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HomeMy WebLinkAboutFERC Letter - Stetson Creek Construction�NLWOLA POWERING ALISKA'$ FMR1 June 27, 2011 Honorable Kimberly D. Bose, Secretary Federal Energy Regulatory Commission 888 First Street, NE Washington, DC 20426 Subject: Cooper Lake Hydroelectric Project (FERC No. 2170), License Condition No. 12, Impracticability of Construction of the Stetson Creek Diversion, Pipeline, and Cooper Lake Diversion Structures - Mutually acceptable proposal to construct the Stetson Creek Diversion, Pipeline, and Cooper Lake Diversion Structures as identified in the Project license Dear Secretary Bose: Appendix A, Condition No. 12—Impracticability of Construction of the Stetson Creek Diversion, Pipeline, and Cooper Lake Diversion Structures —of Chugach Electric Association's (Chugach) Cooper Lake Project (Project) license (issued August 24, 2007) provides that within 20 days of discovery, Chugach shall notify FERC and the Parties to the Cooper Lake Relicensing Settlement Agreement (Parties), in writing, if the Stetson Creek diversion structure, pipeline, and Cooper Lake bypass (Diversion and Bypass) structures cannot be built due to permitting, legal prohibitions, or lack of necessary water rights, or if the total capital cost of engineering, permitting, procuring, and constructing the Diversion and Bypass exceeds $11.04 million in 2004 dollars. Upon such written notification, the license requires Chugach to initiate consultation with the Parties within 30 days and conduct consultation so that Chugach can file with FERC, within 90 days of notifying FERC and the Parties, a mutually acceptable request for time extension, alternative mitigation proposals, modifications to the Diversion and Bypass, or license amendment (if required). Chugach must allow 30 days for the Parties to comment and to make recommendations before filing an implementation schedule, documentation of consultation, copies of comments, and recommendations on proposed plans and specific descriptions of how the Parties' comments are accommodated by the plans. Following the consultation required by Condition 12, Chugach and the Parties have agreed that Chugach will construct the Stetson Creek Diversion, Pipeline, and Cooper Lake Diversion Structures according to the specifications and schedule (as amended) identified in the license. Chugach will design the project in accordance with all requirements included in the license, with improvements identified during feasibility studies, and file a final design with FERC by Chugarh Elechc Asscciation, Inc- . 1'',-,4c945- 530^ • ,'9671563-7J 94 Fax ;907J 562-0027 iy00;47&.'44d n. - co,. August 24, 2012. The engineering developments and consultation process that led to this decision are discussed below. On March 14, 2011, Montgomery Watson Harza (MWH) submitted to Chugach a final Stetson Creek Diversion and Cooper Lake Dam Facilities Feasibility Study report. Based on MWH's analysis, completing the diversion, pipeline, and bypass will cost between $16.4 and $23.9 million (2010$), which exceeds the feasibility limit of $12.74 million (2010$) set forth in Appendix A, Condition 12 of the License (i.e., $11.04 million 2004$). The increase in cost is due primarily to (1) unforeseen logistical challenges associated with establishing a pipeline from the proposed Stetson Creek diversion dam to Cooper Lake, including support for rock cutslopes and measures to address construction conditions on steep, unconsolidated slopes, (2) facilities required to maintain suitable hydraulic conditions at the diversion pipe's outlet into Cooper Lake, (3) design refinements to the Cooper Lake Dam outlet structure required by FERC's Division of Dam Safety & Inspections, Portland Regional Office staff, (4) consumer price impact on construction materials, and (5) construction material quantity increases due to design refinements and logistical challenges associated with the pipeline. The following consultation steps were conducted by Chugach to meet the requirements of Condition 12: • April 1, 2011 - Chugach notified the Parties in writing regarding the March 14, 2011 determination that completion of the Stetson Creek Diversion and Bypass would exceed the $11.04 million ($2004) threshold, thereby initiating consultation as required under Condition 12 of the license (letter provided as Attachment A). • April 20, 2011 - Chugach held a meeting with the Parties at its Anchorage, Alaska offices to discuss potential alternative mitigation proposals to the Stetson Creek Diversion and Bypass (meeting summary provided as Attachment B). • May 2, 2011 - Chugach provided the Parties with a table of potential Cooper Lake mitigation options that could be considered in lieu of the Stetson Creek Diversion and Bypass and requested a follow-up meeting/teleconference on May 24, 2011 to further discuss mitigation options to the Stetson Creek Diversion and Bypass (letter provided as Attachment Q. • May 2, 2011 - The US Fish and Wildlife Service (USFWS) and National Marine Fisheries Service (NMFS) provided their respective determinations regarding practicable alternatives to the Stetson Creek Diversion and Bypass (USFWS and NMFS email correspondence provided as Attachment D). • May 24, 2011 - Follow-up meeting/teleconference with Parties to discuss mitigation options to the Stetson Creek Diversion and Bypass (meeting summary provided as Attachment E). • May 25, 2011 - Chugach submitted to the Parties its proposal to construct the Stetson Creek Diversion, Pipeline, and Cooper Lake Diversion Structures according to the design and schedule (as amended) identified in the license (Attachment F). • May 25, 2011 - June 21, 2011 - Parties submitted their concurrence with Chugach's proposal to construct the Stetson Creek Diversion, Pipeline, and Cooper Lake Diversion Structures according to the design and schedule (as amended) identified in the license (Parties' responses provided as Attachment G). In their May 2, 2011 email correspondence, the USFWS and NMFS communicated their belief that the following two options were the only practicable alternatives to the current Stetson Creek Diversion and Bypass that could be considered: (1) release sufficient water from Cooper Lake into Cooper Creek to overcome cold water temperatures from Stetson Creek and restore ecological function and fish production or (2) remove the [Cooper Lake] dam and return Cooper Creek to its natural pre -Project condition. No other Parties to the Settlement Agreement provided written feedback to Chugach prior to the May 24 meeting. At the May 24 meeting, the USFWS and NMFS reaffirmed their positions (which they stated in writing on May 2, 2011) that the only viable options to constructing the Stetson Creek Diversion and Bypass as described in the license are to release sufficient water from Cooper Lake into Cooper Creek to overcome cold water temperatures from Stetson Creek or decommission the Cooper Lake Project. Other Parties concurred with the conclusions of the USFWS and NMFS. Again, because no mutually acceptable request for time extension, alternative mitigation proposals, or modifications to the Stetson Creek Diversion and Bypass were identified during the consultation described above, Chugach plans to move forward with design and construction of the Stetson Creek Diversion and Bypass project as described in the existing Project license. Submittal of this document satisfies the license requirement for Chugach to file, within 90 days of initiating consultation, as required by Appendix A, Condition 12 of the license, a letter notifying FERC of the outcome of the consultation outlined above. This notification confirms Chugach's intent to meet the August 24, 2012 deadline for filing the final Stetson Creek Diversion and Bypass design and specifications with FERC. Please contact me at (907) 762-4839 or at Trey_Acteson@chugachelectric.cwm if you have any questions or require any further information. Sincerely, Trey Acteson Plant Manager, Peaking ydro Plants cc: Distribution list (attached) Attachments: A Cooper Lake Hydroelectric Project (FERC No. 2170), License Condition No. 12, Notification of Impracticability of Construction of the Stetson Creek Diversion, Pipeline, and Cooper Lake Diversion Structures (dated April 1, 2011) B Cooper Lake Project Condition 12 Meeting with Parties to the Cooper Lake Relicensing Settlement Agreement, Chugach Electric Association Offices, Anchorage, AK, April 20, 2011, Meeting Summary