HomeMy WebLinkAboutGrant Lake Round V Application PackageAlaska Energy Authority
Renewable Energy Fund Round V
Kenai Hydro LLC
Grant Lake Hydroelectric Project
Grant Application
Renewable Energy Fund Round 5
Grant Application
AEA 12-001 Application Page 1 of 18 7/1/2011
Application Forms and Instructions
The following forms and instructions are provided to assist you in preparing your application for
a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA)
and the forms are available online at: http://www.akenergyauthority.org
Grant Application
Form
GrantApp5.doc Application form in MS Word that includes an outline of
information required to submit a complete application.
Applicants should use the form to assure all information is
provided and attach additional information as required.
Application Cost
Worksheet
Costworksheet
5.doc
Summary of Cost information that should be addressed by
applicants in preparing their application.
Grant Budget
Form
GrantBudget5.
doc
A detailed grant budget that includes a breakdown of costs by
milestone and a summary of funds available and requested to
complete the work for which funds are being requested.
Grant Budget
Form Instructions
GrantBudgetIn
structions5.doc
Instructions for completing the above grant budget form.
Authorized
Signers Form
Authorized
signers
form5.doc
Form indicating who is authorized to sign the grant, finance
reports and progress reports and provides grantee information.
• If you are applying for grants for more than one project, provide separate application
forms for each project.
• Multiple phases for the same project may be submitted as one application.
• If you are applying for grant funding for more than one phase of a project, provide
milestones and grant budget for completion of each phase.
• If some work has already been completed on your project and you are requesting
funding for an advanced phase, submit information sufficient to demonstrate that the
preceding phases are satisfied and funding for an advanced phase is warranted.
• If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
• Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
• All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
• In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or
proprietary company data be kept confidential subject to review and approval by the
Authority. If you want information is to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept
confidential. If the Authority determines it is not confidential it will be treated as a
public record in accordance with AS 40.25 or returned to the applicant upon
request.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 2 of 18 7/1//2011
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
KENAI HYDRO LLC
Type of Entity: Fiscal Year End DECEMBER 31
INDEPENDENT POWER PRODUCER
Tax ID # 27-3158417 Tax Status: X For-profit or non-profit ( check one)
Mailing Address
3977 LAKE STREET, HOMER, AK 99603
Physical Address
SAME
Telephone
907-283-2375
Fax
907-335-6213
Email
msalzetti@homerelectric.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
MIKE SALZETTI
Title
GENERATION ENGINEER
Mailing Address
HOMER ELECTRIC ASSOCIATION, INC., 3977 LAKE STREET, HOMER, AK 99603
Telephone
907-283-2375
Fax
907-335-6213
Email
msalzetti@homerelectric.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.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 3 of 18 7/1//2011
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.
Grant Lake Hydroelectric Facility
2.2 Project Location –
Include the physical location of your project and name(s) of the community or communities that will
benefit from your project.
Location – latitude and longitude or street address or community / communities served:
The project would be harnessing the hydro energy of the Grant Lake watershed located near
Moose Pass, Alaska. Persons benefitted would be the utility customers in the Kenai Peninsula.
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
Wind Biomass or Biofuels
X Hydro, including run of river Transmission of Renewable Energy
Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing sources Hydrokinetic
Solar Storage of Renewable
Other (Describe)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Reconnaissance Design and Permitting
Feasibility X Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
The Grant Lake Hydroelectric Facility would consist of 5 MW of installed capacity with an
average annual output of 20,600 MWh of energy, installed on the Grant lake watershed near
Moose Pass, Alaska. The proposed Project is comprised of a diversion dam at the outlet to
Grant Lake (under consideration), an intake structure in Grant Lake, a tunnel, a surge tank, a
penstock, a powerhouse, a tailrace detention pond, a switchyard with disconnect switch & step-
up transformer, and an overhead or underground transmission line. The intake would be in
Grant Lake near its outlet. Water would be conveyed from the intake through a 3200’ penstock
to a powerhouse containing two Francis-type turbines. The powerhouse would be located near
the bank of Grant Creek and would discharge through a second penstock into Grant Creek. A
transmission line would connect the facility to the Railbelt grid near Moose Pass. Please see
the attached Project Description that was filed with FERC on August 13th, 2010. Kenai Hydro
LLC, whose sole member is the Homer Electric Association (HEA), was created in 2008 to
evaluate and possibly develop this site as a low impact hydroelectric facility.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 4 of 18 7/1//2011
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.)
Energy from the project would reduce consumption of carbon-based energy sources, thereby
helping to improve air quality in Kenai Peninsula Borough. This renewable energy would also
stabilize the long term price of power to consumers, and it would be a significant step in
diversifying HEA’s generation portfolio.
It is estimated that nearly $239,579,000 can be saved in avoided fuel cost over a 50-year
period. This represents a tremendous value to the rate payers of Alaska and a generation asset
that would produce clean, renewable power for Alaskans throughout this century.
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.
Construction Funds Needed
Land and Land Rights $ 236,598
Powerhouse Structure 1,668,000
Diversion & Spillway 599,500
Intake 1,218,750
Low Level Outlet 303,000
Water Conductors 10,901,652
Turbine & Generator 2,275,000
Substation Equipment 1,150,000
Misc Power Plant Equipment 325,000
Roads 3,310,000
Transmission 1,212,500
Detention Pond 500,000
Design Engineering 2,370,000
Construction Administration 2,370,000
Contingency 6,952,921
Total Construction Costs $35,392,921
Anticipated Funding Sources
AEA Round V Grant $4,000,000
The balance will be funded by a combination of financing, Federal Grants, other State Grants
and possible legislative appropriation.
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. $ 4,000,000
2.7.2 Other Funds to be provided (Project match) $ -0-
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 4,000,000
Project Costs & Benefits
(Summary of total project costs including work to date and future cost estimates to get to a fully
operational project)
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 5 of 18 7/1//2011
2.7.4 Total Project Cost (Summary from Cost Worksheet
including estimates through construction)
$ 35,392,921
2.7.5 Estimated Direct Financial Benefit (Savings) $ 239,579,000 over a 50
year project lifetime
2.7.6 Other Public Benefit (If you can calculate the benefit in
terms of dollars please provide that number here and
explain how you calculated that number in your application
(Section 5.)
$
PROJECT COST SUMMARY
The construction cost is estimated at $28,440,000 with a contingency fund of $6,952,921 for a
total construction cost of $35,392,921. This does not include $3,480,000 in development and
licensing cost or $105,000 in initial reconnaissance costs.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 6 of 18 7/1//2011
SECTION 3 – PROJECT MANAGEMENT PLAN
Describe who will be responsible for managing the project and provide a plan for successfully
completing the project within the scope, schedule and budget proposed in the application.
3.1 Project Manager
Tell us who will be managing the project for the Grantee and include contact information, a
resume and references for the manager(s). If the applicant does not have a project manager
indicate how you intend to solicit project management support. If the applicant expects project
management assistance from AEA or another government entity, state that in this section.
Type in your answer here and follow same format for rest of the application.
Mr. Mike Salzetti (HEA) will oversee the development of this project with the assistance of Mr.
Brad Zubeck (HEA). Their brief professional biographies are attached in Section 7, Attachment
A as requested.
Mr. Salzetti has the guidance, support and staffing of his parent organization to manage this
project from its current state through design, construction and operation. Kenai Hydro, LLC has
also contracted with qualified consultants to conduct engineering studies and design.
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.)
A summary of the dates is provided below:
Construction Schedule – Based on receiving final FERC License by 3-31-2014.
Task Name Start Finish
Road Construction 3-31-2014 10-31-2014
Detailed Facility Design 3-31-2014 3-31-2015
Power House Construction 5-1-2015 12-31-2015
Diversion & Spillway Construction 5-1-2015 10-31-2015
Intake Construction 9-1-2015 4-1-2016
Low Level Outlet 5-1-2015 10-31-2015
Water Conductor Construction 4-1-2015 4-1-2016
Turbine & Generator Installation 3-31-2014 12-31-2015
Substation Construction 5-1-2015 10-31-2015
Transmission 3-31-2014 10-31-2015
Detention Pond Construction 3-31-2014 10-31-2014
Commissioning & Startup 1-1-2016 5-1-2016
Commercial Operation 5-1-2016
Please see the attach M.S. Project Schedule for more detail.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 7 of 18 7/1//2011
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.)
Each of the following milestones would have a 50% and 100% completion milestone based on the
schedule shown in Section 3.2. Requested reimbursement would be based on a percentage of overall
construction costs.
Milestone #1: Land & Land Rights
This milestone includes obtaining the land rights for the power plant, securing all special use permits and
the associated surveying required for these tasks.
Milestone #2: Power House Structure Construction
This milestone includes the work required to construct the Power House. This work includes the
excavation, the concrete, the metal building erection, building HVAC, plumbing and electrical, power
house ground grid and any required fire protection equipment.
Milestone #3: Impoundment and Waterway Construction
This work includes the completion of the impoundment, spillway, intake, low level outlet and all water
conductors.
Milestone #4: Turbine & Generator
This milestone includes the procurement, delivery and installation of the turbines and generators.
Milestone #5: Access Road Construction
This milestone includes the construction of the access road to the powerhouse and the road from the
powerhouse to intake structure.
Milestone #6: Transmission Construction
This work includes the generator step-up transformer and breaker, the transmission line to the “Railbelt”
grid and the associated apparatus required to connect to the “Railbelt” grid.
Milestone #7: Detention Pond Construction
The work includes the construction of the diversion pond to fully utilize the spin capacity of the project.
All milestones will go through the traditional construction phases of design, bid, procurement,
constructions, testing, commissioning and commercial operation.
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.
Mr. Mike Salzetti will be responsible for management and direct oversight of the project
development. He has the guidance, support and staffing of his parent organization for
managing this project from its current state through construction and operation.
Kenai Hydro LLC, whose sole member is the Homer Electric Association (HEA), was created to
evaluate and develop the site as a low impact hydroelectric facility. Kenai Hydro, LLC has
contracted well- qualified consultants to conduct the engineering, studies, permitting, process
management and facilitation.
Based on their recent FERC relicensing performance with the Cooper Lake hydro facility, Long
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 8 of 18 7/1//2011
View Associates (LVA) was hired to prepare FERC preliminary permit applications. The
preliminary permit for this project was secured and issued by FERC October 7, 2008. LVA will
be retained in various capacities as a license and permitting consultant.
HDR Alaska, Inc.(HDR) has provided engineering and consulting services for the feasibility
phase of this project, and provided their field services for the 2010 field study season. HDR is a
nation-wide engineering firm with a full-service office in Anchorage. HDR Alaska, Inc. has a
long history in this state and offers a full spectrum of engineering, planning, and environmental
services.
The final design and construction contract of the project facilities will be awarded on a
competitive bid process.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
The project manager will issue reports to AEA on a mutually agreeable schedule throughout the
life of the grant. These reports can be customized to meet AEA needs. The expectation is that
these reports could be a one page summary-type document submitted quarterly. The project
would also expect to process requests for reimbursement on a monthly basis.
3.6 Project Risk
Discuss potential problems and how you would address them.
1. There are the risks associated with successfully obtaining a FERC license application.
To address these risks for the purposes of a construction grant request, it is expected
that the release of the grant monies associated with this grant application will be
contingent upon successfully licensing this project.
2. There is the risk that the preliminary cost estimate does not accurately reflect the cost to
construct the project.
The preliminary cost estimate was prepared by HDR Alaska, a nationally recognized
engineering and consulting company with Alaska experience. The preliminary cost
estimate was further refined with a Tunnel Feasibility Study performed by Jacobs
Associates and an HDR access road study. Lastly the project estimate includes an
overall contingency of approximately 25% to account for unknowns, material escalation,
and the current level of engineering design.
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
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 9 of 18 7/1//2011
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.
Precisely quantifying the available energy from Grant Lake will be amongst the work performed
with this grant request. However, initial estimates derived from hydrology data recommend a 5
MW installed with a Capacity Factor of ~50% or 20.6 GWh annually.
Energy Potential
The historical record for energy potential was garnered from USGS stream gage 15256000
records, located on Grant Creek approximately 1/3 mile upstream from the mouth which has an
11-year period of record from 1947 to 1958. This stream gage has a drainage basin of 44.2
square miles and the average annual flow for the period of record was 193-cfs.
Hydropower is renewable, long-lived, efficient, dispatchable and environmentally responsible
Pros
energy that emits no greenhouse gases, waste or air pollution. It uses readily available
technologies, it is low maintenance, displaces consumption of fossil fuels, and it provides long-
term price stability to energy consumers. This particular facility could greatly enhance HEA’s
spinning reserve capacity which provides a significant fuel savings.
Hydropower opportunities on the Kenai Peninsula are extremely limited; potential resources
have been catalogued by the US Geological Survey – Water Resources of Alaska. Proximity to
the Railbelt grid, low impact and available energy recommend a Grant Lake hydro facility to be
atop the short list of viable Kenai Peninsula renewable resources.
The most expedient solution to local energy needs is construction of natural gas-fired generation.
These units are less expensive to procure and install, require a much shorter time to permit, and
have a relatively small footprint compared to hydro power. However, gas-fired units are not
sustainable, subject to market-driven fuel pricing and availability, shorter lived, cost more to
operate and maintain, and emit greenhouse gases.
Disadvantages of hydropower include high initial investment, relatively long time required to
Cons
permit/license, and potential impact on habitats and water quality.
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.
HEA has a 42 MW gas turbine (eff. ~ 40%) at Nikiski that was built in 2001, and it has an 11%
share of the Bradley Lake hydro energy. HEA is in the process of building a steam turbine
facility at its Nikiski Plant to recover the waste heat from combustion turbine. The waste heat
along with duct firing capabilities will add 20MW of capacity to the Nik iski facility. The Nikiski
facility will be the base loaded plant following the expiration of HEA’s wholesale power purchase
agreement with Chugach Electric in 2014. Additionally, HEA has purchased a 48MW aero-
derivative gas turbine and has begun construction of a backup and peaking plant in Soldotna.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 10 of 18 7/1//2011
Lastly, HEA is in negotiations with Chugach Electric to purchase the Bernice Lake Power Plant in
Nikiski which would add an additional 67MW of backup and peaking power to HEA’s generation
portfolio. The average HEA combined load is 62.4 MW (~546 GWh/yr), with winter peaks
approaching 85 MW and summer lows occasionally less than 40 MW.
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.
HEA’s wholesale contracts expire at the end of 2013 and its Board of Directors has approved a
path for HEA to develop assets that will achieve complete self-reliance. This requires that HEA
nearly double its current generation capacity. A hydro facility at Grant lake would contribute to
attaining that goal.
HEA is also seeking to diversify its generation portfolio and moderate its reliance on natural gas.
Part of this diversification is to develop renewable generation. The proposed project would
represent approximately 4 % of HEA’s future energy needs, and would be a significant step in
adding renewable energy to its portfolio. Furthermore, the addition of hydroelectric facilities
would facilitate development of other renewable resources such as wind or tidal.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The primary market for this project’s energy is HEA consumers, and a secondary market is other
Railbelt utilities. A potential market may soon exist for Renewable Energy Credits that can be
sold to utilities or industries seeking a means to comply with various Renewable Energy
Standards or Policies.
This project will have the following positive impacts on the existing energy system and its
customers:
1. Incrementally stabilize the long-term price of power.
2. Provide approximately 4 % of HEA’s immediate generation needs from clean, renewable
hydropower.
3. Offset and reduce greenhouse gas emissions.
4. Provide stored, dispatchable energy and spinning reserve.
Improve consumer confidence in its utility leadership and management.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 11 of 18 7/1//2011
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 hydro project would be comprised of up to a 2’ impoundment dam at the outlet of Grant
Lake, a 3200 foot 10’ diameter feed penstock, a surge tank, two Francis-type turbines with a
combined 5 MW gross capacity power house, and a 200 foot discharge penstock. The dam
(under consideration) would control outflow from the lake, creating or maintaining storage
capacity. The intake tap, an above and below-grade penstock, would be in Grant Lake near its
outlet. Water would be conveyed from the intake through the inlet feed penstock to a
powerhouse located near the bank of Grant Creek, and would ultimately discharge through a
second penstock into Grant Creek. A 7.5 MVA transformer would be used to convert the 13.8 kV
generator voltage to 24.9 kV transmission voltage, and a 4100’ radial circuit would connect the
facility to the Railbelt grid near Moose Pass.
Historic Grant Creek flows recommend an optimal turbine of 5 MW and suggest a Capacity
Factor of about 50%; this would yield an average annual energy output of ~21.4 GWh.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 12 of 18 7/1//2011
4.3.2 Land Ownership
Identify potential land ownership issues, including whether site owners have agreed to the
project or how you intend to approach land ownership and access issues.
The legal description and ownership of lands (ADNR 2006) within the proposed project boundary
are provided in the table below. All land is referenced to the Seward Meridian. Un-shaded rows
pertain to the Grant Lake outlet and Grant Creek. Shaded rows include Grant Lake in its entirety
and potential transmission areas.
Township Range Section Ownership
5N 1W 36 Private
5N 1E 27 USDA Forest Service
5N 1E 28 USDA Forest Service
5N 1E 29 USDA Forest Service
5N 1E 30 State patented land
5N 1E 31 State patented land
5N 1E 32 State patented land
5N 1E 33 USDA Forest Service
5N 1E 34 USDA Forest Service
5N 1E 35 USDA Forest Service
5N 1E 36 USDA Forest Service
4N 1E 1 USDA Forest Service
4N 1E 2 USDA Forest Service
4N 1E 3 USDA Forest Service
4N 1E 5 USDA Forest Service
4N 1E 6 State patented land
4N 1E 7 State patented land
4N 1W 1 Private
4N 1W 12 Private
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
A comprehensive listing of permits was developed. Currently efforts are under way to obtain the
requisite permits in support of a FERC license application.
A list of permits is provided below:
o USDA Forest Service, Special Use Application (SUA)
o Alaska Railroad Corp., Access Road & Transmission Line ROW Crossing of
Tracks
o Transmission Line Right-of-Way, lease or purchase agreements
o AKDNR, Water Rights
A permit to invoke the Traditional License Program was granted by FERC on Sept 15th, 2009.
Kenai Hydro, LLC filed a preliminary permit application with FERC on April 28, 2008 and was
issued a permit on October 7, 2008 (attachment FERC 10-7-08). The purpose of the preliminary
permit term is to determine the feasibility of a proposed project on Grant Lake and Creek in the
Kenai Peninsula Borough, Alaska, and would occupy federal lands managed by the Chugach
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 13 of 18 7/1//2011
National Forest. A Pre-Application Document (PAD) was filed with FERC on August 6, 2009.
FERC approved the Traditional License Program (TLP) as the appropriate course with which to
proceed and secure a FERC license (attachment FERCTLP 9-15-09).
4.3.4 Environmental
Address whether the following environmental and land use issues apply, and if so how they will
be addressed:
• Threatened or Endangered species
• Habitat issues
• Wetlands and other protected areas
• Archaeological and historical resources
• Land development constraints
• Telecommunications interference
• Aviation considerations
• Visual, aesthetics impacts
• Identify and discuss other potential barriers
The FERC license process addresses environmental and land issues. It is expected that the
release of grant monies associated with this grant application will be contingent upon
successfully licensing this project.
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
Total anticipated cost: $38,977,000
Construction cost: $35,392,921 with a ~25% contingency
Requested grant funding: $4,000,000
Applicant matching funds: None at this time
Identification of other funding sources:
This is the first construction grant for which Kenai Hydro has applied. It is anticipated that the
balance of construction funds will come from a combination of financing, Federal grants, State
grants, private grants and possible Legislative appropriation.
Projected capital cost: $35,392,921
Projected development costs: $3,585,000
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 14 of 18 7/1//2011
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.)
Operations and maintenance will be financed through typical utility accounting procedures using
revenue generated by the hydro facility and other utility cash flows. The facility would be
essentially unmanned requiring only periodic inspection and routine maintenance. Annual O &M
costs are anticipated to be about $103,000 (in 2011 dollar) escalating at 3% per year which is
easily supported by the project’s expected annual revenue.
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
Energy from the project will be sold to Homer Electric Association (HEA) for the benefit of its
customers at prevailing rates. It should be noted that the project would incrementally stabilize
long term electricity rates. It is likely that the acceptable rate-of-return will be kept to single-digit
margins.
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.
See the attached Cost Worksheet completed for the proposed Grant Lake project and the
attached spreadsheet Grant Lake Hydro Benefit-Cost 08-25-11 for the bases and conditions
associated with the date in the cost worksheet.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 15 of 18 7/1//2011
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
It is estimated that $239,579,000 can be saved in avoided fuel cost over a 50-year period (using
a 2010 dollars metric). This represents a tremendous value to the rate payers of Alaska and a
generation asset that will produce clean, renewable power for Alaskans throughout this century.
Potential Fuel Displacement
Annual revenue minus the fuel savings cost accounted for above is estimated at approximately
$7/MWh in 2010 dollars escalated at a 5% power price escalation factor. This equates to a
revenue stream of $35,502,179 over a 50-year period.
Anticipated Annual Revenue
The potential tax credits are purely speculative, and will depend on the form of the business
entity that carries the project into licensing, construction and operation
Potential Additional Annual Incentives
It may be possible to sell Renewable Energy Credits engendered by this project, but lack of an
existing market renders a forecast purely speculative.
Potential Additional Annual Revenue Streams
The renewable energy will incrementally stabilize the long term price of power providing an
attractive incentive to potential local businesses.
It may also be possible to sell spinning reserve capacity from this asset when HEA is not utilizing
the spin from this facility.
The energy from the project would reduce consumption of carbon-based energy sources, and
help to improve air quality in Kenai Peninsula Borough. The project would also be an important
step in diversifying HEA’s future generation portfolio.
Non-Economic Public Benefit
A requisite public access road to the dam would substantially enhance recreational opportunities
at Grant Lake.
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.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 16 of 18 7/1//2011
• 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
Operations and maintenance will be financed through typical utility accounting procedures using
revenue generated by the hydro facility and other utility cash flows. The facility would be
essentially unmanned requiring only periodic inspection and routine maintenance. Annual O &M
costs are anticipated to be about $100,000 (in 2010 dollar) escalating at 3% per year which is
easily supported by the project’s expected annual revenue.
SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS
Discuss what you have done to prepare for this award and how quickly you intend to proceed
with work once your grant is approved.
Tell us what you may have already accomplished on the project to date and identify other grants
that may have been previously awarded for this project and the degree you have been able to
meet the requirements of previous grants.
The reconnaissance Phase 1 was completed in 2009, the results of which suggested pursuing
feasibility work. To that end, Field Studies were initiated in 2009 and executed through July of
2010. An authorization to proceed to licensing using the Traditional License Program was
granted by FERC on 9/15/2009 – refer to attachment “FERCTLP 9-15-2009” Numerous agency
and interested shareholder forums have been held, and public comment processes have been
undertaken. The FERC scoping process has been completed and FERC issued Scoping
Document 2 for this project on 8/23/2010 – refer to attachment “KHL_FERC_Scoping2”. Kenai
Hydro has also maintained a website, www.kenaihydro.com that contains project information.
Phase 1 Reconnaissance studies, which were completed in January 2009, were partially funded
by a $100,000 AEA grant. AEA also provided a $816,000 grant award to fund Phase 2 activities
from 2009 through July 2010. Additionally, Kenai Hydro has recently signed a grant agreement
with AEA for $1,184,400 to complete the field and engineering studies required to apply for a
FERC license.
SECTION 8– LOCAL SUPORT
Discuss what local support or possible opposition there may be regarding your project. Include
letters of support from the community that would benefit from this project.
The project has encountered some not unexpected minor, local opposition, but initial reaction of
this sort is common and misunderstanding tends to diminish as people become more
knowledgeable with a project’s details and unsubstantiated rumors are dispelled. Among
ongoing tasks are the receipt, cataloguing and redress of public comments.
The HEA Board of Directors which represents 21,586 member - owners has shown consistent
support for renewable energy projects.
Attached you will find a letter of support for this project signed by Speaker of the Alaska State
House, Representative Mike Chenault; Alaska State Representative Kurt Olson; and Alaska
State Senator Tom Wagoner.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 17 of 18 7/1//2011
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.
Requested Grant Funds $4,000,000
Investments to Date
AEA Reconnaissance Grant 105,000
AEA Round III Grant 816,000
Kenai Hydro/HEA Funds 791,778
Future Committed Funds
AEA Round IV Grant 1,184,000
HEA Round IV Match 296,000
Additional Investments
As stated previously, it is anticipated that the balance of construction funds will come from a
combination of financing, Federal grants, State grants, private grants and possible Legislative
appropriation.
See attached GrandBudget5.doc
HDR Alaska, Inc.
Key Personnel Résumés
IDTask NameDurationStartFinish1Road Construction155 days?3/31/201410/31/20142Detailed Facility Design262 days?3/31/20143/31/20153Power House Construction176 days?5/1/201512/31/20154Diversion & Spillway Construction132 days?5/1/201510/31/20155Intake Construction155 days?9/1/20154/1/20166Low Level Outlet132 days?5/1/201510/31/20157Water Conductor Construction264 days?4/1/20154/1/20168Turbine & Generator Installation460 days?3/31/201412/31/20159Substation Construction132 days?5/1/201510/31/201510Transmission416 days?3/31/201410/31/201511Detention Pond416 days?3/31/201410/31/201512Commission and Start-up 87 days?1/1/20165/1/201613Commence Commercial Operation0 days5/1/20165/1/20165/1Q1Q2Q3Q4Q1Q2Q3Q4Q1Q2Q3201420152016TaskSplitProgressMilestoneSummaryProject SummaryExternal TasksExternal MilestoneDeadlineConstruction Schedule - based on receiving final FERC license by 3/31/2014Page 1Project: Grant Lake Project Works ConDate: 8/24/2011
Renewable Energy Fund Grant Round V Grant Budget Form 7-1-11
Milestone or Task Anticipated
Completion Date
RE- Fund
Grant Funds
Grantee Matching
Funds
Source of Matching
Funds:
Cash/In-kind/Federal
Grants/Other State
Grants/Other
TOTALS
(List milestones based on phase and type of project.
See Attached Milestone list. )
$ $ $
Milestone #1: Land & Land Rights 3/31/2014 $40,000 $0 $40,000
Milestone #2: Power House Structure Construction 12/31/2015 $290,000 $0 $290,000
Milestone #3: Impoundment & Waterway
Construction
4/1/2016 $2,200,000 $0 $2,200,000
Milestone #4: Turbine & Generator Installation 12/31/2015 $400,000 $0 $400,000
Milestone #5: Access Road Construction 10/31/2014 $560,000 $0 $560,000
Milestone #6: Transmission Construction 10/31/2015 $400,000 $0 $400,000
Milestone #7: Detention Pond Construction 10/31/2014 $90,000 $0 $$90,000
$
TOTALS $4,000,000 $4,000,000
Budget Categories:
Direct Labor & Benefits $
$HEA Labor will not
be paid from grant
funds
Labor
$HEA Labor will
not be paid from
grant funds
Travel & Per Diem $ $ $
Equipment $ $ $
Materials & Supplies $ $ $
Contractual Services $ $ $
Construction Services $ $ $
Other $ $ $
TOTALS $4,000,000 $ $4,000,000
Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)-
Add additional pages as needed
*RE – Fund Grant Funds value is calculated by taking ($4,000,000/$23,700,000)*Construction Cost of the Milestone.
Renewable Energy Fund Grant Round V Grant Budget Form 7-1-11
Reconnaissance
Project Milestones that should be addressed in Budget Proposal
Feasibility Design and Permitting Construction
1. Project scoping and
contractor solicitation.
2. Resource identification and
analysis
3. Land use, permitting, and
environmental analysis
4. Preliminary design analysis
and cost
5. Cost of energy and market
analysis
6. Simple economic analysis
7. Final report and
recommendations
1. Project scoping and contractor
solicitation.
2. Detailed energy resource
analysis
3. Identification of land and
regulatory issues,
4. Permitting and environmental
analysis
5. Detailed analysis of existing
and future energy costs and
markets
6. Assessment of alternatives
7. Conceptual design analysis
and cost estimate
8. Detailed economic and
financial analysis
9, Conceptual business and
operations plans
10. Final report and
recommendations
1. Project scoping and contractor
solicitation for planning and
design
2. Permit applications (as
needed)
3. Final environmental
assessment and mitigation
plans (as needed)
4. Resolution of land use, right of
way issues
5. Permit approvals
6. Final system design
7. Engineers cost estimate
8. Updated economic and
financial analysis
9. Negotiated power sales
agreements with approved
rates
10. Final business and operational
plan
1. Confirmation that all design
and feasibility requirements
are complete.
2. Completion of bid documents
3. Contractor/vendor selection
and award
4. Construction Phases –
Each project will have unique
construction phases, limitations,
and schedule constraints which
should be identified by the
grantee
5. Integration and testing
6. Decommissioning old
systems
7. Final Acceptance,
Commissioning and Start-up
8. Operations Reporting
UNITED STATES OF AMERICA 125 FERC ¶ 62,018
FEDERAL ENERGY REGULATORY COMMISSION
Kenai Hydro, LLC Project No. 13212-000
ORDER ISSUING PRELIMINARY PERMIT
(Issued October 07, 2008)
On April 28, 2008, Kenai Hydro, LLC filed an application, pursuant to section 4(f) of
the Federal Power Act (FPA),
1 to study the feasibility of the Grant Lake Project. The project
would be located on Grant Lake and Creek in Kenai Peninsula Borough, Alaska, and would
occupy federal lands managed by the Chugach National Forest.
The proposed project would consist of: (1) an earth filled, concrete faced gravity dam
10 feet high and 200 feet wide; (2) a reservoir with an approximate surface elevation of 800
feet MSL, an approximate surface area of 1,888 acres, and a storage capacity of 37,760 acre
feet; (3) a 5 foot diameter, 1 mile long penstock constructed of high density polyethylene or
steel; (4) a powerhouse containing one turbine generator unit with a total installed capacity of
about 5 MW; (5) a 1-2 mile long, 115 kV transmission line and; (6) appurtenant facilities.
The annual production would be 17.5 GWh, which would be sold to a local utility.
Background
The Commission issued public notice of the application on July 21, 2008. The U. S.
Department of the Interior and the U.S. Department of Agriculture (USDA) filed motions to
intervene to be parties in the proceeding.
2 The USDA also filed comments.
USDA commented on resource issues that need to be evaluated by the permittee
during the course of the preliminary permit. These issues include fish and wildlife, recreation,
and visual resources. The USDA also states the permittee will need to obtain a Special Use
Authorization in order to perform work related to the permit on National Forest lands.
Discussion
1 16 U.S.C. § 797(f) (2000).
2 Timely, unopposed motions to intervene are granted by operation of Rule 214 of the
Commission’s Regulations.Id.§ 385.214(a)(3) (2008).
20081007-3019 FERC PDF (Unofficial) 10/07/2008
Project No. 13212-000 2
The purpose of a preliminary permit is to maintain priority of application for a license
during the term of the permit while the permittee conducts investigations and secures data
necessary, after consultation with the appropriate resource agencies, to determine the
feasibility of the proposed project and prepares an acceptable development application. The
permit confers no authority on the permittee to undertake construction of the proposed project
or any part thereof,
3 or to occupy or use lands or other property of the United States or of any
other entity or individual.
If, during the course of the permittee’s investigation into the feasibility of the proposal,
the permittee decides to prepare a development application, it must first prepare a Notice of
Intent (NOI) and Pre-Application Document (PAD) pursuant to Sections 5.5 and 5.6 of the
Commission’s Regulations. Pursuant to Part 5 of the Commission’s regulations, 18 C.F.R.
Part 5, the permittee must use the Integrated Licensing Process unless the Commission grants
a request to use an alternative process (Alternative or Traditional Licensing Process).
Pursuant to Section 5.3, such a request must accompany the NOI and PAD and set forth
specific information justifying the request.
4 Should the permittee file a development
application, notice of the application will be published, and interested persons and agencies
will have an opportunity to intervene and to present their views concerning the project and the
effects of its construction and operation.
A preliminary permit is not transferable. The named permittee is the only party
entitled to the priority of application for license afforded by this preliminary permit. In order
to invoke permit-based priority in any subsequent licensing competition, the named
permittee must file an application for license as the sole applicant, thereby evidencing its
intent to be the sole licensee and to hold all proprietary rights necessary to construct, operate,
and maintain the proposed project. Should any other parties intend to hold during the term of
any license issued any of these proprietary rights necessary for project purposes, they must be
included as joint applicants in any application for license filed. In such an instance, where
parties other than the permittee are added as joint applicants for license, the joint application
will not be eligible for any permit-based priority. See City of Fayetteville,16 FERC 61,209
(1981).
The Director orders:
3 Issuance of this preliminary permit is thus not a major federal action significantly
affecting the quality of the human environment.
4See Commission Order 2002, issued July 23, 2003.
20081007-3019 FERC PDF (Unofficial) 10/07/2008
Project No. 13212-000 3
(A) A preliminary permit is issued for the this project to Kenai Hydro, LLC, for a
period effective the first day of the month in which this permit is issued, and ending either 36
months from the effective date or on the date that a development application submitted by the
permittee has been accepted for filing, whichever occurs first.
(B) This preliminary permit is subject to the terms and conditions of Part I of the
Federal Power Act and related regulations. The permit is also subject to Articles 1 through 4,
set forth in the attached standard form P-1.
(C) This order is issued under authority delegated to the Director and constitutes final
agency action. Requests for rehearing by the Commission may be filed within 30 days from
the date of issuance of this order, pursuant to 18 C.F.R. 385.713.
William Guey-Lee
Chief, Engineering and Jurisdiction Branch
Division of Hydropower Administration
and Compliance
20081007-3019 FERC PDF (Unofficial) 10/07/2008
Form P-1 (Revised February 2007)
FEDERAL ENERGY REGULATORY COMMISSION
TERMS AND CONDITIONS OF
PRELIMINARY PERMIT
Article 1. The purpose of the permit is to maintain priority of application for a license
during the term of the permit while the permittee conducts investigations and secures data
necessary to determine the feasibility of the proposed project and, if said project is found to be
feasible, prepares an acceptable application for license. In the course of whatever field studies
the permittee undertakes, the permittee shall at all time exercise appropriate measures to
prevent irreparable damage to the environment of the proposed project. All test sites shall be
restored as closely as possible to their original condition and to the satisfaction of the
Commission's authorized representative or, where federal lands are affected, to the
satisfaction of the agency administering such lands.
Article 2. The permit is not transferable and may, after notice and opportunity for
hearing, be canceled by order of the Commission upon failure of the permittee to prosecute
diligently the activities for which a permit is issued, or for any other good cause shown.
Article 3. The priority granted under the permit shall be lost if the permit is canceled
pursuant to Article 2 of this permit, or if the permittee fails, on or before the expiration date of
the permit, to file with the Commission an application for license for the proposed project in
conformity with the Commission's rules and regulations then in effect.
Article 4. At the close of each six-month period from the effective date of this permit,
the permittee shall file four copies of a progress report with the Secretary, Federal Energy
Regulatory Commission, 888 First Street, N.E., Washington, D.C. 20426; and shall serve a
copy on the interveners in this proceeding. The report shall describe, for that report period,
the nature and timing of what the permittee has done under the pre-filing requirements of 18
CFR §§ 4.38 and 5 and other applicable regulations; and, where studies require access to and
use of land not owned by the permittee, the status of the permittee's efforts to obtain
permission therefor.
20081007-3019 FERC PDF (Unofficial) 10/07/2008
FEDERAL ENERGY REGULATORY COMMISSION
WASHINGTON,D.C.20426
September 15,2009
OFFICE OF ENERGY PROJECTS
Project No.13212-001 and 13211-001
–Alaska
Grant Lake/Falls Creek Hydroelectric
Project
Kenai Hydro,L.L.C.
Steve Gilbert,Manager
Kenai Hydro,L.L.C.
6921 Howard Avenue
Anchorage,AK 99504
Reference:Authorization to Use the Traditional Licensing Process
Dear Mr.Gilbert:
In a letter filed August 6,2009,you requested to use the Traditional Licensing
Process (TLP)in preparing a license application for the proposed 4.5-megawatt Grant
Lake/Falls Creek Hydroelectric Project,which would be located on Grant Lake,Grant
Creek and Falls Creek on the Kenai Peninsula,near the community of Moose Pass,
Alaska.On August 6,2009,you filed a notice of intent and pre-application document
(PAD)for the proposed project.
On August 7,2009,you filed documentation that you published notice of your
request to use the TLP in editions of the Anchorage Daily News,Peninsula Clarion and
Homer Tribune.Your notice contained the information required in 18 C.F.R.§5.3(d)(2)
of the Commission’s regulations,including a statement requesting that comments on the
request to use the TLP be filed with the Commission within 30 days of the date of the
notice,which was by September 5,2009.
The U.S.Forest Service (Forest Service)and Alaska Department of Fish and
Game (Alaska DFG)filed comments September 4 and 8,2009,respectfully,supporting
the use of the TLP,with the request that scoping be held early in the licensing process to
advance timely study development and provide time for analysis of results.The Kenaitze
Indian Tribe,filed comments September 4,2009,expressing no opposition to the use of
the TLP.
20090915-3018 FERC PDF (Unofficial) 09/15/2009
P-13212-001 and P-13211-001 2
Comments from Michael Coone y and the Sierra Club Alaska Chapter,filed
September 8,and 10,2009,respectfully,expressed concerns with the use of the TLP,
particularly that the process does not afford adequate public involvement in which to
voice environmental concerns.The Sierra Club also expressed concerns that the
Integrated License Process (ILP),the Commission’s default license process,would need
to be modified through lengthened timeframes,to ensure adequate study development
and deployment.
Also,comments from the Alaska Center for the Environment,filed September 8,
2009,while not advocating one process over the other,do express the different
advantages of the ILP and TLP,noting that early scoping is one benefit of the ILP.
Holding scoping early in the licensing process,as suggested by the Forest Service
and the Alaska DFG,would provide early identification of issues by all interested parties,
which would help to foster the development of any needed studies.Kenai Hydro,L.L.C.,
in a comment filed September 10,2009,expressed support of the TLP with early scoping
and requested agencies and interested parties to consider this as an option when filing
their comments.Early scoping also addresses some of the concerns of the Sierra Club
Alaska Chapter and the Alaska Center for the Environment.In consideration of the
above,I am granting your request to use the TLP with early scoping.
If you have an y questions,please contact Joseph Adamson at (202)502-8085 or
via email at joseph.adamson@ferc.gov.
Sincerely,
Ann F.Miles,Director
Division of Hydropower
Licensing
cc:Mailing List
Public Files
Brad Zubeck,Project Engineer
Kenai Hydro,L.L.C.
280 Airport Way
Kenai,AK 99611
20090915-3018 FERC PDF (Unofficial) 09/15/2009
Document Content(s)
P-13212-001Letter.DOC.................................................1-2
20090915-3018 FERC PDF (Unofficial) 09/15/2009
Renewable Energy Fund Round 5
Project Cost/Benefit Worksheet
RFA AEA12-001 Application Cost Worksheet Page 1 7-1-11
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. The water resource is well documented in the form
of USGS stream gauging data available on Grant
Creek, as well as in the referenced
1984 Ebasco study.
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 1
i. Number of generators/boilers/other
grid, leave this section blank)
ii. Rated capacity of generators/boilers/other
iii. Generator/boilers/other type
iv. Age of generators/boilers/other
v. Efficiency of generators/boilers/other
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor
ii. Annual O&M cost for non-labor
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]
ii. Fuel usage
Diesel [gal]
Other
iii. Peak Load
iv. Average Load
v. Minimum Load
vi. Efficiency
vii. Future trends
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu]
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
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.
Renewable Energy Fund Round 5
Project Cost/Benefit Worksheet
RFA AEA12-001 Application Cost Worksheet Page 2 7-1-11
v. Wood [cords, green tons, dry tons]
vi. Other
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] 5 MW NOMINAL
ii. Heat [MMBtu]
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu]
ii. Coal [tons or MMBtu]
iii. Wood [cords, green tons, dry tons]
iv. Other
4. Project Cost
a) Total capital cost of new system $
b) Development cost
35,392,921
$
c) Annual O&M cost of new system
3,480,000
~$100,000
d) Annual fuel cost $ 0
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 197,626 MCF per year
ii. Heat
iii. Transportation
b) Current price of displaced fuel $6.83/ MCF of natural gas (2010)
c) Other economic benefits 19,585 MCF per year of spin savings & 44 fewer unit
starts.
d) Alaska public benefits Stabilize rates, lower emissions per kWh, conserve gas
Renewable Energy Fund Round 5
Project Cost/Benefit Worksheet
RFA AEA12-001 Application Cost Worksheet Page 3 7-1-11
6. Power Purchase/Sales Price
a) Price for power purchase/sale
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 1.35 This ratio is sensitive to the price of natural gas, discount rates
and the cost of capital. See attached Grant Lake Hydro Benefit – Cost
08-25-2011 spreadsheet
Payback (years)
for details.
To be determined
AEA Grant RFA, Round 1 Application, October 8, 2008
GRANT LAKE/CREEK HYDRO BENEFIT-COST ANALYSIS
ASSUMPTIONS
5.0000 MW, Power Capacity 3%/Year, Discount Rate 9.6 Mcf per MWh for LM6000 Gas-fired Plant
47%CAPACITY FACTOR 3%/Year, Cost Escalation for O&M & Gas beyond 2033 197,626 Mcf, Gas Required for Equivalent Hydro Energy
2.4 aMW, Net Capacity 5%/Year, Power Price Escalation
8760 Hours Per Year 6%/Year, Cost of Capital
100%Availability Multiplier 5.00$ /MWh, Estimated O&M Cost
20586000 kWh, Estimated Annual Power Production
4,942.00$ /kW Estimated Construction Cost
DATE YEAR #
DESIGN &
PERMITTING
COST
CONSTRUCTION
COST
Pay
Period
Cost of Capital
(Interest on
Loan)O&M COST
Present Worth
(PW) of Design
& Permitting
Costs
PW of
Construction
Cost
PW of Cost of
Capital
PW of O&M
Cost PW of All Costs
Projected
Price of Gas
($/Mcf)
Annual Avoided
Fuel Cost
Annual Spin
Savings for 3MW
Total Annual
Savings
Present Worth of
Annual Avoided
Cost
Net Present Worth
= PW Avoided Costs
- PW All Costs
Benefit:Cost
Ratio
PRESENT WORTH (2008) TOTALS ($3,256,465)($29,641,014)($25,886,639)($4,100,884)($62,885,002)$217,966,615 $21,613,319 $239,579,933 ($85,156,614)($22,271,612)1.35
2010 1 $1,500,000 $0 $0 ($1,456,311)6.83$ $133,765
2011 2 $100,000 $0 $0 ($94,260)6.77$ $132,727
2012 3 $1,500,000 $0 $0 ($1,372,712)7.16$ $140,260
2013 4 $375,000 $0 $0 ($333,183)7.68$ $150,473
2014 5 $0 $0 $0 $0 8.05$ $157,664
2015 6 $0 $35,392,921 1 $2,123,575 $0 ($29,641,014)($1,778,461)8.42$ $1,664,602 $165,060 $1,829,662
2016 7 $0 $0 2 $2,096,714 $102,930 ($1,704,821)($83,692)8.60$ $1,699,513 $168,522 $1,868,035 ($1,518,883)
2017 8 $0 $0 3 $2,068,242 $106,018 ($1,632,689)($83,692)8.73$ $1,725,128 $171,062 $1,896,190 ($1,496,870)
2018 9 $0 $0 4 $2,038,061 $109,198 ($1,562,004)($83,692)8.68$ $1,716,010 $170,158 $1,886,167 ($1,445,590)
2019 10 $0 $0 5 $2,006,069 $112,474 ($1,492,704)($83,692)8.94$ $1,767,043 $175,218 $1,942,261 ($1,445,224)
2020 11 $0 $0 6 $1,972,158 $115,849 ($1,424,729)($83,692)9.40$ $1,857,321 $184,170 $2,041,491 ($1,474,817)
2021 12 $0 $0 7 $1,936,212 $119,324 ($1,358,020)($83,692)9.94$ $1,965,023 $194,849 $2,159,873 ($1,514,891)
2022 13 $0 $0 8 $1,898,109 $122,904 ($1,292,520)($83,692)10.34$ $2,044,061 $202,687 $2,246,747 ($1,529,926)
2023 14 $0 $0 9 $1,857,720 $126,591 ($1,228,172)($83,692)10.79$ $2,131,547 $211,362 $2,342,909 ($1,548,939)
2024 15 $0 $0 10 $1,814,908 $130,389 ($1,164,920)($83,692)11.27$ $2,227,579 $220,884 $2,448,464 ($1,571,576)
2025 16 $0 $0 11 $1,769,527 $134,300 ($1,102,711)($83,692)11.52$ $2,276,074 $225,693 $2,501,767 ($1,559,018)
2026 17 $0 $0 12 $1,721,423 $138,329 ($1,041,489)($83,692)11.77$ $2,325,078 $230,552 $2,555,630 ($1,546,198)
2027 18 $0 $0 13 $1,670,433 $142,479 ($981,203)($83,692)12.24$ $2,419,778 $239,942 $2,659,721 ($1,562,306)
2028 19 $0 $0 14 $1,616,384 $146,754 ($921,801)($83,692)12.93$ $2,555,308 $253,381 $2,808,690 ($1,601,757)
2029 20 $0 $0 15 $1,559,091 $151,156 ($863,231)($83,692)13.56$ $2,679,154 $265,662 $2,944,816 ($1,630,473)
2030 21 $0 $0 16 $1,498,361 $155,691 ($805,443)($83,692)14.21$ $2,808,192 $278,457 $3,086,649 ($1,659,226)
2031 22 $0 $0 17 $1,433,988 $160,362 ($748,387)($83,692)14.97$ $2,957,665 $293,279 $3,250,943 ($1,696,643)
2032 23 $0 $0 18 $1,365,751 $165,172 ($692,015)($83,692)15.60$ $3,083,214 $305,728 $3,388,941 ($1,717,149)
2033 24 $0 $0 19 $1,293,421 $170,128 ($636,277)($83,692)16.36$ $3,233,149 $320,595 $3,553,745 ($1,748,207)
2034 25 $0 $0 20 $1,216,751 $175,231 ($581,127)($83,692)17.40$ $3,438,880 $340,995 $3,779,875 ($1,805,289)
2035 26 $0 $0 21 $1,135,481 $180,488 ($526,516)($83,692)18.23$ $3,602,539 $357,224 $3,959,763 ($1,836,121)
2036 27 $0 $0 22 $1,049,334 $185,903 ($472,399)($83,692)18.78$ $3,710,615 $367,940 $4,078,556 ($1,836,121)
2037 28 $0 $0 23 $958,019 $191,480 ($418,728)($83,692)19.34$ $3,821,934 $378,979 $4,200,912 ($1,836,121)
2038 29 $0 $0 24 $861,224 $197,225 ($365,457)($83,692)19.92$ $3,936,592 $390,348 $4,326,940 ($1,836,121)
2039 30 $0 $0 25 $758,622 $203,141 ($312,542)($83,692)20.52$ $4,054,689 $402,058 $4,456,748 ($1,836,121)
2040 31 $0 $0 26 $649,864 $209,235 ($259,937)($83,692)21.13$ $4,176,330 $414,120 $4,590,450 ($1,836,121)
2041 32 $0 $0 27 $534,581 $215,513 ($207,597)($83,692)21.77$ $4,301,620 $426,544 $4,728,164 ($1,836,121)
2042 33 $0 $0 28 $412,380 $221,978 ($155,478)($83,692)22.42$ $4,430,669 $439,340 $4,870,009 ($1,836,121)
2043 34 $0 $0 29 $282,847 $228,637 ($103,535)($83,692)23.09$ $4,563,589 $452,520 $5,016,109 ($1,836,121)
2044 35 $0 $0 30 $145,543 $235,496 ($51,724)($83,692)23.78$ $4,700,496 $466,096 $5,166,592 ($1,836,121)
2045 36 $0 $0 31 $242,561 ($83,692)24.50$ $4,841,511 $480,079 $5,321,590 ($1,836,121)
2046 37 $0 $0 32 $249,838 ($83,692)25.23$ $4,986,757 $494,481 $5,481,238 ($1,836,121)
2047 38 $0 $0 33 $257,333 ($83,692)25.99$ $5,136,359 $509,315 $5,645,675 ($1,836,121)
2048 39 $0 $0 34 $265,053 ($83,692)26.77$ $5,290,450 $524,595 $5,815,045 ($1,836,121)
2049 40 $0 $0 35 $273,005 ($83,692)27.57$ $5,449,164 $540,333 $5,989,496 ($1,836,121)
2050 41 $0 $0 36 $281,195 ($83,692)28.40$ $5,612,639 $556,543 $6,169,181 ($1,836,121)
2051 42 $0 $0 37 $289,631 ($83,692)29.25$ $5,781,018 $573,239 $6,354,257 ($1,836,121)
2052 43 $0 $0 38 $298,320 ($83,692)30.13$ $5,954,448 $590,436 $6,544,884 ($1,836,121)
2053 44 $0 $0 39 $307,269 ($83,692)31.03$ $6,133,082 $608,149 $6,741,231 ($1,836,121)
2054 45 $0 $0 40 $316,487 ($83,692)31.96$ $6,317,074 $626,394 $6,943,468 ($1,836,121)
2055 46 $0 $0 41 $325,982 ($83,692)32.92$ $6,506,586 $645,186 $7,151,772 ($1,836,121)
2056 47 $0 $0 42 $335,762 ($83,692)33.91$ $6,701,784 $664,541 $7,366,325 ($1,836,121)
2057 48 $0 $0 43 $345,834 ($83,692)34.93$ $6,902,837 $684,477 $7,587,315 ($1,836,121)
2058 49 $0 $0 44 $356,209 ($83,692)35.98$ $7,109,923 $705,012 $7,814,934 ($1,836,121)
2059 50 $0 $0 45 $366,896 ($83,692)37.06$ $7,323,220 $726,162 $8,049,382 ($1,836,121)
2060 51 $0 $0 46 $377,903 ($83,692)38.17$ $7,542,917 $747,947 $8,290,864 ($1,836,121)
2061 52 $0 $0 47 $389,240 ($83,692)39.31$ $7,769,204 $770,385 $8,539,590 ($1,836,121)
2062 53 $0 $0 48 $400,917 ($83,692)40.49$ $8,002,280 $793,497 $8,795,777 ($1,836,121)
2063 54 $0 $0 49 $412,944 ($83,692)41.71$ $8,242,349 $817,302 $9,059,651 ($1,836,121)
2064 55 $0 $0 50 $425,333 ($83,692)42.96$ $8,489,619 $841,821 $9,331,440 ($1,836,121)
COSTS
Power Production & Construction Financial Avoided Costs
SAVINGS