HomeMy WebLinkAbout092112_AEA-Connelly Lake Hydroelectric Project
September 21, 2012
Alaska Energy Authority
AEA 13-006 Renewable Energy Grant Application
813 West Northern Lights Blvd
Anchorage, AK 99503
RE: Connelly Lake Hydroelectric Project Grant Application
AEA 13-006 Renewable Energy Grant Application
Dear AEA:
Enclosed in response to RFA AEA 13-006 Renewable Energy Grant Application
program, is an application requesting funding for the Connelly Lake Hydroelectric
Project. Enclosed with this letter are two hard copies and one CD with the document in
PDF format.
Enclosed as per the RFA,
o Grant Application Form
o Cost Worksheet (included in the body of application)
o Grant Budget (included in the body of application)
o Other pertinent information in Section 11
If you have any questions, please call either Glen Martin (Resource Assessment &
Permits) 360-385-1733 x122, or Bob Grimm (President) 360-385-1733 x120.
Sincerely,
Glen D. Martin
Resource Assessment & Permits
Enc. (as stated)
Renewable Energy Fund Round 6
Grant Application
AEA 13-006 Application Page 1 of 26 7/3/2011
Application Forms and Instructions
This instruction page and the following grant application constitutes the Grant Application Form
for Round 6 of the Renewable Energy Fund. An electronic version of the Request for
Applications (RFA) and this form are available online at:
http://www.akenergyauthority.org/RE_Fund-6.html
If you need technical assistance filling out this application, please contact Shawn Calfa,
the Alaska Energy Authority Grant Administrator at (907) 771-3031 or at
scalfa@aidea.org.
If you are applying for grants for more than one project, provide separate application
forms for each project.
Multiple phases for the same project may be submitted as one application.
If you are applying for grant funding for more than one phase of a project, provide
milestones and grant budget for each phase of the project.
In order to ensure that grants provide sufficient benefit to the public, AEA may limit
recommendations for grants to preliminary development phases in accordance with 3
ACC 107.605(1).
If some work has already been completed on your project and you are requesting
funding for an advanced phase, submit information sufficient to demonstrate that the
preceding phases are satisfied and funding for an advanced phase is warranted.
If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or
proprietary company data be kept confidential subject to review and approval by the
Authority. If you want information is to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept
confidential. If the Authority determines it is not confidential it will be treated as a
public record in accordance with AS 40.25 or returned to the applicant upon
request.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 2 of 26 7/3//2012
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Alaska Power & Telephone Company
Type of Entity: Utility Fiscal Year End: December 31
Tax ID # 92-0153693 Tax Status: X For-profit or non-profit ( check one)
Mailing Address
P.O. Box 3222
Port Townsend, WA 98368
Physical Address
193 Otto Street
Port Townsend, WA
Telephone
360-385-1733
Fax
360-385-7538
Email
glen.m@aptalaska.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Glen Martin
Title
Permitting, Licensing, & Environmental Review
Manager
Mailing Address
P.O. Box 3222
Port Townsend, WA 98368
Telephone
360-385-1733
Fax
360-385-7538
Email
glen.m@aptalaska.com
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
X An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes
1.2.2 Attached to this application is formal approval and endorsement for its project by
its board of directors, executive management, or other governing authority. If the
applicant is a collaborative grouping, a formal approval from each participant’s
governing authority is necessary. (Indicate Yes or No in the box )
Yes
1.2.3 As an applicant, we have administrative and financial management systems and
follow procurement standards that comply with the standards set forth in the grant
agreement.
Yes
1.2.4 If awarded the grant, we can comply with all terms and conditions of the attached
grant form. (Any exceptions should be clearly noted and submitted with the
application.)
Yes
1.2.5 We intend to own and operate any project that may be constructed with grant
funds for the benefit of the general public. If no please describe the nature of the
project and who will be the primary beneficiaries.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 3 of 26 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)
Connelly Lake 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 Connelly Lake Hydroelectric Project (Project) will be located in Southeast Alaska,
approximately 14 miles northwest of the City of Haines and 10 miles southwest of the City of
Skagway.
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.
59º25’32”N, 135º39’20”W
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
Haines, Lutak, and Skagway.
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
Wind Biomass or Biofuels
X Hydro, including run of river Transmission of Renewable Energy
Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing sources Hydrokinetic
Solar Storage of Renewable
Other (Describe)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Pre-Construction Construction
Reconnaissance X Design and Permitting
Feasibility Construction and Commissioning
X Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
Connelly Lake is an 85 acre alpine lake, and drains into the Chilkoot River. The Project facilities
will include a dam at the lake outlet, a penstock about 6,200 feet long, a 12.0 MW powerhouse
with two generating units, a 14-mile-long buried 34.5 kV transmission line and a 14-mile long
access road. Phase III has not been completed yet with field studies, permitting and final
design continuing.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 4 of 26 7/3//2012
The Project will be developed by the Applicant to provide additional generation to its
interconnected Haines and Skagway electrical systems (existing 15-mile submarine cable), to
provide backup renewable power to Haines should the submarine cable fail, or should the only
other storage project in Upper Lynn Canal, Goat Lake Hydro, have a major problem with a long
term shutdown. And in the early years of operations to possibly provide summer power to
cruise ships moored at Haines or Skagway to help pay off any debt as quickly as possible. The
Project will be on state and private land, including the Haines State Forest and Chilkat Bald
Eagle Preserve.
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 Project will provide additional hydroelectric generation to the Applicant’s Upper Lynn Canal
(ULC) system, which includes Haines, Skagway, and other nearby communities. The Applicant
also sells power to Inland Passage Electric Cooperative from the ULC system. The primary
Project benefit to the customers because they would be buffered from the loss either of the
submarine cable that connects them or from the loss of Goat Lake Hydro if there is a major
problem. Currently, 90-95% of the primary hydroelectric generators in the ULC system are near
Skagway, with only diesel generation and two small run-of-river hydro’s located near Haines. If
the submarine cable between Haines and Skagway were to be damaged, nearly all generation
for Haines would need to be from diesel units. The Project will connect into the system near
Haines, and so in the event of a submarine cable outage Haines would be fully supplied with
hydro generation. If Haines were cut off from the Skagway area hydropower, the amount of
time before reconnection could take from 6-12 months, which during the winter could be very
costly. If Goat Lake Hydro had a major outage, Skagway would also rely heavily on diesel
generation during the winter months, because Goat Lake Hydro is the only storage project in
ULC.
The Project will also be a long-term resource to offset diesel generation. Currently, diesel
generation is necessary during low water periods and for peak load; continuing load growth will
make diesel generation more frequent. The potential generation of a 12.0 MW project is
estimated to be 40 GWh, which should be sufficient to meet increasing loads for many years to
come, although generation during the early years of the Project’s life would likely be fairly limited
unless a contract can be made with the cruise ship industry or some other customer.
To sell power during the summer months to cruise ships docked at either Haines or Skagway,
an estimated annual load from supplying one ship is estimated to be 9,000 MWh, with a peak of
11 MW. The Applicant estimates that a power sales rate of $0.25/kWh would be attractive to
the cruise lines in 2019, and that revenue would be sufficient to offset the Applicant’s costs
(assuming the development is 80% grant funded by the State). Excess revenue could be either
assigned to the State to offset the cost of the grant funding and provide an additional revenue
source to the State, or assigned to the Applicant to lower electricity rates to the Applicant’s
customers. Installation of a larger capacity to supply two cruise ships may be possible, which
would increase the revenue to the State. The Applicant will fully evaluate the Project economics
with supply of one and two cruise ships during the current Phase II feasibility studies.
It should also be noted that the Project could supply power to new industrial loads if they occur.
Currently, mineral explorations are being conducted in the Klukwan area, and there is some
discussion that a mine on the order of the Greens Creek Mine near Juneau could be developed
in the Chilkat River Valley.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 5 of 26 7/3//2012
2.6 PROJECT BUDGET OVERVIEW
Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source
of other contributions to the project.
The total cost of the Project is estimated to be $45,890,000, not including costs incurred by
Haines Light & Power Co. (HL&P) in the 1990s for a preliminary design of the project. No
reconnaissance level studies (i.e. Phase I) are necessary because of the previous HL&P work.
Note that the Applicant purchased HL&P in 1998, including assets associated with the Project.
The Applicant is currently conducting feasibility, conceptual design, environmental scoping, and
preliminary environmental studies with partial funding provided through an REF Round IV grant
($468,000). In the Round IV grant application, the Applicant indicated the expected cost for the
Phase III (permitting and final design) work would be $715,000 and Phase IV (construction)
would be $32,000,000. The Applicant has reevaluated the expected Phase III and IV costs, and
has determined that they will likely be more than previously indicated. Therefore, the Applicant
has increased its proposed budget for the Project and is applying for increased grant funding
with this Round VI application to cover the increased costs. The Applicant requests with this
application grant funding of $1,752,000, which is 80% of the estimated costs of continued Phase
II studies ($375,000) plus Phase III ($1,815,000). The Applicant will provide $418,000 in
matching funds (20% match) from its normal operating funds. The total estimated costs for
each phase, including construction, are shown below:
Phase I Reconnaissance: ..................................................................................$0
Phase II Feasibility and Conceptual Design:............................................$375,000
Phase III: Final Design and Permitting..................................................$1,815,000
Phase IV: Construction ....................................................................... $43,700,000
Total.................................................................................................... $45,890,000
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. $1,752,000
2.7.2 Cash match to be provided $438,000
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) $2,190,000
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)
$46,475,000 [includes all
funds used and to be used]
2.7.7 Estimated Direct Financial Benefit (Savings) $398,000,000 1
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.)
$ Not calculated; benefits
include increased system
reliability and reduction in
cruise ship emissions.
1 Includes potential savings in diesel fuel costs over 50 years with projected utilization of Project output
and estimated revenue from sale of 9,000 MWh/year to cruise ships over 50 years.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 6 of 26 7/3//2012
SECTION 3 – PROJECT MANAGEMENT PLAN
Describe who will be responsible for managing the project and provide a plan for successfully
completing the project within the scope, schedule and budget proposed in the application.
3.1 Project Manager
Tell us who will be managing the project for the Grantee and include contact information, a
resume and references for the manager(s). If the applicant does not have a project manager
indicate how you intend to solicit project management support. If the applicant expects project
management assistance from AEA or another government entity, state that in this section.
Vern Neitzer, Chief Engineer, AP&T
Mr. Neitzer is located in Skagway near the Project location, and has extensive experience in
managing hydroelectric development. A resume for Mr. Neitzer is included in Section 11.
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.
Project Schedule and Milestones to be funded by this grant are listed below.
Milestones Tasks
Start
Date
End
Date
Environmental Studies Ethnographic Survey July
2013
Dec.
2013
Environmental Studies Archaeological Survey Aug.
2013
Dec.
2013
Environmental Studies Recreational and Subsistence Survey July
2013
June
2014
Field Study Results Review
FERC/ Agency / NGO / Public review of
study results, including (2) meetings and
possibly more studies being required
July
2013
June
2014
Permit Applications Preparation
DNR-Water Use Permit; State Parks
Agreement; Haines State Forest Permit;
404 Permit; ADF&G Title 16 Habitat
Permit; FERC License Application;
Agency/NGO/Public meetings
July
2013
Dec.
2014
Stream Gaging for 3 years Stream gage(s) maintained and data
collected every 3-4 months for 2 years
July
2013
July
2015
Permit Applications Processing FERC Processes License Application Feb.
2015
Oct.
2017
Post-License Issuance
Develop plans from license articles
(required agency input); develop final
design for FERC approval prior to the
construction phase
Nov.
2017
May
2018
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 7 of 26 7/3//2012
3.3 Project Resources
Describe the personnel, contractors, accounting or bookkeeping personnel or firms, equipment,
and services you will use to accomplish the project. Include any partnerships or commitments
with other entities you have or anticipate will be needed to complete your project. Describe any
existing contracts and the selection process you may use for major equipment purchases or
contracts. Include brief resumes and references for known, key personnel, contractors, and
suppliers as an attachment to your application.
Key personnel of the Applicant involved in the project development and their roles will be:
Vern Neitzer, Project Manager
Bob Berreth, Electrical Design
Ben Beste, Mechanical Design
Larry Coupe, Civil Design
Glen Martin, Permits
Karl Wood, Grant Funds Management
The Applicant will prepare much of the final design in-house using its staff civil, mechanical, and
electrical engineers, who all have extensive experience in hydroelectric development. These
engineers designed the Applicant’s South Fork and Kasidaya Creek projects, which entered
service in 2005 and 2008, respectively. The Applicant was also involved in parts of designing
the two storage projects we operate, Goat Lake Hydro and Black Bear Lake Hydro. The
Applicant will contract with a consulting engineering firm for final design of the Connelly Lake
dam; the firm will be selected on the basis of experience with similar structures and competitive
proposals.
Stream gaging at the outlet of Connelly Lake and near the confluence of Connelly Creek with
the Chilkoot River will continue to be by the Applicant.
Preliminary geotechnical investigations were conducted by the Applicant in the current Phase II
work. The additional investigations necessary for the completion of Phase II are listed below
with the likely contractors. The Applicant has used these contractors and consultants on
previous similar work:
Ethnographic Survey - - Scientific Resource Surveys
Archaeological Survey - - HDR, Inc.
Recreation and Subsistence Survey - - DNR Div. Parks & Outdoor Recreation
Continued stream gaging - - AP&T
Activity funded in the previous Round IV funding are listed below with the appropriate contractor
used:
Fish surveys - - The Shipley Group
Water quality sample analysis - - Analytica Group, Inc.
Wetlands Delineation - - HDR, Inc.
Botanical Survey - - HDR, Inc.
Mt. Goat Survey - - ADF&G (because the regularly do surveys)
Other terrestrial animal surveys - - HDR, Inc.
Geotechnical Survey - - Phil Duoos & Crux Subsurface, Inc.
Timber Inventory - - DNR-Forestry
The additional investigations necessary for Phase III are listed below:
Engineering Final Design
Permitting and License Application
Renewable Energy Fund Round 6
Grant Application
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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 III, the Applicant proposes to provide quarterly reports to AEA regarding the
status of the work and use of the grant funds. The Applicant has provided similar reports to
AEA and other grant funding agencies in the past several years on other projects, and has
established the necessary procedures for producing the reports expeditiously.
Deliverables to be provided to AEA during Phase III will include (as requested):
All permit applications
All environmental / engineering study / survey reports
All plans developed to satisfy license and permit conditions
Annual stream gage reports for 2 years
Final design plans, specifications, and design reports
3.5 Project Risk
Discuss potential problems and how you would address them.
Site Control – The Applicant does not yet have development rights on land to be occupied by
part of the transmission line, access road, bridge, powerhouse, and a small part of the penstock.
We are working with the private land owners to negotiate leases, easements, or sales. State
land within the Chilkat Bald Eagle Preserve that is in the Chilkoot River Valley will also require
negotiations with DNR to determine how both can co-exist.
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. The structure with the greatest seismic risk will be the
Connelly Lake dam; the Applicant will have the dam designed by a consulting engineer with
appropriate experience. In addition, the Applicant expects that the dam design will be closely
evaluated by the FERC during its normal review and approval process.
Underground Construction – The Project as currently envisioned does not include a significant
amount of underground construction. Geotechnical investigations will be conducted at the dam
and powerhouse areas to provide an adequate level of knowledge about ground conditions at
those sites. In the current Phase II, the Applicant is evaluating the costs and benefits of using a
tunnel and shaft instead of a surface penstock. If that is chosen as the preferred alternative,
additional field investigations will be conducted to confirm the suitability of the site.
Inclement Weather – Working conditions in the dam area are very harsh during the winter. The
proposed schedule assumes no work on the dam and upper portions of the penstock during the
December-March period. Work during the winter will be limited to the powerhouse.
Environmental Opposition – The Applicant has encountered some Haines area opposition to
Project development, primarily because the proposed road could increase access into the
Chilkoot Valley and because of the perceived impacts to the sockeye run in this drainage. The
Applicant believes the environmental impacts can be prevented or adequately mitigated so that
impacts are not significant. Other Haines citizens have expressed support for this project as
being in the best interest of the Haines area (letters of support are enclosed in Section 11). The
Applicant is attempting to meet regularly with concerned citizens to address any issues with the
Project, with the intent of reaching a favorable consensus. In our meetings to date, some
Haines citizens have asked us to consider development of Schubee Lake as an alternative; The
Applicant conducted a site visit to Schubee Lake in 2009, and also had a reconnaissance study
and feasibility analysis by a third party (HDR, Inc.) of that site’s potential. The conclusion to
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 9 of 26 7/3//2012
date is that Schubee will be too expensive and would also require a submarine cable, which we
would prefer to avoid.
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.
Potential Energy Resource: The energy generated by the Project will be derived from the
inflow to Connelly Lake and the head between the lake and the power plant. The Connelly Lake
outflow was measured by the USGS from August 1, 1993 to September 30, 1997; based on that
gage record, the Applicant expects the average annual inflow to be 39 cfs. Average daily flows
will vary from near zero during cold winter periods to several hundred cfs following intense
storms. The actual generation will vary depending on the installed capacity, reservoir size, and
load to be served. With the Applicant’s currently-proposed arrangement and preliminary
modeling, the installed capacity will be 12 MW, the reservoir will have an active storage capacity
of 6,700 acre-feet, the average head will be about 2,140 feet, and the potential average annual
energy will be 40 GWh. The Applicant intends to evaluate a range of installed capacities and
reservoir sizes during the Phase II studies now in progress to select an optimum arrangement for
licensing.
Alternative Energy Resources: Currently, local loads are met primarily by hydroelectric
generation, with a small amount of diesel generation required during low water periods and for
peaking loads. The potential average annual generation from all current hydro resources is
about 38.1 GWh. A load forecast prepared for the SEIRP shows ULC loads growing from 28.8
GWh in 2011 to 49.4 GWh in 2061. The Applicant is committed to adding renewable generation
to meet future load growth rather than increasing use of its diesel generators in order to minimize
the cost of electricity to its customers. Also, when in port, cruise ships rely on their on-board
fossil-fuel generation systems, which could be served by shore-based renewable generation, as
currently occurs in Juneau and elsewhere (this would help pay down the projects debt in the
early years while the local communities need less energy.
The Applicant is not aware of any alternative energy sources that would be more economical
than conventional hydroelectric generation. Wind and solar potential is very limited in the area,
and there are no identified geothermal, tidal, or wave energy sites. Some are looking at LNG,
but there are potential problems with that as well. There are other hydroelectric sites in the area,
including:
Schubee Lake: The Applicant is in the process of evaluating Schubee Lake; it would
require a new submarine cable interconnection to Haines and the storage would be less,
and thus would not provide the same benefits as Connelly Lake.
West Creek: The West Creek project would be located at the Skagway end of the
existing submarine cable, and thus would not provide the same benefits as Connelly
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Grant Application
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Lake if the submarine cable between the two communities failed.
Walker Lake: The Walker Lake project would be located near Klukwan, and thus could
provide generation to Haines, however, the Applicant has evaluated the Walker Lake site
and believes the Connelly Lake site would provide much more energy at less cost
because Walker Lake will not provide much if any winter generation.
Yeldagalga Creek: The Yeldagalga Creek site was recently proposed by a Juneau firm
to supply power to the Kensington mine, but it could also provide power to Haines.
However, it would require a new submarine cable interconnection to Haines and would
be a run-of-river project, and thus would not provide the same benefits at Connelly Lake,
which is a storage project.
Based on the above, the Applicant believes the more likely alternative to the Connelly Lake site
is supplemental diesel generation. Compared to diesel generation, the Project will have the
following advantages:
less expensive cost of power (hydropower stabilizes rates);
reduced air emissions (particulate matter as well as Greenhouse Gases) (and could
possibly also reduce cruise ship emissions);
using less diesel reduces the opportunities for spills;
uses fewer hazardous substances.
The Project may have the following disadvantages:
As with all hydroelectric projects, the initial cost of development is much higher than for
diesel generation.
In addition, there may be environmental impacts associated with the Project, such as the
access, transmission route, bridge, and powerhouse through a portion of the Chilkat Bald
Eagle Preserve, impacts to fish habitat, and minor modifications of the flow in the
Chilkoot River.
4.2 Existing Energy System
4.2.1 Basic configuration of Existing Energy System
Briefly discuss the basic configuration of the existing energy system. Include information about
the number, size, age, efficiency, and type of generation.
The existing ULC energy system configuration is as follows:
Unit Type Capacity, kW Efficiency, kWh/gal Age, years
Goat Lake Hydro (storage) 4,000 N.A. 12
Dewey Lakes Hydro (storage) 943 N.A. 107
Lutak Hydro (run of river) 285 N.A. 10
10-Mile(1) Hydro (run of river) 600 N.A. 9
Kasidaya Hydro (run of river) 3,000 N.A. 1
Skagway #6 Diesel 855 14.69 23
Skagway #7 Diesel 1,100 14.80 13
Skagway #8 Diesel 500 14.89 18
Skagway #9 Diesel (refurbished) 930 ? <2
Haines #1 Diesel 800 12.64 40
Haines #2 Diesel 1,265 12.93 26
Haines #3 Diesel 1,600 14.92 20
Haines #4 Diesel 2,865 12.83 14
(1) The Applicant purchased power from IPEC’s 10-Mile hydro project until 2002. Purchases
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resumed in 2008.
Haines and Skagway are interconnected by a 15-mile-long, 34.5-kV submarine cable with a
capacity of approximately 20 MW. 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.
The Applicant’s ULC system is primarily hydroelectric generation with diesel backup. In recent
years diesel has been needed for peaking operations during summers when loads are high and
at the end of some long winters when the storage in Goat Lake is low. The Applicant would use
the Project to supplement the other ULC hydro resources to eliminate diesel generation now and
for many years to come. The Project could also provide power to 1-2 cruise ships that visit
Haines and Skagway each summer; the Applicant as part of its current feasibility evaluation of
the Project will determine the costs and benefits of providing power to one or more cruise ships.
However, the main purpose of this project is to provide the Haines end of the submarine cable
with a reliable renewable energy system that will handle all the current load and allow future
economic growth if the cable ever fails. The time needed to repair or replace the cable is
estimated to take from 6 to 12 months.
The Applicant expects the following impacts on the existing energy resources:
Run-of-river hydros - - no impact; the energy available from run-of-river hydros would
continue to be dispatched first
Storage hydros - - the Project operation would be coordinated with that of Goat Lake and
Dewey Lakes to maintain storage at comparable levels, with adjustment as necessary for
differing runoff characteristics. In the early years at least, this would probably reduce
generation by Goat Lake.
Diesels - - the diesel generators would only be operated during hydro forced outages and
as necessary to confirm their standby capability
Submarine cable - - the submarine cable linking Haines and Skagway could see less
current flow. More importantly, loss of the submarine cable due to seafloor instability or
other cause would not have a catastrophic impact since Haines loads would still be fully
served by renewable energy
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
Loads in the Applicant’s ULC system are primarily residential and commercial. Loads are
typically higher in the summer than winter due to seasonal tourism business, however, winter
peaks loads can occur due to cold weather. The Applicant to date has not experienced a
significant amount of conversion from oil or wood-fired space heating to electric space heating,
but it expects that more conversions will take place in the future as heating oil prices rise.
The Project will be able to supply loads in any of the interconnected communities in the ULC
system, as well as IPEC loads in the Chilkat valley. Currently, it is sometimes necessary for The
Applicant to use diesel generation to supplement the hydro generation, either due to low
streamflows, outages, or for peaking. Load increases and expansion of the system have
exacerbated this situation. When diesel generation is required, electric rates increase and cause
fluctuations in customer energy bills that can be difficult to anticipate or adjust for. Adding more
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hydro capacity to the ULC grid will alleviate fluctuating electric rates for customers.
If the Project is configured to provide shore power to cruise ships docked at Haines or Skagway,
the cruise lines would see their operating costs decrease, which would be beneficial for that
industry, which in turn would help the communities because the local economy is currently so
dependent on tourism.
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
hydroelectric project. Hydroelectric technology is well developed, and provides most of the
renewable energy generated in the world in general, and Southeast Alaska in particular. The
Project will utilize the abundant rainfall and steep topography afforded by the Connelly Lake
basin to generate renewable energy.
Optimum installed capacity – The optimum installed capacity is estimated to be 12 MW. An
economic sizing of the installed capacity will be accomplished during the Phase II studies now in
progress.
Anticipated capacity factor – The capacity factor is estimated to be 38%, based on an installed
capacity of 12 MW and the estimated average annual generation of 40 GWh.
Anticipated annual generation – The potential annual generation is estimated to be 40 GWh (with
a 12 MW installed capacity). The actual annual energy will vary from year to year, depending on
load and precipitation.
Anticipated barriers – There are no known technological barriers to development of the Project.
Basic integration concept – The ULC system is already a hydro-based system with diesel
backup. Integrating another hydro project to the system will not present any difficulties. The run-
of-river hydros in the system (Lutak, Kasidaya, Dewey) will be dispatched first, followed by
storage hydros (Goat Lake and Connelly Lake). Generally, the storage hydros will be dispatched
based on their then current storage levels and operating characteristics. In addition, one or both
of the storage hydros will always be on-line to provide system stability.
Delivery methods – The Project will be interconnected to the ULC grid at Lutak Inlet by a 14-
mile long, 34.5 kV transmission line.
4.3.2 Land Ownership
Identify potential land ownership issues, including whether site owners have agreed to the
project or how you intend to approach land ownership and access issues.
The project is primarily on land owned by the State of Alaska (Haines State Forest, Chilkat Bald
Eagle Preserve), with some small private landholdings along the access road/transmission line
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route. The Applicant has applied for land leases from DNR and the Haines State Forest. The
Applicant is currently negotiating with private landowners. Permits to conduct field surveys on
state land have been received (Dept. of Parks & Outdoor Recreation).
The Applicant now has a FERC Preliminary Permit (P-14229).
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
Expected permits:
FERC license
404 permit (Corps of Engineers)
Water right (ADNR)
State land lease (ADNR)
Fish habitat permit (ADF&G)
State Parks Permit (including approval from Chilkat Bald Eagle Preserve) (DNR)
Haines State Forest (easement/permit?) (DNR)
SHPO review
Permitting Timeline: Permit applications will be filed with the various agencies in Phase III after
completion of the necessary environmental studies, begun in Phase II. We currently estimate
that permit applications and the FERC license application will be filed in late 2014 or early 2015
and the permits and FERC license will be received by winter 2017.
Potential Permitting Barriers: At this time the Applicant is not aware of any issues that would
preclude development of the Project, having received State approval to conduct field studies on
State land; however, the main issue we are addressing is State approval for development. The
Applicant is aware that some Haines residents are opposed to the Project and may use the
permitting process to prevent or delay development, however, using the FERC process will keep
the project moving forward.
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
Threatened and endangered species: The Applicant is not aware of any threatened and
endangered species in the Project area. The Applicant conducted field studies regarding
threatened and endangered species during the summer of 2012, but the results are not in yet.
However, impacts are not expected to their habitat in part because the valley was previously
logged.
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Habitat Issues: Habitat surveys were conducted by ADF&G in the 1990’s for fish in Connelly
Lake and in the Chilkoot River near the lake outlet stream’s confluence with the river. No fish
were found in the lake or using the outlet stream. The Chilkoot River provides anadromous
rearing and spawning habitat, and the Applicant is continuing fish surveys at least through
October 2012 with analyses to determine potential impacts. The Applicant believes the impacts
will be minor because the flow fluctuations in the summer will be small compared to the natural
flow in the Chilkoot River. In the winter, the project will likely increase the natural flow of the
Chilkoot River, which could be beneficial, but needs further evaluation. Control of sediment is a
major concerned by those reviewing the project; so good design and a sound Erosion &
Sedimentation Control Plan will be required. Impacts to wildlife are currently being evaluated,
but are not expected to be significant.
Wetlands: The Project will affect some wetlands, including Connelly Lake and possibly small
muskeg areas along the penstock route. Wetlands along the access road may also be impacted.
However, no significant impacts are expected. The Applicant will conduct a wetland delineation
survey. Wetlands will be avoided where possible in the project design.
Archaeological Resources: The Applicant will conduct an ethnographic survey prior to
conducting an archaeological survey. Both are expected to occur in 2013, but could go into the
summer of 2014 since one must occur before the other. No significant impacts to archeological
or cultural resources are expected, although the area has some cultural history.
Land Development Constraints: We are unsure if there will be any land development
constraints; discussions with DNR-Chilkat Bald Eagle Preserve have not begun. Lease
agreements with the state will specify any necessary mitigation requirements for the Project
features. DNR will determine how much access will be allowed into the valley with a road
improvement.
Telecommunications Interference: The 34.5 kV transmission line will not create interference with
telecommunications. In addition, the Applicant expects to bury all of the transmission line to
avoid any impacts to bald eagles and any other avian species.
Aviation Considerations: The Applicant does not expect any interference or concerns regarding
aviation; with transmission line buried there is nothing tall enough to cause a problem.
Visual, Aesthetic Impacts: The Applicant expects that most visual impacts from the Project will
be associated with the forest clearing required for the access road, penstock, staging area, and
powerhouse site. Most of the access road will be a reconstruction of an existing abandoned and
overgrown logging road. The Applicant expects to take appropriate steps to reduce the visual
impacts with coloration, by sitting project features so that natural features to block there view,
and by keeping clearings as small as possible. The project is unlikely to be visible from the
Chilkoot Lake State Park at the south end of the lake.
Other Potential Barriers: No other potential barriers are known 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:
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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 (not required)..................................................................$0
Phase II (including current Round IV grant) ……………$960,000 (R6: $375k + R4: $585k)
Phase III Final Design and Permitting ...........................$1,815,000
Phase IV Construction................................................ $43,700,000
Total............................................................................. $46,475,000
Requested Grant Funding: $1,752,000 (80% of total cost for Round VI Phase II + Phase III)
Applicant Matching Funds: $438,000 (20% of total cost for Phase II + Phase III)
Other Funding Sources: Other funding sources have not been identified at this time. The
Applicant will provide the matching funds for Phase II and Phase III from its normal operating
funds.
Projected Capital Cost of Renewable Energy System: $43,700,000 (assumed to be the cost of
Phase IV Construction)
Projected Development Cost of Proposed Renewable Energy System: $2,775,000 (assumed to
be the sum of Phase I, II, and III costs).
These estimated costs reflect the applicant’s knowledge and experience at building hydroelectric
projects. The estimated costs have increased significantly since previous grant applications to
fully consider the expected costs of FERC licensing, as well as the costs to increase the capacity
to 12 MW to provide for load growth in the area; and also to possibly serve cruise ship loads in
the early years of operations (which will help reduce the debt service much faster).
Phase II: Project Costs for Completion of Field Studies
Environmental Studies (additional)………………………………………… $375,000
Total For Phase II:………………………………………………………….. $375,000
Phase III: Project Costs for Final Design & Permitting
Permit Applications/FERC License Application Preparation ................... $329,000
Permit Applications Processing................................................................. $64,000
Post-License Activity ............................................................................... $125,000
Stream Gaging (data collection for 3 years).............................................. $42,000
Geotechnical Investigations......................................................................$527,000
Surveying and Mapping.......................................................................... $156,000
Final Design........................................................................................... $572,000
Total For Phase III:.............................................................................. $1,815,000
Phase IV: Project Costs for Construction
Construction Management ................................................................... $1,200,000
Mobilization ...........................................................................................$1,600,000
Access Roads and Bridges .................................................................. $3,200,000
Dam and Reservoir............................................................................... $8,900,000
Penstock .............................................................................................$11,600,000
Powerhouse ..........................................................................................$9,900,000
Switchyard.............................................................................................$1,900,000
Transmission ....................................................................................... $5,400,000
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Total For Phase IV:........................................................................... $43,700,000
4.4.2 Project Operating and Maintenance Costs
Include anticipated O&M costs for new facilities constructed and how these would be funded by
the applicant.
(Note: Operational costs are not eligible for grant funds however grantees are required to meet
ongoing reporting requirements for the purpose of reporting impacts of projects on the
communities they serve.)
The Applicant estimates the following incremental annual O&M costs for the Project ($2011):
Incremental labor cost.................................................................. $200,000
Incremental expenses.................................................................. $400,000
Total ............................................................................................. $600,000
The Applicant is not requesting grant funding for O&M costs.
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 Applicant is developing this project to supply power to the ULC system customers. The
Haines area is supplied by 90-95% of its renewable energy from the Skagway end of a
submarine cable. If this cable were to fail or the only storage project (Goat Lake Hydro) were to
have a major stoppage with lengthy repairs, Haines and those communities around it would be
relying upon diesel generation for 90-95% of their electricity. The cable could take from 6-12
months to replace or repair. Goat Lake Hydro could take 2-6 months to repair depending on the
problem and time of year. If Goat Lake Hydro shuts down during the winter, Skagway would
also suffer under the use of a significant amount of diesel generation. Connelly Lake Hydro,
depending on the situation, could also provide backup renewable energy for Skagway as well as
Haines. In the mean time, or before all the energy that Connelly Lake Hydro would generate is
needed, at least one cruise ship that visit Haines and Skagway during the summer tourist season
could be supplied with renewable energy while they idle in port. The load for the larger cruise
ships is about 9 MW; these ships idle in port running their diesel generators the whole time.
Having a sales contract with the cruise industry in the early years of operations could
significantly offset the debt service for the project. The Applicant projects that a sales price of
$0.25/kWh in 2019 would be attractive to the cruise lines and the revenue from those sales
would provide a positive net income to the Applicant and the State.
The Applicant expects that the rates to its commercial and residential customers would not
increase due to Project development.
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.
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Annual average resource availability. 40 GWh potential annual hydroelectric output
(amount varies depending on precipitation & load)
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 2 grid, leave this section blank)
i. Number of generators/boilers/other 7 hydro units, 8 diesel
ii. Rated capacity of generators/boilers/other 8,828 kW hydro, 9,915 kW diesel
iii. Generator/boilers/other type Hydro and diesel
iv. Age of generators/boilers/other Varies
v. Efficiency of generators/boilers/other
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor $125,000 approx.
ii. Annual O&M cost for non-labor $40,000 approx., excluding fuel
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] 27.4 GWh generation (2010)
ii. Fuel usage
Diesel [gal] 67,000 gal/yr (2001-2010 avg.)
Other
iii. Peak Load 4,900 kW
iv. Average Load 2,900 kW (2010)
v. Minimum Load 1,500 kW
vi. Efficiency Varies (13.8-14.0 kWh/gal diesel, 80-85% hydro)
vii. Future trends Modest 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]
12,000 kW
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh]
ii. Heat [MMBtu]
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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 $46,100,000 (est. cost of Phases I-IV)
b) Development cost $2,400,000 (est. cost of Phase II, and III)
c) Annual O&M cost of new system $600,000 (2019 est.)
d) Annual fuel cost No fuel cost
Project Benefits
a) Amount of fuel displaced for
i. Electricity 36,000 gallons / annually
ii. Heat
iii. Transportation
b) Current price of displaced fuel $3.97/gal (May 2011) Haines price; with taxes = $4.07/gal.
c) Other economic benefits $2,250,000 revenue from sales to cruise ships (2019)
d) Alaska public benefits Reduced diesel emissions; reduced PCE
Power Purchase/Sales Price
a) Price for power purchase/sale $0.25/kWh (2019 sales to cruise ships)
We currently serve Upper Lynn Canal (Haines, Lutak, Skagway, Dyea) except for about 10-Mile
on the Haines Highway. We do not expect this project to increase costs for our customers, but
the final percentages for loans and grants has not been determined.
Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 2.2
Payback (years) 15 years
4.4.5 Proposed Biomass System Information
Please address the following items, if know. (For Biomass Projects Only)
N/A
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SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
Potential annual fuel displacement (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: The Applicant estimates the Project’s potential annual fuel
displacement to be about 139,000,000 of diesel fuel over a 50 year period, for an average
annual potential displacement of about 2,800,000 gallons. The actual displacement will vary
from year to year, depending on the volume and timing of precipitation in the Connelly Lake
basin and the load growth of the interconnected system.
The fuel displacement by the Applicant would be relatively small, amounting to about
$79,000,000 over a 50 year period. Direct revenue from sales of power to one cruise ship
would amount to an additional $236,000,000 over a 50-year period. The rate of return over 50
years would be 7.2%. The actual lifetime of the Project is indefinite; many hydro projects are
still operating after 100 years of service.
The values provided above are from the Applicant’s analysis, which is based on the following
assumptions:
Diesel fuel costs as estimated by Black & Veatch for the Southeast Integrated Resource
Plan through 2061; for 2062-2068, fuel cost escalation assumed at 7.43% to match
SEIRP rate for 2061. Fuel prices are the average of prices for Haines and Skagway.
Load growth through 2061 as estimated by Black & Veatch for the Southeast Integrated
Resource Plan, with modifications to eliminate a large load addition in 2016. Loads for
2062-2068 are assumed to escalate at 0.3% per year to match SEIRP rate for 2036-
2061.
9,000 MWh cruise ship load begins in first year of Project operation and continues
throughout the Project life.
Minimum diesel generation of 1,000 MWh/yr without Connelly Lake due to outages and
testing.
Minimum diesel generation of 500 MWh/yr with Connelly Lake.
Average diesel efficiency of14.4 kWh/gallon.
Current diesel O&M costs of $0.010/kWh, escalating at 2.75% per year.
Sales to cruise ships at $0.25/kWh in 2019, escalating at 2.75% per year.
Anticipated annual revenue: The Applicant would expect a net decrease in its revenue, because
the Project would substitute hydro generation for diesel generation, thus decreasing the Cost of
Power Adjustment rate. At current RCA tariff rates, the Applicant would expect to obtain
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$184,000,000 over a 50-term for its investment in the Project (depreciation, incremental O&M,
and regulated return on investment).
Sales to cruise ships could provide an additional $236,000,000 in revenue over a 50-term term.
That amount would be sufficient to cover the incremental costs to the Applicant so that the
Applicant’s rates would not be affected, as well as surplus revenue that could be used to reduce
the Applicant’s rates or reimburse the State for its investment. In addition, the State would
spend less on the PCE program, since the Project generation would decrease the amount of
diesel generation subject to PCE reimbursement. The Applicant estimates that this savings
could amount to about $5,000,000 over a 50 year term. If the cruise ship revenues are split
85% Applicant / 15% State, the return would be approximately equal over the 50 year term. The
PCE savings are based on the following assumptions:
Current PCE rate............................................................................ $0.072
PCE rate escalation................................................................... 1.0%/year
Portion of incremental generation valued at PCE rate ..................... 100%
Potential additional annual incentives: Unknown.
Potential additional revenue streams: Unknown.
Non-economic public benefits to Alaskans: The main non-economic benefit of the Project would
be improving the reliability of the ULC system. Currently, Haines is supplied primarily by
generation near Skagway that is transmitted over a 13-year old submarine cable. The cable is
partially located in an area of loose marine sediment that is known to be unstable during seismic
events. The Project would provide hydro generation to Haines in the event the submarine cable
becomes unusable.
Another major non-economic benefit would be the reduction of emissions from on-board
generation by cruise ships while docked in Skagway or Haines. The potential Project
generation is equivalent to a reduction in emissions of about 33,000 tons per year. These
environmental benefits would maintain the desirability of Haines and Skagway as cruise ship
destinations.
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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
Proposed business structure: The Applicant is a public utility regulated by the Regulatory
Commission of Alaska. The Applicant does not anticipate any change to that business structure
as a consequence of the Project.
O&M financing: The Applicant will fund the O&M costs from power sales revenues.
Potential operational issues: The Project will be designed in accordance with all applicable
standards and practices, and the design will be reviewed by FERC prior to and during
construction to minimize the potential for unusual operational issues.
The impact of climate change on the Project operation is unknown at this time; a recent study for
the State of Alaska suggests that climate change may cause more winter precipitation to be in the
form of rain than snow. This could actually be of benefit, as it would decrease the extreme
variability in the seasonal flow pattern, thus making the limited storage more effective.
O&M costs: The Applicant estimates the following incremental annual O&M costs for the Project
($2011):
Incremental labor cost.................................................................. $200,000
Incremental expenses.................................................................. $400,000
Total ............................................................................................. $600,000
Reporting commitment: The Applicant will provide reports to AEA on the savings and benefits in
any format and on any schedule specified by the AEA.
SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS
Discuss what you have done to prepare for this award and how quickly you intend to proceed
with work once your grant is approved.
Tell us what you may have already accomplished on the project to date and identify other grants
that may have been previously awarded for this project and the degree you have been able to
meet the requirements of previous grants.
The Applicant has considered development of the Connelly Lake site for many years. In fact, it
was the main alternative to development of Goat Lake Hydro. Over the years, The Applicant has
conducted several site visits to Connelly Lake and other nearby potential hydro sites in order to
confirm the technical and economic superiority of the Project. In the last couple of years, the
Applicant has been holding public meetings and one-on-one communications with Haines
residents to provide information about the Project and develop local support.
The Applicant is currently in Phase II feasibility work with $468,000 in REF Round IV grant
funding. That work includes the following:
Evaluation of alternative arrangements and development of a conceptual design
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Installation of a stream gage at the Connelly Lake outlet
A geotechnical reconnaissance in the fall of 2011, to be followed by seismic refraction
surveys in the summer of 2012
Environmental scoping per FERC license requirements
Environmental field studies
Most of this work will be completed by December 2012. However, during meetings held this
summer with the agencies and public, additional issues have surfaced requiring additional
funding (as well as the reallocation of Round IV funds that occurred earlier this year due to these
meetings). The Applicant has budgeted for additional Round VI funding to complete the
environmental studies, i.e. ethnographic survey, archaeological survey, recreation and
subsistence use survey, and stream gaging. Additional studies may be required as this project
moves forward. The Applicant will proceed with the proposed Phase III work as soon as the
funds are available, in order to maintain continuity of the field work.
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 Applicant has conducted several public meetings in Haines to explain our intent with this
project. An agency and public meeting were held in Juneau and Haines in June to discuss the
project. There is a small but vocal portion of the Haines area residents opposed to the Project,
primarily because the proposed road could increase access into the Chilkoot Valley, and
because of perceived impacts from the flow modifications that would occur in the Chilkoot River
due to Project operation (potentially impacting fish). The Applicant believes the environmental
impacts will be minor or can be prevented or adequately mitigated. Letters of support are
included in Section 11. The Applicant will meet regularly with concerned citizens to address any
issues with the Project, with the intent of reaching a favorable consensus.
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.
Amount requested in grant funds: $1,752,000 (80% of the estimated Phase II and Phase III cost)
Investments to date: The Applicant has invested (or will as Round IV funds are used) $117,000
for Phase II work. Also, the Applicant has conducted several site visits over the years and has
reconsidered the conceptual design for the project; the total cost for that work is estimated to be
on the order of $20,000, paid out of the Applicant’s general operating budget.
Additional investment by The Applicant: AP&T will provide matching funds in the amount of
$438,000 (20% of the estimated Phase II and Phase III costs).
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PHASE II MILESTONES OR TASKS
Milestone or Task
Phase II – Completion of
Environmental Surveys and
Geotechnical Investigations
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
Environmental Studies
(additional) July 2014
E.1: Ethnological Survey December
2013 $96,000 $24,000 $120,000
E.2: Archaeological Survey July 2014 $108,000 $27,000 Cash, labor &
benefits $135,000
E.3: Recreational &
Subsistence Survey April 2014 $96,000 $24,000 Cash, labor &
benefits $120,000
TOTALS $300,000 $75,000 $375,000
Budget Categories:
Direct Labor & Benefits $56,000 $14,000 $70,000
Travel & Per Diem $11,200 $2,800 $14,000
Equipment
Materials & Supplies $4,000 $1,000 $5,000
Contractual Services $228,800 $57,200 $286,000
Construction Services
Other
TOTALS $300,000 $75,000 $375,000
PHASE III MILESTONES OR TASKS
Milestone or Task
Phase III – Design &
Permitting
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
Project Scoping and
Contractor Solicitation
Completed
June 2017 Cash, labor &
benefits
Permit Applications Submitted
to Agencies May 2015 $23,200 $5,800 Cash, labor &
benefits $29,000
FERC License Application
submitted and FERC Review,
AIR, EA Review, License
Articles Developed
October
2017 $144,000 $36,000 Cash, labor &
benefits $180,000
Final Environmental
Assessment and Mitigation
Plans Completed
May 2017 $96,000 $24,000 Cash, labor &
benefits $120,000
Land Ownership – Resolution
of land use & right-of-way
issues / Permitting completed
July 2017 $51,200 $12,800 Cash, labor &
benefits $64,000
Post-License Activity (after
license is issued)
(administrative)
October
2018 $100,000 $25,000 Cash labor &
benefits $125,000
Stream Gaging (data collection
for 2 years)
September
2015 $33,600 $8,400 Cash, labor &
benefits $42,000
Geotechnical Investigations
(for design)
December
2014 $421,600 $105,400 Cash, labor &
benefits $527,000
Surveying and Mapping December
2014 $124,800 $31,200 Cash, labor &
benefits $156,000
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 24 of 26 7/3//2012
Final Design Completed April 2018 $457,600 $114,400 Cash, labor &
benefits $572,000
Project Benefits – Updated
economic & financial analysis
completed
Final business & operational
plan completed
TOTALS $1,452,000 $363,000 $1,815,000
Budget Categories:
Direct Labor & Benefits $555,280 $138,820 $694,100
Travel & Per Diem $58,720 $14,680 $73,400
Equipment $1,600 $400 $2000
Materials & Supplies $3,600 $900 $4,500
Contractual Services $832,800 $208,200 $1,041,000
Construction Services $0 $0 $0
Other $0 $0 $0
TOTALS $1,452,000 $363,000 $1,815,000
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 25 of 26 7/3//2012
SECTION 10 – AUTHORIZED SIGNERS FORM
Community/Grantee Name: Alaska Power & Telephone Company
Regular Election is held: 1st Quarter annually
Date: May (specific date varies)
Authorized Grant Signer(s):
Printed Name Title Term Signature
Glen D. Martin Permitting/Licensing/Environmental
Review/Grant Writing N/A
Karl Wood Grant Funds Administration N/A
I authorize the above person(s) to sign Grant Documents:
(Highest ranking organization/community/municipal official)
Printed Name Title Term Signature
Robert S. Grimm CEO / President N/A
Grantee Contact Information:
Mailing Address: P.O. Box 3222, Port Townsend, WA 98368
Phone Number: (360) 385-1733 x122
Fax Number: (360) 385-7538
E-mail Address: glen.m@aptalaska.com
Federal Tax ID #: 92-0153693
Please submit an updated form whenever there is a change to the above information.
Renewable Energy Fund Round 6
Grant Application
AEA13-006 Grant Application Page 26 of 26 7/3//2012
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 Robert S. Grimm
Signature
Title CEO / President
Date
RESUMES
04/04/12 3
4
Page 2
LETTERS OF SUPPORT
I support this Hydro Project. Please make this happen.
Thank You
Scott Bradford
20111122-5087 FERC PDF (Unofficial) 11/22/2011 1:00:50 PM
I am writing this comment in support of the Connelly Lake Hydro project. I have
followed this project and am in favor of hydro power being on the Haines side of
the canal, it just makes more sense.
Karen Hess
(907) 766-2050 office
(907) 766-2424 home
(907) 314-0037 cellular
20111011-5209 FERC PDF (Unofficial) 10/11/2011 2:12:46 PM
HAINES BOROUGH
RESOLUTION NO. 09-01-149
A resolution of the Haines Borough Assembly recognizing the
need for a new, cost-effective, environmentally appropriate,
reliable, and renewable source of electric power for
citizens of the Haines Borough, and supporting the efforts
of Alaska Power & Telephone, Inc. (AP&T) to develop a
project to address this need.
WHEREAS, the Haines Borough is committed to replacing fossil
fuel-based energy production wherever and whenever possible with
energy produced reliably, efficiently and at a reasonable cost
from renewable sources, and
WHEREAS, at a January 20, 2009 meeting, the Haines Borough
Energy Sustainability Commission recommended that the Assembly
support efforts by AP&T to secure funding to do additional design
and data gathering for hydro electric sources including but not
limited to Connelly Lake and Schubee Lake to help inform the
public process prior to permitting, and
WHEREAS, electricity has the potential to replace petroleum
products as the energy resource used for home heating and
transportation, and
WHEREAS, current hydro-electric power production infrastructure
is inadequate to provide for present demand for power, and
therefore cannot meet potential increased demand for low cost
electric power to support new or expanded uses such as heat,
transportation, and industrial/commercial growth, and
WHEREAS, the demand for electric power in the Upper Lynn Canal
has periodically exhausted the installed capacity of the existing
hydroelectric generating system during the fall, winter, and
spring months, forcing the utility to generate power with diesel
generation equipment, resulting in higher rates for customers,
and
WHEREAS, AP&T proposes to investigate, permit, design, and
construct a hydroelectric facility in the most viable and
appropriate site in Upper Lynn Canal area, to address the energy
needs of the area, and
WHEREAS, the Haines Borough Assembly acknowledges there are risks
to any ecosystem in the vicinity of planned projects for
developing new energy resources, and
WHEREAS, AP&T has a long history of constructing hydroelectric
plants in Southeast Alaska while simultaneously providing for the
protection of the ecosystem within which the hydroelectric plant
is located;
Adopted
Resolution 09-01-149
Page Two
THEREFORE BE IT RESOLVED, that the Haines Borough Assembly
recognizes the need for increased electric power generation from
a renewable resource in the Upper Lynn Canal, and it endorses the
concept of creating new hydro-electric capacity in the region;
AND BE IT FURTHER RESOLVED, that the Haines Borough Assembly
supports the investigation, study, conceptual design, and initial
permitting of any potential projects by AP&T or others which can
be shown to provide reliable, cost effective, renewable energy in
a manner which does not adversely impact local rate payers, the
local economy, the watershed ecosystems, or the traditional uses
of the area;
AND BE IT FURTHER RESOLVED, the Haines Borough Assembly has an
interest in participating as a partner in any power generation
project that would promote and ensure the lowest possible rates
for its citizens, provide for the greatest reliability and future
growth, and create potential for the Borough to realize revenue
from the sale of excess power to commercial users.
ADOPTED BY A DULY CONSTITUTED QUORUM OF THE BOROUGH ASSEMBLY OF
THE HAINES BOROUGH, ALASKA, THIS 27th DAY OF JANUARY, 2009.
____________________________
Jerry LAPP, Deputy Mayor
ATTEST:
______________________________
Julie Cozzi, Borough Clerk
MUNICIPALI'IJ' O F SKAGWAY
GATEVVAY'TO TTIE GOLD RUSLI O}: "98"
POST OFFICE l]OX 415
SKAGVVAY, ALT\S KA 99S4tI
(907) 983-72e7 (PHONE)
(90?) 983-215i 0-'A,\)
I 3 .lune 2008
Steven I-i. Haagenson
Alaslia Energy A utlrori t.v
813 West Nor-tliem Lights Boulevald
Anchorage. Alaslca 9950-l
Subjcct: Munic:ipal supl)oi't of (lonnelly l.iii';r': I-lyclrol)o\\/cl Pr-oict't
Dear Mr. Haagenson,
The lVlunicipality of Slcagway suppor-ts Alasl<a Power'&'I'elepht.rrrc Conrpany's (r\l'&f) clesir.' to leusr'
or purchase land from the State o1'41aslca to develop a new hych-oelectt-ic gcneration pro.ject rrt
Connelly Lake.'l'his project is located in the Haines l3orough at a site founcl above Chill<oot l.,rl<c at
the lread of Lutal< Inlet.
As a Iicensed pLrblic Lltility in thc State o1'r\laska, AP&'l' provirics llower to the comnrunities in the
Upper Lynn Ca-nal thror-rgh an existing distlibution systum fed b-y hydr-oelcctlic ancl clir::sc) geirci'lrtiot.r
syslems. AP&'f has lead u successfirl effort in the lasl J3 years tr) r'ccluce tltc rcgiorr's titrpcndt'rtt on
diesel generated power. vvith sonrc 70% of power being ltroviderl to cltstonrcrs thloLrglr it-s
hydroel ectric lacil ities.
Development of the Connelly Lalce Hydropower Project rvould l'itt'ther reduce lJpper l.ynn (-;irnl's
dependence on fossil fuels forpowergeneration ancl ensure sr,r['{lcicnt enclg-y is availirirltr ii.rr'lrrtut'c
econonric growth within tlre regiou, AP&l is well lsrorvn in thc inclitstry lirr its innt,r'.rt.ir-tn irr
develcipmenl t-rl' small scule hydlopf)wer projt-cis.
Sincerely, .-,\
,-(tmau1!&L**
Thomas Cochr-an - Mayor'
Senatol Al berl I(ookesh
Representative lJill fhomas..tr.
GOVERNING BODY RESOLUTION
CERTIFICATION
FIGURES