HomeMy WebLinkAboutWaterfall Creek Grant Applicationround520111-1
Renewable Energy Fund Round 5
Grant Application
AEA 12-001 Application Page 1 of 19 7/1/2011
Application Forms and Instructions
The following forms and instructions are provided to assist you in preparing your application for
a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA)
and the forms are available online at: http://www.akenergyauthority.org
Grant Application
Form
GrantApp5.doc Application form in MS Word that includes an outline of
information required to submit a complete application.
Applicants should use the form to assure all information is
provided and attach additional information as required.
Application Cost
Worksheet
Costworksheet
5.doc
Summary of Cost information that should be addressed by
applicants in preparing their application.
Grant Budget
Form
GrantBudget5.
doc
A detailed grant budget that includes a breakdown of costs by
milestone and a summary of funds available and requested to
complete the work for which funds are being requested.
Grant Budget
Form Instructions
GrantBudgetIn
structions5.doc
Instructions for completing the above grant budget form.
Authorized
Signers Form
Authorized
signers
form5.doc
Form indicating who is authorized to sign the grant, finance
reports and progress reports and provides grantee information.
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 completion of each phase.
If some work has already been completed on your project and you are requesting
funding for an advanced phase, submit information sufficient to demonstrate that the
preceding phases are satisfied and funding for an advanced phase is warranted.
If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or
proprietary company data be kept confidential subject to review and approval by the
Authority. If you want information is to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept
confidential. If the Authority determines it is not confidential it will be treated as a
public record in accordance with AS 40.25 or returned to the applicant upon
request.
Renewable Energy Fund
Grant Application Round 5
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
City of King Cove
Type of Entity: A local government Fiscal Year End June
Tax ID # 92-6001247 Tax Status: For-profit or X non-profit ( check one)
Mailing Address
3380 “C” Street, Suite 205
Anchorage, AK 99503
Physical Address
Same as mailing
Telephone
907-274-7563
Fax
907-276-7569
Email
ghennighmgr@gci.net
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Gary L. Hennigh
Mailing Address
Same as above
Phone
Same as above
Fax
Same as above
Email
Same as above
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
X A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes 1.2.2. Attached to this application is formal approval and endorsement for its project by
its board of directors, executive management, or other governing authority. If the
applicant is a collaborative grouping, a formal approval from each participant’s
governing authority is necessary. (Indicate Yes or No in the box )
See attached resolution 12-02
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 W e intend to own and operate any project that may be constructed with grant
funds for the benefit of the general public.
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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)
Waterfall Creek Hydroelectric Project
2.2 Project Location –
Include the physical location of your project and name(s) of the community or communities that will
benefit from your project.
Location – latitude and longitude or street address or community / communities served:
Delta Creek Valley – King Cove, Alaska
The Project will be located on a small creek located approximately 5 miles north of
the City of King Cove. This creek is adjacent to and west of an existing hydroelectric
project on Delta Creek that was constructed in 1995. The creek has a noticeable
waterfall that is visible from the Delta Creek hydroelectric powerhouse.
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)
Reconnaissance X Design and Permitting
Feasibility X Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
This project will be a modest, run-of-the-river hydroelectric facility using Waterfall
Creek and consisting of a concrete diversion/intake structure, 4,500’ HDPE penstock
pipeline, 16’x40’ metal powerhouse on concrete slab, Pelton Impulse Turbine and
induction generator, remote-automatic control system, and 5,000’ access road. This
facility will be a working partner to the city’s existing and highly successful Delta
Creek hydroelectric project, which has been operating for the last fifteen years.
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2.5 PROJECT BENEFIT
Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel
costs, lower energy costs, etc.)
The public benefits and financial savings that accrue upon completion of this
project are both immediately significant and profound in their ramifications over
the life of the Waterfall Creek project:
Waterfall Creek is projected to displace approximately 64,000 gallons of diesel fuel
that would otherwise have to be purchased and consumed annually. This
represents 900,000 kwH of electrical power, year after year from a clean renewable
resource, and in peak season, will be more than enough to meet city system
demand.
Estimated annual savings: 64,000 gal/diesel @ $4.27 (current price) = $275,000;
Peter Pan Seafoods is interested in purchasing a minimum of 500,000 khW of
“surplus power” at a cost of between $0.12 to $0.15/kWH. Potential for additional
annual revenue: $60,000 to $75,000.
Total savings + new revenue: $335,000 to $350,000;
Upon execution of a purchase agreement, power from Waterfall Creek is projected
to displace 47,000 gallons of diesel fuel that Peter Pan Seafoods would otherwise
have had to purchase and consume annually. See discussion under Public health
benefits below for more information. See also attached Memorandum of
Agreement (MOA) between Peter Pan Seafood and the City of King Cove.
Anticipated annual debt for this project is estimated at $100,000 (assumes total
maximum city debt of $1.2 million). Total new revenue, minus new debt, equals
excess revenue annually into electric enterprise account = $225,000;
Savings from diesel equipment maintenance and equipment depreciation costs:
Estimated at $20,000 annually;
The additional revenue will conservatively ensure the city stays at its current
$0.30/kwH rate, and position the community well to be able to offset future PCE
program reductions;
Public health benefits – the estimated, annual 110,000 gallons of diesel fuel which
could be replaced by renewable energy from the Waterfall Creek translates into
860 metric tons of avoided carbon dioxide emissions – roughly the equivalent of
400 cars driving 10miles/day every day for a year;
Cleaner air will benefit all the residents of King Cove, permanent and temporary.
This includes the millions of migratory birds that call King Cove home in spring,
summer and fall.
Public peace of mind. The community will, for the first time, derive as much as
70% of its electrical power from renewable sources in its own backyard. King
Cove will be saved from being at the mercy of extreme swings in the price of
diesel fuel and be able to provide residents with some security against the
extremes of KC’s weather, which have been known to delay fuel deliveries.
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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.
Total project costs are estimated at $3.8 million: $400,000 for the final design and
permitting, and $3.4 million for construction. KC requests $1.9 million (50% of
project total costs) from AEA’s Renewable Energy Fund (Round 5.) King Cove is
prepared to provide matching funds for the remaining $1.9 million balance as follows:
“Best case” scenario: $200,000 from cash/capital project fund derived in full from
local tax base; $1.0-$1.2 million in long –term debt; Aleutian’s East Borough grant of
$200,000; and KC will apply for additional grants from one or more of the following:
US Dept. of Agriculture/Rural Development, US Department of Energy or EDA to total
$500,000; and,
“Worst case” scenario: $300,000 in cash/capital project fund derived in full from local
tax base; 1.4 million in long –term debt; Aleutians East Borough grant - $200,000.
The city brings to this project invaluable in-kind contributions. They are experience,
a proven track record and infrastructure. The successful Delta Creek project, with 15-
years of successful plant construction and operation, is a blueprint for how small,
extremely rural communities can succeed with a small hydro project. KC has
demonstrated that it supervises complex construction well, exercises budget
discipline, and brings projects on-line on time. Lessons have been learned about
what constitutes adequate operations and management resources. The idea with this
project, as it was with Delta Creek, is to build infrastructure that lasts and then take
good care of it.
As City leaders planned for Waterfall Creek (initial feasibility study was
commissioned in 2006), it was with these values in mind: keep costs as low as
possible, respect the water resource and utilize as much Delta Creek infra-structure
as possible. The geographic proximity of these three tributaries feeding into Delta
Creek is fortuitous. The result is that with the addition of a new turbine and generator
and a small expansion of the exiting powerhouse, the addition and construction of
this new facility will be very cost effective. Similarly, the already-installed
transmission lines provide an immediately viable delivery system. Estimated value of
this infrastructure already in place is $1 million.
2.7 COST AND BENEFIT SUMARY
Include a summary of grant request and your project’s total costs and benefits below.
Grant Costs
(Summary of funds requested)
2.7.1 Grant Funds Requested in this application. $1.9 million
2.7.2 Other Funds to be provided (Project match) $1.9 million
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $3.8 million
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Project Costs & Benefits
(Summary of total project costs including work to date and future cost estimates to get to a fully
operational project)
2.7.4 Total Project Cost (Summary from Cost Worksheet
including estimates through construction)
$3.8 million
2.7.5 Estimated Direct Financial Benefit (Savings) $ 325,000 annually
2.7.6 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.)
$20,000 annually
(approx savings from
diesel maintenance &
reduced depreciation
costs)
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.
Project Manager will be Gary Hennigh. Mr. Hennigh has been King Cove’s City
Manager for the last 21 years. He is responsible for the overall delivery and
management of public services including: all general government programs; port &
harbors; police and fire services; water, sewer, solid waste, and electrical utilities;
and recreational programs. He directly supervises the city’s annual operating budget
of $5 million and its five department heads. Gary also directs the City’s lobbying
efforts in Juneau and Washington, DC.
Gary also oversees and administers the city’s major capital construction projects,
grant/loan agreements and professional services contracts. Throughout his tenure
and with his guidance and advocacy, the city has successfully acquired over $60
million in federal and state grants for hydroelectric, water, and transportation
projects. This includes the Delta Creek Hydroelectric project, which in 1995 was
awarded an “Excellence in Engineering Design” from the American Consulting
Engineering Council.
Gary has a B.A. degree in geography from Mansfield University of Pennsylvania and a
Master’s degree in regional planning from Pennsylvania State University.
Project Engineer will be Dan Rowley. Dan Rowley is an Alaska registered civil
engineer on the Aleutians East Borough staff. Besides providing engineering
supervision and support for AEB projects, he frequently supports local governments
within the Borough, to include King Cove. He was the City’s engineer for upgrades to
include paving on the five- mile road to King Cove’s airport; this was a joint venture
between the BIA and the Agdaagux Tribe of King Cove. Similarly, he was the City’s
engineer for a multi-year project to upgrade and pave several miles of the
community’s streets. That effort began with topographic surveys, property appraisals
and acquisitions to establish rights-of- way. Initially the city street project was a
continuation of the BIA and Agdaagux Tribe joint venture. Eventually, other funding
was utilized to hire CRW Engineers for design and construction administration
support. Dan Rowley administered the consultant selection process and served as
the City’s project representative, providing valuable oversight and direction. On
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behalf of AEB, Mr. Rowley has managed the design and construction of the King
Cove Access Project. Begun in 1999, this is a phased multi-million dollar project to
construct a new road from the City of King Cove Airport to the hovercraft terminal site
in Cold Bay. Prior to joining the AEB staff in 1999, Dan Rowley was employed by
CH2M Hill for 30 years including 12 years as its manager for Alaska.
3.2 Project Schedule
Include a schedule for the proposed work that will be funded by this grant. (You may include a
chart or table attachment with a summary of dates below.)
Final Design & Permitting
Project Milestones # 3 - Final Environmental Assessment September 2012
#5 – Permit Approvals November 2012
#6 – Final Design January 2013
#7-10 – cost, plans, & sales agreement February 2013
Construction
Project Milestones # 1-2 confirmation/completion bid docs February 2013
#3 – contract award April 2013
#4 – construction completed August 2013
#5, 6, 7, & 8 – testing, acceptance & reporting October 2013
Note: these project milestones numbers are taken from the Grant Budget Form in the
application package. Where a number, like tasks #1 and #2, for Final Design and
Permitting is not shown above indicates this task has been already been completed prior
to this application.
3.4 Project Resources
Describe the personnel, contractors, equipment, and services you will use to accomplish the
project. Include any partnerships or commitments with other entities you have or anticipate will
be needed to complete your project. Describe any existing contracts and the selection process
you may use for major equipment purchases or contracts. Include brief resumes and references
for known, key personnel, contractors, and suppliers as an attachment to your application.
The City of King Cove has an existing term contract with HDR Alaska, which will be
amended to include provision for the final design and permitting for this project, as
well as assistance with the construction bid and award process. Primary HDR staff
who will be involved with Waterfall Creek are well known to AEA, and they include
Duane Hippe, Paul Berkshire, Bob Butera, and James Brady.
See attached 2007 Concept Design Report for Waterfall Creek prepared by HDR
through Alaska Energy and Engineering for the Alaska Energy Authority
The city filed a Preliminary Water Rights permit application with the Dept. of Natural
Resources in 2010. Subsequent project design parameters prepared in 2009 for the
project, along with Waterfall Creek flow monitoring and fish sampling work in 2008
through 2010, were funded jointly by AEA and the City.
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The work recently completed by AEA as part of its 2006-2010 power projects in King
Cove included a major upgrade and integration of the control systems for the Delta
Creek Hydroelectric facility and the new diesel system control.
Canyon Industries (turbine & generator package) and Arctic Insulation & Mfg (HDPE)
are both well known vendors to the city and to HDR. Each has provided services and
product to King Cove for more than two decades.
The City will strictly follow procurement policies for all services and materials
necessary for this project.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
The City will require monthly, written progress reports from the city project engineer
and/or HDR project manager. These will be submitted to AEA for information and
review. As identified milestones are achieved, these will be communicated to AEA.
Written and verbal inquiries from AEA regarding project will be responded to in a
timely fashion. Any presentations or updates provided to KC’s city council will also
be shared with AEA, to include invitations for AEA to attend meeting and/or observe
the project firsthand.
3.6 Project Risk
Discuss potential problems and how you would address them.
There is always risk involved in any construction project, and particularly so in rural,
remote Alaska. King Cove’s previous experience with Delta Creek and our other
major construction projects have taught us a lot. By having HDR as our partner in the
final permitting and design phase, our combined track record is considerable. We
have a combined hands-on experience and ability to work as a team that will serve us
well on Waterfall Creek.
SECTION 4 – PROJECT DESCRIPTION AND TASKS
Tell us what the project is and how you will meet the requirements outlined in Section 2 of
the RFA.
The level of information will vary according to phase(s) of the project you propose to
undertake with grant funds.
If you are applying for grant funding for more than one phase of a project provide a
plan and grant budget form for completion of each phase.
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
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available for the market to be served by your project.
See the attached “ King Cove – Waterfall Creek Hydroelectric Project Concept Design
Report (CDR)” prepared by HDR in September 2007 for the Alaska Energy Authority
(AEA) via a contract with Alaska Energy and Engineering (AEE).
An addendum to the CDR precedes the report presenting revised Waterfall Creek
environmental flow data, revised annual and monthly energy forecasts, updated
project cost information, a table with our 2013 power demand profile and expected
sources of power generation, and a graph showing the integration of PPSF purchasing
surplus power at a 500,000 kWh level.
Subsequent to the 2007 CDR, both AEA and the city have funded other preliminary
work in order to further develop and produce this information.
Pros – We know about hydroelectric power in King Cove. We have a track record that
is demonstrated in both word and deed. See Section 2.5 Project Benefit and Section,
3.1 Project Manager, and Section 3.4 Project Resources. The City’s prior investment
in existing Delta Creek system and our willingness to provide similar matching funds
for this project, are indicators of ability and follow through. As previously mentioned,
the shared electrical transmission line (original cost = $500,000) from the site five
miles to “downtown” King Cove is a plus. The expansion of the existing Delta Creek
power house to accommodate the Waterfall Creek turbine and generator is a much
less expensive proposition than needing a new powerhouse. This will provide an
excellent location for integrating both hydroelectric control systems for better
operator monitoring, troubleshooting, security, and total system efficiency.
Cons – None. Given our 15-years of successful hydro experience this project is one
we approach with confidence. .
The only other viable energy source in the region is diesel fuel. In addition, there are
NO other, yet-proven energy alternatives available for our market. Nonetheless, the
city is pursuing, at its own expense, another year of wind measurements in the Ram
Creek Valley. This valley is one west of the Delta Creek Valley, where a year’s worth of
wind data was collected in 2005/2006. The results were that we have class 6 winds,
but with a very high turbidity factor. Ram Creek Valley, however, is more protected
than the Delta Creek Valley, with the added advantage of being immediately adjacent
our new diesel power house and SCADA system. The city continues to be open to
exploring any feasible alternative that expands our energy production portfolio. We
are watching closely how the Kodiak Electric Association does with its combo hydro-
diesel-wind system
Like much of rural Alaska, our “energy market” is a single-site, off-the-grid market.
However, as referenced in Section 2.5, the potential for sale of surplus power from the
Waterfall Creek project to Peter Pan Seafoods (PPSF) is excellent. See signed
Memorandum of Agreement with PPSF, in which they indicate their support for the
project and their willingness to consider a power purchase contract.
Depending on the amount of surplus energy available from Waterfall Creek, PPSF is
willing to consider purchasing anywhere from 500,000 kWh to 1.0 MW. This range is
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consistent with the demand estimates identified in the “King Cove Energy Projects –
Concept Design Report” finalized in October 2005 by Alaska Energy and Engineering
for AEA.
4.2 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.
AEA is familiar with King Cove’s diesel energy system, as this agency recently
assisted us in completing a $3 million upgrade/replacement of our old diesel system.
Three new CAT diesels (1- model 3512; with a maximum kWh output of 1050 and 2 -
model 3456; each with a maximum kWh output of 475) manufactured in 2006/2007) and
city supplied CAT 3512 (about 12 years old, low hours, and a top/bottom rebuild in
2004; maximum output of 650 kWh).
Efficiency of these generators ranges between 13.5 to 14.0 gallon/kWh. These provide
our current diesel production, with a generating capacity of 2.4 MW (megawatts). They
are in addition to the 800 KwH that our current Delta Creek hydro can produce under
optimum summer conditions, usually from May through October. In winter months,
Delta Creek hydro produces around 150-200 kWh daily, rising in the spring/fall months
to between 300-400 kWh.
4.2.2 Existing Energy Resources Used
Briefly discuss your understanding of the existing energy resources. Include a brief discussion of
any impact the project may have on existing energy infrastructure and resources.
The city’s existing diesel plant and Delta Creek hydroelectric facility have adequate
capacity to meet the city’s power generation demands for many years. However, the
costs and environmental impacts to the community and local industry can be
significantly reduced with the addition of Waterfall Creek to our power generation
system. These include the replacement of 60,000 - 65,000 gallons of annual diesel fuel
that would otherwise be required by the city’s diesel system; the opportunity to sell
Peter Pan Seafoods, Inc. a minimum of 500,000 kWh and in the process replace
another 35,000 - 47,000 gallons of annual diesel fuel used in their plant.
We have demonstrated a desire and an ability to look long term to the financial and
environmental consequences for our city of having renewable energy. We have seen
the benefits in Delta Creek and we are anxious to keep going, to keep succeeding, to
use the power of water to achieve a new level of energy independence; in so doing we
hope that other communities will watch King Cove and know that they can dream big
too.
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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.
Existing energy market consists of approximately 130 residential households, two
major boat harbors, a new 40,000 s.f. school, an old school of comparable size that
has been transformed into the community’s multi-purpose center. There are also
numerous public facilities and a major municipal water system requiring constant well
field pumping, with two large and four smaller commercial establishments.
Peter Pan Seafoods, one of the largest year-round seafood processors in Alaska, has
their own diesel system. Their peak demand is at least 3 times the city’s peak
demand. Their growth is now being constrained by their inability to expand their
power generation capacity and this is why they are very receptive to purchasing any
amount of energy the city may be able to sell them.
Again, the only “impact” that Waterfall Creek is going to have on either the existing
city system or PPSF system is cheaper cost per kWh, energy efficiencies, and the gift
of cleaner air for everyone.
Also, for every $100,000 to $150,000 in energy savings (i.e. replacing diesel costs in
the current system and paying debt service on Waterfall Creek), and combined with
revenue from power sales to PPSF from Waterfall Creek, the city anticipates it can
lower current kWh rates by $0.02 for all city utility customer classes.
See also answer to Section 4.1 for discussion of King Cove’s energy market. See
answer to Section 2.5 regarding affects on consumers.
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
See attached HDR “Concept and Design” report from September 2007 and related
addendum.
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.
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The entire project is located on lands owned by the King Cove Native Corporation.
See attached letter of support from King Cove Native Corporation re use of the land
for this project.
The city will be acquiring title to the land where this facility will be built as part of its
ongoing 14C3 ANCSA selections with the King Cove Corporation. This is the same
land ownership transfer process used by the city for the earlier Delta Creek hydro
process.
The in-kind value of this land (i.e. 18 acres @ $5,000/acre = $90,000) has not been
included in the projects or funding components of this application. However, the city
wishes to bring this to AEA’s attention as another strong indicator of the full
community support that exists for this project . See attached letter of support from
King Cove Corporation for this project.
4.3.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
outstanding permit issues.
List of applicable permits
Anticipated permitting timeline
Identify and discussion of potential barriers
It is possible that the following acts, laws, and orders may require the following permits
and clearances in order to construct the Waterfall creek Hydro Project:
Nat’l Environmental Policy Act – Denali Commission and US Department of
Agriculture, Rural Utilities Service: Environmental documentation (Categorical
Exclusion, Environmental Assessment, or Environmental Impact Statement)
required for all federally funded projects.
Clean Water Act – Us Army Corps of Engineers, Alaska District, Regulatory
Branch: Department of Army, Section 404/10 Wetland/Waters of the US Fill Permit;
Alaska Dept of Environmental Conservation: Certificate of Reasonable Assurance
(Section 401 Water Quality Certification.) This is required for any permits issued by
USACE; Environmental Protection Agency: National Pollutant Discharge
Elimination System (NPDES) general permit for construction activities, pursuant to
Section 402 of the Federal Water Pollution Control Act.
National Historic Preservation Act – State Historic Preservation Officer: Section
106 Consultation.
Magnuson-Stevens Fishery Conservation and Management Act – National Oceanic
and Atmospheric Administration (NOAA) Fisheries: Consultation on Essential Fish
Habitat.
Migratory Bird Treaty Act – US Fish & Wildlife Service : Consultation on migratory
birds
Bald and Golden Eagle Protection Act – USFWS: consultation on nesting bald
eagles.
AS 41.14.840: Fishway Act: AS 41.14.870: Anadromous Fish Act – Alaska Dept of
Fish & Game, Habitat: Title 41 Fish Habitat Permit
Alaska Water Use Act (As 46.15) – ADNR Division of Mining Land and Water:
Application for Water Rights for Hydroelectric Power Generation.
Anticipated Permitting timeline – as noted in 3.2/3.3. Please note that the city has already
submitted initial project permit applications for the required Habitat Permit and Water
Rights Permit.
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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
Neither the city nor HDR expects any of the above “issues” to present a problem in the
final permitting for this facility.
As noted in the previous section, our initial permit submittals for the required Habitat
Permit and Water Rights Permit have already resulted in an agreement by the city to lower
the Waterfall Creek flow of 12 cfs by .50 cfs. We are in on-going discussions with these
two State agencies regarding flow and fish habitat concerns, but do not anticipate any
significant concerns or permit stipulations.
AEA was involved in many of these discussions back in 2009/2010 when HDR was still
under contract to them for the previously mentioned preliminary design and permitting
work, which was completed.
Our confidence in this expectation is further reinforced by knowing that none of these
issues were problematic or required mitigation for our Delta Creek hydro facility, which is
adjacent the proposed facility.
4.4 Proposed New System Costs and Projected Revenues
(Total Estimated Costs and Projected Revenues)
The level of cost information provided will vary according to the phase of funding requested and
any previous work the applicant may have done on the project. Applicants must reference the
source of their cost data. For example: Applicants Records or Analysis, Industry Standards,
Consultant or Manufacturer’s estimates.
4.4.1 Project Development Cost
Provide detailed project cost information based on your current knowledge and understanding of
the project. Cost information should include the following:
Total anticipated project cost, and cost for this phase
Requested grant funding
Applicant matching funds – loans, capital contributions, in-kind
Identification of other funding sources
Projected capital cost of proposed renewable energy system
Projected development cost of proposed renewable energy system
As previously noted in Section 2.6 and 2.7, the enclosed city council resolution, and the
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addendum to the CDR in Section 10, the total project cost is $3.8 million. This is the
amount for this final phase of the project, which has been further split and documented
as $400,000 for the final design and permitting and $3.4 million for construction.
This grant funding request is for fifty percent (50%) of this $3.8 project cost.
The city will match this request with a combination of cash (city’s capital project budget
fund which is exclusively funded by local sales/fish taxes), long-term debt, a grant from
the Aleutians East Borough, and the expectation that an additional grant(s) from either
USDA/RD or USDOE between $200,000 and $500,000.
As noted in Section 2.6, our “best case” scenario” is $200,000 cash/city capital project
fund; $200,000 grant from the Aleutians East Borough; 1.0 million debt; and $500,000
grant(s) from either/or USDA/RD or USDOE.
Our “worst case scenario” is City cash/capital project funding of $300,000, $1.4 million
debt, and the $200,000 AEB grant. Annual debt costs on $1.4 million would be around
$100,000. The project would still be financially viable and offer a positive benefit/cost
ratio.
Also, as noted in Section 4.3.2, there will be an in-kind value of land from the King Cove
Corporation of around $90,000.
4.4.2 Project Operating and Maintenance Costs
Include anticipated O&M costs for new facilities constructed and how these would be funded by
the applicant.
(Note: Operational costs are not eligible for grant funds however grantees are required to meet
ongoing reporting requirements for the purpose of reporting impacts of projects on the
communities they serve.)
Annual operating costs, including anticipated debt, for the Waterfall Creek portion of the
city’s power generation system is estimated to be between $120,000 and $140,000.
These annual O&M costs, like all other costs to operate and maintain our diesel power
plant and Delta Creek hydro facility are paid for through the cost of customer user fees
(i.e. cost of a kWh).
The city operates its electrical utility as an enterprise fund in a manner to achieve and
maintain financial solvency, including a repair and replacement item with the fund.
4.4.3 Power Purchase/Sale
The power purchase/sale information should include the following:
Identification of potential power buyer(s)/customer(s)
Potential power purchase/sales price - at a minimum indicate a price range
Proposed rate of return from grant-funded project
The enclosed Memorandum of Agreement between the City and Peter Pan Seafoods
identifies our only potential buyer.
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The potential power purchase/sales price is estimated to be between $0.12 to $0.15/kWh.
The proposed rate of return from Waterfall Creek is estimated to be a 3.3 B/C ratio.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Download the form, complete it, and submit it as an attachment. Document any conditions or
sources your numbers are based on here.
The worksheet is complete and attached to the application. As noted throughout this
application, the 2007 Waterfall Creek CDR, the 2005 CDR for King Cove Energy Projects,
and miscellaneous city power generation and cost data are the basis for the Waterfall
Creek cost estimates.
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 (gal and $) over the lifetime of the evaluated
renewable energy project
Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or cost based rate)
Potential additional annual incentives (i.e. tax credits)
Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
Discuss the non-economic public benefits to Alaskans over the lifetime of the project
Potential annual fuel displacement over the life of the project (assume 40 years) is
estimated to be $11.1 million.
Potential, anticipated revenue from power sales over the life of the project is estimated to
be $3.0 million.
Potential annual incentives (tax credits) or revenue streams (like green tag sales, etc.) are
unknown to us at this time.
Non- economic public benefits to Alaska have been previously summarized in Section 2.4
(page 3). The health benefits of 860 metric tons of LESS annual, carbon emissions in
King Cove and the western end of the Alaska Peninsula and the eastern Aleutian Islands
means better air quality for the residents and less respiratory illnesses and a cleaner
environment for everyone (including the area’s extensive waterfowl and mammals)!
SECTION 6– SUSTAINABILITY
Discuss your plan for operating the completed project so that it will be sustainable.
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Include at a minimum:
Proposed business structure(s) and concepts that may be considered.
How you propose to finance the maintenance and operations for the life of the project
Identification of operational issues that could arise.
A description of operational costs including on-going support for any back-up or existing
systems that may be require to continue operation
Commitment to reporting the savings and benefits
Again, as noted in an earlier section (2.6) the sustainability and operability of this
project is no different than our existing Delta Creek hydro facility. The city has the
experience and a proven track record to construct, operate, maintain, and operate
hydroelectric facilities.
Our successful Delta Creek project, with 15- years of successful operation, is a
blueprint for how small, extremely rural communities can succeed with a small hydro
project. KC has demonstrated that it supervises complex construction well, exercises
budget discipline, and brings projects on-line on time. Lessons have been learned
about what constitutes adequate operations and management resources. The idea
with this project, as it was with Delta Creek, is to build infrastructure that lasts and
then take good care of it.
Operations & Maintenance: One of the contractor requirements for the Waterfall Creek
hydro facility will be to develop a comprehensive O & M manual for all aspects of this new
facility. The same requirement for the Delta Creek facility was successfully accomplished
by HDR Engineering, Inc. and their subcontractors. The existing O & M document is a
constant source of information for plant employees and routinely serves as a technical
guide.
The operational costs and overall financial viability of this project will be integrated into
the city’s overall power distribution system. The financial operations of this system are
part of the city’s electrical enterprise fund, which by definition is to achieve and maintain
financial solvency by regulating and maintaining electric user rates to generate the
necessary annual revenue to meet annual operating expenses, as well as, adequate
funding for a repair and replacement fund for any major, unanticipated needs.
The commitment to reporting “savings” will always be ongoing as a part of the city
reviewing and amending, as circumstances allow, the electric user rates in King Cove.
Any such savings will also be reported in the monthly and annual PCE utility cost reports.
The city will always continue to tout the benefits of renewable energy. We do this in
periodic reports to our users, as well as, to the government agencies who have helped us
achieve these benefits. We have never been shy about publishing news releases to share
with others around the state and elsewhere!
SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS
Discuss what you have done to prepare for this award and how quickly you intend to proceed
with work once your grant is approved.
Tell us what you may have already accomplished on the project to date and identify other grants
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that may have been previously awarded for this project and the degree you have been able to
meet the requirements of previous grants.
As expressed throughout this grant application, the city has been moving forward with
this project for the last 3+ years. The city has spent over $125,000 in the last two years,
along with AEA spending similar/more funding, to conduct flow monitoring and fish
sampling in Waterfall Creek and in submitting the initial permit application to the state for
water rights and fish habitat permits. Additional project design standards and
specifications have also been prepared subsequent the 2007 CDR.
Our timeframe to move forward with our expectation to have Waterfall Creek on line by
October 2013 may seem ambitious. However, it has been well thought out and
coordinated with HDR.
With the city’s experience, both operationally and financially, with our Delta Creek hydro
facility we know that time is of the essence. Significant financial savings will begin
accruing immediately with this facility on-line.
No previous grants have been directly awarded to the city for this project.
The city has an exemplary record of achievements with over $25 million in various state
and federal grants for a variety of community projects over the last 10-15 years. A review
of the city’s annual audits can further substantiate these statements.
SECTION 8– LOCAL SUPORT
Discuss what local support or possible opposition there may be regarding your project. Include
letters of support from the community that would benefit from this project.
The entire community of King Cove is in favor of the city pursuing funding for a second
hydro-electric project. This support is reflected by the attached letters from the King
Cove Corporation, as well as the Agdaagux and Belkofski tribes. In addition, the
Memorandum of Understanding between the city and Peter Pan Seafoods, the
community’s largest employer, speaks to their favorable interest in the project as well.
SECTION 9 – GRANT BUDGET
Tell us how much you want in grant funds Include any investments to date and funding sources,
how much is being requested in grant funds, and additional investments you will make as an
applicant.
Include an estimate of budget costs by milestones using the form – GrantBudget5.doc
The budget costs by milestones forms are enclosed with this application.
Sections 2.6 and 4.4.1, along with enclosed city resolution 12-02 have described and
documented the project’s overall budget, anticipated sources of funding, and the city’s
specific request of $1.9 million from the AEA Renewable Energy Fund.
The city expects to spend another $100,000 to $150,000 over the next 8-10 months
finalizing the environmental flow rates and acquiring the final water rights and fish
habitat permits for the project. The city is fully aware that this expenditure is NOT part of
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any of the match funding for this grant application.
Instead, it is one of the main reasons that the city is optimistic of completing the final
design, permitting, and construction per the schedules documented in this application.
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SECTION 10 – 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. Cost Worksheet per application form Section 4.4.4.
C. Grant Budget Form per application form Section 9.
D. Letters demonstrating local support per application form Section 8.
E. An electronic version of the entire application on CD per RFA Section 1.7.
F. Authorized Signers Form.
G. 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.
H. 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.
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