Loading...
HomeMy WebLinkAboutWaterfall Creek Round 6 applicationRenewable Energy Fund Round 6 ®Grant Application c4111111111111DENERGY AUTHORITY g 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: hftp://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(cDaidea.om. • 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. AEA 13-006 Application Page 1 of 27 7/3/2011 Renewable Energy Fund Round 6 ALAS"_, S __, Grant Application L% ENERGY AUTHORITY SECTION 1 — APPLICANT INFORMATION Name (Name of utility, IPP, orgovemment entity submitting proposal) City of King Gov. Type of Entity: Flscal Year End Tax IC p 92-6001247 Tax Status: —For-profit or Xnon-profit (chock one) Mailing Address Physical Address 3380 C Street, Suite 205 Same as mailing Anchorage, AK 99603 Telephone Fax Email 907-274-763 907-276-7569 henni hmgr ci.nel 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Gary L. Hennigh Title City Administrator Mailing Address 3380 C Street, Suite 205 Anchorage, AK 99603 Telephone 907-274-7563 Fax Email 9hennighm9r@9ci.net 907-276-7569 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer in accordance with 3 AAC 107.695 (a) (1), or X A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2 Attached to this application is formal approval and endorsement for 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. AEA13-006 Grant Application Page 2 of 27 7/3//2012 Renewable Energy Fund Round Grant Application 4111111111C) ENERGY AUTHORITY SECTION 2 — PROJECT SUMMARY This is intended to be no more than a 1-2 page overview of 2.1 Project Title — (Provide a 4 to 5 word title for yc Waterfall Creek Hydroelectric Project project) 2.2 Project Location — Include the physical location of your protect and name(s) of the community or communities that will benefit from your project in the subsections below. Delta Creek Vallev — King Cove, Alaska The Project will be located on a small creek located approximately 5 miles north of the City of King Cove. This creek is adjacent to and west of an existing hydroelectric project on Delta Creek that was constructed in 1995. The creek has a noticeable waterfall that is visible form the Delta Creek hydroelectric powerhouse. 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 pmject'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 formal as follows: 61.195676..149.898663. If you would like assistance obtaining this intormation please contact AEA at 907-771-3031. 55.069129,-162.313385 2.2.2 Community benefiting — Name(s) of the community or communities that will be the beneficiaries of the project. The City of King Cove 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 Feasibility X Construction and Commissioning Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. This project will be a modest run -of -the -river hydroelectric facility using Waterfall Creek and AEA13-006 Grant Application Page 3 of 27 7/3/2012 Renewable Energy Fund Round 6 p� n Grant Application I 400U)ENERGY AurHORMY consisting of a concrete diversion/intake structure, 4,5UuHL)Vt penstock pipeline, 1b A4U' metal powerhouse on concrete slab, Pelton Impulse Turbine and induction generator, remote - automatic control system, and 5,000' access road. This facility will be a working partner to the City's existing and highly successful Delta Creek hydroelectric project, which has been ooeratind for the last seventeen vears. AEA13-006 Grant Application Page 4 of 27 7/3//2012 Renewable Energy Fund Round 6 i� of iall�n Ill Grant Application �EN8RGY AUTHORrrY 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.) The public benefits and financial savings which will accrue upon completion of this project are both immediately significant and profound in their ramifications over the life of the Waterfall Creek project. Waterfall Creek is projected to displace approximately 75,000 gallons of diesel fuel that would otherwise have to be purchased and consumed annually. This represents approximately 1 MW of electrical power, year after year from a clean renewable resource. The estimated annual savings of 75,000 gallons of diesel fuel is $290,000 at our current price of $3.87/gallon. Also, Peter Pan Seafoods is interested in purchasing a minimum of 500,000 kWh of "surplus power" at a cost of between $0.12 to $0.15/kWh. This potential additional annual revenue is between $60,000 to $75,000. Together, the City is projecting this savings and new revenue to be between $350,000 and $365,000. Upon execution of a purchase agreement, power from Waterfall Creek is projected to displace about 35,000 gallons of diesel fuel that Peter Pan Seafoods would otherwise have to purchase and consume annually. See also attached Memorandum of Agreement (MOA) for a surplus power agreement between Peter Pan Seafoods and the City of King Cove. Our anticipated annual debt for the Waterfall Creek project is estimated between $80,000 and $100,000. This assumes a maximum of $1,000,000 in long term debt. In summary, the anticipated fuel cost savings with Waterfall Creek will be around $290,000. Then, using as "worst case' debt cost assumption of $100,000, the City expects about a $200,000 in additional annual revenues for our electric fund. This additional revenue should ensure the City is able to maintain our current $0.30/kWh rate, and position the community to offset any future, reasonable PCE program reductions. Public health benefits — the estimated annual 110,000 gallons of diesel fuel which could be replaced by renewable energy from the Waterfall Creek translates into 860 metric tons of avoided carbon dioxide emissions — roughly the equivalent of 400 cars driving 10 miles/day every day for a year. Cleaner air will benefit all the residents of King Cove! With the addition of Waterfall Creek, the community expects to derive between 70 to 75% of its total, annual demand for electrical power from renewable sources in its own "backyard." Consequently, King Cove will be saved from being at the mercy of extreme swings in the price of diesel fuel and be able to provide residents with some security against the extremes of King Cove's weather, which have been known to delay fuel deliveries. AEA13-006 Grant Application Page 5 of 27 713/12012 MEMORANDUM OF UNDERSTANDING This Memorandum of Understanding (MOU) is executed this 21s' day of September, 2012 between the City of King Cove ("City") and Peter Pan Seafoods, Inc. ("PPSF") for the mutual purposes and understandings set forth below. WHEREAS, the City is finalizing a construction and funding plan to construct the Waterfall Creek Hydroelectric Project ('Project") in 2013/2014; and WHEREAS, the Project is expected to annually produce between 1,000,000 kWh (1.0 MW) and 1,200,000 (1.2 MW); and WHEREAS, approximately 50% (.5 MW to .6 MW)) of the renewable energy from the Project is expected to be available for sale to PPSF on an annual basis; and WHEREAS, the "King Cove Energy Projects — Concept Design Report" (October 5, 2005) prepared by Alaska Energy and Engineering for the Alaska Energy Authority estimated a potential daily PPSF demand of 200 to 250 kW for their "kitchen, laundry, store, Anchor Inn, dormitories and housing, and other non -process loads;" and, WHEREAS, this potential daily kW demand translates into an annual demand of up to .8 MW. NOW THEREFORE, the City and PPSF agree as follows: 1) PPSF supports the City's efforts to fund and construct the Project as soon as possible. 2) PPSF acknowledges a willingness to consider purchasing a minimum of .8 MW/year. 3) Subject to any applicable statutory, regulatory or grant requirements for the project, the City agrees to: a) include a range of potential power sales from the Project to PPSF (including amount and costs) as part of its AEA grant application and an updated city power business plan; b) draft a Power Purchase Agreement with a negotiated cost/kWh based on current, expected kWhs available for sale from the Project; and c) include an option for additional power sales (including amount and costs) from the city's diesel generation system and existing Delta Creek Hydroelectric facility. d) research, and feasible, establish a process for capturing any carbon tax credits, carbon trading revenue, and/or other derivative revenue. 4) If for any reason, the City is unable to proceed with the Project, this MOU will terminate immediately without any further action required by the City of PPSF. 5) Nothing in this MOU shall bind the City or PPSF to the sale or purchase of power from the project. 6) This MOU constitutes the entirety of the understanding between the City and PPSF with regard to the subject matter herein. Any amendment, modification or alteration of the MOU shall be in writing and signed by both parties. For City of King Cove: 141� t'vl IJL Henry Mack, Mayor 9 1g, I Z a Date MOU City and PPSF, Page 2 of 2 For Peter Pan Seafoods, Inc. Dale Schwarzmiller, V.P. Alaska Production 9 Zo is Dale King Cove Energy Projects October 5, 2005 Concept Design Report Alaska Energy and Engineering 4.6 Peter Pan Seafoods Domestic Loads The City of King Cove has been able in the past to receive power from the Peter Pan Seafoods plant. However, in the 1990's the City utility transformers at the Peter Pan substation failed and were removed. With the construction of a new City diesel power plant, it is unlikely the City will require power from Peter Pan. However, Peter Pan Seafoods has expressed an interest in purchasing electric power from the City for its "non -process" or "domestic" electric loads. Benefits of Peter Pan purchasing power from the City include freeing up existing Peter Pan generation capacity for increased process loads, as well as increased revenues for the City electric utility. Additionally, should the City hydroelectric generation capacity be increased, the domestic loads could be met predominantly by hydroelectric power, which would reduce air pollution. The City and Peter Pan Seafoods would need to negotiate a long term sales agreement prior to implementing this option. The proposed electric service would provide City power to Peter Pan facilities that do not directly support fish processing. Potential facilities would include the kitchen, laundry, store, Anchor Inn, dormitories and housing, and other non - process loads. It is estimated that the total demand of this service will be approximately 200 to 250 kW at a fairly high power factor. The point of connection will be on the east side of the existing Peter Pan .-. substation building. Feeder 11 currently feeds all "domestic" loads within the .� Peter Pan Seafoods processing plant from the Peter Pan 480 volt switchgear. Feeder 11 feeds a 1200 amp, 480-volt panelboard, which then feeds multiple loads, including some processing loads. The proposed arrangement is to install a new 480-volt panelboard dedicated to loads considered non -essential for fish processing. A new circuit breaker and meter will be installed on the outside of the substation building and an automatic transfer switch will control whether the domestic loads receive power from the City or from the Peter Pan electrical system. A one -line diagram of the proposed connection is shown in Appendix A. 4.7 Peter Pan Seafoods Absorption Refrigeration The PPSF processing plant operates multiple refrigeration compressors that are part of a central ammonia refrigeration system. The connected load of the electric driven compressors exceeds 1000 kW (approximately 1400 HP). In addition to the electric driven chillers, there is also a 180-ton screw compressor driven by a CAT 3412 diesel engine. PPSF power plant has two exhaust heat recovery boilers, one 70 HP and one 100 HP. The boilers are designed to provide 115 psi steam for processing loads. Both boilers have been out of service for the past 2+ years, in part due to difficulties in achieving design steam flows to critical processing loads. The available energy from the exhaust heat recovery system with a prime power plant load of 2000 kW is approximately 3.6 million Btu/hour or the equivalent of about 22 Renewable Energy Fund Round 6 /()= or.rr. Grant Application i ® ENERGY AUrHORnY 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 Waterfall Creek project is estimated to cost $4.3 million, as of September 2012. The City's engineering consultants, HDR Alaska, have prepared a detailed project cost summary to support this estimate: Our anticipated funding scenario for this $4.3 million estimate is as follows: $2,600,000 AEA Renewable Energy Fund #6 — this request 200,000 AEA Energy Fund #5 (confirmed) 300,000 City Local Cash Match (confirmed) 200,000 Aleutians East Borough — FY14 Grant (anticipated) 1,000,000 City Debt (most likely from State Power Project Fund) $4,300,000 TOTAL PROJECT COST Per this $4.3 million project cost estimate, $400,000 has been previously funded by AEA (FY13 Energy Fund Grant #5) and the City. As further discussed in Section 3.2, all tasks for the final design and permitting and construction bid document preparation, bidding, and contract award are anticipated to be completed by May 2013. The City brings to this project invaluable in -kind contributions. They are experience, a proven track record and infrastructure. Our successful Delta Creek project, with 17 years of successful plant construction and operation, is a blueprint for how small extremely rural communities can succeed with a small hydro project. King Cove has demonstrated that it supervises complex construction well, exercises budget discipline, and brings projects on-line on time. Lessons have been learned about what constitutes adequate operations and management resources. The idea with this project, as it was with Delta Creek, is to build infrastructure that lasts by well maintaining and operating. As City leaders planned for Waterfall Creek (initial feasibility study was commissioned in 2006), it was with these values in mind: keep costs as low as possible, respect the water resource and utilize as much Delta Creek infra -structure as possible. The geographic proximity of these four tributaries feeding into Delta Creek is fortuitous. The result is that with the addition of a new turbine and generator, and a small expansion of the existing powerhouse, the construction of this new facility will be very cost effective. Similarly, the already -installed transmission lines provide an immediately viable delivery system. Estimated value of this infrastructure already in place is $1 million. 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. $2.6 million 2.7.2 Cash match to be provided (City cash & debt) $1.1 million 2.7.3 In -kind match to be provided (SEE ABOVE SUMMARY) $0.0 2.7A Other grant applications not yet approved $200,000 (AEB) 2.7.5 Total Grant Costs (sum of 2.7.1 through 2.7.3) $3.9 million AEA13-006 Grant Application Page 6 of 27 7/3//2012 Renewable Energy Fund Round 6 ONE Grant Application / =1111D ENERGY AIfTHORRY A $200,000 FYt 3 grant from the AEA Renewable Energy Fund #5 has been awarded. This grant, combined with the above funding sources, totals to $4.3 million. 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 $4.3 million including estimates through construction) 2.7.7 Estimated Direct Financial Benefit (Savings) $350,000 2.7.8 Other Public Benefit (If you can calculate the benefit in Cleaner airlenvironment & terms of dollars please provide that number here and long —term rates explain how you calculated that number in your application (Section 5.) AEA13-006 Grant Application Page 7 of 27 7/3//2012 Renewable Energy Fund Round 6 Grant Application t ENEnGVAUTHOWTY 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. Proiect Manager will be Gary Hennigh. Mr. Hennigh has been King Cove's City Administrator for the last 22 years. He is responsible for the overall delivery and management of public services including: all general government programs; port & harbors; police and fire services; water, sewer, solid waste, and electrical utilities; and recreational programs. He directly supervises the City's annual operating budget of $5 million and its five department heads. Gary also directs the City's lobbying efforts in Juneau and Washington, D.C. Gary also oversees and administers the City's major capital construction projects, grant/loan agreements and professional services contracts. Throughout his tenure and with his guidance and advocacy, the City has successfully acquired over $60 million in federal and state grants for hydroelectric, water and transportation projects. This includes the Delta Creek Hydroelectric project, which in 1995 was awarded an "Excellence in Engineering Design' from the American Consulting Engineering Council. Gary has a B.A. degree in geography form Mansfield University of Pennsylvania and a Master's degree in regional planning from Pennsylvania State University. 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. AEA13-006 Grant Application Page 8 of 27 7/3//2012 Renewable Energy Fund Round 6 411111D all AL&W"Ill Grant Application i6ill ENERGY AUTHORITY This schedule of project milestones is a summary from the detailed project tasks, schedule and deliverables prepared by HDR Alaska and submitted to the City on July 13, 2012. Note that the final design and permitting tasks and construction tasks (1-3) are ongoing and expected to be completed prior to the award of this grant. This work is being funded by the FYI AEA Grant ($200,000) and the local required match ($200,000). Therefore, construction of tasks 4-8 (shown in Bold in following table) will be funded via this grant request ($2.6 million) and a combination of City cash ($100,000), long-term debt ($1.0 million), and FY14 grant from the Aleutians East Borough ($200,000). The City gave HER Alaska a Notice -to -Proceed on July 18, 2012 for the above noted tasks for the final design and permitting and construction (tasks 1-3). These tasks are being paid for via the AEA Renewable Energy Grant #5 ($200,000) and the City's FY12 & 13 local match funding requirement ($200,000). Milestones Tasks Start Date End Date Final Design & Permitting #3 Final Environmental Assessment Jan 2012 Jan 2013 #5 Permit Approvals Jan 2011 Nov 2012 #6 Final Design Jul 2012 Feb 2013 #7-10 cost, plans & sales agreement Oct 2012 Feb 2013 Construction #1-2 Confirmation/completion bid does Oct 2012 Feb 2013 #3 Contract Award Feb 2013 Apr 2013 #4 Construction completed May 2013 Dec 2013 #5,6,7 & 8 testing, acceptance & reporting Oct 2013 Feb 2014 Note: these project milestones numbers are taken from the Grant Budget Form in the application package. Where a number, like tasks #1 and #2, for Final Design and Permitting is not shown above indicates this task has already been completed prior to this application. AEA13-006 Grant Application Page 9 of 27 7/3/2012 Renewable Energy Fund Round 6 Grant Application �4000-- ENERGY AtmioRmy 3.3 Project Resources Describe the personnel, contractors, accounting or bookkeeping personnel or firms, equipment, and services you will use to accomplish the project. Include any partnerships or commitments with other entities you have or anticipate will be needed to complete your project. Describe any existing contracts and the selection process you may use for major equipment purchases or contracts. Include brief resumes and references for known, key personnel, contractors, and suppliers as an attachment to your application. The City of King Cove has an existing term contract with HDR Alaska which has been amended to include provision for the final design and permitting for this project, as well as assistance with the construction bid and award process. Primary HDR staff who will be involved with Waterfall Creek are well known to AEA, and include: Paul Berkshire, Bob Butera and James Brady. See the attached 2007 Concept Design Report for Waterfall Creek which was prepared by HDR through a contract with the Alaska Energy and Engineering Consultants for the Alaska Energy Authority. The City filed a preliminary Water Rights permit application with the Dept. of Natural Resources in 2010. Subsequent project design parameters prepared in 2009 for the project, along with Waterfall Creek flow monitoring and fish sampling work in 2008 through 2010, were funded jointly by AEA and the City. The work recently completed by AEA is part of its 2006-2010 power projects in King Cove. This work included a major upgrade and integration of the control systems for the Delta Creek Hydroelectric facility and the new diesel system. The Waterfall Creek will benefit from these control system upgrades. Canyon Industries (turbine & generator package) and Arctic Insulation & Mfg. (HDPE) are both well known vendors to the City and to HDR. Each has provided services and products to King Cove for more than two decades. As always, the City will follow its local government procurement policies for all services and materials necessary for this project. 3.4 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Please provide an alternative contact person and their contact information. The City will require monthly written progress reports from the HDR project manager. These reports will be submitted to AEA for information and review. As identified milestones are achieved, these will be communicated to AEA. Written and verbal inquiries from AEA regarding the project will be responded to in a timely fashion. Any presentations or updates provided to King Cove's City Council will also be shared with AEA — including invitations for AEA to attend meetings and/or observe the project firsthand. AEA13-006 Grant Application Page 10 of 27 7/3//2012 Renewable Energy Fund Round 6 Grant Application ®40107) ENERGY AUIHOPoTY 3.5 Project Risk Discuss potential problems and how you would address them. There is always risk involved in any construction project, and particularly so in rural, remote Alaska. King Cove's previous experience with Delta Creek and our other major construction projects have taught us a lot. By having HDR as our partner in this project, as they were with the Delta Creek project, we are extremely confident in our mutual abilities to minimize project risks. We have a combined hands-on experience and ability to work as a team that will serve us well on Waterfall Creek. AEA13-006 Grant Application Page 11 of 27 7/3//2012 Renewable Energy Fund Round 6 � /�� Grant Application / 4001DENERGY Aurrioairy 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. See the attached "King Cove — Waterfall Creek Hydroelectric Project Concept Design Report (CDR)" prepared by HDR in September 2007 for the Alaska Energy Authority (AEA) via a contract with Alaska Energy and Engineering (AEE). A September 2012 addendum to the CDR precedes the report. This addendum provides the following information: 1) Revised Waterfall Creek flow data; 2) Revised annual and monthly energy forecast from Waterfall Creek using a 0.5 cfs environment flow reduction, which is expected to annually produce approximately 1.2 Mill; 3) Current project cost estimate, as of September 2012, which documents a $600,000 cost escalation subsequent the September 2007 cost estimate in the CDR; 4) Table with projected 2014 power demand profile and expected sources of power generation; and 5) Graph showing the integration of PPSF purchasing 500,000 kWh of surplus power form the City. Subsequent to the 2007 CDR, both AEA and the City have funded other preliminary work in order to further develop and produce this information. PROS — We know about hydroelectric power in King Cove. We have a track record that is demonstrated in both word and deed. See Section 2.5 Project Benefit and Section 3.1 Project Manager and Section 3.4 Project Resources. The City's prior investment in our existing Delta Creek system and our willingness to provide similar matching funds for this project, are indicators of ability and follow through. As previously mentioned, the shared electrical transmission line (original cost = $500,000) from the site five miles to "downtown" King Cove is a plus. The expansion of the existing Delta Creek power house to accommodate the Waterfall Creek turbine and generator is a much less expensive proposition than needing a new powerhouse. This will provide and excellent location for integrating both hydroelectric control systems for better operator monitoring, troubleshooting, security and total system efficiency. CONS — NONE. Given our 17 years of successful hydro experience this project is one we approach with confidence. The only other viable energy source in the region is diesel fuel. In addition, there is NO other, AEA13-006 Grant Application Page 12 of 27 7/3/2012 Renewable Energy Fund Round 6 Grant Application � p eel n GONE) ENERGY AUTHORITY yet -proven energy alternatives available for our market. Nonetheless, the City is pursuing, at it. own expense, another year of wind measurements in the Ram Creek Valley. This valley is one west of the Delta Creek Valley, where a year's worth of wind data was collected in 2005/2006. The results were that we have class 6 winds, but with a very high turbidity factor. Ram Creek Valley, however, is more protected than the Delta Creek Valley, with the added advantage of being immediately adjacent to our new diesel power house and SCADA system. The City continues to be open to exploring and feasible alternative that expands our energy production portfolio. We are watching closely how the Kodiak Electric Association does with its combo hydro -diesel -wind system. Like much of rural Alaska, our "energy market" is a single -site, off -the -grid market. However, as referenced in Section 2.5, the potential for sale of surplus power from the Waterfall Creek project to Peter Pan Seafoods (PPSF) is excellent. See signed Memorandum of Agreement with PPSF, in which they indicate their support for the project and their willingness to consider a power purchase contract. Depending on the amount of surplus energy available from Waterfall Creek, PPSF is willing to consider purchasing anywhere form 500,000 kWh to 1.0 MW. This range is consistent with the demand estimates identified in the "King Cove Energy Projects — Concept Design Report" finalized in October 2005 by Alaska Energy and Engineering for AEA. 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. AEA is familiar with King Cove's diesel energy system, as this agency recently assisted us in completing a $3 million upgrade/replacement of our old diesel system. Three new CAT diesels (1-model 3512; with a maximum kWh output of 1050 and 2-model 3456; each with a maximum kWh output of 475 and manufactured in 2006/2007) and City supplied CAT 3512 (about 13 years old, low hours and a top/bottom rebuild in 2004; maximum output of 650 kWh). Efficiency of these generators ranges between 13.5 to 14.0 gallons/kWh. These provide our current diesel production with a generating capacity of 2.4 MW (megawatts). They are in addition to the 850 kWh that our current Delta Creek hydro can produce under optimum summer conditions, usually from May through October. In winter months Delta Creek hydro produces around 200-300 kWh daily, rising in the spring/fall months to between 400-600 kWh. 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. The City's existing diesel plant and Delta Creek hydroelectric facility have adequate capacity to meet the City's power generation demands for many years. However, the costs and environmental impacts to the community and local industry can be significantly reduced with the addition of Waterfall Creek to our power generation system These include the replacement of 70,000 — 75,000 gallons of annual diesel fuel that would otherwise be required by the City's diesel system; the opportunity to sell Peter Pan Seafoods, Inc. a minimum of 500,000 kWh and in the process replace approximately another 35,000 gallons of diesel fuel used in their plant. We have demonstrated a desire and an ability to look long term to the financial and AEA13-006 Grant Application Page 13 of 27 7/31/2012 Renewable Energy Fund Round 6 Grant Application ®� 40IND ENERGY AU1H0RrrY environmental consequences for our City of having renewable energy. We have seen the benefits in Delta Creek and we are anxious to keep going, to keep succeeding, to use the power of water to achieve a new level of energy independence; in so doing we hope that other communities will watch King Cove and know they can dream big too. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Existing energy market consists of approximately 130 residential households, two major boat harbors, a new 40,000 s.f. school, and old school of comparable size that has been transformed into the community's multi -purpose center. There are also numerous public facilities and a major municipal water system requiring constant well field pumping, with two large and four smaller commercial establishments. Peter Pan Seafood, one of the largest year-round seafood processors in Alaska, has their own diesel system. Their peak demand is at least 3 times the City's peak demand. Their growth is now being constrained by their inability to expand their power generation capacity and this is why they are very receptive to purchasing any amount of energy the City may be able to sell them. Again, the only "impact" that Waterfall Creek is going to have on either the existing City system or PPSF system is cheaper cost per kWh, energy efficiencies, and the gift of cleaner air for everyone. Also, for every $100,000 to $150,000 in energy savings (i.e. replacing diesel costs in the current system and paying debt service on Waterfall Creek), and combined with revenue from power sales to PPSF from Waterfall Creek, the City anticipates it can lower current kWh rates by $0.02 for all City utility customer classes. See also answer to Section 4.1 for discussion of King Cove's energy market. See answer to Section 2.5 regarding effects on customers. 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 See attached HDR "Concept and Design' report from September 2007 and the September 2012 addendum. AEA13-006 Grant Application Page 14 of 27 7/3/2012 Renewable Energy Fund Round 6 Grant Application AMID 41111111 ill ENERGYAUm10RMY 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 entire project is located on village owned by the King Cove Village Corporation. See attached letter of support from King Cove Corporation for this project. The City expects to purchase 20 acres of land from the corporation for this project. The purchase price is expected to be $100, 000. 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 It is possible that the following acts, laws and orders may require the following permits and clearances in order to construct the Waterfall Creek hydro project: • Nat'l Environmental Policy Act — Denali Commission and US Department of Agriculture, Rural Utilities Service: environmental documentation (Categorical Exclusion, Environmental Assessment, or Environmental Impact Statement) required for all federally funded projects. • Clean Water Act — US Army Corps of Engineers, Alaska District, Regulatory Branch: Department of Army, Section 404/10 Wetland/Waters of the US Fill Permit; Alaska Dept. of Environmental Conservation: Certificate of Reasonable Assurance (Section 401 Water Quality Certification). This is required for any permits issued by USACE; Environmental Protection Agency: National Pollutant Discharge Elimination System (NDPES) general permit for construction activities, pursuant to Section 402 of the Federal Water Pollution Control Act. • National Historic Preservation Act — State Historic Preservation Officer: Section 106 Consultation. • Magnuson -Stevens Fishery Conservation and Management Act — National Oceanic and Atmospheric Administration (NOAA) fisheries: Consultation on Essential Fish Habitat. • Migratory Bird Treaty Act— US Fish & Wildlife Service: Consultation on migratory birds. • Bald and Golden Eagle Protection Act — USFWS: consultation on nesting bald eagles. • AS 41.14.840: Fishway Act: AS 41,14.870: Anadromous Fish Act — Alaska Dept. of Fish & Game, Habitat: Title 41 Fish Habitat Permit. • Alaska Water Use Act (AS 46.15) —ADNR Division of Mining Land and Water: Application for Water Rights for Hydroelectric Power Generation. Anticipated Permitting timeline — as noted in 3.2/3.3. Please note that the City has already submitted initial project permit applications for the required Habitat Permit and Water Rights Permit. AEA13-006 Grant Application Page 15 of 27 7/3//2012 Renewable Energy Fund Round 6 Grant Application ©� MERGY AUTHORITY`S 4.3.4 Environmental Address whether the following environmental and land use issues apply, and if so how they will be addressed: • Threatened or Endangered species • Habitat issues • Wetlands and other protected areas • Archaeological and historical resources • Land development constraints • Telecommunications interference • Aviation considerations • Visual, aesthetics impacts • Identify and discuss other potential barriers The City or HDR do not expect any of the above "issues" to present a problem in the final permitting for this facility. As noted in the previous section, our initial permit submittals for the required Habitat Permit and Water Rights Permit have already resulted in an agreement by the City to lower the Waterfall Creek flow of 12 cfs by .05 cfs. We are in on -going discussions with these two State agencies regarding flow and fish habitat concerns, but do not anticipate any significant concerns or permit stipulations. AEA was involved in many of these discussions back in 200912010 when HDR was still under contract to them for the previously mentioned preliminary design and permitting work, which was completed. Our confidence in this expectation is further reinforced by knowing that none of these issues were problematic or required extensive mitigation for our Delta Creek hydro facility, which is adjacent to the proposed facility. 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 As previously noted in Section 2.6 and 2.7, and in the addendum to the CDR in Sectionl0, the total project cost is now estimated at $4.3 million. The cost for this second (final) phase of the AEA13-006 Grant Application Page 16 of 27 7/3/2012 Renewable Energy Fund Round 6 MID Grant Application � ENERGY AIfrHORrrY project is $3.9 million. This phase covers land acquisition ($100,000), construction ($3.6 milli and construction management ($200,000). This grant request for AEA Energy Fund Round #6 is for $2.6 million. The additional $1.3 million for this phase will come from the City ($1.1 million in combination cash and long-term debt) and FY14 Aleutians East Borough grant for $200,000. The enclosed Resolution 13-02 authorizes the submittal of this grant for up to $2.8 million. Refer to the following summary of total project cost by phase and funding sources: Phase 1 Final Design & Permitting 400,000 Subtotal 400,000 Phase 2 Land Acquisition 100,000 Construction 3,600,000 Construction Management 200,000 Subtotal 3,900.000 Total Project Cost $4,300,000 Funding AEA City/Other Total Phase 1 200,000 200,000 400,000 Phase 2 2,600,000 1,300,000 3,900,000 2,800,000 1,500,000 $4,300,000 The total anticipated AEA Renewable Energy Fund grants of $2.8 million (Fyl3 for $200,000 and FY14 for $2.6 million) represents 65% of the total project costs. This level of financial participation by AEA/State is consistent with similar renewable energy projects for communities of comparable size to King Cove. 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.) Annual operating costs, including anticipated debt for the Waterfall Creek portion of the City's power generation system, is estimated to be between $120,000 and $140,000. These annual O&M costs, like all other costs to operate and maintain our diesel power plant and Delta Creek hydro facility, are paid for through the cost of customer user fees (i.e. kWh/cost). The City operates its electrical utility as an enterprise fund in a manner to achieve and maintain financial solvency, including a repair and replacement item within the fund. 4.4.3 Power Purchase/Sale The power purchase/sale information should include the following: AEA13-006 Grant Application Page 17 of 27 7/3//2012 Renewable Energy Fund Round 6 Mir, pl pF Grant Application i4MMLD ENERGY AIfrHORrfY • Identification of potential power buyer(s)/customer(s) • Potential power purchase/sales price - at a minimum indicate a price range The enclosed Memorandum of Agreement between the City and Peter Pan Seafoods identifies our only potential buyer. The potential power purchase/sales price is estimated to be between $0.12 to $0.15/kWh. The proposed rate of return from Waterfall Creek is estimated to be a 3.3 B/C ratio. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. The worksheet is complete and attached to the application. As noted throughout this application, the 2007 Waterfall Creek CDR, the 2005 CDR for King Cove Energy Projects, and miscellaneous City power generation and cost data are the basis for the Waterfall Creek cost estimates. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. 1,200,000 kWh 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' grid, leave this section blank) I. Number of generators/boilers/other 4 generators and 1 hydro turbine/generator ii. Rated capacity of generators/boilers/other All gens = 2,450 kw/ & Delta Creek hydro = 850 kw iii. Generator/boilers/other type (2) CAT 3512 & (2) CAT 3456 & Gilkes generator iv. Age of generators/boilers/other 3 Gen 5 yrs; i gen 12 yrs; hydro gen 15 yrs. v. Efficiency of generators/boilers/other 13.5 - 14.0 kWh b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $225,000 ii. Annual O&M cost for non -labor $910.000 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] 5.200,000 ii. Fuel usage ' 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. AEA13-006 Grant Application Page 18 of 27 7/3//2012 Renewable Energy Fund Round 6 Grant Application ®� I ENERGY AUTHORrrV Diesel [gal] 151,000 Other iii. Peak Load 1020 kWh iv. Average Load 500-600 v. Minimum Load 200 vi. Efficiency 14.0 kWh/gal vii. Future trends 1 % - 2 % annual growth 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 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] b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 5,400,000 kWh it. 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 $4,300,000 b) Development cost $400,000 (final design & permitting) c) Annual O&M cost of new system $130,000 (includes annual debt $1.0 million) d) Annual fuel cost $0 for new system ($515,000 — current diesel Project Benefits a) Amount of fuel displaced for i. Electricity 75,000 gallons AEA13-006 Grant Application Page 19 of 27 7/3//2012 Renewable Energy Fund Round 6 � Grant Application ��ENB4GY AuTHoRrry if. Heat iii. Transportation b) Current price of displaced fuel $3.87 c) Other economic benefits "Surplus Power Sales" — approx. $75,000 d) Alaska public benefits Reduced carbon emissions and less dependency on PCE program Power Purchase/Sales Price a) Price for power purchase/sale Range between $0.12 to $0.15/kWh Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 3.3 Payback (years) 30 4.4.5 Proposed Biomass System Information Please address the following items, if know. (For Biomass Projects Only) • What woody biomass technology will be installed (cord wood, pellets, chips, briquettes, pucks). • Efficiency of the biomass technology. • Thermal or electric application. • Boiler efficiency. • Displaced fuel type and amount. • Estimated tons of wood pellets or chips (specify) to be used per year, and average moisture percentage. • Estimated cords of wood to be used per year, specify whether dry or green and the moisture percentage. • Ownership/Accessibility. Who owns the land and are their limitations and restrictions to accessing the biomass resource? • Inventory data. How much biomass is available on an annual basis and what types (species) are there, if known? AEA13-006 Grant Application Page 20 of 27 7/3/2012 Renewable Energy Fund Round 6 � Grant Application ® �) ENERGY AIfrHORrrY 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 Potential annual fuel displacement over the life of the project (assume 40 years) is estimated to be $11.6 million Potential anticipated revenue from power sales over the life of the project is estimated to be $3.0 million. Potential annual incentives (tax credits) or revenue streams (like green tag sales, etc.) are unknown to us at this tie. Non -economic public benefits to Alaska have been previously summarized in Section 2.4. The health benefits of 860 metric tons of LESS annual, carbon emission in King Cove and the western end of the Alaska Peninsula and the eastern Aleutian Islands means better air quality for the residents and less respiratory illnesses and a cleaner environment for everyone. 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 Again, as noted in an earlier section (2.6) the sustainability and operability of this project is no different than our existing Delta Creek hydro facility. The City has the experience and proven track record to construct, operate, maintain and hydroelectric facilities. Our successful Delta Creek project with 17-years of successful operation, is a blueprint for how small, extremely rural communities can succeed with a small hydro project. King Cove has demonstrated that it supervises complex construction well, exercises budget discipline and brings projects on-line on time. Lessons have been learned about what constitutes adequate operations and management resources. The idea with this project, as it was with Delta Creek, is to build AEA13-006 Grant Application Page 21 of 27 7131/201: Renewable Energy Fund Round 6 �y� GOOD Grant Application I 41111111111DENERGY AurrlGaTY infrastructure that lasts and then is taken good care of. Operations & Maintenance: One of the contractor requirements for the Waterfall Creek hydro facility will be to develop a comprehensive O&M manual for all aspects of this new facility. The same requirement for the Delta Creek facility was successfully accomplished by HDR Alaska and their subcontractors. The existing O&M document is a constant source of information for plant employees and routinely serves as a technical guide. The operational costs and overall financial viability of this project will be integrated into the City's overall power distribution system. The financial operations of this system are part of the City's electrical enterprise fund, which by definition, is to achieve and maintain financial solvency by regulating and maintaining electric user rates to generate the necessary annual revenue to meet annual operating expenses, as well as adequate funding for a repair and replacement fund for any major unanticipated needs. The commitment to reporting "savings" will always be ongoing as part of the City reviewing and amending, as circumstances allow, the electric user rates in King Cove. Any such savings will also be reported in the monthly and annual PCE utility costs reports. The City will always continue to tout the benefits of renewable energy. We do this in periodic reports to our users, as well as to the government agencies who have helped us achieve these benefits. We have never been shy about publishing news releases to share with others around the state and elsewhere! 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. As expressed throughout this grant application, the City has been moving forward with this project for the last 3+ years. The City has spent over $125,000 in the last three years, along with AEA spending similar/more funding, to conduct flow monitoring and fish sampling in Waterfall Creek and in submitting the initial permit application to the state for water rights and fish habitat permits. Additional project design standards and specifications have also been prepared subsequent to the 2007 CDR. We now expect to have Waterfall Creek on line by spring of 2014 With the City's experience, both operationally and financially, with our Delta Creek hydro facility we know that time is of the essence. Significant financial savings will begin accruing immediately with this facility on-line. The City has been awarded a $200,000 FY13 grant from Round 5 of the AEA Renewable Energy Grand Fund. This $200,000 AEA grant has been matched dollar -for -dollar by the City. Together, this $400,000 in finding is currently being used to complete Phase 1 of the project. AEA13-006 Grant Application Page 22 of 27 7/3/2012 Renewable Energy Fund Round 6 I dNED O61156 Grant Application � ENERGY AUTHORITY The City has an exemplaryrecord of achievements with over $30 million in various state and federal grants for a variety of community projects over the last 10-15 years. A review of the City's annual audits can further substantiate these statements. 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. The entire community of King Cove is in favor of the City pursuing funding for a second hydro- electric project. This support is reflected by the attached letters from the King Cove Corporation, as well as the Agdaagux and Belkofski tribes. In addition, the Memorandum of Understanding between the City and Peter Pan Seafoods, the community's largest employer, speaks to their favorable interest in the project as well. 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. The budget costs by milestones forms are enclosed with this application. Sections 2.6 and 4.4.1, have described and documented the project's overall budget and anticipated sources of funding. The City has also spent $100,000 the last two years attempting to finalize the environmental flow rates and acquiring the final water rights and fish habitat permits for the project. The City is requesting $2.6 million in Round 6 of the AEA Renewable Energy Grant. The City will be providing a $1.3 million match to this $2.6 million request to AEA. Also for Phase 1 funding (final design and permitting) AEA has provided a $200,000 grant (Rounds) which is being matched dollar -for -dollar by the City. Applications should include a separate worksheet for each project phase that was identified in section 2.3.2 of this application, (Reconnaissance, Feasibility, Conceptual Design, Design and Permitting, and Construction). Please use the tables provided below to detail your proposed project's budget. Be sure to use one table for each phase of your project. If you have any question regarding how to prepare these tables or if you need assistance preparing the application please feel free to contact AEA at 907-771-3031 or by entailing the Grant Administrator, Shawn Calla, atscalfa@aidea.org. AEA13-006 Grant Application Page 23 of 27 7/3//2012 Renewable Energy Fund Round 6 ® pl,7n Grant Application ©ENERGY ALMHORITY Source of Matching Anticipated Grantee Funds: Milestone or Task Completion RE -Fund Matching Cash/In- TOTALS Date Grant Funds Funds kind/Federal Grants/Other State Grants/Other (List milestones based on phase and type of project. $ $ $ See Milestone list below. Construction $ $ $ Task 4 Dec 2013 $2,500,000 $1,200,000 Federal $3,700,000 Grant/debt Task 5-8 Feb 2014 $ 100,000 $ 100.000 Debt $ 200,000 $ $ 50,000 $ $ $ $ $ $ $ TOTALS $2,600,000 $1,300,000 $3,900,000 Budget Cate ories: Direct Labor & Benefits $ $ $ Travel & Per Diem $ $ $ Equipment $ $ $ Materials & Supplies $ $ $ Contractual Services $ 150,000 $ 150,000 $ 300,000 Construction Services $2,450,000 $1.150,000 $3,600,000 Other $ $ $ TOTALS $2,600,000 $1,300,000 1 $3,900,000 Proiect Milestones that should be addressed in Budget Pr000sal Reconnaissance Feasibility Design and Permitting Construction 1. Project seeping. and 1. Project seeping 1. Project scoping 1. Confirmation that all contractor solicitation. and contractor and contractor design and feasibility solicitation. solicitation for requirements are 2. Resource planning and complete, identification and 2. Detailed energy design analysis resource analysis 2. Completion of bid 2. Permit documents 3. Land use, permitting, 3. Identification of applications (as and environmental land and regulatory needed) 3. Contractor/vendor analysis issues, selection and award 4. Preliminary design 4. Permitting and 3. Final environmental 4. Construction Phases analysis and cost environmental assessment and 5. Cost of energy and analysis mitigation plans 9 a Each project will have market analysis 5. Detailed analysis of (as needed) unique construction 6. Simple economic existing and future 4. Resolution of phases, limitations, analysis costs sts and land use, right of and schedule markets constraints which 7. Final reportand 6. Assessment of way issues should be identified recommendations alternatives 5. Permit approvals by the grantee 6. Final system 5. Integration and 7. Conceptual design design testing analysis and cost 7. Engineers cost 6. Decommissioning old AEA13-006 Grant Application Page 24 of 27 7/31/2012 Renewable Energy Fund Round 6 dill A64QUAal Grant Application L ENERGY AUIHORIIY estimate estimate systems 8. Detailed economic 8. Updated 7. Final Acceptance, and financial economic and Commissioning and analysis financial analysis Start-up 9, Conceptual 9, Negotiated 8, Operations Reporting business and power sales operations plans agreements with 10. Final report and approved rates recommendations 10. Final business and operational plan AFA13-006 Grant Application Page 25 of 27 7/31/2012 Renewable Energy Fund Round 6 GEND Grant Application i©®ENERGYAUTHORnv SECTION 10 - AUTHORIZED SIGNERS FORM Community/Grantee Name: City of King Cove Regular Election is held: Date: August 9, 2012 October 9, 2012 Authorized Grant Siener(s): Printed Name Title Term Si nature Gary Hennigh City Administrator 1" Bonnie Folz Administrative Manager �1 G- I authorize the above person(s) to sign Grant Documents: (Highest ranking organization/community/municipal official) Printed Name Title Term Signature Henry Mack Mayor 2012 r Grantee Contact Information: Mailing Address: 3380 C Street, Suite 205 Anchorage, AK 99503 Phone Number: 907-274-7563 Fax Number: 907-276-7569 E-mail Address: ghennighmgr@gci.net Federal Tax ID #: 92-6001247 Please submit an updated form whenever there is a change to the above information. AEA13-006 Grant Application Page 26 of 27 7/3//2012 Renewable Energy Fund Round 6 pL,./1SKL Grant Application ENERGY AUTHORITY SECTION 11 —ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Contact information, resumes of Applicant's Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4. Applicants are asked to separate resumes submitted with applications, if the individuals do not want their resumes posted. B. Letters demonstrating local support per application form Section 8. C. An electronic version of the entire application on CD per RFA Section 1.7. D. Governing Body Resolution or other formal action taken by the applicant's governing body or management per RFA Section 1.4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. - Provides as point of contact to represent the applicant for purposes of this application. - Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. E. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations and that they can indeed commit the entity to these obligations. Print Name Gary HenNgh Signature Title City Admi, i rator Date September 24, 2013 AEA13-006 Grant Application Page 27 of 27 7/3//2012 DING COVE CORPORATION Ph: 907-497.2312 PO Boa 38 Fax: 907-497-2444 King Coae, Ak 99612 kcc@arctinnet !, 2012 - - Mr. Henry Mack, Mayor P.O. Box 37 King Cove, AK 99612 Re: Letter of Support for Waterfall Creek hydro -electric project Dear Mayor Mack: Once again, the King Cove Corporation (KCC) wishes to express its strong support for the City of King Cove's efforts to complete the construction of the Waterfall Creek project in 2014. We recognize that in order to accomplish this project it will take more financial resources than the City of King Cove can afford to take on alone. We are pleased to learn that the City is asking the Alaska Energy Authority to partner with King Cove in providing the resources for this renewable energy facility. We support these efforts. The land to be utilized for this project is owned by KCC. We are actively engaged in negotiations with King Cove about the terms for the use of this land. These negotiations will be successfully concluded in the near future. The success of the City's current Delta Creek hydroelectric project, including over 17 years of successful plant operation and management is a blueprint for how to succeed with a small community hydro project. It should serve as a strong indicator to potential grant and/or lending agencies that King Cove knows what it is proposing where Waterfall Creek is concerned. This previous experience puts King Cove in a strong position to assert that it does not make promises that it cannot keep. In addition, the fact that existing infrastructure and transmission lines can be used in bringing the new hydro on-line, makes this an economic win for everyone involved- KCC has already seen the improvement that Delta Creek hydroelectric facility has made in our shareholder's lives. In the immediate term, wehave enjoyed cheaper utility rates and breathed cleaner air. But, it is the knowledge that we aren't completely at the mercy of the diesel fuel barge that comforts our members the most. Since we are always planning long-term, it is reassuring to know that we have a completely sustainable source of electric power available to our families for generations to come. This peace of mind from the Delta Creek hydroelectric facility will be enhanced by the additional hydro power from Waterfall Creek, and while it will not keep us out of the diesel business completely, it will go a Jong way to delivering a clean and secure energy future for our grandchildren and beyond. We wish you well as you pursue this funding and strongly support the City's efforts. Sincerely, Dean Gould, President Agdaagux of King Cove P.O. Box 249 King Cove, AK 99612 September 13, 2012 Mr. Henry Mack, Mayor P.O. Box 37 King Cove, AK 99612 Re: Letter of Support for Waterfall Creek hydro -electric project Dear Mayor Mack: The Agdaagux Tribal Council (ATC) wishes to express its strong support for the City of King Cove's efforts to complete the construction of the Waterfall Creek project in 2014. We recognize that in order to accomplish this project it will take more financial resources than the City of King Cove can afford to take on alone. We are pleased to learn that the City is requesting the Alaska Energy Authority to partner with King Cove in providing funding for this renewable energy facility. Wersupport these efforts. The success of the City's current Delta Creek hydroelectric project, including over 17 years of successful plant operation and management, is a blueprint for how to succeed with a small community hydro -electric project. It should serve as a strong indicator to potential grant and/or lending agencies that King Cove knows what it is proposing where Waterfall Creek is concerned. This previous experience puts King Cove in a strong position to assert that it does not make promises that it cannot keep. In addition, the fact that existing infrastructure and transmission lines can be used in bringing the new hydro on-line, makes this an economic win for everyone involved. ATC has already seen the improvement that Delta Creek hydro -electric facility has made in our shareholder's lives. In the immediate term, we have enjoyed cheaper utility rates and breathed cleaner air. But, it is the knowledge that we aren't completely at the mercy of the diesel fuel barge that comforts our members the most. Since we are always planning long-term, it is reassuring to know that we have a completely sustainable source of electric power available to our families for generations to come. This peace of mind from the Delta Creek hydroelectric facility will be enhanced by the additional hydro power from Waterfall Creek, and while it will not keep us out of the diesel business completely, it will go a long way to delivering a clean and secure energy future for our grandchildren and beyond. We wish you well as you pursue this funding and strongly support the City's efforts. S gerely, Etta Kuzakin, President Belkofski Tribal Council P.O. Box 57 King Cove, Alaska 99612 Phone: 907-497-3122/Fax: 907-497-3123 kcbWaiarctic.net September 07. 2012 Mr. Henry Mack. Mayor P.O. Box 37 King Cove. AK 99612 Re: Letter of Support for Waterfall Creek hydro -electric project Dear Mayor Mack: The Belkofski 'tribal Council (BTC) wishes to express its strong support for the City of King C'ove's efforts to complete the construction of the Waterfall Creek project in 2014. We recognize that in order to accomplish this project it will take more financial resources than the City of King Cove can afford to take on alone. We are pleased to learn that the City is asking the Alaska Energy Authority to partner with King Cove in providing the resources for this renewable energy facility. We support these efforts. The success of the City's current Della Creek hydroelectric project. including over 17 years orsuccessful plant operation and management, is a blueprint for how to succeed with a small community hydro -electric project. It should serve as a strong indicator to potential grant and/or lending agencies that King Cove knows what it is proposing where Waterfall Creek is concerned. This previous experience puts King Cove in a strong position to assert that it does not make promises that it cannot keep. In addition, the fact that existing infrastructure and transmission lines can be used in bringing the new hydro on-line. makes this an economic win for everyone involved. BTC has already seen the improvement that Delta Creek hydro -electric facility has made in our tribal member's lives. In the immediate term, we have enjoyed cheaper utility rates and breathed cleaner air. But, it is the knowledge that we aren't completely at the mercy of the diesel fuel barge that comforts our membersthe most. Since we are always planning long-temt, it is reassuring to know that we have a completely sustainable source of electric power available to our families for generations to come. This peace of mind from the Delta Creek hydroelectric facility will be enhanced by the additional hydro power from Waterfall Creek, and while it will not keep us out of the diesel business completely. it will go a long way to delivering a clean and secure energy future for our grandchildren and beyond. We wish you well as you pursue this funding and strongly support the City's efforts. Sincerely James Kenezuroff V ice -President i CITY OF KING COVE Resolution 13-02 A RESOLUTION AUTHORIZING THE SUBMITTAL OF A GRANT APPLICATION FOR THE ALASKA ENERGY AUTHOITY'S RENEWABLE ENERGY FUND (ROUND 6) FOR THE WATERFALL CREEK HYDROELECTRIC PROJECT WHEREAS, the City of King Cove is ready to complete the final design, permitting and construction Of the Waterfall Creek Hydroelectric Project; WHEREAS, prior Alaska Energy Authority (AEA) and City funding has been used to establish and document the technical and financial feasibility of this project; WHEREAS, the City is finalizing its funding plan to proceed with the final design/ permitting, preparing the construction bid documents, and construction; WHEREAS, the timetable for these steps is final design, permitting, and construction bid documents to be completed by November 2012 and construction to occur in 2013; and, WHEREAS, the total Waterfall Creek Hydroelectric Project is expected to cost $4.5 million; per this estimate, $500,000 is for final design/permitting and preparing all construction bid documents and $4 million for construction. NOW THEREFORE BE IT FURTHER RESOLVED, this grant application for AEA's Renewable Energy Fund (Round 6) requests $2.8 million; BE IT FURTHER RESOLVED, that the City will secure the other $1.7 million in funding from a combination of sources Including: City cash and long-term debt (up to $1.0 million); and additional grants from USDA/RD, USDOE, EDA and/or Aleutians East Borough; BE IT FURTHER RESOLVED, that City Administrator, Gary Hennlgh, is hereby authorized to represent the City of King Cove on all matters related to this grant request and the overall execution of the Waterfall Creek Hydroelectric Project; and FINALLY, BE IT FURTHER RESOLVED, that the City of King Cove is in good standing with respect to all existing credit and federal tax obligations. PASSED AND ADOPTED, by a duly constituted quorum of the City of King Cove Council this 30° day of August, 2012. �ATTEEST: ,��yt p , Ti91Ltl(11M1+1 t 1 t. �fr� 11�Y� `-35vannah Yatchme ,�Clty Clerk����� Area 5_ Abstained a Nays 0 Aba = Henry macA Mayo City of King Cove A L A- S K A Addendum (September 2012) King Cove Waterfall Creek Hydroelectric Project Concept Design Report (September 2007 by HOR) This addendum supplements and/or replaces the following information in the 2007 Concept Design Report (CDR) prepared by HDR Alaska. A copy of the CDR follows this addendum. Amount of Energy Expected from Waterfall Creek The CDR estimated that the Waterfall Creek Hydroelectric Project installed capacity of 375kW, with a maximum turbine Flow of 12.0 cis, would provide approximately 1,400,000 kWh of annual energy. This hydra energy is estimated to displace about 95,000 gallons of diesel fuel. (See pages 9 & 10 of the CDR.) Subsequent to this consideration, the City has agreed to provide a 0.5 cfs environmental Flow reduction in order to satisfy ADF&G and ADNR permit concerns. This reduction reduces the annual energy output to 1,200,00 kWh. This annual flow is estimated by month in the following summary. This Flow information supersedes the Flow information in Table 4 in the CDR. Also, this summary shows the reduced energy output if an additional 0.5 cfs flow reduction is going to be required to obtain the Title 41 permit (Fish Habitat). This would reduce the available energy by another 5% to approximately 1,070,000 kWh. The City continues to object to any permit requirement requiring more than a 0.5 cfs Flow reduction. 0.5 cfs Reduction 1.0 cfs Reduction January 41,000 34,000 February 18,000 15,000 March 42,000 36,000 April 49,000 45,000 May 94,000 84,000 June 210,000 160,000 July 119,000 116,000 August 124,000 111,000 September 195,000 174,000 October 159,000 144,000 November 69,000 63,000 December 80 000 74,000 1,200,000 1,070,000 Oneoine Permit Discussions with DNA and F&G As of last week (September 20, 2012), the City has been "unofficially" informed that a ADNR will require a 1.0 cfs environmental Row requirement in response to the City's water permit request for Waterfall Creek. This requirement will reduce the expected energy output from 1.2 MW to 1.07 MW, as shown in the preceding summary. However, ADF&G is still "unofficially" recommending a 1.5 cfs environmental flow requirement for their Title 41 Fish Habitat permit. This requirement will reduce the 1.07 MW to 0.95 MW. The City believes this is an excessive requirement that will require the City to spend an additional $50,000 to $100,000 annually to replace this lost hydro/renewable energy potential with diesel. A request has been made to elevate this "unofficial" ADF&G determination to the Department's Director of Habitat and ADNR's Director of Land and Water Division. The City contends, as a minimum, that a reasonable, offsite mitigation measure be identified and mutually agreed to by ADF&G and the City to resolve this permit issue. 2014 City Power Demand and Generation Sources Table 1 is the City's forecast of power demand by source for 2014. Three demand scenarios have been developed and documented in the notes accompanying the table. The City's 2012 actual power production by source has been assumed to increase 1.5% in 2013 to 5.3 MW. The same 2012 power generation source with 60% production coming from our Delta Creek hydro facility and 40% from our diesel system has been assumed. The following graph shows the integration of PPSF purchasing surplus power at a 500,000 kWh load level. At this level, the combined City and PPSF demand could not be entirely met with both Delta Creek and Waterfall Creek facilities online, except for a small period of time in June. However, it should be noted that if the 2012 performance of the Delta Creek facility is regularly achievable, then total hydro production between May and October can meet the combined demands of the City and Peter Pan, and most likely, even if Peter Pan wishes to purchase 800,000 kWh. However, if the City needs to ultimately agree to a 1.0 cfs environmental flow permit stipulation, that could limit the annual energy output from Waterfall Creek to approximately 1.1 MW. 2 Revised Project Cost As noted elsewhere in this grant application, the Waterfall Creek project is currently estimated to cost $4.3 million. This represents a 13% increase from the cost estimate in the CDR. A copy of HDR Alaska's February 13, 2012 project cost estimate is attached. This cost estimate is $4.1 million. An additional $100,000 to purchase 18-20 acres of King Cove Corporation land for the project and another $100,000 for inflation has been added to adjust the inflation factor from February 2012 to July 2013. Thus, the total revised cost estimate is $4.3 million. /L,� ) � \ 2 § }\m \� oe O o WO O O M N O O A N O Qi VI O W 0 U m M c LL m O }a c 3 Y RCOF L V u y lL o U L m O O O 0 0 0 0 0 0 0 0 0 0 0 0 0 0 c o I 2/13/20121 KING COVE "WATERFALL CREEK" HYDROELECTRIC PROJECT PRELIMINARY DESIGN COST ESTIMATE Revised February 13, 2012 .1 Penstock, access roads ACRE $0 $ - .2 Royalty on Materials 26,373 CY $1 $ 26,373 Subtotal -Ace No. 330 - Land and Land Rights $ 26,373 1MNf6 MOBILIZATION AND LOGISTICS 1 Mobilization/Demobilization 1 L.S. $ 250,000 $ 250,000 Subtotal - Ace No. 330.5- Mobilization and Logistics $ 250,000 331 STRUCTURES AND IMPROVEMENTS Powerhouse Addition (18' X 40') 720 sf .1 Clearing (Powerhouse/Switchyard) 0 ACRE $ 2,500 $ - 2 Excavation 300 C V. $ 12 $ 3,600 .3 Backfll 300 C.Y. $ 30 $ 9,000 .4 Riprap(tailrace) 40 C.Y. $ 70 $ 2,800 .5 Concrete (including reinforcing) 50 C.Y. $ 1,300 $ 65,000 .6 Furnishings and Fixtures 1 L.S. $ 5,000 $ 5,000 7 Pre-eng'd Metal Building 720 S.F. $ 100 $ 72,000 .8 HVAC and Plumbing 0 L.S. $ 5.000 $ - .9 Grounding Grid 1 LS. $ 5,000 $ 5,000 Subtotal -Ace No. 331-Stuctures and Improvements $ 162,400 332 RESERVOIRS, DAMS, AND WATERWAYS 1 Waterfall Creek Intake .1 Diversion/Dewatering 1 LS $10,000 $ 10,000 .2 Common Excavation 150 CY $ 12 $ 1,800 3 Rock Excavation 200 CY $50 $ 10,000 .4 Backfll 75 CY $30 $ 2,250 5 Florap 220 CY $70 $ 15,400 .6 SWctural Concrete 100 CY $1,300 $ 130,000 7 Mass Concrete (lean concrete to fill riprap voids) 20 CY $400 $ 8,000 Miscellaneous Metals .1 Trashrack 1 LS $ 1,000 $ 1,000 .2 Railings 54 LF $ 40 $ 2,160 3 Grating and Supports 50 SF $ 20 $ 1,000 .4 Access hatches 1 EA $ 500 $ 500 5 Access Hatch Entry Shed 1 EA $ 5,000 $ 5,000 Electrical Equipment $ - 1 Staff gages 1 LS $ 600 $ 600 .2 Monitoring wells & level instruments 2 EA $ 1,300 $ 2,600 .3 480/120V transformer (20 kVa) 1 EA $ 2,400 $ 2,400 .4 electrical distribution panel 1 EA $ 600 $ 600 5 48 VDC Battery pack & charger 1 EA $ 3,200 $ 3,200 .6 PLC, 1/0 Rack and F/O interface 1 LOT $ 7,900 $ 7,900 .7 Space Heater 1 LS $ 800 $ 800 .8 Electrical Installation 1 LS $ 24,000 $ 24,000 Mechanical Equipment $ - .1 16" Butterfly Valve w/ Operator 1 EA $ 5,000 $ 5,000 2 10" Low Level Outlet 30 LF $ 50 $ 1,500 3 36"x60" Sluice gate 1 LS $ 20,000 $ 25000 4 10" Gate Valve 1 LS $ 2,000 $ 2,000 5 Shipping & installation (all gales & valves) 1 LS $ 20,000 $ 20,000 .6 Ventilation Fan and ducts 1 LS $ 1,600 $ 1,600 Subtotal - Waterfall Creek Intake $ 279,310 2 Penstock, Intake to Sla 79+79 (Pipe in roadway) 1 Clearing (30' Woe) 0 ACRE $ 2,500 $ - .2 Pipe Supply, HOPE, 18" SDR 26 1,150 LF $ 21 $ 23,690 .3 Pipe Supply, HOPE, 18" SDR 17 550 LF $ 31 $ 16,968 4 Pipe Supply, HOPE, 18" SDR 11 280 LF $ 46 $ 12,908 .5 Rock Excavation 440 C.Y. $ 50 $ 22,000 6 Common Excavation 1,760 C.V. $ 12 $ 21,120 7 Bedding 0 C.Y. $ 35 $ - .8 Backfill 0 C Y. $ 20 $ - .9 Install Pipe 3,938 LF $ 15 $ 59,070 Subtotal -Penstock $ 155,756 3 Penstock, Station 79N9 to Powerhouse .1 Clearing (30' wide) 1 4 ACRE $ 2,500 $ 3,444 2 Pipe Supply, Steel, 16", 10 Ga 1,480 LF $ 79 $ 116,920 3 Pipe Supply, HOPE, 18" SDR 11 500 LF $ 29 $ 14,345 4 Rock Excavation 0 C.V. $ 50 $ - 5 Common Excavation 2,200 C.Y. $ 12 $ 26,400 .6 Bedding 800 C.Y. $ 35 $ 28,000 7 Backfill 1,400 C V. $ 20 $ 28,000 8 Install Pipe 3,938 LF $ 25 $ 98,450 Subtotal - Penstock $ 315,559 .4 Spnngs Creek Diversion .1 Pipe Supply, HOPE, 8" SDR 26 440 LF $ 5 $ 2,310 2 Rock Excavation 0 C.V. $ 50 $ - .3 Common Excavation 100 C V. $ 12 $ 1,200 4 Bedding 30 C.V. $ 35 $ 1,050 5 Backfill 0 C Y. $ 20 $ - 6 Install Pipe 440 LF $ 15 $ 6,600 .7 Inlet 1 LS $ 5,000 $ 5,000 .8 Outlet energy dissipation 1 LS $ 1,000 $ 1,000 9 Stream gage on Waterfall Creek 1 LS $ 20,000 $ 20,000 Subtotal- Diversion $ 37,160 Subtotal -Acc No. 332 - Reservoir, Dams, & Waterways $ 787,784 333 TURBINES AND GENERATORS A 325 kW Pelton turbine, generator, controls 1 LS $ 390,000 $ 390,000 Subtotal -Acc No. 333- Turbines and Generators $ 390,000 334 ACCESSORY ELECTRICAL EQUIPMENT 1 Supply Power Cable (powerhouse to intake) 4,500 LF $ 10 $ 45,000 .2 Supply Fiber Optic Cable (powerhouse to intake) 4,500 LF $ 3 $ 13,500 .3 Cable Installation (powerhouse to intake) 4,500 LF $ 5 $ 22,500 4 Splice Vaults (powerhouse to intake) 2 EA $ 5,000 $ 10,000 Subtotal -Acc No. 334- Accessory Electrical Equipment $ 91,000 336 ROADS .1 Clearing (30' wide) 2.1 ACRE $ 2,500 $ 5,165 2 Delta Creek Bridge 1 LS $ 150,000 $ 150,000 3 Rock Excavation 1.000 C Y. $ 50 $ 50,000 4 Common Excavation 1.000 C Y. $ 12 $ 12,000 .5 Surface Course 1,500 C.Y. $ 35 $ 52,500 .6 Backfll 24,750 C.V. $ 20 $ 495,000 7 Riprap (Della Creek Crossing) 93 C.Y. $ 70 $ 6,533 .8 Culverts 100 LF $ 80 $ 8,000 .9 Gate 1 EA $ 5,000 $ 5,000 Subtotal -Aec No. 336-Roads $ 784,199 353 SUBSTATION EQUIPMENT AND STRUCTURES .1 Main Transformer 1 EA $15,000 $ 15,000 .2 Disconnect switch 1 EA $15,000 $ 15,000 Subtotal - Ace No. 353 -Substation Equipment and Structures $ 30,000 SUMMARY 330 LAND AND LAND RIGHTS $ 26,373 #### MOBILIZATION AND LOGISTICS $ 250,000 331 STRUCTURES AND IMPROVEMENTS $ 162,400 332 RESERVOIRS, DAMS, AND WATERWAYS $ 787784 333 TURBINES AND GENERATORS $ 390,000 334 ACCESSORY ELECTRICAL EQUIPMENT $ 91,000 336 ROADS $ 784,199 353 SUBSTATION EQUIPMENT AND STRUCTURES $ 30,000 TOTAL DIRECT CONSTRUCTION COSTS $ 2,521,756 Equipment Contingency(Accts. 333,334,353) 25% $ 128,000 General Contingency (Accra 330,330. 5,331, 332,336) 25% $ 503,000 CONTINGENCY ALLOWANCE 25% Average $ 631,000 TOTAL DIRECT CONSTRUCTION COSTS +CONTINGENCIES $ 3,152,766 Final Design $ 300,000 Licensing/Permi0ing $ 40,000 Construction Management $ 250,000 Construction Financing (8 months at 6%) $ 71,000 TOTAL OTHER COSTS $ 661,000 TOTAL PROJECT COSTS (2009 DOLLARS, ROUNDED) $ 3,800,000 Inflation November 2009 to February 2012 7% $ 268,017 TOTAL PROJECT COSTS (2011 DOLLARS, ROUNDED) $ 4,100,000 Total Debt Amount $ 3,900,000 Annual Debt Service (30 yr @ 3%) $ 197,311 Annual O&M Allowance $ 20,000 Annual Project Cost $ 217,311 Project Annual Energy (MWh/yr) (assumes 0.5 cfs nstream flow plus flow from Spring: $ 740 First Year Energy Cost per kWh $ 0.29 Diesel Fuel Cost $ 4.00 GAL Diesel Efficiency 13.5 Wh/gal Annual Value of Displaced Diesel Fuel $ 219,259 Benefit/Cost Ratio (Annual Value of Displaced Diesel Fuel/Annual Project Cost) 1.0 a° � i s B 0 3 __ —_ _. _I-__ -T _ —r _ n m m � d "u o LL w 0 3 � d W �. W O v j � N o= E U rnvW m c Y U `a - �� o U �' Via` m m c d Q U � m � ., m o � e 0 z 0 N Q h-LTAR ONE COMPANY Manysolwian.- Memorandum To: Steve Stassel Alaska Energy and Engineering From: Bob Butera, HER Project: King Cove "Waterfall Creek" Hydroelectric Project Concept Design Report - Final CC: Date: September 12, 2007 Job No: 201662/43449 Introduction This Technical Memorandum (TM) documents engineering studies conducted by HDR Alaska, Inc. to develop a concept design for the proposed Waterfall Creek Hydroelectric Project ("Project'). This concept design is intended to provide sufficient information to Alaska Energy and Engineering, Inc. to determine whether to proceed further with this project. Additional mapping, surveying, geotechnical exploration, design and permitting will be necessary to further this project should a decision be made to move forward. This concept design was preceded by a site reconnaissance done on May 18, 2005 and a follow up reconnaissance study dated August 5, 2006. This concept design study includes: • Description of project setting • Hydrologic analysis • General project arrangement • Diversion/intake structure concept design I • Pipeline concept design • Powerhouse concept design • Cost estimate • Power generation estimate • Economic analysis Project Setting The Project will be located on a small unnamed creek approximately 5 miles north of the City of King Cove. This creek is adjacent to and west of an existing hydroelectric project on Delta Creek that was constructed in 1995. The creek has a noticeable waterfall that is visible from the Delta Creek hydroelectric powerhouse. For the purposes of this memorandum we will call this creek "Waterfall Creek". The drainage basin for this creek is generally south facing, and ranges in elevation from approximately 3000 feet down to 700 feet near the top of the waterfall and 190 feet where Waterfall Creek meets Delta Creek. The basin can best be observed from near the water tank at the high point on the King Cove Airport Road. A preliminary fisheries investigation and a summer fish monitoring program were done in 2006 in the portion of Waterfall Creek from its confluence with Delta Creek upstream to approximately 500 feet upstream of the confluence. The results from both sampling efforts found Dolly Varden present in Waterfall Creek and no salmon species were observed. This work is documented in a memorandum dated April 23, 2006. This fish monitoring program will be continued in 2007 to ^ verify that no off year salmon migration went unnoticed. HDRAIasln, Inc. YSY+C SOeeI Hms M7)U9 alp) Pa}+1 o110 S. YO Fv (9S116N-M]2 N CS F't— wwx.Atltlruartv.mm There is little vegetation in the upper portion of the basin upstream of the waterfall. Vegetation in the lower portion of the project area is typical of the Alaska Peninsula, with a mix of open areas and dense shrubs. There are no trees. There are some muskeg areas on flatter areas. Bedrock is exposed at the falls and within portions of the creek ravine but its depth throughout the remainder of the project area is unknown. The entire project is located on lands owned by the King Cove Native Corporation. Aerial photography for the area is available from October 30, 1995 at a scale of 1"=2000'. Additional lower level photography was taken on the same date at a scale of 1 "= 500'. Both sets of photography were taken for the Delta Creek Water Project. Mapping for that project was done at a scale of 1" = 200" and a 2 foot contour interval. This mapping covered the lower portion of the project site, up to the extent of the lower level photography. Additional mapping for the remainder of the project could be completed from the higher elevation photography, with a contour interval of 10 feet. Hydrology Based on USGS mapping the drainage area of Waterfall Creek upstream of the waterfall is approximately 0.7 square miles. There are three forks above the waterfall with the main fork to the west. At the time of the site reconnaissance there was a snowfield above 1000 feet elevation. Review of aerial photography from October 30, 1995 did not show any glaciers in the basin. �. Waterfall Creek includes four distinct sections: • A steep gradient reach from the headwaters to the top of the waterfall. • The waterfall. • A steep gradient reach approximately 2,000 feet long extending from the Waterfall to a bench above Delta Creek where the creek bends 90 degrees to flow south, and • A moderate gradient reach (5 to 9 percent) approximately 800 feet long extending from the bench to the confluence with Delta Creek. The drainage basin of Waterfall Creek is similar to the upper basins of Delta Creek in aspect and elevation. A drainage area comparison to previous stream gaging on Delta Creek gives an estimated range of flows for Waterfall Creek of 4 to 12 cubic feet per second (cfs). The estimated bank full flow (approximately equivalent to the mean annual flood) was estimated from channel slope and cross section to be approximately 20 cfs. Flow measurements were done near the confluence of Delta Creek and upstream of the waterfall. These measurements showed that the creek was neither losing nor gaining much water from groundwater in the reach between the waterfall and the confluence with Delta Creek. This is consistent with the observation that the creek appears to be incised to bedrock. A 1200 V-notch weir was constructed on Waterfall Creek on May 20, 2005. It is located at a bedrock control in the streambed approximately 500 feet upstream of the confluence of Waterfall Creek and Delta Creek at an approximate elevation of 280 feet. A stage recorder was installed on May 20, 2005 and set to record on an hourly basis. The recorder was retrieved on November 1, 2005 prior to ice conditions in the creek. Periodic readings of the staff gage were done throughout the NORAIaeW.Inc. 115]5cs4eel PAore 190n NI.4CW Py 2.110 SWR 315 F r fiH.MI2 Prv.'AIX Ve, PN 9956i MNf.mm winter of 2005-2006. On February 23, 2006 the recorder was reinstalled and data collected to June 19, 2006. The stage data was converted to flow data using a weir equation. Data collected for the period of May 20, 2005 to November 1, 2005 and February 23, 2006 to June 19, 2006 is of excellent quality. Data for the period of November 1, 2005 to February 23, 2006 was interpolated based on the periodic staff gage observations. Average monthly flows and maximum and minimum monthly flows are shown in Table 1. Daily flows are shown in Figure 1. An annual flow duration curve for this site is shown in Figure 2. The flow duration curve was used to make an initial determination of the range of flows that would be usable for power generation. Table 1 Waterfall Creek Flow Data* - 'MONTA- Average Monthly Flow, cis; Maximum Monthly Flow, cfs Minimum Monthly Flow, cfs January 2.5 3.4 1.8 February 1.6 1.8 1.3 March 2.6 12.6 1.5 April 2.9 11.3 0.7 May 5.4 15.0 1.2 June 11.2 18.6 9.1 July 5.8 8.9 4.3 August 6.3 18.3 3.2 September 10.8 21.3 6.6 October 7.7 12.9 4.6 November 3.7 5.5 2.5 December 4.0 5.0 2.1 mlai ;, `5 8 21.3 0.7 -Based on flow daza from 5-20-2005 to 6-19-2006 The flood peaks for Waterfall Creek have been estimated from USGS regression equations detailed in WRI Report 034188. Estimated peak flood estimates are shown in Table 2: Table 2 Waterfall Creek Peak Flood Estimates Fiotrd'-FrequencyDischarge . cfs 2 years 120 IN years 330 500 ears 416 The peak hourly flow for the period of 5-20-2005 to 6.19-2006 was 37.4 cfs on August 18, 2005. General Project Arrangement The project will capture the streamflow, approximately 500 feet upstream of the falls and return it to Delta Creek at the existing Delta Creek tailrace. The general project arrangement will include the following main features and is shown in Figure 3 with a detail of the lower portion shown in Figure 4. • An intake structure located 500 upstream of the waterfall at approximately elevation 720 feet • A pipeline located to the northeast side of Waterfall Creek. NORAIasMJnu 25]SLShael PM Wwzm Po 3010 Sane 303 F.(Wrw-m Arobra"e M' -3 rwvY .- A powerhouse constructed as an addition to the existing Delta Creek Hydro Project powerhouse. • Use of the existing 480V - 12.5 kV transformer and 5.6 mile 12.5 kV transmission line connecting the existing Delta Creek Hydro powerhouse to the City of King Cove diesel powerhouse. An access road to the intake structure that branches off of the newly constructed King Cave to Leonard Harbor Road and generally located on the west and north side of Waterfall Creek. Portions of the project will be similar to the existing Delta Creek Hydroelectric Project and these pertinent drawings are attached to indicate the type of construction expected. Diversion/Intake Structure The evaluation of alternatives for the diversion/intake structure is based only on a brief field reconnaissance. There is no topography or geological information for this area. We recommend a topographic survey at the proposed site and a geotechnical exploration to confirm presence and depth of bedrock. A potential intake site was identified approximately 500 feet upstream of the waterfall at approximately elevation 720 feet (measured by altimeter). It is located downstream of the forks and is at a narrow confined section. It is the highest elevation site that will allow road and pipeline access. There is a bedrock outcrop on the east side of the creek at this site. The diversion pond depth should be the lowest possible to minimize the cost of the structure, but at �.., the maximum turbine flow it should be high enough to prevent formation of a vortex in the pond. A i deeper pond is also valuable in limiting frazil ice effects on project operation; it is likely that frazil ice occurs in Waterfall Creek, but that has not been confirmed. For this concept design we assume that the dam height will be less than 10 feet. Based on the field reconnaissance the diversion will be approximately 20 feet wide at the base and 40 feet wide at the top (assuming a 10 foot tall dam). The diversion structure will create only a small head pond with very limited storage. As a result, it should be possible to design the structure for a relatively small flood, since overflow and subsequent failure would not release a damaging amount of water. The 100-year flood is recommended as the design flood. The Waterfall Creek basin does not contain any glaciers and appears to have a stable bed at the intake site. The basin upstream of the falls is steep with a ready supply of sediment. Waterfall Creek likely generates a fair amount of bedload (sand and gravel) during extreme events. The bedload will tend to accumulate in the diversion pond, and the diversion/intake structure will need to include facilities to periodically flush the accumulated material to prevent it from being drawn into the pipeline. The characteristics of this site are similar, although peak flows are smaller and the crest length will be shorter, than the diversion and intake structure constructed at Clear Creek on the Delta Creek Hydro Project. For this concept design report we will assume that the Waterfall Creek diversion and intake structure will be similar to the Clear Creek structure. Use of a similar structure to Clear Creek will also aid operator familiarity with the project. HORAhsM.1no. a%Lae19](]MIU>i64AaIIM l M10 Svk M6 Nc'7K— The recommended diversion structure consists of a central concrete core wall with rock fill on both sides to provide stability. The core wall will be keyed into the rock foundation, and the outer face of the rock fill will be grouted with concrete to prevent erosion of the fill. The abutments are relatively narrow, which will minimize the concrete and fill volume of the structure. The recommended arrangement is shown in the attached drawing from the Delta Creek Hydra Project. Pipeline A buried pipeline will be constructed from the intake to the powerhouse. The pipeline diameter will be 16 to 18 inches, and the pipeline will be approximately 4,500 feet long. The upper (lower pressure) portion of the pipeline will be High Density Polyethylene (HDPE) pipe and the lower (higher pressure) portion will be steel pipe. Two potential concept level alignments for the pipeline are shown in Figure 2. Determination of the optimum route will need to await mapping, soils exploration and a site visit. One route is longer but lower gradient. The other is steeper and approximately 1000 feet shorter but maybe more difficult to construct and will deviate from the proposed access road route. The longer route is assumed for the purpose of this study. The pipeline route will cross Delta Creek. The existing mapping does not cover this crossing location but from review of aerial photography it appears that a pipeline without a sag can be constructed across the creek and to the existing powerhouse. This will need to be verified with additional mapping and by conventional surveying methods. During low flows this crossing of Delta Creek can be significantly dewatered by diverting the flow into the existing hydroelectric penstock. This will aid construction of this creek crossing. Optimal pipe size is a balance of pipe cost vs. head loss. For the range of flows expected on the project an inside pipe diameter of about 15 to 16 inches is optimal. HDPE will be an ideal material for the low pressure segment of the pipe line. It is relatively light in weight, which minimizes shipping and handling costs, and requires little maintenance. The pipe segments are heat -fused to form watertight joints to minimize leakage. It is a tough and durable material, which will simplify construction and allow a less restrictive bedding specification. It is also very smooth to minimize friction losses. HDPE pipe is produced in standard sizes and thicknesses. It is generally specified by outer diameter and Standard Dimension Ratio (SDR). The pressure rating for the pipe varies linearly with the SDR. Some SDR classes are more common, and we have assumed that only the 3 most common classes would be used (SDR 26, 17, and 11, corresponding to pressure ratings of 64, 100, and 160 psi). At some point along the conduit alignment, the cost for HDPE pipe will be more than the cost of a stronger type of pipe (such as steel) because of the relatively low strength of HDPE. For the purposes of this evaluation, we have continued the HDPE to where the static pressure is 160 psi (estimated as approximately 2800 feet downstream of the intake). The transition point is highly dependent on the cost of the pipe materials, and so it should be re-evaluated when detailed survey data is available and again when the time comes for ordering the pipe. The nominal size of HDPE pipe selected is 18" which depending on the wall thickness ranges in inside diameter from 14.7 to 16.6 inches. HORAlaAM.l , Mcso t I P.(W. fi4-= I F'g5dlo Swu3 rm(Wn 644-4022 AM r, ,M 995M —M-.mm The optimal nominal size of the steel penstock is 16 inches, which will have a similar inside diameter to the adjoining 18" HDPE pipe. The recommended thickness for the steel pipe is 3/16 inch (assuming the steel has an allowable stress of 18,000 psi). This thickness should allow for transient pressure requirements which will be determined during design. The steel pipe will need to be coated for corrosion protection. An epoxy lining and polyurethane coating will provide longevity. A breakdown of the pipeline materials and dimensions are shown in Table 3 below Table 3 Pipeline Materials and Dimensions Pipeline Segment - 1 2 3 4 Horizontal Alignment Starting Station (feet) 0+00 11+00 17+00 28+00 Ending Station (feet) 11+00 17+00 28+00 45+00 Horizontal Length feet 1,100 600 1,100 1,700 Vertical Alignment' Starting Elevation (feet) 720.0 572.0 490.0 350.0 Ending Elevation (feet) 572.0 490.0 350.0 216.0 Average Sloe % 13% 13% 13% 8% Pipe Information Total Length (feet) 1,100 600 1,100 1,700 Nominal Diameter (inch) 18 18 18 16 Material HDPE HDPE HDPE Steel SDR (Std. Dim. Ratio) 26 17 11 NA Wall Thickness (inches) 1.154 1.412 2.182 0.188 Pressure Ratin si 64 100 160 3592 Construction Information Support Type Buried Buried Buried Buried Adiacentto Road? Yes I Yes I Yes Partial Allelevations baud onan avumW slope of13%roomiom m-1bluffofneluI— Based on allowable stress of Is." psi. Powerhouse A powerhouse could be located on either the east or west side of Delta Creek. A powerhouse on the east side would be located adjacent to the existing powerhouse. This would allow use of the existing mechanical and electrical systems within the existing powerhouse and would provide for ease of operator access. A site on the west side of Delta Creek was also considered because it would allow the tailrace water to be returned to Waterfall Creek upstream of potential anadromous fish habitat areas. Anadromous fish habitat was not found during the reconnaissance fisheries work and this alternative was dropped due to the advantages of co -location with the existing Delta Creek powerhouse. A 16' x 40 foot addition on the east side of the existing powerhouse is proposed. The penstock would enter on the north wall of this addition. Discharge from the turbine will flow through a concrete channel in the powerhouse foundation, then into the existing powerhouse tailrace channel to Delta Creek. Hoa N.M. lnc. 2525Cs1ae1 I FMre(�ll&1-1Mo Gage sol to SUWTX Fu (9prIH4.4oII gygrz ,qK 93503 wrm.Nnrc.am The powerhouse includes the following features: • A 16'x40' slab -type reinforced concrete foundation, with column footings and perimeter walls similar to the existing powerhouse. • A 16'x40' pre-engineered insulated metal building superstructure, designed for the appropriate snow, seismic, crane, and wind loads. The existing building shell will be modified to include doors to access the addition. • A double nozzle Felton impulse turbine with hydraulically -operated needle valves and jet deflectors. Rotational speed would be 720 rpm. • An induction generator rated at 375 kW, 480V. • A butterfly -type turbine shutoff valve. • A hydraulic power unit for operating the turbine valves. • An overhead monorail hoist for assembling and loading turbine and generator components. The existing powerhouse work area will be extended to the north to allow hoist loads to be set or picked up from trucks in the work area. The existing backup diesel generator will need to be relocated. • A control system designed for remote -automatic operation of the generating unit. • This arrangement will piggyback on the existing DC power system, HVAC equipment plumbing systems and substation equipment. Access Road A road will be required to access the intake site and to construct and maintain the pipeline. A potential access route was identified along the northeast side of the creek (right side when facing waterfall). From the intake area, this route would traverse a bench to exit the creek canyon and then swing downhill and to the south to connect with the recently constructed road to Leonard Harbor. This access route would take advantage of the new bridge across Delta Creek. The length of this road is approximately 5,000 feet. The average slope over this route would be 10% with some steeper sections. Winter access on this road may be difficult as a photograph of the site from winter of 2006 showed that there may be significant snow drifting along the upper sections of the roadway. Mapping, surveying and soils exploration will be necessary to further define this route. HEIR Alaska, Inc, zn CS4ee1 P (WrIw_ Pa 7d* SW.3 `.M7)a44-40T1 ArcAw .AK 9B5]i Miu . Ie-'N Cost Estimate The estimated total cost of this project is $3,700,000, This cost includes construction, contingency, design, permitting, construction management, escalation and construction financing. A detailed cost estimate is attached. The estimated cost of the turbine, generator and controls is based on a preliminary quotation from Canyon Industries, a firm located in Washington that specializes in the manufacture of small Pelton turbines. The estimated cost of the HDPE pipe is based on preliminary quotations from Arctic Pipe in Anchorage, Alaska. The estimated cost of the steel pipe is based on preliminary quotations from Northwest Pipe in Seattle, Washington. The remainder of the costs including mobilization, intake and diversion, powerhouse and access roads, are based upon bid prices from the King Cove Delta Creek Hydroelectric Project that was bid in 1994. There were 10 bidders on this project and bidders provided both lump sum prices for project components and unit prices for additional work. Average bid prices were used and were inflated from 1994 to 2007 by 147% based on the Engineering News Record Construction Cost Indices. Power Generation The annual generation of the project has been estimated using a spreadsheet that calculates the generation for each hour of the available streamflow record. As discussed in the hydrology section, this streamflow, record consists of approximately one year of flow record from May 20, 2005 to June 19, 2006. It is unknown whether this period represents a high, low or average period of streamflow. Where there are overlapping dates an average was used. The primary assumptions and parameters used by the model in calculating the energy generation are as shown below: Installed capacity: Maximum turbine flow: Minimum turbine flow: Gross head: Type of operation: Pipeline length: Pipeline inside diameter: Conduit friction coefficient: Turbine Type: Turbine/generator efficiency: Transformer efficiency: Transmission efficiency: Instream Flow Requirements Streamflow record 375 kW 12.0 cfs 0.6 cfs 500 feet (headwater at El 720, turbine CL at El 220) Run -of -river 4,560 feet 16" 140 for both steel and HDPE (Hazen Williams) 2-jet Pelton Varies (30 to 84%depending on flow) 99% 95% 0 cfs Average hourly flows, 1 year record The maximum turbine flow of 12 cfs is the maximum that this type of generator can handle. Increases in flow will cause an incremental increase in generator costs. As it works out, this 12 cfs maximum flow is about the optimum flow for the project. The minimum flow is set as 5% of the maximum flow. Generation from the project will also be limited by the loads to be met. It is assumed that electric demand is great enough to use all available hydroelectric power. Has Aleske, Inc I u2 Cc o I mw MnW-mm I vage Balm sdusas ra.l�>tsaa zozz aGm,aye,ra assos �anak�� The estimated generation by the project. for the assumptions discussed above is 1,400 MWh per year. Below is the theoretical power generation by month based on flows from May 2005 to June 2006. Table 4 Estimated Energy Generation Month Energy kWh Januai 57,056 February30,489 March 57,464 April 63,286 May 109,660 June 228,564 Jul I37,837 August 141,334 Se tember 2I0,610 October 177471 November 86,001 December 97155 Annual 1400 000 Economic Analysis The table below provides a simple economic analysis of the project. Project Annual Energy kWh/ r 1,400,000 Estimated Pro'ec[ Cos[ $3,700,000 Annual Debt Service 25 r 6%, ]000011 ncin of entire project cost $260,000 Annual O&M Allowance —kWh, $10,000 First Year EnergyCost per 200 ddollars $0.20 Estimated Diesel Efficiency kWh/ al lon 14 Annual Value of Displaced Diesel Fuel at $2.45 er gallon 2007 cost $245,000 Annual Value of Displaced Diesel Fuel at $3.00 per gallon $300,000 Annual Value of Displaced Diesel Fuel at $3.5 per gallon $350,000 HER Alaska, Inc. Z%csl.. Rbm(WI)W-M P 90�10 SYi.XE Fm19n)6 Z22 KING COVE "WATERFALL CREEK" HYDROELECTRIC PROJECT � CONCEPT DESIGN COST ESTIMATE cNo 330 Destx tlon -"- P AN D LAN IG Ouant tY nit _ Unit _- -Price -_._-_ ota ) .1 .2 enstock, oyatyon acstates s arenas 0 0 0 Subtotal -Ace Na. 330 - Lantl antl Lend Rights 330.5 MOBILIZATION AND LOGISTICS .1 Mc Iizatm emo unction S, 418,077 418,07 Subtotal - Ace No. 330.5- Mobilization and Logistics qi8 331 STRUCTUR AND I MPROVEMENTS Power Ouse Addition 16' X 40') 640 at .1 .2 .3 .4 .5 .6 .8 .9 1.0 Cleanng (Power Dose/Switchyard) Excavaton Backfill -- Riprap tailrace) Concrete (including rein ornm9) Metal Fabricatons Furnishings and xhnes re-eng'd etas Building VAC and Plumbing noun ing n 0 "__178 50 28 500 i 640 1 1 ACRE C.Y. C.Y. C.V. LB. S.F. L.S. $ P,208 $ 11 $ 59 $ 1,152 $ 6 $ ion $ 5,000 5,0 0 $ - 1,973 $ 2,943 $ 32,655 $ 3.000 69,000 5,000 Subtotal - Ace No. 331-Stuctures antl Improvements 1 332 RE RVOIRS, MS, AN WATER .1 UFUUIeQ Rock uam 1 L. $ 611.1 $ 611,144 ubtotal - routetl Rock Dam $ 611,144 2 enstoc .1 .2 .3 .4 .5 Cleanng (30' wide) Pi Su I Steel i6° 3/16"well thickness Pi eSu I HDPE 18"SDR 26 Pi eSu I HOPE 18" SDR 17 Pi eSu HDPE 18"SDR 11 3.1 1,700 1,10 600 1, 1001 ACRE L F LF LF $ 2,208 55 $ 26 $ 8 6, 42 $ 93,500 18,810 $ 15,342 $ 41.888 .7 .8 .9 1.0 1.1 1.2 Rock Excavation Common Excavation Bedding Bas fil11 Her (Delta reek Crossing) Instal Pipe 300 5,000 1,700 3,600 1 74 F 4.500 C. .V. C.Y. C.V. V. LF 48 1 $ 32 10 $ 59 1 $ 14,504 $ 55,483 54,842 $ 37,087 4,361 67. 0 Subtotal - Penstock 410,1 Subtotal - Acc No. 332 - Reservoiy Oams, & Waterways 1,021,30 333TURBINES AND GENE R .1 I 325 kW Penon turbine, ensraun, wnirols 1 L 385,000 $ 385,000 ubtota -Acc No.3 3- ur inesantl Generators _- _ _$ ----'-- '--""-'"--- $ 385,000 9/12/2007 El KING COVE "WATERFALL CREEK" HYDROELECTRIC PROJECT CONCEPT DESIGN COST ESTIMATE 334 ACC Y ELEC AL EOU ENT .1 .1 .1 apply Power able power Ouse !o iota e) Su ly i ar O tic Cab a (owerhouse to intake) Ca a Installation powerhouse to intake) 4,50 4.500 4,500 L LF 8 3 $ 9 39,736 $ 13,245 $ 39, 140 .1 p ce aults powerhouse to intake) ,4 8,830 Subtotal - ACC NO. 334- AccessoryElectrical Equl mant 335 MISCELLANEOUS MEC ANICAL EQUIPMENT .1 oncrail rang .S. $ ,07 ,0]6 Subtotal - Act, No.335- Miscellaneous Mechanical Equipment 2 6 336 1 IROADS Intake Access Road, 45 LF 1 $ .979 1 $ 278,979 Subtotal - Ace No. 336- Bonds .979 SUMMARY 330 LAND AND LAND RIGHTS l $ 330.5 MO^o ILIZATION AND L GI TICS $ 418,0]] 331 1 ISTRUCTURES AND IMPROV M NTS 123,8281 332 RESERVOIRS, AMS,ANDWATE WAYS $ 1.021,302 333 TURBINES AND GENERAT RS 385,000 334 ACCESSORY ELECTATALE—QUIP"I I $ 101, 548 335 MISCELLA U MECHANI AL UIPMEN $ 22,076 278. TOTAL DIRECT CONSTRUCTION COSTS 2,350, 10 Equipment ont ngenc Ccts. 333,334,335) 10 e, $ 51, 00 enera onbngency (Acc!s 3 31,332, 3 2 $ 00 CONTINGENCY ALLOWANCE Average - 419, TOTAL DIRECT CONSTRUCTION COSTS t CO NGENCIES $ 2,]69,810 DesIgn Engineering. urveying &Geotechnical _ i._......__......._______ 12% - . $ 335 t!inq Constriction 2%. .1-, 55,396 Construction Management M 4%! $ 110.792 Escalation 200i to 2003 (1 year at 5% par year b% : 135,491 onstruchon Financing( I year at l071par year) ID%I 6,981 TOTAL OTHER COSTS 91 TOTAL PROJECT COSTS(2W] DOLLARS, ROUNDED) I I 1 $ 3,700,000 IF" Annual e t Service 30 yr inancing or entire protect cost) 26 ,200 nnual O&M Allowance $10,000 Pro sin Annual Energy (MWh/ r 1 $g] irst ear nergy oat per $g. Diesel Fuel Cost A esal EOiclencyalue of Oisp ace lose ue 44,4]5 9/12/2007 O O 4 O 00 �r F a n W ❑ O U Y � O OC Y W L LLI W N i G O W LU }y O N yA L C x O O T O tf7 O "It M N SAO NI N101J m 4 M 1m 4 N O m — �vcm p p 'o^ mm _ LL w m m QmN nay lame 6ae w N P O M p M �m v'aeeoc mmm m a T I I'l. cc T ammN n,m N<,m e o TQP ldm ricrn Y O T m 4 m m n N 0 m O O P �oiM ui6 ri .re riry a •amNm �OTnM�v) Tp��Tm O m� r (NVNM NryC)M mNN K P �pNm mta W LL ni o)TIT (VNN NNNNN 2 i N OImP N mma0 m4 000N O 2 U W � y NM�OTm NOMNOOa m mPP IOmNm ntpN W NY]m vlP CQQpYPMM MNjM N[VN NNNN w a > w � z w 1Lm fa WP, f� mO OO�OmoI RT hN4 ViPP PNQ w� p � n m T O N M Q m m P M o m 1p Q � U O p ] Q= W W Z O g E z° 0 onyon `.J Hydro September 12, 2007 Mr. Robert Butera, P.E. HDR Alaska 2525 C Street, Suite 305 Anchorage, AK 995032632 Dear Bob, Thank you for your email regarding the Waterfall Creek hydroelectric project. We appreciate the opportunity to update our estimate for this equipment package. Canyon Hydro has been building the highest quality equipment for hydroelectric power equipment since 1976. We feel that when you choose a hydroelectric equipment package you are also choosing a company to work with. Our company's reputation has been developed by building the best turbines available and by providing our customers with responsive service throughout the project. From the information sent, we understand the static head is planned for 500 feet and that the net head is assumed to be 450 feet for the sake of this feasibility study. For this estimate, we have increased the turbine's capacity to 12 cfs. We expect an output of 375KW at the rated flow. .-. We are pleased to offer a package to include Canyon double nozzle Pelton turbine with hydraulically actuated needle nozzles and jet deflectors, 720rpm - 375KW - 3/480/60 induction generator, hydraulic power unit, TIV, controls and switchgear to parallel with the local grid. Budget estimate for the package as described is ..............$385,000.00 USD Estimate is FOB Deming, 30 - 34 weeks after receipt of order The equipment offered will be custom designed to meet the particular requirements of the sites assuring the most efficient system possible. As the projects progress and any further requirements are determined, we would be pleased to offer complete Preliminary Design Specifications and quotation as necessary. I look forward to discussing this proposal with you. Please contact me if you have any questions. Best regards, Brett Bauer BWB:pan Canyon Hydro - me water power diVelon of canyon Industries, Inc. • 5500 Blue Heron lane • P0. Boa 36 • Deming WA 98244 360,592-5552 • Fax: 360.592.2235 • email: torbines®canyonhydro.com • www,cur,onhydracom fm 0 w U Z Q K O LL � W W a 00 W Za m O� U C) � W OJ W m O Z = W Z W m � U FJ LL Z � Ow w�a 0 I 0 U W a w w ep e e e e e a e e A0N31O1333 itOIV8W]0/3NIe2ini 03N19WOO Ur-w A th N �i A ri N m N ri6v'6ri N c� N {y (O 1� m ul m W W m OJ ro LL W Q e a s a a e e o a 0 J O � O N p CJ O Q p b O (O p O O p I v Arctic Insulation & Mfg I704 Ship Ave a Anchorage, AK99501 (907) 677-9540—Main Office (907) 677-954I — Fax Customer HER Engineering 2525 C STREET SUITE 305 ANCHORAGE, AK 99503 Attn: Mr. Bob Butera, PE Quote 9J30 Phone Number Tenn. Quote by FOB 644-2028 Net 30 irh Seattle Item # Qty. Unit Description Unit Price Weight Total 1. 1,000 LF 18" HOPE SDR 26 PE3408 17.10 16.48 17,100.00 PIPE 40' LENGTH BLK 2. 520 LF 18" HOPE SDR 17 PE3408 PIPE 25.57 24. 33 13,296.40 40' LENGTH BLK 3. 1,000 LF 18" POPE SDR 11 PE3408 PIPE 38.08 36.70 38,080.00 40' LENGTH BLK 4. 1 EA FREIGHT FROM FACTORY 2,400.00 2,400.00 TO SEATTLE DOCK Bob, Sorry about the delay with this quote. Ifyou have any questions please let ma know. Thank you. John Held, Total $70,876.40 Our products art waramed omy to me exert mat we wits replace without charge, products proved to have man ufact nrmg centers within six monMs of the date of delivery mansard provided we have bean given an opportunity seterms the product alleged no be defective. No warrenry is included against any expeme for removal, reinstallation or outer consequential damages arising from any deket. Due to the widely varying conditions under which our products are imaded and used, we can=be and are trot bound, and no person is authorized to bind as by any hrticen werterry whawnewr expressed or implied including the warranty or enchant ability ma fitnsss for a particular purpose, Arnie Insulation & manufacturing will not accept may pmchsse orders involving matinee mallet liquidated damages. Arctic loaddi n& Manufacturing more are net 30 days. T U W 3 m nrr n U� ~ Q Z U w Jom Quo U Q J jo ? O U Oar Uzo p =z� >� O U 0 1� s 4 §� _a lMI .�fl, !)\ \ � J!| \�, | � � \. ` <it \ .,/ gi I L¢¢S Y QI c I@ �3 e a e > o �a ou wa s e uuu��� yob fb� I � - �_� a �� _ n _ M,