HomeMy WebLinkAboutJack River Grant Application6 (No Resumes)
GRANT APPLICATION
– FOR –
JACK RIVER HYDROELECTRIC PROJECT
FEASIBILITY STUDY
SEPTEMBER 2012
– SUBMITTED TO –
ALASKA ENERGY AUTHORITY
RENEWABLE ENERGY GRANT PROGRAM – ROUND VI
RFA #AEA-13-006
– SUBMITTED BY –
NATIVE VILLAGE OF CANTWELL
P.O. BOX 94
CANTWELL, AK 99729
Renewable Energy Fund Round 6
Grant Application
AEA 13-006 Application Page 1 of 23 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.
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
NATIVE VILLAGE OF CANTWELL
Type of Entity: LOCAL GOVERNMENT (TRIBAL GOVERNMENT) Fiscal Year End SEPTEMBER 30
Tax ID # 92-0046670 Tax Status: For-profit or X non-profit ( check one)
Mailing Address
P.O. BOX 94
CANTWELL, AK 99729
Physical Address
133.4 DENALI HWY
CANTWELL, AK 99729
Telephone
907-768-2591
Fax
907-768-1111
Email
HALLVC@MTAONLINE.NET
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
VERONICA NICHOLAS
Title
PRESIDENT, NATIVE VILLAGE OF CANTWELL
Mailing Address
P.O. BOX 94
CANTWELL, AK 99729
Telephone
907-768-2591
Fax
907-768-1111
Email
HALLVC@MTAONLINE.NET
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
A local government, or
X 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.
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SECTION 2 – PROJECT SUMMARY
This is intended to be no more than a 1-2 page overview of your project.
2.1 Project Title – (Provide a 4 to 5 word title for your project)
JACK RIVER HYDROELECTRIC PROJECT FEASIBILITY STUDY
2.2 Project Location –
Include the physical location of your project and name(s) of the community or communities that will
benefit from your project 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 907-771-3031.
The project is located on Jack River approximately 3 miles southeast of Cantwell (MP
209.5 Parks Hwy). This project is located at approximately 63d 21’N, 148d 49’ W.
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
Communities that will benefit from this project include those communities on the railbelt
energy grid - primarily those served by GVEA from Cantwell north.
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
Wind Biomass or Biofuels
X Hydro, including run of river Transmission of Renewable Energy
Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing sources Hydrokinetic
Solar Storage of Renewable
Other (Describe)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Pre-Construction Construction
Reconnaissance Design and Permitting
X Feasibility Construction and Commissioning
Conceptual Design
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2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
Cantwell is currently served by GVEA via the power transmission line between MEA and GVEA
(Alaska Intertie System). The Native Village of Cantwell wishes to improve the reliability and
lower the cost of the community of Cantwell’s power system. To accomplish this we propose to
build a storage hydroelectric project on the Jack River, a short distance from Cantwell. The
reconnaissance study currently under way has identified several project configurations with
capacities between 700 kW and 7 MW that may be feasible. A feasibility study is necessary to
identify which of these configurations would best meet the community’s needs.
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.)
A hydroelectric plant is proposed on Jack River. This plant will supply renewable energy into the
Alaska Intertie System that runs between Fairbanks and Anchorage. Increasing the supply of
renewable energy on the railbelt grid will help to stabilize and lower rates in Fairbanks, which
fluctuate with the price of oil on world markets. Increased renewable energy will also reduce
dependence on Cook Inlet natural gas, which is increasingly in short supply and more costly
than in past decades.
This plant will also provide local backup generation capability for The Native Village of Cantwell,
the Community of Cantwell, Carlo Creek, and McKinley Village. Currently, these communities
are served directly from the Alaska Intertie System, and have no local utility generation or
backup power supply. In the past, damage to the transmission line from an avalanche caused a
two day outage in the dead of the winter; temperatures without wind chill can be –50 F in this
area. High winds are constant in the Cantwell area so the wind chill is an important factor.
These transmission failures can last for several days or weeks in the worst case, and pose a
grave hazard to the local people and infrastructure. In previous years, Cantwell has also
experienced outages due to lightening strikes. If lightening damages insulators or other
infrastructure, these outages can last a day or more.
The proposed hydro project will be a storage project, and may be able to help GVEA regulate
output from their new wind farm under construction at Eva Creek near Healy.
This storage hydro project will be able to help regulate flows in Jack River, which is an active
river prone to channel shifting and flooding. The project would help control floods, helping to
protect private lands and structures in the Cantwell area, as well as helping to protect the Denali
Highway, Parks Highway, and Alaska Railroad in the vicinity of Cantwell.
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 estimated cost of the feasibility study is $225,000. The Native Village of Cantwell requests
$213,750 in grant funds and is providing $11,250 in matching funds from its own resources for
the study. The Native Village of Cantwell will also provide in-kind labor and equipment support
for the project. We have done this on the on-going reconnaissance study by helping out with
the stream gauge and field work where appropriate.
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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. $213,750
2.7.2 Cash match to be provided $ 0
2.7.3 In-kind match to be provided $ 11,250
2.7.4 Other grant applications not yet approved $ 0
2.7.5 Total Grant Costs (sum of 2.7.1 through 2.7.3) $225,000
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)
$10 to 250 million
(depending on
configuration)
2.7.7 Estimated Direct Financial Benefit (Savings) $13 to 300 million
(depending on
configuration)
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.)
No quantifiable financial
benefits, see narrative.
The reconnaissance study currently underway is evaluating several different project
configurations with a wide range of costs and project benefits. More study is necessary to
determine which configuration is best and the specific costs and benefits of the selected
development configuration.
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SECTION 3 – PROJECT MANAGEMENT PLAN
Describe who will be responsible for managing the project and provide a plan for successfully
completing the project within the scope, schedule and budget proposed in the application.
3.1 Project Manager
Tell us who will be managing the project for the Grantee and include contact information, a
resume and references for the manager(s). If the applicant does not have a project manager
indicate how you intend to solicit project management support. If the applicant expects project
management assistance from AEA or another government entity, state that in this section.
Mr. Gordon Carlson of Cantwell will be the project manager for the feasibility study. He has
been successfully managing the reconnaissance study that is currently being concluded. The
Native Village of Cantwell has been working with Polarconsult Alaska, Inc. for several years to
advance a hydro project at Jack River, and contracted with Polarconsult for the current
reconnaissance study. Once funding has been secured to do a feasibility study for the Jack
River Hydro project, the village intends to hire Polarconsult Alaska, Inc. to proceed with this next
phase of study. Resumes for Polarconsult personnel to be assigned to this project are attached
to this proposal.
3.2 Project Schedule and Milestones
Please fill out the schedule below. Be sure to identify key tasks and decision points in in your
project along with estimated start and end dates for each of the milestones and tasks. Please
clearly identify the beginning and ending of all phases of your proposed project.
Please fill out form provided below. You may add additional rows as needed.
Milestones Tasks Start Date End Date
Grant Agreement with AEA Sign Grant Agreement July 2013 Sept. 2013
1. Project Management, Scoping and
Contractor Solicitation Sign Contract Sept. 2013 Nov. 2013
2. Detailed Energy Resource Analysis
Hydrology Study Nov. 2013 Sept. 2014
Geotechnical Studies Nov. 2013 Sept. 2014
3. Identify land and Regulatory Issues
Land / Fish / Wildlife Study June 2014 Oct. 2014
4. Permitting and Environmental Analysis Jan. 2014 July 2014
5. Market Analysis Jan. 2014 July 2014
6. Assessment of Alternatives Sept. 2014 Dec. 2014
7. Conceptual Design Analysis and Cost
Estimate Nov. 2014 Feb. 2015
8. Detailed Economic and Financial
Analysis Nov. 2014 Feb. 2015
9. Business and Operations Plans Oct. 2014 Jan. 2015
10. Draft Final Report Jan. 2015 Mar. 2015
11. Final Report Address comments Mar. 2015 May 2015
Schedule is based on timely signing of grant agreement. Tasks are based on months from
grant agreement signing.
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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.
To accomplish this project the Native Village of Cantwell will be using all of its resources. The
village administrator has already spent many years to secure funding to do a reconnaissance
study for this project which is finally underway and will be completed this fall. The village has
also used and will continue to use its office, computer, telephone, fax and other office
equipment until this project is accomplished. Village members have and will continue to
volunteer their time and experience (experience as an electrician, owner of a construction
company, etc...) until this project is completed.
The Native Village of Cantwell has worked successfully with Polarconsult Alaska, Inc. for
several years in efforts to study Jack River’s hydropower potential, including hiring Polarconsult
to perform the reconnaissance study that is currently under way. The Native Village of Cantwell
intends to hire Polarconsult to perform the feasibility study for Jack River.
3.4 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
Please provide an alternative contact person and their contact information.
The Village Administrator, Mr. Arnel Hernandez, will be the liaison between the village,
Polarconsult, and the Alaska Energy Authority for the duration of this project. The village will be
submitting quarterly reports to the Alaska Energy Authority until this project is completed. Mr.
Hernandez has successfully served in this capacity for the on-going hydro reconnaissance
study.
3.5 Project Risk
Discuss potential problems and how you would address them.
This project is still in the study phase and as such there is limited risk associated with the
project at the current level of study. In the event the studies conclude the project is not feasible,
the village will not pursue the project and there is no risk.
Various problems may be encountered in the course of studies and field work for the project.
Such problems will be addressed by hiring qualified and experienced individuals to perform
these studies and work. Such individuals are capable of recognizing problems early on and
properly handling them when they do occur.
One potential problem is not getting funding from the State of Alaska to do a feasibility study for
the Jack River Hydro project. If this should occur the village will continue to look for funding
through the State and the Federal Government to do this study.
Another potential problem that the village might encounter, after doing a feasibility study and it is
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determined the Jack River Hydro project is viable and cost effective, is lack of funding to start
construction. This project will provide the Alaska Intertie System with many benefits, so the
village is encouraged to continue looking for funding through the State and the Federal
Government as needed to accomplish this project.
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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.
Jack River drains approximately 140 square miles of the Talkeetna Mountains south of Cantwell.
There are at least three potential dam sites as the river emerges from the mountains approximately
three miles southeast of Cantwell. A dam at any of these sites would provide for a significant amount
of storage, likely meeting the current year-round local energy needs of Cantwell and surrounding
areas, as well as significant additional energy that would be sent via the Alaska Intertie System to
other railbelt communities. The various project development options considered in the
reconnaissance study have projected energy generation potential of 10,000 to 50,000 MWh annually.
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.
GVEA currently serves the village of Cantwell and the surrounding area (Carlo Creek and McKinley
Village) via a three-phase distribution system. Power is provided through a tap off the MEA-GVEA
intertie (Alaska Intertie System). Cantwell and the surrounding area has no local electrical
generation capability. When lightening, wind, or avalanches cause an outage on the Intertie,
Cantwell cannot be served until the intertie is restored.
The combined load in Cantwell and surrounding areas is approximately 500 to 1,000 kW during the
summer months and 250 to 600 kW in the winter months.
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.
Cantwell and surrounding areas receive electricity from the Alaska Intertie System. This electricity is
generated from several energy sources, including coal, naptha, fuel oil, natural gas and hydropower.
This project will provide more renewable hydropower to the intertie system and the railbelt
communities. Hydropower is more stably priced and less costly than many of the fossil-fuel derived
energy sources currently used on the railbelt. In particular, this project will help to reduce the amount
of fuel oil and naptha burned by GVEA in Fairbanks and North Pole. The cost of these energy
resources on the GVEA system has recently ranged from approximately 20 to 90 cents per kWh.
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4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
Energy costs for the communities served off of the Alaska Intertie System are high due to the high
costs of fuel. Lower electric costs are expected to increase demand from existing customers, and will
encourage new business opportunities in Cantwell and surrounding communities.
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 specific project design would depend on the preferred project configuration that would be
determined by the proposed feasibility study. Generally, the project would consist of the
following major components:
1. A gravity dam located at one of three dam sites along Jack River. This dam could be rock fill,
roller-compacted concrete, or of a different type.
2. A reservoir behind the dam. Some reservoir configurations would likely be sufficient to provide
for the year-round energy needs of Cantwell and the surrounding areas, others would also
provide significant capacity for other railbelt areas.
3. A penstock or tunnel to increase the available project head. The penstock would likely be buried
for frost protection where possible.
4. A powerhouse fitted with a series of either Kaplan or Francis turbines, depending on the available
project head.
5. Synchronous generators to allow black-start capability to provide electricity for Cantwell and
surrounding areas during intertie outages. These are also expected to be easier to integrate with
the intertie and substation operations.
6. A power line extension to the existing three-phase overhead distribution system along the Denali
Highway.
7. Depending on the preferred project configuration, the existing 5 MVA transformer at the Cantwell
substation of the Intertie may need to be replaced with a larger transformer. Other upgrades at
the substation could also be necessary.
The project’s installed capacity is estimated at approximately 700 kW to 7,500 kW. The capacity
factor is estimated to be between 0.50 to 0.75. Annual energy generation is estimated at 10,000 to
50,000 MWh annually. All of these parameters depend on which project configuration is identified by
the feasibility study as the best development at Jack River.
Observations prior to and during the reconnaissance study indicate that a hydroproject at Jack River
is likely technically feasible. The most important remaining unknowns for the project pertain to
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project benefits and costs, and the project’s economic feasibility.
Critical unknowns for this project are the hydrology and geotechnical conditions. Stream flow in 2012
has been unusually high in spring and summer, stemming in part from the above average snows of
the 2011-12 winter. More hydrology data is needed to better characterize Jack River and develop
higher-confidence estimates of average hydrology and long-term energy generation potential. More
and site specific geotechnical information is needed for the selected dam site to better refine
estimated costs and preliminary design of a dam on Jack River. Analysis of bed load is appropriate
to develop estimates of the useful life of a reservoir on Jack River. All of these factors will influence
the project’s economic feasibility.
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.
Land where the project would be located is owned by Ahtna, Inc. Depending on the project
configuration, some of the reservoir may be located on state or federal land, and some project
access or other features may be located on private land.
Ahtna, Inc. is aware of this project, has issued land use permits to support project studies, and has
provided a letter of support for the project (attached).
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
The project is expected to require the following major permits for construction.
1. Potentially a FERC license, or exemption from FERC licensing. Some project configurations may
not fall under FERC jurisdiction.
2. Land authorizations from Ahtna, Inc. and other land owners (potentially private owners and/or the
State of Alaska).
3. Fish Habitat Permit. Jack River is not anadromous fish habitat, but some resident fish species are
likely present.
4. U.S. Department of Army permits for work in waters of the U.S. including wetlands.
5. Alaska Department of Natural Resources Water Rights.
6. RCA authorization. A Utility Certificate from the Regulatory Commission of Alaska may be
required depending on how the Native Village of Cantwell proceeds with the Jack River project.
Once a decision to develop the project is made (at the conclusion of the Feasibility Study), permits
are estimated to take 1.5 to 5 years to obtain. This estimate will be refined once the project
configuration is determined. The longer timeframe would correlate with the larger project options,
due to the increased level of study required and the fact that the reservoir for the largest project
configuration would occupy some federal lands and thus the project would require a FERC license.
No permitting barriers are known at this time.
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4.3.4 Environmental
Address whether the following environmental and land use issues apply, and if so how they will be
addressed:
Threatened or Endangered species
Habitat issues
Wetlands and other protected areas
Archaeological and historical resources
Land development constraints
Telecommunications interference
Aviation considerations
Visual, aesthetics impacts
Identify and discuss other potential barriers
The following assessment is based on currently available information. More detailed responses
would depend on the specific project configuration that is selected.
Threatened or endangered species: None known.
Habitat issues: Reservoirs would flood some habitat area. The extend and type of habitat flooded
depends on project configuration.
Wetlands and other protected areas: All project configurations would fill some wetlands (dam
footprint, access roads, etc.) and flood other wetlands (reservoir, tailrace, etc.)
Archeological resources: None known.
Land development constraints: None known.
Telecommunications Interference: None known.
Aviation considerations: None known.
Visual, aesthetics impacts: Some dam configurations may be briefly visible to alert travelers from
portions of the Denali or Parks highways. Most visual or aesthetic impacts are limited to vantage
points from the air, remote terrain around Cantwell, or the immediate vicinity of the project.
Other potential barriers: the Jack River valley receives some modest recreational use that could be
affected depending on the selected project configuration. Improved access to the area would likely
open up comparable access to comparable areas at least partially mitigating these concerns.
4.4 Proposed New System Costs and Projected Revenues
(Total Estimated Costs and Projected Revenues)
The level of cost information provided will vary according to the phase of funding requested and any
previous work the applicant may have done on the project. Applicants must reference the source of
their cost data. For example: Applicants records or analysis, industry standards, consultant or
manufacturer’s estimates.
4.4.1 Project Development Cost
Provide detailed project cost information based on your current knowledge and understanding of the
project. Cost information should include the following:
Total anticipated project cost, and cost for this phase
Requested grant funding
Applicant matching funds – loans, capital contributions, in-kind
Identification of other funding sources
Projected capital cost of proposed renewable energy system
Projected development cost of proposed renewable energy system
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The project configuration and feasibility has not been determined, so total project costs are unknown,
but estimated at $10 million to 250 million depending on project configuration, geotechnical site
conditions, and other factors.
The cost of the feasibility study is $225,000. The Native Village of Cantwell requests $213,750 in
grant funds and is providing $11,250 in matching funds from its own resources for the study. The
Native Village of Cantwell will also provide in-kind labor and equipment support for the project. We
have done this on the on-going reconnaissance study with project administration and helping out with
the stream gauge and field work where appropriate.
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 project concept is not sufficiently developed at this point in time to provide meaningful O&M cost
estimates. No factors are currently known that would result in abnormally high or low O&M costs
compared to typical costs for small to medium-sized storage hydroelectric projects in Alaska.
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
Sale of power from the Jack River project could take a number of forms. The most straightforward
power sales contract to put in place would be to sell electricity to GVEA on a wholesale basis.
GVEA’s power purchase rate for non-firm power (calculated as the average avoided cost of fuel) is
currently approximately $0.11 to 0.13 per kWh. Because Jack River has storage potential, the
project could provide firm power which would command a higher price than the non-firm power
purchase rate in GVEA’s tariff.
Sale to other railbelt utilities is also an option, although GVEA typically has the highest rates on the
railbelt. Sale to non-utilities is also a possibility in certain instances, but it can be more difficult to set
up these contractual relationships.
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
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Renewable Energy Source Jack River Hydroelectric Project
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. Estimated capacity factor of 0.50 to 0.75
(depends on project configuration)
Configuration used for this sheet: 0.75
Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel)
Existing Energy Generation and Usage
a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank)
i. Number of generators/boilers/other Railbelt
ii. Rated capacity of generators/boilers/other Railbelt
iii. Generator/boilers/other type Railbelt
iv. Age of generators/boilers/other Railbelt
v. Efficiency of generators/boilers/other Railbelt
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor Railbelt
ii. Annual O&M cost for non-labor Railbelt
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] Railbelt
ii. Fuel usage
Diesel [gal] Railbelt
Other Railbelt
iii. Peak Load Railbelt
iv. Average Load Railbelt
v. Minimum Load Railbelt
vi. Efficiency Railbelt
vii. Future trends Railbelt
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] --
ii. Electricity [kWh] 4,150,000 kWh annually
(Cantwell and surrounding areas)
iii. Propane [gal or MMBtu] --
iv. Coal [tons or MMBtu] --
1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric
Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power.
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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]
Approximately 700 to 7,500 kW
(depending on project configuration)
Configuration used for this sheet: 7,500 kW
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] Approximately 10,000,000 to 50,000,000 kWh annually
(depending on project configuration)
Configuration used for this sheet: 50,000,000 kWh / year
ii. Heat [MMBtu] --
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu] --
ii. Coal [tons or MMBtu] --
iii. Wood [cords, green tons, dry tons] --
iv. Other 666,000 to 3.3 million gallons of fuel oil annually.
Configuration used for this sheet: 3.3 million gallons/year
(Assumes GVEA displaces fuel oil for 100% of hydro
project output and generation efficiency of 15 kWh/gallon)
Project Cost
a) Total capital cost of new system $10 million to $250 million
(depending on project configuration)
Configuration used for this sheet: $150 million
b) Development cost $150 million
c) Annual O&M cost of new system $500,000
d) Annual fuel cost $0
Project Benefits
a) Amount of fuel displaced for
i. Electricity 3.3 million gallons fuel oil
ii. Heat --
iii. Transportation --
b) Current price of displaced fuel $3.00 per gallon
c) Other economic benefits --
d) Alaska public benefits $9.9 million annually in avoided fuel cost.
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Power Purchase/Sales Price
a) Price for power purchase/sale $0.15 per kWh (2011 AEA/ISER Price Model)
Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio $170.8 million / 146.7 million = 1.16
Payback (years) $146.7 million / $9.9 million = simple payback 14.8 years.
4.4.5 Proposed Biomass System Information
Please address the following items, if know. (For Biomass Projects Only)
What woody biomass technology will be installed (cord wood, pellets, chips, briquettes,
pucks).
Efficiency of the biomass technology.
Thermal or electric application.
Boiler efficiency.
Displaced fuel type and amount.
Estimated tons of wood pellets or chips (specify) to be used per year, and average moisture
percentage.
Estimated cords of wood to be used per year, specify whether dry or green and the moisture
percentage.
Ownership/Accessibility. Who owns the land and are their limitations and restrictions to
accessing the biomass resource?
Inventory data. How much biomass is available on an annual basis and what types (species)
are there, if known?
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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
Assuming one of the larger project configurations under consideration in the reconnaissance
study is developed, the estimated annual fuel displacement by the project would be
approximately 3.3 million gallons of fuel oil or equivalents (naptha) burned by GVEA. This is
based on 50,000,000 kWh of hydro generation and a fuel efficiency of 15 kWh per gallon at
GVEA. At an assumed fuel cost of $3 per gallon, this is valued at $9.9 million annually.
A wholesale power purchase contract with GVEA would likely be at their system average
avoided cost plus an additional amount because the Jack River project would have significant
capacity. Capacity has an assumed value of $0.02 per kWh. Energy has an assumed value of
$0.15 per kWh (based on the 2011 AEA/ISER price model for the northern railbelt). Annual
project revenue with these assumptions is $8,500,000.
Several entities have expressed an interest in purchasing the clean energy from this project.
This is most easily achieved through the sale of ‘Green Tags’ or selling the environmental
attributes of the project separately from the physical electricity. Green Tags on the voluntary
market have stabilized at a price of approximately $0.001 per kWh, which would result in
incremental revenue of $50,000 per year assuming that all Green Tags from the project were
sold.
All cities connected to the railbelt grid would benefit from this project. This project would
increase the amount of renewable energy available to the railbelt, decreasing dependence on
fossil fuels, which in the case of natural gas in Cook Inlet is a diminishing resource and in the
case of fuel oils in Fairbanks is very costly. Coal is inexpensive and stably-priced, however the
potential for future carbon taxes would increase the cost of electricity from coal.
This project would improve the reliability of the electric grid for Cantwell and surrounding
communities by creating a local generation source that can keep the lights on when the Alaska
Intertie is out of service. It would also create greater energy independence for these
communities.
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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
Selection of business structures is premature given the state of study of the Jack River
Hydroelectric Project. While the Native Village of Cantwell has not begun to evaluate business
options, some potential business structures could include:
1. Become an IPP and obtain QF status, exemption, or utility certification from the RCA
2. Joint venture with GVEA
3. Form a new electric utility and assume responsibility for providing electric service in Cantwell
and the surrounding area.
O&M costs for the project would be funded by revenues from sale of electricity. The market value
of the electricity easily exceeds likely O&M costs.
No unusual operational issues are known at this time.
Operational costs would include periodic scheduled overhauls of the turbines, generators, and
ancillary equipment, reservoir maintenance (trash rack clearing, etc), and related hydro project
operations. The Alaska intertie System would provide backup for the hydro and also would
provide a market for hydro generation in excess of local needs.
The Native Village of Cantwell commits to reporting the savings and benefits associated with the
Jack River hydroelectric project.
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.
Upon signing of the RE Program Round 4 reconnaissance study grant agreement with AEA in
2011, the Native Village of Cantwell promptly entered into a contract with Polarconsult Alaska,
Inc. to perform the Jack River hydro reconnaissance study. This included timely mobilization of
a drill rig to Cantwell to install a stream gauging station before freeze up. The station was
installed in November 2011.
The field work for the reconnaissance study has now been completed, and Polarconsult is
currently completing analysis of data and reconnaissance-level evaluation of various project
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options. This study will be completed this fall. The Native Village of Cantwell will be ready to
continue with the feasibility study upon receipt of funds from AEA in the summer of 2013.
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.
Attached to this application are letters of support from David M. Talerico (Denali Borough
Mayor), H. Keith Waters (V.P. Planning and Budget, Usibelli Coal Mine, Inc.), Paul R. Anderson
(Superintendent, Denali National Park and Preserve), Todd Hoener (GVEA Energy Efficiency
Specialist) and Kathryn Martin (Ahtna, Vice President Land and Resources).
The tribe is not aware of any opposition to this project.
SECTION 9 – GRANT BUDGET
Tell us how much you want in grant funds Include any investments to date and funding sources,
how much is being requested in grant funds, and additional investments you will make as an
applicant.
Provide a narrative summary regarding funding sources and your financial commitment to the
project.
The Native Village of Cantwell is requesting the amount of $213,750 to do a feasibility study for
the Jack River Hydro Project. The village has been trying to get a feasibility study done for this
project for several years and the village has been using its own funds to pay the administrator to
accomplish this goal. Village members have and will continue to donate their time and
experience to this project until this project is complete.
Applications should include a separate worksheet for each project phase that was identified in
section 2.3.2 of this application, (Reconnaissance, Feasibility, Conceptual Design, Design and
Permitting, and Construction). Please use the tables provided below to detail your proposed
project’s budget. Be sure to use one table for each phase of your project.
If you have any question regarding how to prepare these tables or if you need assistance preparing the
application please feel free to contact AEA at 907-771-3031 or by emailing the Grant Administrator,
Shawn Calfa, at scalfa@aidea.org.
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Milestone or Task
Anticipated
Completion
Date
RE- Fund
Grant Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
Grant Agreement with AEA
Notice to
Proceed = 0
months
1. Project Management,
Scoping and Contractor
Solicitation
End of 2nd
month $0 $11,250 Native Village
of Cantwell $11,250
2. Detailed Energy Resource
Analysis
Hydrology Study End of 12th
month $35,000 $0 $35,000
Geotechnical Studies End of 12th
month $60,000 $0 $60,000
3. Identify land and Regulatory
Issues
Land / Fish / Wildlife Study End of 13th
month $20,000 $0 $20,000
4. Permitting and
Environmental Analysis
End of 10th
month $10,000 $0 $10,000
5. Market Analysis End of 10th
month $5,000 $0 $5,000
6. Assessment of Alternatives End of 13th
month $4,750 $0 $4,750
7. Conceptual Design Analysis
and Cost Estimate
End of 16th
month $30,000 $0 $30,000
8. Detailed Economic and
Financial Analysis
End of 16th
month $17,000 $0 $17,000
9. Business and Operations
Plans
End of 16th
month $7,000 $0 $7,000
10. Draft Final Report End of 18th
month $20,000 $0 $20,000
11. Final Report End of 20th
month $5,000 $0 $5,000
TOTALS $213,750 $11,250 $225,000
Budget Categories:
Direct Labor & Benefits $0 $6,500 Native Village
of Cantwell $6,500
Travel & Per Diem $0 $2,500 Native Village
of Cantwell $2,500
Equipment $0 $750 Native Village
of Cantwell $750
Materials & Supplies $0 $1,500 Native Village
of Cantwell $1,500
Contractual Services $213,750 $0 $225,000
Construction Services $0 $0 $
Other $0 $0 $
TOTALS $213,750 $11,250 $225,000
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Project Milestones that should be addressed in Budget Proposal
Reconnaissance Feasibility Design and
Permitting Construction
1. Project scoping and
contractor solicitation.
2. Resource
identification and
analysis
3. Land use, permitting,
and environmental
analysis
4. Preliminary design
analysis and cost
5. Cost of energy and
market analysis
6. Simple economic
analysis
7. Final report and
recommendations
1. Project scoping
and contractor
solicitation.
2. Detailed energy
resource analysis
3. Identification of
land and regulatory
issues,
4. Permitting and
environmental
analysis
5. Detailed analysis of
existing and future
energy costs and
markets
6. Assessment of
alternatives
7. Conceptual design
analysis and cost
estimate
8. Detailed economic
and financial
analysis
9, Conceptual
business and
operations plans
10. Final report and
recommendations
1. Project scoping
and contractor
solicitation for
planning and
design
2. Permit
applications (as
needed)
3. Final
environmental
assessment and
mitigation plans
(as needed)
4. Resolution of
land use, right of
way issues
5. Permit approvals
6. Final system
design
7. Engineers cost
estimate
8. Updated
economic and
financial analysis
9. Negotiated
power sales
agreements with
approved rates
10. Final business
and operational
plan
1. Confirmation that all
design and feasibility
requirements are
complete.
2. Completion of bid
documents
3. Contractor/vendor
selection and award
4. Construction Phases
–
Each project will have
unique construction
phases, limitations,
and schedule
constraints which
should be identified
by the grantee
5. Integration and
testing
6. Decommissioning old
systems
7. Final Acceptance,
Commissioning and
Start-up
8. Operations Reporting
ATTACHMENT B
LETTERS OF SUPPORT
ATTACHMENT C
ELECTRONIC VERSION OF ENTIRE APPLICATION
ATTACHMENT D
GOVERNING BODY RESOLUTION