HomeMy WebLinkAboutThayer Lake Grant Application CompleteFileKootznoowoo, Incorporated
TLHD Grant Application
Table of Contents
Round (5)
1. March 2000 HDR Executive Summary
2. Kootznoowoo Resolutions
• 08-01 Kootznoowoo, Inc Supporting Angoon Energy Policy
• 09-02 Authorizing Kootznoowoo Inc to Seek Government Funding and
Legislation with the US Government, State of Alaska for the Purpose of
Designing, Permitting and Construction of Kootznoowoo's Thayer Lake
Hydroelectric Development
• 09-05 Authorizing Application to the State of Alaska Energy Authority
(AEA) Renewable Energy Grant Funds for Powerline and Generation
Facilities in Angoon, Alaska
• 10-01 Authorization Application to the State of Alaska Energy Authority
(AEA) Renewable Energy Grant Funds for Powerline and Generation
Facilities in Angoon, Alaska
• 11-04 Authorizing Application to the State of Alaska Energy Authority
(AEA) Renewable Energy Grant Funds for Powerline and Generation
Facilities in Angoon, Alaska
3. Outside Entity Resolutions of Support
• 09-05 City of Angoon Authorizing and Directing the Filing of Municipal
Preference Federal Energy Regulatory Commission Preliminary Permits
to Develop Hydropower Projects with Kootznoowoo, Incorporated
• 09-06 ACA Support of Kootznoowoo, Incorporated to Seek Funding
• 02-09 Juneau Chamber of Commerce Supporting the City of Angoon's
Energy Initiative and the USFS Record of Decision approving Thayer
Lake Hydroelectric Project
• Serial No. 2475 City & Borough of Juneau Expressing Assembly Support
for the City of Angoon's Energy Initiative and the Thayer Lake Hydro
Project
• 28-09Grand Camp/ANB Camp Support for Angoon's Renewable Energy
Developments
• Alaska Miners Association Resolution Supporting the City of Angoon
Initiative and the USFS Record of Decision Approving the Thayer Creek
Hydroelectric Project
• TA 09-46 CCTHITA Support of Renewable Energy and Alternative Fuels
for our Communities (ref Thayer Creek page 2)
0 SE Alaska Native Economic Futures Coalition — Letter of Support
4. Resumes
• Peter Naoroz, General Manager/Kootznoowoo, Incorporated
• Albert Howard, Mayor of the City of Angoon
• Roger Bason, Natural Currents Energy Group
5. IPEC August 19, 2011 0- Letter re: Rate Increase
6. Allocation for Cost Benefit Purposes
7. Round 5 Project Cost/Benefit Worksheet
8. Round 5 Kootznoowoo's Discussion on Future Power Needs from TLHD
9. Round 5 Grant Budget
10. Round 5 Grant Application — Transmission
11. Round 5 Grant Budget — Transmission
12. Round 5 Grant Application — Generation
13. Round 5 Grant Budget — Generation
PROTECT
FEASIBILITY EVALUATION REPORT:
EXECUTIVE SUMMARY
FOR
K00TZN00W00
I N CC) RPO RAI L D
BY
MAI�-C H-� 1000
r
ANGOON HYDROELECTRIC PROJECT
]FEASIBILITY EVALUATION REPORT
EXECUTIVE SUMMARY
A. INTRODUCTION
- Kootznoowoo Incorporated (Kootznoowoo) is the village corporation for the city of Angoon,
which is located on the west side of Admiralty Island approximately 60 miles southwest of
Juneau, Alaska. Kootznoowoo is considering the development of the Angoon. Hydroelectric
Project (Project) as a means to lower the cost of power generation in Angoon, directly benefiting
i the residents with lower electric bills and indirectly stimulating the local economy. The Alaska
National Interest Lands Conservation Act of 1980 (ANILCA) specifically provides to
Kootznoowoo the right to develop the Project subject to conditioning authority by the U.S.
u Forest Service.
11
L
B. ANGOON LOADS AND RESOURCES
Electricity is currently supplied to residents and businesses in Angoon by the Tlingit-Haida
Regional Electric Authority (T-HREA) at rates that are some of the highest in Alaska (about 32.5
0/kWh). The average load in Angoon is currently about 230 kW, and the peak load is about 425
kW. To meet the existing loads, T-HREA has a single power plant in Angoon with two diesel
generators with an aggregate generating capacity of 1,115 kW.
Potential new electric loads are possible in Angoon due to the recent distribution of over 600
homesites to Kootznoowoo shareholders and the proposed siting of a Alaska Marine Highway
System near Angoon by the Alaska Department of Transportation and Public Facilities. Practical
alternatives for supplying the existing and new loads are: 1) continuation of diesel generation,
and 2) development of the Project if sufficient funding assistance can be obtained (as is relatively
common for small hydro developments in Alaska).
C. PROJECT SETTING
The Project would be located on Thayer Creek approximately 6 miles north of Angoon, as shown
in Figure ES-1. Thayer Creek flows out of Thayer Lake for about 6 miles at a gentle grade
through a broad forested valley, then steepens for 6,800 feet through a narrow forested canyon,
and finally flattens again for 2,000 feet before flowing into Chatham Straight. The Project will
develop the energy potential in the steep section of the stream. The lower section supports
anadromous runs of pink, chum, and coho salmon, and the upper section supports cutthroat trout.
It is unknown if the steep section of stream supports any resident fish.
The average flow in Thayer Creek is about 370 cfs, and can vary from 25 cfs during cold periods
in the winter to over 2000 cfs during storms in the fall and winter.
The Project area is in the Kootznoowoo Wilderness on Admiralty Island, an area with no roads
and few trails. The lack of access will have a significant influence on the ability to develop the
Project economically, both from the direct cost of providing access during construction and
operation and from possible opposition to the Project's development.
HER Alaska, Inc. ES-1 March 2000
l Angoon Hydroelectric Project Feasibility Evaluation Report
Kootznoowoo, Incorporated Executive Summary
D. ALTERNATIVE ARRANGEMENTS
The initial phase of the work documented by this report was to evaluate several alternative
arrangements for the Project so that a preferred alternative could be selected. Three primary
alternative arrangements were evaluated, as follows:
m1
o Alternative 1 - - Pipeline and Penstock
a Alternative 2 - - Directional -Drilled Tunnel
Alternative 3 - - Conventional Tunnel
A comparison of some of the primary costs and benefits of these three alternatives is shown in
Table ES-1_
Additional alternatives looked at the cost and benefits of decreasing the installed capacity to 500
r kW, using overhead or buried transmission instead of submarine, and adding a water supply
PIP along the submarine transmission line. At a review meeting on April 26, 1999,
Kootznoowoo selected Alternative 1 - - Pipeline and Penstock as the preferred alternative. In the
second phase of work, this preferred alternative was refined to develop the selected arrangement,
1 as described below.
E. SELECTED ARRANGEMENT
1. Project Features
Figure ES-2 provides a general plan of the selected arrangement for the Project. The major
features are as follows:
Port :facilities will include a temporary barge landing, mooring buoys, and a garage for housing
operation and maintenance vehicles. The port facilities will be located approximately 1.8 miles
south of the outlet of Thayer Creek where an existing peninsula provides secure anchorage and
protection from storms.
a._ There will be three access roads for the selected arrangement. The first will lead from the port
facilities to the power plant, and will be approximately 1.9 miles long. The second access road
will lead from the powerhouse access road near the powerhouse to the diversion dam/intake
3 structure, and will be approximately 7,200 feet long. A 1,000-feet long spur from this road will
provide access to the top of the surge tank during construction. The third access road will be
from the port facilities to Kootznoowoo Inlet, and will be a minimum -construction road
primarily for installation of the transmission line; it will also provide emergency access to the
Angoon facilities by all -terrain vehicles.
The diversion dam will be located approximately 8500 feet above tidewater at the head of a
very steep section of rapids about 250 feet above sea level. The dam will be primarily a concrete
,s
wall approximately 10 feet high, with grouted rockfill on each side for stability.
The intake structure will be located on the north abutment of the diversion dam, and will be
primarily a concrete structure housing a trashrack, transition section, shutoff valve, sluiceway,
and control facilities. Modified shipping containers will be incorporated in the construction of
J the intake structure, and will initially function as diversion flumes to bypass water around the
.9
damsite during construction.
HDR Alaska, Inc. ES-2 March 2000
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Angoon Hydroelectric Project Feasibility Evaluation Report
Kootanoowoo, Incorporated Executive Summary
The pipeline will be a 42-inch diameter HDPE pipeline about 6,100 feet long from the intake
structure to just above the powerhouse. The pipeline will be laid on grade through the forest for
its entire length, with minimal clearing. It will be at a gentle grade to minimize the pipe
thickness requirement.
-: The penstock will be aboveground 36-inch diameter steel pipe about 510 feet long. It will
convey water from the downstream end of the pipeline down the hillside to the powerhouse. Just
upstream of the powerhouse, the penstock will branch into two 24-inch pipes leading to the
turbines.
l The surge tank will be a 240 feet long section of 6 feet diameter concrete pipe laid on grade
above the junction of the pipeline and penstock. The surge tank will provide passive protection
against pressure surges in the pipeline. It will also assure good frequency control by the Project.
The power plant will be located about 300 feet downstream of a waterfall that serves as a
=a natural barrier to upstream migration of anadromous fish. The power plant structure will be a
pre-engineered metal building set on a concrete foundation, and will be about 30-feet by 68-feet
in plan dimension, and about 25 feet high. It will house two generating units,'each consisting of
a 700-HP horizontal -shaft Francis turbine, 500AW synchronous generator, and flywheel. The
_1 power plant will also contain standard utility controls and metering to provide remote unattended
operation. The power plant will discharge through a pipe as far upstream as practical to
minimize the impact to anadromous fish habitat.
i The transmission line will include three distinct sections. The initial section will be an
r overhead 12.5-kV line from the powerhouse to the port facilities, and will be placed adjacent to
the powerhouse access road (a length of 1.9 miles). The second section will be from the port
facilities to Kootznoowoo Inlet (4.2 miles). It will also be an overhead .line, but it will be
constructed through the forest from the minimum -construction access road described above, with
V` a clearing width of approximately 25-30 feet. The third section will be a submarine crossing of
Kootznoowoo Inlet to vicinity of the existing float plane dock (4,600 feet).
During construction, there will be two staging areas. One will be located at a large flat area
between the port facilities and the power plant. A construction camp could also be located at that
site if necessary. The second staging area would be located at a flat area about midway between
=` the power plant and the diversion dam. This staging area will be used primarily for construction
of the diversion dam and pipeline.
2. Generation
The Project will be able to supply all of Angoon's power needs at current load levels over 99%
of the time; generation would need to be supplemented on an average of about 2 days per year.
This percentage would decrease to slightly less than 99% (4 days/year) if loads increase by 50%
and to 97% (10 days/year) if loads increase by 100%. The Project has the potential to generate
about 8.5 million kWWyear, which is over 4 times the current Angoon annual energy
requirement (2.0 million kWh/year).
The generation amounts indicated above are based on an assumed instream flow requirement of
20 cfs. If resident fish are found in the bypassed reach of Thayer Creek, it is probable that the state and federal fisheries agencies would want a significantly greater instream flow, which
would decrease the Project generation.
:3
HDR Alaska, Inc. ES-4 March 2000
::1
Angoon Hydroelectric Project Feasibility Evaluation Report
Kootznoowoo, Incorporated Executive Summary
3. Estimated Construction Cost
The estimated total cost for the selected arrangement is $8,100,000, as summarized in Table ES-
`' -s 2. The cost includes about $6,900,000 for direct construction costs and about $1,200,000 for
indirect costs for licensing,design,
gn, and construction management. This estimate is based on a
conventional design/bid/build method of Project development. Other methods of development
are possible which could reduce the cost total cost, although at some greater risk or loss of
management control by Kootznoowoo.
"y The estimated cost of $8,100,000 compares to $9,300,000 previously estimated for Alternative 1,
and $8,500,000 estimated in 1996 by the GH Group for a somewhat similar Project arrangement
and assumptions.
F. DEVELOPMENT SCHEDULE
_. A preliminary development schedule is shown in Figure ES-3. The development of the Project
will occur in three phases, assuming the development proceeds on a "normal" track. The first
phase is preliminary rydesign and permitting, which includes the current effort as well as future
work to obtain the necessary construction approvals froth state and federal authorities. The
second phase is design and contract bidding, and the final phase is the actual construction.
As can be seen from Figure ES-3, the schedule results in the Project generating power in mid-
2005, which is considered the earliest that the Project could be completed. A significantly longer
schedule can be expected if there is a lack of consensus regarding the desirability of development
of the Project. In the near term, Project development should focus the following activities:
,M
t • Determination of the regulatory framework for Project development.
a Pursuit of grant funding and/or low -interest loans to make the Project economical.
e Resolution of utility structure issues associated with Project development.
_l G. ECONOMIC ANALYSIS
The economic analysis contained in the 1998 Angoon Power Supply Study was updated to
reflect the estimated cost of the Project as determined by the current studies. The economic
analysis is basically a comparison of the future cost of power to Angoon citizens with and
without the Project under two different utility structures.
For the first utility structure, it was assumed that power from the Project would be sold to T-
HREA, who would continue to supply electricity to Angoon. With this utility structure, there is
only a small benefit to T-HREA customers from Project construction if nearly all of the
construction cost is grant -funded (i.e., a 2-3% reduction in power costs). Although the benefit is
small, obtaining grant -funding could be easier with this utility structure since the grant would
help more citizens.
For the second utility structure, it was assumed that T-HREA ceases supplying electricity to
Angoon, and Angoon sets up a municipal utility. With this utility structure, there is a substantial
benefit to the community if nearly all of the construction cost is grant -funded. The cost of power
" to Angoon citizens initially would be slightly less than the current cost, and would stay relatively
constant.
HDR Alaska, Inc. ES-5 March 2000
di
-71
Angoon Hydroelectric Project
Kootznoowoo, Incorporated
TABLE ES-2
COST ESTIMATE SUMMARY FOR
SELECTED PROJECT ARRANGEMENT
Feasibility Evaluation Report
Executive Summary
330
Land and Land Rights
$
—
330.5
Mobilization and Logistics
$
741,000
331
Structures and Improvements
$
543,000
332
Reservoirs, Dams, and Waterways
$
1,587,000
333
Turbines and Generators
$
715,000
334
Accessory Electrical Equipment
$
366,000
335
Miscellaneous Mechanical Equipment
$
110,000
336
Roads and Bridges
$
789,000
353
Substation Equipment and Structures
$
48,000
355
Transmission Line
$
1,173,000
:. _DOTAL DIRECT .7j& 77
it.
777-- -
CONTINGENCIES:
Equipment Contingency (Accts. 333,334,335) $ 120,000
Transmission Line Contingency (Acets 353,355) $ 240,000
General Contingency (Aects 330,330.5,331,332,3316,350) $
777777��� 440,000
TOTAL 'TN -CONT
PERMITTING AND ENGINEERING:
Licensing/Permitting 578,000
Design Engineering 400,000
Construction Management
$ 250,000
HDR Alaska, Inc. ES-6
March 2000
ALASKA Renewable Energy Fund Round 5
MED ENERGY AUTHORFY Grant Application
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
GrantApp5.doc
Application form in MS Word that includes an outline of
Form
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
Costworksheet
Summary of Cost information that should be addressed by
Worksheet
5.doc
applicants in preparing their application.
Grant Budget
GrantBudget5.
A detailed grant budget that includes a breakdown of costs by
Form
doc
milestone and a summary of funds available and requested to
complete the work for which funds are being requested.
Grant Budget
GrantBudgetln
Instructions for completing the above grant budget form.
Form Instructions
structions5.doc
Authorized
Authorized
Form indicating who is authorized to sign the grant, finance
Signers Form
signers
reports and progress reports and provides grantee information.
form5.doc
• 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.
AEA 12-001 Application Page 1 of 28 7/1/2011
ALASORITY
dEV-- ENERGYHKA
Renewable Energy Fund
Grant Application Round 5
SECTION 1 — APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Kootznoowoo Incorporated
Type of Entity: Fiscal Year End
Independent Power Producerr�
Tax ID # v V dq 0 Tax Status: x For -profit or non-profit ( check one)
Mailing Address
Physical Address
8585 Old Dairy Road, Suite 104
8585 Old Dairy Road, Suite 104
Juneau, AK 99801
Juneau, AK 99801
Telephone
Fax
Email
907-790-2992
907-790-2995
peterkootznoowoo.corn
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Title
Peter Naoroz
General Manager and President
Mailing Address
8585 Old Dairy Road, Suite 104
Juneau, AK 99801
Telephone
Fax
Email
907-790-2992
907-790-2995
peter(a�kootznoowoo.com
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
X
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes
1.2.2. Attached to this application is formal approval and endorsement for its project by
its board of directors, executive management, or other governing authority. If the
applicant is a collaborative grouping, a formal approval from each participant's
governing authority is necessary. (Indicate Yes or No in the box )
Yes
1.2.3. As an applicant, we have administrative and financial management systems and
follow procurement standards that comply with the standards set forth in the grant
agreement.
Yes
1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached
grant form. (Any exceptions should be clearly noted and submitted with the
application.)
Yes
1.2.5 We intend to own and operate any project that may be constructed with grant
funds for the benefit of the general public.
AEA12-001 Grant Application Page 2 of 28 7/1//2011
/401ED ALASKA Renewable Energy Fund
ENERGY AUTHORITY Grant Application Round 5
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)
Type in your answer here and follow same format for rest of the application.
Thayer Lake Hydropower Development (TLHD) Transmission 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.
The Project location is located on the west shoreline of Admiralty Island National Monument
approximately six miles north of Angoon, Alaska in the middle of the Kootznoowoo
Wilderness. The City of Angoon, the Southeast Region and the State of Alaska will benefit
from this project.
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
X
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
Design and Permitting
Feasibility
X
Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
Thayer Lake Hydropower Development consists of a 1+MV1/ run of the river hydropower project
located in the Tongass Forest within the Admiralty Island National Monument based on a
proposal that Kootznoowoo submitted in March 2000 which is described more full in the
Angoon Hydrologic Project Feasibility Evaluation Report currently on file with the AEA (Project).
The development would be located on Thayer Creek approximately 6 miles north of Angoon.
Thayer Creek flows out of Thayer Lake (64 square mile reservoir) at a gentle grade through a
broad forested valley then steepens for 6,800 feet through a narrow forested canyon and finally
flattens again for 2000 feet before flowing into Chatham Strait. The development will tap the
energy potential in the steep section of the stream and will avoid any impact on anadromous
fish that use the lower portion of the creek. The average flow of Thayer Creek is approximately
370 cfs and can vary from 25 cfs during the coldest periods of the winter to over 2000 cfs during
storms in the fall and winter. The generating facility has a head of 250 feet which is
AEA12-001 Grant Application Page 3 of 28 7/1//2011
/ALASKA Renewable Energy Fund
�i ENERGY AUTHORITY Grant Application Round 5
approximate because of the wording of the Forest Service Record of Decision (ROD) requiring
maintenance of fish habitat. An additional restriction set forth in the ROD which is not
considered in the HDR proposal requires the overland transmission line be buried where
feasible along the access road to the community of Angoon. The generating facilities funding
will be submitted in a separate companion application for Round V funds.
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.)
Kootznoowoo's goal in applying for these funds, which will augment other sources, is to
construct the transmission portion of an energy generating and transmitting project that
meets the congressional requirements of the Secretary of Agriculture for the cultural
and economic benefits for the community of Angoon and as such is mindful of the
increased health risks and costs associated with the current diesel based generating
capacity of Angoon, Alaska. While not quantified in terms of health care costs savings
over time and impacts on the global economy Kootznoowoo goal is to decrease and
ultimately eliminating the hydrocarbon emissions attributable to current diesel
generating facilities in the community and replacing it with clean generating capacity
and backup.
An additional public benefit is eliminating relatively risky shipments of diesel fuel in a
very important state fisheries area surrounding the community of Angoon and the
concomitant costs associated with stand by and actual clean up efforts which must be
borne by the utility rate payers and both the State of Alaska and the federal
government.
Reduced fuel costs and lower energy costs, particularly to businesses and government
sector users, provide significant public benefit and an opportunity for economic growth
in an otherwise stagnant and declining economy.
Finally, the replacement of volatile priced fuels that must be transported at significant
additional expense will be replace by clean and stable priced renewable fuel which is
locally produced.
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.
Kootznoowoo has expended significant funds, time and effort to date on this project. The State
of Alaska and the federal government have also contributed funds in identifying this project and
preparing a Record of Decision and a Final Environmental Impact Statement. Based on the HDR
feasibility and evaluation report reference herein and submitted to AEA as part of Round IV
application updated for inflation and additional known charges, the following is the current
budget for completion of the overall project:
Reconnaissance, Feasibility, Environmental $ 2,200,000
Preconstruction Engineering, Permitting, Design & Construction $ 2,221,000
Construction Costs Generating Facility Only $ 4,372,402
AEA12-001 Grant Application Page 4 of 28 7/1//2011
/46ILFALASKA
Renewable Energy Fund
Grant Application Round 5
Construction Costs Transmission Facility
Contingency
Total Project Cost with Contingency
$ 4,784,000
$ 1,623,706
$15,201,108
Kootznoowoo is not seeking recovery of previously expended funds through this application.
Kootznoowoo's request for funds under this application is for $3,500,000, which includes
construction activities associated with the construction of the transmission facilities and road
shown in the HDR, Alaska Project documents along with a variant that includes underground
lines called for in the Record of Decision by the Forest Service. Final design will confirin actual
configuration.
In a separate application filed in conjunction with this application Kootznoowoo is requesting
funds in the amount of an additional $3,500,000 for the generating facilities. The intent of the
separate application is to seek maximum State funds for both portions of the overall TLHD
Project and begin construction of the transmission components in the Summer of 2012.
Kootznoowoo will contribute and endeavor to secure the additional funds necessary to complete
the final project. It will seek additional funds from sources including but not limited to direct
federal funds, tribal authorized funds and funds available from the community or the State of
Alaska.
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.
$3,500,000
2.7.2 Other Funds to be provided (Project match)
$1,284,000
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2)
$4,784,402
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
$15,201,108
including estimates through construction)
2.7.5 Estimated Direct Financial Benefit (Savings)
$20.7 million
2.7.6 Other Public Benefit (If you can calculate the benefit in
$14.4 million conversion
terms of dollars please provide that number here and
of diesel home heating
explain how you calculated that number in your application
from diesel
(Section 5.)
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
AEA12-001 Grant Application Page 5 of 28 7/1//2011
/441EF-2ALASKA Renewable Energy Fund
�) ENERGY AUTHORITY Grant Application Round 5
management assistance from AEA or another government entity, state that in this section.
The project manager will be Peter Naoroz the General Manager and President of
Grantee. Mr. Naoroz' resume is attached. Mr. Naoroz intends to hire an assistant
project manager who will be retained by a firm with significant qualifications in
completing run of river hydroelectric projects. Because of the unique nature of this
project's location and permitting requirements, Mr. Naoroz will maintain full
responsibilities for permitting, will directly oversee the Assistant Project Manager,
project funding including power sales agreement, and project implementation including
but not limited to procuring project construction management services and retaining
qualified general contractors who meet requirements of the USDA Forest Service.
Firms which have expressed an interest in providing project management services
include Chatham Electric, AP&T, and Cascade Creek, LLC, and other companies
identified during the final design work being conducted in FY ending June 2012. We will
be continuing our search for qualified firms and select one based on a proven capability
to perform work on time and on budget, experience in building hydropower in Southeast
Alaska; proven experience in building Low Impact Hydropower Institute approved
hydropower generation facilities.
Kootznoowoo will coordinate with and solicit input from AEA, the City of Angoon, the
Angoon Community Association and the certificated public utility, IPEC during each
phase of the Project.
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.)
Many phases of the development project have successfully been completed. The
reconnaissance and preliminary feasibility and environmental work necessary for
proceeding to preconstruction activities have been completed and fully funded by either
Kootznoowoo or the federal government. The schedule of proposed work that will be
funded by this phase of this grant includes the following major tasks:
• Any finalization of Special Use Permits
• Additional fundraising
• Bidding of Construction activities under Final Plan
• Construction Commencement, Substantial Completion, Testing and Final Signoff
under provisions of Power Sale Agreement and Commencement of Operations
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them. The
Milestones must also be included on your budget worksheet to demonstrate how you propose to
manage the project cash flow. (See Section 2 of the RFA or the Budget Form.)
Construction Phase
Confirmation that all design and feasibility requirements are complete. Sept. 2012
Completion of bid documents October 2012
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Bidding, Feedback and Bid Awards
January 2013
Road Construction — Generation Facility
Spring Summer
2013
Road Construction — Power Line and Transmission
Spring Summer
2013
Power House Construction
Spring Summer
2013
Transmission Line Construction
Spring Summer
2013
Integration and testing
Fall 2013
Decommissioning old systems or System Integration
Winter 2013
Final Acceptance, Commissioning and Start-up
Spring 2014
Operations Reporting
-Spring 2014
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.
No formal partnerships or commitments with other entities other the U.S. Department of
Energy have been entered into. Kootznoowoo has entered into a Memorandum or
Understanding with the local federally recognized tribe, Angoon Community Association
as well as the City of Angoon. We also have the support and cooperation of the City of
Angoon and the Angoon Community Association as can be evidenced by previously
submitted Energy Resolution which remains in effect, as well as the Resolutions of
Support from each organization. This critical group of entities will work collaboratively
on supporting the development of the Project and utilize their influence to move the
project to completion. In exchange for this support Kootznoowoo will endeavor to make
the project a success by completing tasks on time and on budget, and by keeping these
entities informed on progress; utilizing open and competitive bidding on project
components; and providing for and requiring a local hiring preference for labor and
contracting. Kootznoowoo selection processes include a preference for shareholders
and their spouses during competitive bidding. Kootznoowoo also commits to the
procurement requirements of the federal government, its agencies and including those
requirements of the Recovery Act (Stimulus) as required by funders. The AEA will have
access to all final bid documents and criteria prior to bid awards. Kootznoowoo Project
Manager retains all contract decision authority.
IPEC, the community of Angoon's electric utility, has prepared a strategic plan which
has been adopted by its Board of Directors identifying the Project as its renewable
solution for the Community. The plan states that TLHD will displace 90% of the diesel
requirement it uses to generate electricity. On June 1St 2009 representatives of IPEC
and the AEA described Thayer Lake as Angoon's perfect solution to decrease local
diesel generation. The purpose of the meeting was to seek common ground to building
the project. Subsequent to this meeting Kootznoowoo has received a bid from a highly
regarded law firm to assist Kootznoowoo in entering into a power sales agreement once
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we are in a position to determine the final economics and as a condition to funding
construction of the project. Kootznoowoo expects significant public benefits to ensue
from the project which will be memorialized in the final power sales agreement.
IPEC has reported to the Southeast Conference in its Status Report on Quest for Diesel
Independence dated September 14, 2009 that "it is conceived that IPEC will buy power
from Kootznoowoo when the project is built as long as it is cheaper than diesel -
generated power." Kootznoowoo will not proceed with this project unless this is the
case and it will not proceed unless TLHD can significantly reduce the overall cost of
power to Angoon ratepayers. IPEC's letter dated November 7, 2009 has previously
been provided to the AEA. On August 19, 2011 IPEC wrote to all of its customers a
letter that stated in part "IPEC believes that Thayer Creek project is the best and most
promising renewable energy project that could lead to reduced rates in Angoon, and we
stand ready to do whatever we can to advance this project." Letter attached.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
During finalization of Project Design and Permitting, the Project Manager will initiate a bidding process
with the advice and guidance of the Kootznoowoo Advisory Committee which has been constituted and
includes the following organizations and interests which has been authorized by the Kootznoowoo Board
of Directors:
Kootznoowoo, Inc. — Peter Naoroz, General Manager and Chair of Committee
Local Utility — Peter Bibb, COO, IPEC has been invited
State of Alaska — Lawrence Blood, Rural Utilities Business Staff, DCRA, State of Alaska has accepted
Representative of the USDA Forest Service — Chad Van Ormer Admiralty District Ranger
Representative of the City of Angoon — Mayor Albert Howard or designee
Representative of the Angoon Community Association -- President Wally Frank or designee
Natural Currents LLC — Mr. Roger Bason, President and CEO
Kootznoowoo will plan to monitor phases of the project and keep AEA informed on the status by
communicating internally and externally as follows:
Weekly conference calls among the Project Manager and potential contractors and consultants with a
report of findings to the Advisory Committee via email.
Scheduling of initial meeting with AEA.
Monthly Scheduled meeting of Kootznoowoo Advisory Committee with written progress reports to AEA
and U.S. DOE Golden.
Selection of General Contractor Qualifications and recommendation from Advisory Committee and
Project Manager to Kootznoowoo Board of Directors with copy to AEA and any other Grant fonder for
informational purposes.
Submittal of updated Schedule and Cost Estimates to all interested parties including AEA.
During Project construction, communications within the team will consist of
Weekly conference calls among the Project Manager, Construction Manager, Construction
Superintendents, Design Engineer, and representatives of the Forest Service with written report to
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Weekly regarding compliance with environmental requirements
Bi-weekly written reports from the Construction Manager and Design Engineer detailing work completed,
work to be completed in the next two weeks, and potential problems identified.
Periodic site visits by the Project Manager, Construction Manager, Design Engineer, with a detailed
report on findings provided to the members of the Kootznoowoo Advisory Committee
These internal discussions and reports will form the basis of monthly reports and quarterly reports to the
AEA and others.
The reports will show in a clear and concise manner progress made on the various tasks and milestones,
the work to be accomplished in the ensuing month, and potential problems and corrective actions to be
considered or implemented. Cost data as described above will also be provided on a monthly basis.
Microsoft Project or similar software will be used to develop and maintain schedule and budget
information; updating of the management files will be on a bi-weekly basis.
3.6 Project Risk
Discuss potential problems and how you would address them.
Resource construction always carry certain amounts of uncertainty be it technical or
financial. Construction of a run of river project such as TLHD carries significantly less
risks than say a lake tap project with significant underground work. Additionally the
technology is proven and risks are further mitigated by complete and thorough Forest
Service oversight; particularly, when the standards are established and applied by the
USDA Forest Service under their standard field manual and a ROD which has been
thoroughly vetted by stakeholders through a full blown Environmental Impact Statement
and a to be established Special Use Permit. This high level of scrutiny was established
by the U.S. Congress under ANILCA. However risks do exist and some of the potential
risks and mitigating actions being taken by Kootznoowoo Incorporated for TLHD
includes the following.
Permitting — Will be substantially complete prior to use of construction funds.
Final Design — Will be completed and Construction documents prepared in a manner
that is consistent with the Record of Decision by the Forest and the Final EIS
Seismic — Project components will be designed appropriately for seismic activity, and it
is noted that the Eastern Denali- Chatham fault line runs through Chatham Straits where
Thayer Creek outfalls. The ROD requires that the diversion dam be constructed to
meet the guidelines for low hazard dams established by the Alaska Department of
Natural Resources. (ROD page 11)
Underground Construction — The current design for the project does not include
significant underground construction. Appropriate Geotechnical work will be done as
part of the preconstruction activities and finalized prior to construction activities at the
diversion structure and power house foundation and Penstock placement to assure
sound construction. It is anticipated that a routine boring and tunneling will occur to
cross Kootznahoo Inlet.
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Construction Pricing and Performance — Only qualified contractors will be given a bid
package and they will be required to make appropriate site visits to assure the quality of
their bids as part of the bidding process.
Cost Overruns — The Project budget includes an appropriate level of contingency.
Operations — All major elements of the Project will carry standard warranties as
appropriate.
Operations and maintenance of the Project will be performed by qualified contractors in
accordance with Forest Service and Kootznoowoo hiring and employment policies.
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
available for the market to be served by your project.
The TLHD as envisioned will be a 1+ megawatt hydroelectric resource located
approximately 6 miles north of Angoon Alaska. Annual energy production during an
average water year is estimated to be 8 million kilowatt-hours. The community load
factor will be confirmed during the upcoming year with the final design and confirmed
based on the passage of time, new telecommunication, entertainment and broadband
services and the conversion of diesel heat to electric heat as well as projected load
factors.
During final design the Project will be evaluated to accommodate increased storage in
the future and new technology to deal with freeze that will allow for better matching
generation with load requirements. These features are not felt to be warranted at this
time but as loads increase will be reconsidered.
Advantages: As will be discussed in the next subsection, diesel generation must be used
to provide electric generation in Angoon. The TLHD project will eliminate the need for
approximately 95% of the diesel generation until alternative reliable backup can be
provided that is capable of generations during low water according to estimates provided
by IPEC, the certificated community utility.
While other small hydroelectric resources are available in the area, none are as
accessible and proximate to Angoon, nor are they ready for immediate construction.
The project is located in a hydro reserve envisioned by Congress to provide power to
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Angoon. Tidal energy has promising potential in and near Angoon but the technology
will need to be proven and deployment cannot be deemed feasible nor reliable at this
time.
Geothermal, biofuel, wind and other alternative energy production is all of limited
application to Angoon at this time because of the lack of development of the regional
intertie. Until this is accomplished the best source of power necessary to displace diesel
in Angoon is this Project.
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.
Inside Passage Electrical Cooperative (IPEC) until recently operated (3) 500 kva diesel
fired generators at a diesel cost of over $4.25 a gallon (and increasing) resulting in a
power cost to consumers and businesses that are approximately $.54 per KWh currently
and as high as $0.62 per kWh recently. Significant upgrades have occurred under the
supervision and by the AEA. The Grantee is aware of the upgrade to the system and
the addition of a new control system which currently is presently having "bugs worked
out". It is assumed that the efficiency of the system will be slightly better. Until the
system reliability is confirmed by IPEC and AEA we assume that the historic numbers
mentioned elsewhere are accurate for this grant proposal. Feedback from AEA and
IPEC would be helpful in other grant request the Grantee will be making however IPEC
feels that it may be premature to engage in depth discussion because of limited
resources and manpower at their end.
Historically and until the past couple of months the community of Angoon has been
serviced by IPEC with four diesel generators.
Generators (#2 diesel fuel engines)
Caterpillar 3456ATAAC 475 kW
Caterpillar 3508DI 550 kW (existing)
Angoon's electric generation facility consists of three diesel generator sets (genset) with
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a total capacity of approximately 1,500 kw. The community's load is typically between
250kw and 400kw. Their voltage output is 480v 3-phase which feeds three -250kw
overhead transformers. These transformers boost to a 7,200v distribution voltage and a
majority of the community receives power by an overhead distribution system.
Kootznoowoo understands that these systems have been removed and replaced with
one 1 CAT 3456 genset with planned heat exchanger. We understand that this planned
unit is in testing mode and no reliable data on efficiency has been established. While
optimistic about savings, this application assumes similar efficiency going forward on the
basis of a stable load. AEA will have the best information available through its oversight
of the project.
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.
Existing Energy Resources are entirely diesel generation by the local electric utility and a
combination of wood, diesel and propane for heating and cooking. Several other
residences and a large lodge utilize diesel generation for their electric production. As
detailed in the next section significant need and demand exists under a lower cost price
structure for electricity. The Project is designed to displace fossil fuel and replace with
local clean renewable energy.
In 2007, IPEC burned 147,157 gallons of diesel to produce 1,949,156 of sold kWh. The
average cost of diesel was $2.55 in 2007, but exceeds $4.25 in 2010. In 2011
Kootznoowoo paid a high of $4.70 per gallon and a low of $4.67 per gallon for number 1
diesel plus delivery or nearly $5.00 per gallon. With diesel rising $5.00 is a realistic
round figure for current home heating costs. Our hydropower development will stabilize
electrical costs to a low rate, reduce operating costs, reduce fuel spill issues and reduce
carbon emissions in our community. These ancillary benefits are in addition to
significantly increasing the standard of living of one of the lowest income per capita
communities $11,357 with 82% of the residents being Alaska Natives with an overall
community poverty rate of 27.9% (2000 US Census and Alaska Dept of Labor Workforce
and Development 2007) with 87% unemployment (TANF, Central Council of Tlingit and
Haida Indians of Alaska).
The average annual flow of Thayer Creek is estimated to be 369 cfs with peak flows
exceeding 2000 cfs (HDR 2000 and with 2003 update data included). Hydrodynamic
head at proposed power house site is 250 feet. The development has the capacity to
generate 8,500,000 kWh annually or four times the current consumption load of the
community. It is anticipated that economic forces of elasticity of demand in the
consumer, tribal and business markets will increase demand from the current usage.
Further, most homes, businesses and schools are heated with diesel fuel. It is
anticipated that with the advent of low cost hydropower that space heating energy usage
will begin substitution from oil heat to electrical heat once the project is completed.
Kootznoowoo expects the demand to expand as future local demand as sales
opportunities are created.
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One demonstration solar energy site has been developed in the last year involving a
single residential home. No data is available has been available even though the project
has been in operation slightly over a year.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The following table provides a historic summary of energy sales over the past six years
according to IPEC and as publish by AEA for the community of Angoon
FY 2003
1,755,719
kWh
FY2004
1,765,541
kWh
FY 2005
1,746,764
kWh
FY 2006
1,658,402
kWh
FY 2007
1,677,750
kWh
FY 2008
1,934,201
kWh
FY 2009
1,893,727
kWh
FY 2010
1,739,139
kWh
The Thayer Lake Hydropower Development is the highest economic and energy priority
for the City of Angoon, the Angoon Community Association (traditional IRA tribe) and
Kootznoowoo Incorporated as evidenced ourjointly developed Angoon Community
Energy Plan.
The economic benefits of this project are profound and will decrease the diesel
generated electrical expenses to the State of Alaska (through PCE program) community
residences, businesses and tribal members by over $900,000 a year (2012 expected
cost of $0.62 per kWh versus an expected hydropower development cost $0.15 per kWh
at a community usage of 2,000,000 kWh per year). This is a profound economic impact
since the community has a population of approximately 470. In addition, the advent of
low cost electricity will provide strong incentive for businesses, schools, municipal
buildings and homes of tribal members to convert from expensive diesel space heating
to cheaper and more economically reliable hydropower electricity. It is estimated that
this will provide an additional $1.5 million dollars in collective energy savings in
displacing another 500,000 gallons of diesel a year. Kootznoowoo through TLHD has
the goal to completely displace the use of fossil fuel use in Angoon with a goal of 100%
renewable energy driven Native community as a hallmark of the only community in the
Admiralty Island National Monument Wilderness. TLHD will allow Angoon to become
energy self sufficient in energy generation for current and future load growth. Converting
police, municipal, school, and fire vehicles (as well as personal vehicles) to plug in
electric and or electric hybrid vehicles will over time further decrease the use of fossil
fuels in Angoon.
In addition to the substantial increase in the standard of living and promotion of
economic benefits, TLHD will provide cultural and social benefits. Currently the Angoon
public schools have cut back on sports and extracurricular activities in order to pay
energy expenses. These lack of activities have spawned unwanted social behaviors that
would be eliminated if these programs could resume with lower energy costs. The gym
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and other sports activities are unheated or not heated after hours which have further
reduced the recreational and social activities or our youth. In some cases, this has led
some of our tribal member families to move out of their traditional community so they can
provide resources to their children. TLHD will reverse this downward social spiral
impacting our youth and young adults.
Many of our elders are on fixed income and many residents live on a subsistence
lifestyle where fishing and hunting provide the majority of the protein consumed in many
households. Allowing fish and game to be readily and more cheaply frozen will allow
more sharing of resources with our elderly and at our social gatherings where
subsistence foods is a staple. Additionally, many of our citizens have curtailed their
transportation expenses to regional cultural events so that they can pay their energy
bills. This has led to a decrease in some of our most respected elders and leaders from
attending and contributing to important Native issues and forums. In some cases, our
elders have had to move out of their traditional community leaving a vacuum of tribal
knowledge and protocol with some clans.
Some of our traditional clan houses have become in disrepair because there are no
funds to heat the houses which has led to further degradation. Lower energy costs will
allow clans and their members to fix and maintain structures that are over 100 years old.
It is important to the community of Angoon to protect and allow these cultural structures
to be preserved. Furthermore, it is difficult for our community to host regional events that
Angoon has traditionally hosted due to the high cost of energy. Therefore, low cost
hydropower will revitalize our ability to host cultural and traditional events that we have
been forced to eliminate.
An ancillary benefit is that Thayer Creek has the opportunity to provide future clean
water source for the community of Angoon. The location of existing small dam and
water line along the planned transmission line provides the opportunity for additional
infrastructure along an existing grandfathered right of way for future water sourcing.
Although the current Angoon water source is acceptable, it has limitations and the
Thayer Creek could provide a better quality water source in the future. An underground
crossing alternative across Kootznoowoo Inlet provides significant opportunity to
enhance water supply and fire protection as part of the Project at no additional costs.
Angoon's largest employer, a destination lodge of national reputation, has until recently
provided its own diesel generated power and has become an IPEC customer. This
Lodge burns about 15 gallons per hour of diesel for 90 days a year or about 32,400
gallons. The national economic picture makes predictions about the future of the Lodge
uncertain however lower cost energy will certainly enhance operations.
The City of Angoon has expended funds on renovation of a cold storage facility and is
expected to be operational as soon as economic and less expensive power is available.
This facility was constructed in conjunction with the Angoon Community Association with
contributions from Kootznoowoo but cannot operate at the existing cost of power and
therefore it cannot support the fishing industry. When operating much of the operation
will be seasonal in nature. However, the facility will be open the entire year with some
basic maintenance load during the off-season months.
Kootznoowoo, in collaboration with Tlingit and Haida and Sealaska, had created the
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Angoon Business Center which limped through 2009/2010 but will be terminated from its
current location for lack of funds to support the operations going forward. This business
incubator while run as energy efficiently as possible supported 15 computer terminals
and a fledgling business which manufactured coats with a number of sewing machines.
The Angoon business center has found new sponsors but it replaces a load which was
part of the school district and the vacancy created has not be absorbed by an
economically viable entity.
Kootznoowoo and others have also considering establishing a tourist destination facility
that will include a large all electric commercial kitchen that was contributed to the
community as a gift from a local benefactor. This kitchen served a camp of 125 workers
daily and with significant power requirements that will likely be served by a standalone
generator. Community economics and high cost of electricity have prevented this project
from moving forward.
Kootznoowoo has been contacted by more than one small cruise operator and has
looked at the potential benefits of attracting small boutique boats to Angoon. The lack of
modern amenities and the cost of services with embedded costs of utilities make such a
proposition marginal in terms of economics. Being able to attract and charge berth fees
which include reliable shore power would change to economics to marginally attractive.
Perhaps the single most significant factor which must be considered as a potential
impact on the energy market is the possibility of bringing on significant new housing to
the market. Remarkably, at a time when most of Alaska is experience significant
migration to regional centers, Angoon continues to maintain a core population despite
the high cost of transportation and energy. The reasons are beyond the scope of this
application but importantly each and every original shareholder of Kootznoowoo was
deeded a residential lot of a minimum size of acre and up to 1.5 acre depending on
location. In addition to this conveyance nearly 900 acres of prime real estate was
conveyed to the City of Angoon for future development. There is no other community in
Southeast Alaska with this inventory of platted residential lots and opportunities for
immediate growth. If the average usage is extrapolated over 4 times the number of
homes and business in Angoon it is reasonable to predict the load growth will quadruple
and the load growth would be faster than average due to pent up demand. Reasonable
scenarios exist that completely reverse the stable to declining economy of Angoon with
reduction of energy costs.
GCI has recently installed a cable landing station in Angoon that is a customer of IPEC.
This cable landing station also provides television, broadband and telephone service to
Angoon at the lowest rate in the State. Accordingly, it is reasonable to expect use of
these services to increase the average household demand for electricity in the future.
The historic TV cable provider (the City of Angoon) will be displaced with higher value
lower cost content provided by GCI.
Without TLHD any one of these loads would create significant need for diesel
generation. The Project will provide the long-term/low-cost power required for the
development of these and other potential loads. The Project will increase the value of
the public's private property and business in Angoon and increase the likelihood that
new businesses will begin and be able to maintain themselves and not fail due to the
high cost of electricity.
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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 capacityfactor
• Anticipated annual generation
• Anticipated barriers
• Basic integration concept
• Delivery methods
The HDR feasibility and evaluation along with the Forest Service FEIS has been
provided under previous cover to the AEA and are incorporated herein by reference and
more fully describes in detail the system we propose. The final design will update the
systems utilizing the Grant Awarded to Kootznoowoo, Inc. this past fiscal year and those
positive changes will be incorporated in the system which will be constructed. Land
ownership, permits and environment issues are described at length and the proposed
system is suitable and well thought out and designed to meet the requirements of the
U. S. Congress in granting certain rights to Kootznoowoo to develop hydroelectric
resources for Angoon.
The specific technology is well established and proven and consists generally of a small
diversion dam, a pipeline and penstock which powers two Francis turbines which in turn
generate the renewable energy — these facilities are considered the generating facilities
and the subject of one grant application in Round V. From the powerhouse the power
will be transmitted to Angoon via an overland transmission line which will be buried
where feasible consistent with the ROD. A second grant application will cover the
transmission assets and service road
The proposed plan is to install two generators capable of producing 1 MW however the
next phase will review all assumptions related to potential load and stream flow with the
goal of optimizing capacity. Given Angoon's current average load and peak load this
configuration is optimum as it will allow Angoon's current load to be serviced reliably with
some room to grow.
As designed the anticipated annual generation is approximately 8,500,000 mWh per
year which is approximately 4 times the annual requirements. Please see the details in
Selected Arrangements in the HDR report.
Once the final design is completed the only barrier to completing is construction funding.
On the operational side, occasional, low water flows will require the current diesel genset
to serve in a back up capacity on average less than a week during the coldest days of
the year. The energy produced will be transmitted over a 6 mile transmission line which
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will be buried where feasible and which will ideally be run through a drilled conduit under
Kootznoowoo Inlet to the existing power grid operated by IPEC, the Angoon's utility.
The local utility will purchase power from Kootznoowoo as provided in a power sales
agreement and operation and maintenance responsibilities will be detailed in that
agreement.
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.
All the land and waters upon which the Project will be situated is either National Forest in
a highly restricted category of land status — "Wilderness Monument" or on land surface
estate owned by Kootznoowoo, Inc. The Alaska National Interest Lands Conservation
Act (ANILCA), Section 506(a)3(B) gives Kootznoowoo, Inc., the right to develop
hydroelectric resources on Admiralty Island at the Project locations, subject to such
conditions as the Secretary shall prescribe for the protection of water, fishery, wildlife,
recreational and scenic values of Admiralty Island. The Secretary through the USDA
Forest Service has prescribed these conditions in the ROD completed in July 2009. The
intertie connection across Kootznoowoo Inlet between Kootznoowoo's surface estate
and the City of Angoon will involve future negotiation for easements with private
landowners and these details are anticipated as part of finalizing the permitting and
several options are available and funds necessary are anticipated to be well within the
contingencies provided.
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
Please see the ROD which is attached for a complete list of applicable permits. Permit
timeline will ensue once sufficient funds are available to engage permitting professional
and pay necessary fees including mitigations impacts necessary after negotiations.
Anticipated Permitting Timeline: September 2012 for USDA special use permits, FERC
does not have jurisdiction. Water Permits if any will be substantially negotiated by
September 2012.
Identify and discussion of potential barriers to permitting: Kootznoowoo does not
anticipate barriers based on discussions to date with Forest Service officials who are
responsible for coordinating activities of permitting authorities. The only significant
barrier to permits is funding. In all likelihood Kootznoowoo will need to mitigate the
impacts of affecting wetlands as required by the requirement of the U.S. Army Corps of
Engineer's 404 permit and may require longer time frame than September 2012 and this
will be dictated by final design.
Importantly Thayer Lake Hydropower Development is the number one priority of the
combined Angoon Energy plan in which Kootznoowoo, Incorporated, the City of Angoon
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and the Angoon Community Association (traditional IRA) have signed off on. Please see
attached resolutions and letter to President Obama. In addition, IPEC submitted a
strong letter of support in Environmental Impact Study process and has demonstrated
their political and local support for the development. Additionally other communities and
important economic entities continue to support the Project and TLHD is blessed with
wide community support from within the community and tribal members that live outside
the community but would like to return once energy costs have been stabilized and an
economy can return. The development has a Final Environmental Impact study that is
culmination of years of environmental wrangling with the US Forest Service and
Environmental groups. We now enjoy the support of the US Forest Service along with
local and national Environmental groups. Our only barrier to development that we are
working on is securing funds for construction funds to build the development. With this
$3.5 million grant from the Renewable Energy Fund of the State of Alaska, the U.S.
Departments of Energy, Agriculture and Interior the cash flow from the project will more
than pay for the anticipated operating costs and under our scenarios make a return to
Kootznoowoo to provide resources for our tribal members.
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
Discussion
• Any threatened and endangered species have been fully disclosed in the Final
Environmental Impact study and do not pose a barrier to Project completion
• Habitat Issues are also disclosed in the same document and requirements for
mitigating the impacts on habitat are fully articulated.
• Wetlands and other protected areas are fully disclosed in the Final Environmental
Impact Statement (FEIS) and do not pose a significant barrier to Project
completion. The Army Corp of Engineers has physically been present on the site
with the Forest Service and Grantee and no barriers to construction are
anticipated with the current design.
• Archaeological and historical resources have been disclosed by the FEIS and
certain mitigation measures will be required which Kootznoowoo feels are
attainable and will require continued community participation and monitoring.
• Land development constraints have been fully analyzed by both HDR, Alaska and
the Forest Service based on their experts and significant experience. The original
road to the diversion dam was relocated based on recent experience in Gustavus
with roads that are proximate to streams and creeks. The relocation will add
slightly to the length but will protect critical habitat and reduce the chance of
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unstable soils and fill
• Telecommunications interference — there is no anticipated telecommunication
interference.
• Aviation considerations — the crossing off Kootznoowoo Inlet is designed to be
under water to avoid impacting the seaplane approach that is currently utilized by
the community.
• Visual, aesthetics impacts have been addressed fully to the standards established
by ANILCA in the Forest Service Record of Decision (ROD) based on the
alternatives established in the Final Environmental Statement.
• Identify and discuss other potential barriers
Kootznoowoo does not anticipate barriers based on discussions to date with Forest
Service officials who are responsible for coordinating activities of permitting authorities.
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
Proposed New System Costs and Projected Revenues
(Total Estimated Costs and Projected Revenues)
Attached is the detailed budget entitled "Thayer Lake Hydroelectric Budget" which has
previously been submitted to the AEA as part of Round IV. This information will be update with
the final design phase currently underway and it is anticipated that the costs will escalate over the
next 12 months at the current rate of inflation.
Also attached is a Schedule of HDR cost estimates which have been adjusted to 2011 dollars
using a 3% inflation rate. Updating to 2012 which we anticipate the start of construction will
escalate costs to approximately $8.8 million.
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.)
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TABLE 4.4.2 Project Operating and Maintenance Costs
0&M Cost
Basis
Amount
Labor
1 half-time position
$25 000
Transportation
200 trips/year@$25/trip
$5,000
Misc. Expenses
$15 000
Administrative
35% of O&M
$15,000
Insurance
0.1% of Total Construction Cost
$8,000
Replacements
0.2% of Total Construction Cost
$17,000
Total
$85,000
Source: HDR Angoon Hydroelectric Project Feasibility Evaluation Report March 2000
Operating cost estimates from HDR's study assume coordination with the O&M of the existing
diesel plant so that a single new half time position is required. Kootznoowoo believes that in
order to retain qualified personnel to maintain both systems the position will need to pay more
than the estimated costs even if inflated for wage inflation over the past 10 years. Additionally
the transportation estimate of $25 per trip will need to inflate at the rate of inflation of gasoline
over the same period of time. These estimates will be updated with the updated feasibility
analysis completed with this phase of the project and negotiated in the Power Sales Agreement
and prior to construction funding.
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
• Potential power buyers and customers include existing utility — IPEC is anticipated to be
the major customer. Depending on the utility rate structure — particularly for large interruptible
users at least one lodge has expressed an interest in purchasing power directly from
Kootznoowoo. Kootznoowoo also may start a business venture with a large user of energy on
lands on the North side of Kootznoowoo Inlet that would be serving after the communities power
needs were met in order to avoid spilling surplus power.
• Kootznoowoo has been, until this summer, been targeting a pro forma $0.15 kWh for
power sales which cuts power cost based on recent prices in half. In 2009-2010 fuel costs
averaged as much as $.30 per kWh, however until the current phase of the Project involving the
preconstruction activities can reveal the likely economics of the projects including available
federal grant funds this figure is only a target. A price range would be $0.13 to $0.18 depending
on other terms of the power sales agreement such as sharing of employees and creation of
operating efficiencies. By including the COO of IPEC in this critical final design phase we are
optimistic about reducing our operating costs by working collaboratively on reducing
maintenance and operation costs. For example a buried transmission line with an underground
cable through Kootznoowoo inlet should reduce O&M for the life of the project. Because of the
lack of economies of scale it is essential for the utility and Kootznoowoo to look for every
possible savings in order to keep the rate as low as possible.
In speaking to representatives of AEA during the summer months it is also possible that it will be
necessary to target a slightly higher price in order to enjoy a more full sponsorship by the State of
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Alaska. A power purchase and sales price will be determined ultimately by the negotiations that
lead up to a power sales agreement with IPEC but it is anticipated and we understand from these
discussion by targeting a price relatively close to the average "whole sale" cost of power in Prince
of Wales Island that this project can be constructed and operated at an overall residential price of
$0.22 to $0.25 utilizing a combination of grant funding and guaranteed or special loan
arrangement.
Kootznoowoo understand that the rate of return for grant funded projects are limited and that the
State of Alaska portion of funds are subject to regulations and covenants that insure the "public
benefit of those funds" so it is not anticipated that market rates are achievable.
• In any event, Kootznoowoo is endeavoring to make the community cost of power as low
as possible. Given the significant current investment in the project it is unrealistic for
Kootznoowoo to expect to accomplish this without significant grant funds. A full recovery on the
basis of a risk adjusted fair market basis requires considerations aside from the power sale
revenues. As Kootznoowoo and its original shareholders and their heirs and assigns own
significant land in the service area it only snakes sense to pursue public funds to best of our ability
while available and therefore avoid unnecessary expenses. Simply put, Kootznoowoo is not
looking for a direct market rate return from the State of Alaska's grant funded portion of the
project. By keeping energy prices as low as possible the return from grant funds can be seen
elsewhere in ways that are not traditionally measure — such as the health and sustainability of the
City of Angoon as well a business ventures Kootznoowoo can sponsor. On new funds,
Kootznoowoo would expect a normal market rate of return from its financial contributions.
Kootznoowoo believes it will be able to achieve significant public benefit as is described further
in Section 5 and elsewhere.
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.
Cost worksheets are attached and a narrative is included as an additional attachment which
includes documentation
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
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4EV_) ENERGY AUTHORITY Grant Application Round 5
Diesel generation pollutes Angoon's otherwise pristine environment and community. Per
a July 9, 2007 letter submitted the US Forest by the Inside Passage Electric Cooperative
(IPEC), the utility discharged 3,437,981 pounds of CO2 emissions in 2006. One key
benefit of our development would be to mitigate this discharge of CO2 emissions in our
community that impacts the health and safety of our shareholder, tribal and community
members — all of whom are residents of Alaska in Angoon. Kootznoowoo expects to
receive on behalf of its shareholders significant benefit from low cost power.
The least of these benefits is the annual revenue contemplated under the Power
Purchase Agreement. Targeting a sales price of $0.15 per kWh and adjusting for the
cost incurred (HDR, Alaska, 2000) net operating income in the range of $200,000 is
reasonable to expect initially.
Significant growth will cause this revenue to increase and the average cost to drop so it
is reasonable for revenues to grow faster than inflation. However, the real benefits to
Kootznoowoo's land holdings and the value of shareholder lots is immediate as the
community moves toward positive economic growth and expectations change to a more
positive economic future.
Tax credits, green tags and renewable energy subsidies may or may not be available
depending on the action of state and federal policy makers. This project is not
dependent on such incentives but if they are available they should inure to the benefit of
Kootznoowoo Shareholders and the community of Angoon.
Other benefits including the possibility of eliminating all diesel household heat.
Angoon's annual electric diesel generation produces approximately 2,000,000 kWh
(source AEA). There are other independent producers of diesel generated electricity and
these figures are unknown at this time. No known renewable energy produces electricity
in Angoon at this time. However, more disturbing, no use of electricity is used for space
heating in Angoon due to the high cost of electricity. Therefore over 95% of the energy
usage for space heating for homes and businesses is produced through diesel
generated heat. Approximately 5% of the homes use firewood or are supplemented with
firewood.
The CBJ Greenhouse Gas Emission study released in March 2009 reveals that Juneau
is 81 % dependent on diesel in its total non -transportation use of energy. Naturally,
Angoon does not have hydropower so it is 100% diesel dependent. Converting the
MMBTU requirements for Angoon using the CBJ 81 % figure, we find that Angoon would
convert to its diesel usage to electrical usage if the price of electricity provided the
economic incentive to convert to lower cost electrical heat. Theoretically, (based on
2,000,000 kWh figure) the community of Angoon would need 10,500,000 kWh
(2,000,000/19%) if it completely converted its home heating and diesel fuel usage to
electrical generation from low cost methods. Theoretically, the community of Angoon
currently needs the equivalent of 10,500,000 kWh for its current needs if their needs can
be compared "one to one" with Juneau's usage. Because of the high cost of fuel in
Angoon and current conservation efforts this estimate is very conservative but is a
straightforward extrapolation. We know that the PCE supplement creates a significant
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barrier to realistically making this conversion. However a significant reduction in the
price of electricity would allow for conversion to occur. In other words low cost power
would drive conversion from diesel and other CO2 producing fuel sources in the
community of Angoon much as has recently occurred in Juneau, Petersburg, Sitka and
other communities.
IPEC will be able to completely idle their diesel generation capacity to a stand by status
and would be able to salvage unnecessary equipment further reducing cost of operating
existing infrastructure. IPEC would however need to build and expand its distribution
system in Angoon as demand will increase the number of homes, business and public
buildings which are operated as the economy moves forward. In a community planning
on building an airport in the next year or so and building a new ferry terminal and other
necessary infrastructure it is entirely reasonable to expect significant economic growth
particularly compared to recent years of decline. There exists the potential for many new
housing starts do to one of the highest level of vacant but "shovel ready" housing lots in
the Community directly the result of Kootznoowoo shareholders receiving lands from
Kootznoowoo. We expect Angoon to likely experience an unprecedented power
demand in converting home heat fuel from diesel to relatively inexpensive hydroelectric
power which, in turn would justify line upgrades and line expansion to new areas within
the community.
Currently, the community of Angoon has one of the highest unemployment rates at 87%
(source TANF program, Central Council of Tlingit and Haida Indians of Alaska) and
lowest per capita income in Southeast Alaska. The per capita income for Angoon was
$11, 357. Nearly a third of families and Angoon's overall population are below the
poverty line (source US Census Bureau Fact finder for Angoon, Alaska). Alaska ranks
number one in energy use per capita. According to the Cold Climate Housing Research
Center 2009 Alaska Housing Assessment, the average Sealaska household (of which
Angoon belongs) consumes $6,072 of energy per year.
Over half of the average household per capita income of Angoon residents is spent on
energy. The impact of this project to bring low cost hydropower to the community of
Angoon and energy customers is potentially profound. Energy customers are making
decisions to either heat their homes or feed their household. TLHD is ready to finalize its
design based on these facts and the enormous price increase in the cost of diesel since
the HDR feasibility analysis. An updated design and procurement of necessary permits
and funding is all that remains between continuing the decline associated with diesel
generation and the growth anticipated with economical and non volatile hydroelectric
power generation. The boost to the economy with the construction should be the
catalyst for this growth as families begin to return to Angoon once the see progress on
the horizon. An investment by the State of Alaska alongside the current award by the US
DOE in this project is needed now in order to save this community.
IPEC currently sells electricity in a non -subsidized rate at over $0.52 per kWh. TLHD
would dramatically reduce and stabilize the electrical rate, would provide for a
meaningful alternative to heating fuels such as diesel, propane and wood and would
allow the City of Angoon to prosper. It will result in direct out of pocket annual savings to
Angoon ratepayers of over $300,000 annually for electricity alone and increase
disposable income by nearly $600 per capita or $1800 for a household of three.
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As can be seen from the attached chart conversion to electric heat is entirely likely to
occur and the update to the existing feasibility will recalculate loads based on rational
economic behavior which can be shown graphically by the following chart. New homes
will also likely be constructed with electric heating as part of design. It is expected that
this conversion will be directly related to the price of electricity which in turn is based on
future demand predictions. Kootznoowoo would prefer to overestimate demand
estimates and encourages AEA to do the same for the factors mentioned above and for
the reasons we have seen other communities react to lower cost power.
Figure 3.2-1 Electricity Price Threshold for Conversion
Electricity Price Threshold for Conversion
Icg t J°b iI resL�g eRc:_rcy a�tl Oil Pride of e_ 90 p=r 115 gJ 'ty pn:e mist be less th 1C52'k:'rh ienJ
-
0.25 -_------ --__—
- [-#ficiexoy-
-----
--- - --- ---
--- ----------- ----- - -- ----_--�3il+leatCY-
0.20
s_______
___
,_______________-__ _________
__________ _________
0.15
_________
----------
--------------------------
--------------- ------ ------
------
0.10
'_____________________ ___!
_____________
0.05
-----------
0.00
--------------------------
---- ------------------------------- ---------
1.00 1.20 1.40 1.60 1.80 2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40 3.60 3.80 4.00 4.20 4.40 4.60 4.80 5.00
Oil Price (SNSgal)
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
• Kootznoowoo will operate the Project in a corporate entity. At present it has
reserved the name Natural Power for such a purpose. The likely entity will be an
LLC that will operate as an IPP. The LLC structure gives Kootznoowoo the
benefits of corporate protection of assets and is consistent with other entities
owned by Kootznoowoo, Inc., and it can be managed for little additional costs.
This form of business structure gives us the greatest opportunity to attract and
retain partners such as the local utility once the project is fully constructed and in
an operating mode. Other concepts may need to be considered as facts and
circumstances dictate.
• Kootznoowoo expects the project to finance the maintenance and operations for
the life of the project as run of river hydro projects while expensive are very well
understood and relatively simple to maintain and operate.
• Identification of operational issues that could arise.
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• According to HDR the operational cost of the Project was calculated to be $85,000
per year in 1999 dollars. Costs identified were Labor, Transportation by boat,
Miscellaneous Expenses, Administrative, Insurance and Replacement Reserves.
Even after adjusting for inflation these figures appear too low and unrealistic given
reporting requirements for IPP's in Alaska. We believe that economies of scale
and operation can be achieved by working very closely and cooperatively with the
local utility and we will explore this thoroughly during the negotiations for a power
sales agreement. Because on -going back-up to the Project must be provided by
IPEC we expect to be able to achieve our mutual goals of the lowest cost power to
the community and at the same time look forward to increased economy as
demand and revenues grow.
• Kootznoowoo is committed to reporting the savings and benefits of this project as
part of its ongoing responsibilities under the grant and under its role of steward of
the lands and waters in and around Angoon. It will of course have a long-term
interest in Angoon and its largest landowner, and as its business interests grow
with economic and competitive energy becomes available.
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.
As stated elsewhere Kootznoowoo has methodically moved this project forward and anticipates
that the final design and permitting will be completed in the fall of 2012. Accordingly we intend
to proceed immediately to construction once funds are approved. This will require preparations
that include acceptance of final design, specifications and construction drawings, short listing one
or two acceptable project contractors and negotiating financing or finding all necessary funding.
Kootznoowoo has met the Forest Service requirements to date for designing TLHD as stated
elsewhere. We have completed all required environmental work with the assistance of the USDA
Forest Service. The Department of Energy has awarded Kootznoowoo preconstruction funds.
Kootznoowoo is in good standing given the snatch provided by the AEA. Kootznoowoo
anticipates completing the requirements of both grants.
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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 City of Angoon, the Angoon Community Association (federally recognized tribe),
IPEC and relevant entities have made it clear that this project is uniformly considered the
number 1 community priority and project even though the Community has other projects,
earlier in the development phase, that are beneficial to the Regional Economy and the
Community. The priority is established, in part, because it was a dream of Angoon's
Elders, at the time of ANCSA, to build this project. The City of Angoon, the Angoon
Community Association (federally recognized tribe) and Kootznoowoo considers this
project the community's highest priority. This may be the only project in the Tongass
that enjoys support from both the conservation groups as well as the industry. According
to the Forest Supervisor of the Tongass, Forrest Cole and as reported to Kootznoowoo,
Inc. by the Monument Ranger in June 2010, it is the number 1 priority of the Tongass
National Forest. Kootznoowoo does not expect any opposition to the project. Letters of
support are on file with the AEA and included in Round III and Round IV applications.
Also, please review the Final EIS and the USDA Forest Service ROD for a complete list
of support letters from the region and the community.
Include letters of support
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
Provide a narrative summary regarding,funding sources and your financial commitment to the
project.
As described in the Round IV application, the total cost of TLHD is estimated to be
approximately $14 million, including all costs spent to date. More than likely this will change
with the results of final design and preconstruction activities planned in 2011112. Initial
reconnaissance studies, preliminary design, and the necessary environmental work were funded
from internal equity and a small federal grant as well as support from the USDA Forest Service
who prepared the Record of Decision, the project scoping and environmental work necessary to
complete the FEIS.
Currently, internal equity totals slightly more than $2.2 million. For several years, internal
equity has been used to move the Project forward.
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A federal award was recently added to the project sources of funds and the Kootznoowoo Board
has accepted these funds and directed staff to seek sources of the match which was accomplished
this past year through our Round IV efforts and AEA's response and subsequent appropriation.
This application continues the effort to find equity dollars to construct the project.. Other efforts
include possibility of liquidating assets of Kootznoowoo to invest in the project. Given the
economics both to Kootznoowoo and the future ratepayers it essential to maximize efforts to find
grant funds from all possible sources. Significant funds, tribal funds for economic development
and healthy communities, tribal road funds and as well as funds designed for simply creating
sustainable communities continue to be available to the project.. The State of Alaska's
contribution would certainly improve the chances of completing this project at the earliest date
possible. We have discussed with the AEA utilizing a combination of General Funds and State
Loans or Loan assistance to complete project constructions. Future costs will be funded by a
combination of corporate equity, possible debt, federal grants, and proceeds from this grant.
Total equity will be targeted at 20 percent of total Project costs ($2.8 million). Kootznoowoo is
committed to the completion of Thayer Creek and we will continue to rely on the City ofAngoon
and the federally recognized tribe (the Angoon Community Association) for project support so
that benefits may flow to the ratepayers ofAngoon.
To date we have favorable response from the federal government and the State of Alaska — the
federal government on business case, feasibility and environmental analysis and the fed/state of
preconstruction and permitting. It is anticipated that a combination of fed/state support will be
needed to complete construction and enter into operation but the end product is designed to
create a self sustaining community based energy source for both electric and home heating
purposes. It is designed financially to move the community away from non renewable resources
to renewable and designed to eliminate an ongoing subsidy from the State of Alaska and replace
that with a productive economic base including lands and waters currently owned by
Kootznoowoo and its shareholders which is relatively unproductive.
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Renewable Energy Fund
Grant Application Round 5
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.
Print Name
Peter M. Ior
Signature
,/
Title
r
Vresident, General Ma ager and Project Manager
Date
August 25, 2011
AEA12-001 Grant Application Page 28 of 28 7/1//2011
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/GoVD ALASKA Renewable Energy Fund Round 5
40= ENERGY AUTHORITY Grant Application
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
GrantApp5.doc
Application form in MS Word that includes an outline of
Form
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
Costworksheet
Summary of Cost information that should be addressed by
Worksheet
5.doc
applicants in preparing their application.
Grant Budget
GrantBudget5.
A detailed grant budget that includes a breakdown of costs by
Form
doc
milestone and a summary of funds available and requested to
complete the work for which funds are being requested.
Grant Budget
GrantBudgetln
Instructions for completing the above grant budget form.
Form Instructions
structions5.doc
Authorized
Authorized
Form indicating who is authorized to sign the grant, finance
Signers Form
signers
reports and progress reports and provides grantee information.
form5.doc
• 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.
AEA 12-001 Application Page 1 of 28 7/1/2011
ALAHSKA
Renewable Energy Fund
Grant Application Round 5
SECTION 1 — APPLICANT INFORMATION �77
Name (Name of utility, IPP, or government entity submitting proposal)
Kootznoowoo Incorporated
Type of Entity: Fiscal Year End opezcmeeyl-
Independent Power Producer (�
-
Tax ID # % Tax Status: x For -profit or non-profit check one)
Mailing Address
Physical Address
8585 Old Dairy Road, Suite 104
8585 Old Dairy Road, Suite 104
Juneau, AK 99801
Juneau, AK 99801
Telephone Fax Email
907-790-2992 907-790-2995 peterCcbkootznoowoo.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Title
Peter Naoroz
General Manager and President
Mailing Address
8585 Old Dairy Road, Suite 104
Juneau, AK 99801
Telephone
Fax
Email
907-790-2992
907-790-2995
peter kootznoowoo.com
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
X
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes
1.2.2. Attached to this application is formal approval and endorsement for its project by
its board of directors, executive management, or other governing authority. If the
applicant is a collaborative grouping, a formal approval from each participant's
governing authority is necessary. (Indicate Yes or No in the box )
Yes
1.2.3. As an applicant, we have administrative and financial management systems and
follow procurement standards that comply with the standards set forth in the grant
agreement.
Yes
1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached
grant form. (Any exceptions should be clearly noted and submitted with the
application.)
Yes
1.2.5 We intend to own and operate any project that may be constructed with grant
funds for the benefit of the general public.
AEA12-001 Grant Application Page 2 of 28 7/1//2011
/4KIF' ALASKA Renewable Energy Fund
ENERGY AUTHORITY Grant Application Round 5
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)
Type in your answer here and follow same_format for rest of the application.
Thayer Lake Hydropower Development (TLHD) Generation 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.
The Project location is located on the west shoreline of Admiralty Island National Monument
approximately six miles north of Angoon, Alaska in the middle of the Kootznoowoo
Wilderness. The City of Angoon, the Southeast Region and the State of Alaska will benefit
from this project.
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
X
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
Design and Permitting
Feasibility
X
Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
Thayer Lake Hydropower Development consists of a 1+MW run of the river hydropower project
located in the Tongass Forest within the Admiralty Island National Monument based on a
proposal that Kootznoowoo submitted in March 2000 which is described more full in the
Angoon Hydrologic Project Feasibility Evaluation Report currently on file with the AEA (Project).
The development would be located on Thayer Creek approximately 6 miles north of Angoon.
Thayer Creek flows out of Thayer Lake (64 square mile reservoir) at a gentle grade through a
broad forested valley then steepens for 6,800 feet through a narrow forested canyon and finally
flattens again for 2000 feet before flowing into Chatham Strait. The development will tap the
energy potential in the steep section of the stream and will avoid any impact on anadromous
fish that use the lower portion of the creek. The average flow of Thayer Creek is approximately
370 cfs and can vary from 25 cfs during the coldest periods of the winter to over 2000 cfs during
storms in the fall and winter. The generating facility has a head of 250 feet which is
AEA12-001 Grant Application Page 3 of 28 7/1//2011
&ALASKAENERGH
Renewable Energy Fund
Grant Application Round 5
approximate because of the wording of the Forest Service Record of Decision (ROD) requiring
maintenance of fish habitat. An additional restriction set forth in the ROD which is not
considered in the HDR proposal requires the overland transmission line be buried where
feasible along the access road to the community of Angoon. The transmission line funding will
be submitted in a separate companion application for Round V funds.
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.)
Kootznoowoo's goal in applying for these funds, which will augment other sources, is to
construct the generating portion of an energy generating and transmitting project that
meets the congressional requirements of the Secretary of Agriculture for the cultural
and economic benefits for the community of Angoon and as such is mindful of the
increased health risks and costs associated with the current diesel based generating
capacity of Angoon, Alaska. While not quantified in terms of health care costs savings
over time and impacts on the global economy Kootznoowoo goal is to decrease and
ultimately eliminating the hydrocarbon emissions attributable to current diesel
generating facilities in the community and replacing it with clean generating capacity
and backup.
An additional public benefit is eliminating relatively risky shipments of diesel fuel in a
very important state fisheries area surrounding the community of Angoon and the
concomitant costs associated with stand by and actual clean up efforts which must be
borne by the utility rate payers and both the State of Alaska and the federal
government.
Reduced fuel costs and lower energy costs, particularly to businesses and government
sector users, provide significant public benefit and an opportunity for economic growth
in an otherwise stagnant and declining economy.
Finally, the replacement of volatile priced fuels that must be transported at significant
additional expense will be replace by clean and stable priced renewable fuel which is
locally produced.
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.
Kootznoowoo has expended significant funds, time and effort to date on this project. The State
of Alaska and the federal government have also contributed funds in identifying this project and
preparing a Record of Decision and a Final Environmental Impact Statement. Based on the HDR
feasibility and evaluation report reference herein and submitted to AEA as part of Round IV
application updated for inflation and additional known charges, the following is the current
budget for completion of the overall project:
Reconnaissance, Feasibility, Environmental $ 2,200,000
Preconstruction Engineering, Permitting, Design & Construction $ 2,221,000
Construction Costs Generating Facility Only $ 4,372,402
AEA12-001 Grant Application Page 4 of 28 7/1//2011
A L A S K A
4NE—) ENERGY AUTHORITY
Renewable Energy Fund
Grant Application Round 5
Construction Costs Transmission Facility
Contingency
Total Project Cost with Contingency
$ 4,784,000
$ 1,623,706
$15,201,108
Kootznoowoo is not seeking recovery of previously expended funds through this application.
Kootznoowoo's request for funds under this application is for $3,500,000, which includes
construction activities associated with the construction of the generating facility, road, diversion
structure, and penstock and power house shown in the HDR, Alaska Project documents.
In a separate application filed in conjunction with this application Kootznoowoo is requesting
funds in the amount of an additional $3,500,000 for the transmission line construction (including
construction of maintenance road and burying transmission lines where feasible as well as
tunneling under Kootznoowoo Inlet to complete the transmission connection to the community).
The intent of the separate application is to seek maximum State funds for both portions of the
overall TLHD Project and begin construction of the transmission components in the Summer of
2012.
Kootznoowoo will contribute and endeavor to secure the additional funds necessary to complete
the final project. It will seek additional funds from sources including but not limited to direct
federal funds, tribal authorized funds and funds available from the community or the State of
Alaska.
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.
$3,500,000
2.7.2 Other Funds to be provided (Project match)
$872,402
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2)
$4,372,402
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
$15,201,108
including estimates through construction)
2.7.5 Estimated Direct Financial Benefit (Savings)
$20.7 million
2.7.6 Other Public Benefit (If you can calculate the benefit in
$14.4 million conversion
terms of dollars please provide that number here and
of diesel home heating
explain how you calculated that number in your application
from diesel
(Section 5.)
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
AEA12-001 Grant Application Page 5 of 28 7/1//2011
A L A S K A Renewable Energy Fund
/ME:) ENERGY AUTHORITY Grant Application Round 5
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.
The project manager will be Peter Naoroz the General Manager and President of
Grantee. Mr. Naoroz' resume is attached. Mr. Naoroz intends to hire an assistant
project manager who will be retained by a firm with significant qualifications in
completing run of river hydroelectric projects. Because of the unique nature of this
project's location and permitting requirements, Mr. Naoroz will maintain full
responsibilities for permitting, will directly oversee the Assistant Project Manager,
project funding including power sales agreement, and project implementation including
but not limited to procuring project construction management services and retaining
qualified general contractors who meet requirements of the USDA Forest Service.
Firms which have expressed an interest in providing project management services
include Chatham Electric, AP&T, and Cascade Creek, LLC, and other companies
identified during the final design work being conducted in FY ending June 2012. We will
be continuing our search for qualified firms and select one based on a proven capability
to perform work on time and on budget, experience in building hydropower in Southeast
Alaska; proven experience in building Low Impact Hydropower Institute approved
hydropower generation facilities.
Kootznoowoo will coordinate with and solicit input from AEA, the City of Angoon, the
Angoon Community Association and the certificated public utility, IPEC during each
phase of the Project.
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.)
Many phases of the development project have successfully been completed. The
reconnaissance and preliminary feasibility and environmental work necessary for
proceeding to preconstruction activities have been completed and fully funded by either
Kootznoowoo or the federal government. The schedule of proposed work that will be
funded by this phase of this grant includes the following major tasks:
• Any finalization of Special Use Permits
• Additional fundraising
• Bidding of Construction activities under Final Plan
• Construction Commencement, Substantial Completion, Testing and Final Signoff
under provisions of Power Sale Agreement and Commencement of Operations
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them. The
Milestones must also be included on your budget worksheet to demonstrate how you propose to
manage the project cash flow. (See Section 2 of the RFA or the Budget Form.)
Construction Phase
Confirmation that all design and feasibility requirements are complete. Sept. 2012
Completion of bid documents October 2012
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Bidding, Feedback and Bid Awards
January 2013
Road Construction — Generation Facility
Spring Summer
2013
Road Construction — Power Line and Transmission
Spring Summer
2013
Power House Construction
Spring Summer
2013
Transmission Line Construction
Spring Summer
2013
Integration and testing
Fall 2013
Decommissioning old systems or System Integration
Winter 2013
Final Acceptance, Commissioning and Start-up
Spring 2014
Operations Reporting
Spring 2014
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.
No formal partnerships or commitments with other entities other the U.S. Department of
Energy have been entered into. Kootznoowoo has entered into a Memorandum or
Understanding with the local federally recognized tribe, Angoon Community Association
as well as the City of Angoon. We also have the support and cooperation of the City of
Angoon and the Angoon Community Association as can be evidenced by previously
submitted Energy Resolution which remains in effect, as well as the Resolutions of
Support from each organization. This critical group of entities will work collaboratively
on supporting the development of the Project and utilize their influence to move the
project to completion. In exchange for this support Kootznoowoo will endeavor to make
the project a success by completing tasks on time and on budget, and by keeping these
entities informed on progress; utilizing open and competitive bidding on project
components; and providing for and requiring a local hiring preference for labor and
contracting. Kootznoowoo selection processes include a preference for shareholders
and their spouses during competitive bidding. Kootznoowoo also commits to the
procurement requirements of the federal government, its agencies and including those
requirements of the Recovery Act (Stimulus) as required by funders. The AEA will have
access to all final bid documents and criteria prior to bid awards. Kootznoowoo Project
Manager retains all contract decision authority.
IPEC, the community of Angoon's electric utility, has prepared a strategic plan which
has been adopted by its Board of Directors identifying the Project as its renewable
solution for the Community. The plan states that TLHD will displace 90% of the diesel
requirement it uses to generate electricity. On June 1st 2009 representatives of IPEC
and the AEA described Thayer Lake as Angoon's perfect solution to decrease local
diesel generation. The purpose of the meeting was to seek common ground to building
the project. Subsequent to this meeting Kootznoowoo has received a bid from a highly
regarded law firm to assist Kootznoowoo in entering into a power sales agreement once
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we are in a position to determine the final economics and as a condition to funding
construction of the project. Kootznoowoo expects significant public benefits to ensue
from the project which will be memorialized in the final power sales agreement.
IPEC has reported to the Southeast Conference in its Status Report on Quest for Diesel
Independence dated September 14, 2009 that "it is conceived that IPEC will buy power
from Kootznoowoo when the project is built as long as it is cheaper than diesel -
generated power." Kootznoowoo will not proceed with this project unless this is the
case and it will not proceed unless TLHD can significantly reduce the overall cost of
power to Angoon ratepayers. IPEC's letter dated November 7, 2009 has previously
been provided to the AEA. On August 19, 2011 IPEC wrote to all of its customers a
letter that stated in part "IPEC believes that Thayer Creek project is the best and most
promising renewable energy project that could lead to reduced rates in Angoon, and we
stand ready to do whatever we can to advance this project." Letter attached.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
During finalization of Project Design and Permitting, the Project Manager will initiate a bidding process
with the advice and guidance of the Kootznoowoo Advisory Committee which has been constituted and
includes the following organizations and interests which has been authorized by the Kootznoowoo Board
of Directors:
Kootznoowoo, Inc. — Peter Naoroz, General Manager and Chair of Committee
Local Utility — Peter Bibb, COO, IPEC has been invited
State of Alaska — Lawrence Blood, Rural Utilities Business Staff, DCRA, State of Alaska has accepted
Representative of the USDA Forest Service — Chad Van Ormer Admiralty District Ranger
Representative of the City of Angoon — Mayor Albert Howard or designee
Representative of the Angoon Community Association -- President Wally Frank or designee
Natural Currents LLC — Mr. Roger Bason, President and CEO
Kootznoowoo will plan to monitor phases of the project and keep AEA informed on the status by
communicating internally and externally as follows:
Weekly conference calls among the Project Manager and potential contractors and consultants with a
report of findings to the Advisory Committee via email.
Scheduling of initial meeting with AEA.
Monthly Scheduled meeting of Kootznoowoo Advisory Committee with written progress reports to AEA
and U.S. DOE Golden.
Selection of General Contractor Qualifications and recommendation from Advisory Committee and
Project Manager to Kootznoowoo Board of Directors with copy to AEA and any other Grant fonder for
informational purposes.
Submittal of updated Schedule and Cost Estimates to all interested parties including AEA.
During Project construction, communications within the team will consist of:
Weekly conference calls among the Project Manager, Construction Manager, Construction
Superintendents, Design Engineer, and representatives of the Forest Service with written report to
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Weekly regarding compliance with environmental requirements
Bi-weekly written reports from the Construction Manager and Design Engineer detailing work completed,
work to be completed in the next two weeks, and potential problems identified.
Periodic site visits by the Project Manager, Construction Manager, Design Engineer, with a detailed
report on findings provided to the members of the Kootznoowoo Advisory Committee
These internal discussions and reports will form the basis of monthly reports and quarterly reports to the
AEA and others.
The reports will show in a clear and concise manner progress made on the various tasks and milestones,
the work to be accomplished in the ensuing month, and potential problems and corrective actions to be
considered or implemented. Cost data as described above will also be provided on a monthly basis.
Microsoft Project or similar software will be used to develop and maintain schedule and budget
information; updating of the management files will be on a bi-weekly basis.
3.6 Project Risk
Discuss potential problems and how you would address them.
Resource construction always carry certain amounts of uncertainty be it technical or
financial. Construction of a run of river project such as TLHD carries significantly less
risks than say a lake tap project with significant underground work. Additionally the
technology is proven and risks are further mitigated by complete and thorough Forest
Service oversight; particularly, when the standards are established and applied by the
USDA Forest Service under their standard field manual and a ROD which has been
thoroughly vetted by stakeholders through a full blown Environmental Impact Statement
and a to be established Special Use Permit. This high level of scrutiny was established
by the U.S. Congress under ANILCA. However risks do exist and some of the potential
risks and mitigating actions being taken by Kootznoowoo Incorporated for TLHD
includes the following.
Permitting — Will be substantially complete prior to use of construction funds.
Final Design — Will be completed and Construction documents prepared in a manner
that is consistent with the Record of Decision by the Forest and the Final EIS
Seismic — Project components will be designed appropriately for seismic activity, and it
is noted that the Eastern Denali- Chatham fault line runs through Chatham Straits where
Thayer Creek outfalls. The ROD requires that the diversion dam be constructed to
meet the guidelines for low hazard dams established by the Alaska Department of
Natural Resources. (ROD page 11)
Underground Construction — The current design for the project does not include
significant underground construction. Appropriate Geotechnical work will be done as
part of the preconstruction activities and finalized prior to construction activities at the
diversion structure and power house foundation and Penstock placement to assure
sound construction. It is anticipated that a routine boring and tunneling will occur to
cross Kootznahoo Inlet.
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Construction Pricing and Performance — Only qualified contractors will be given a bid
package and they will be required to make appropriate site visits to assure the quality of
their bids as part of the bidding process.
Cost Overruns — The Project budget includes an appropriate level of contingency.
Operations — All major elements of the Project will carry standard warranties as
appropriate.
Operations and maintenance of the Project will be performed by qualified contractors in
accordance with Forest Service and Kootznoowoo hiring and employment policies.
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
available for the market to be served by your project.
The TLHD as envisioned will be a 1+ megawatt hydroelectric resource located
approximately 6 miles north of Angoon Alaska. Annual energy production during an
average water year is estimated to be 8 million kilowatt-hours. The community load
factor will be confirmed during the upcoming year with the final design and confirmed
based on the passage of time, new telecommunication, entertainment and broadband
services and the conversion of diesel heat to electric heat as well as projected load
factors.
During final design the Project will be evaluated to accommodate increased storage in
the future and new technology to deal with freeze that will allow for better matching
generation with load requirements. These features are not felt to be warranted at this
time but as loads increase will be reconsidered.
Advantages: As will be discussed in the next subsection, diesel generation must be used
to provide electric generation in Angoon. The TLHD project will eliminate the need for
approximately 95% of the diesel generation until alternative reliable backup can be
provided that is capable of generations during low water according to estimates provided
by IPEC, the certificated community utility.
While other small hydroelectric resources are available in the area, none are as
accessible and proximate to Angoon, nor are they ready for immediate construction.
The project is located in a hydro reserve envisioned by Congress to provide power to
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Angoon. Tidal energy has promising potential in and near Angoon but the technology
will need to be proven and deployment cannot be deemed feasible nor reliable at this
time.
Geothermal, biofuel, wind and other alternative energy production is all of limited
application to Angoon at this time because of the lack of development of the regional
intertie. Until this is accomplished the best source of power necessary to displace diesel
in Angoon is this Project.
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.
Inside Passage Electrical Cooperative (IPEC) until recently operated (3) 500 kva diesel
fired generators at a diesel cost of over $4.25 a gallon (and increasing) resulting in a
power cost to consumers and businesses that are approximately $.54 per KWh currently
and as high as $0.62 per kWh recently. Significant upgrades have occurred under the
supervision and by the AEA. The Grantee is aware of the upgrade to the system and
the addition of a new control system which currently is presently having "bugs worked
out". It is assumed that the efficiency of the system will be slightly better. Until the
system reliability is confirmed by IPEC and AEA we assume that the historic numbers
mentioned elsewhere are accurate for this grant proposal. Feedback from AEA and
IPEC would be helpful in other grant request the Grantee will be making however IPEC
feels that it may be premature to engage in depth discussion because of limited
resources and manpower at their end.
Historically and until the past couple of months the community of Angoon has been
serviced by IPEC with four diesel generators.
Generators (#2 diesel fuel engines)
Caterpillar 3456ATAAC 475 kW
Caterpillar 3508DI 550 kW (existing)
Angoon's electric generation facility consists of three diesel generator sets (genset) with
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a total capacity of approximately 1,500 kw. The community's load is typically between
250kw and 400kw. Their voltage output is 480v 3-phase which feeds three -250kw
overhead transformers. These transformers boost to a 7,200v distribution voltage and a
majority of the community receives power by an overhead distribution system.
Kootznoowoo understands that these systems have been removed and replaced with
one 1 CAT 3456 genset with planned heat exchanger. We understand that this planned
unit is in testing mode and no reliable data on efficiency has been established. While
optimistic about savings, this application assumes similar efficiency going forward on the
basis of a stable load. AEA will have the best information available through its oversight
of the project.
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.
Existing Energy Resources are entirely diesel generation by the local electric utility and a
combination of wood, diesel and propane for heating and cooking. Several other
residences and a large lodge utilize diesel generation for their electric production. As
detailed in the next section significant need and demand exists under a lower cost price
structure for electricity. The Project is designed to displace fossil fuel and replace with
local clean renewable energy.
In 2007, IPEC burned 147,157 gallons of diesel to produce 1,949,156 of sold kWh. The
average cost of diesel was $2.55 in 2007, but exceeds $4.25 in 2010. In 2011
Kootznoowoo paid a high of $4.70 per gallon and a low of $4.67 per gallon for number 1
diesel plus delivery or nearly $5.00 per gallon. With diesel rising $5.00 is a realistic
round figure for current home heating costs. Our hydropower development will stabilize
electrical costs to a low rate, reduce operating costs, reduce fuel spill issues and reduce
carbon emissions in our community. These ancillary benefits are in addition to
significantly increasing the standard of living of one of the lowest income per capita
communities $11,357 with 82% of the residents being Alaska Natives with an overall
community poverty rate of 27.9% (2000 US Census and Alaska Dept of Labor Workforce
and Development 2007) with 87% unemployment (TANF, Central Council of Tlingit and
Haida Indians of Alaska).
The average annual flow of Thayer Creek is estimated to be 369 cfs with peak flows
exceeding 2000 cfs (HDR 2000 and with 2003 update data included). Hydrodynamic
head at proposed power house site is 250 feet. The development has the capacity to
generate 8,500,000 kWh annually or four times the current consumption load of the
community. It is anticipated that economic forces of elasticity of demand in the
consumer, tribal and business markets will increase demand from the current usage.
Further, most homes, businesses and schools are heated with diesel fuel. It is
anticipated that with the advent of low cost hydropower that space heating energy usage
will begin substitution from oil heat to electrical heat once the project is completed.
Kootznoowoo expects the demand to expand as future local demand as sales
opportunities are created.
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One demonstration solar energy site has been developed in the last year involving a
single residential home. No data is available has been available even though the project
has been in operation slightly over a year.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The following table provides a historic summary of energy sales over the past six years
according to IPEC and as publish by AEA for the community of Angoon
FY 2003
1,755,719
kWh
FY 2004
1,765,541
kWh
FY 2005
1,746,764
kWh
FY 2006
1,658,402
kWh
FY 2007
1,677,750
kWh
FY 2008
1,934,201
kWh
FY 2009
1,893,727
kWh
FY 2010
1,739,139
kWh
The Thayer Lake Hydropower Development is the highest economic and energy priority
for the City of Angoon, the Angoon Community Association (traditional IRA tribe) and
Kootznoowoo Incorporated as evidenced our jointly developed Angoon Community
Energy Plan.
The economic benefits of this project are profound and will decrease the diesel
generated electrical expenses to the State of Alaska (through PCE program) community
residences, businesses and tribal members by over $900,000 a year (2012 expected
cost of $0.62 per kWh versus an expected hydropower development cost $0.15 per kWh
at a community usage of 2,000,000 kWh per year). This is a profound economic impact
since the community has a population of approximately 470. In addition, the advent of
low cost electricity will provide strong incentive for businesses, schools, municipal
buildings and homes of tribal members to convert from expensive diesel space heating
to cheaper and more economically reliable hydropower electricity. It is estimated that
this will provide an additional $1.5 million dollars in collective energy savings in
displacing another 500,000 gallons of diesel a year. Kootznoowoo through TLHD has
the goal to completely displace the use of fossil fuel use in Angoon with a goal of 100%
renewable energy driven Native community as a hallmark of the only community in the
Admiralty Island National Monument Wilderness. TLHD will allow Angoon to become
energy self sufficient in energy generation for current and future load growth. Converting
police, municipal, school, and fire vehicles (as well as personal vehicles) to plug in
electric and or electric hybrid vehicles will over time further decrease the use of fossil
fuels in Angoon.
In addition to the substantial increase in the standard of living and promotion of
economic benefits, TLHD will provide cultural and social benefits. Currently the Angoon
public schools have cut back on sports and extracurricular activities in order to pay
energy expenses. These lack of activities have spawned unwanted social behaviors that
would be eliminated if these programs could resume with lower energy costs. The gym
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and other sports activities are unheated or not heated after hours which have further
reduced the recreational and social activities or our youth. In some cases, this has led
some of our tribal member families to move out of their traditional community so they can
provide resources to their children. TLHD will reverse this downward social spiral
impacting our youth and young adults.
Many of our elders are on fixed income and many residents live on a subsistence
lifestyle where fishing and hunting provide the majority of the protein consumed in many
households. Allowing fish and game to be readily and more cheaply frozen will allow
more sharing of resources with our elderly and at our social gatherings where
subsistence foods is a staple. Additionally, many of our citizens have curtailed their
transportation expenses to regional cultural events so that they can pay their energy
bills. This has led to a decrease in some of our most respected elders and leaders from
attending and contributing to important Native issues and forums. In some cases, our
elders have had to move out of their traditional community leaving a vacuum of tribal
knowledge and protocol with some clans.
Some of our traditional clan houses have become in disrepair because there are no
funds to heat the houses which has led to further degradation. Lower energy costs will
allow clans and their members to fix and maintain structures that are over 100 years old.
It is important to the community of Angoon to protect and allow these cultural structures
to be preserved. Furthermore, it is difficult for our community to host regional events that
Angoon has traditionally hosted due to the high cost of energy. Therefore, low cost
hydropower will revitalize our ability to host cultural and traditional events that we have
been forced to eliminate.
An ancillary benefit is that Thayer Creek has the opportunity to provide future clean
water source for the community of Angoon. The location of existing small dam and
water line along the planned transmission line provides the opportunity for additional
infrastructure along an existing grandfathered right of way for future water sourcing.
Although the current Angoon water source is acceptable, it has limitations and the
Thayer Creek could provide a better quality water source in the future. An underground
crossing alternative across Kootznoowoo Inlet provides significant opportunity to
enhance water supply and fire protection as part of the Project at no additional costs.
Angoon's largest employer, a destination lodge of national reputation, has until recently
provided its own diesel generated power and has become an IPEC customer. This
Lodge burns about 15 gallons per hour of diesel for 90 days a year or about 32,400
gallons. The national economic picture makes predictions about the future of the Lodge
uncertain however lower cost energy will certainly enhance operations.
The City of Angoon has expended funds on renovation of a cold storage facility and is
expected to be operational as soon as economic and less expensive power is available.
This facility was constructed in conjunction with the Angoon Community Association with
contributions from Kootznoowoo but cannot operate at the existing cost of power and
therefore it cannot support the fishing industry. When operating much of the operation
will be seasonal in nature. However, the facility will be open the entire year with some
basic maintenance load during the off-season months.
Kootznoowoo, in collaboration with Tlingit and Haida and Sealaska, had created the
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Angoon Business Center which limped through 2009/2010 but will be terminated from its
current location for lack of funds to support the operations going forward. This business
incubator while run as energy efficiently as possible supported 15 computer terminals
and a fledgling business which manufactured coats with a number of sewing machines.
The Angoon business center has found new sponsors but it replaces a load which was
part of the school district and the vacancy created has not be absorbed by an
economically viable entity.
Kootznoowoo and others have also considering establishing a tourist destination facility
that will include a large all electric commercial kitchen that was contributed to the
community as a gift from a local benefactor. This kitchen served a camp of 125 workers
daily and with significant power requirements that will likely be served by a standalone
generator. Community economics and high cost of electricity have prevented this project
from moving forward.
Kootznoowoo has been contacted by more than one small cruise operator and has
looked at the potential benefits of attracting small boutique boats to Angoon. The lack of
modern amenities and the cost of services with embedded costs of utilities make such a
proposition marginal in terms of economics. Being able to attract and charge berth fees
which include reliable shore power would change to economics to marginally attractive.
Perhaps the single most significant factor which must be considered as a potential
impact on the energy market is the possibility of bringing on significant new housing to
the market. Remarkably, at a time when most of Alaska is experience significant
migration to regional centers, Angoon continues to maintain a core population despite
the high cost of transportation and energy. The reasons are beyond the scope of this
application but importantly each and every original shareholder of Kootznoowoo was
deeded a residential lot of a minimum size of/2 acre and up to 1.5 acre depending on
location. In addition to this conveyance nearly 900 acres of prime real estate was
conveyed to the City of Angoon for future development. There is no other community in
Southeast Alaska with this inventory of platted residential lots and opportunities for
immediate growth. If the average usage is extrapolated over 4 times the number of
homes and business in Angoon it is reasonable to predict the load growth will quadruple
and the load growth would be faster than average due to pent up demand. Reasonable
scenarios exist that completely reverse the stable to declining economy of Angoon with
reduction of energy costs.
GCI has recently installed a cable landing station in Angoon that is a customer of IPEC.
This cable landing station also provides television, broadband and telephone service to
Angoon at the lowest rate in the State. Accordingly, it is reasonable to expect use of
these services to increase the average household demand for electricity in the future.
The historic TV cable provider (the City of Angoon) will be displaced with higher value
lower cost content provided by GCI.
Without TLHD any one of these loads would create significant need for diesel
generation. The Project will provide the long-term/low-cost power required for the
development of these and other potential loads. The Project will increase the value of
the public's private property and business in Angoon and increase the likelihood that
new businesses will begin and be able to maintain themselves and not fail due to the
high cost of electricity.
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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 HDR feasibility and evaluation along with the Forest Service FEIS has been
provided under previous cover to the AEA and are incorporated herein by reference and
more fully describes in detail the system we propose. The final design will update the
systems utilizing the Grant Awarded to Kootznoowoo, Inc. this past fiscal year and those
positive changes will be incorporated in the system which will be constructed. Land
ownership, permits and environment issues are described at length and the proposed
system is suitable and well thought out and designed to meet the requirements of the
U. S. Congress in granting certain rights to Kootznoowoo to develop hydroelectric
resources for Angoon.
The specific technology is well established and proven and consists generally of a small
diversion dam, a pipeline and penstock which powers two Francis turbines which in turn
generate the renewable energy — these facilities are considered the generating facilities
and the subject of one grant application in Round V. From the powerhouse the power
will be transmitted to Angoon via an overland transmission line which will be buried
where feasible consistent with the ROD. A second grant application will cover the
transmission assets and service road
The proposed plan is to install two generators capable of producing 1 MW however the
next phase will review all assumptions related to potential load and stream flow with the
goal of optimizing capacity. Given Angoon's current average load and peak load this
configuration is optimum as it will allow Angoon's current load to be serviced reliably with
some room to grow.
As designed the anticipated annual generation is approximately 8,500,000 mWh per
year which is approximately 4 times the annual requirements. Please see the details in
Selected Arrangements in the HDR report.
Once the final design is completed the only barrier to completing is construction funding.
On the operational side, occasional, low water flows will require the current diesel genset
to serve in a back up capacity on average less than a week during the coldest days of
the year. The energy produced will be transmitted over a 6 mile transmission line which
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will be buried where feasible and which will ideally be run through a drilled conduit under
Kootznoowoo Inlet to the existing power grid operated by IPEC, the Angoon's utility.
The local utility will purchase power from Kootznoowoo as provided in a power sales
agreement and operation and maintenance responsibilities will be detailed in that
agreement.
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.
All the land and waters upon which the Project will be situated is either National Forest in
a highly restricted category of land status — "Wilderness Monument" or on land surface
estate owned by Kootznoowoo, Inc. The Alaska National Interest Lands Conservation
Act (ANILCA), Section 506(a)3(B) gives Kootznoowoo, Inc., the right to develop
hydroelectric resources on Admiralty Island at the Project locations, subject to such
conditions as the Secretary shall prescribe for the protection of water, fishery, wildlife,
recreational and scenic values of Admiralty Island. The Secretary through the USDA
Forest Service has prescribed these conditions in the ROD completed in July 2009. The
intertie connection across Kootznoowoo Inlet between Kootznoowoo's surface estate
and the City of Angoon will involve future negotiation for easements with private
landowners and these details are anticipated as part of finalizing the permitting and
several options are available and funds necessary are anticipated to be well within the
contingencies provided.
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
Please see the ROD which is attached for a complete list of applicable permits. Permit
timeline will ensue once sufficient funds are available to engage permitting professional
and pay necessary fees including mitigations impacts necessary after negotiations.
Anticipated Permitting Timeline: September 2012 for USDA special use permits, FERC
does not have jurisdiction. Water Permits if any will be substantially negotiated by
September 2012.
Identify and discussion of potential barriers to permitting: Kootznoowoo does not
anticipate barriers based on discussions to date with Forest Service officials who are
responsible for coordinating activities of permitting authorities. The only significant
barrier to permits is funding. In all likelihood Kootznoowoo will need to mitigate the
impacts of affecting wetlands as required by the requirement of the U.S. Army Corps of
Engineer's 404 permit and may require longer time frame than September 2012 and this
will be dictated by final design.
Importantly Thayer Lake Hydropower Development is the number one priority of the
combined Angoon Energy plan in which Kootznoowoo, Incorporated, the City of Angoon
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41K--) ENERGY
Renewable Energy Fund
Grant Application Round 5
and the Angoon Community Association (traditional IRA) have signed off on. Please see
attached resolutions and letter to President Obama. In addition, IPEC submitted a
strong letter of support in Environmental Impact Study process and has demonstrated
their political and local support for the development. Additionally other communities and
important economic entities continue to support the Project and TLHD is blessed with
wide community support from within the community and tribal members that live outside
the community but would like to return once energy costs have been stabilized and an
economy can return. The development has a Final Environmental Impact study that is
culmination of years of environmental wrangling with the US Forest Service and
Environmental groups. We now enjoy the support of the US Forest Service along with
local and national Environmental groups. Our only barrier to development that we are
working on is securing funds for construction funds to build the development. With this
$3.5 million grant from the Renewable Energy Fund of the State of Alaska, the U.S.
Departments of Energy, Agriculture and Interior the cash flow from the project will more
than pay for the anticipated operating costs and under our scenarios make a return to
Kootznoowoo to provide resources for our tribal members.
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
Discussion
• Any threatened and endangered species have been fully disclosed in the Final
Environmental Impact study and do not pose a barrier to Project completion
• Habitat Issues are also disclosed in the same document and requirements for
mitigating the impacts on habitat are fully articulated.
• Wetlands and other protected areas are fully disclosed in the Final Environmental
Impact Statement (FEIS) and do not pose a significant barrier to Project
completion. The Army Corp of Engineers has physically been present on the site
with the Forest Service and Grantee and no barriers to construction are
anticipated with the current design.
• Archaeological and historical resources have been disclosed by the FEIS and
certain mitigation measures will be required which Kootznoowoo feels are
attainable and will require continued community participation and monitoring.
• Land development constraints have been fully analyzed by both HDR, Alaska and
the Forest Service based on their experts and significant experience. The original
road to the diversion dam was relocated based on recent experience in Gustavus
with roads that are proximate to streams and creeks. The relocation will add
slightly to the length but will protect critical habitat and reduce the chance of
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ALASKA
Renewable Energy Fund
Grant Application Round 5
unstable soils and fill
Telecommunications interference — there is no anticipated telecommunication
interference.
• Aviation considerations — the crossing off Kootznoowoo Inlet is designed to be
under water to avoid impacting the seaplane approach that is currently utilized by
the community.
• Visual, aesthetics impacts have been addressed fully to the standards established
by ANILCA in the Forest Service Record of Decision (ROD) based on the
alternatives established in the Final Environmental Statement.
• Identify and discuss other potential barriers
Kootznoowoo does not anticipate barriers based on discussions to date with Forest
Service officials who are responsible for coordinating activities of permitting authorities.
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
Proposed New System Costs and Projected Revenues
(Total Estimated Costs and Projected Revenues)
Attached is the detailed budget entitled "Thayer Lake Hydroelectric Budget" which has
previously been submitted to the AEA as part of Round IV. This information will be update with
the final design phase currently underway and it is anticipated that the costs will escalate over the
next 12 months at the current rate of inflation.
Also attached is a Schedule of HDR cost estimates which have been adjusted to 2011 dollars
using a 3% inflation rate. Updating to 2012 which we anticipate the start of construction will
escalate costs to approximately $8.8 million.
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.)
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Renewable Energy Fund
Grant Application Round 5
TABLE 4.4.2 Project Operating and Maintenance Costs
0&M Cost
Basis
Amount
Labor
1 half-time position
$25,000
Transportation
200 trips/year@$25/trip
$5 000
Misc. Expenses
$15,000
Administrative
35% of 0&M
$15,000
Insurance
0.1% of Total Construction Cost
$8,000
Replacements
0.2% of Total Construction Cost
$17,000
Total
"'
$85,000
Source: HDR Angoon Hydroelectric Project Feasibility Evaluation Report March 2000
Operating cost estimates from HDR's study assume coordination with the O&M of the existing
diesel plant so that a single new half time position is required. Kootznoowoo believes that in
order to retain qualified personnel to maintain both systems the position will need to pay more
than the estimated costs even if inflated for wage inflation over the past 10 years. Additionally
the transportation estimate of $25 per trip will need to inflate at the rate of inflation of gasoline
over the same period of time. These estimates will be updated with the updated feasibility
analysis completed with this phase of the project and negotiated in the Power Sales Agreement
and prior to construction funding.
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
• Potential power buyers and customers include existing utility — IPEC is anticipated to be
the major customer. Depending on the utility rate structure — particularly for large interruptible
users at least one lodge has expressed an interest in purchasing power directly from
Kootznoowoo. Kootznoowoo also may start a business venture with a large user of energy on
lands on the North side of Kootznoowoo Inlet that would be serving after the communities power
needs were met in order to avoid spilling surplus power.
• Kootznoowoo has been, until this summer, been targeting a pro forma $0.15 kWh for
power sales which cuts power cost based on recent prices in half. In 2009-2010 fuel costs
averaged as much as $.30 per kWh, however until the current phase of the Project involving the
preconstruction activities can reveal the likely economics of the projects including available
federal grant funds this figure is only a target. A price range would be $0.13 to $0.18 depending
on other terms of the power sales agreement such as sharing of employees and creation of
operating efficiencies. By including the COO of IPEC in this critical final design phase we are
optimistic about reducing our operating costs by working collaboratively on reducing
maintenance and operation costs. For example a buried transmission line with an underground
cable through Kootznoowoo inlet should reduce O&M for the life of the project. Because of the
lack of economies of scale it is essential for the utility and Kootznoowoo to look for every
possible savings in order to keep the rate as low as possible.
In speaking to representatives of AEA during the summer months it is also possible that it will be
necessary to target a slightly higher price in order to enjoy a more full sponsorship by the State of
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do ALASKA
4ME--) ENERGY AUTHORITY
Renewable Energy Fund
Grant Application Round 5
Alaska. A power purchase and sales price will be detennined ultimately by the negotiations that
lead up to a power sales agreement with IPEC but it is anticipated and we understand from these
discussion by targeting a price relatively close to the average "whole sale" cost of power in Prince
of Wales Island that this project can be constructed and operated at an overall residential price of
$0.22 to $0.25 utilizing a combination of grant funding and guaranteed or special loan
arrangement.
Kootznoowoo understand that the rate of return for grant funded projects are limited and that the
State of Alaska portion of funds are subject to regulations and covenants that insure the "public
benefit of those funds" so it is not anticipated that market rates are achievable.
• In any event, Kootznoowoo is endeavoring to snake the community cost of power as low
as possible. Given the significant current investment in the project it is unrealistic for
Kootznoowoo to expect to accomplish this without significant grant funds. A full recovery on the
basis of a risk adjusted fair market basis requires considerations aside from the power sale
revenues. As Kootznoowoo and its original shareholders and their heirs and assigns own
significant land in the service area it only makes sense to pursue public funds to best of our ability
while available and therefore avoid unnecessary expenses. Simply put, Kootznoowoo is not
looking for a direct market rate return from the State of Alaska's grant funded portion of the
project. By keeping energy prices as low as possible the return from grant funds can be seen
elsewhere in ways that are not traditionally measure — such as the health and sustainability of the
City of Angoon as well a business ventures Kootznoowoo can sponsor. On new funds,
Kootznoowoo would expect a normal market rate of return from its financial contributions.
Kootznoowoo believes it will be able to achieve significant public benefit as is described further
in Section 5 and elsewhere.
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.
Cost worksheets are attached and a narrative is included as an additional attachment which
includes documentation
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
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ENERGY AUTHORITY Grant Application Round 5
Diesel generation pollutes Angoon's otherwise pristine environment and community. Per
a July 9, 2007 letter submitted the US Forest by the Inside Passage Electric Cooperative
(IPEC), the utility discharged 3,437,981 pounds of CO2 emissions in 2006. One key
benefit of our development would be to mitigate this discharge of CO2 emissions in our
community that impacts the health and safety of our shareholder, tribal and community
members — all of whom are residents of Alaska in Angoon. Kootznoowoo expects to
receive on behalf of its shareholders significant benefit from low cost power.
The least of these benefits is the annual revenue contemplated under the Power
Purchase Agreement. Targeting a sales price of $0.15 per kWh and adjusting for the
cost incurred (HDR, Alaska, 2000) net operating income in the range of $200,000 is
reasonable to expect initially.
Significant growth will cause this revenue to increase and the average cost to drop so it
is reasonable for revenues to grow faster than inflation. However, the real benefits to
Kootznoowoo's land holdings and the value of shareholder lots is immediate as the
community moves toward positive economic growth and expectations change to a more
positive economic future.
Tax credits, green tags and renewable energy subsidies may or may not be available
depending on the action of state and federal policy makers. This project is not
dependent on such incentives but if they are available they should inure to the benefit of
Kootznoowoo Shareholders and the community of Angoon.
Other benefits including the possibility of eliminating all diesel household heat.
Angoon's annual electric diesel generation produces approximately 2,000,000 kWh
(source AEA). There are other independent producers of diesel generated electricity and
these figures are unknown at this time. No known renewable energy produces electricity
in Angoon at this time. However, more disturbing, no use of electricity is used for space
heating in Angoon due to the high cost of electricity. Therefore over 95% of the energy
usage for space heating for homes and businesses is produced through diesel
generated heat. Approximately 5% of the homes use firewood or are supplemented with
firewood.
The CBJ Greenhouse Gas Emission study released in March 2009 reveals that Juneau
is 81 % dependent on diesel in its total non -transportation use of energy. Naturally,
Angoon does not have hydropower so it is 100% diesel dependent. Converting the
MMBTU requirements for Angoon using the CBJ 81 % figure, we find that Angoon would
convert to its diesel usage to electrical usage if the price of electricity provided the
economic incentive to convert to lower cost electrical heat. Theoretically, (based on
2,000,000 kWh figure) the community of Angoon would need 10,500,000 kWh
(2,000,000/19%) if it completely converted its home heating and diesel fuel usage to
electrical generation from low cost methods. Theoretically, the community of Angoon
currently needs the equivalent of 10,500,000 kWh for its current needs if their needs can
be compared "one to one" with Juneau's usage. Because of the high cost of fuel in
Angoon and current conservation efforts this estimate is very conservative but is a
straightforward extrapolation. We know that the PCE supplement creates a significant
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AUTENERGYH
Renewable Energy Fund
Grant Application Round 5
barrier to realistically making this conversion. However a significant reduction in the
price of electricity would allow for conversion to occur. In other words low cost power
would drive conversion from diesel and other CO2 producing fuel sources in the
community of Angoon much as has recently occurred in Juneau, Petersburg, Sitka and
other communities.
IPEC will be able to completely idle their diesel generation capacity to a stand by status
and would be able to salvage unnecessary equipment further reducing cost of operating
existing infrastructure. IPEC would however need to build and expand its distribution
system in Angoon as demand will increase the number of homes, business and public
buildings which are operated as the economy moves forward. In a community planning
on building an airport in the next year or so and building a new ferry terminal and other
necessary infrastructure it is entirely reasonable to expect significant economic growth
particularly compared to recent years of decline. There exists the potential for many new
housing starts do to one of the highest level of vacant but "shovel ready" housing lots in
the Community directly the result of Kootznoowoo shareholders receiving lands from
Kootznoowoo. We expect Angoon to likely experience an unprecedented power
demand in converting home heat fuel from diesel to relatively inexpensive hydroelectric
power which, in turn would justify line upgrades and line expansion to new areas within
the community.
Currently, the community of Angoon has one of the highest unemployment rates at 87%
(source TANF program, Central Council of Tlingit and Haida Indians of Alaska) and
lowest per capita income in Southeast Alaska. The per capita income for Angoon was
$11, 357. Nearly a third of families and Angoon's overall population are below the
poverty line (source US Census Bureau Fact finder for Angoon, Alaska). Alaska ranks
number one in energy use per capita. According to the Cold Climate Housing Research
Center 2009 Alaska Housing Assessment, the average Sealaska household (of which
Angoon belongs) consumes $6,072 of energy per year.
Over half of the average household per capita income of Angoon residents is spent on
energy. The impact of this project to bring low cost hydropower to the community of
Angoon and energy customers is potentially profound. Energy customers are making
decisions to either heat their homes or feed their household. TLHD is ready to finalize its
design based on these facts and the enormous price increase in the cost of diesel since
the HDR feasibility analysis. An updated design and procurement of necessary permits
and funding is all that remains between continuing the decline associated with diesel
generation and the growth anticipated with economical and non volatile hydroelectric
power generation. The boost to the economy with the construction should be the
catalyst for this growth as families begin to return to Angoon once the see progress on
the horizon. An investment by the State of Alaska alongside the current award by the US
DOE in this project is needed now in order to save this community.
IPEC currently sells electricity in a non -subsidized rate at over $0.52 per kWh. TLHD
would dramatically reduce and stabilize the electrical rate, would provide for a
meaningful alternative to heating fuels such as diesel, propane and wood and would
allow the City of Angoon to prosper. It will result in direct out of pocket annual savings to
Angoon ratepayers of over $300,000 annually for electricity alone and increase
disposable income by nearly $600 per capita or $1800 for a household of three.
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Renewable Energy Fund
Grant Application Round 5
As can be seen from the attached chart conversion to electric heat is entirely likely to
occur and the update to the existing feasibility will recalculate loads based on rational
economic behavior which can be shown graphically by the following chart. New homes
will also likely be constructed with electric heating as part of design. It is expected that
this conversion will be directly related to the price of electricity which in turn is based on
future demand predictions. Kootznoowoo would prefer to overestimate demand
estimates and encourages AEA to do the same for the factors mentioned above and for
the reasons we have seen other communities react to lower cost power.
Figure 3.2-1 Electricity Price Threshold for Conversion
Electricity Price Threshold for Conversion
lsg. at 50% oil ^eatng of taency and Oil Price or SZOD per US gal. e;sanoty price must be less than SO.1051AWh for c ,m ion)
0.25 �----
------------------------------------ ---------------------
--------------------------
-----------------------
0.20
--------- ---- - - —-
i --- -----------------------
.c
3
----------------- -----------
-----------------
---�
--------------------------------------
w 0.15
- - -
u
-- —----------------------
1------------
---- - --- ------- ------
a--------------------------
'---- ------ ------
0.10
--- ----
----
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-- —--------
-
------------------------------------
w
------ - ---- --- --- --
----------------------- -
----------------
0.05
----------------
-----
-----------------------
j - --- --- �
---- --- - - - - --
-------------------------------
0.00
------------ —
i
---------------
1.00 1.20 1.40 1.60 1.80 2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40 3.60 3.80 4.00 4.20 4.40 4.60 4.80 5.00
Oil Price (SiUSgal)
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
• Kootznoowoo will operate the Project in a corporate entity. At present it has
reserved the name Natural Power for such a purpose. The likely entity will be an
LLC that will operate as an IPP. The LLC structure gives Kootznoowoo the
benefits of corporate protection of assets and is consistent with other entities
owned by Kootznoowoo, Inc., and it can be managed for little additional costs.
This form of business structure gives us the greatest opportunity to attract and
retain partners such as the local utility once the project is fully constructed and in
an operating mode. Other concepts may need to be considered as facts and
circumstances dictate.
• Kootznoowoo expects the project to finance the maintenance and operations for
the life of the project as run of river hydro projects while expensive are very well
understood and relatively simple to maintain and operate.
• Identification of operational issues that could arise.
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IIIIIIIIIED ENERGYHKA
Renewable Energy Fund
Grant Application Round 5
• According to HDR the operational cost of the Project was calculated to be $85,000
per year in 1999 dollars. Costs identified were Labor, Transportation by boat,
Miscellaneous Expenses, Administrative, Insurance and Replacement Reserves.
Even after adjusting for inflation these figures appear too low and unrealistic given
reporting requirements for IPP's in Alaska. We believe that economies of scale
and operation can be achieved by working very closely and cooperatively with the
local utility and we will explore this thoroughly during the negotiations for a power
sales agreement. Because on -going back-up to the Project must be provided by
IPEC we expect to be able to achieve our mutual goals of the lowest cost power to
the community and at the same time look forward to increased economy as
demand and revenues grow.
• Kootznoowoo is committed to reporting the savings and benefits of this project as
part of its ongoing responsibilities under the grant and under its role of steward of
the lands and waters in and around Angoon. It will of course have a long-term
interest in Angoon and its largest landowner, and as its business interests grow
with economic and competitive energy becomes available.
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.
As stated elsewhere Kootznoowoo has methodically moved this project forward and anticipates
that the final design and permitting will be completed in the fall of 2012. Accordingly we intend
to proceed immediately to construction once funds are approved. This will require preparations
that include acceptance of final design, specifications and construction drawings, short listing one
or two acceptable project contractors and negotiating financing or finding all necessary funding.
Kootznoowoo has met the Forest Service requirements to date for designing TLHD as stated
elsewhere. We have completed all required environmental work with the assistance of the USDA
Forest Service. The Department of Energy has awarded Kootznoowoo preconstruction funds.
Kootznoowoo is in good standing given the snatch provided by the AEA. Kootznoowoo
anticipates completing the requirements of both grants.
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/GZFE�l ALASKA Renewable Energy Fund
ENERGY AUTHORITY Grant Application Round 5
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 City of Angoon, the Angoon Community Association (federally recognized tribe),
IPEC and relevant entities have made it clear that this project is uniformly considered the
number 1 community priority and project even though the Community has other projects,
earlier in the development phase, that are beneficial to the Regional Economy and the
Community. The priority is established, in part, because it was a dream of Angoon's
Elders, at the time of ANCSA, to build this project. The City of Angoon, the Angoon
Community Association (federally recognized tribe) and Kootznoowoo considers this
project the community's highest priority. This may be the only project in the Tongass
that enjoys support from both the conservation groups as well as the industry. According
to the Forest Supervisor of the Tongass, Forrest Cole and as reported to Kootznoowoo,
Inc. by the Monument Ranger in June 2010, it is the number 1 priority of the Tongass
National Forest. Kootznoowoo does not expect any opposition to the project. Letters of
support are on file with the AEA and included in Round III and Round IV applications.
Also, please review the Final EIS and the USDA Forest Service ROD for a complete list
of support letters from the region and the community.
Include letters of support
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
Provide a narrative summary regarding.funding sources and your financial commitment to the
project.
As described in the Round IV application, the total cost of TLHD is estimated to be
approximately $14 million, including all costs spent to date. More than likely this will change
with the results of final design and preconstruction activities planned in 2011112. Initial
reconnaissance studies, preliminary design, and the necessary environmental work were funded
from internal equity and a small federal grant as well as support from the USDA Forest Service
who prepared the Record of Decision, the project scoping and environmental work necessary to
complete the FEIS.
Currently, internal equity totals slightly more than $2.2 million. For several years, internal
equity has been used to move the Project forward.
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/® ALASKA Renewable Energy Fund
4111111111EDENERGY AUTHORITY Grant Application Round 5
A federal award was recently added to the project sources of funds and the Kootznoowoo Board
has accepted these funds and directed staff to seek sources of the match which was accomplished
this past year through our Round IV efforts and AEA's response and subsequent appropriation.
This application continues the effort to find equity dollars to construct the project.. Other efforts
include possibility of liquidating assets of Kootznoowoo to invest in the project. Given the
economics both to Kootznoowoo and the future ratepayers it essential to maximize efforts to find
grant funds from all possible sources. Significant funds, tribal funds for economic development
and healthy communities, tribal road funds and as well as funds designed for simply creating
sustainable communities continue to be available to the project.. The State of Alaska's
contribution would certainly improve the chances of completing this project at the earliest date
possible. We have discussed with the AEA utilizing a combination of General Funds and State
Loans or Loan assistance to complete project constructions. Future costs will be funded by a
combination of corporate equity, possible debt, federal grants, and proceeds from this grant.
Total equity will be targeted at 20 percent of total Project costs ($2.8 million). Kootznoowoo is
committed to the completion of Thayer Creek and we will continue to rely on the City ofAngoon
and the federally recognized tribe (the Angoon Community Association) for project support so
that benefits may flow to the ratepayers ofAngoon.
To date we have favorable response from the federal government and the State of Alaska — the
federal government on business case, feasibility and environmental analysis and the fed/state of
preconstruction and permitting. It is anticipated that a combination of fed/state support will be
needed to complete construction and enter into operation but the end product is designed to
create a self sustaining community based energy source for both electric and home heating
purposes. It is designed financially to move the community away from non renewable resources
to renewable and designed to eliminate an ongoing subsidy from the State of Alaska and replace
that with a productive economic base including lands and waters currently owned by
Kootznoowoo and its shareholders which is relatively unproductive.
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/461EE--2') ALASKA
ENERGY AUTHORITY
Renewable Energy Fund
Grant Application Round 5
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.
Print Name
Peter M. Naoroz
//
Signature
Title
Preside t, General Manager and Project Manager
Date
August 25, 2011
AEA12-001 Grant Application Page 28 of 28 7/1//2011
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ti
RESOLUTION # 08-01
A RESOLUTION OF KOOTZNOOWOO INCORPORATED SUPPORTING
ANGOON ENERGY POLICY
WHEREAS, Angoon through the Angoon Community Association, the City of Angoon
and Kootmoowoo Inc. (collectively Angoon) are working toward energy independence
and economic development through local self-determination that supports private and
public energy initiatives, and
WHEREAS, Angoon encourages establishment of a progressive customer -oriented
energy policy including a 100% renewable portfolio standard, construction of a fully
integrated Southeast Intertie, net metering and the adoption of market driven competitive
production of environmentally sustainable energy, and
WHEREAS, Angoon understands that Southeast Alaska has the energy potential to be
one of the top producing energy regions of the United States and the "North Slope" of
renewable energy and that Angoon through its actions can help lead the efficient
deployment of assets in the region by its planning leadership and its status as the only
community completely surrounded by a Wilderness Monument in the United States.
NOW, THEREFORE BE IT RESOLVED THAT, Angoon, Alaska, designates
Kootmoowoo Inc. to lead the effort to design, coordinate, develop, and fully implement
our community energy plan and utility corridors, and
FURTHER RESOLVED, that Kootmoowoo Inc. will provide assistance and work
collaboratively with our neighbors in Kake, Juneau and Yukon and B.C. First Nations to
assist in resolving their goals of energy independence, security and reduction in costs,
and
"Angoon, Alaska is a place where we care for our environment, our people and where
we share our surplus with others. "
FINALLY RESOLVED THAT, Angoon energy plan recognizes numerous potential
funding sources, priorities and means of implementation but considers the highest
priorities as follows:
• Thayer Creek Hydroelectric, a planned "run of the river project" capable of being
scaled to provide contribution to a future regional solution.
• Natural Currents Tidal Project, a pilot or demonstration project based on new
technology.
• A modified intertie plan adding less costly and realistic corridor alternatives.
• The construction of the Petersburg to Kake intertie of sufficient size to provide
back-up power to Angoon.
• Support construction of the Pelican to Hoonah Intertie ultimately to connect to the
regional intertie.
• An "avalanche free" utility corridor from Hood Bay through Angoon to Greens
Creek and then on to Juneau.
• All energy efficiency and customer projects capable of producing a net metering
benefit to the community.
• Exploration and development of future energy sources from other local resources
including geothermal, biomass, coal bed methane within the historic Angoon area
as defined by Goldschmidt and Haas and shown on Exhibit "A"
"Angoon, Alaska is a place where we care for our environment, our people and where
we share our surplus with others. "
CERTIFICATION
The foregoing Resolution was adopted at a duly called and convened meeting of the
Council of the Kootznoowoo Incorporated held this 5th day of December 2008, at which a
Quorum was present by a vote of In Favor, Against,
Absent, Abstain.
' ATTEST
IN WITNESS WHEREOF, I have hereunto set my hand as Secretary
KOOTZNOOWOO INCORPORATED and have affixed hereto the Official Seal of said
Corporation this __e day of yr ,-2008
Matthe sh, ChairmanAralMan*aggerPresident
A�
Pete . Naoroz, Gen
Rosemary Nease, rporate Secretary
Cc: President Bill Martin
Governor Sarah Palin
Senator Albert Kookesh
Representative Bill Thomas
Inside Passage Electric Cooperative, Jodi Mitchell
Southeast Conference, Robert Venables
;a $ --
Date
Date
Date
` Angoon, Alaska is a place where we care for our environment, our people and where
we share our surplus with others. "
KOOTZNOOWOO INCORPORATED
RESOLUTION 09- 0 0--
RESOLUTION AUTHORIZING KOOTZNOOWOO INCORPORATED
TO SEEK GOVERNMENT FUNDING AND LEGISLATION WITH THE U.S.
GOVERNMENT, THE STATE OF ALASKA FOR THE PURPOSE OF DESIGNING,
PERMITTING AND CONSTRUCTION OF KOOTZNOOWOO'S THAYER LAKE
HYDROELECTRIC DEVELOPMENT
WHEREAS, Kootznoowoo has conducted various feasibility studies ofthepotentialforhydro
power development in the Hydro Reserve Area on Admiralty Island which was established pursuant
to the terms of the Alaska National Interest Lands and Conservation Act; and
WHEREAS, as a result ofthese feasibility studies Kootznoowoo has determined that ahydro
development project has the potential to provide low cost stable power rates; and
WHEREAS, Kootznoowoo has also determined that the ANILCA established Hydro Reserve
land rights on Admiralty Island were intended by the U. S. Government to be used for the purpose of
providing a low cost stable power source for the people of Angoon; and
WHEREAS, the Congress of the United States has established and authorized numerous
departments and programs including the Department of Energy Tribal Energy Program; and
WHEREAS, the DOE has offered matching funds to Kootznoowoo to finalize design and
permitting, provide funds necessary for negotiating a power sales agreement with the local utility and
prepare construction documents to build Thayer Lake Hydroelectric for the Angoon Corrununity and
People and to assist Kootznoowoo's shareholders enjoy positive economic benefits; and
WHEREAS, due to the need for power for new energy consumers such as the proposed Ferry
Terminal Hub and to meet the needs of future growth in the Community of Angoon, a stable and low
cost source of clean energy is deemed imperative to the future welfare ofthe People and Community
of Angoon; and
WHEREAS, the City of Angoon and the Angoon Community Association support
Kootznoowoo, Incorporated in this effort to provide low cost stable power for the Community and
People of Angoon;
NOW, THEREFORE BE IT RESOLVED, that the General Manager be and hereby is authorized
ratify prior conunitments of Kootznoowoo funds to match DOE dollars based on Application
DE-PS36-09GO99014 Renewable Energy and Energy Efficiency Deployment in Indian Country,
to seek legislation to provide funds, and to negotiate and secure grant funding from all available
sources, to design, permit and construct a hydro power project in the Hydro Reserve Area on
Admiralty Island;
BE IT FURTHER RESOLVED that the General Manager is authorized to pursue any and all
procedures and to execute any and all documents necessary to facilitate hydro power project with the
U. S. Government and the State ofAlaska or any participating third party, and seek supporting letters
from same; and establish bank account with First National Bank of Alaska.
IT IS HEREBY RESOLVED THAT Peter Naoroz and Rosemary Nease and Geraldine
Nelson is authorized by Kootznoowoo Incorporated to have signature authority on the following First
National Bank of Alaska account:
IT IS FURTHER RESOLVED THAT Peter Naoroz, General Manager/President and
Rosemary Nease, Corporate Secretary and the officers and directors of Kootznoowoo Incorporated
are authorized to take all actions necessary and execute all documents necessary to effectuate this
resolution.
BE IT FINALLY RESOLVED that this Resolution shall become effective immediately and
the Secretary of the Corporation shall be and hereby is authorized to provide a copy of this
Resolution to all interested parties as evidence ofthe Board ofDirectors adoption ofthis Resolution
and its approval of the actions represented hereby.
IN WITNESS WHEREOF, I have hereunto set my hand as Secretary ofKOOTZNO0W00,
INCORPORATED and have affixed hereto the official seal of said Corporation this �
200�. day of
KOOTZNOOWOO, INCORPORATED
By.
Corp to Secretary
KOOTZNOOWOO INCORPORATED
RESOLUTION 09-05
AUTHORIZING APPLICATION TO THE STATE OF
ALASKA ENERGY AUTHORITY RENEWABLE ENERGY
GRANT FUNDS FOR POWERLINE AND GENERATION
FACILITIES IN ANGOON, ALASKA
WHEREAS, the State of Alaska and the Federal Government have over a number of years
undertaken through their agencies, including the Alaska Energy Authority, extensive studies and
commissioned. reports on the Hydro -electric potential of Thayer Lake and other locations in and
around Angoon, Alaska; and
WHEREAS, Kootznoowoo Incorporated, owns the right to develop hydroelectric resources on
Admiralty Island National Monument and the Kootznoowoo Wilderness within township 49
south, range 67 east, and township 50 south, range 67 east, Copper River Base and Meridian,
subject to such conditions as the Secretary of Agriculture shall prescribe for the protection of
water, fishery, wildlife, recreational, and scenic values of Admiralty Island, has requested that
the USDA Forest Service prepare and complete a environment review of a plan of development
prepared by HDR, Alaska dated March 2000 for the construction and operation of Thayer Lake
Hydroelectric; and
WHEREAS, on May 2009 Kootznoowoo Incorporated received a copy of the Forest Service
final environmental impact statement which is available at the Tongass National Forest web site
at the following site http://www.fs.fed.us/r10/tngass/projects/agoon hydro/index.shtml and
which adds significant costs to the proposal submitted by Kootznoowoo by required buried
transmission cable and a relocation of the power house resulting in a loss of head; and
WHEREAS, Kootznoowoo Incorporated has received an award of approximately $1.1 million
of matching funds from the U. S. Department of Energy Tribal Renewable Funds to finalize
design and complete permitting requirements for a l+ mW hydroelectric project known as
Thayer Lake Hydro approximately 6 miles north of Angoon, Alaska; and
WHEREAS, Angoon, Alaska is a High Energy Cost Community as identified by the USDA
Rural Utility Service and that the cost of electricity in Angoon is over 500% (5 times) the
national average for a cost of a kilowatt hour of power; and
WHEREAS, On June 1, 2009 representatives of the City of Angoon, Inside Passage Electrical
Cooperative, the Southeast Conference, Angoon Community Association and the State of Alaska
met with Kootznoowoo, Incorporated in Angoon, Alaska to discuss the current economic
condition of the community, the cost of power and the availability of renewable energy grant
funds from the State of Alaska for projects such as the overland power line described in the EIS
and the power generation facility at Thayer Creek; and
WHEREAS, On June 1, 2009 Kootznoowoo Incorporated was informed that the HDR proposed
project was the perfect type of project to meet the goals of the State of Alaska Renewable Energy
Fund and that given the high cost of power Kootznoowoo should apply for $4,000,000 for
construction of transmission line and an additional amount of $4,000,000 for the generating
facility; and
There exists a need for low cost power for municipal operations, residential use and much
needed economic development particularly job creation which cannot occur at the current cost of
power; and,
NOW, THEREFORE BE IT RESOLVED that Kootznoowoo is authorized to apply for the
maximum available funding from the AEA ($4,000,000 for construction of transmission line and
an additional amount of $4,000,000 for the generating facility) and receive funds, appropriations,
loan guarantees and make necessary financial arrangements including but not limited to meeting
the requirement of the Alaska Energy Authority under the State of Alaska Renewable Energy
Grant program.;
IN WITNESS WHEREOF, I have hereunto set my hand as Secretary of
KOOTZNOOWOO INCORPORATED and have affixed here to the official seal of said
Corporation this , -,/1 — day of rn/JZ4 , 20 .
KOCO�T�Z�NOO WOO INCORPORATED
By. u ,
Corporate Secr ary
KOOTZNOOWOO INCORPORATED
RESOLUTION 10-0I
AUTHORIZING APPLICATION TO THE STATE OF
ALASKA ENERGY AUTHORITY RENEWABLE ENERGY
GRANT FUNDS FOR POWERLINE AND GENERATION
FACILITIES IN ANGOON, ALASKA
WHEREAS, the State of Alaska and the Federal Government have over a number of years
undertaken through their agencies, including the Alaska Energy Authority, extensive studies and
cortlnlissioned reports on the Hydro -electric: potential of Thayer Lake and other locations in and
around Angoon. Alaska; and
WHEREAS, Kootznoowoo Incorporated, owns the right to develop hydroelectric resources on
Admiralty Island National Monument and the Kootznoowoo Wilderness within township 49
south, range 67 east, and townshil. 50 south, range 67 east, Copper River Base and Meridian.
subject to such conditions as the Secretary of Agriculture shall prescribe for the protection of
water, fishery, wildlife, recreational, and scenic values of Admiralty Island, has requested that
the USDA Forest Service prepare and complete a environment review of a plan of development
prepared by HDR, Alaska dated March 2000 for the construction and operation of Thayer Like
Hydroelectric: and
WHEREAS. on May 2009 Kootznoowoo Incorporated received a copy of the Forest Service
fined environmental Impact statement which is available at the Tongass National forest vveb site
at the following site http:1,'www.t.s.l'ed.us/rl0/tongassiprc iectsiatigoon_hydroiindex.shiml and
which adds significant costs to the proposal submitted by Kootznoowoo by required buried
transmission cable and a relocation of the power house Cesulting in a loss of head; and
WHEREAS, Kootznoowoo Incorporated has received an award of approximately $ L I million
of matching funds from the U. S. Department of Energy Tribal Renewable Funds to finalize
design and complete permitting requirements for a l+ mW hydroelectric project known a5
Thayer L;tke I-Ivdro approximately 6 miles north of ;lagoon, Alaska; and
WHEREAS, Angoon, Alaska is a High Energy Cost Community as identified by the USDA
Rural Utility Service and that the cost of electricity in Angoon is over 50VIo (5 times) tht
national average fora cost of a kilowatt hour of power: and
WHEREAS, On June I, 2009 representatives of the City of Angoon, Inside Passage Electrical
Cooperative, the Southeast Conference, Angoon Community Association and the State. of Alaska
met with Kooiznoowoo. Incorporated Hi Angoon, Alaska to discuss the current economic
condition of the ccunnluntly, the cost of power and the availability of renewable enem y grant
funds from the State of Alaska for projects such as the overland power line described in the FIS
and the power generating facility at Thayer Creek: and
WHEREAS, On June 1, 2009 Kootznoowoo Incorporated was informed that the HDR proposed
project was the perfect type of'project to meet the goals of the State of Alaska Renewable y
Fund and that given the high cost of power Kootznoowoo should Energy
apply for $4,t}QO,OQO for
construction of transmission line and an additional amount of $4,000,00for the generating
facility; and
WHEREAS, there exists a region wide and community need for low cost power for municipal
operations, residential use and much needed economic development particularly job creation
which cannot occur at the current cost of power and Kootr_noowoo's Thayer Creek project has
received support frorn numerous sources including the City of Angoon, the Angoon Community
Association, the Alaska Miners Association -Juneau Branch, the City and Borough of Juneau,
Southeast Conference; and others,
WHEREAS, the USDA Forest Service has represented to Kootznoowoo that Thayer Creek
Hydroelectric is the Number I project in the Tongass National Forest: and
NOW, THEREFORE BE IT RESOLVED that Kootznoowoo is authorized to apply for the
maximum available funding from the AEA ($4,t1U(},(}()() for construction of transmission line and
an additional amount of $4,000.00() for the generating facility} and receive funds, appropriations.
loan guarantees and make necessary financial arrangements including but not limited to meeting
file requirement of (lie Alaska Energy Authority under the. State of Alaska Renewable Energy
Grunt program.;
IN WITNESS WHEREOF, I have hereunto set my hand as Secretary of
KOOTZNOOWOO INCORPORATED and have affixed here to the official seal of said
Corporation this 3 day of -)
KOOTZNOOWOO INCORPORATED
Corporate Secre ary
KOOTZNOOWOO INCORPORATED
RESOLUTION 11-04
AUTHORIZING APPLICATION TO THE STATE OF ALASKA ENERGY
AUTHORITY RENEWABLE ENERGY GRANT FUNDS FOR
POWERLINE AND GENERATION FACILITIES IN ANGOON, ALASKA
WHEREAS, the State of Alaska and the Federal Government have over a number of years undertaken
through their agencies, including the Alaska Energy Authority, extensive studies and commissioned reports on
the Hydro -electric potential of Thayer Lake and other locations in and around Angoon, Alaska; and
WHEREAS, Kootznoowoo Incorporated, owns the right to develop hydroelectric resources on
Admiralty Island National Monument and the Kootznoowoo Wilderness within township 49 south, range 67
east, and township 50 south, range 67 east, Copper River Base and Meridian, subject to such conditions as the
Secretary of Agriculture shall prescribe for the protection of water, fishery, wildlife, recreational, and scenic
values of Admiralty Island, has requested that the USDA Forest Service prepare and complete a environment
review of a plan of development prepared by HDR, Alaska dated March 2000 for the construction and operation
of Thayer Lake Hydroelectric; and
WHEREAS, on May 2009 Kootznoowoo Incorporated received a copy of the Forest Service final
environmental impact statement which is available at the Tongass National Forest web site at the following site
http://www.fs.fed.us/r10/tongass/projects/angoon hydro/index.shtml and which adds significant costs to the
proposal submitted by Kootznoowoo by required buried transmission cable and a relocation of the power house
resulting in a loss of head; and
WHEREAS, Kootznoowoo Incorporated has received an award of approximately $1.1 million of
matching funds from the U. S. Department of Energy Tribal Renewable Funds to finalize design and complete
permitting requirements for a l+ mW hydroelectric project known as Thayer Lake Hydro approximately 6
miles north of Angoon, Alaska; and
WHEREAS, Angoon, Alaska is a High Energy Cost Community as identified by the USDA Rural
Utility Service and that the cost of electricity in Angoon is over 500% (5 times) the national average for a cost
of a kilowatt hour of power; and
WHEREAS, On June 1, 2009 representatives of the City of Angoon, Inside Passage Electrical
Cooperative, the Southeast Conference, Angoon Community Association and the State of Alaska met with
Kootznoowoo, Incorporated in Angoon, Alaska to discuss the current economic condition of the community,
the cost of power and the availability of renewable energy grant funds from the State of Alaska for projects
such as the overland power line described in the EIS and the power generating facility at Thayer Creek; and
WHEREAS, On June 1, 2009 Kootznoowoo Incorporated was informed that the HDR. proposed project
was the perfect type of project to meet the goals of the State of Alaska Renewable Energy Fund and that given
the high cost of power Kootznoowoo should apply for $4,000,000 for construction of transmission line and an
additional amount of $4,000,000 for the generating facility; and
WHEREAS, there exists a region wide and community need for low cost power for municipal
operations, residential use and much needed economic development particularly job creation which cannot
occur at the current cost of power and Kootznoowoo's Thayer Creek project has received support from
numerous sources including the City of Angoon, the Angoon Community Association, the Alaska Miners
Association — Juneau Branch the City and Borough of Juneau, Southeast Conference; and others
WHEREAS, a MOU has been entered by the City of Angoon, the Angoon Community Association and
Kootznoowoo, Inc evidencing a desire to work collectively for the benefit of Angoon and the Thayer Creek
project is considered the top priority with respect to economic development among the entities and there exists a
need for low cost power for municipal operations, residential use and much needed economic development
particularly job creation which cannot occur at the current cost of power; and
WHEREAS, the USDA Forest Service has represented to Kootznoowoo that Thayer Creek
Hydroelectric is the Number 1 project in the Tongass National Forest; and
WHEREAS, the State of Alaska has grant funded $1,060,000 towards Thayer Creek in FY 2011-12's
Capital Budget and is requesting that Kootznoowoo indicate what tax treatment it would like to receive for
these funds which are designated as preconstruction and available for federal matching purposes; and
NOW, THEREFORE BE IT RESOLVED that Kootznoowoo is authorized to apply for the maximum
available funding from the AEA (approximately $3,500,000 for construction of transmission line and an
additional amount of $3,500,000 for the generating facility) and receive funds, appropriations, loan guarantees
and make necessary financial arrangements including but not limited to meeting the requirement of the Alaska
Energy Authority under the State of Alaska Renewable Energy Grant program Round V; and
BE IT FURTHER RESOLVED that the General Manager is authorized to finalize the FY 2011 Grant
from the AEA including accepting those funds as taxable to the corporation.
IN WITNESS WHEREOF, I have hereunto set my hand as Secretary of KOOTZNOOWOO
INCORPORATED and have affixed here to the official seal of said Corporation this day of
20 �
KOOTZNOO WOO INCORPORATED
By:
Corporate Secretary
CITY OF ANGOON
PO. BOX 189 - ANGOON, ALASKA 99820 - (907) 788-3653 - FAX (907) 788-3821
REcS71vE0
CITY OF ANGOON
RESOLUTION 09-05,
A RESOULUTION OF THE CITY OF ANGOON, ALASKA, AUTHORIZING
AND DIRECTING THE FILING OF MUNICIPAL PREFERENCE FEDERAL
ENERGY REGULATORY COMMISSION PRELIMINARY PERMITS TO
DEVELOP HYDROPOWER PROJECTS WITH KOOTZNOOWOO
INCORPORATED
WHEREAS, the City of Angoon is on record of supporting the private and public
development of energy resources in Southeast Alaska and recognizing the important
resource provided by Congress in ANILCA through Kootznoowoo Incorporated;
WHEREAS, the City of Angoon has been in consultation with Kootznoowoo
Incorporated, business entities, State, Tribal and Federal officials regarding energy issues
impacting the City of Angoon;
WHEREAS, the City of Angoon has the ability to file hydro -electric permits using their
"municipal preference" as authorized by Federal Energy Regulatory Commission (FERC)
regulations;
WHEREAS, filing for federal hydro -electric preliminary permits will increase
Angoon's ability to negotiate acceptable terms for low cost power in Angoon and
Southeast Alaska with the additional benefits of providing for the communities economic
well being by creating family wage jobs, job training, enhanced city revenues, and
economic development opportunities associated with affordable power;
WHEREAS, hydropower development is a clean industry, displaces diesel, and reduces
carbon dioxide and green house gas emissions that these benefits are consistent with our
way of life;
WHEREAS, the City of Angoon has adopted an Energy Policy as outlined in the
attached Resolution #08-01;
NOW THEREFORE BE IT RESOLVED, that the City of Angoon authorizes the
Mayor of Angoon to negotiate contracts with Kootznoowoo Incorporated and other
business interests to file "municipal preference" hydro -electric power preliminary permits
and all applications necessary to implement this resolution; and
BE IT FURTHER RESOLVED, the Mayor is authorized to seek federal, state, Tribal
and other funding for grants and other financial assistance to further the implementation
of this resolution;
BE IT FURTHER RESOLVED, that they Mayor is authorized to represent the City
before all Tribal, federal, state, municipal and business agencies with regards to energy
issues and the implementation of this resolution.
ADOPTED, this 10`" day of December 2008, by the City of Angoon by a vote of 5
Yeas, 0 nays, 0 abstentions, and 2 absence.
CERTIFIED
..rA'�.��
�;
ATTEST
Mud Uv
CI Y CLERK
ANGOON COMMUNITY ASSOCIATION
1'Iarch 11, 2009
The Honorable Barack Obama
President of the United States
The White House
Washington, DC 20500
Dear Mr. President,
The tribal government; Augoon Community Association, would first like to extend their sincere
congratulations on your accomplishment of being the President of our beloved country. This is a huge step
forvard for the United States.
Enclosed is a resolution of the tribal government in support of the efforts of our village corporation, formed
under ANSCA.
The community believes that there are several ways to address the economic crisis that is before us. One of
the avenues is to reduce the high cost of energy. Our resolution is requesting direction to secure funding for a
project that has been "shovel ready" since the passage of ANMCA.
The stimulus plan, is the avenue for the immediate funding of this import.-tnt community project .which can
develop into an economic boost for this one great State of Alaska.
To die great future of you and your cabinet.
S,inncc ly, , r, 3 �l
Wally R. Flank, Sr -
President
CC: Secretary of Interior
Secretary of Agriculture
Department of Energy
Senator Lisa Murkowski
Representative Don Young
City of Angoun
Kootzaoo-,voo, Inc.
PO BOX 328 • ANGOON, ALASKA • 99820
PHONE.* (907) 738-3411 • FAX: (907) 788.3412
Angoon Communit ssoci ti
y on
P.O. Box 328 * Angoon, Alaska 99820 * (907) 788-3411 * FAX (907) 788-3412
RESOLUTION OF THE ANGOON COMMUNITY ASSOCIATION
No. 09-06
WHEREAS: The Angoon Community Association (ACA) is the tribal governing body of the Community of
Angoon as authorized by the acts of Congress of June 18, 1934, (48 Stat. 948), and May I, 1936 (49 Stat 1250)
approved by the Secretary of the Interior on May 10, 1939 and ratified by the membership of Angoon
Community Association by an election on November 15, 1939, and
WHEREAS: Article V-Powers, Section 1 (a) states "To negotiate with the Federal and Territorial (state)
Governments on behalf of the Community—-, _ ", and
WE EREAS: the tribal government was the first formal government of the community of Angoon, and
WHEREAS: the City of Angoon is the second formal government which has the sole ownership of all utilities,
easements, corridors, and ROW of the community of Angoon, and
WHEREAS: the village corporation, Kootznoowoo, Inc., has the exclusive right to develop a Hydro project
within the national monument, and
WIMRBAS: one way to enhance the economy of a community is to reduce the high cost of living, and
WHEREAS: the tribal government, Angoon Community Association, has the sovereign authority to work
directly with the federal government, now therefore
BE IT .RESOLVED THAT. the President of the United States, the Honorable Barack Obatna, and his cabinet,
be authorized to work directly with the village corporation, Kootznoowoo, Inc., on funding for the completion
of the hydro facility in Thayer Creek, which is shovel ready, be it
FURTBER RESOLVED: that the funds be allocated to the tribal government and all the funds be used for
construction by the direction of the procurement policy of the tribal government, be it
FINALLY RESOLVED THAT: the stimulus funding, because it is a wilderness area, be used to construct a
maximum output facility in the Thayer Creek corridor.
STONED:
CERTIFICATION Wally R- rank, Sr., President
I, the undersigned, as the Secretary of the Angoon Community Association hereby certify that the Council of
the Association is composed of Seven (7) members, of whom G constituted a quorum were present at a
meeting there of duly and regularly called, noticed, convened and held. this I lth day of March. 2009; and that
the foregoing resolution No. 09-06 was adopted at such meeting by affirmative vote of 5Aye and 5 Nay.
In witness there f, I have set my hand as Secretary this I Ith day of 11+Iarc1 2009.
r
ATTEST:
Fl yd Jffn, Secretary
MAY f REC'D
3100 Channel Drive, Suite 300 • Juneau AK 99801 • (907) 463-3488 • Fax (907) 463-3489
E-mail: iuneauchamber@eci.net • icc@alaska.com • Web site: btto://www.iuneauchamber.com
CHAMBER OF COMMERCE
Board Members
Chuck Collins,
A RESOLUTION OF THE JUNEAU CHAMBER OF COMMERCE IN
Cnpy ErpresslSi/Sign Pro ssres.Elect
SUPPORT OF THE THAYER CREEK HYDROELECTRIC PROJECT
Ted Quinn, Past President
Capiral Ogice Supplies
n V 2 — Q 9
Bob Martin
Goldbelr, Inc.
Alaska Knijeworks
Bob Hale
Juneau Derpire
RomeromerDerr
rr
Resolution Supporting the City of Angoon's Energy Initiative and the USFS
HarriPlumbing &Heating
Neil
Record of
Decision approving Thayer Creek Hydroelectric Project.
MacKinnon
Alaska Laundn•
Sharon Burns
AOcstar;arts
WHEREAS An y r y g
, goon through the Angoon Community Association the City of Angoon
Jeremy Hansen
Hansen
and Kootznoowoo, Inc, has been striving for energy independence; improved
Gress
Dick Knapp
economic development and quality of life; and
Petro Marine
onHabeger
Royal Caribbean Cnrisr Lines
WHEREAS, Angoon has been promoting the Thayer Creek Hydroelectric project for
Carlton TheC
The arlrorr SmithCo.
more than two decades
,and that the U.S. Forest Service has issued draft
Sheldon winters
Lessn=r & Winters
environmental impact statements with a final record of decision pending; and
Tim Mcleod
A6L&P
Nathan McGowan
WHEREAS, the Thayer Creek Hydroelectric project is "shovel -ready" and should
sealaska
qualify for federal stimulus funds and other public funding;
Benefactor Members
THEREFORE, be it resolved that the Juneau Chamber of Commerce, urges the U.S.
ACS
Forest Service, to finalize the Record of Decision as soon as possible so this project
Allen Marine
First National Bank of Alaska
can move forward to p jobs anp
improve the economy;provide obd improve that quality of
Hunt Totem
life in this region; and
Juneau Empire
GCI Communications
AJCommunications
Wal Man
BE IT FURTHER RESOLVED, that the U.S. Forest Service authorize and permit the
Home Depot
Thayer Creek Hydro project proposal submitted by Kootznoowoo, Inc which provides
Platinum Members
for an overland transmission route and the necessary roads and staging areas to
AEL&P
construct and operate the project in the manner envisioned by the leaders of Angoon
Alaska Litho
Alaska Marine Lines
for over 25 years; • and
Alaska Pacific Bank
Alaska USA FCU
Alaskan Brewing Company
BE IT FURTHER RESOLVED, that the U.S. Forest Service work in partnership with
gionalHospital
BPAenRegional
Angoon, other Southeast Alaska communities, the State of Alaska and other U.S.
C13J(Manager'sOffice)
Government agencies in developing a Southeast Alaska hydroelectric energy inter -tie
Coeur Alaska, Office
Coeur Alaska• Inc.
system with appropriate corridors and linkage to BC Hydro and the Bonneville Power
Coogan Construction
Grid •
r
Copy Express
Elgee Rehfeid & Menz
Gree nMee
Greens Creek Mining
�
FINALLY BE IT RESOLVED, that this Resolution be communicated to the U.S.
Goldbeh,Inc.
Forest Service; the Alaska Congressional Delegation; the Governor of Alaska and the
Sign Pro
Taku Oil
Alaska State Legislature.
True North FCU
UAS
Wells Fargo Bank of Alaska
Western Auto Marine
PASSED AND APPROVED by the Juneau Chamber of Commerce Board of Directors
On this Date: April 28, 2009
Cathie Roemmich, CEO Juneau Chamber of Commerce
Representing Nearly 400 Member Businesses
Presented by: The Manager
Introduced: 05/18/2009
Drafted by: J.W. Hartle
RESOLUTION OF THE CITY AND BOROUGH OF JUNEAU, ALASKA
Serial No. 2475
A Resolution Expressing Assembly Support for the City of
Angoon's Energy Initiative and the Thayer Creek
Hydroelectric Project.
WHEREAS, the Assembly supports the development of hydroelectric infrastructure
in Southeast Alaska in order to facilitate the economic well-being of the region; and
WHEREAS, Angoon, through the Angoon Community Association, the City of
Angoon and Kootznoowoo, Inc., has been striving for energy independence, improved
economic development, and improved quality of life; and
WHEREAS, Angoon has been promoting the Thayer Creek Hydroelectric Project for
more than two decades; and
WHEREAS, in March 2009 the United States Forest Service issued the Final
Environmental Impact Statement on the Thayer Creek Hydroelectric Project proposal,
and issuance of the Record of Decision is now pending; and
WHEREAS, the Thayer Creek Hydroelectric Project is "shovel -ready" and should
qualify for federal stimulus funds and other public funding.
NOW, THEREFORE, BE IT RESOLVED BY THE ASSEMBLY OF THE CITY AND BOROUGH
OF JUNEAU, ALASKA:
Section 1. That the Assembly of the City and Borough of Juneau urges the
United States Forest Service to finalize and issue the Record of Decision on the Thayer
Creels Hydroelectric Project as soon as possible so that the Project, which will promote
economic development, provide jobs, and improve the quality of life in this region, may
move forward.
Section 2. That the Assembly urges the United States Forest Service to authorize
and permit the Thayer Creek Hydroelectric Project proposal submitted by
Kootznoowoo, Inc., which provides for an overland transmission route and the
necessary roads and staging areas to construct and operate the project in the manner
envisioned by the leaders of Angoon for over 25 years.
Section 3. That the Assembly urges the United States Forest Service to work in
partnership with Angoon, other Southeast Alaska communities, the State of Alaska,
and other United States Government agencies in developing a Southeast Alaska
hydroelectric energy intertie system with appropriate corridors and linkage to the
British Columbia Hydroelectric and the Bonneville Power Grid.
Section 4. That copies of this resolution shall be sent to the United States Forest
Service, the Honorable Governor Sarah Palin, the Alaska Congressional Delegation,
and the Alaska State Legislature.
Section 5. Effective Date. This resolution shall be effective immediately upon
adoption.
Adopted this 18`h day of May, 2009.
�),
Bruce Botelho, Mayor
Attest:
Eliz th . Mc �en�,Deputy Clerk
-2- Res. 2475
Grand Camp
Afaska Active Brotherhood
RESOLUTION #28-09
Title: Support for Angoon's Renewable Energy Developments
WHEREAS, Southeast Alaska has abundant energy resources which are untapped,
and where there is beginning to emerge Native corporation and Native
community ownership of these resources; and
WHEREAS, Angoon pays some of the highest energy costs in Southeast Alaska;
and
WHEREAS, the City of Angoon and Kootznoowoo Inc. have developed and
signed an Angoon Energy Plan which identifies priorities and goals
including a plan to reduce the cost of energy for Angoon through the
development of renewable energy; and
WHEREAS, the Angoon Community Association has provided strong letters of
support tc Kootznoowoo Inc. to develop and construct Thayer- Lake
Hydroelectric to its full potential and as the community's top energy
priority, and
WHEREAS, Kootznoowoo Inc. has successfully completed the eiivironmental
work and record of decision necessary to secure a permit to construct
an environmentally sound run of river hydroelectric project in Angoon
in a Wilderness Monument; and
WHEREAS, Kootzn.00woo Inc. has received grants and is developing the Thayer
Lake hydroelectric facility that it was granted rights to develop under
ANILCA, and
WHEREAS, The City of Angoon has filed on two FERC hydropower permits:
Ruth Lake and Scenery Lake to develop and bring low cost
hydropower to all communities of Southeast Alaska,
WHEREAS, there are important rural Alaska areas which are energy rich, but do
not benefit from harnessing these energy sources due to irsuf icient or
missing transmissio, assets, and
NOW THEREFORE BE IT RESOLVED, that the Grand Camp of Alaska
Native Brotherhood and Sisterhood wholly supports the leadership of the
Kootznoowoo Inc. and the City of Angoon for claiming and developing energy
resources under Native leadership and Native ownership whereby Angoon is
seeking energy self determination for their Native community, for diesel
generation communities and for generations to follow.
BE IT FURTHER RESOLVED, that the Grand President and the Executive
Committee urge the federal government through the Department of Energy, the
Department of Agriculture, the Department of Interior and the Federal Energy
Regulatory Commission; the State of Alaska and Southeast Conference to support
Native leadership and development of hydropower projects at Thayer Lake,
Scenery Lake and Ruth Lake for the benefit of all Southeast Alaskans by reducing
green house gas emissions, by creating jobs in rural Southeast Alaska and by
lowering the energy costs that Southeast Alaskan citizens pay to heat and fuel their
homes, schools, and_businesses. ;
✓'l�9/!d% t=ii€�j4`��I� g��'Y?'iF,,
Grand President ANS Grand President J
�
ATTEST: I certify that this resolution was adopted by the ANB Grand Camp
Executive Committee on October 15, 2009
ANB GrandSecretary
Resolution Supporting the City of Angoon's Energy Initiative and the
USFS Record of Decision approving the Thayer Creek Hydroelectric
Project
WHEREAS, the Juneau Branch of the Alaska Miners Association is committed to supporting the
development of hydroelectric infrastructure in Southeast Alaska in order to facilitate the
economic well being of the region; and
WHEREAS, Angoon through the Angoon Community Association, the City of Angoon and
Kootznoowoo, Inc., has been striving for energy independence; improved economic
development and quality of life; and
WHEREAS, Angoon has been promoting the Thayer Creek Hydroelectric Project for more than
two decades; and that the United States Forest Service has issued draft environmental impact
statements with a final Record of Decision pending; and
WHEREAS, the Thayer Creek Hydroelectric Project is "shovel -ready" and should qualify for
federal stimulus funds and other public funding;
THEREFORE, BE IT RESOLVED that the Juneau Branch of the Alaska Miners Association urges
the United States Forest Service to finalize the Record of Decision as soon as possible so that
this project may move forward to improve the economy, provide jobs and improve the quality
of life in this region; and
BE IT FURTHER RESOLVED, that we urge the United States Forest Service to authorize and
permit the Thayer Creek Hydroelectric Project proposal submitted by Kootznoowoo, Inc., which
provides for an overland transmission route and the necessary roads and staging areas to
construct and operate the project in the manner envisioned by the leaders of Angoon for over
25 years; and
BE IT FURTHER RESOLVED, that we urge the United States Forest Service to work in partnership
with Angoon, other Southeast Alaska communities, the State of Alaska and other United States
Government agencies in developing a Southeast Alaska hydroelectric energy inter -tie system
with appropriate corridors and linkage to the British Columbia Hydroelectric and the Bonneville
Power Grid;
FINALLY, BE IT RESOLVED, that this Resolution be communicated to the United States Forest
Service, the Alaska Congressional Delegation, the Governor of Alaska and the Alaska State
Legislature.
ON BEHALF OF THE JUNEAU BRANCH OF THE ALASKA MINERS ASSOCIATION, April 24, 2009,
Mike Bell, Chairman
CENTRAL COUNCIL
thmpt and haiaa m0ian UNBEs of alaska
ANDREW P. HOPE BUILDING
320 West Willoughby Avenue • Suite 300
Juneau, Alaska 99801-1726
CENTRAL COUNCIL OF TLINGIT AND HAIDA INDIAN TRIBES OF ALASKA
Seventy -Fourth Annual Tribal Assembly
April 15-18, 2009
Juneau, Alaska
Resolution TA/ 09-46
Title: Renewable Energy and Alternative Fuels for our Communities
By: Delegates Bob Loescher, Floyd Kookesh, Selina Everson
WHEREAS, Central Council of Tlingit and Haida Indian Tribes of Alaska (Central
Council) is a federally recognized tribe of more than 26,000 tribal citizens; and
WHEREAS, the cost of energy and the cost of fuels has continued to increase and
continues to be a burden on tribal members and their businesses; and
WHEREAS, despite these millions of dollars of public investments, many of our
Southeast Alaskan Native communities remain isolated when alternatives such as line extensions
can connect these communities to existing low cost utilities;
WHEREAS, protectionist practices including maintaining unfair status quo by the
Regulatory Commission of Alaska with respect to generating and transmitting utility districts
disproportionately impacts predominately Alaska Native communities;
WHEREAS, the Executive Council adopted the 2009 Strategic Energy Plan; and
WHEREAS, to bring meaningful change to our region we need a systemic fix through a
Regional Transmission Organization (RTO), and that development of a community -run RTO
will facilitate an electrical intertie between our communities and their energy sources; and
WHEREAS, Central Council is the best single source in Southeast Alaska to help our
communities to receive and account for public and private funds for energy related projects,
programs and development; and
WHEREAS, the Federal and State government have subsidized and awarded hundreds of
millions of dollars to urban and predominately non -Native communities to develop hydropower
and transmission lines here in Southeast Alaska; and
TEL. 907-586-1432 www,ccthito.org TOLL FREE 800-344-1432
TA Resolution 09-46
Page 2 of 3
WHEREAS, despite these millions of dollars of public investments, many of our
Southeast Alaskan Native communities are on diesel generation and high administrative and
overhead costs associated with diesel generation; and
WHEREAS, we have Native village corporations and Native communities such as Haida
Corporation, Kake Tribal Corporation, Kootznoowoo Incorporated and the City of Angoon filing
federal permits, and making investments and partnerships in renewable energy development and
operations; and
WHEREAS, Native entities should own and control Southeast Alaska renewable energy
resources where possible and support the needed public investments in transmission line
extensions to connect our communities; and
WHEREAS, as a result of this situation many of these entrepreneurial Native village
corporations and in some cases desperate communities deserve full political and financial
support and encouragement from all tribal entities, ANCSA corporations and Native non-profit
agencies for their leadership and investments to help themselves to lead and assist our
conununities toward renewable energy development and alternative fuels in order to lower
energy costs for our people, to help end outmigration from their communities, to create
renewable energy jobs and to preserve the economic livelihood that is impacting our diesel
disadvantaged communities; and
NOW THEREFORE BE IT RESOLVED, that the Seventy -Fourth General Assembly of
Central Council of Tlingit and Haida Indian Tribes of Alaska convened in Juneau, Alaska on
April 15 — 18, 2009 hereby reaffirms Resolution GA 08-03, Declaration of Emergency Related to
Energy; and
BE IT FURTHER RESOLVED, that the Central Council supports the Coastal
Community Gas Utility Project for twenty four communities, the AK -BC energy transmission
line near Wrangell, Reynolds Creek project for Haida Corporation and Hydaburg, Thayer Creek
project for Kootznoowoo Incorporated, Scenery Lake project for the City of Angoon and
Kootznoowoo, Incorporated and Cascade Creek project for Kake Tribal Corporation because all
of these projects will reduce the cost of power and fuels to our rural Native communities; and
BE IT FURTHER RESOLVED, that the federal and state government should
immediately fiend our Southeast Intertie under the Central Council Regional Transmission
Authority (RTA) proposal; and
BE IT FURTHER RESOLVED that we request that the federal and state government
support all Native owned, controlled and those that have Native participation in renewable
energy and alternative fuels projects that will provide much needed low cost renewable energy
resources for our people to end outmigration, increase our economic development, increase our
TA Resolution 09-46
Page 3 of 3
job base and to better our current and future generations struggling to raise families in our
traditional rural and urban communities that are diesel disadvantaged; and
BE IT FINALLY RESOLVED that tribal implementation of the energy program as
described above is subject to available federal, state and other funds and subject to approval of
the Executive Committee upon recommendation of the Finance Committee.
ADOPTED this 18`h day of April 2009, by the Seventy -Fourth Tribal Assembly of
Central Council of Tlingit and Haida Indian Tribes of Alaska.
CERTIFY
President William E. Martin
ATTEST
0-
Tribal Secretary Michele Metz
AFN '
Southeas
Villages
City ofK�ke
Douglas
Indian
Association
Goldbelt
incorporated
Haida
Corporation
Huna Totem
Corporation
Hydaburg
Cooperative
Association
Inside
Passage
Electric
Cooperative
Inc.
Kake Tribal
Corporation
Kootznoowoo
Incorporated
Organized
Village of
Kasaan
Sealaska
Corporation
Sealaska
Heritage
Institute
Southeast
Alaska
Regional
Health
Consortium
Tlingit &
Haida
Central
Council
Tlingit —
Haida
Regional
Housing
Authority
utheast Alaska Native Economic Futures Coalition
One Sealaska Plaza, Suite 400 - Juneau, Alaska 99801 • (907) 686-9121
February 14, 2008
Naoroz, President
oowoo, Incorpora
bird Dairy Road, S`
Q'-;' aska 99801
Re:
Dear Mr.
The Southeast Alaska: 1`
supporting the planning; tie
The support includes, ,E`tit,
grant funds for the Thayer,.
concerned about the:,.cor
opportunities due to the;ex
Alaska. To address the c
Creek Project so that re<
residential and commercial
this letter of support to secu
Affordable energy is a fundamental elemei
rural Alaska, including Angoon Tlae con
detrimental to the lives of life long Alaskans
Please contact us if we can offer furtFier
energy Intertie project. Thank you fo'(your 1
Sincerely,
Dewey Ska
Chair
FEB 2 ` RECD
)alition writes this letter
the Thayer Creek Project.
lete of Alaska and Federal
the Coalition is extremely
and lack of economic
ra:roughout rural Southeast
a, we, support the Thayer
gy,` can be available for
nt-rYhat_the Coalition writes
for :;economic development throughout
ued high; cost of fuel prices remains
slding IrAngoon and >their businesses.
ssrstance with this critical :community
.e nd consideration
E
INSIDE PASSAGE ELECTRIC COOPERATIVE
August 19, 2011
Dear IPEC Members:
We at IPEC are very concerned about the negative effect of high electric rates on your finances
and quality of life. We realize that many of you are struggling to pay your bills, and that high
electric rates are especially difficult for businesses.
Unfortunately, the recent spike in diesel prices has led to yet another rate increase through the
fuel surcharge (also known as the Cost of Power Adjustment, or CODA). The PCE program will
absorb most or all of the increase for residential consumers, but businesses and other customers
not covered by the PCE program will be subject to the full rate increase.
Diesel prices paid by IPEC have reached all-time highs, even exceeding the summer peaks of
2008. We all know what it's like to fuel -up our cars nowadays, so you might imagine what it's like
for IPEC to buy diesel by the tens of thousands of gallons. Fortunately, fuel prices are now on the
decline and we are hopeful that next quarter the fuel surcharge will decrease.
I want to assure you that relief is on the way, although in some cases it may take years. IPEC
has many power projects on the horizon. that will reduce and stabilize your electric rates,
including the Gartina Falls hydroelectric project for Hoonah, and an intertie for Kake that would
connect it with Petersburg hydroelectric power. Also, we are in the process of purchasing the 10
Mile Hydro for Chilkat Valley & Klukwan. Our goal is to wean IPEC from fossil fuel electric
generation, and to rely on diesel for back-up power only. Other projects we are considering for
Hoonah include geothermal power from the head of Tenakee Inlet, and the Water Supply Creek
hydro potential. Also, we are applying for grant funds to study the Walker Lake hydro potential
for Chilkat Valley & Klukwan.
We continue to support the Thayer Creek hydro project for Angoon, which is being developed by
Kootznoowoo Inc., and they have the sole rights to develop the project. This is a project that
would be owned by the village corporation, and would sell power to IPEC for distribution in
Angoon. The laws and regulations of the State of Alaska require that Kootznoowoo sign a power
sales agreement with IPPEC. My staff has advanced ideas, written a grant — and offered to write
' more — for Kootznoowoo, but so far we have no agreement. IPEC believes the Thayer Creek
project is the best and most promising renewable energy project that could lead to reduced rates
in Angoon, and we stand ready to do whatever we can to advance this project. _.
IPEC's board of directors will soon meet to discuss many issues that have an effect on your
electric rates. The first is a possible transition from our current postage -stamp rate structure,
whereby each community pays the same rates, to a community cost -based rate structure. Under
this format the costs to serve at each community will be determined, and each community's rates
will be adjusted accordingly. If this happens there will be winners and losers, but doing so will
provide a clearer focus on the areas where we can improve through power project development. In
short, the winners are likely to be those communities powered by hydroelectricity.
RO. Box 210149 Auke .Bay, Alaska 99821. (907) 789-3196 Fax (907) 790-8517
Another program IPEC's board will soon consider is an operations audit. By hiring an
independent consultant, we hope to find increased efficiencies over and above those we have
already implemented. We have made great strides in achieving near optimal efficiencies at our
power plants through our success in winning grants that have funded the installation of new
equipment. But, we hope that bringing in an expert to look at our operations from a fresh
perspective will help us to identify and implement ideas to achieve even greater cost savings.
IP.EC is one of few non-profit electric cooperatives in the State of Alaska that is regulated, since
cooperatives are, by nature, governed by their members through an elected board of directors.
The question our board will soon address is if the cost of regulation is something our rate payers
should have to bear. To give you an idea of how much regulatory review can cost, IPEC spent
about $139,013 on the most recent rate case, and then had to spend another $22,803 when one of
our members intervened and insisted on a hearing. Sometime in the future we may ask for your
vote to deregulate IPEC so that you, our members, won't have to pay these costs.
Ideally electric utilities enjoy sales growth, which in turn more than offsets increasing costs of
operations. But IPEC has experienced a long period of declining sales at the same time that costs
of providing electric service have increased. Because we are regulated, IPEC was required to
submit a .revenue requirement based on the 2008 test year. It showed that we needed a rate
adjustment to meet our rising cost of services, and to satisfy our lenders. For IPEC and our rate
payers, it seems a no -win situation: to get an increase in rates our rate payers have to bear the
costs of presenting our rate adjustment case. Top that off with the situation that developed when
a rate payer intervened, and we are all on the hook for those expenses as well.
The rate increase was implemented in .February 2009, so there will be no further increase from
this filing other than the cost of fuel adjustments, which come in the form of a fuel surcharge.
The payments we collect from our members barely meet the minimum requirements of our debt
obligations. As a member -owned non-profit electric cooperative, we don't have to worry about
making a profit, but charging any less for electricity would put our utility at risk of loan default.
Should this happen, IPEC's ability to provide our members with safe, reliable electric power
would be in severe jeopardy.
We all want the same thing: lower prices for the electricity we distribute. In a perfect world,
increasing demand would more than compensate for increased operational costs, but rural
communities throughout Alaska are losing population. At this time, our best defense is to
increase efficiencies to lower the cost of operations, and to invest in lower cost energy generation
technologies such as hydropower.
We look to you, our members, for suggestions. Please feel free to contact me.
Sincerely,
INSIDE PASSAGE ELECTRIC COOPERATIVE, INC.
6-�d1 �
Jodi Mitchell, CMA
Chief Executive Officer & General Manager
Allocation for Cost Benefit Purposes
Budget for TLHD Generating and Transmission Combined
Reconnaisance, Feasibility, Environmental $ 2,200,000
Preconstruction Engineering, Permitting, Design & Construction $ 2,221,000
Construction Costs Generating Facility Only $ 4,372,402
Construction Costs Transmission Facility $ 4,784,000
Contingency $ 1,623,706
$15,201,108
Budget for Generating Facility Only
Reconnaisance, Feasibility, Environmental $ 2,200,000
Preconstruction Engineering, Permitting, Design & Construction $ 2,056,000
Construction Costs Generating Facility Only $ 4,372,402
Construction Costs Transmission Facility
Contingency at 50% of total $ 811,853
$ 9,440,255
Budget for TLHD Transmission Facility Only
Reconnaisance, Feasibility, Environmental
Preconstruction Engineering, Permitting, Design & Construction $ 165,000
Construction Costs Generating Facility Only
Construction Costs Transmission Facility $ 4,784,000
Contingency at 50% of total $ 811,853
$ 5,760,853
$ 15, 201,108
�, Renewable Energy Fund Round 5
/GOEVGNE-'D
ALASKA� enewaALASKA gv,ENERGYAUTHORITY MW-;ENERGYAUTHORITY project Cost/Benefit Worksheet
Please note that some fields might not be applicable for all technologies or all project
phases. The level of information detail varies according to phase requirements.
1. Renewable Energy Source
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. 8,000,000
Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel)
2. Existing Energy Generation and Usage
a) Basic configuration (if system is part of the Railbelt' grid, leave this section blank)
i. Number of generators/boilers/other 1 435 kW CAT 3456 Genset
ii. Rated capacity of generators/boilers/other 500 kW
iii. Generator/boilers/other type Diesel
iv. Age of generators/boilers/other New
v. Efficiency of generators/boilers/other 13-14 kWh/gallon
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor 100,000
ii. Annual O&M cost for non -labor 150,000
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] 2,000,000
ii. Fuel usage
Diesel [gal] 184,440 based on 2008 actual plus new lodge customer
Other
iii. Peak Load 400kW
iv. Average Load 250kW
v. Minimum Load 200kW
vi. Efficiency 13-15kWh per gallon
vii. Future trends Home heating conversion to electric heat, economic growth, new airport and
ferry terminal
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] unknown
ii. Electricity [kWh] Numerous space heaters
iii. Propane [gal or MMBtu] Unknown
iv. Coal [tons or MMBtu] none
v. Wood [cords, green tons, dry tons] Common for residents to burn — 5%
vi. Other
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.
RFA AEA12-001 Application Cost Worksheet Page 1 7-1-11
/ol--)) ALASKA/�) ALASKA Renewable Energy Fund Round 5
�iENERGY AUTHORITY ME-) ENERGY AUTHORITY project Cost/Benefit Worksheet
3. 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]
Hydro
b)
Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh]
2,000,000
ii. Heat [MMBtu]
Convert diesel home heat and utilize balance of available
power or 6,000,000 kWh beginning in year 5
17,455 MMbtu
c)
Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu]
0
ii. Coal [tons or MMBtu]
0
iii. Wood [cords, green tons, dry tons]
0
iv. Other
0
4.
Project Cost
a)
Total capital cost of new system
$10,780,108
b)
Development cost
$2.200,000+ $ 2,221,000=$4,421,000
c)
Annual O&M cost of new system
$85,000 per HDR
d)
Annual fuel cost
0
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 184,400 x 4.50 = $ 829,800
ii. Heat 130,266 x 4.50 = $ 586,197
iii. Transportation
b) Current price of displaced fuel
c) Other economic benefits
d) Alaska public benefits
6. Power Purchase/Sales Price
a) Price for power purchase/sale
7. Project Analysis
$4.15
(PV = 3%, 47 years, 829,800 = $20.7 million)
(PV = 3%, 45 years, 586,197 = $14.4 million)
$0.35 fuel increase until operational, Improved health,
stable prices, economic growth
$.15 for 2,000,000 kWh year 3 for 47 years
$.15 for 6,000,000 kWh year 5 for 45 years
RFA AEA12-001 Application Cost Worksheet Page 2 7-1-11
/461F) ALASKA� ALASKA
Renewable Energy Fund Round 5
�)ENERGY AUTHORITY ME:) ENERGY AUTHORITY project Cost/Benefit Worksheet
a) Basic Economic Analysis
Project benefit/cost ratio $20.7 + $14.4 = $35.1 million/ $15.2 million = 2.31
Payback (years) To be determined by later phases of the project
RFA AEA12-001 Application Cost Worksheet Page 3 7-1-11
TLHD 2011 Round V
Kootznoowoo's discussion on future power needs from TLHD
Angoon's annual electric diesel generation produces approximately 2,000,000 kWh
(source CHP center, AEA grant documents filed by IPEC). There are other independent
producers of diesel generated electricity and these figures are unknown at this time. No
known renewable energy produces electricity in Angoon at this time. However, more
disturbing, no use of electricity is used for space heating in Angoon due to the high cost
of electricity. Therefore over 95% of the energy usage for space heating for homes and
businesses is produced through diesel generated heat. Approximately 5% of the homes
use firewood or are supplemented with firewood.
The CBJ Greenhouse Gas Emission study released in March 2009 reveals that Juneau is
81 % dependent on diesel in its total non -transportation use of energy. Naturally, Angoon
does not have hydropower so it is 100% diesel dependent. Converting the MMBTU
requirements for Angoon using the CBJ 81 % figure, we find that Angoon would convert
its diesel usage to electrical usage if the price of electricity provided the economic
incentive to convert to lower cost electrical heat. Theoretically, (based on 2,000,000
kWh figure) the community of Angoon would need 10,500,000 kWh (2,000,000/19%) if
it completely converted its home heating and diesel fuel usage to electrical generation
from low cost methods. Theoretically, the community of Angoon currently needs the
equivalent of 10,500 MWh for its current needs if their needs can be compared one to one
with Juneau's. Because of the high cost of fuel in Angoon and current conservation
efforts this estimate is very conservative but is a straightforward extrapolation. We know
that the PCE supplement creates a significant barrier to realistically making this
conversion. However a significant reduction in the price of electricity would allow for
conversion to occur. In other words low cost power would drive conversion from diesel
and other CO2 producing fuel sources in the community of Angoon much as has recently
occurred in Juneau, Petersburg, Sitka and other communities.
IPEC will be able to completely idle their diesel generation capacity to a stand by status
and would be able to salvage unnecessary equipment further reducing cost of operating
existing infrastructure. IPEC would however need to build and expand its distribution
system in Angoon as demand will increase the number of homes, business and public
buildings which are operated as the economy moves forward. In a community planning
on building an airport in the next year or so and having commenced building a new ferry
terminal and other necessary infrastructure, it is entirely reasonable to expect significant
economic growth particularly compared to recent years of decline. There exists the
potential for many new housing starts due to one of the highest level of vacant but
"shovel ready" housing lots in the Community directly the result of Kootznoowoo
shareholders receiving lands from Kootznoowoo. We expect Angoon to likely
experience an unprecedented power demand in converting home heat fuel from diesel to
relatively inexpensive hydroelectric power which, in turn would justify line upgrades and
line expansion to new areas within the community.
Currently, the community of Angoon has one of the highest unemployment rates at 87%
(source TANF program, Central Council of Tlingit and Haida Indians of Alaska) and
lowest per capita income in Southeast Alaska. The per capita income for Angoon was
$11, 357. Nearly a third of families and Angoon's overall population are below the
poverty line (source US Census Bureau Fact finder for Angoon, Alaska). Alaska ranks
number one in energy use per capita. According to the Cold Climate Housing Research
Center 2009 Alaska Housing Assessment, the average Sealaska household (of which
Angoon belongs) consumes $6,072 of energy per year.
Over half of the average household per capita income of Angoon residents is spent on
energy. The impact of this project to bring low cost hydropower to the community of
Angoon and energy customers is potentially profound. Energy customers are making
decisions to either heat their homes or feed their household. TLHD is ready to finalize its
design based on these facts and the enormous price increase in the cost of diesel since the
HDR feasibility analysis. An updated design and procurement of necessary permits and
funding is all that remains between continuing the decline associated with diesel
generation and the growth anticipated with economical and non volatile hydroelectric
power generation. The boost to the economy with the construction should be the catalyst
for this growth as families begin to return to Angoon once the see progress on the
horizon. An investment by the State of Alaska alongside the current award by the U.S.
DOE in this project is needed now in order to save this community.
IPEC currently sells electricity in a non -subsidized rate at over $0.52 per kWh (nearly
$0.60 for 2011). TLHD would dramatically reduce and stabilize the electrical rate, would
provide for a meaningful alternative to heating fuels such as diesel, propane and wood,
and would allow the City of Angoon to prosper. It will result in direct out of pocket
annual savings to Angoon ratepayers of over $300,000 annually for electricity alone and
increase disposable income by nearly $600 from this alone.
As can be seen from the attached chart conversion to electric heat is entirely likely to
occur and the update to the existing feasibility will recalculate loads based on rational
economic behavior which can be shown graphically by the following chart. New homes
will also likely be constructed with electric heating as part of design. It is expected that
this conversion will be directly related to the price of electricity which in turn is based on
future demand predictions. Kootznoowoo would prefer to overestimate demand
estimates and encourages AEA to do the same for the factors mentioned above and
because of the pattern shown by other communities of converting from diesel to electric
once lower cost power has become available.
Figure 3.2-1 Electricity Price Threshold for Conversion
Electricity Price Threshold for Conversion
(Qe. of 60% oa h- ,0 Effi—r aW w Price of st00 P'r us gat, etecl6c4 p� must be lens th SOADN Wh for —stoo)
0.25
_
-----------------------------------------------------------------------
---------------------------------------------------------------0ilileating-
-------------------------- -------------------------------------EfficieRoy-
--------------------------------- ----------------------
--------------------------
--------------------------- - - - ------ - ----
L-
3
- - - - - - - - - - - - - - - - - - - - - - - - -
-------------------- - - - - --
- - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - -
--------------------------------- ----
0.15
------------ - - - - --
---------------- ----------------------
$
------ ----- ------- -- - -----
----- -- — ---------- ------- ------gpq,-
a
0.10
-------- -- ----- --- ------ --
-----------
------ --- ------
---- -- ---- ----- ---------- -- -- - --
----- ----- ----- ------------------
-------------------- ----
---- --- ------------------------------
--------------- --- ---
--- ------------------------------------
r-----------
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------------------------------------------
0.05
------- -- -- - ----
- -------------------------------
0.00
--------------------------
------------- ------------------------------
1.00 1.20 1.40 1.60 1.8D 2.00 2.20 2.40 2.60 2.80 3.00 3.20 3.40 3.60 3.80 4.00 4.20 4.40 4.60 4.80 5.00
Oil Price ($lus0a0
Figure 3-2-1 AK -BC Interfie Feasibility Study SE Alaska 2007
According the AK BC Intertie Feasibility Study SE Alaska report 2007, electricity Price
threshold conversion for SE Alaska was determined and shown graphically in the chart
above. Many factors contribute to this, availability of funds to convert, incentives, price
of electricity and diesel. Angoon pays approximately $5.00 a gallon for home heating
fuel so one element leading to conversion is in place. A targeted low price of
hydroelectric would place another critical element into place to support he conversion
rate calculated. In other words it would be rational to make the switch if incentives and
capital was available. One such factor that can assure the switch is the extremely high
capital cost associated with diesel furnaces and the high cost of O&M. A $500 annual
maintenance cost will almost assure the switch if funds are available to purchase and
install new equipment. This conversion will occur much more quickly if government
sponsored measures continue into the future and as diesel price climb.
The following conversion has some significant ramification to the energy supply, demand
and economic analysis that follows assuming a 50% conversion which is arguably
reasonable under a peak oil scenario and completion of TLHD.
Assumptions
Community's Annual Electric Load
Community's Total Energy is 86 % Diesel (non Transportation)
Total Equivalent Energy
Conversion rate -- btu/kWh 3412.14
Total Equivalent Energy
Heat Component of Energy
50% of Households Convert Heat to electricity
Energy Converted
Conversion for Diesel #1 at 134,000 (btu/gal)
Diesel Displaced
annual
1,665,526 kWh
11,900,000 kWh
40,593 MMbtu
34,910 MMbtu
17,455 MMbtu
130,266 gallons
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