC will acquire property access and complete environmental and engineering/conceptual design studies. APC may use the following contractors for the various surveys:  Wetlands delineation.................................................................... HDR Alaska Inc.  Threatened and endangered plant species survey.......................HDR Alaska Inc.  Fish surveys.....Romey Associates, LLC (or possibly staff from SSRAA Hatchery)  Water quality sampling.................... Analytica Group Environmental Laboratories Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 10 of 27 7/3//2012  Cultural resource surveys .......................................................... Browne Research  Geotechnical investigations .................................................... GeoEngineers, Inc. APC permitting specialists will compile the environment information into resource assessment documents as required by the various permitting agencies. APC engineers will conduct the engineering/conceptual design studies in-house. Phase III: Final Design & Permitting The Federal Energy Regulatory Commission (FERC) ruled in late 2010 that they have jurisdiction, and that a FERC license or exemption will be required. Accordingly, in this phase the following permits will be acquired:  FERC license or exemption  404 permit (Corps of Engineers)  Fish habitat permit (ADF&G)  Land lease or easement (ADNR)  Water right (ADNR)  SHPO review Also in Phase III, APC will prepare the final design documents in-house using its staff civil, mechanical, and electrical engineers, who all have extensive experience in hydroelectric development. These engineers designed APC’s South Fork Hydroelectric Project which entered service in 2005, as well as APC’s Kasidaya Creek Hydroelectric Project which began service in October 2008. Phase IV: Construction Construction will be by local contractors and APC staff, as follows:  Access road .................................................... local contractor(s) or force account  Intake fabrications..................................... Reynold Grey Machining and Services  Intake on-site construction .............................. local contractor(s) or force account  Penstock materials procurement..................................................................... APC  Penstock installation ........................................local contractor(s) or force account  Generating equipment procurement ................................................................APC  Powerhouse fabrications............................Reynold Grey Machining and Services  Powerhouse construction............................. local contractor(s) and force account  Transmission line construction......................local contractor(s) and force account  Testing and start-up .........................................................................................APC Reynold Grey Machining and Services is a welding and fabrication company in Port Townsend, Washington that APC has used frequently for similar work, including fabrication of container modules for diesel powerplants recently installed in Slana and Allakaket. Reynold Grey is located near APC’s engineering staff, who thereby can conveniently oversee the proposed fabrication work. APC will negotiate purchase orders for materials and equipment from vendors who have performed well on APC’s recent projects. 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. During Phases II and III, APC proposes to provide quarterly reports to AEA regarding the status of the work. APC has provided similar reports to AEA and other grant funding agencies in the past several years on other projects, and has established the necessary procedures for producing the report expeditiously. Besides the quarterly reports, at the completion of Phase II, Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 11 of 27 7/3//2012 APC will provide AEA with a copy of a report that includes the conceptual design drawings and cost estimate. At the completion of Phase III, APC will provide AEA with a copy of the final design drawings, specifications, and cost estimate, and the permits along with a request to release the grant funds for construction. During Phase IV, communications within the team would consist of:  Weekly reports by the Environmental Compliance Monitor (as likely to be required by the ADF&G Fish Habitat Permit)  Bi-weekly conference calls among the Project Manager, Construction Superintendent, the Design Engineers, and SSRAA managers.  Periodic site visits by the Project Manager and Design Engineers. These internal discussions will form the basis of quarterly reports to AEA. The reports will show in a clear and concise manner progress made on the various tasks/milestones, the work to be accomplished in the ensuing quarter, and potential problems and corrective actions to be considered or implemented. Cost data will also be provided on a quarterly basis. Microsoft Project or similar software will be used to develop and maintain schedule and budget information; updating of the management files will be on a monthly basis. 3.5 Project Risk Discuss potential problems and how you would address them. Site Control – APC does not yet have development rights on the land, but will apply to ADNR for those rights through a lease or easement. APC is confident that Project development can be coordinated with the SSRAA operation already on the site. Seismic – Project components will be designed appropriately for seismic activity, since the Project will be located in a moderate-risk seismic zone. Structures will be buried as much as possible to minimize seismic impacts. Underground Construction – The Project does not include underground construction, which can be fraught with cost overrun potential. Geotechnical investigations will be made at the diversion and powerhouse areas to provide an adequate level of knowledge about ground conditions at those sites. Inclement Weather – Working conditions in the Project area during the winter could cause brief interruptions of the construction schedule. If prolonged interruptions occur that could jeopardize the completion schedule, APC will add contractors or more personnel as necessary to get back on schedule. Renewable Energy Fund Round 6 Grant Application AEA 13-006 Application Page 12 of 27 7/3/2011 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. Proposed Energy Resource: The Neck Lake site has the potential to generate perhaps 3.2 GWh per year with an installed capacity of 750 kW; however, that would be much greater than the required generation to serve the Whale Pass load (currently about 300 MWh/yr). APC will evaluate the optimum installed capacity during Phase II; at this time an installed capacity of 124 kW is planned. At this time the only viable alternative to the Project is considered to be continued diesel generation. The Project would eliminate diesel generation for almost all of the year and significantly reduce diesel generation for the remainder. Pros: Compared to diesel generation, the Project will have the following advantages:  less expensive to operate than diesel (lower O&M);  no need to purchase fuel;  no air emissions;  fewer hazardous substances;  no particulate matter emissions;  can come on-line after a power outage almost immediately, but diesel can’t;  lower and more stable electric rates for customers Cons: As with all hydroelectric projects, the initial cost of development is much higher than for diesel generation. APC has been aggressively extending its transmission system to most of the communities on Prince of Wales Island, and is planning to Naukati Bay in 2013. Theoretically, the transmission system could be extended another 25 miles to Whale Pass from Naukati Bay, however, it would cost much more than the Project, and would likely be less reliable. 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. Existing Power Generation There are 3 gensets in APC’s Whale Pass diesel power plant, as follows: Unit #1 = JD4045, 70 kW, Installed 1995, 11.27 kWh/gal (averaged from 2008) Unit #2 = Cummins BT5.9, 100 kW, Installed 1995, 11.38 kWh/gal (averaged from 2008) Unit #3 = Cummins NT855-64, 160 kW, Installed 2008, 12.62 kWh/gal (avg. July/August 2008) Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 13 of 27 7/3//2012 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 being the existing energy resource, this hydroelectric project will for nearly all of the year eliminate the use of diesel generators. At other times only one diesel gensets will be needed in addition to the hydro power. This will reduce the use of diesel and the frequency of their maintenance, including overhauls and replacement. The diesel generators that would be impacted are all owned and operated by APC in Whale Pass. The Project will reduce this area’s reliance on fossil fuels. APC also owns the transmission and distribution infrastructure, so no impacts will occur to existing energy infrastructure and resources. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The existing energy market for the Project is Whale Pass. Whale Pass is an isolated community on the northern end of POW, approximately 25 road miles above Naukati Bay. APC currently owns and operates all of the electrical infrastructure on the island. The Project will reduce fossil fuel consumption by the diesel power plant in Whale Pass by approximately 25,000 gallons per year. The existing diesel plant will be placed on standby status, reducing APC’s diesel operations and maintenance costs. Currently, Whale Pass customers pay $0.6067 per kWh (excluding PCE subsidy). Whale Pass residential customers who use less than 500 kWh/month will see only a small decrease in their electric bills, since the PCE COPA would decrease proportionally. Commercial customers and residential customers who use more than 500 kWh/month will see a larger decrease in their electric bills (up to 18.3 ¢/kWh in the first year of operation). Electric rates would be much more stable once the Project is in operation. 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 Renewable energy technology specific to location – The Project will be a conventional run-of- river hydroelectric project. Facilities to be constructed include:  400 feet of single lane access road  Intake with fish screen, 34 cfs diversion capacity  350 feet of 30- inch diameter pipeline  Powerhouse with four 31-kW generating units, each consisting of a pump-as-turbine and Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 14 of 27 7/3//2012 synchronous generator  Upgrade of about 4 miles of transmission line from single-phase to three-phase. Hydroelectric technology is well developed, and provides most of the renewable energy generated in the world in general and in Alaska in particular. The Project will utilize the abundant rainfall and steep topography afforded by the falls on the Neck Lake outlet stream to generate renewable energy. Optimum installed capacity – 124 kW (to be confirmed by Phase II studies). Anticipated capacity factor – 28% (to be confirmed by Phase II studies). Anticipated annual generation – Approximately 300 MWh/yr, which would off-set about 25,000 gallons of diesel used per year. If Whale Pass loads grow, the Project would be able to generate as much as 1,000 MWh/yr with the proposed installed capacity of 124 kW. Anticipated barriers – No technological barriers. Basic integration concept – Integration of hydropower is not particularly difficult; APC already operates two independent integrated hydro-diesel systems. For much of the year the hydro generation will be much more than the load, and therefore the diesel generation will be on standby; one or more hydro units will be on-line, with any excess generation shunted to dummy resistance loads. During low flow periods, possibly during late summer and during parts of the winter when flow is low, the hydro generation may be placed in lag position with diesel taking the lead. During the transition periods, diesel unit(s) will be block loaded in lag position, with the hydro in lead position. Preliminary studies indicated that the Project would be able to replace about 99.5% of the diesel generation, excluding planned or forced outages. Delivery methods – Project generation will be delivered to Whale Pass via a 4-mile-long transmission line from the powerhouse to the existing 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. The project is located on State land and APC will apply for an easement or lease to use the land. 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 Applicable Permits:  FERC license or exemption  404 permit (Corps of Engineers)  Water right (ADNR)  State land lease or easement (ADNR)  Fish habitat permit (ADF&G)  SHPO review Permitting Timeline: APC expects to complete environmental and preliminary design studies in early 2014, file for permits (excluding the FERC license or exemption) by mid 2014, and file for Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 15 of 27 7/3//2012 the FERC license or exemption in early 2015. All permits excluding the FERC license or exemption are expected to be issued by the end of 2014. The date to obtain the FERC license or exemption is speculative, as it is a new process; mid-2016 is APC best guess at this time. Potential Permitting Barriers: There are no known permitting barriers at this time. It appears that the Project would qualify for a FERC exemption rather than a license, but that is not certain. 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 T&E Species: No impacts are anticipated to T&E species due to the projects location and small size. However, the agencies will be consulted prior to making any determination. Habitat Issues: The Southern Southeast Regional Aquaculture Association has established a rearing and trapping facility at the lake and outlet stream. Coho salmon smolts are reared in pens in the lake, then released into the lake for migration out to tidewater during the spring. When the adults return, they ascend a ladder into a single raceway, where they are quickly processed for shipment south. Water for the raceway and ladder is diverted from the head of the second (middle falls). A general arrangement of the SSRAA facilities is shown in the Reconnaissance Report located in Section 10 (it is a preliminary drawing and is not 100% accurate). SSRAA’s existing knowledge of fish usage of the stream is expected to be sufficient so that additional fish surveys will not be required. Wetlands: There is potential for a small amount of wetlands to be impacted. A wetlands delineation may be necessary to determine what, if any, impacts there may be. Archaeological & Historical Resources: A review by SHPO of this site will need to occur to determine if an archaeological survey will be necessary. Because of SSRAA’s existing use of much of the site, an archaeological survey is unlikely to be required. Land Development Constraints: APC will coordinate with SSRAA to make sure their needs and goals are not affected by construction and operation of the Project. Telecommunications Interference: The 12 kV transmission line will not create interference with telecommunications. Aviation Considerations: Not applicable. Visual, Aesthetic Impacts: The Project will not be in a visually or aesthetically special view shed that needs protection. The visual impact will be similar to that of the existing SSRAA aquaculture facility. Potential Barriers: None known at this time. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 16 of 27 7/3//2012 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 Anticipated project costs:  Phase I:.....................................$3,500 (APC records)  Phase II: .............................. $145,885 (APC records and estimate based on APC experience)  Phase III:.............................. $252,000 (APC estimate based on APC experience)  Phase IV:.......................... $2,380,000 (APC estimate based on APC experience)  Total: ................................ $2,777,885 Requested grant funding: ............$297,600 (to complete Phase II and Phase III) Applicant matching funds: .................$74,400 Other sources of funding: ..................$22,385 REF Round 2 grant Projected capital cost:................... $2,380,000 (capital cost is assumed to be the cost of Phase IV – Construction) Projected development cost: .......... $397,885 (development cost is assumed to be the total cost of Phases I, II, and III) 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 incremental O&M cost for the hydro project is estimated to be $25,000 in the first year of operation (late 2018). APC will operate and maintain the Project with proceeds from sale of power to its customers. No grant funding is requested for operation and maintenance. 4.4.3 Power Purchase/Sale The power purchase/sale information should include the following: Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 17 of 27 7/3//2012  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 APC is developing this Project to supply power to a community it already serves. The power generated by the Project ultimately will be sold to APC’s customers in Whale Pass at a lesser cost than the current cost of diesel generation. APC estimates that the current retail price for electricity to Whale Pass customers could be reduced by 8.7¢/kWh if the Project is funded as proposed herein (excluding PCE). Rate of Return: APC’s regulated rate of return is currently 10.75% 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 18 of 27 7/3//2012 Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. Neck Lake outlet stream, 120 cfs average flow, 57 feet head 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 Railbelt 1 grid, leave this section blank) i. Number of generators/boilers/other 3 ii. Rated capacity of generators/boilers/other 330 kW combined iii. Generator/boilers/other type Diesel iv. Age of generators/boilers/other 15 years v. Efficiency of generators/boilers/other 11.3 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 $15,000 (incremental cost) ii. Annual O&M cost for non-labor $10,000 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] 306,000 kWh sold (average 1998-2007) ii. Fuel usage Diesel [gal] 25,000 gal (2008) Other iii. Peak Load 63 kW 63 kW iv. Average Load 49 kW 49 kW v. Minimum Load 35 kW 35 kW vi. Efficiency 11.3 kWh/gal 11.3 kWh/gal vii. Future trends Stable, use of electricity may increase with less expensive rates Stable, use of 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] vi. Other 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 19 of 27 7/3//2012 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] 124 kW b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 1,000,000 kWh max. (300,000 kWh at current load levels) 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 $2,777,885 (total of Phases I-IV) b) Development cost $397,885 (total of Phases I-III) c) Annual O&M cost of new system $25,000 d) Annual fuel cost $0 Project Benefits a) Amount of fuel displaced for i. Electricity 25,000 gal/yr ii. Heat iii. Transportation b) Current price of displaced fuel $3.66/gal (2012 per SEIRP) c) Other economic benefits Not estimated. d) Alaska public benefits Reduced PCE ($4,626,000); reduced diesel emissions Power Purchase/Sales Price a) Price for power purchase/sale Not applicable Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 3.92 for APC, 1.89 for State of Alaska (30 years, 0% discount rate) Payback (years) 7.5 years for APC, 24 years for State of Alaska (0% discount rate) Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 20 of 27 7/3//2012 4.4.5 Proposed Biomass System Information Please address the following items, if know. (For Biomass Projects Only) N/A Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 21 of 27 7/3//2012 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 people of Alaska will benefit from the Project development as follows: Potential annual fuel displacement: Over the last 10 years, Whale Pass used an average of about 25,000 gallons of diesel fuel annually to generate an average of 306,000 kWh/year. Diesel fuel prices are currently nearly $4/gallon. Over a 30 year term the Project could potentially save over 800,000 gallons of diesel fuel valued at approximately $10,000,000, assuming fuel prices and loads escalate in accordance with the mid-level projections of the SEIRP. APC notes that if the Project were built, there would be excess energy available during most periods, so there could be incentive for Whale Pass residents to convert to electric heating, which would increase the loads substantially over those developed in the SEIRP. Anticipated annual revenue: If funded as proposed herein, the Project is estimated to result in a decrease in generation costs of about $40,000 in the first year of operation. APC would expect to have a new rate tariff for Whale Pass that passes those savings on to the Whale Pass customers, i.e. APC’s revenues would decrease by 40,000 in the first year of operation. Potential additional annual incentives: Not estimated. Potential additional revenue streams : Not estimated. Non-economic public benefits to Alaskans: Reduced air emissions and noise, reduced chance for oil spills. Other benefits: The State of Alaska would spend less on the PCE program, since the Project generation would decrease the amount of diesel generation subject to PCE reimbursement. PCE savings are estimated to be $4,194,000 over the first 30 years of Project operation. In the short term the local economy would benefit due to local hire for construction. In the long term, lower and more stable electric rates could lead to more residential and commercial development, which in turn would add more income to this community. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 22 of 27 7/3//2012 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 APC will operate the Project to supply power to APC’s Whale Pass system for eventual sale to its retail customers. APC will maintain the Project as it does with its other hydroelectric resources, which can be expected to have a life of at least 50 years. The Project will be remotely operated, with continuous monitoring by a SCADA system. O&M personnel will visit the plant at least once per week for routine checks on the equipment. A routine maintenance schedule will be established, a brief annual shutdown is likely for maintenance, which would be scheduled to coincide with a low-flow period to minimize the loss of generation. 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. APC visited the Project site, coordinated with SSRAA, and prepared a reconnaissance report in 2008. We expected to begin the Phase II Feasibility Work in early 2009 if grant funds were made available. Although we were awarded $108,000 from the Round 2 REF grants for Phase II work, the grant documents were not received until late October 2009. Once the grant funds were released, APC immediately contracted with a surveyor to obtain topographic mapping of the site, and began development of the design concept. We also filed a jurisdiction determination request with FERC in early 2010. At that point, APC suspended design work pending the jurisdiction determination. In late 2010, FERC ruled that they had jurisdiction and that a license would be required. APC then decided to discontinue Project development, as the cost to obtain a FERC license would make development uneconomical. APC then returned the unspent grant funds to AEA ($85,615). 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. Since the proposed project would decrease electric rates and use a waterway that is already developed for aquaculture by SSRAA, we would not expect any local opposition unless the proposed project interferes with SSRAA’s operation. We fully expect to design a project that avoids interference and is “junior” in priority to SSRAA’s operation. In our discussions to date with SSRAA, they have been supportive of hydroelectric development as long as it does not interfere. SSRAA has hydro generation at other facilities of theirs, and they understand the benefits that they and the community would gain. Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 23 of 27 7/3//2012 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. Investments to date and funding sources: APC has spent approximately $3,500 of its own funds to date on Phase I development activities in 2008. To date, all APC costs have been paid out of APC’s general operations funds. In 2009-2010, APC used $22,385 of a $108,000 Round 2 grant for Phase II work until development was halted (no APC match was required for the Round 2 grant). Amount requested in grant funds: $96,000 To complete Phase II $201,600 Phase III $297,600 Total this Round 6 grant Additional investment by APC: APC will provide matching funding equaling 20% of the total cost (i.e. a match of $74,400). This matching amount will be paid from APC’s general operations funds. PHASE II MILESTONES OR TASKS 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 Geotechnical investigations Sept. 2013 $24,000 $6,000 Cash $30,000 Conceptual design Dec. 2013 $14,400 $3,600 In-kind $18,000 Environmental studies Sept. 2014 $48,000 $12,000 Cash $60,000 Economic analysis and report Mar. 2014 $9,600 $2,400 In-kind $12,000 TOTALS $96,000 $24,000 $120,000 Budget Categories: Direct Labor & Benefits $22,000 $5,500 $27,500 Travel & Per Diem $2,000 $500 $2,500 Equipment $0 $0 $0 Materials & Supplies $0 $0 $0 Contractual Services $72,000 $18,000 $90,000 Construction Services $0 $0 $0 Other $0 $0 $0 TOTALS $96,000 $24,000 $120,000 Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 24 of 27 7/3//2012 PHASE III MILESTONES OR TASKS 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 Permit applications (excluding FERC license or exemption) June 2014 $28,800 $7,200 In-kind $36,000 Permit processing (excluding FERC license or exemption) Dec. 2014 $14,400 $3,600 In-kind $18,000 FERC scoping Mar. 2014 $28,800 $7,200 In-kind $36,000 FERC draft application Dec. 2014 $38,400 $9,600 In-kind $48,000 FERC final application Mar. 2015 $14,400 $3,600 In-kind $18,000 Final design June 2015 $76,800 $19,200 In-kind $96,000 TOTALS $201,600 $50,400 $252,000 Budget Categories: Direct Labor & Benefits $191,600 $48,400 $240,000 Travel & Per Diem $10,000 $2,000 $12,000 Equipment $0 $0 $0 Materials & Supplies $0 $0 $0 Contractual Services $0 $0 $0 Construction Services $0 $0 $0 Other $0 $0 $0 TOTALS $201,600 $50,400 $252,000 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 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 1. Project scoping and contractor solicitation for planning and design 2. Permit applications (as needed) 3. Final environmental assessment and mitigation plans (as needed) 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 Renewable Energy Fund Round 6 Grant Application AEA13-006 Grant Application Page 25 of 27 7/3//2012 6. Simple economic analysis 7. Final report and recommendations 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 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 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 RESUMES 04/04/12 3 4 Page 2 LETTERS OF SUPPORT GOVERNING BODY RESOLUTION CERTIFICATION AEA ROUND II GRANT CLOSEOUT DOCUMENTS December 16, 2010 Audrey Alstrom, Project Manager Alaska Energy Authority 813 W. Northern Lights Blvd Anchorage, AK 99503 Dear Rebecca; Alaska Power Company is closing Grant 2195455 – Neck Lake Feasibility Study. There have been no additional expenses incurred since the June 2010 reimbursement. Enclosed you find the final Progress Report narrative, Financial Report – Grant Funds, FERC Determination Letter, and preliminary design drawing. Every effort has been made to provide the necessary information. Please contact me if questions arise or if additional information is required. Respectfully submitted, Karl B. Wood Senior Accountant Karl.w@aptalaska.com ALASKA POWER & TELEPHONE COMPANY PO BOX 3222 – 193 OTTO STREET PORT TOWNSEND, WA 98368 (360) 385-1733 – (800) 982-0136 FAX (360) 385-5177 Alaska Energy Cost Reduction Program Progress Report Grantee: Alaska Power and Telephone Company Project Name: Neck Lake Feasibility Study Grant # 2195455 Period of Report: Final Report (October 1 to December 15, 2010 Project activities completed • Acquired topographic mapping (by Sentec) • Developed preliminary arrangement of project features • Prepared request for FERC jurisdictional determination • Prepared responses to FERC requests for additional information • Coordinated with SSRAA regarding preliminary project arrangement and potential impact mitigation measures Project existing or potential problems: • FERC determination resulted in increased licensing, permitting, and design requirements rendering this project economically unfeasible. Activities targeted for the Next Reporting Period, First Quarter 2011: • Project terminated . FIGURES