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HomeMy WebLinkAboutStetson Cover Letter and Grant App - SignedCHUGAtow" Awn a POWERING ALASKA'S FUTURE September 21, 2012 Shawn Calfa, Grant Administrator Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 Subject: AEA 13-006 — RE Fund Grant Application Round 6 Dear Mr. Calfa: Enclosed you will find Chugach Electric Association's (Chugach's) renewable energy grant application for construction of a diversion project at Stetson Creek. This diversion project will increase the hydroelectric energy production from the Cooper Lake power plant by an estimated 5,500 MWh per year. This project is currently being bid for construction. As this application includes costing information that could be detrimental to Chugach if it is made public prior to the close of competitive bidding for the project, Chugach requests that its grant application remain confidential until October 31, 2012. The grant application package includes: • The grant application including a grant/budget worksheet and a cost/benefit worksheet • A map of the area where the project is located • A project schedule • A summary of the value of fuel savings due to hydro production from the diversion project and from the existing Cooper Lake facility • Professional bias for the project manager and key staff • An organizational chart of Chugach's Power Supply Division • Letters of support • A signed resolution from Chugach's Board of Directors • The Opinion of Probable Construction Costs dated August 24, 2012 Chugach's point of contact for this grant application is Ron Vecera, Director of Renewable Energy Business Development. He can be reached directly at 762-4759. Sincerely, co Bradley =s Chief Executive Officer Chugach Electric Association, fnc. 5601 Electron Crive, P.O. Box 196300, Anchorage, Alaska 99519-6300 • (907 563-7494 Fox (907) 562-0027 • (800) 478-7494 www.chugochelectric.com • info&chugochelec1ric.corn Renewable Energy Fund Round 6 401D i=IK:) ,Grant Application ENERGY � AUNORMY 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.akenergyauthoritV.o[g/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. AEA 13-006 Applicatic Page I of 24 7/3/2011 Renewable Energy Fund Round 6 JMED "�.� GOOD Grant Application �ENEFIGYMTHOWY SECTION 1 —APPLICANT INFORMATION Name (!Name of utility, IPP, or government entity submitting proposal) Chugach Electric Association, Inc. Type of Entity: Electric Utility (Cooperative) Fiscal Year End: 12/31/12 Tax ID #92-0014224 Tax Status: -For-profit or _X_non-prof it check one) Mailing Address Physical Address P.O. Box 196300 5601 Electron Drive Anchorage, Ak 99519-0300 Anchorage, Ak 99519 Telephone I Fax Email 907 762-4759 907 762-4191 Ron vecera@chugachelectric.com 1.1 APPLICANT POINT OF CONTACT 1 GRANTS MANAGER Name Title Ronald K. Vecera Director, Renewable Energy Business Development Mailing Address P.O. Box 196300 Anchorage, Ak 99519-6300 Telephone Fax Email (907) 762-4759 (907) 762-4191 Ron_vecera@chugachelectric.com 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate..lf 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); 1.2.2 Attached to this application is formal approval and endorsement for its project by Yes 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 ) 1.2.3 As an applicant, we have administrative and financial management systems and Yes follow procurement standards that comply with the standards set forth in the grant agreement. 1 2.4 if awarded the grant, we can comply with all terms and conditions of the attached Yes grant form. (Any exceptions should be clearly noted and submitted with the application.) 1.2.5 We intend to own and operate any project that may be constructed with grant Yes funds for the benefit of the general public. If. no please describe the nature of the project and who will be the primary beneficiaries. AEA13-006 Grant Application Page 2 of 24 7/3//2012 Renewable Energy Fund Round 6 4 Grant Application .�ENERGY AUTHORrrY' 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) Stetson Creek Diversion/Cooper Lake Dam Facilities Project 2.2 Project Location — Include the physical location of your project and name(s) of the community or communities that will benefit from your project in the subsections below. 2.2.1 Location of Project — Latitude and longitude, street address, or community name. Latitude and longitude coordinates may be obtained from Google Maps by finding you project's location on the map and then right clicking with the mouse and selecting "What is here? The .coordinates will be displayed in the Google search window above the map in a format as follows 61 195676 -149 898663, If you would like assistance obtaining this information please contact AEA at 907- 771-303 1. The project is located at the northern extent of the existing Cooper Lake project, approximately 4.5 miles south of Cooper Landing, Alaska. A map of the area is attached. 2.2.2 Community benefiting - Name(s) of the community or communities that will be the beneficiaries of the project. Communities benefiting from the renewable energy include those Chugach serves (i.e., Anchorage, Girdwood, Portage, Hope, Cooper Landing, Moose Pass and Tyonek) and well as the City of Seward. Current wholesale contracts with Matanuska Electric and Homer Electric will expire before this project is in service so it is doubtful that their communities will benefit. Residents and visitors to Kenai Peninsula communities will benefit from improved fish habitat. 2.3 PROJECT TYPE Put X in boxes as appropriate.: 2.3.1 Renewable Resource Type Wind Biomass or Biofuels X Hydra, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Pre -Construction Construction Reconnaissance Design and Permitting Feasibility X Construction and Commissioning Conceptual Design AEA13-006 Grant Application Page 3 of 24 713112012 Renewable Energy Fund Round 6 �® n I Grant Application 4001CENERGY AUTHORTY 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. As a condition of the Federal Energy Regulatory Commission (FERC) relicensing of the Cooper Lake Plant in 2007, Chugach agreed to construct a project to divert water from Stetson Creek into the Cooper Lake reservoir and a related structure to release water into Cooper Creek. The project will enhance fish habitat and add water to Cooper Lake which will result in additional hydroelectric energy generation. Most importantly, constructing this project allows the license for the Cooper Lake hydro facility to be renewed for 50 years. A schedule showing how the project will proceed is attached. 2.5 PROJECT BENEFIT Briefly discuss the financial and public benefits that will result from this project. (such as reduced fuel costs, lower energy costs, etc.) This project needs to be completed to ensure that the Cooper Lake Power Plant (CLPP) can continue to operate. This project is a condition of the CLPP relicensing in 2007 and is required to know with certainty that CLPP is licensed to operate for an additional 50 years granted by the new license. Certainty of ongoing CLPP hydroelectric production is essential as the plant produces about 42,000 MWh per year, which offsets approximately 600,000 mcf of natural gas fired generation. The incremental hydro generation from additional water is estimated at 5,500 MWh per year. This approximately offsets an additional 78,500 mcf's of gas fired generation. Another benefit of the project is the enhancement of fish habitat in Cooper Creek. See section 5 of this grant application for elaboration on these benefits. The Kenai Peninsula economy will also benefit from the construction of the project as it will take approximately 2 years and will require several highly skilled craftsmen and construction workers. 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 actual cost to construct this project will not be known until it is bid for construction. Bid documents were released on August 10, 2012 and bids are due on September 28, 2012. An Opinion of Probable Construction Costs (OPCC), copy attached, dated August 24, 2012 was prepared by MWH Americas. It provides a class 2 estimate of $16.5 million, plus or minus 10%. For purposes of this grant application, Chugach will conservatively estimate the project cost at the top end (i.e., plus 10%) of the range. This amount of $18,130,000 was then increased by $70,800 to add a security camera system. Along with expenditures to date of $3.01 million, and owner's cost associated with construction, the total estimated cost is $23.8 million. The $3.01 million Chugach has spent so far has been for studies, design and procurement, and includes $576,080 received from the AEA as a Round IV renewable energy grant (No. 7040005). The $576,080 from AEA included $30,000 for feasibility and $546,080 for design and permitting. AEA13-006 Grant Application Page 4 of 24 7/3//2012 Renewable Energy Fund Round 6 M Grant Application i411111111E) ENERGY AUMORTY Chugach has continued to seek grant funds for this project and in last year's legislative session Chugach received a $5.825 million grant. Chugach understands that the AEA will grant up to $4 million combined for the design, permitting and construction phases. Thus, through this AEA grant application, Chugach will be requesting $3,453,920 for construction of the project. This is the difference between the $4 million limit and the $546,080 previously granted for design and permitting. Financing will not be an issue for Chugach. Any funds that Chugach is unable to secure through grants will be provided by other financing options. Chugach has a $100 million commercial paper credit facility and a $50 million line of credit available. Short-term, any needed funds will likely come from commercial paper as it is cheaper than the line of credit. Long-term financing will replace the short term financing upon project completion. Chugach has "investment grade" credit ratings. Current credit ratings on long-term debt are from Standard & Poor's Rating Services of A- (Stable) and from Fitch Ratings of A- (Positive). If Chugach is unable to secure additional grant funds Chugach will nevertheless continue with the project using the best funding available. 2.7.2 Cash match to be provided $ 17,343,267 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 through2.7.3) $20,797,187 Project Costs & Benefits (Summary of total to ect. costs.including work to date and, future cost estimates ( Y P" J 9 to get to.a fully , operational project) 2.7.6 • Total Project Cost (Summary from Cost Worksheet _ $ 23,808,913 including estimates through construction) 2.7.7. Estimated Direct Financial Benefit (Savings) $ 16,049,776 2.7.8 Other Public Benefit (If you can calculate the benefit in "' $ Extends license of CLPP terms of dollars please provide that number here and for 50 years; reduced explain how you calculated that number in your application carbon emissions; (Section 5.) enhances fish habitat; jobs benefit for two year construction project. SECTION 3 PROJECT MANAGEMENT PLAN Y 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. AEA13-006 Grant Application page 5 of 24 7/3//2012 Renewable Energy Fund Round 6 ® " Grant Application �OEM::) ENERGY AUMORITY 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.' Chugach's project manager is Peter Poray, Plant Manager for Peaking and Hydro Units. Mr. Poray has been working on this project for the past several years. The executive manager for this effort is Paul Risse, Sr. Vice President of Power Supply. Their professional bios are attached. Contact information for the primary contact is as follows: Peter Poray P.O. Box 196300 Anchorage, Ak 99519-6300 (907) 762-4788 Peter Poray(d)chuaachelectric.com For on -site project management, Chugach will hire a contract employee prior to the start of the first construction season. This will be a highly qualified individual whose resume will be submitted to FERC for approval. 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. Start End Milestones Tasks Date Date Pre -construction Management Submittal reviews, agency sub -plan updates and approvals, personnel staffing, FERC Authorization to Construct. 117/13 4/1/13 Construction - General General site costs and work: mobilization, demobilization, clearing, dock construction, SWPPP implementation, office set-up, site grubbing, site condition surveys, fuel costs. 411113 10/14/14 Construction of Siphon Pipeline 30" piping installation and its lake outlet and System creek inlet structure construction, connection to diversion pipeline, instrumentation vaults & building, and balance of siphon plant. 6127/13 9/21/13 Construction of Diversion Dam and Excavation, rock anchoring, site prep, rock Intake Structures drains, concrete dam construction, dam mechanical and piping installations. 6/28/14 8/11/14 Construction of Access & 36" inside diameter diversion pipe Diversion Pipeline installation in lake, diversion access road construction to Stetson Creek, staging diversion pipe, diversion pipeline excavation and installation, instrumentation vault & building and balance of diversion pipeline 7/4113 1 1011114 AEA13-006 Grant Application Page 6 of 24 713112012 Renewable Energy Fund Round 6 4010 Grant Application � ENERGY AUTHORITY plant. Instrumentation Installation of metering, control systems, remote power system, testing and commissioning. 7/2/14 10/1/14 Security Camera Install camera mounting pole, cameras and commission. 10/1/14 10/14/14 Project Closeout As -built documentation, construction management and final documentation. 9/19114 11/30/14 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. In addition to the key management personnel identified earlier, an organizational chart of Chugach's extensive Power Supply Division is attached. Chugach has a great deal of experience in the construction, operation and maintenance of both thermal and hydroelectric generation projects. Key contractors who have supported the permitting and design effort include the engineering firms MWH Americas, Inc. and HDR Alaska, inc. MWH Americas prepared the OPCC that was recently received and is included in this grant application. Both of these firms have extensive experience in Alaska. Selection of a contractor to construct the project will take place in late 2012 after bids are received based on a competitive bidding solicitation which is currently underway. Chugach also has extensive internal administrative expertise to support the project, including the administration of a grant. Key areas of expertise within Chugach that will contribute to the project include grants administration, accounting, procurement, environmental and information services. 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. Chugach will keep the AEA apprised of the project's status by preparing routine reports that conform to AEA's reporting requirements and by other exchanges of information on an as - needed basis. AEA13-006 Grant Application Page 7 of 24 7/3112012 Renewable Energy Fund Round S Grant Application i41111111111M) ENERGY AUTHORITY 3.5 Project Risk Discuss potential problems and how you would address them. The primary risk of this project is the cost. Until bids are received at the end of this month, there is uncertainty about the project's cost. There is a risk of project cost exceeding the budget due to escalating costs for materials, equipment and man power as well as unexpected construction difficulties in a remote location due to weather, access or other conditions. This risk is being addressed by the thorough design effort, conservative budgeting using a class 2 estimate of probable construction cost, and the competitive bidding process for construction contractor selection. There will also be construction risk. Although the project is well designed and planned there is always the possibility of unforeseen events, such as a storm, that affects working conditions and impedes the project's progress. This risk is mitigated by the hiring of a qualified contractor who is familiar with the adverse working conditions that can be encountered in Alaska and having a realistic project schedule that includes some flexibility to ensure milestones are timely completed. AEA13-006 Grant Application Page 8 of 24 713112012 Renewable Energy Fund Round 6 A41111RD Grant Application ENERGYAMORTY SECTION 4 PROJECT DESCRIPTION AND TASKS • The level of infonnation wiiil 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." w. Y 4.1 Proposed Energy Resource Describe the potential extentlamount 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.:1.For design and permitting or construction projects, please provide feasibility documents,design documents, and permitting documents (if applicable) as attachments to this application. The addition of water to Cooper Lake is expected to result in incremental hydro generation of 5,500 MWh per year. Additional water flow into Cooper Lake will allow this incremental energy to be generated by two existing 9.6 MW hydro units at the CLPP. More importantly, the project is a condition of the FERC relicensing of the CLPP, which will allow this plant to continue to produce an average of 47,500 (5,500 incremental + existing average of about 42,000) MWh per year of renewable hydroelectric energy for another 50 years. Design of this project is complete and has been previously provided to AEA. Contractor bid solicitation is currently underway. The OPCC received on August 24, 2012 is attached. 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 Cooper Lake project was commissioned in 1960 and consists of: • A 920 foot -long rock and fill dam that raises the elevation of Cooper Lake to a licensed maximum operating level of 1,190 feet mean sea level. • Cooper Lake with a surface area of 2,910 acres. • An intake structure on the southeast shore of Cooper Lake; a 10,686 foot -long tunnel and penstock. + A powerhouse located on the southwest shore of Kenai Lake containing two turbine generators, each rated at 9.6 MW, which were repowered in 2000. • A 6.3 mile -long, 69 kV transmission line extending from the powerhouse to the Quartz Creels substation. • A step-up transformer at the Quartz Creek substation. AEA13-006 Grant Application Page 9 of 24 7/3//2012 Renewable Energy Fund Round 6 J401"D " JIlliji Grant Aoalication �ENERGYAUTHORMY • A 90.4 mile -long, 115 kV transmission line from the Quartz Creek substation to the Anchorage substation. 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 project is to construct diversion and bypass structures that will provide additional water to the existing energy resource. This will allow 5,500 MWhlyear of incremental energy to be generated and delivered with the existing energy system. 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 includes Chugach's retail electric consumers and wholesale customers Matanuska Electric, Homer Electric and the Seward Electric System. Matanuska and Homer, however, will likely not be Chugach customers at the time of project completion, due to the pending expiration of their wholesale power purchase agreements with Chugach. 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 The proposed system includes diversion and bypass structures that will increase the energy output of the CLPP, described in detail in 4.2.1, by 5,500 MWh per year. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. The project is located within the Chugach National Forest. The following federal agencies have all agreed to the project as part of the settlement agreement to relicense the CLPP • U.S. Department of Agriculture, Forest Service • U.S. Department of the Interior, Fish and Wildlife Service • U.S. Department of the Interior, National Park Service • U.S. Department of Commerce, National Oceanic and Atmospheric Administration, National Marine Fisheries Service AEA13-006 Grant Application Page 10 of 24 713112012 Renewable Energy Fund Round 6 � n i own Grant Aaplication e�ENERGYAurHORrry 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 Other than some permits that will be needed during the course of construction, all permits have been acquired. These include: • U.S. Army Corps of Engineers, 404 Permit • Alaska Department of Environmental Conservation 401 Water Quality Certification • Alaska Department of Fish and Game Fish Habitat Permit • U.S. Forest Service (USFS) Permits 4.3.4 Environmental Address whether the following environmental and land use issues apply, and if so how they will be addressed: e 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 - - There are a number of environmental, habitat, land use and cultural issues that have been addressed by the project and agreed to by interested parties as part of the relicensing of the CLPP and by plans developed for use during project construction and approved by the USFS and the relicensing settlement agreement parties. In addition to the federal agencies listed in 4.3.2 above, other parties to the licensing settlement agreement include: • Kenaitze Indian Tribe • Alaska Department of Fish and Game • Alaska Department of Natural Resources • The Fish for Cooper Creek Coalition • Alaska Flyfishers Association • Alaska Center for the Environment 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. AEA13-006 Grant Application Page 11 of 24 7/3//2012 Renewable Energy Fund Round 6A _ ® j Grant Aaglication iMI&D ENERGY AUTHORIF Y 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 enerav system A conservative estimate of the project's cost is $23.8 million. This is based on the high range of the recent OPCC, dated August 24, 2012, prepared by MWH Americas. Project costs are summarized as follows: Cost to Date (Studies, Design and Procurement) $ 3,011,726 Construction — Contractual Services 18,200,800 Construction - Owner's Costs 2,596,387 Total $ 23,808,913 A much firmer cost estimate will be known after competitive bidding, currently underway, is completed and a construction contractor is selected. Chugach has spent $3.01 million on this project to date including $576,080 received from a Round IV AEA renewable energy grant. Chugach recently received a $5.825 million grant from the State of Alaska which will be administered by the AEA. Chugach will fund the remainder of the project cost with internal and external financing. As stated earlier, Chugach has "investment grade" credit ratings and has ready access to capital for this project. The details of the budget and the amount Chugach will finance, assuming no further grants are received, is provided on p. 19 of this grant application. 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.) O&M expenses are estimated at $130,000 to $190,000 per year. Labor will be required to operate the facilities, perform routine maintenance to ensure the structures perform in accordance with design requirements and respond to malfunctions and system failures. There will also be an annual start-up and shutdown of the facility. In addition, a budget will be established for annual replacement of worn or broken equipment, surveying and dam inspection and stream gauging. O&M expenses will be included in Chugach's revenue requirement for generation and transmission service and recovered through rates approved by the Regulatory Commission of Alaska (RCA). AEA13-006 Grant Application Page 12 of 24 713112012 Renewable Energy Fund Round 6 GOD A Grant Application i=111E) ENERGY AU11HORrrY 4.4.3 Power Purchase/Sale The power purchase/sale information should include the following: a Identification of potential power buyer(s)lcustomer(s) • Potential power purchase/sales price - at a minimum indicate a price range • Proposed rate of return from grant -funded project The incremental hydro power will be added to Chugach's available power supply and sold to existing consumers at tariffed rates. As of August 2012, Chugach's rates include about 6.4 cents per kWh for generation costs. Chugach's rates are regulated by the RCA. Chugach's rates are designed to earn an annual margin from generation and transmission sales that is equal to 10% of annual long-term interest expense for generation and transmission debt. Any margin (return) Chugach earns from this project will be due to additional long-term interest expense associated with debt financing of the project. Chugach will not earn a return on any portion of the project cost paid for with grant funding. 4.4.4 Project Cost Worksheet " Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. 'lease, 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 Stetson = 5,500 MWh; Cooper Lake = 42,000 MWh Unit depends on project type (e.g.,windspeed, hydropower output, biomasss fuel) K Existing Energy Generation and Usage 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. AEA13-006 Grant Application Page 13 of 24 713112012 new system $23,808,913 new system:,-,�r $160,000 (mid pt. of est. range) Project Benefits 3),., Amount of fuel displaced for AEAI 3-006 Grant Application $0 Page 14 of 24 7/3//2012 Renewable Energy Fund Round 6 AMMU) �Grant Application moo Grant 17 d) ' Alaska public benefits '. Power Purchase/Sales Price Allows relicensing of Cooper Lake Hydro Plant for 50 years saving approx. 600,000 mcflyear of natural gas in addition to the 78,500 incremental mcf above. Reduced carbon emissions, enhanced fish habitat & recreation, jobs during construction. a) Price for power purchaselsale $.075/kWh (rate for generation in Chugach's rates) Project Analysis a) . Basic Economic Analysis Project beriefit/cost ratio 0.67 Payback. (years) 28 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. fi 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. AEA13-006 Grant Application Page 15 of 24 7/3//2012 Renewable Energy Fund Round 6 Grant Application idEMID ENERGY A THORMY • 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? The net present value (NPV) for the Stetson project is $16,049,776 through 2057, the period the new FERC license covers. In addition, the NPV of the fuel related benefit of the existing CLPP, allowed to continue operating with the new license, is estimated at $120,373,324 through 2057. These calculations are summarized on an attachment and are based on Chugach's production costing model which evaluated the reduced fuel use that is possible because of the hydro energy. Further, while a value has not been calculated, there is also the benefit of reduced carbon emissions. Revenue recovery of project costs will be through cost -based rates reviewed and approved by the RCA. The primary non -energy related benefit of the enhancement of fish habitat by increasing water temperature in Cooper Creek, which extends from the Project Dam at Cooper Lake to the Kenai River. The portion of the creek upstream from the confluence with Stetson Creek (the main tributary to Cooper Creek) currently has minimal flow, due to the diversion of all lake outflows through the powerhouse. Studies have shown that currently lower water temperatures in Cooper Creek are a likely limiting factor to the establishment and/or maintenance of salmon or trout populations in the creek. Fish habitat will be improved by diverting colder water from Stetson Creek into Cooper Lake and releasing warmer flows form near the surface of Cooper Lake into upper Cooper Creek. The proposed release from Cooper Lake will accomplish two main objectives: 1) restoring flows in Cooper Creek upstream of Stetson Creek and 2) increasing stream temperatures into a range more beneficial for salmon and trout spawning and incubation, by exchanging input of Stetson Creek's cold water for input of Cooper Lake's warmer water to Cooper Creek. The fish species most likely to benefit from Cooper Creek flow and temperature changes include Chinook, Coho, Sockeye and Pink salmon, and Rainbow trout. The enhanced habitat could restore significant spawning use of the creed up to the barrier falls by salmon. Increased temperatures will result in significantly early fry emergence, thereby increasing fry survival and AEA13-006 Grant Application Page 16 of 24 7/3112012 Renewable Energy Fund Round 6 �� . . Grant Application 400ZD ENERGY 4un-I0131717Y potentially increasing the number of returning adults. Wildlife will benefit from increased numbers of salmon in Cooper Creek. In addition to the above, the project will provide the economic benefit of construction jobs for a period of approximately 2 years. This is a very sustainable project as the structures constructed as a result of this project are expected to be used as long as the Cooper Lake power plant remains in operation. The plant is currently licensed through 2057 and the life of the generation units, with maintenance and occasional repowering, is expected to last through the duration of the license. This project will be part of the overall CLPP, which is an integral part of Chugach's power supply portfolio. It will be operated and maintained as any system generating asset would be and costs associated with the project will be recovered through existing ratemaking methods. Chugach does not anticipate any ongoing operational or financial issues associated with the project. Chugach commits to reporting savings and benefits, as required by the AEA. Chugach has expended approximately $3.01 million on this project, culminating in the submittal of the proposed 100% engineering design to FERC on July 3, 2012 and the recent solicitation of bids for construction of the project. Bid documents were issued in late 2012 to be ready for the 2013 construction season. Chugach has received 2 grants for this project. A $576,080 grant was received via AEA's Round IV renewable energy grant fund solicitation. Other than a small portion for feasibility analysis, the bulk of this grant was used for engineering design and permitting. Chugach has been very responsive in meeting its project and financial reporting responsibilities with respect to this grant and did not have any issues, discrepancies or disputes. Chugach also received a $5.825 million appropriation in the last legislative session. This grant funding will be administered by AEA. As with the previous Stetson Creek grant, as well as a AEA13-006 Grant Application Page 17 of 24 7/3//2012 Renewable Energy Fund Round 6 4019) Grant Application i4111111111111K) ENERGY AUMORITY variety of other Chugach grants being administered by the AEA, Chugach anticipates a solid working relationship with AEA. Chugach has the expertise, resources, and commitment to use public money in a responsible and accountable manner and will continue to do so for any and all grants received. r 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 project was part of the FERC relicensing settlement agreement signed by the following governmental and non -governmental organizations: U.S. Department of Agriculture, Forest Service, Alaska Region U.S. Department of the Interior, Fish and Wildlife Service U.S. Department of Commerce, National Marine Fisheries Service U.S. Department of Interior, National Park Service State of Alaska, Department of Natural Resources State of Alaska, Department of Fish and Game Kenaitze Indian Tribe Alaska Center for the Environment Fish for Cooper Creek Coalition; and Alaska Fly Fishers Letters of support were also received from: Fish for Cooper Creek Coalition; and Alaska Fly Fishers SECTION 9 GRANT BUDGET' Tell us how much you want in,grant funds Include any investments to date and funding sources,f how much is being requested in grant. funds, and additional investments you will make as an apclicant.z. Provide a narrative summary regarding funding sources and your financial commitment to the project. Chugach is requesting $3,453,920 in grant funds. Along with a previously granted $576,080 (Round IV), of which $546,080 was for design and permitting, this will bring Chugach to the AEA renewable energy grant limit of $4 million for design and construction. To date Chugach has spent $3.01 million on this project, including the $576,080 from the AEA. Chugach also recently received a State appropriation of $5.825 million for this project. While Chugach will continue to seek grant funding for this project, work will continue and Chugach will fund (finance) any costs in excess of grant amounts. Chugach has a very strong financial condition, including a commercial paper financing facility of $100 million, a line of credit of $50 million, and the ability to access the capital markets to convert short-term to long-term financing when desired. Applications should include a separate worksheet for each project phase that was identified in section 2.3.2 of this application, (Reconnaissance, Feasibility, Conceptual Design, Design and Permitting, and Construction). Please use the tables provided below to detail your proposed AEA13-006 Grant Application Page 18 of 24 713112012 Renewable Energy Fund Round 6 p•■lm 4MVGrant Application I ENERGY AU-1 HORrFY project's budget. Be sure to use one table for each phase of your project. If you have any question regarding how to prepare these tables or if you need assistance preparing the application please feel free to contact AEA at 907-771-3031 or by emailing the Grant Administrator, Shawn Calfa, at scalfa(cDaidea.org. ViJ,,wwjY�ijyy f�ytll1.i-. r 4: Antla'll?at$l �raxtt$$ il�unds: s4} Milestone'b�rTask Completion . RE � �, Z Mat h :' r TOTALS Date Grant Funds Funds kincillFiederal rsntsr Sf (List milestones based on phase and type of project. $ $ $ See Milestone list below. ) Construction Phase: $ $ $ Pre -construction management 4/1113 $ $ 88,200 Cash $ 88,200 Construction - General 10/14/14 $ 404,139 $ 2,784,639 Cash/Other $ 3,188,778 SOA Grant Construction of Siphon 9/21113 $ 500,000 $ 2,362,870 Cash/Other $ 2,862,870 Pipeline System SOA Grant Construction of Diversion Dam 8/11/14 $ 500,000 $ 845,647 Cash/Other $ 1,345 647 & Intake Structure SOA Grant Construction of Access and 1011114 $2,000,000 $10,506,559 Cash/Other $ 12,506,559 Diversion Pipeline SOA Grant Instrumentation 10/1114 $ $ 680,809 Cash $ 680,809 Security Cameras 10/14/14 $ $ 85,172 Cash $ 85,172 Project Closeout 11/30/14 $ $ 39,152 Cash $ 39,152 $ $ $ TOTALS $3,404,139 $17,393,048 $ 20,797,187 Budget Categories. Direct Labor & Benefits $ $ 424,212 Cash $ 424,212 Travel & Per Diem $ $ 30,000 Cash $ 30,000 Equipment $ $ $ Materials & Supplies $ $ 15,000 Cash $ 15,000 Contractual Services $ $ 2,127,175 Cash $ 2,127,175 Construction Services $3,4D4 139 $14,796,661 Cash/Other $ 18 20D,800 `' SOA Grant ' Other $ $ $ TOTALS $3,404,139 $17,393,048 $20,797,187 F L t 4 • Arntiripated trsrri$$ F Funds MNaston* RE "Ftrurrcl 3 Gashfln .- or Task Completion . R. ra tint Funds Ma#ctaing }�j �' 'lClndlFederti .7 TALSr - Dam Funds iy' A _�'Y ] 1. : k, a. s •,° „� Y r jri *�' .y. 1 r# cantslf)ther F v �� 5 1 i r 3 h gt$te 3.. (List milestones based on phase and type of project. $ $ $ See Milestone list below. $ $ $ $ $ $ AEA13-006 Grant Application Page 19 of 24 7/31/2012 Renewable Energy Fund Round 6 GIF-D, GERD Grant Application ANNID ENEIRW AJ11-ICRITY I U I ALZI Budget Ca oriel: Direct Labor & Benefits $ $ $ Travel & Per Diem $ $ $ Equipment $ $ $ Materials & Supplies $ $ $ Contractual Services $ $ $ Construction Services $ $ $ Other $ $ $ TOTALS $ $ 1 1 $ zoume Matching Fund S. 'AJnftClpafM d RE -:Fund Grantee Milestone or Task Completion Grant Funds Matchino.: .'aamn- kindWedera il TOTA" Date Funds r State < (List milestones based on phase and type of project. $ $ $ See Milestone list below. ) I 1 1 $ 1 $ 1 1 $ 1 TOTALS I $ $ $ Budget Categories: Direct Labor & Benefits $ $ $ Travel & Per Diem $ $ $ Equipment $ $ Materials & Supplies $ $ $ Contractual Services $ $ $ Construction Services Other $ $ $ TOTALS $ $ $ 4. Funds: Ci Anti paftd REFund X Grant" C ft Milestone or Task Completion . ., I Matrhing x8h TOTALS Date GrantFunds FkindtFedenal unds tv, g (List milestones based on phase and type of project. $ $ $ See Milestone list below. AEA1 3-006 Grant Application Page 20 of 24 7/3//2012 Renewable Energy Fund Round 6 �1111111111E) Grant Application ili annnD f7VuwA rHORITY ~ TOTALS I $ $ $ Budget Cate g oriest Direct Labor & Benefits $ $ $ Travel & Per Diem $ $ $ Equipment $ $ $ Materials & Supplies $ $ $ Contractual Services $ $ $ Construction Services $ $ $ Other $ $ $ TOTALS $ $ $ Sc%ul�e +Cris;_ ;. MatoWng Anticipated RE. Fund _: grantee Funds:. Ca$hlln. : 14tllestone or Task Completion Grans Funds . Matching . kind/Federal TOTALS ..;. ` Date ;.Funds Grents/Mer fete (Li; Limilestones based on phase and type of project. $ $ $ See Milestone list below. ) I 1 1$ 1$ 1 1$ 1 $ $ $ TOTALS $ $ $ Budget Categories: Direct Labor & Benefits $ $ $ Travel & Per Diem $ $ $ Equipment $ $ $ Materials & Supplies $ $ $ Contractual Services $ $ $ Construction Services r .a $ $ $ Other - $ $ $ TOTALS $ $ $ Prniprt Mllpctnnpc that chnuld hp addrpsspd in Buetapt Prnnncal Reconnaissance Feasibility Design and Permitting Construction 1. Project scoping and 1. Project scoping 1. Project scoping 1. Confirmation that all contractor solicitation. and contractor and contractor design and feasibility 2. Resource solicitation. solicitation for requirements are identification and 2. Detailed energy planning and complete.design analysis resource analysis 2. Completion of bid 3. Land use, permitting, 3. Identification of Permit 2. applications (as documents and environmental land and regulatory needed) 3. Contractor/vendor analysis issues, selection and award 3. Final AEA13-006 Grant Application Page 21 of 24 713112012 Renewable Energy Fund Round 6 iMINED ®Grant Application ENERGYAUMORmr 4. Preliminary design 4. Permitting and environmental 4. Construction Phases analysis and cost environmental assessment and — 5. Cost of energyanalysis and mitigation plans (as needed) ! Each project will have market analysis 5. Detailed analysis of unique construction 6. Simple economic existing and future 4. Resolution of phases, limitations, analysis energy costs and land use, right of and schedule markets way issues constraints which 7. Final report and recommendations 6. Assessment of 5. Permit approvals should be identified by the grantee alternatives 6. Final system 5. Integration and 7. Conceptual design design testing analysis and cost estimate 7. Engineers cost 6. Decommissioning old estimate systems 8. Detailed economic $. Updated and financial economic and 7. Final Acceptance, analysis financial analysis Commissioning and 9, Conceptual Start-up business and 9• Negotiated 8. Operations Reporting operations plans power sales agreements with 10. Final report and approved rates recommendations 10. Final business and operational plan AEA13-006 Grant Application Page 22 of 24 7/3//2012 Renewable Energy Fund Round 6 © _ Grant Application ENB=*YXYMORmr SECTION 10 - AUTHORIZED.SIGNERS FORM x Community/Grantee Name: Regular Election is held: Date: Authorized Urant 5liner s : Printed Name I I Term Signature I authorize the above person(s) to sign Grant Documents: (Highest ranking organization/community/municipal official) Printed Name Title Term Signature Grantee Contact Information: Mailing Address: Phone Number: Fax Number: E-mail Address: Federal Tax ID #: Please submit an updated form whenever there is a change to the above information. AEA13-006 Grant Application Page 23 of 24 713/12012 Renewable Energy Fund Round 6 I � � Grant Application �7ENERGYAUTHORITY SECTION 11 7.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 Blame Bradley W. Evans Signature Title Chief Executiv ' r Date�2-- AEA13-006 Grant Application Page 24 of 24 7/3//2012