HomeMy WebLinkAbout01 West Creek Round 6 AEA grant application FINALRenewable Energy Fund Round 6
Grant Application
AEA 13-006 Application Page 1 of 27 7/3/2011
Application Forms and Instructions
This instruction page and the following grant application constitutes the Grant Application Form
for Round 6 of the Renewable Energy Fund. An electronic version of the Request for
Applications (RFA) and this form are available online at:
http://www.akenergyauthority.org/RE_Fund-6.html
If you need technical assistance filling out this application, please contact Shawn Calfa,
the Alaska Energy Authority Grant Administrator at (907) 771-3031 or at
scalfa@aidea.org.
If you are applying for grants for more than one project, provide separate application
forms for each project.
Multiple phases for the same project may be submitted as one application.
If you are applying for grant funding for more than one phase of a project, provide
milestones and grant budget for each phase of the project.
In order to ensure that grants provide sufficient benefit to the public, AEA may limit
recommendations for grants to preliminary development phases in accordance with 3
ACC 107.605(1).
If some work has already been completed on your project and you are requesting
funding for an advanced phase, submit information sufficient to demonstrate that the
preceding phases are satisfied and funding for an advanced phase is warranted.
If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or
proprietary company data be kept confidential subject to review and approval by the
Authority. If you want information is to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept
confidential. If the Authority determines it is not conf idential it will be treated as a
public record in accordance with AS 40.25 or returned to the applicant upon
request.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 2 of 27 7/3//2012
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Municipality of Skagway Borough
Type of Entity: Fiscal Year End June 30
Government
Tax ID # 926000088 Tax Status: For-profit or X non-profit ( check one)
Mailing Address
P O Box 415, Skagway, AK 99840
Physical Address
700 B Spring Street, Skagway, AK 99840
Telephone
907-983-2297
Fax
907-983-2151
Email
t.smith@skagway.org
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Tom Smith
Title
Borough Manager
Mailing Address
Municipality of Skagway, P O Box 415, Skagway, AK 99840
Telephone
907-983-2297
Fax
907-983-2151
Email
t.smith@skagway.org
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
or
No
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
or
No
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
or
No
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
or
No
1.2.5 We intend to own and operate any project that may be constructed with grant
funds for the benefit of the general public. If no please describe the nature of the
project and who will be the primary beneficiaries.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 3 of 27 7/3//2012
SECTION 2 – PROJECT SUMMARY
This is intended to be no more than a 1-2 page overview of your project.
2.1 Project Title – (Provide a 4 to 5 word title for your project)
West Creek Hydroelectric Project
2.2 Project Location –
Include the physical location of your project and name(s) of the community or communities that will
benefit from your project in the subsections below.
The West Creek Hydroelectric Project is located on West Creek approximately 7 miles west of
Skagway and adjacent to the small community of Dyea. The primary purpose of the Project
would be to offset diesel generation by cruise ships that dock in Skagway from May through
September each year. Up to four cruise ships per day dock in Skagway for 12-15 hours and
continuously operate their diesel gensets to provide for onboard electricity requirements. The
continuous stack emissions create a blue haze at approx. 1,500’ elevation where vegetation has
been noticeably affected. A secondary purpose of the project would be to provide winter energy
to the local utility and to also provide winter energy to other utilities in the region. The sale of
energy to the cruise ships, the local utility and other utilities will provide the means to support
the project once constructed and operational.
2.2.1 Location of Project – Latitude and longitude, street address, or community name.
Latitude and longitude coordinates may be obtained from Google Maps by finding you project’s location on the map
and then right clicking with the mouse and selecting “What is here? The coordinates will be displayed in the Google
search window above the map in a format as follows: 61.195676.-149.898663. If you would like assistance obtaining
this information please contact AEA at 907-771-3031.
Lat N 59°31’33” Long W 135°24’45”
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
Skagway, Alaska; Haines, Alaska; potentially other electric utilities in the area and region
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
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 4 of 27 7/3//2012
Reconnaissance Design and Permitting
X Feasibility Construction and Commissioning
X Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
The Municipality of Skagway (Municipality) proposes to construct the West Creek
Hydroelectric Project (Project) located on West Creek, approximately 7 miles west of Skagway
and adjacent to the small community of Dyea. The primary purpose of the Project would be
offsetting diesel generation by cruise ships that dock in Skagway from May through September
each year. Up to five cruise ships per day dock in Skagway for 12 -15 hours and continuously
operate their diesel plants to provide for on-board electricity consumption. The continuous stack
emissions spread a blue haze at about the 1,500 foot elevation where vegetation has been
noticeably affected. The Project will improve air quality and save vegetation in the area (there
may be other unknown environmental benefits). To emphasize how serious the air quality of the
area is being taken, the National Park Service, Municipality of Skagway, and Alaska Power &
Telephone Company (AP&T) have a cooperative agreement to place and maintain equipment at
AP&T’s Dewey Lakes Hydro project site to monitor this pollution. Preliminary results of this
monitoring are attached as an appendix. A secondary purpose of the Project is to provide winter
energy to the local utility when they have a shortfall of hydro energy from their hydroelectric
projects (2011 = Dewey Lakes Hydro, Lutak Hydro, Goat Lake Hydro, Kasidaya Creek Hydro)
as well as to sell winter energy to other utilities in the area.
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 primary purpose of the Project is to reduce the environmental impacts of on -board diesel
generation by cruise ships. The environmental benefits include: cleaner air from 1-3 cruise ships
shutting down their diesel generators while in port; fewer trees and other vegetation being
stressed at and above the 1500-foot elevation; and other unknown environmental and public
benefits related to the reduction of greenhouse gas and particulate matter emissions.
The Municipality anticipates negotiating power sales agreements with cruise lines that visit
Skagway at rates that would be less than the cost of self-generating but would still cover the cost
of owning and operating the Project. The Municipality may also receive some benefit from
surplus power sales to the local utility (AP&T) as well as sales via a power sales agreement with
other energy users in the area. The financial benefits to the cruise ship industry would be from
lower costs of operation. The Municipality could share the net revenues with the State so that its
investment could be returned.
The benefits of the Project will depend a great deal on how the construction costs are financed.
The Municipality’s preliminary economic analysis is based on 80% being funded by grants from
the State and, 20% being funded by the Municipality with 6%/30-year municipal bonds. The
cost of power to the cruise lines starts at 90% of the equivalent cost of self-generation and
escalates at 2.75% per year. Net revenues are split 50/50 between the Municipality and the State.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 5 of 27 7/3//2012
That financing arrangement provides a positive long-term benefit for all three parties (cruise
lines, the Municipality, and the State). Other financing arrangements would provide differing
results, and can be evaluated during the Phase II studies.
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 Municipality estimates the proposed Phase II work (Feasibility/Conceptual Design) will cost
$320,000. In addition, cost estimates for Phase III and IV are shown in the table below for reference to
the project’s eventual total budget. The Municipality proposes to provide a match of 20% of the Phase II
costs, which will be paid from the Municipality’s share of tourism tax revenue.
The estimated construction cost will also depend on whether a run-of-river or storage project is selected
from the Phase II studies. Preliminary estimated costs are shown in the budget summary table below; the
construction costs are based on updating the costs estimated by Beck in the 1982 feasibility study:
Phase Phase II Phase III Phase IV Total
Run-of-River Project
AEA Grant Funds
Municipality Match
$236,000
$84,000
$5,588,000
$1,397,000
Total
$320,000 $6,985,000 $114,820,000 $127,000,000
Storage Project
AEA Grant Funds
Municipality Match
$236,000
$84,000
$6,628,000
$1,657,000
Total $320,000 $8,285,000 $131,420,000 $140,025,000
For the purposes of this grant application, the Municipality believes it prudent to only conduct a
feasibility analysis and conceptual design at this time, and therefore requests that AEA provide $236,000
in grant funding, which will all be used for Phases II. The Municipality will provide matching funding in
the amount of $84,000. Please see the attached Grant Budget for a cost breakdown for each phase of
development.
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. $ 236,000
2.7.2 Cash match to be provided $ 84,000
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 6 of 27 7/3//2012
2.7.3 In-kind match to be provided $
2.7.4 Other grant applications not yet approved $
2.7.5 Total Grant Costs (sum of 2.7.1 through 2.7.3) $ 320,000
Project Costs & Benefits
(Summary of total project costs including work to date and future cost estimates to get to a fully
operational project)
2.7.6 Total Project Cost (Summary from Cost Worksheet
including estimates through construction)
$ 140,000,000
2.7.7 Estimated Direct Financial Benefit (Savings) $ 268,000,000
2.7.8 Other Public Benefit (If you can calculate the benefit in
terms of dollars please provide that number here and
explain how you calculated that number in your application
(Section 5.)
$ 165,000,000
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.
For the proposed Phase II work, the project manager will be Tom Smith, Borough Manager, and Stan
Selmer, Mayor of the Municipality of Skagway. Both are residents of Skagway.
The Phase II work may be conducted by AP&T for the Municipality. Both project managers will
coordinate activities as necessary. Tom Smith, Borough Manager has 10 years of Municipal Management
experience in Alaska. Mr. Selmer has extensive experience in project management and electrical
generation, transmission and distribution, and hydro development, including the integration and operation
of hydro/diesel systems.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 7 of 27 7/3//2012
3.2 Project Schedule and Milestones
Please fill out the schedule below. Be sure to identify key tasks and decision points in in your
project along with estimated start and end dates for each of the milestones and tasks. Please
clearly identify the beginning and ending of all phases of your proposed project.
Please fill out form provided below. You may add additional rows as needed.
Milestones Tasks
Start
Date
End
Date
Data collection and review
July
2013
Aug.
2013
Site Inspection Aug
2013
Aug
2013
Hydrology studies Sept
2013
Oct
2013
Operations Model development Oct
2013
Nov
2013
Develop cost estimate
spreadsheet
Nov
2013
Jan
2014
Develop economic analysis model Range of parameters to consider Nov
2013
Jan
2014
Analysis of project alternatives Selection of alternatives Nov
2013
Mar
2014
Draft report Selection of preferred alternative for scoping
based on the draft report
Mar
2014
May
2014
Environmental scoping June
2014
Aug
2014
Final Report Oct
2014
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.
Phase I: Reconnaissance
Not required.
Phase II: Resource Assessment/Feasibility Analysis/Conceptual Design
In this phase AP&T will assist the Municipality in conducting a feasibility analysis and scoping of
environmental studies necessary to permit the selected Project arrangement. Key Borough and AP&T
personnel and their respective roles will be:
Tom Smith, Borough/Municipality Project Manager
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 8 of 27 7/3//2012
Stan Selmer, Borough Mayor/Project Manager
Bob Berreth, Electrical Design
Ben Beste, Mechanical Design
Larry Coupe, Civil Design
Vern Neitzer, AP&T Chief Engineer
Glen Martin, Resource Assessment and Permits
The Municipality and AP&T believe that the Project does not require licensing by the Federal Energy
Regulatory Commission (FERC), since the Project will not be on Federal lands, affect interstate
commerce, or be on a navigable stream. The Municipality will apply for a jurisdictional determination
from FERC early in Phase II to confirm that a FERC license will not be required (takes about 6 months
for this determination). Obtaining a FERC license would increase the Project cost and extend the
development schedule significantly.
The Beck/APA 1982 feasibility analysis will provide some basic information for reevaluation of the site,
including topographic mapping, geotechnical data, and environmental information. Some of the
environmental information may need to be updated, and additional field work may be required. The
Municipality and/or AP&T may use or has used the following contractors for the various studies:
Wetlands delineation - - HDR Alaska Inc.
Threatened and endangered plant species survey - - HDR Alaska Inc.
Fish surveys - - Romey Associates, Inc.
Water quality sampling - - Analytica Group, Inc.
Cultural resource surveys - - Browne Research
Geotechnical investigations - - GeoEngineers, Inc.
Tasks in the feasibility analysis will include:
Collection of data, maps, and reports from previous studies, generation/load data from cruise
lines, cruise ship visitation records, and hourly flow data from the USGS
Site visit by AP&T engineers
Hydrology studies to develop a long-term daily flow record and hourly flows for representative
years
Development of spreadsheet models for power studies, cost estimates, and economic analyses
Optimization studies of project alternatives, including number of boats to be served, amount of
storage to be provided, type and diameter of power conduit, and type of transmission line
Preparation of draft report for review and preferred alternative selection by the Municipality
Scoping of environmental issues and development of study plans to support permitting of the
selected Project arrangement
Preparation of final feasibility report, including results of the environmental scoping.
3.4 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
Please provide an alternative contact person and their contact information.
During Phase II, the Municipality proposes to provide quarterly reports to AEA regarding the status of the
work. The Municipality has provided similar reports to grant funding agencies in the past on other
projects, and has established the necessary procedures for producing the report expeditiously. In addition,
at the completion of Phase II, the Municipality will provide AEA with a copy of the conceptual design
drawings and cost estimate. Additional funding will be pursued during Phase II for Phase III and possibly
Phase IV of this project, depending on the initial results during Phase II.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 9 of 27 7/3//2012
3.5 Project Risk
Discuss potential problems and how you would address them.
FERC Jurisdiction – As noted above, the Municipality and AP&T believe that FERC licensing
will not be required. However, there is the risk that FERC could assert jurisdiction based on
West Creek being navigable or because of proximity to the Klondike Gold Rush National
Historical Park. A non-jurisdictional determination will be applied for early in Phase II. If FERC
does assert jurisdiction, the Municipality will either appeal the ruling, or continue Project
development under FERC jurisdiction at greater cost. A letter of conditional support from the
National Park Service is included with this application.
Seismic – Project components will be designed appropriately for seismic activity, since the
Project will be located in a moderate-risk seismic zone. Structures will be buried as much as
possible to minimize seismic impacts.
Landslides – In July 2002, a moraine collapse in the upper West Creek valley caused flooding
near the West Creek/Taiya River confluence. Although that type of event is unlikely to occur
again, it indicates the active geologic nature of the area. During Phase II, the Municipality will
have a consultant conduct a thorough review of the geologic hazards, which will be addressed in
the Phase II preliminary design.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 10 of 27 7/3//2012
SECTION 4 – PROJECT DESCRIPTION AND TASKS
The level of information will vary according to phase(s) of the project you propose to
undertake with grant funds.
If some work has already been completed on your project and you are requesting funding for
an advanced phase, submit information sufficient to demonstrate that the preceding phases
are satisfied and funding for an advanced phase is warranted.
4.1 Proposed Energy Resource
Describe the potential extent/amount of the energy resource that is available.
Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be
available for the market to be served by your project. For pre-construction applications, describe
the resource to the extent known. For design and permitting or construction projects, please
provide feasibility documents, design documents, and permitting documents (if applicable) as
attachments to this application.
Proposed Energy Resource: The optimum arrangement for the Project will be determined during the
Phase II studies. The various alternatives will have varying installed capacities and annual generation
capabilities. The Beck/APA 1982 study looked at alternatives varying from 6 MW & 24 GWh per year to
17 MW and 75 GWh per year. For the proposed feasibility study, the Municipality expects to evaluate
capacities from 10 MW to 25 MW.
The Project is well-suited to the proposed task of supplying shore power to cruise ships docked in
Skagway, since the high streamflows coincide with the tourist season. There are no other renewable
resources that could provide the same amount of reliable power. AP&T is considering development of a
hydroelectric project at Connelly Lake which could also be configured to provide power to cruise ships in
Haines and/or Skagway, but it would have only about half the potential of the Project. Even so, AP&T
and the Municipality believe there is enough cruise ship load that both the Project and Connelly Lake
could be developed economically. The only real alternative to the Project is then considered to be
continued diesel generation by the cruise ships.
Pros: Compared to the diesel generation on the cruise ships, the Project will have the following
advantages:
reduce use of diesel fuel by cruise ships;
reduce air emissions of both CO2 and NOx gases as well as particulate matter while docked in
Skagway;
reduce haze visible in and around Skagway;
reduce or eliminate impacts to vegetation in the area;
may provide other public health benefits unknown at this time;
would provide a backup energy source for the local grid;
any available winter energy could be sold to other utilities in the region
Cons: As with all hydroelectric projects, the initial cost of development is much higher than for diesel
generation.
4.2 Existing Energy System
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 11 of 27 7/3//2012
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.
AP&T serves Skagway as part of its Upper Lynn Canal (ULC) system, which includes the following
generating units:
Unit Type Capacity, kW Efficiency, kWh/gal Age, years
Goat Lake Hydro (storage) 4,000 N.A. 14
Dewey Lakes Hydro (storage) 943 N.A. 109
Lutak Hydro (run of river) 285 N.A. 12
10-Mile(1) Hydro (run of river) 600 N.A. 11
Kasidaya Creek Hydro (run of river) 3,000 N.A. 4
Skagway #6 Diesel 855 14.69 25
Skagway #7 Diesel 1,100 14.80 15
Skagway #8 Diesel 500 14.89 20
Skagway #9 Diesel (refurbished) 930 ? 2
Haines #1 Diesel 800 12.64 42
Haines #2 Diesel 1265 12.93 28
Haines #3 Diesel 1600 14.92 22
Haines #4 Diesel 2865 12.83 16
(1) AP&T purchased power from Southern Energy’s 10-Mile hydro project until 2002. Purchases resumed
in 2008 and continue to the present.
Haines and Skagway are interconnected by a 15-mile-long 34.5-kV submarine cable with a capacity of
approximately 20,000 kW. Skagway and Dyea are connected by a 7.3-mile long 7.2-kV distribution line,
and Haines and the IPEC system are connected by a 10-mile long 12.47-kV distribution line.
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.
AP&T’s ULC system is primarily hydroelectric generation with diesel backup. In recent years diesel has
been needed for peaking operations and at the end of some long winters. AP&T is evaluating another
hydroelectric project near Haines (Connelly Lake Hydro) to supplement the ULC resources to eliminate
the current diesel generation. That project should also allow for significant load growth in the ULC
system.
The Project is intended to provide power to the cruise ships that visit Skagway each year from May
through September. This project would not have an impact on the existing energy (AP&T) resources
which are solely dedicated to providing power for the residential and commercial customers of ULC. The
existing energy resources can in no way handle even one cruise ship at this time. The Project would not
replace or share the load with any existing generating resources. The Project could provide backup
renewable energy for the ULC system in the event of an emergency, e.g. an extended outage of the Goat
Lake hydro project as well as provide winter energy to other electric utilities in the area.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The existing energy market would be the cruise ships that come to Skagway from May through September
each year. Each large cruise ship has about a 7 MW average load that requires continuous diesel operation
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 12 of 27 7/3//2012
while spending approximately 12-15 hours in port. During the 2012 season, between three and four cruise
ships were scheduled to be in port most week days, Mondays – Fridays, with lighter numbers over
weekends. The Project could be sized to handle up to three cruise ships, which could cut emissions by
about two-thirds. The current ULC electric grid (owned and operated by AP&T) has no available or
surplus renewable energy resources to supply power to these cruise ships. The Project will not affect the
existing energy resources or market as this would be a new market requiring new resources. However, as
explained elsewhere in this document there is a significant need to get cruise ships off of their own
generation while in port due to the apparent impacts they are having on the environment.
4.3 Proposed System
Include information necessary to describe the system you are intending to develop and address
potential system design, land ownership, permits, and environmental issues.
4.3.1 System Design
Provide the following information for the proposed renewable energy system:
A description of renewable energy technology specific to project location
Optimum installed capacity
Anticipated capacity factor
Anticipated annual generation
Anticipated barriers
Basic integration concept
Delivery methods
Renewable energy technology specific to location – The Project will be a conventional run-of-river or
storage hydroelectric project with an installed capacity of as much as 25 MW. The exact configuration of
the Project will be determined during Phase II. Hydroelectric technology is well developed, and provides
most of the renewable energy generated in the world in general, and in Alaska in particular. The Project
will utilize the rain, snow, glacial melt and steep topography afforded by the West Creek basin to generate
renewable energy.
Optimum Installed Capacity – 25 MW (to be confirmed by Phase II studies)
Anticipated capacity factor – 12% (to be confirmed by Phase II studies)
Anticipated annual generation – 27 GWh (to be confirmed by Phase II studies)
Anticipated barriers – No technological barriers.
Basic integration concept – AP&T’s ULC system is primarily hydroelectric with diesel
backup. Integration of the comparatively large Project into the existing system will require that the Project
be well-governed, however, that is not an unusual or difficult requirement. The cruise ship loads are
expected to be relatively easy to control. Note that AP&T also has experience with connecting cruise
ships to local grids as they designed much of the hookup at Juneau for AEL&P.
The Project could be developed as a completely independent system from AP&T’s ULC system, but that
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 13 of 27 7/3//2012
would eliminate some of the auxiliary benefits of the Project.
Delivery methods – Delivering the power to the Skagway dock will require approximately 12 miles of
new or upgraded transmission line, as well as new switchyards, substations, and shorepower switches and
connections. The optimum arrangement for these facilities will be determined during Phase II
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.
By the time a project would be considered to be built all lands in and around the project would be owned
by the Municipality of Skagway. All lands have currently been selected through the Municipal
Entitlement Land process.
4.3.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
outstanding permit issues.
List of applicable permits
Anticipated permitting timeline
Identify and discussion of potential barriers
Applicable Permits:
404 permit (Corps of Engineers) To be sought in Phase III
Water right (ADNR), Needed in Phase II
Fish habitat permit (ADF&G) Needed in Phase II
SHPO review Phase III
Municipality of Skagway approval.
National Park Service permit, if required
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
In 1982 R.W. Beck conducted a feasibility study of this site for the AEA. In Section 9 is a copy of the
Environmental Analysis of the large storage project proposed at that time. Below are comments pulled
from that analysis.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 14 of 27 7/3//2012
T&E Species: The 1982 AEA report states this site has no Federally-listed endangered or threatened
species residing in it. Field studies may still be conducted for this site, but impacts to such species are not
anticipated.
Habitat Issues: The 1982 AEA report, with the large project proposed at that time, states that impacts of
West Creek flow variations, possible turbidity increases, and possible temperature alterations on fish
resources are expected to be minimal because West Creek contributes only 30% of the total flows of the
Taiya River. Fish habitat surveys will still likely need to be conducted, but the creek has been identified
by ADF&G as having Coho rearing habitat (Stream No. 115-34-10230-2009) in the lower part. There is
black bear habitat that with a large reservoir would impact some of their home range. According to the
1982 AEA report, impacts to wildlife habitat in general are expected to be minimal.
Wetlands: The only wetland is the creek itself. If a storage reservoir is developed, then additional
wetlands will be created in the valley (the reservoir) that may benefit both avian and furbearer species.
Archaeological Resources: This project will have a SHPO review. Available information will be
researched prior to hiring an archaeologist to review the site, if necessary. The Project is near the
Klondike Gold Rush National Historical Park, therefore it is likely an archaeologist will have to review
this site.
Land Development Constraints: None known at this time.
Telecommunications Interference: The 34.5 kV transmission line does not create interference with
telecommunications. This size of conductor is frequently found on the same pole with telephone lines, as
they are also found to coexist on AP&T’s poles. For the Project, part of the transmission line is likely to
be buried. Higher voltages can cause interference however.
Aviation Considerations: The project does not pass by an airport and the wood poles will only be about 45
feet in height, well below any flight pattern. The ROW fo r the transmission line is bordered by forest on
both sides and trees in the area are generally as tall as the poles or taller so that flying would be
problematic regardless of transmission line.
Visual, Aesthetic Impacts: Wood poles will be placed approximately 300 feet apart for the transmission
line, where above ground. Parts of or the entire transmission line may be buried in conduit. Although the
area is forested, which is expected to minimize visual and aesthetic impacts, the penstock corridor could
be partially visible from the Klondike Gold Rush National Historical Park. The construction corridor will
be kept to a minimum of clearing. A directional bore tunnel from the bottom of the lake formed by an
impoundment dam may be used in lieu of a penstock.
Potential Barriers: None at this time
4.4 Proposed New System Costs and Projected Revenues
(Total Estimated Costs and Projected Revenues)
The level of cost information provided will vary according to the phase of funding requested and
any previous work the applicant may have done on the project. Applicants must reference the
source of their cost data. For example: Applicants records or analysis, industry standards,
consultant or manufacturer’s estimates.
4.4.1 Project Development Cost
Provide detailed project cost information based on your current knowledge and understanding of
the project. Cost information should include the following:
Total anticipated project cost, and cost for this phase
Requested grant funding
Applicant matching funds – loans, capital contributions, in-kind
Identification of other funding sources
Projected capital cost of proposed renewable energy system
Projected development cost of proposed renewable energy system
Anticipated project costs:
Phase I: $0 (reconnaissance study not required)
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 15 of 27 7/3//2012
Phase II: $320,000 (AP&T estimate based on AP&T experience)
Phase III: $8,285,000 (AP&T estimate based on AP&T experience)
Phase IV: $131,420,000 (AP&T estimate based on AP&T experience)
Total: $140,025,000
Requested grant funding: $236,000 (for Phase II only)
Applicant matching funds: $84,000
Other sources of funding: N/A
Projected capital cost: $131,420,000 (capital cost is assumed to be the cost of Phase IV – Construction)
Projected development cost: $8,605,000 (development cost is assumed to be the total cost of Phases II and III)
4.4.2 Project Operating and Maintenance Costs
Include anticipated O&M costs for new facilities constructed and how these would be funded by
the applicant.
(Note: Operational costs are not eligible for grant funds however grantees are required to meet
ongoing reporting requirements for the purpose of reporting impacts of projects on the
communities they serve.)
Total Anticipated O&M Costs for Project and how it would be funded: $1,500,000/year approx.
O&M by the Municipality will be paid for from revenue acquired through selling power to the cruise ships
the local utility (AP&T) and other utilities in the area.
4.4.3 Power Purchase/Sale
The power purchase/sale information should include the following:
Identification of potential power buyer(s)/customer(s)
Potential power purchase/sales price - at a minimum indicate a price range
Proposed rate of return from grant-funded project
The potential power buyer would be the cruise lines that have ships dock in Skagway. Concepts for power
purchase agreements will be discussed with the cruise lines in Phase II. The intent of the agreements will
be to set a rate which is less than the cost of self-generation by the cruise ships, yet provides an adequate
return to the Municipality and the State. The Municipality’s preliminary economic analysis for the Project
in 2007 assumes a sales price of $0.252/kWh in 2015*, escalating at 2.75% per year. That price is 90% of
the expected cost of self-generation by the cruise ships with diesel fuel at $3.88/gallon. Fuel costs are
currently less than $3.88/gallon because of the global economic downturn, but by 2015 when the Project
could be operational, the cost of diesel fuel should be at least that much. The analysis also assumes that
fuel prices and the power sales rate are constant after 20 years. Under these assumptions, the calculated
rate of return is 6.4%. The calculated savings over 50 years is $165,000,000 by the cruise lines and
$268,000,000 by the Municipality and State. Clearly, this Project has the potential to be a significant
source of income for both the Municipality and the State. In addition power purchase agreements will be
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 16 of 27 7/3//2012
reviewed with other utilities in the region for energy they could use in the winter with potential reciprocal
purchase by the MOS for any additional need by cruise ships during the period of time in the summer
months when other regional surplus energy is available.
*There is little likelihood that the West Creek Project will be constructed in 2015, however, the
relationship established between a sales price of $0.252/kWh in 2015 with a fuel cost of $3.88 gallon is
accurate. Prices today, September 17, 2012, for fuel for generation in Skagway is $4.0216 per gallon.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Please fill out the form provided below
Renewable Energy Source
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. Needs study work to determine annual average
resource availability.
Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel)
Existing Energy Generation and Usage
a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank)
i. Number of generators/boilers/other MOS has no current generators
ii. Rated capacity of generators/boilers/other NA
iii. Generator/boilers/other type NA
iv. Age of generators/boilers/other NA
v. Efficiency of generators/boilers/other NA
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor NA
ii. Annual O&M cost for non-labor NA
c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the
Railbelt grid, leave this section blank)
1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric
Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 17 of 27 7/3//2012
i. Electricity [kWh] NA
ii. Fuel usage
Diesel [gal] NA
Other NA
iii. Peak Load NA
iv. Average Load NA
v. Minimum Load NA
vi. Efficiency NA
vii. Future trends NA
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] NA
ii. Electricity [kWh] NA
iii. Propane [gal or MMBtu] NA
iv. Coal [tons or MMBtu] NA
v. Wood [cords, green tons, dry tons] NA
vi. Other NA
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]
Feasibility studies to help determine this answer
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] Awaiting feasibility
ii. Heat [MMBtu]
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu]
ii. Coal [tons or MMBtu]
iii. Wood [cords, green tons, dry tons]
iv. Other Hydro project
Project Cost
a) Total capital cost of new system
b) Development cost This phase feasibility = $320,000
c) Annual O&M cost of new system
d) Annual fuel cost
Project Benefits
a) Amount of fuel displaced for
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 18 of 27 7/3//2012
i. Electricity Once constructed approximately 1.9 million gals annually are displaced.
Cruise ships only.
ii. Heat
iii. Transportation
b) Current price of displaced fuel $7.638 million in 2012 dollars for cruise ships only
c) Other economic benefits All other fuels displaced for regional needs
d) Alaska public benefits Fuel and emissions displacement
Power Purchase/Sales Price
a) Price for power purchase/sale To be determined
Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio For Skagway, 1.92 with 80% grant funding of construction cost
For State, 2,06 with 80% grant funding of construction cost
Non-discounted values based on 50/50 sharing of net revenues
Payback (years) Not calculated
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.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 19 of 27 7/3//2012
Ownership/Accessibility. Who owns the land and are their limitations and restrictions to
accessing the biomass resource?
Inventory data. How much biomass is available on an annual basis and what types (species)
are there, if known?
SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
Potential annual fuel displacement (gallons and dollars) over the lifetime of the evaluated
renewable energy project
Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or cost based rate)
Potential additional annual incentives (i.e. tax credits)
Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
Discuss the non-economic public benefits to Alaskans over the lifetime of the project
See benefits spreadsheet in appendices
SECTION 6– SUSTAINABILITY
Discuss your plan for operating the completed project so that it will be sustainable.
Include at a minimum:
Proposed business structure(s) and concepts that may be considered.
How you propose to finance the maintenance and operations for the life of the project
Identification of operational issues that could arise.
A description of operational costs including on-going support for any back-up or existing
systems that may be require to continue operation
Commitment to reporting the savings and benefits
The Project will be a conventional run-of-river or storage hydroelectric project with an installed capacity of
as much as 25 MW. The exact configuration of the Project will be determined during Phase
II. Hydroelectric technology is well developed, and provides most of the renewable energy generated in
the world in general, and in Alaska in particular. The Project will utilize the rain, snow, glacial melt and
steep topography afforded by the West Creek basin to generate renewable energy. All energy at 25 MW
can be utilized in the local market and the O&M for the life of the project will be financed by energy sales.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 20 of 27 7/3//2012
The only major operational issue will be that of low water years and their predictability could be developed
through feasibility.
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.
We have already received via the National Park Service a Lidar mapping product for the vicinity
of West Creek, Alaska. This mapping product has an approximate value of $50,000. The
Municipality of Skagway has applied for AEA Renewable Energy grants for the feasibility of this
project for 4 of the past 5 years and has not received grant funding. If we are awarded funding in
Round 6 we will at least start stream gauging after July 1, 2013. All other anticipated studies
would start in sequence from that date:
Tasks in the feasibility analysis will include:
Collection of data, maps, and reports from previous studies, generation/load data from cruise lines,
cruise ship visitation records, and hourly flow data from the USGS
Site visit by AP&T engineers
Hydrology studies to develop a long-term daily flow record and hourly flows for representative
years
Development of spreadsheet models for power studies, cost estimates, and economic analyses
Optimization studies of project alternatives, including number of boats to be served, amount of
storage to be provided, type and diameter of power conduit, and type of transmission line
Preparation of draft report for review and preferred alternative selection by the Municipality
Scoping of environmental issues and development of study plans to support permitting of the
selected Project arrangement
Preparation of final feasibility report, including results of the environmental scoping.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 21 of 27 7/3//2012
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.
See appendices
SECTION 9 – GRANT BUDGET
Tell us how much you want in grant funds Include any investments to date and funding sources,
how much is being requested in grant funds, and additional investments you will make as an
applicant.
Provide a narrative summary regarding funding sources and your financial commitment to the
project.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 22 of 27 7/3//2012
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 f or each phase of your project.
If you have any question regarding how to prepare these tables or if you need assistance preparing the
application please feel free to contact AEA at 907-771-3031 or by emailing the Grant Administrator,
Shawn Calfa, at scalfa@aidea.org.
Milestone or Task
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
(List milestones based on
phase and type of project.
See Milestone list below. )
Data collection and review Aug 2013 $ 14,400 $ 3,600 MOS cash $ 18,000
Site Inspection Aug 2013 $ 12,000 $ 3,000 MOS cash $ 15,000
Hydrology Oct 2013 $ 8,000 $ 2,000 MOS cash $ 10,000
Operation Model Nov 2013 $ 8,000 $ 2,000 MOS cash $ 10,000
Cost estimate spreadsheet Jan 2014 $ 24,000 $ 6,000 MOS cash $ 30,000
Economic analysis model Jan 2014 $ 6,400 $ 1,600 MOS cash $ 8,000
Alternatives analysis Mar 2014 $ 76,000 $ 19,000 MOS cash $ 95,000
Draft report May 2014 $ 28,000 $ 7,000 MOS cash $ 35,000
Environmental scoping Aug 2014 $ 28,800 $ 7,200 MOS cash $ 36,000
Seismic/geologic review Aug 2014 $ 0 $ 25,000 MOS cash $ 25,000
Final report Oct 2014 $ 13,600 $ 3,400 MOS cash $ 17,000
Project Management $ 16,800 $ 4,200 MOS cash $ 21,000
TOTALS $ 236,000 $ 84,000 $ 320,000
Budget Categories:
Direct Labor & Benefits $ 10,000 $ 2,000 $ 12,000
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ 226,000 $ 82,000 $ 308,000
Construction Services $ $ $
Other $ $ $
TOTALS $ 236,000 $ 84,000 $ 320,000
Milestone or Task
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
(List milestones based on
phase and type of project.
See Milestone list below. )
$ $ $
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 23 of 27 7/3//2012
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
TOTALS $ $ $
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ $ $
Construction Services $ $ $
Other $ $ $
TOTALS $ $ $
Milestone or Task
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
(List milestones based on
phase and type of project.
See Milestone list below. )
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
TOTALS $ $ $
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ $ $
Construction Services $ $ $
Other $ $ $
TOTALS $ $ $
Milestone or Task
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
(List milestones based on
phase and type of project. $ $ $
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 24 of 27 7/3//2012
See Milestone list below. )
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
TOTALS $ $ $
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ $ $
Construction Services $ $ $
Other $ $ $
TOTALS $ $ $
Milestone or Task
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
(List milestones based on
phase and type of project.
See Milestone list below. )
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
$ $ $
TOTALS $ $ $
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ $ $
Construction Services $ $ $
Other $ $ $
TOTALS $ $ $
Project Milestones that should be addressed in Budget Proposal
Reconnaissance Feasibility Design and
Permitting Construction
1. Project scoping and
contractor solicitation.
2. Resource
identification and
analysis
3. Land use, permitting,
1. Project scoping
and contractor
solicitation.
2. Detailed energy
resource analysis
3. Identification of
1. Project scoping
and contractor
solicitation for
planning and
design
2. Permit
1. Confirmation that all
design and feasibility
requirements are
complete.
2. Completion of bid
documents
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 25 of 27 7/3//2012
and environmental
analysis
4. Preliminary design
analysis and cost
5. Cost of energy and
market analysis
6. Simple economic
analysis
7. Final report and
recommendations
land and regulatory
issues,
4. Permitting and
environmental
analysis
5. Detailed analysis of
existing and future
energy costs and
markets
6. Assessment of
alternatives
7. Conceptual design
analysis and cost
estimate
8. Detailed economic
and financial
analysis
9, Conceptual
business and
operations plans
10. Final report and
recommendations
applications (as
needed)
3. Final
environmental
assessment and
mitigation plans
(as needed)
4. Resolution of
land use, right of
way issues
5. Permit approvals
6. Final system
design
7. Engineers cost
estimate
8. Updated
economic and
financial analysis
9. Negotiated
power sales
agreements with
approved rates
10. Final business
and operational
plan
3. Contractor/vendor
selection and award
4. Construction Phases
–
Each project will have
unique construction
phases, limitations,
and schedule
constraints which
should be identified
by the grantee
5. Integration and
testing
6. Decommissioning old
systems
7. Final Acceptance,
Commissioning and
Start-up
8. Operations Reporting