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Adak Hydroelectric Feasibility Study
Grant Application for:
Alaska Energy Authority
Renewable Energy Fund – Round 5
Submitted by:
615 E 82nd Ave, Suite 200
Anchorage, AK 99518
26 August 2011
Renewable Energy Fund Round 5
Grant Application
AEA 12-001 Application Page 1 of 19 7/1/2011
Application Forms and Instructions
The following forms and instructions are provided to assist you in preparing your application for
a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA)
and the forms are available online at: http://www.akenergyauthority.org
Grant Application
Form
GrantApp5.doc Application form in MS Word that includes an outline of
information required to submit a complete application.
Applicants should use the form to assure all information is
provided and attach additional information as required.
Application Cost
Worksheet
Costworksheet
5.doc
Summary of Cost information that should be addressed by
applicants in preparing their application.
Grant Budget
Form
GrantBudget5.
doc
A detailed grant budget that includes a breakdown of costs by
milestone and a summary of funds available and requested to
complete the work for which funds are being requested.
Grant Budget
Form Instructions
GrantBudgetIn
structions5.doc
Instructions for completing the above grant budget form.
Authorized
Signers Form
Authorized
signers
form5.doc
Form indicating who is authorized to sign the grant, finance
reports and progress reports and provides grantee information.
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 completion of each phase.
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.
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
TDX Power, Inc.
Type of Entity: Corporation Fiscal Year End: September 30
Tax ID # 92-0167220 Tax Status: X For-profit or non-profit ( check one)
Mailing Address
615 E 82nd Avenue, Suite 200,
Anchorage AK 99518
Physical Address
615 E 82nd Avenue, Suite 200,
Anchorage AK 99518
Telephone
907 762 8450
Fax
907 562 0387
Email
hroeterink@tdxpower.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Hans Roeterink
Title
Chief Executive Officer
Mailing Address
615 E 82nd Avenue, Suite 200,
Anchorage AK 99518
Telephone
907 762 8450
Fax
907 562 0387
Email
hroeterink@tdxpower.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.
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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)
Adak Hydroelectric Feasibility Study
2.2 Project Location –
Include the physical location of your project and name(s) of the community or communities that will
benefit from your project.
Adak is the southern-most community in Alaska, on the latitude of Vancouver Island in Canada.
The former Navy Air Facility Adak is located off the Alaskan mainland near the center of the
Aleutian chain, approximately 1,200 miles west-southwest of Anchorage, Alaska. Flight time to
Anchorage is three hours. Adak Island‟s coordinates are latitude 51°53‟0" N, at longitude 176°
38‟46" W. The Bering Sea surrounds the island to the north and the Pacific Ocean to the south.
Adak is located in the Aleutian Islands Recording District. The area encompasses 122.4 sq. miles
of land and 4.9 sq. miles of water.
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)
Reconnaissance Design and Permitting
X Feasibility Construction and Commissioning
X Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
The project builds on existing reconnaissance level engineering work recently completed for a
hydroelectric power plant in Adak, and makes use of Adak‟s existing infrastructure such as
dams, access roads, and possibly an existing penstock. The reconnaissance studies show that a
series of alpine lakes in the immediate vicinity of the city have the potential to displace the diesel
power plant as the primary energy source for Adak. Resource availability, engineering
considerations, land ownership and permitting issues were all considered. The diesel power plant
would still be required for backup, and would be available to parallel with the hydroelectric
facility during high load conditions. TDX‟s engineering feasibility studies will focus on two
areas;
Quantifying the hydroelectric potential. Work will include a detailed mapping and
hydrology studies, a permitting evaluation including onsite studies and agency
consultations, assessment of alternatives, a detailed cost analysis for the selected project
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and development timeline; and,
Interconnection requirements for integration with the utility, including analysis and
selection of optimum generator and hydro-turbine size, type, and configuration;
identification of requirements for paralleling switchgear and controls, and all other major
power system components
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.)
TDX and its subsidiary TAG are at a crossroads, considering various options for renewal or
replacement of the existing power plant. Concurrent development of a hydroelectric plant could
impact the size of diesel gensets, selection of switchgear and other controls equipment, and
urgency of the project. Now is the time to advance design of a hybrid power system in Adak in
order to maximize operating efficiency in the years to come.
A hydroelectric-diesel hybrid power system would stabilize the cost of power for all of TAG‟s
ratepayers. Further, by replacing the grossly oversized diesel power plant, the hydroelectric
facility would provide a safer, more reliable power source for the community. The project has
the potential to help revitalize the community of Adak by eliminating one of the major hurdles to
commercial investment in the region – high, volatile energy prices.
Adak‟s electricity rates are among the highest in the state, currently $0.79/kWh, including
COPA. A hydroelectric power plant could reduce the 175,000-200,000 gallons of diesel used
annually by TAG by up to 95%. These drastic fuel savings would result in substantial savings to
TAG ratepayers and to the State of Alaska through reduced PCE payments. In 2010, the State
contributed $137,000 to TAG‟s ratepayers through the PCE program.
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.
$314,367 is required to complete a feasibility study of a hydroelectric-diesel hybrid power
system and is requesting the total amount of funding from the Alaska Energy Authority (the
Authority). Other contributions to the investment in Adak‟s hydroelectric potential includes the
following:
Aleut Corporation conducted hydrology surveys
City of Adak has invested in dam safety and maintenance
Navy invested heavily installing dams, roads and power distribution infrastructure
TDX Power and the Authority have invested in a reconnaissance study
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. $ 314,367
2.7.2 Other Funds to be provided (Project match) $0
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2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $314,367
Project Costs & Benefits
(Summary of total project costs including work to date and future cost estimates to get to a fully
operational project)
2.7.4 Total Project Cost (Summary from Cost Worksheet
including estimates through construction)
$4,100,000 - $7,400,000
2.7.5 Estimated Direct Financial Benefit (Savings) $ 715,000/year (fuel
savings)
2.7.6 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.)
N/A
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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.
Martin Miller will be the Project Manager. Mr. Miller‟s resume is attached to this application.
3.2 Project Schedule
Include a schedule for the proposed work that will be funded by this grant. (You may include a
chart or table attachment with a summary of dates below.)
We will start this project immediately upon execution of an agreement. TDX views this study as
key knowledge that will help determine in which power generation equipment to invest, e.g.
hydroelectric turbines, or diesel generator sets. The project schedule assumes a July 2012 start
date.
July 2012 – August 2012: Project scoping, solicit consultants, gather resources
Sept 2012 – April 2013: Identify land and regulatory issues, collect hydrology and electrical load
data. Begin permitting evaluation.
April 2013 – Deliverable: pre-feasibility study, including the items listed above as well as
detailed energy resource analysis, detailed analysis of existing and future energy costs and
markets, and an assessment of the alternatives.
May 2013 – July 2013: Permitting site visit and findings. Review concept based on
environmental findings. Perform design analysis and detailed cost estimate for the proposed
alternative. Develop detailed economic and financial analysis, conceptual business and
operations plan.
August 2013 – Deliverable: Final Feasibility Study, including all items mentioned above as well
as recommendations
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them. The
Milestones must also be included on your budget worksheet to demonstrate how you propose to
manage the project cash flow. (See Section 2 of the RFA or the Budget Form.)
The proposed schedule includes an initial site visit followed by a period of hydrology and utility
load data collection, leading to analysis of the options, and preliminary project selection.
Following the preliminary selection of a project, a site visit is planned to verify permitting
requirements, including identification of anadromous habitat and wetlands, review of known
cultural or historical sites, and review of Navy-era the contaminated areas. Based on updated
permitting information, final project selection will take place. A detailed cost estimate, timeline,
financial analysis will be performed on the selected project.
3.4 Project Resources
Describe the personnel, contractors, 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
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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.
TDX Power will use internal personnel to manage the project and perform electrical engineering
tasks. The TDX team will conduct the following:
analyze and define appropriate interconnection requirements; and,
evaluate and specify size, type of generation, switching, communications and system
controls equipment required for an integrated hydro-diesel hybrid power system.
TDX teamed with Hatch USA on the Reconnaissance phase of this project, and we plan to
continue that relationship. Hatch has pledged to support the project with hydroelectric
engineering design work. Statement of Qualification (SOQ) and resumes from key employees
are attached to this application.
TDX is committed to working with the local stakeholders, including the Aleut Corporation, and
the City of Adak.
Resumes of key personnel are attached.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
TDX Power‟s Project Manager will provide direct oversight of all aspects of the project and will
provide monthly or quarterly status reports by email (or other method allowed by the Authority,
if email is not available) to the Authority‟s Project Manager.
The report will update the Authority on the Project‟s progress, regulatory and compliance issues,
possible delays, and grant expenditures during the quarter. The Progress Reports will summarize,
in one or two pages, the progress made on grant tasks during the previous period and identify any
difficulties in completing tasks or meeting goals or deadlines. TDX will also include with the
report copies of any work products due to the Authority during this period.
3.6 Project Risk
Discuss potential problems and how you would address them.
The project is low-risk, in terms of budget, timeline, and product.
Typically, maritime weather and the remote location are primary project risks in Adak and
surrounding areas. However, since the project is only planned through the feasibility phase,
minimal equipment or logistical challenges are expected.
Local stakeholders, the Aleut Corporation and the City of Adak support renewable energy
development and will endeavor to create an atmosphere of success. If any unidentified conflicts
arise the TDX Project Manager will immediately address all concerns and communicate possible
resolutions with all stakeholders and the Authority.
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SECTION 4 – PROJECT DESCRIPTION AND TASKS
Tell us what the project is and how you will meet the requirements outlined in Section 2 of
the RFA.
The level of information will vary according to phase(s) of the project you propose to
undertake with grant funds.
If you are applying for grant funding for more than one phase of a project provide a
plan and grant budget form for completion of each phase.
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.
Based on the results of the Adak Diesel Hybrid Reconnaissance Report hydroelectric power has
the best potential to compete with diesel generation in Adak. A series of elevated lakes near Adak
were dammed by the Navy, and Lake Bonnie Rose (surface elevation 739 feet) has an existing
penstock to town that serves as the city‟s drinking water source. The topography, hydrology, and
existing infrastructure all add up to a good hydroelectric potential.
Hydroelectric technologies are commercially mature and could likely be used effectively in Adak.
Based on the existing infrastructure and the presence of lakes for storage, hydroelectric power has
the potential to displace 95% of Adak‟s diesel fuel use and become the primary operating plant.
A strong wind resource is also available in Adak and should be pursued in the absence of a viable
hydroelectric project (see Adak Reconnaissance Study Draft Report 7/11/2011). The first step
to advance the wind study is to relocate the existing anemometer tower to a new and less
turbulent location. Ruther wind studies are not included in this proposal.
Renewable energy is more cost efficient than the existing diesel generating system. The price of
hydrocarbons is likely to increase in the future, which would impact the cost of operating a diesel-
based power system.
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 diesel generator based power plant is located on the south side of the airport opposite the
major loads. The power system was built in phases, beginning in the 1950s, to accommodate a
growing military operation. The oldest switchgear section, the “2400 Volt Bus,” contains three
(3) Caterpillar 3516 engines (Generators 3, 4, and 5), each rated at 800kW, 2400 volts. These are
the primary generators. Each genset has in excess of 30,000 hours runtime and all are due for
complete overhaul. Based on FY2010 the diesel generator sets average 9.28 kWh/gallon
efficiency.
The manually controlled generator switchgear includes Woodward governors and loadshare
modules. Fuel injection is mechanical. The governors and load-share modules, circa 1982, could
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potentially by reused in a new switchgear lineup, but more likely all new equipment would be
installed.
Distribution wiring is mainly copper. Routing is largely buried, but significant sections of the city
utilize overhead distribution. The effects of Adak‟s harsh weather can be seen in the condition of
transformers, power poles, and junction boxes, many of which do, or will soon, require
replacement. As can be expected with such an old system, changes over time have not been
properly documented on the as-built drawings. Also, large sections of the distribution system
have been disconnected and abandoned in place due to a lack of use.
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.
Adak is well situated to make use of local renewable energy sources. Located on the border
between the Bering Sea and the North Pacific Ocean, Adak is home to strong, consistent winds.
Located on a volcanic island, near-surface geothermal resources may be located nearby. Located
on a mountainous hillside near several natural lakes, the potential clearly exists to develop
hydroelectric power. Based on previous study hydroelectric potential is the most promising local
energy resource. The community of Adak supports the development of renewable energy as a
way of stabilizing and possibly reducing the cost of energy in their community.
TDX has been working with the City of Adak and the Aleut Corporation to develop plans that
address local views and concerns. The integration of renewable power systems with the existing
infrastructure will need to be addressed in order to properly and efficiently size and control all
generating assets. The utility‟s renewal and replacement strategy should consider integration with
generating facilities outside the diesel power plant. An emphasis on uncomplicated systems will
help improve operating efficiency over the long term. Maintenance personnel in Adak do not
have the breadth of technical or material resources that urban developers are accustomed to. The
plant and integration design should consider local expertise and maintenance operations as critical
components of a long-term project. As a long-time operator of rural Alaskan utilities and other
power generation facilities TDX Power understands the difficulties of operating under these
conditions.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The existing electrical infrastructure was build to support the US Navy operations in Adak, which
had a peak population of nearly 6,000 people. With closure of the NAF-Adak, ownership of the
electric utility was transferred to the local government and was later purchased by TDX Power.
There are currently 195 utility customers in Adak, of which 105 are residential. The electricity
market in Adak is regulated by the State of Alaska through the Regulatory Commission of
Alaska. TDX Adak Generating, LLC, a wholly owned subsidiary of TDX Power, owns and
operates the utility under certificate number CPCN 684. TDX Adak Generating reports that the
current electrical load averages roughly 200 –250kW, with recent annual sales of approximately
1.5 – 2.5 million kWh.
The price of electricity is currently averaging $0.79/kWh for residential customers.
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TDX Adak Generating ratepayers do qualify for the State‟s power cost equalization program
(PCE), which subsidizes residential customers and some community facilities. A special contract
with Icicle Seafoods, the local fish processing plant, was submitted to the RCA for approval on
June 10, 2011. Operation of the plant is expected to cause a dramatic spike in consumption during
the peak fish processing months of February, March and April. Neither TDX Adak Generating
nor Icicle Seafoods can provide an accurate estimate of the processing load since Icicle has self-
generated in the past with a 2200kW genset. The peak fish processing load is expected to be
between 1000 –2000kW, with a more moderate 100kW load for the remainder of the year.
The utility is in distress after years of inadequate maintenance. The existing electrical
infrastructure is in various stages of disrepair. There is a major and urgent need for renewal
and/or replacement both at the powerhouse and at the distribution level. TDX Adak Generating is
evaluating options for renewal or replacement of the existing power plant to better serve
customers. This upcoming utility work would significantly affect any renewable energy project in
Adak. Continued coordination with the utility will be a key factor for successful development of
any renewable energy project.
4.3 Proposed System
Include information necessary to describe the system you are intending to develop and address
potential system design, land ownership, permits, and environmental issues.
4.3.1 System Design
Provide the following information for the proposed renewable energy system:
A description of renewable energy technology specific to project location
Optimum installed capacity
Anticipated capacity factor
Anticipated annual generation
Anticipated barriers
Basic integration concept
Delivery methods
A description of renewable energy technology specific to project location
Initial analysis found about 13 individual hydroelectric project configurations near Adak. A
simple approach to comparing these individual options was adopted to identify the options with
the best potential for development. Current loads appear to have dropped enough from historic
levels such that a single hydroelectric development should meet the majority of demand. Any
project would be paralleled with a diesel plant. Any large project that could support the town
load on its own would have that capability as well.
The results show that two developments rank the highest:
Utilizing the existing water system pipeline and installing a power recovery turbine in
place of the PRV
Constructing a storage project utilizing Lake Bonnie Rose for the intake and locating a
powerhouse on Mitt Lake
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The second option, with higher head and power output, appears at this stage of analysis to be the
most feasible option for meeting a majority of energy generation needs economically. This option
is a storage project with an intake on Lake Bonnie Rose and a powerhouse discharging to Mitt
Lake. The estimated useable storage for the lake is the surface area times a depth of 5 feet. Also
included is a requirement to supply 0.5 cfs of water for potable supply.
The results indicate that Lake Bonnie Rose has daily and some seasonal storage value. The
approximate analysis of the performance using the hourly demand data and storage is an
approximation that does not include varying efficiency, headloss, minimum diesel loading and
run time, or ice and snow effects on storage. For this level of study, the results are generally
adequate to test the viability of the concept and determine if feasibility efforts should be
considered. The results of the hourly energy analysis show that, for most of the year, the
hydroelectric project could displace diesel generation entirely.
Optimum installed capacity
Projects were identified and sized based on resource availability. The initial analysis presented
above does not include storage or useable energy (demand constrained) considerations. The
feasibility study will identify the most cost effective project capacity which will be dictated by
system load, hydrology, and system storage capability.
Anticipated barriers
Primary issues impacting development potential for the project options include cost, energy, and
environmental concerns. A comparative formula was developed for assessing and ranking the
project cost and energy produced. The environmental factors assigned based on estimated impacts
to aquatic issues and, to a lesser extent, physical footprint of the project. No “show-stopper”
issues were identified in the reconnaissance phase of this project.
Anticipated capacity factor; Anticipated annual generation; Basic integration
concept
The table below illustrates the anticipated capacity factor; anticipated annual generation; and
basic integration concept
Parameter
Available Energy from Hydro 2,600,000kWh
Hydro Capacity Factor 67%
Annual Energy Demand 2,450,000kWh
Fraction of Demand Met by
Hydro
2,330,000kWh
Fraction of Demand Met by
Diesel 110,000kWh
Estimated Diesel Efficiency 14kWh/gal
Current Diesel Fuel Use 175,000gal
Diesel Fuel Use with Hydro 7,900gal
Annual Fuel Savings with
Hydro
167,100gal
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Delivery methods
Power generation is anticipated to be delivered through the existing distribution system from a
tie-in point on the medium voltage system nearest the powerhouse. The extensive distribution
system has adequate tie-in points in various locations. Specific recommendations will be
developed as part of this study.
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.
All of the land and infrastructure required for the project are privately owned by either the Aleut
Corporation or the City of Adak. Both entities support renewable energy development in Adak,
and have expressed willingness to work with TDX to develop a hydroelectric power system. A
letter of support from the Aleut Corporation is attached to this application.
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
Due to significant environmental and legal requirements associated with project development on
refuge lands, USFWS Alaska Maritime National Wildlife Refuge lands on the south side of Adak
Island are not being considered for development.
In accordance with the permitting memo prepared under the Reconnaissance Report, the
following permits will be required for construction of a hydroelectric project. A detailed
evaluation of the following permits will be performed under this project, including consultation
with relevant agencies, and on-site investigation of fish habitat, wetlands, and known cultural
sites.
Wetlands Permit / Water Quality Certification (USACE / AK DEC)
SHPO Permit (AK DNR)
Endangered Species Act Clearance (USFWS, NMFS)
Essential Fish Habitat Consultation (NOAA Fisheries)
Coastal Zone Management Program (currently unenforceable)
Fish Habitat – Title 16 permit (ADF&G)
Water Rights (AK DNR)
Contamination review (US Navy, EPA, AK DEC)
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
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Habitat issues
Wetlands and other protected areas
Archaeological and historical resources
Land development constraints
Telecommunications interference
Aviation considerations
Visual, aesthetics impacts
Identify and discuss other potential barriers
Threatened or Endangered species and Habitat Issues
The following ESA-listed species may be found in the project area: Aleutian shield fern, an
endangered species managed by the USFWS; the northern sea otter and Steller‟s eider, threatened
species managed by the USFWS; and the Steller sea lion, fin whale, humpback whale, sperm
whale, blue whale and north Pacific right whale, endangered species managed by the National
Marine Fisheries Service (NMFS). Critical habitat for Aleutian shield fern has not been
established, but it is possible that the ferns are located within project option areas. Critical habitat
for Steller sea lion surrounds Adak Island, but no haul out or rookery sites are in the vicinity of
the project options. Critical habitat for northern sea lions in the area is from mean high tide
seaward. Critical habitat for the whale species is also off shore. (Sea otters, Steller sea lions, and
whale species are also regulated under the MMPA, which has separate consultation requirements
that could occur concurrently with this process.)
The marine waters surrounding Adak provide Essential Fish Habitat (EFH) for the following
species: walleye pollock, squid, skate, sculpin, rock sole, and northern rockfish. No Habitat Areas
of Particular Concern are found at the project location. Anadromous streams are also considered
EFH for salmon species. Based on Alaska Department of Fish and Game‟s (ADF&G) Catalog
ofWaters Important for the Spawning, Rearing or Migration of Anadromous Fishes, there are
about 12 anadromous streams around the community of Adak. The extent of project work is
projected to be outside anadromous habitat, which will minimize impacts and permitting
requirements. However, further evaluation and definition of anadromous habitat is required and
is included in this project.
Wetlands and other protected areas
It is likely that a wetland permit would be required for all proposed renewable energy projects;
however, it is recommended that prior to submitting an application, a preliminary wetlands
jurisdictional determination is completed to determine the extent of wetlands in the project area.
A USACE wetland permit would be required if the project requires dredging or the placement of
fill in wetlands. Also, a wetlands permit would be required if any project components were placed
below ordinary high water of any navigable stream. If the project is constructed in undisturbed
areas, it is likely that a wetlands survey and the submittal of a preliminary jurisdictional
determination and a wetland permit application would be required. Potential impacts to wetlands
could be reduced by constructing the project within previously disturbed areas and by
incorporating existing infrastructure.
Archeological and historical resources
Since there is the potential that there are cultural or historic resources in alternative energy project
option areas, to make the permitting process more efficient, consultation with the SHPO should
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occur during the permitting process. The project could wait for the federal permitting agencies to
complete this consultation as a part of their process; however, completing the NHPA consultation
with the SHPO is expected to help move the permitting process forward. If the project is
constructed in undisturbed areas, it is likely that a cultural resources survey would be required
and the SHPO would require the submittal of a finding of effects letter. If the project would result
in impacts to buildings more than 50 years old, it is likely that SHPO would require the submittal
of a finding of effects letter. Potential impacts to cultural resources could be reduced by
constructing the project within previously disturbed areas and by incorporating existing
infrastructure, such as road right-of-ways.
Land development constraints
The land is owned by the City of Adak and/or the Aleut Corporation and no constraints exist at
this time.
Telecommunications interference
There are no telecommunications interferences anticipated on this project.
Aviation considerations
There would likely be no FAA permitting requirements associated with a hydroelectric project.
Visual, aesthetics and other potential barriers
A re-evaluation of environmental issues such as fish habitat, wetlands, archeological, and visual
and/or aesthetic impacts will be conducted in detail as part of the feasibility study.
Section 4.3.3 of this application outlines the permits we expect to pursue.
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
Total anticipated project cost are $4.1 million - $7.4 million, including approximately $800 in
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development cost (reconnaissance, feasibility, design and permitting), and capital cost in the
range of $3.3 million to $6.6 million for the preferred 440kW facility. Capital cost assumptions
are based on industry standards adjusted for the remote location ($7,500 – 15,000 per kW
capacity).
Cost for the Feasibility Study is $314,367. TDX Power is requesting funding to cover the entire
feasibility study. No matching funds or other funding streams are available at this time.
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.)
This proposal is for engineering studies only. There are no operating and maintenance costs
associated with the project.
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 customers are the ratepayers of Adak. TDX Adak Generating (TAG), a wholly-owned
subsidiary of TDX Power, owns and operates the utility in Adak. It is anticipated that TAG will
own the hydroelectric power plant. The City of Adak currently owns the dams and may retain
ownership of that portion of the project.
If a small hydroelectric project is developed, the sales price would need to be below the avoided
cost of power, which fluctuates with the price of diesel fuel. If a larger hydroelectric project
designed to operate without the diesel power plant is developed, the rate cap may be significantly
higher since it would eliminate the need to operate the diesel power plant for much of the year.
There is no “rate of return” associated with this engineering study. If TDX Power develops a
project, we would expect that a rate of return consistent with the RCA‟s regulations and
procedures would be allowed. There is no rate of return on the grant-funded portion of any
project.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
The Project Cost Worksheet is attached to this application.
Development Cost and Capital cost for construction are based on industry standards since a
detailed design is not available for cost estimating purposes.
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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 (gal and $) 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
Using the current cost of diesel fuel in Adak of $4.29 per gallon, the annual savings in fuel would
be about $715,000. Over a 30 year period with a discount rate of 3% this equates to a present
value of about 14.3 million dollars. For comparison, it is estimated that the capital costs for
similar rural hydroelectric projects should be in the range of about $7,500 per kW to $15,000 per
kW. Thus, at 440 kW, the preferred option is expected to cost from 3.3 million to 6.6 million
dollars. Currently, there are no additional annual incentives or additional annual revenue streams.
Non-economic public benefits to Alaskans over the lifetime of the project will include the
reduced exposure to NOX from the diesel generators, reduced noise pollution to the community
and surrounding eco-system, reduced potential for diesel spills that impact land and water.
Additionally, there is a perceived mental health benefit for people when they have reduced stress
worrying about diesel shipments and costs. The positive aspect of renewable energy is a sense of
ownership and pride in „green‟ technology for this small village as well as an improved climate
for business investment 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 goal of this project is to make investments that could lead to stably priced, reliable energy
over the long term. TDX has proven itself as a rural utility operator and hybrid system design
house, focused on maintaining top quality service at a reasonable price. This engineering study fits
within our existing business to develop the power generation system in Adak that provides low-
cost, consistent, reliable and safe service.
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Operations and maintenance (O&M) for the life of the project will be supported financially by
operating revenues. Operation issues due to lack of technological expertise in Adak will be
addressed by operations training as well as Anchorage-based support. Costs incurred for day to
day operations will include the salary for the operators and general administrative functions.
Normal replacement of parts and equipment will be scheduled and budgeted into the annual
budget to continue optimum operations. Savings and benefits will be reported to the stakeholders
and the Authority through annual reports.
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.
TDX Power purchased the Adak utility in 2008 and has focused on improving safety and
reliability of the existing system. Much work is left to be done, including replacement of nearly
all major equipment in the power plant. If further studies show that a hydroelectric power plant
can economically compete with diesel, TDX Power is prepared to immediately pursue this option,
possibly allowing the utility to downsize the projected replacement diesel plant.
Under a REF grant from the Authority, TDX Power recently performed a reconnaissance report
for a hybrid power system on Adak, considering wind, geothermal, and hydroelectric options. The
results of that study indicate that there is a substantial hydroelectric potential. Much of the
required infrastructure required for a hydroelectric project is already in place, including access
roads and dams. Detailed hydrology reports have been prepared for all the major lakes near
Adak. This information can be leveraged to support the feasibility study.
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.
Local support from the community, stakeholders, the Aleut Corporation and the City of Adak will
help to assure continuing success with this project. TDX has conducted outreach efforts with
each of these entities and they have each indicated a willingness to support TDX‟s plans for
hydroelectric development in Adak. A letter of support from the Aleut Corporation is attached to
this application.
At this time there is no opposition to the project.
Although it was not possible to gain formal approval and support for the project from the City of
Adak, through our ongoing discussions we are confident that the City will support the project and
make land and other assets available for development.
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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.
Include an estimate of budget costs by milestones using the form – GrantBudget5.doc
$314,367 is required to complete a feasibility study of a hydroelectric-diesel hybrid power
system and is requesting the total amount of funding from the Alaska Energy Authority (the
Authority). Other contributions to the investment in Adak‟s power system includes the
following:
Aleut Corporation conducted hydrology surveys
City of Adak has invested in dam safety and maintenance
Navy invested heavily installing dams, roads and power distribution infrastructure
TDX Power and the Authority have invested in a reconnaissance study
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Project Cost/Benefit Worksheet
RFA AEA12-001 Application Cost Worksheet Page 1 7-1-11
Please note that some fields might not be applicable for all technologies or all project
phases. The level of information detail varies according to phase requirements.
1. Renewable Energy Source
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. 440kW or greater (multiple projects are feasible)
Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel)
2. 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 4 diesel generators
ii. Rated capacity of generators/boilers/other 3 x 800kW, 1 x 1100kW
iii. Generator/boilers/other type Diesel
iv. Age of generators/boilers/other 18+ years
v. Efficiency of generators/boilers/other 9.28 kWh / gallon of fuel
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor $311,334
ii. Annual O&M cost for non-labor $1,444,430 (including $830,699 in fuel expenses)
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] 2,208,634
ii. Fuel usage
Diesel [gal] 237,762
Other N/A
iii. Peak Load 580kW
iv. Average Load 252kW
v. Minimum Load 200kW
vi. Efficiency 9.28kW / gallon
vii. Future trends Upwards due to recent fish plant connection
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] N/A
ii. Electricity [kWh] N/A
iii. Propane [gal or MMBtu] N/A
iv. Coal [tons or MMBtu] N/A
v. Wood [cords, green tons, dry tons] N/A
vi. Other N/A
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.
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RFA AEA12-001 Application Cost Worksheet Page 2 7-1-11
3. 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]
440kW
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] 2,330,000 kWh
ii. Heat [MMBtu] N/A
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu] N/A
ii. Coal [tons or MMBtu] N/A
iii. Wood [cords, green tons, dry tons] N/A
iv. Other N/A
4. Project Cost
a) Total capital cost of new system $3.3 – $6.6 million
b) Development cost Approx. $800,000, including recon + feasibility +
design + permitting
c) Annual O&M cost of new system $616,741 (66% of existing O&M from 2b)
d) Annual fuel cost 0
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 167,100 gallons
ii. Heat 0
iii. Transportation 0
b) Current price of displaced fuel $4.29/gallon
c) Other economic benefits N/A
d) Alaska public benefits 95% reduction in PCE payout: $131,000
6. Power Purchase/Sales Price
a) Price for power purchase/sale $0.26/kWh [4c / 3c(i)]
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 2.0 to 3.5 (NPV of fuel savings / total capital cost)
Payback (years) 3.35 years (4a + 4b)/[(current price – 6a)*3b(i)]
Renewable Energy Fund Grant Round V Grant Budget Form 7-1-11
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
1.0 Project scoping/contractor solicitation 01 August 2012 $5,762 N/A N/A $5,762
2.0 Detailed energy resource analysis 01 April 2013 $147,899 N/A N/A $147,899
3.0 Identification of land and regulatory issues 01 October 2012 $2,622 N/A N/A $2,622
4.0 Permitting and environmental analysis 01 July 2013 $52,863 N/A N/A $52,863
5.0 Detailed analysis of existing and future energy costs
and markets
01 October 2012 $6,907 N/A N/A $6,907
6.0 Assessment of Alternatives - Pre-feasibility Report 01 April 2013 $42,462 N/A N/A $42,462
7.0 Conceptual design analysis and cost estimate 01 August 2013 $14,782 N/A N/A $14,782
8.0 Detailed economic and financial analysis 01 August 2013 $12,429 N/A N/A $12,429
9.0 Conceptual business and operations plans 01 August 2013 $2,542 N/A N/A $2,542
10.0 Final report and recommendations 01 August 2013 $26,099 N/A N/A $26,099
TOTALS $314,367 N/A $314,367
Budget Categories:
Direct Labor & Benefits $98,789 N/A N/A $98,789
Travel & Per Diem $42,725 N/A N/A $42,725
Equipment $0 N/A N/A $0
Materials & Supplies $3,000 N/A N/A $3,000
Contractual Services $169,853 N/A N/A $169,853
Construction Services $0 N/A N/A $0
Other $0 N/A N/A $0
TOTALS $314,367 N/A $314,367
Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)-
Add additional pages as needed
Renewable Energy Fund Grant Round V Grant Budget Form 7-1-11
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