HomeMy WebLinkAboutCVEA Allison Creek REF5 Ap 08-24-11Copper Valley Electric Association, Inc.
Allison Creek Project
AEA 12 - 001
Renewable Energy Fund Round V Grant Application
August 24, 2011
Copper Valley Electric Association, Inc.
PO Box 45
Glennallen, Alaska 99588
(907-)822-3211 * Fax (907) 822-5586
Renewable Energy Fund Round 5
Grant Application
AEA 12-001 Application Page 1 of 19 7/1/2011
Allison Creek Project
Grant Application
AUGUST 2011
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 2 of 19 7/1//2011
Application Forms and Instructions
The following forms and instructions are provided to assist you in preparing your application for
a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA)
and the forms are available online at: http://www.akenergyauthority.org
Grant Application
Form
GrantApp5.doc Application form in MS Word that includes an outline of
information required to submit a complete application.
Applicants should use the form to assure all information is
provided and attach additional information as required.
Application Cost
Worksheet
Costworksheet
5.doc
Summary of Cost information that should be addressed by
applicants in preparing their application.
Grant Budget
Form
GrantBudget5.
doc
A detailed grant budget that includes a breakdown of costs by
milestone and a summary of funds available and requested to
complete the work for which funds are being requested.
Grant Budget
Form Instructions
GrantBudgetIn
structions5.doc
Instructions for completing the above grant budget form.
Authorized
Signers Form
Authorized
signers
form5.doc
Form indicating who is authorized to sign the grant, finance
reports and progress reports and provides grantee information.
If you are applying for grants for more than one project, provide separate application
forms for each project.
Multiple phases for the same project may be submitted as one application.
If you are applying for grant funding for more than one phase of a project, provide
milestones and grant budget for completion of each phase.
If some work has already been completed on your project and you are requesting
funding for an advanced phase, submit information sufficient to demonstrate that the
preceding phases are satisfied and funding for an advanced phase is warranted.
If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or
proprietary company data be kept confidential subject to review and approval by the
Authority. If you want information is to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept
confidential. If the Authority determines it is not confidential it will be treated as a
public record in accordance with AS 40.25 or returned to the applicant upon
request.
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Copper Valley Electric Association, Inc. (CVEA)
Type of Entity: Electric Utility Fiscal Year End: December
Tax ID # 92-0023631 Tax Status: For-profit or x non-profit ( check one)
Mailing Address
PO Box 45
Glennallen, AK 99588
Physical Address
Mile 187 Glenn Highway
Glennallen, AK 99588
Telephone
907-822-3211
Fax
907-822-5586
Email
Matthews@cvea.org
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Jaime L. Matthews
Title
Manager of Administration & Finance
Mailing Address
PO Box 45
Glennallen, AK 99588
Telephone
907-822-8311
Fax
907-822-5586
Email
Matthews@cvea.org
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)
x An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes
or
No
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
or
No
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
or
No
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
or
No
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.
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SECTION 2 – PROJECT SUMMARY
This is intended to be no more than a 1-2 page overview of your project.
2.1 Project Title – (Provide a 4 to 5 word title for your project)
Allison Creek 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 Allison Creek Hydroelectric Project is located adjacent to the Prince William Sound,
immediately south of Valdez, Alaska.
CVEA is a member-owned electric cooperative providing central station electric service to a
relatively large geographic area of Eastern Interior and Prince William Sound. CVEA is a
stand-alone (not interconnected to another power system) electric utility.
The service territory is divided into two districts, the Valdez District and the Copper River Basin
District. The Valdez District is comprised of the organized area of the city of Valdez. The
Copper River Basin District incorporates many outstretched communities including: Glennallen,
Gakona, Gulkana, Tazlina, Copper Center, Kluti-Kaah, Copperville, Kenny Lake, Tolsona,
Mendeltna, Nelchina, Eureka, and Sheep Mountain.
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 Allison Creek Project is a run of the river (ROR) alternative involving construction of a
diversion structure on Allison Creek at elevation 1,300 feet. Water will be diverted from the
creek into a 42 inch surface / buried penstock to a 6.5 megawatt powerhouse near tidewater.
Attachment A is the Final Feasibility Study which provides details on this project as presented
and approved by the CVEA Board of Directors.
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2.5 PROJECT BENEFIT
Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel
costs, lower energy costs, etc.)
CVEA’s vision is to reduce or eliminate our dependence on fossil fuel and stabilize the
Cooperative’s cost of generation with regional, sustainable resources.
Allison Creek is a fuel savings project which leads to lower cost and stable energy for CVEA’s
members. The original cost of Allison Creek power was estimated to be 21¢ per kWh which was
equivalent to $80/bbl oil.
With grants already received, the cost of power is estimated to be 15.93¢ per kWh. With oil
currently at $110/bbl, this is a large reduction in power costs.
2.6 PROJECT BUDGET OVERVIEW
Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source
of other contributions to the project.
The total project is estimated to cost $38,804,000. Cost details are provided on page 16 of
Attachment A.
CVEA has been awarded $13,288,000 through various grants. Page 1 of Attachment D details
the source of funds, grants received so far, and a plan of finance for the future. Details are
discussed later in the application.
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. $ 6,114,000
2.7.2 Other Funds to be provided (Project match) $ 6,114,000
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $12,228,000
Project Costs & Benefits
(Summary of total project costs including work to date and future cost estimates to get to a fully
operational project)
2.7.4 Total Project Cost (Summary from Cost Worksheet
including estimates through construction)
$38,804,000
2.7.5 Estimated Direct Financial Benefit (Savings) $1,142,857 annually at
current fuel costs
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.)
$ Unknown, see section 5
for other benefits.
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SECTION 3 – PROJECT MANAGEMENT PLAN
Describe who will be responsible for managing the project and provide a plan for successfully
completing the project within the scope, schedule and budget proposed in the application.
3.1 Project Manager
Tell us who will be managing the project for the Grantee and include contact information, a
resume and references for the manager(s). If the applicant does not have a project manager
indicate how you intend to solicit project management support. If the applicant expects project
management assistance from AEA or another government entity, state that in t his section.
Please see Attachment B for all resumes.
CVEA has contracted with Hatch Acres to manage the activities for the license application, final
design and permitting. Richard Griffith is the lead consultant for Hatch Acres and has over 45
years of experience in the hydro industry.
CVEA’s Chief Executive Officer (CEO) Robert A. Wilkinson has been in the utility industry for
25 years. Robert provides support to CVEA Management and communicates results and
decisions to CVEA’s Board of Directors.
CVEA’s Manager of Administration & Finance is Jaime Matthews who has worked in the utility
industry for 11 years. Jaime will be the grant manager for CVEA.
CVEA’s Executive Engineer / Project Manager is John Duhamel. John is the Project Manager
for CVEA and has been involved with the project for over a year. John has led the role for
CVEA in filing the license application which will be submitted to FERC by August 31, 2011.
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 detailed project schedule is included in Attachment C.
CVEA is requesting grant funds to purchase equipment and materials that have a long lead time.
This work will begin in 3rd Quarter 2012.
Proposed milestones are identified in Section 3.3 below.
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.)
Proposed milestones for equipment purchases are identified on the grant budget form. A recap
is identified on the following page.
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- 3rd Quarter 2012 Develop contract awards to vendor
- 4th Quarter 2012 Award contracts to vendor
- 1st Quarter 2013 Begin fabrication
- Varies Complete fabrication and deliver equipment
Schedules will vary for each major equipment purchase. These are not identified at this time.
One example is penstock material. This is something CVEA can acquire and store until needed.
Although not part of this grant funding request, project milestones are identified on Page 2 of
Attachment D.
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.
Hatch Acres is CVEA’s main contractor for this project. Richard Griffith is the lead consultant
for Hatch Acres and brings over 45 years in the hydro industry. His resume is included in
Attachment B. Hatch Acres has assisted CVEA the past three years with field studies and the
work required to file the license application.
At this stage of the project CVEA has not purchased any major equipment.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
Monthly written and financial reports are prepared for updating the Board of Directors at
CVEA’s monthly board meetings which occur on the third Thursday of each month.
Under CVEA’s current grants, monthly written and financial reports are prepared quarterly
which include progress-to-date, accomplished milestones, and any changes or updates to the
scope of the project.
CVEA has been meeting with AEA personnel at least annually to provide in-person reports and
to answer any questions on the project.
3.6 Project Risk
Discuss potential problems and how you would address them.
Since 2007, CVEA has been studying the hydroelectric potential of the Allison Lake Basin. In
2010 CVEA completed review of five project alternatives including construction of an earth
filled dam at elevation 1,345 feet and a 9,000 foot penstock to a powerhouse near tidewater.
The project, which was deemed technically feasible, had significant geotechnical, access and
avalanche challenges that drove project economics to an unacceptable level.
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The current project reduces construction risk associated with the site, lessens avalanche and
access risks, and has fewer environmental impacts.
In comparison to other hydroelectric projects, the risks and problems for this project are quite
small. There is always the risk of cost over-runs due to the discovery of unknown conditions
(such as archeological finds or unstable ground) but our current research finds this remote.
Cost over-runs could also occur because of harsh weather during construction.
Because the terrain is steep, the working conditions of the project are difficult and safety cabling
of people and materials will be common. Much of the construction will be accomplished with
helicopters. This adds the risks associated with helicopter operations and weather will have an
impact on the progress of helicopter work.
Other risks will be spelled out in very detailed plans such as the erosion control plan, spill
control and prevention plan, quality control plan, and other site plans. In all, the risks and
problems can be controlled by planning and proper oversight.
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.
Attachment A, Pages 6-12 discuss details on system loads, resources, hydrology, etc.
The fully subscribed energy potential is 23,300,000 kWhs per year. With existing system loads,
and nature of seasonal generation, CVEA has the ability to utilize 16,000,000 of these kWhs. All
the information presented in this grant application is based on 16,000,000 kWhs.
In early 2011, CVEA distributed a Strategic Issues Paper to all CVEA members. This paper
discusses projects and technologies being researched. Please see Attachment E for a copy of this
paper.
CVEA continues to evaluate other alternatives to reduce the cost of power for CVEA’s members.
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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.
CVEA generates electrical power at its two diesel plants, one in Valdez and one in Glennallen, a
Cogeneration project in Valdez, and a 12 megawatt hydro facility in Valdez. Power is
transferred between the two districts on a 106-mile transmission line through Thompson Pass
and the Chugach Mountains.
The CVEA Cogeneration Plant is a state-of-the-art facility located at the Petro Star Valdez
Refinery. It is a 5.2 megawatt Solar turbine and heat recovery unit that utilizes "light straight
run" as its fuel source and provides exhaust heat to the attached crude heater for Petro Star’s use
in the refining process. The plant was completed in the spring of 2000 and is remotely controlled
from the Solomon Gulch hydroelectric facility. Efficiency for this unit is 9.3 kWhs per gallon for
production of electricity but the project sells heat at a combined efficiency of 75-80%. Annual
O&M costs for 2011 are budgeted at $51,500 which does not include labor.
The Glennallen Diesel Plant (GDP) is the oldest of CVEA’s three thermal plants. It has
expanded over the years to meet the needs of CVEA customers. The available generation
capacity of the plant is 11 megawatts. The GDP houses a total of seven diesel engines; three
Fairbanks Morse 38D8 1/8 opposed piston units, two Enterprise DSR 46 units, one Caterpillar
3516B unit, and one EMD unit with a capacity of 2.8 megawatts. The five largest units are
remotely controlled from the Solomon Gulch hydroelectric facility. The current average
efficiency is 14 kWhs per gallon. Annual O&M costs for 2011 are budgeted at $332,000 which
does not include labor.
The Valdez Diesel Plant (VDP) was constructed after the 1964 Good Friday Earthquake that
caused the city of Valdez to relocate to its present location. The plant houses one Fairbanks
Morse 38D8 1/8 opposed piston unit, three Enterprise DSR 46 units, and a trailer-mounted Solar
Centaur turbine unit. The available generation capacity of this plant is 8.9 megawatts. The three
largest units are remotely controlled from the Solomon Gulch hydroelectric facility. The average
efficiency is 13.7 kWhs per gallon. Annual O&M costs for 2011 are budgeted at $168,000 which
does not include labor.
Previously owned by the Four Dam Pool Power Agency, CVEA acquired ownership of the
Solomon Gulch hydroelectric facility in February 2009. The 12-megawatt Solomon Gulch
hydroelectric facility is located on Dayville Road in Valdez. Power is generated by two Fuji
Francis water turbines. The facility began providing power to CVEA customers in 1982. CVEA
operates its dispatch center from this facility. The plant is manned 24 hours a day, seven days a
week. Plant operators are responsible for the operation of up to four generation plants at one
time via remote control operations. From the hydro plant, operators can start and stop units in
any or all of CVEA's three generation facilities: Glennallen diesel, Valdez diesel, or the
cogeneration plant, as well as the hydro project. Annual O&M costs for 2011 are budgeted at
$532,000 which does not include labor.
CVEA's service areas are tied together with a 106-mile, 138-kilovolt transmission line that is
owned and operated by CVEA. The transmission line provides a link to all four generating
plants. Power can flow from any of the generating facilities to end consumers. Historically,
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power flows from the Solomon Gulch hydro plant to the Copper River Basin District during the
summer months. The transmission line traverses severe terrain between the two districts and
parts of it, in the Thompson Pass area, has severe avalanche risk. The transmission line was last
damaged by an avalanche in December 2009.
CVEA’s Rates
CVEA’s base rates have not changed since 1998. The Cost of Power Charge changes monthly
based on actual fuel and the cost of hydro. This has caused the overall rate to vary based on
seasonal generation. Rates are lower in the summer while generating close to 90% hydro and
higher in the winter when we are generating with fuel.
The graph on the following page illustrates CVEA’s average revenue per kWh collected for 2008,
2009 and 2010. The average revenue includes the cost of power charge which is included in a
separate line below.
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.
Currently CVEA generates approximately 52% of our kWhs with hydro. This will increase to
68% after Allison Creek. Fossil fuel consumption will be reduced by 16%.
Details on CVEA’s generation are included on Page 4 of Attachment D. A graph on the
following page illustrates before Allison Creek and after.
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4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The Allison Creek project would have a positive impact on CVEA’s members by lowering the
Cost of Power and would allow CVEA to not be as dependent on fossil fuels as we are today. In
addition, the project will provide long term energy at a stable price.
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 primary features of the run of river project include the following:
- A low diversion structure on Allison Creek at elevation 1,300
- A 42” diameter surface / buried penstock
- A 6.5 MW powerhouse along Allison Creek at elevation 130 with a 3.8 mile transmission
line leading to the Petro Star substation.
- A permanent 550 foot access road to the powerhouse and a temporary 4,500 foot trail for
penstock construction access.
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- Additional details can be found in the final feasibility report in Attachment A.
The general arrangement is identified on the map below.
The fully subscribed energy potential is 23,300,000 kWhs per year; however, with existing system
loads, and nature of seasonal generation, CVEA has the ability to utilize 16,000,000 of these
kWhs.
Page 6 of Attachment A discusses the run of the river operation. Without a reservoir to regulate
available flows at the intake, the project can only be operated when instantaneous flows are
within the range of physical capability of the generating equipment. All flows greater than the
maximum capability will flow past the intake as spill.
On the basis included in the final feasibility report, the plant could operate approximately 62% of
the time and the total amount of the water available for generation is represented in the chart on
the following page.
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The chart below identifies the energy potential on a monthly basis.
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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 land surrounding Allison Lake is owned by the State of Alaska. CVEA has acquired an
access permit from Alyeska for field studies as the work requires a physical crossing of Alyeska
property. This permit is renewed annually.
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
CVEA was awarded the FERC preliminary permit on September 4, 2008. The purpose of the
preliminary permit is to secure and maintain priority to allow CVEA to study the power potential
of Allison Lake and develop information necessary to support a license application. The license
application will be filed by August 31, 2011.
Other permits required are standard among hydroelectric projects. Land use permits from the
land owners and water rights permits are typical requirements and are obtained before
construction begins on the project.
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
CVEA has completed the necessary studies required to submit a license application. CVEA has
worked closely with all agencies to study the necessary aspects of the project prior to the license
application being filed. Additional study may occur as required by FERC prior to a license being
issued.
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.
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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
The total construction cost is estimated at $32,106,000 (in 2010 $). The total project cost is
estimated at $38,804,000.
CVEA is requesting $6,114,000 in this round of grant applications. Attachment D on Pages 1
and 2 gives the details on CVEA’s plan of finance.
CVEA plans to apply for any federal funding that may come available. The remaining amount
will be funded with loans. CVEA will continue to explore all possibilities to secure the lowest
cost financing available.
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.)
Project O&M costs are estimated at $280,000 as identified in Page 16 on Attachment A. CVEA is
not pursuing grant funding for O&M as these costs would be funded through electric rates.
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
CVEA estimates the first year cost of power to be approximately 15.93¢. This estimate includes
financing the remaining $25,516,000 at 7%. For every 100 basis point reduction (1%), the
project cost is reduced by approximately .6¢ per kWh. For every $1 million in grant funds
received, the project cost is reduced .5¢ per kWh.
CVEA will use 16,000,000 out of the 23,300,000 kWhs on start up. Subscription of the excess
power will occur as the member base grows.
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4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Please see the attached cost worksheet required as part of the grant application. Additional
financial detail is provided in Attachment D.
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
This project allows CVEA to displace approximately 1,664,000 gallons of fossil fuel when fully
subscribed. At current load levels, utilizing 16,000,000 kWhs per year, CVEA will displace
1,142,857 gallons per year. At current fuel prices this equates to approximately $4,011,429
annually. With a 2% increase in fuel annually over 30 years, this equates to a fuel savings of
$176,151,000 as identified on Page 5 of Attachment D.
With the addition of Allison Creek and the project costs, CVEA members will save approximately
$1,462,629 in the first year. This savings increases as fuel costs increase.
CVEA is excited at the prospect of adding Allison Creek to our power production capabilities.
Allison Creek will move our hydro production from 52% to 68% and it eliminates the use of 1.66
million gallons of diesel fuel per year. This in turn eliminates 19,000 tons of CO2 emissions, and
10,000 tons of hazardous. As an additional benefit, it reduces the chance of acidification of the
oceans at our current rate and it reduces the chances of an oil spill since we would need fewer
refueling operations.
The positive effects of eliminating the use of fossil fuel cannot be ignored when calculating the
merit of this project. We understand that Allison Creek has a footprint (albeit small) in the
environment. We understand that some impacts will be felt by birds, fish, mammals and view-
shed. We have been working very closely with state and federal agencies to minimize these
impacts and we believe we have achieved a project that has an overwhelmingly net positive
impact on the environment and community.
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 17 of 19 7/1//2011
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
CVEA is a locally regulated IRC 501 (c)(12) cooperative electric utility organized and doing
business under AS 10.25 Alaska Electric and Telephone Cooperative Act. CVEA was
incorporated in 1955 and has been doing business under Certificate of Public Convenience and
Necessity No. 10 since 1959. CVEA proposes to own and operate the Allison Creek hydroelectric
facility. CVEA demonstrates sustainability in its every day successful operation of the
cooperative.
The maintenance and operations would be funded through electric rates.
CVEA owns redundant generation assets to adequately back up the Allison Creek project in the
event the project cannot deliver energy to the CVEA system.
CVEA has identified the benefits in Section 5 and has a commitment to report any other savings
and benefits as the project progresses.
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.
CVEA is in the process of filing the original license application to FERC by August 31, 2011, and
will proceed with the project schedule included in Attachment B.
CVEA has been in compliance with both grants issued on this project:
- State of Alaska 2008 capital budget appropriation (grant #2195314) $1,000,000
- Renewable Energy Fund Round I (grant 2195390) $2,288,000
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.
In June 2011, CVEA solicited support from CVEA members for the Allison Creek Project. This
was a very successful effort and the final product comprised of two volumes of letters and signed
Renewable Energy Fund
Grant Application Round 5
AEA12-001 Grant Application Page 18 of 19 7/1//2011
petitions given to the State of Alaska in support of a capital budget appropriate request. In
summary CVEA received 326 letters of support and 700 petition signatures. Included with this
application are 14 letters, more are available upon request. There is no known opposition of the
Project.
SECTION 9 – GRANT BUDGET
Tell us how much you want in grant funds Include any investments to date and funding sources,
how much is being requested in grant funds, and additional investments you will make as an
applicant.
Include an estimate of budget costs by milestones using the form – GrantBudget5.doc
Please see the attached estimate of budget costs. CVEA is requesting funds for equipment
purchases as there is a long lead time for these types of items. A typical long lead time purchase
at CVEA is separated into payment phases: award of contract, fabrication of equipment,
completion and delivery.
Attachment D, financial backup Page 2 breaks out the project funding by the phases identified in
the budget form.
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. 23,300,000 kWh
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 Railbelt1 grid, leave this section blank)
i. Number of generators/boilers/other 14 (see page 9 of grant application for breakdown)
ii. Rated capacity of generators/boilers/other 37.1 MW (see page 9 of grant application)
iii. Generator/boilers/other type Fairbanks Morse, Enterprise, Caterpillar, Solar
iv. Age of generators/boilers/other Ranges from 1952-2009
v. Efficiency of generators/boilers/other Ranges from 9.3 kWh/gallon to 15.2 kWh/gallon,
average diesel efficiency 14.0 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 $1,288,458
ii. Annual O&M cost for non-labor $1,083,500
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] 86,662,011 kWh’s – 2010 gross generation
ii. Fuel usage
Diesel [gal] 817,700 gallons per year – 2010 actual
Other LSR: 3,494,000 gallons per year – 2010 actual
iii. Peak Load 13.50 MW – 2010 actual
iv. Average Load 12.00 MW – 2010 actual
v. Minimum Load 10.60 MW – 2010 actual
vi. Efficiency Ranges from 9.3 kWh/gallon to 15.2 kWh/gallon
vii. Future trends Minimal growth
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] N/A
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
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.
Renewable Energy Fund Round 5
Project Cost/Benefit Worksheet
RFA AEA12-001 Application Cost Worksheet Page 2 7-1-11
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] 16,000,000 kWh first year (assumption used in all analysis)
23,300,000 kWh fully subscribed
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 $38,804,000
b) Development cost $32,106,000
c) Annual O&M cost of new system $280,000
d) Annual fuel cost N/A
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 1,142,857 gallons x $3.51 = $4,011,429
b) Current price of displaced fuel $3.51 per gallon
c) Other economic benefits
d) Alaska public benefits
6. Power Purchase/Sales Price
a) Price for power purchase/sale N/A
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio
$99,686,629 / $38,804,000 = 2.57
Payback (years) 16 years (see attachment D: financial backup page 5 for details)
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. )
Develop contracts for long lead time equipment 3rd Quarter 2012 $ $ $
Contract award to vendor 4th Quarter 2012 $1,528,500 $1,528,500 $3,057,000
Fabrication of equipment begins 1st Quarter 2013 $1,528,500 $1,528,500 $3,057,000
Completion of material Varies (2013-2014) $1,528,500 $1,528,500 $3,057,000
Delivery of material on site Varies (2013-2014) $1,528,500 $1,528,500 $3,057,000
*Each long lead time piece of equipment/material
will have a separate contract similar to the above.
*CVEA has not yet identified a separate schedule
for each piece of equipment
TOTALS $6,114,000 $6,114,000 $12,228,000
Budget Categories:
Direct Labor & Benefits $ $ $
Travel & Per Diem $ $ $
Equipment / Materials & Supplies $6,114,000 $6,114,000 $12,228,000
Materials & Supplies $ $ $
Contractual Services $ $ $
Construction Services $ $ $
Other $ $ $
TOTALS $6,114,000 $6,114,000 $12,228,000
Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)-
Add additional pages as needed
Allison Lake Hydropower DevelopmentFINAL FEASIBILITY STUDYADDENDUM
January 2011
The Energy Company
Robert A. Wilkinson, CEO December 20, 2010
Copper Valley Electric Association H-327730
P.O. Box 45
Glennallen, AK 99588-2832
Dear Robert Subject: Allison Creek Hydroelectric Project
Final feasibility Study – Addendum
We are pleased to submit herewith our Addendum to the Final Feasibility Study for the Allison Lake
Hydroelectric Project. This addendum presents our analysis of two additional options for the project as follows:
• Alternative 4a (Alt 4a): A run-of-river development on Allison Creek commencing approximately 2,000
downstream of the outlet of Allison Lake consisting of a diversion structure and a penstock leading to a
6.5 MW powerhouse at the same location as considered for Alt 3c.
• Alternative 4b (Alt 4b): The addition of an inflatable gate on the Solomon Gulch Spillway that would
raise the normal maximum water surface of Solomon Lake by five feet.
Our principal conclusions for these two alternatives as stated within the report include:
• Alternative 4a
- A run-of-river Alt 4a development of the Allison Creek basin is not cost effective with operation
within the existing CVEA system load.
- With the addition of 2 MW to the CVEA system load, the project would be competitive with the
cost of diesel generation.
- The reduced scale of the hydropower development of the Allison Creek basin as offered by Alt 4a
would reduce the risk of construction cost overruns, seepage and dam safety concerns and
environmental impacts as compared to Alt 3c.
- Alt 4a is superior to Alt 3c in all respects.
• Alternative 4b
- The addition of inflatable gates to the Solomon Gulch Spillway as proposed for Alt 4b would add
approximately 2 GWh of energy to the CVEA system.
- The addition of inflatable gates to the Solomon Gulch Spillway as proposed for Alt 4b would
require amendment to existing FERC License for the Solomon Gulch Project.
- On the basis of the energy potential and cost estimates prepared for this evaluation, Alt 4b currently
would not be an economically viable project.
Based on these conclusions we recommend that the CVEA adopt Alt 4a as the preferred alternative for the
development of the hydroelectric potential of the Allison Creek basin and that further consideration of Alt 3c and
Alt 4b be terminated.
We greatly appreciate the opportunity to work with you on this interesting project. If you have any questions
regarding the subject report, be sure to give us a call.
Yours very truly,
A. Richard Griffith, P.E.
Project Manager
Hatch Acres Corporation
6 Nickerson Street, Suite 101, Seattle, WA 98109 USA
Tel: 206-352-5730 • Fax: 206-352-5734 • www..hatchacres.com
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 i
Table of Contents
1. Introduction............................................................................................................................................1
1.1 General..........................................................................................................................................1
1.2 Alternative 4 – General Arrangement.............................................................................................2
1.3 Alternative 4a – Diversion Structure on Allison Creek with Penstock leading to
Powerhouse (Alt 4a).......................................................................................................................3
1.4 Alternative 4b – Raising Solomon Gulch Reservoir Maximum Water Surface 5 feet with
Inflatable Gates on Spillway (Alt 4b) ..............................................................................................4
2. Power Studies..........................................................................................................................................6
2.1 Unconstrained Run-of-River Operation ..........................................................................................6
2.2 System Loads and Resources..........................................................................................................7
2.2.1 System Loads........................................................................................................................7
2.2.2 System Resources.................................................................................................................7
2.3 AUTO Vista Model: Allison Creek Run-of-River Hydropower Development...................................8
2.4 Hydrology......................................................................................................................................8
2.5 Hydro Equipment Characteristics ...................................................................................................9
2.6 AUTO Vista Results........................................................................................................................9
3. Project Construction Cost and Construction Schedule..........................................................................13
3.1 Construction Cost Estimates .........................................................................................................13
3.1.1 Alternative 4a.....................................................................................................................13
3.1.2 Alternative 4b.....................................................................................................................14
3.2 Construction Schedule.................................................................................................................15
3.3 Economic Analysis.......................................................................................................................16
3.3.1 Cost of Power – Alternative 4a...........................................................................................16
3.3.2 Cost of Power – Alternative 4b...........................................................................................17
4. Regulatory and Environmental Considerations......................................................................................19
4.1 Alternative 4a...............................................................................................................................19
4.1.1 Regulatory Considerations..................................................................................................19
4.1.2 Environmental Field Investigations .....................................................................................19
4.1.3 Environmental Considerations............................................................................................20
4.2 Alternative 4b ..............................................................................................................................21
4.2.1 Regulatory Considerations..................................................................................................21
4.2.2 Environmental Field Studies ...............................................................................................21
4.2.3 Environmental Considerations............................................................................................21
5. Conclusions and Recommendations......................................................................................................22
5.1 Conclusions.................................................................................................................................22
5.1.1 Alternative 4a.....................................................................................................................22
5.1.2 Alternative 4b.....................................................................................................................22
5.2 Recommendations .......................................................................................................................23
6. References.............................................................................................................................................24
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 ii
Tables
Table 1.1 FFS – Design and Economic Conditions..................................................................................1
Table 2.1 AUTO Vista Hydrologic Years ................................................................................................9
Table 2.2 Annual Generation – Existing Condition, Loads and Resources............................................10
Table 2.3 Annual Generation – Alt 4a w/ Existing Load........................................................................10
Table 2.4 Annual Generation – Alt 4b w/ Existing Load .......................................................................10
Table 2.5 Annual Generation – Existing Resources w/ 2 MW Additional Load.....................................11
Table 2.6 Annual Generation – Alt 4a w/ 2 MW Additional Load ........................................................11
Table 2.7 Annual Generation – Alt 4b w/ 2 MW Additional Load........................................................11
Table 2.8 Annual Benefits – Alt 4a & 4b...............................................................................................12
Table 3.1 Alternative 4a – Total Construction Cost (Bid 1/2010)..........................................................14
Table 3.2 Alternative 4b – Total Construction Cost (Bid 1/2010) .........................................................15
Table 3.3 Basic Assumptions for Economic Analysis.............................................................................1 6
Table 3.4 Alternative 4a – First Year Annual Cost (2010 Dollars).........................................................16
Table 3.5 Alternative 4a – Cost of Power.............................................................................................17
Table 3.6 Alternative 4b – Cost of Power.............................................................................................18
Table 4.1 Summary of Major Environmental Field Studies ...................................................................20
Figures
Figure 1.1 Alternative 4 General Arrangement........................................................................................2
Figure 1.2 Alternative 4a – Plan and Profile............................................................................................3
Figure 1.3 Diversion Structure – Plan and Cross Section.........................................................................4
Figure 1.4 Typical Obermeyer Gate Installation......................................................................................5
Figure 1.5 Solomon Gulch Obermeyer Spillway Gate Cross Section.......................................................5
Figure 2.1 Allison Creek Annual Flow-Duration Curve............................................................................6
Figure 2.2 Allison Average Monthly Distribution of Energy Production ..................................................7
Figure 2.3 AUTO Vista Model Elements: Alts 4a and 4b..........................................................................8
Figure 2.4 Allison Powerhouse Unit Characteristics – 2 x 3.25 MW Units..............................................9
Figure 3.3 Alternative 4a – Construction Schedule................................................................................15
Appendices
Appendix A – Alternative 4a, System Dispatch
Appendix B – Obermeyer Gate Cost Estimate
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 1
1. Introduction
1.1 General
A fundamental premise of the studies leading to the Final Feasibility Study (FFS) for the Allison Lake
Hydroelectric Project (Project) of May 2010 was that an additional hydropower project is needed to
support the Solomon Gulch Project during winter months. Currently the Copper Valley Electric
Association, Inc. (CVEA) must rely on diesel generation to meet system load to make up for the
inability of the Solomon Gulch Project to generate during the winter period. The Allison Creek basin
exhibits the same basic annual pattern of inflow as the Solomon Gulch basin. The 7 months of May
through November are estimated to account for 98% of the annual inflow leaving only a 2%
contribution for the 5 months of December through April. Accordingly, the focus of project studies
has been to determine the most cost-effective manner to develop storage within Allison Lake to allow
for generation during the low flow winter time period. In all, six different schemes, Alt 1, Alt 2 and
Alt 3a through Alt 3d, were reviewed and reported on as part of the previous studies for the Project.
The manner in the proposed design for each alternative to provide the necessary storage is described
in Section 1.3 through Section 1.5 of the FFS.
The Project studies have shown that each of the six arrangements are technically and
environmentally feasible. However, the studies also reveal that each arrangement includes
significant challenges potentially affecting their long term economics and/or operational reliability as
listed in Table 1.1.
Table 1.1
Final Feasibility Report
Design and Economic Considerations
Alternative Design and Economic Considerations
Alt 1 Tunnel cost
Alt 2 Tunnel cost
Alt 3a Reliable operation of siphon and maintenance thereof during winter period
Alt 3b Drilling of micro-tunnel in glacial moraine
Alt 3c Embankment cost, foundation conditions for embankment, seepage, liquifaction & avalanches
Alt 3d Embankment cost, foundation conditions for embankment, seepage, liquifaction & avalanches
Subsequent to the completion of the FFS, the range of challenges as summarized above led to a
concern regarding the viability of a storage project within the Allison Creek drainage. However, the
high elevation of the first 2000’ below the outlet of Allison Lake suggests that there would be a
significant amount of energy available from Allison Creek as a run-of-river project. To date the system
load characteristics of CVEA has been such that much of the this additional energy would be
stranded; i.e. there would be no load available for the project to serve.
Recently, however, a 2 MW industrial facility has been brought into the CVEA system. This
additional load will provide an opportunity to CVEA to more fully operate a run-of-river project to
accommodate what would otherwise be served by diesel generation. This scheme is referred to as
Alt 4.
The purpose of this Addendum to the FFS dated May 2010, is to present the evaluation of the
economic viability of alternative run-of-river arrangements for capturing the hydropower potential of
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 2
Allison Creek as a project to serve an expanded CVEA system load. Accordingly, the scope of work
leading to this Addendum to the FFS has included the following activities:
1. Development of alternative project arrangements consistent with the purposes of this
Addendum
2. Review of Allison Lake hydrology as related to the run-of-river hydropower potential of the
identified alternatives
3. Preliminary layout and cost estimate of hydroelectric project features for each of the
identified project arrangements
4. Economic evaluation of the identified alternatives
5. Environmental review of the of the identified alternatives
6. Preparation of this addendum to the Final Feasibility Report including the resulting
conclusions and recommendations
1.2 Alternative 4 – General Arrangement
The primary features of the run-of-river project selected for this review include the following:
• A low diversion structure on Allison Creek at El. 1300,
• A 42” diameter surface / buried penstock,
• A 6.5 MW powerhouse along Allison Creek at El. 130 with a 1.75 mile transmission line
leading to the Solomon Gulch switchyard, and
• A permanent 1,000 foot access road to the powerhouse and a temporary 4,500 foot trail for
penstock construction access.
The general arrangement for Alt 4 of these features is shown in Figure 1.1. Two versions of Alt 4 are
reviewed herein as described in the following paragraphs.
Figure 1.1
Alternative 4 General Arrangement
ALTERNATIVE 4
Diversion Structure
Powerhouse
Penstock
Allison Lake
ALTERNATIVE 4
Diversion Structure
Powerhouse
Penstock
Allison Lake
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 3
1.3 Alternative 4a – Diversion Structure on Allison Creek with Penstock leading to
Powerhouse (Alt 4a)
Alt 4a includes the primary features as described above. Plan and profile views of Alt 4a are shown
in Figure 1.2. The general details of the penstock and powerhouse are shown on Figures B.6 and
B.7 respectively within Appendix B of the FFS. The actual dimensions of the penstock and
powerhouse will be in proportion to the 42” penstock and 6.5 MW powerhouse as referenced above
for Alt 4 in lieu of the 36” penstock and 4 MW powerhouse for Alt 3c as shown in the FFS.
The access road to the powerhouse as shown in Figure 1.2 will be designed in accordance with the
criteria set forth in Appendix C.3. The design of the access trail from the loop road off the Trans
Alaska Pipeline System corridor to the point where the penstock crosses over a ridge will follow the
same alignment to that point as was studied for the construction access for Alt 3c. However, the
width of the corridor will be reduced consistent with the use helicopters as the primary access for
construction of the penstock and diversion structure.
Figure 1.2
Alternative 4a – Plan and Profile
PLAN
PROFILE
The diversion structure will located along Allison Creek at approximately El. 1300. The specific
location and type of diversion scheme to be used for the run-of-river option will be determined at the
next level of the design process. A conceptual drawing of the type of diversion structure used for the
present purpose is shown in Figure 1.3.
Surface / Buried Penstock
0+005+0010+0015+0020+0025+0030+0035+0040+0045+0050+0055+0060+0065+00100
500
1000
Elevation (ft)Station(ft )
Powerhouse
70+00Surface / Buried Penstock
0+005+0010+0015+0020+0025+0030+0035+0040+0045+0050+0055+0060+0065+00100
500
1000
Elevation (ft)Station(ft )
Powerhouse
70+00Diversion Structure
Powerhouse
S u rf a ce / B u ri ed Pe n st o c k
AccessTrail
AccessRoad
Allison Lake
Diversion Structure
Powerhouse
S u rf a ce / B u ri ed Pe n st o c k
AccessTrail
AccessRoadAccessRoad
Allison Lake
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 4
Figure 1.3
Diversion Structure – Plan and Cross Section
PLAN
CROSS SECTION
1.4 Alternative 4b – Raising Solomon Gulch Reservoir Maximum Water Surface 5 feet
with Inflatable Gates on Spillway (Alt 4b)
Alt 4b adds additional storage to Solomon Gulch reservoir by modifying the spillway with 5 foot
high inflatable gates extending the full length of the 450 foot long spillway. The proprietary
Obermeyer Gate System consist of steel panels that are raised up by inflating a rubber bladder. This
is necessary because the alternative rubber bladder gates without steel panels are not sufficiently
controllable. They must be either in the fully inflated or fully deflated mode and can release too
much water into the tailrace during the transition. The Obermeyer gates can operate at any stage
between up or down thereby controlling water release. The profile view of Alt 4b is shown in Figure
1.5. 130013101300131001020 5030 40
SCALE IN FEET42”FPenstockAllison Creek130013101300131001020 5030 40
SCALE IN FEET
01020 5030 4001020 5030 40
SCALE IN FEET42”FPenstockAllison CreekAllison CreekEL. 1300
EL. 1306
WS EL. 1301 @ 80 cfs
WS EL. 1305 @ 800 cfs
15 201005
SCALE IN FEET
EL. 1300
EL. 1306
WS EL. 1301 @ 80 cfs
WS EL. 1305 @ 800 cfsWS EL. 1305 @ 800 cfs
15 201005
SCALE IN FEET
15 20100515 20100 5 15 201005
SCALE IN FEET
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 5
Figure 1.4
Typical Obermeyer Gate Installation
Figure 1.5
Solomon Gulch Obermeyer Spillway Gate Cross Section
COLLAPSIBLE REINFORCED RUBBER
RESTRAINING STRAP TYP (3) PLACES
EACH 19.56’ GATE SECTION
TOP OF GATE EL. 690.0
STEEL GATE PANEL SUPPLIED IN NOMINAL
19.56’ LENGTHS. (23) GATE PANELS SPAN
450’ GATE LENGTH
DUCTILE IRON
CLAMP CASTING
EL. 684.5 INFLATABLE DUAL CHAMBER AIR BLADDER
SUPPLIED IN NOMINAL 19.56’ LENGTHS
RESTRAINING STRAP ANCHOR BOLT TYP
(6) PLACES EACH 19.56’ GATE SECTION
STAINLESS STEEL MAIN ANCHOR
BOLT TYP 12’ ON CENTER
COLLAPSIBLE REINFORCED RUBBER
RESTRAINING STRAP TYP (3) PLACES
EACH 19.56’ GATE SECTION
TOP OF GATE EL. 690.0
STEEL GATE PANEL SUPPLIED IN NOMINAL
19.56’ LENGTHS. (23) GATE PANELS SPAN
450’ GATE LENGTH
DUCTILE IRON
CLAMP CASTING
EL. 684.5 INFLATABLE DUAL CHAMBER AIR BLADDER
SUPPLIED IN NOMINAL 19.56’ LENGTHS
RESTRAINING STRAP ANCHOR BOLT TYP
(6) PLACES EACH 19.56’ GATE SECTION
STAINLESS STEEL MAIN ANCHOR
BOLT TYP 12’ ON CENTER
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 6
2. Power Studies
2.1 Unconstrained Run-of-River Operation
By definition, without a reservoir to regulate available flows at the intake, a hydropower project can
only be operated when instantaneous flows are within the range of physical capability of the
generating equipment. All flows greater than the maximum capability will flow past the intake as
spill. In addition, all flows required for other instream uses as well as all flows less than that required
to operate the smallest hydropower unit must be passed by the intake.
This condition is illustrated in Figure 2.1 in the form of an annual flow duration curve for the run-of-
river hydropower arrangement described in Section 1. The curve, which is based on the hydrology
defined in the FFS, shows that a run-of-river facility installed on Allison Creek could operate
whenever the flows in the creek are between 9 cfs and 85 cfs for the condition:
• The minimum instream flow release is 5 cfs
• The minimum turbine flow is 4 cfs, and
• The maximum turbine flow is 80 cfs.
Figure 2.1
Allison Creek Flow Annual Flow-Duration Curve
On this basis, the plant could operate approximately 62% of the time and the total amount of water
available for generation, Qgen, is represented by the blue cross-hatched area within Figure 2.1. The
difference in elevation between the diversion structure and the powerhouse times Qgen times 8,760
hours in a year provides an estimated 23.3 GWh as the average total amount of energy potentially
available from a run-of-river project on Allison Creek.
The same basic approach as applied to monthly flow duration curves results in the monthly
distribution of the 23.3 GWh as shown in Figure 2.2.
0.0
50.0
100.0
150.0
200.0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
ExcedenceFlow (cfs)Instream Flow
Qmin=5 cfs
Unit Qmin=4 cfs
Generation 23.3 GWh
(Unit Qmax=80 cfs)
Spill
ExcedenceFlow (cfs)0.0
50.0
100.0
150.0
200.0
0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
ExcedenceFlow (cfs)Instream Flow
Qmin=5 cfs
Unit Qmin=4 cfs
Generation 23.3 GWh
(Unit Qmax=80 cfs)
Spill
ExcedenceFlow (cfs)
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 7
Figure 2.2
Allison Average Monthly Distribution of Energy Production
The above analysis is valid for the case that the energy from the project is not constrained by the
system load conditions. Specifically, the monthly distribution of energy as shown in Figure 2.2 is
important from the perspective the ability of CVEA to assimilate a run-of-river project on Allison
Creek into their system. For example, the Solomon Gulch Project can substantially accommodate
the total system under current load conditions for the month of July. Accordingly, the 4.8 GWh
available generation from Allison Lake could theoretically be stranded and the Allison Creek flows
would spill past the intake.
However, the complete loss of the 4.8 GWh will be offset to some degree by the storage capability
within Solomon Gulch by allowing Solomon Gulch to remain full longer into the fall season. The
analysis of this opportunity is with the AUTO Vista model as presented in the FFS is presented below
for Alt 4a and Alt 4b.
2.2 System Loads and Resources
2.2.1 System Loads
The AUTO Vista model operates on an hourly time step to meet system loads in the most cost
effective manner using available system resources as a function of their respective cost of production.
For the present study, two cases for the system load were considered as follows:
• The system load as recorded by CVEA data for 2006, as was the basis for all previous
studies.
• The above case with the addition of a new 2 MW load to continuously serve Petro Star
for 50 weeks of the year.
2.2.2 System Resources
The system resources considered for the existing case included the combined diesel plant facilities in
Valdez and Glennallen, the combined cycle unit as operated under the contract with Petro Star, and
the existing hydropower facilities at the Solomon Gulch Project. The proposed development
included the additions as discussed in Section 1 above as well as retirement of the existing thermal
generation resources to the extent possible in each respective case under consideration.
0.1 0.0 0.0 0.1
2.2
4.3
4.8
4.3
3.6
2.7
1.0
0.4
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Total Annual Energy
= 23.3 GWh
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 8
2.3 AUTO Vista Model: Allison Creek Run-of-River Hydropower Development
AUTO Vista was used to evaluate the generation benefits of various upgrade configurations under
consideration for the Project during the studies leading to the FFS Report. As stated at the close of
Section 1, the focus of this Addendum includes Alt 4a and Alt 4b as discussed below. The following
is a description of the program and a discussion of the how AUTO Vista was applied for the
condition that the run-of-river operation of the Project is required to operate within the CVEA system.
The AUTO Vista model for the Project includes the drainage basins for both the existing Solomon
Gulch Project and Allison Lake. It is comprised of a series of arcs and nodes with each element
having its set of characteristics as defined in the FFS. The graphical model for the existing system, Alt
4a and Alt 4b as expressed in these terms is shown in Figure 2.3. Major features of the AUTO Vista
model are briefly described below.
Figure 2.3
AUTO Vista Model Elements: Alt 4a and Alt 4b
2.4 Hydrology
The hydrology used for the AUTO Vista model is based on the work done by the U.S. Army Corps of
Engineers (COE) in 1982 as part of their evaluation of the potential project configurations for
maximizing the Allison Lake resource. The correlations developed from that study results in a 39-
year period of average daily flows from 1950 through 1989. A statistical analysis of this period of
record was performed to establish a representative smaller group of 7 years for use within the present
AUTO Vista. The set of 7 years was chosen on the basis of balancing the wet to dry conditions of
annual inflow to the two basins. The specific years chosen and the associated representative inflow
conditions are summarized in Table 2.1.
ALSQ
(Allison Lake
Inflow)
ALSS
(Allison Lake Spill)
ALSP
(Allison Lake
Power)
ALST
(Allison Lake TWL)
SLGR
(Solomon Gulch Reservoir)
SLGQ
(Solomon Gulch Inflow)
SLGP
(Solomon Gulch Power)
SLGT
(Solomon Gulch TWL)
S_SINK
(Source_Sink)
SINS
(Solomon
Instream Flow)
SLGS
(Solomon Gulch Spill)
SLGINS_RJ
(Solomon Gulch INS Junc)
ALSSPWY_RJ
(Allison SPWY TWL)
ALSR
(Allison Lake)
A_SINK
(Source_Sink)
ALSQ
(Allison Lake
Inflow)
ALSS
(Allison Lake Spill)
ALSP
(Allison Lake
Power)
ALST
(Allison Lake TWL)
SLGR
(Solomon Gulch Reservoir)
SLGQ
(Solomon Gulch Inflow)
SLGP
(Solomon Gulch Power)
SLGT
(Solomon Gulch TWL)
S_SINK
(Source_Sink)
SINS
(Solomon
Instream Flow)
SLGS
(Solomon Gulch Spill)
SLGINS_RJ
(Solomon Gulch INS Junc)
ALSSPWY_RJ
(Allison SPWY TWL)
ALSR
(Allison Lake)
A_SINK
(Source_Sink)
ALSR
(Allison Lake)
A_SINK
(Source_Sink)
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 9
Table 2.1
AUTO Vista Hydrologic Years
2.5 Hydro Equipment Characteristics
The performance curves for the Solomon Gulch powerhouse have been included as provided by the
CVEA. The new units at the proposed Allison Lake powerhouse for Alt 4a is based on Hatch Acres
in-house generic data for Pelton units. Both alternatives include a 6.5 MW generating station
comprised of two 3.25 MW generating units. A plot of the characteristics used in this analysis for
each of the 3.25 MW units is shown in Figure 2.4.
All elements of the conduit system components for each alternative have been assumed to perform in
accordance with published engineering data.
Figure 2.4
Allison Powerhouse Unit Characteristics – 2 x 3.25 MW Units
2.6 AUTO Vista Results
Stacked bar charts indicating the most efficient dispatch of system resources as required to meet the
system load are included in Appendix A for the existing condition, Alt 4a and Alt 4b. The first
charts compare the existing condition to the development alternatives for the 1961 water year, which
is the 50% year as indicated in Table 2.1.
Total Inflow
Year Percentile Acre-Feet
1969 10% 28,900
1984 25% 30,800
1954 25% 30,900
1961 50% 33,200
1957 75% 36,100
1977 75% 37,900
1989 90% 42,800
Average 34,400
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0 5 10 15 20 25 30 35 40 45Discharge (cfs)Efficiency (%)0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
Power (MW)Calculated Efficiency
Caculated Power
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 10
The annual generation for the base case of the existing load and resource condition for each of the 7
years included in the analysis is shown in Table 2.2 and the annual generation for Alt 4a and Alt 4b
for the existing load condition is shown in Tables 2.3 and 2.4 below.
Table 2.2
Annual Generation – Existing Condition, Loads and Resources
Table 2.3
Annual Generation – Alt 4a w/ Existing Load
Table 2.4
Annual Generation – Alt 4b w/ Existing Load
Generation (MWh)
Year Solomon Allison Total Hydro Diesel Cogen Total
196 9 51,900 0 51,90 0 11,300 23,100 86,400
1984 55,200 0 55,200 8,100 23,000 86,400
1954 55,700 0 55,700 7,600 23,000 86,400
1961 59,700 0 59,70 0 6,100 20,600 86,400
1957 58,500 0 58,500 7,200 20,700 86,400
1977 61,800 0 61,80 0 3,100 21,500 86,400
1989 62,100 0 62,100 4,400 19,900 86,400
Average 57,800 0 57,800 6,800 21,700 86,400
Generation (MWh)
Year Solomon Allison Total Hydro Diesel Cogen Total
196 9 54,60 0 13,700 68,400 50 0 17,50 0 86,400
1984 54,000 15,100 69,200 300 16,900 86,400
1954 49,500 13,800 63,400 500 22,500 86,400
1961 53,20 0 14,100 67,300 50 0 18,50 0 86,400
1957 55,100 11,800 67,000 500 18,900 86,400
1977 57,80 0 12,400 70,200 30 0 15,90 0 86,400
1989 57,900 10,300 68,200 400 17,800 86,400
Average 54,600 13,000 67,700 400 18,300 86,400
Generation (MWh)
Year Solomon Allison Total Hydro Diesel Cogen Total
1969 55,100 15,30 0 70,400 500 15,50 0 86,400
1984 55,000 16,200 71,200 400 14,800 86,400
1954 51,900 13,600 65,500 500 20,300 86,400
1961 55,300 14,40 0 69,800 400 16,20 0 86,400
1957 56,100 12,900 69,000 500 16,800 86,400
1977 59,300 12,90 0 72,200 500 13,70 0 86,400
1989 59,300 10,900 70,100 500 15,800 86,400
Average 56,000 13,700 69,700 500 16,200 86,400
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 11
The annual generation for the base case of the additional 2MW load and resource condition for each
of the 7 years included in the analysis is shown in Table 2.5 and the annual generation for Alt 4a and
Alt 4b for the additional 2MW load condition is shown in Tables 2.6 and 2.7 below.
Table 2.5
Annual Generation – Existing Resources w/ 2 MW Additional Load
Table 2.6
Annual Generation – Alt 4a w/ 2 MW Additional Load
Generation (MWh)
Year Solomon Allison Total Hydro Diesel Cogen Total
1969 57,000 18,100 75,100 3,000 25,500 103,500
1984 57,700 19,000 76,700 3,000 23,900 103,500
1954 53,500 17,800 71,300 8,200 24,100 103,500
1961 58,900 16,600 75,500 4,200 23,800 103,500
1957 59,600 15,200 74,800 4,600 24,200 103,500
1977 61,900 15,700 77,700 2,000 23,900 103,500
1989 62,600 14,000 76,600 4,600 22,400 103,500
Average 58,700 16,600 75,400 4,200 24,000 103,500
Table 2.7
Annual Generation – Alt 4b w/ 2 MW Additional Load
The annual general benefits from the AUTO Vista Analyses for Alt 4a and Alt 4b can then be
summarized for each load case as shown in Table 2.8 in terms of the incremental hydropower
generation and associated reduction on thermal power as required to satisfy the system load for each
of the alternatives under consideration. Please note that the minor differences between the hydro
and thermal generation values for each alternative are due to rounding within the AUTO Vista
modeling.
Generation (MWh)
Year Solomon Allison Total Hydro Diesel Cogen Total
1969 51,700 0 51,700 28,700 23,100 103,500
1984 54,800 0 54,800 25,600 23,100 103,500
1954 55,500 0 55,500 24,900 23,100 103,500
1961 59,100 0 59,100 21,400 23,000 103,500
1957 62,100 0 62,100 19,800 21,700 103,500
1977 66,000 0 66,000 15,200 22,400 103,500
1989 66,500 0 66,500 15,500 21,600 103,500
Average 59,400 0 59,400 21,600 22,600 103,500
Generation (MWh)
Year Solomon Allison Total Hydro Diesel Cogen Total
196 9 58,200 19,000 77,200 900 25,400 103,500
1984 58,500 20,200 78,700 1,000 23,900 103,500
1954 55,600 17,800 73,400 5,900 24,200 103,500
1961 60,400 17,100 77,500 2,300 23,700 103,500
1957 61,300 15,600 76,900 2,600 24,100 103,500
1977 63,800 15,700 79,500 300 23,700 103,500
1989 63,800 14,900 78,600 2,500 22,400 103,500
Average 60,200 17,200 77,400 2,200 23,900 103,500
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 12
Table 2.8
Annual Benefits – Alt 4a & 4b
Resource Existing Alt 4a Alt 4b Existing Alt 4a Alt 4b
Hydro 57,800 67,700 69,700 59,400 75,400 77,400
Fossil 28,500 18,700 16,700 44,200 28,200 26,100
Total 86,300 86,400 86,400 103,600 103,600 103,500
Benefit 9,900 11,900 16,000 18,000
Existing Load - Generation (MWh) 2 MW Addition - Generation (MWh)
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 13
3. Project Construction Cost and Construction Schedule
Construction costs and schedules were prepared and reported for the various upgrade configurations
under consideration for the Project during the Pre-Feasibility Study, Interim Feasibility Review and
Final Feasibility Study. As stated at the close of Section 1, the focus of this Addendum to the Final
Feasibility Study Report includes Alt 4a and Alt 4b as discussed below.
3.1 Construction Cost Estimates
All cost estimates are based on January 2010 bid price levels. The Direct Construction cost for each
alternative is the total of all costs directly chargeable to the construction of the project and in essence
represents a contractor’s bid. Indirect costs include an allowance for contingencies, engineering and
owner administration and are added to the Direct Construction Cost to result in the Total
Construction Cost. The contingency used for all alternatives was 25%. Engineering and Owner
Administration assumed for all alternatives was 15% of construction cost, inclusive of contingencies.
The period of time required to complete the FERC licensing process can be expected to be
approximately 3 years. Adding another 2+ years to construct the project over three construction
seasons suggests that a realistic on-line date of the project to be in the range of 2015. Accordingly, it
is appropriate to include escalation to the above costs to determine a realistic on-line cost for the
project. However, for the purposes of the present economic analyses, 2010 dollars are used herein
to avoid the need to hypothesize what the cost of thermal generation may be that far into the future.
3.1.1 Alternative 4a
The basis for the construction cost of the various elements of Alt 4a are listed below as follows:
• Mobilization. The mobilization cost is taken directly from the estimates for Alt 3c on
the basis that the construction activities for the initial year of construction are nearly
identical.
• Construction Access Trail. The cost of the 4,500 foot access trail to the high point of the
penstock above the powerhouse is estimated as 60% of the estimate for the access road
for Alt 3c. The overall length of the trail is approximately 30% of that of the route for
Alt 3c and the width of the road bench for the trail will be two-thirds for that required
for Alt 3c. However, the alignment for the trail will be the same as that for the Alt 3c
road, which is by far the most difficult portion for construction.
• Diversion Structure. The cost for the diversion structure is based on the unit costs for
similar features of the nearby diversion structure for the Humpback Creek project that is
currently under construction for Cordova Electric Cooperative.
• Surface Pipeline / Penstock. The cost of the surface pipeline / penstock is based on the
detailed estimates developed for the comparable penstock segments of Alt 3c as
included in Appendix E of the FFS.
• Powerhouse. The costs for the major equipment within the 6.5 MW powerhouse are
based on preliminary quotations from equipment suppliers while the cost for other
lower cost items were obtained from in-house cost data and from recently obtained bid
prices on similar construction.
• Switchyard. The switchyard cost is taken directly from the estimate for Alt 3c.
• Transmission. The transmission cost is taken directly from the estimate for Alt 3c.
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 14
The resulting construction cost estimate for Alt 4a is summarized in Table 3.1.
Table 3.1
Alternative 4a
Total Construction Cost (Bid 1/2010)
Item
1. Mobilization $1,573,000
2. Construction Access Trail $2,916,000
3. Dam, Intake & Spillway
a. Diversion Structure $2,230,000
b. Spillway $0
$2,230,000
4. Surface Penstock / Pipeline
a. HDPE Pipeline $0
b. Steel Pipeline $5,176,000
Subtotal $5,176,000
5. Powerhouse
a. Civil Works $2,594,000
b. Turbine & Generator $4,710,000
c. Misc. Mech. Equip.$683,000
d. Misc. Elec. Equip.$1,015,000
e. Bridge Crane $187,000
Subtotal $9,189,000
6. Switchyard $525,000
7. Transm. & Interconnection $310,000
Direct Construction Cost (Bid 1/09)$21,919,000
Escalation -$590,000
Direct Construction Cost (Bid 1/10)$21,329,000
Contingencies $6,076,000
Engineering & Owner Admin.$4,111,000
Total Construction Cost (Bid 1/10)$32,106,000
3.1.2 Alternative 4b
The cost for the addition of a Obermeyer Gate on the top of the Solomon Gulch Spillway 5 feet in
height was considered on its own as an incremental feature for the CVEA system. The cost of this
addition is based on a preliminary quotation for the gate materials and a configuration as suggested
by the Obermeyer company. The costs for modifications to the existing spillway and installation of
the gate are based on estimated quantities of construction and in-house unit costs. The resulting cost
for Alt 4b is summarized in Table 3.2.
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 15
Table 3.2
Alternative 4b
Total Construction Cost (Bid 1/2010)
Item
Labor $2,106,000
Equipment $235,000
Materials $1,951,000
Direct Construction Cost (Bid 1/10)$4,292,000
Contingencies $858,000
Engineering & Owner Admin.$773,000
Total Construction Cost (Bid 1/10)$5,923,000
3.2 Construction Schedule
The construction schedule for Alt 4a and Alt 4b is primarily controlled by the following major
factors:
• Delivery time for major powerhouse equipment
• Access to Allison Lake for construction activity
• Four month window for construction activity at Allison Lake
A similar approach has been used to develop a schedule for each alterative relative to the purposes
of the cost estimates presented above and the annual costs presented below for each alternative. The
schedule for Alt 4a is presented in Figure 3.3 as an example thereof.
Figure 3.3
Alternative 4a
Construction Schedule
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 16
3.3 Economic Analysis
Annual costs of the Project can be apportioned into fixed and variable costs. For this analysis, the
fixed amount, amortization of the Total Capital Requirements less earnings on Reserves, is based on
7% interest rate financing over a 30-year term. Variable annual costs escalate each year and include
operation and maintenance (O&M) costs, administrative and general expenses, interim replacements
and insurance. The basic assumptions for determining the annual fixed and variable costs of the
Project are shown in Table 3.3.
Table 3.3
Basic Assumptions for Economic Analyses
Item Value
Construction Period (Alt 4a) 25 months
Financing Term 30 years
Financing Interest Rate 7%
Reinvestment Rate Same as financing
Escalation of Project Costs 3% annually
Financing Reserve 1 year of debt service
Financing Expenses 3% of Total Investment Cost
Variable Annual Costs $500,000
3.3.1 Cost of Power – Alternative 4a
The Total Investment cost includes interest during construction (IDC) over an assumed 25-month
construction period. As outlined above, we have assumed that construction at the project site would
come to a stop during the winter months, with the exception of equipment installation within the
powerhouse structure. The development of the annual cost for Alt 4a is shown in 2010 dollars on
Table 3.4.
Table 3.4
Alternative 4a – First Year Annual Cost (2010 dollars)
Item Cost
Total Construction Cost (Bid 1/10)$32,106,000
Interest During Construction 2,435,000
Total Investment Cost $34,541,000
Reserve Fund 3,127,000
Financing & Legal 1,036,000
Working Capital 100,000
Total Capital Requirements (1/10)$38,804,000
Annual Cost
Debt Service $3,127,000
O&M Cost 280,000
Administrative & General 112,000
Insurance 50,000
Interim Replacements 50,000
Earnings on Reserve Fund (219,000)
Total First-Year Annual Cost $3,400,000
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 17
As discussed in Section 2 above, the unit cost of power becomes a function of the extent to which
the power available from the Project can actually contribute to the CVEA system load on a day-to-
day, hour-to-hour basis. In this regard, three scenarios are presented including:
1. The AUTO Vista studies performed indicate that a total of 9,900,000 kWh from the
Project can be used within the existing CVEA system load.
2. With an additional 2 MW of load within the CVEA system, the AUTO Vista studies
performed also indicate that a total of 16,000,000 kWh from the Project can be
effectively utilized.
3. The review of the available flow data for Allison Creek indicate that a 6.5 MW run-of-
river project at the site would have the capability to produce a total of 23,300,000 kWh
at such time that the CVEA system load that would not constrain its operation.
The cost of power resulting from these three scenarios is presented in Table 3.5.
Table 3.5
Alternative 4a – Cost of Power
3.3.2 Cost of Power – Alternative 4b
As indicated by the results included in Table 2.8, the addition of the Obermeyer gate to the Solomon
Gulch spillway adds 2,000,000 kWh to the energy for the Alt 4a development with and without the
anticipated additional 2 MW of load to the CVEA system. Further, the Alt 4b contribution to the
CVEA system load is essentially the same without a run-of-river development of Allison Creek. The
resulting cost of power during the first year of operation is shown in Table 3.6.
Item Value
Alt 4a with Existing System Load (kWh)9,900,000
First-Year Cost of Power (1/2010) ($/kWh)$0.343
Alt 4a with 2 MW Additional Load (kWh)16,000,000
First-Year Cost of Power (1/2010) ($/kWh)$0.213
Alt 4a with Expanded CVEA System (kWh)23,300,000
First-Year Cost of Power (1/2010) ($/kWh)$0.146
Total First-Year Annual Cost $3,400,000
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 18
Table 3.6
Alternative 4b – Cost of Power
Item Cost
Total Construction Cost (Bid 1/10)$5,469,000
Interest During Construction 255,000
Total Investment Cost $5,724,000
Reserve Fund 526,000
Financing & Legal 172,000
Working Capital 100,000
Total Capital Requirements (1/10)$6,522,000
Annual Cost
Debt Service $526,000
O&M Cost 280,000
Administrative & General 112,000
Insurance 50,000
Interim Replacements 50,000
Earnings on Reserve Fund (37,000)
Total First-Year Annual Cost $981,000
Added Hydro Generation, Existing System (kWh)2,000,000
First-Year Cost of Power (1/2010) ($/kWh)$0.491
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 19
4. Regulatory and Environmental Considerations
4.1 Alternative 4a
4.1.1 Regulatory Considerations
CVEA provided the Preliminary Application Document (PAD), including the Draft Application for
License and Preliminary Draft Environmental Assessment (PDEA) (Draft Application) for the Allison
Lake Project to entities listed on the Project Contact List on April 13, 2010. The PAD, including the
Draft Application for License, described the proposed 4.5 MW storage project and was prepared
under the regulation for Major Unconstructed Project Less Than 5 MW pursuant to 18 CFR 4.61.
The proposed run-of-river modification to the Project would have an installed capacity of 6.5 MW
and therefore would be greater than 5 MW and the Application for License would be prepared
pursuant to 18 CFR 4.41, Major Unconstructed Project Greater Than 5 MW. This change in the
applicable FERC regulation would not significantly affect the environmental work to date and the
PDEA, however, the Engineering Exhibit A as provided on April 13, 2010, would need to be
modified and expanded to address engineering Exhibits A through D as required by 18 CFR 4.41.
The change from the 4.5 MW storage project to the proposed 6.5 MW run-of-river project will
require:
• Revision of the PDEA to present the run-of-river project description and related operation.
• Preparation of the revised engineering exhibits. The Draft Application as provided on April
13, 2010, included the engineering Exhibit A for the proposed 4.5 MW storage project
pursuant to 18 CFR 4.61. The change to the proposed 6.5 MW run-of-river project changes
the applicable FERC regulation to 18 CFR 4.41 and the engineering exhibits expand to
Exhibits A through D.
• Preparation and issuance of Revised Scoping Document 1 (SD1). The process for issuing the
revised SD1 was discussed with FERC Staff. CVEA will not be required to hold new scoping
meetings, nor conduct an additional site visit. FERC Staff recommended that CVEA (1)
provide a revised SD1 along with a revised PAD to entities on the Project Contact List; and,
(2) following provision of these revised documents, schedule a teleconference with the
resource agencies and other interested participants to discuss the revised proposed Project.
In light of the above, the level of effort going forward for document preparation for the 6.5 MW run-
of-river option would be greater than that required for the 4.5 MW storage option due to the
redundancies involved with the 18 CFR 4.41 process. However, the downstream benefits in the
activities for development of the run-of-river project would be greatly increased as discussed below,
greatly overweighing the additional effort required for document preparation and the licensing
process itself.
4.1.2 Environmental Field Investigations
In support of the preliminary permit, environmental field investigations began in 2008 for the
Project. The status of these field investigations and desk-top reviews as of May 2010 is summarized
in Section 5 of the FFS and the complete reports can be found in Appendix F to the FFS. The major
studies conducted are listed in Table 4.1.
All of the studies to date are equally applicable to the run-of-river project as discussed herein and
those arrangements considered in the FFS. Further, the selection of a run-of-river arrangement for the
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 20
project is not expected to require any new major areas of study in the support the FERC licensing
process. However, as indicated by Table 4.1, on-going work will be required in several areas as
follows:
• Water Use & Quality. The on-going work in this area will primarily be continued
monitoring of the two stream gages in order to develop and maintain a continuous record for
the flow regime for Allison Creek.
• Biological Resources. The baseline work for fish populations and habitat, vegetation, birds
and mammals, and wildlife habitats is complete. Areas that will require further work
include:
- Aquatic Resources: Further work will be necessary to provide a basis for final
negotiation of the amount of flow required to maintain an in-stream flow between
the diversion structure and the powerhouse.
- Wetlands: Further work will be required to evaluate the extent of any wetlands
located along the selected transmission line alignment.
• Archaeological / Historical Resources. The field work for the archaeological and historical
resources of the project area has been completed.
Table 4.1
Summary of Major Environmental Field Studies
Type of Field Investigation Conducted By Timeline
Geological Resources
(As described in Section 2) R&M Consultants Began: 2008
Completed: 2009
Water Use and Quality R&M Consultants Began: 2008
Completed: on-going
Biological Resources
- Fish and Aquatic Resources
- Vegetation
- Wetlands
- Birds and Mammals
- Wildlife Habitats
ABR, Inc. Began: 2008
Completed: on-going
Archaeological/Historical NLUR, Inc. Began: 2009
Completed: 2010
4.1.3 Environmental Considerations
While the regulatory framework for Alt 4a is more detailed than that associated for Alt 3c, the
associated scope of environmental issues is greatly reduced. The more significant elements of this
comparison are:
• Allison Lake would be left in its natural state in the case of Alt 4a, which has not been the
case for all arrangements previously considered. In the lake-tap alternatives the lake would
have been drawn down by as much as 100 feet during the winter season; and in the case of
Alt 3c the lake would have been raised 43 feet thereby inundating the existing east and west
shorelines and the delta at the south end of the lake.
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 21
• The construction activity of the dam near the outlet of the lake would disturb a significant
area with attendant concerns for water quality within Allison Creek to a much greater extent
that would be associated with the construction of the diversion structure for Alt 4a.
• The construction of the diversion structure for Alt 4a would not require that a road be
constructed to the outlet of Allison Lake nor the extensive amount of traffic thereon
associated with the construction of the major dam structure included with Alt 3c.
• In the case of Alt 3c, there would be a potential for seepage beneath and around the dam
resulting in a loss of water available for hydropower generation as well as changed ground
water conditions in the glacial moraine downstream of Allison Lake. While not likely, any
seepage that may occur at the location of the diversion structure associated with Alt 4a
would be very minor.
• In the case of Alt 4a, the flow regime within Allison Creek would remain unchanged
between Allison Lake and the diversion structure as well as the within the reach downstream
of the powerhouse, the latter being the area of primary concern for the habitat for both
resident and anadromous fish species.
All of these factors would greatly reduce the level of effort of that required for Alt 4a as compared to
Alt 3c for agency consultation throughout the remaining licensing activities as well as for
environmental monitoring during construction and operation of the project.
4.2 Alternative 4b
4.2.1 Regulatory Considerations
An amendment to the existing Solomon Gulch Project FERC License (No. P-2742) would be required
for the proposed five foot raise in the normal maximum water surface of Solomon Lake as proposed
for Alt 4b. The amendment would require that agency consultation take place in a manner
comparable to that currently anticipated for the Allison Lake development. As part of the
consultation process, issues that were not resolved according to current practice during the original
licensing process would likely be revisited by existing agency staff.
4.2.2 Environmental Field Studies
Ostensibly, the environmental field studies would focus on habitat values within the additional area
to be submerged surrounding Solomon Lake as the result of the proposed five foot raise in the
normal maximum water surface of Solomon Lake. It can be expected, however, that agency
consultation would result in requests for further studies with regard to other aspects of the project
that were not studied in accordance with current practice as part of the original licensing process.
4.2.3 Environmental Considerations
No specific concerns of a fatal flaw nature have been identified with regard to the environmental
effects of the proposed five foot raise in the normal maximum water surface of Solomon Lake as
proposed for Alt 4b.
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 22
5. Conclusions and Recommendations
5.1 Conclusions
5.1.1 Alternative 4a
In addition to the general conclusions relating to the development of a hydropower project in the
Allison Creek basin as provided in the FFS, conclusions specific to the run-of-river Alt 4a gained as
the result of the present evaluation include the following:
• The scope of the project as propose for the run-of-river Alt 4a is significantly reduced from
that associated with Alt 3c.
• A run-of-river Alt 4a development of the Allison Creek basin can produce 22.3 GWh of
energy on an average annual basis within the environment of an unconstricted system load.
• A run-of-river Alt 4a development of the Allison Creek basin would produce 9.8 GWh of
energy on an average annual basis within the existing CVEA system load. The project is not
cost effective under this load condition.
• With the addition of 2 MW to the CVEA system load, the Alt 4a average annual contribution
to the CVEA system load would increase to 16.0 GWh. On this basis, the project would be
competitive with the cost of diesel generation.
• Further increases in the CVEA system load would in turn result in a further reduction in the
cost of power from Alt 4a.
• The reduced scale of the hydropower development of the Allison Creek basin as offered by
Alt 4a would in turn minimize the risk of construction cost overruns relative to that
potentially associated with Alt 3c.
• The diversion structure proposed for Alt 4a would entail a minimal, if any, risk of seepage or
other dam safety related issues in contrast to that potentially associated with the large dam at
the outlet of Allison Lake as proposed for Alt 3c.
• On the basis that the installed capacity of the run-of-river Alt 4a is expected to be greater
than 5 MW, FERC 18 CFR 4.41 would be the required regulation for the preparation of a
FERC License Application for the project.
• The reduced scale of the hydropower development of the Allison Creek basin as offered by
Alt 4a will result in an overall reduction in environmental effects relative to that associated
with Alt 3c.
• In contrast to any of the storage project arrangements as previously considered for
development of the Allison Creek basin, the run-of-river configuration as proposed for Alt 4a
would maintain the existing flow and temperature regimes downstream of powerhouse. This
would be a major advantage for Alt 4a owing to the critical importance of this reach of
Allison Creek to resident and anadromous fish populations.
• Alt 4a is superior to Alt 3c in all respects.
5.1.2 Alternative 4b
Conclusions specific to Alt 4b gained as the result of the present evaluation include the following:
• The addition of inflatable gates to the Solomon Gulch Spillway as proposed for Alt 4b would
add approximately 2 GWh of average annual energy to the CVEA system for service to all
system load and resource conditions considered for the project, existing and future.
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 23
• The addition of inflatable gates to the Solomon Gulch Spillway as proposed for Alt 4b would
require an amendment to existing FERC License for the Solomon Gulch Project.
• On the basis of the energy potential and cost estimates prepared for this evaluation, the
addition of inflatable gates to the Solomon Gulch Spillway as proposed for Alt 4b would not
currently be an economically viable project relative to the other resources available to the
CVEA.
5.2 Recommendations
Based on the conclusions referenced and outlined above, we provide the following
recommendations:
• Adopt Alt 4a as the preferred alternative for the development of the hydroelectric potential
of the Allison Creek basin.
• Terminate further consideration of Alt 3c and Alt 4b.
• Complete the analysis of the environmental effects of a hydropower development within the
Allison Creek basin on the basis of Alt 4a.
• Optimize the capacity of the powerhouse for the run-of-river Alt 4a.
• Prepare a FERC License Application for Alt 4a pursuant to the provisions of 18 CFR 4.41.
Copper Valley Electric Association, Inc. - Allison Lake Hydroelectric Project
Addendum – Final Feasibility Report
December 2010 24
6. References
1. Hatch Acres Corporation, Allison Lake Hydropower Development – FINAL FEASIBILITY STUDY,
prepared for Copper Valley Electric Association, May 2010 .
2. HDR Engineering, Inc., SOLOMONGULCH HYDROELECTRIC PROJECT – RESERVOIR
CAPACITY – FEASIBILITY STUDY, prepared for Copper Valley Electric Association, November
1991.
Appendix A
Alt 4a System Dispatch
Nov DecApr MayJanJunMarFebSep Oct NovAugJulAlt 4aGeneration (MW)AUTOVista ANALYSIS AUTOVista ANALYSIS ––ALT 4aALT 4aAnnual Dispatch w/ Existing Load Annual Dispatch w/ Existing Load ––19611961SG 2Allison 1DieselAllison 2CogenSG 1ExistingAppendix A -1
Nov DecApr MayJanJunMarFebSep Oct NovAugJulAlt 4aGeneration (MW)AUTOVista ANALYSIS AUTOVista ANALYSIS ––ALT 4aALT 4aAnnual Dispatch w/ 2 MW Added Load Load Annual Dispatch w/ 2 MW Added Load Load ––19611961SG 2Allison 1DieselAllison 2CogenSG 1Existing + 2 MWAppendix A -2
Appendix B
Obermeyer Gate –
Cost Estimate
SOLOMON GULCH HYDROELECTRIC FACILITY OBERMEYER GATE INSTALLATIONConstruction Cost SummaryNEW INSTALLATIONBased on Dick Freeman's Avista- Nine Mile estimate dated Dec 18, 2007 and Jim Rutherford's Humpback Creek Estimate, 03/2009, and Obermeyer quote dated October 22, 2010TOTAL LABOREQUIPMENTMATERIALSNo. ItemCrew SizeHours / Crew Hours Rate Total Item Qty Rate Weeks Total Item Qty Rate Total1 Mobilization$57,200$42,000$15,200$0780560 75 $42,000 966 Loader1 4000 2$8,0001$0Flatbed trucks2 1500 2$6,000Pettibone Fork Lift1 600 2$1,2002 Remove Existing Splitter Piers$67,800$52,500$4,800$10,5007 100700 75 $52,500 600 cfm compressor1 1800 2$3,600 Miscellaneous (20% of labor)10500 1$10,500Pettibone Fork Lift1 600 2$1,200$03 Drill and Set Anchors - 112 each$210,320$144,000$31,200$35,1208 2401920 75 $144,000$0 Miscellaneous5000 1$5,000$0 Anchors 1" x 15 ft x 56 ea x 2.67 lbs ea.5000 3$15,0000600 cfm compressor1 1800 4$7,200 Grout1680 9$15,120airtracks2 2700 4$21,600Pettibone Fork Lift1 600 4$2,4004 Pour Concrete$311,366$180,000$70,400$60,966Description: Pour additional spillway concete to anchor Obermeyer Gate, middle spitter wall and create a right abutment. Approx. 524 CY of concrete with a 1:2:4 mix, 4 x 60 hour weeks$0Labor - 10 men working 6 (10) hour days10 2402400 75 $180,000Generator - 60 kw1 900 4$3,600 Miscellaneous5000 1$5,000Compressor - 66 cfm1 2100 4$8,400 Form lumber 27600 $0.50 $13,800Mix truck1 5500 4$22,000 Rebar - cut, bundled in town 32390 $0.80 $25,912Water truck1 2500 4$10,000 Cement 72 $90 $6,480Concrete pump10 600 4$24,000 Sand 171 $10 $1,710Pettibone Fork Lift1 600 4$2,400 Gravel 281 $12 $3,372Misc vibrators, saws, drills104$0 Additives/Curing (add 10% to all) 1.38 $3,400 $4,6925 Install Air Piping Along Crest$78,540$60,000$5,800$12,7408 100800 75 $60,000 600 cfm compressor1 800 2$1,600flatbed truck1 1500 2$3,000Pettibone Fork Lift1 600 2$1,2002" pipe with fittings, galvanized530 20$10,600miscellaneous2140 1$2,14012 03 2010 Obermeyer Annual Cost_arg_joee.xls
SOLOMON GULCH HYDROELECTRIC FACILITY OBERMEYER GATE INSTALLATIONConstruction Cost SummaryNEW INSTALLATIONBased on Dick Freeman's Avista- Nine Mile estimate dated Dec 18, 2007 and Jim Rutherford's Humpback Creek Estimate, 03/2009, and Obermeyer quote dated October 22, 2010TOTAL LABOREQUIPMENTMATERIALSNo. ItemCrew SizeHours / Crew Hours Rate Total Item Qty Rate Weeks Total Item Qty Rate Total6 Set Obermeyer Assemblies in Place $1,764,325$234,000$43,600$1,486,72513 2403120 75 $234,000 $0Pettibone Fork Lift1 600 4$2,400 Obermeyer $1,486,72560 ton crane1 7000 4$28,000 2 each 225' long x 5' high, assumed 600 cfm compressor1 1800 4$7,200 same cost as AVISTA, 9 mileflatbed truck1 1500 4$6,000 (250' long x 10' high)7 Install Abutment Seal Plates (both ends) $479,400$405,000$50,400$24,00015 3605400 75 $405,000 $0Pettibone Fork Lift1 600 6$3,600 Drill bits, epoxy grout14000 1$14,000600 cfm compressor1 1800 6$10,800 Anchors600 1$600mish air tools13500 1 2$27,000 Concrete1200 1$1,200flatbed truck1 1500 6$9,000 Form lumber500 2$1,000Handrail platforms (lbs)1440 5$7,2008 Install Compressor, MCC, Local Controls $78,000$60,000$12,000$6,0008 100800 75 $60,000 flatbed truck1 1500 2$3,000 Miscellaneous6000 1$6,00010 Ton Crane1 7000 1$7,000Miscellaneous1 1000 2$2,000Pettibone Fork Lift1 600 29 Raise Reservoir, Startup, Turnover $34,000$30,000$2,000$2,0004 100400 75 $30,000 Miscellaneous2000 1 1$2,000 Miscellaneous2000 1$2,000SUBTOTAL $3,080,95180 1560 16100$1,207,500$235,400$1,638,051Supervision (% of labor)$301,87525% $301,875Overhead (% of labor)$181,12515% $181,125Overtime factor (% of total labor)$169,05010% $169,050Profit on labor (% of labor)$148,7648% $148,764Profit on materials (% of labor)$81,9035%$81,903Contigency (20%)$792,734Engineering & Owqner Administration (15%)$713,460SUBTOTAL$5,469,861 12 03 2010 Obermeyer Annual Cost_arg_joee.xls
1
OBERMEYER HYDRO, INC.
P.O. BOX 668 FT. COLLINS, COLORADO 80522 USA TEL 970-568-9844 FAX 970-568-9845
E-mail: hydro@obermeyerhydro.com WWW: http://www.obermeyerhydro.com
October 22, 2010
Project Quotation Sheet
Project: Solomon Gulch, Alaska
Client: Joe Earsley, Hatch Associates Consultants, Inc.
Gate Size: 5’ high x 450’ long
Obermeyer Hydro, Inc. (OHI) is pleased to issue this proposal for the supply of an
Obermeyer Water Control Gate for the Solomon Gulch Project in Alaska. Obermeyer
Hydro will supply the following components for this project:
Steel Package: (23), nominal 19.56’ wide steel gate panel (4200-lbs each)
along with ductile iron clamp castings, hinge retainers, web
retainers, splitters, restraining strap clamps, and two UHMW
polyethylene plates. Gate panels and peripheral parts to be
sand blasted and coated with CeramKote 54 epoxy paint.
Ductile iron castings shall be sand blasted and hot dip
galvanized in accordance with ASTM A123 and ASTM 153.
Bladder Package: (23), nominal 19.56’ wide two ply polyester reinforced dual
chamber air bladders complete with air bladder connection
assemblies for connection into owner supplied air piping.
Control System: One OHI model 10-3 automatic water level control system.
Control system to utilize a Square D Momentum Series PLC
to maintain a user input upstream water elevation. PLC to
measure upstream water elevation using included KPSI
submersible depth transmitter. Control system provided in
dual Nema 12 rated electrical boxes (PLC and mechanical).
Operator interface to PLC to be via color touchscreen panel.
Control system to have capability to control up to three
independent gate zones.
Air Supply : Dual Ingersoll Rand model UP6-30-125 rotary screw air
compressors with desiccant air dryers, filtration system, and
400-gallon receiver tank. Each compressor to output 125-cfm
at 125-psig and shall actuate the gate to normal operating
pressure in approximately 60-minutes with both machines
operating. 3-phase power required.
Misc. Package: All stainless steel gate system anchor bolts, stainless steel
fasteners, stainless steel abutment and restraining strap
2
anchor bolts, interpanel seals, three copies of engineering
drawings and calculations, and three copies of operation and
maintenance manuals.
Obermeyer Hydro is pleased to offer this complete package FOB Wellington,
Colorado for the sum total of USD 1,486,725.00. This price is valid until November 30,
2010. Shop drawings will be available within 4-weeks of purchase order. Delivery of
gate shall be in accordance with mutually agreed upon project schedule
The above prices specifically exclude the following items:
1. Interconnecting wiring or piping.
2. Building for housing compressor and controls.
3. Installation except for any purchased supervision and training.
4. Any needed anchor bolt epoxy.
5. Bid, supply, or performance bond.
6. Federal, state, or any local taxes.
In addition to the above equipment supply package OHI also recommends the
following installation supervision and owner training program:
Trip One: Ten day on-site installation consulting trip by OHI technical during
gate installation. Purpose of the trip is to supervise the installation of
the gate and the control building equipment.
Trip Three: Two day system start-up and owner training trip. Day one will be
dedicated to gate testing and day two will be for owner training and
Operation and Maintenance manual review.
The price for the listed installation supervision and owner training program is USD
12,000.00. Additional on-site services are available for USD 1000.00 per day plus any
added travel related expenses.
As all parts are custom manufactured, a thirty percent (30%) deposit will be
required with the placement of an order. The balance, less five percent (10%) retention
shall be upon shipping from Wellington, Colorado. The retention shall be due net sixty
days after shipping from Wellington, Colorado or upon commissioning of gate whichever
comes first. OHI reserves the right to invoice for partial shipments.
All parts manufactured by Obermeyer Hydro are offered and guaranteed as
outlined in standard OHI sales agreement. Items that are supplied, but not manufactured
by Obermeyer Hydro, are covered by the original manufacturer’s warranty.
Sincerely,
Obermeyer Hydro, Inc.
Robert Eckman
Vice President
SOLOMON GULCH, ALASKAOHI BILL OF MATERIALSSIZE: 5' x 450'OCTOBER 22, 2010COMPONENT DESCRIPTIONQUANTITYEST WEIGHT/UNITTOTAL WEIGHT(POUNDS)GATE SYSTEM GATE PANEL (19.56' SECTION)23420096600 HINGE RETAINER A45041800 WEB RETAINER A4612552 WEB RETAINER B4612552 RESTRAINING STRAP CLAMP138202760 SPLITTER237161 CLAMP CASTINGS22513430150 STAINLESS STEEL ABUTMENT PLATE215003000 1/2"-13UNC x 1-1/4" STAINLESS STEEL HEX BOLT (SPLITTER BAR)500.210 1/2"-13UNC STAINLESS STEEL FLAT WASHER (SPLITTER BAR)500.210 3/4"-10UNC SS HEX NUT (HINGE FLAP)18000.2360 3/4" SS FLAT WASHER (HINGE FLAP)18000.2360 5/8"-11UNC SS HEX NUT (SEALS)5600.2112 5/8" SS FLAT WASHER (SEALS)5600.2112 1"-8UNC x 4" STAINLESS STEEL HEX HEAD CAP SCREW (RESTRAINING STRAP)702140 1"-8UNC SS HEX NUT (RESTRAINING STRAP)1400.570 1" SS FLAT WASHER (RESTRAINING STRAP)2100.2552.5 1" x 12" 304 STAINLESS STEEL ANCHOR BOLTS (REST. STRAP)70151050 1-3/4" x 24" STAINLESS STEEL ANCHOR BOLT (MAIN ANCHOR)450198550 1-3/4" STAINLESS STEEL SPERHICAL HEX NUT (MAIN ANCHOR)45031350 1-3/4" STAINLESS STEEL SPHERICAL WASHER45031350 AIR BLADDER (19.56' DUAL CHAMBER)2371016330 HINGE FLAP (19.56' SECTION)23902070 RESTRAINING STRAP 70251750 ABUTMENT SEAL22550 INTERPANEL SEAL2225550 INTERBLADDER SEAL25125 OHI 10-3 MECHANICAL CABINET (1-zone control system)1300300 OHI 10-3 SQUARE D WATER LEVEL CONTROLLER1300300 KPSI WATER LEVEL TRANSDUCER WITH 50' CABLE12525 OHI TSM-005 GATE POSITION SENSOR WITH 50' CABLE22550 INGERSALL RAND UP6-30-125 ROTARY SCREW AIR COMPRESSOR 212922584 INGERSALL RAND D221IM AIR DRYER2198396 INGERSALL RAND GP216 AIR FILTER425100 INGERSALL RAND HE216 AIR FILTER425100 400-GALLON RECEIVER TANK1500500 AIR CONNECTION ASSEMBLY23123GATE SYSTEM TOTAL174254.5
END
Attachment D: Financial backup page 1
Allison Creek Plan of Finance
The final feasibility report indicates the total cost of the Allison Creek project in 2010 dollars is
$38,804,000.
Copper Valley Electric received $10,000,000 from the State of Alaska FY12 capital budget. The
following language is included in Senate Bill 46; “It is the intent of the legislature that the state's
capital investment into energy generation projects not exceed 50% of the total investment
required to fully complete those projects”.
Total Project Cost $38,804,000
Maximum 50% State of Alaska investment $19,402,000
State of Alaska Summary for Allison Creek
2008 Capital Budget Appropriation (Grant 2195314) $ 1,000,000
2009 Round I REF (Grant 2195390) $ 2,288,000
2011 Capital Budget Appropriation (In progress) $10,000,000
2012 Round V REF (Applications due 8/26/11) $ 6,114,000 note 1
Total State of Alaska $19,402,000 = 50% State
Note 1:
Section 1.15 of the Renewable Energy Fund Round V applications state construction is limited to
$8 million per project however the 50% language from SB 46 limits CVEA from applying for all
amounts eligible under the grant application.
Other Round V limitations require final design and permitting to be $500,000 or no more than
20% of anticipated construction cost. CVEA’s estimate for construction only is $32 million.
20% equates to $6.4 million. Final design and permitting is estimated at $2.27 million which
does not exceed the threshold in round 5. CVEA is not applying for final design and permitting
costs.
Round V Application
CVEA is applying for $12,228,000 with 50% match: $6,114,000 State and $6,114,000 CVEA.
Remaining Funding/Matching
CVEA intends to apply for any Federal funding that may become available. If no grants are
available, CVEA will secure funding through the lowest cost financing available.
Currently CVEA is a 100% borrower through our banker National Rural Utilities Cooperative
Financing Corporation (CFC). CVEA has been in contact with CFC throughout the project and
verbally been given the okay to borrow the amount needed. CVEA will continue to explore all
possibilities to secure the lowest cost financing available.
Allison Creek Funding Breakdown
Format of Grant Budget Form for all funding Amount
2008 State
Capital
Budget
REF
Round 1
Round 1
Match & Pre-
Grants 10 Million
Round 5
(costs after
7/12)
CFC/Round 5
Match
Pre - Design and Construction (Filing License Appilcation)3,575,383 1,000,000 1,975,148 600,235 - - -
Design and Permitting 2,270,000 - 312,852 78,213 1,878,935 - -
Project Scoping / contractor solicitation 50,000 40,000 10,000
Permit applications (as needed)190,000 152,000 38,000
Final enviornmental assessment and mitigation plans 30,000 24,000 6,000
Resolution of land use, right of way issues 50,000 40,000 10,000
Permit approvals 20,000 16,000 4,000
Final system design 1,730,000 40,852 10,213 1,678,935
Engineers cost estimate 40,000 40,000
Updated economic and financial analysis 100,000 100,000
Negotiated power sales agreements with approved rates - -
Final business and operational plan 60,000 60,000
Construction 32,958,617 - - - 8,121,065 6,114,000 18,723,552
Confirmation that all design and feasibility requirements are complete 50,000 50,000
Completion of bid documents 50,000 50,000
Contractor/vendor selection and award 100,000 100,000
Construction phases (each project will have unique phases…)1,250,000 1,250,000
Integration and testing 200,000 200,000
Decommissioning old systems (N/A)- -
Equipment & Materials 27,995,000 6,321,065 6,114,000 15,559,935
Other: Project Mgmt, Insurance, Etc.3,163,617 - 3,163,617
Final acceptance, commissioning and start up 100,000 100,000
Operations Reporting 50,000 50,000
TOTAL 38,804,000 1,000,000 2,288,000 678,448 10,000,000 6,114,000 18,723,552
Attachmend D: Financial backup page 2
Cost per kWh
REF1 OTHER Other LOAN TOTALS
Grants 2,288,000 1,000,000 10,000,000 13,288,000
Loan Amount 25,516,000 25,516,000
Interest Rate 7.00%38,804,000
Term Assumption 30
Annual Cost
Debt Service 2,056,243 2,056,243
O&M 280,000
Administrative & General 112,000
Insurance 50,000
Interim Replacements 50,000
Total First-Year Annual Cost 2,548,243
Delivered Energy 16,000,000
Delivered First-Year Cost of Power ($/kWh)0.1593$
Under 16 million kWh scenario
Cost of Power with no REF5 grant 0.1593$
Cost of Power with 6.114 million REF5 grant 0.1285$
Savings with REF5 grant 0.0308$
Under 23.3 million kWh scenario
Cost of Power with no REF5 grant 0.1094$
Cost of Power with 6.114 million REF5 grant 0.0882$
Savings with REF5 grant 0.0212$
GRANTS LOANS
Attachmend D: Financial backup page 3
Generation Cost Comparison
Section 1 Percentage Generation kWh's %kWh's %Variance
Solomon Gulch 50,466,544 52%50,466,544 52%-
Allison Creek - 0%16,000,000 16%16,000,000
Glennallen Diesel Plant (GDP)18,499,829 19%2,499,829 3%(16,000,000)
Valdez Diesel Plant (VDP)2,000,000 2%2,000,000 2%-
Cogen 26,299,200 27%26,299,200 27%-
Total Generation 97,265,573 100%97,265,573 100%-
Section 2 Gallons of fuel
Budgeted
Gallons
kWh/gallon
Efficiency
Projected
Gallons Variance
GDP Gallons 1,321,416 14.00 178,559 (1,142,857)
VDP Gallons 145,985 13.70 145,985 -
Cogen Gallons 2,827,871 9.30 2,827,871 -
Total gallons 4,295,273 3,152,416 (1,142,857)
Section 3 Costs Cost by Plant NOTES Cost by Plant NOTES Variance
Solomon Gulch 4,541,989 9¢ per kWH 4,541,989 9¢ per kWH -
Allison Creek - 15.93¢ per kWh 2,548,800 15.93¢ per kWh 2,548,800
GDP 4,638,171 $3.51 per gal 626,743 $3.51 per gal (4,011,429)
VDP 512,409 $3.51 per gal 512,409 $3.51 per gal -
Cogen 8,257,383 $2.92 per gal 8,257,383 $2.92 per gal -
Total Fuel & Hydro Costs 17,949,952$ 16,487,324$ (1,462,629)$
Fuel cost per gallon based on $110/barrel
Budget 2011
Before Allison Creek
Projected
After Allison Creek
Attachmend D: Financial backup page 4
Cost Benefit Analysis Detail
Project Benefit / Cost Ratio
Gallons 1,142,857
Fuel Inflation 2%
Assumes no growth
A B A-B=C C
Year Project Life
Cost per
gallon of
Diesel Fuel Savings
16 million
kwh's at 15.93¢Savings Accum Savings
2011 3.51$
2012 3.58$
2013 3.65$
2014 3.72$
2015 1 3.80$ 4,342,100 2,548,800 1,793,300
2016 2 3.88$ 4,428,941 2,548,800 1,880,141 3,673,442
2017 3 3.95$ 4,517,520 2,548,800 1,968,720 5,642,162
2018 4 4.03$ 4,607,871 2,548,800 2,059,071 7,701,232
2019 5 4.11$ 4,700,028 2,548,800 2,151,228 9,852,460
2020 6 4.19$ 4,794,028 2,548,800 2,245,228 12,097,689
2021 7 4.28$ 4,889,909 2,548,800 2,341,109 14,438,798
2022 8 4.36$ 4,987,707 2,548,800 2,438,907 16,877,705
2023 9 4.45$ 5,087,461 2,548,800 2,538,661 19,416,366
2024 10 4.54$ 5,189,211 2,548,800 2,640,411 22,056,777
2025 11 4.63$ 5,292,995 2,548,800 2,744,195 24,800,972
2026 12 4.72$ 5,398,855 2,548,800 2,850,055 27,651,026
2027 13 4.82$ 5,506,832 2,548,800 2,958,032 30,609,058
2028 14 4.91$ 5,616,968 2,548,800 3,068,168 33,677,227
2029 15 5.01$ 5,729,308 2,548,800 3,180,508 36,857,734
2030 16 5.11$ 5,843,894 2,548,800 3,295,094 40,152,828
2031 17 5.22$ 5,960,772 2,548,800 3,411,972 43,564,800
2032 18 5.32$ 6,079,987 2,548,800 3,531,187 47,095,987
2033 19 5.43$ 6,201,587 2,548,800 3,652,787 50,748,774
2034 20 5.53$ 6,325,619 2,548,800 3,776,819 54,525,593
2035 21 5.65$ 6,452,131 2,548,800 3,903,331 58,428,924
2036 22 5.76$ 6,581,174 2,548,800 4,032,374 62,461,298
2037 23 5.87$ 6,712,797 2,548,800 4,163,997 66,625,295
2038 24 5.99$ 6,847,053 2,548,800 4,298,253 70,923,549
2039 25 6.11$ 6,983,994 2,548,800 4,435,194 75,358,743
2040 26 6.23$ 7,123,674 2,548,800 4,574,874 79,933,617
2041 27 6.36$ 7,266,148 2,548,800 4,717,348 84,650,965
2042 28 6.49$ 7,411,471 2,548,800 4,862,671 89,513,635
2043 29 6.61$ 7,559,700 2,548,800 5,010,900 94,524,535
2044 30 6.75$ 7,710,894 2,548,800 5,162,094 99,686,629
176,150,629$ 76,464,000$ 99,686,629$
Estimated Cost of Construction 38,804,000$
Project benefit / cost ratio 2.57
Attachmend D: Financial backup page 5
Copper Valley Electric AssociationStrategic Issues Paper 2011
Dear Member,
February 2011
In 2006, in an effort to better communicate with members, Copper Valley Electric
Association published a Strategic Issues Discussion Paper to bring you up to speed
on some of the difficult issues facing CVEA. Since then we’ve learned a lot, made a
lot of changes, and celebrated some accomplishments; however, CVEA continues to
face many difficult issues and challenges. This paper, CVEA Strategic Issues Paper
2011, is intended to provide you with updated information on projects we’ve been
working on, issues that we face, and opportunities we are evaluating.
With a recent increase in load, CVEA now generates 50 percent of its annual elec-
tricity requirements from fossil fuel plants and, as a consequence, the cost of power
members pay on their electric bill remains high. For this reason, CVEA is working
toward its vision to reduce or eliminate our dependence on fossil fuel and stabilize
the Cooperative’s cost of generation with regional, sustainable resources.
To accomplish this task, a substantial amount of the Co-op’s time and resources are
spent looking at alternative ways to generate electricity. CVEA believes that hydro-
power is the most viable and cost effective alternative to fossil fuel and has been
studying the hydroelectric potential of the Allison and Silver Lake resources. More
about those efforts can be found in the body of this report. While we are focused
on the development of hydroelectricity, CVEA is also investigating wind, and learn-
ing more about other potential local resources including tidal, geothermal, and bio-
mass technologies.
Providing safe, reliable electric service remains the core of CVEA’s mission. While
there are many outages that are out of CVEA’s control, the Co-op’s effort to improve
system reliability is ongoing. Several major projects that addressed system reli-
ability, such as the Valdez Transformer Replacement, the Glennallen Diesel Plant
Upgrade, and the Solomon Gulch Overhaul, to name a few, were completed in
2010. Additional projects are slated for 2011. One major reliability issue is the ava-
lanche problem in Thompson Pass. Solving this ongoing problem is a high priority
for CVEA.
Page 1
External forces such as environmental and regulatory requirements are changing
the way CVEA does business. National environmental policy continues to drive
efforts to monitor, control, and reduce emissions from the Co-op’s three thermal
power plants. Despite CVEA’s outstanding record of staying under emissions lim-
its, CVEA will need to make adjustments to meet new and more stringent require-
ments, and these adjustments will come with a significant cost.
It is our goal to provide CVEA members with a complete picture of the major issues
and opportunities facing their Co-op. To accomplish this task, this paper is broken
into six separate sections:
(1) Cost of Power and Financial Matters
(2) Power Supply Planning - Major Projects
(3) Alternative Energy Opportunities
(4) Keeping the Lights On
(5) Beyond Our Borders
(6) Community Foundation
This paper contains a lot of information, yet it is quite probable that it leaves many
of your questions unanswered. We want to answer those questions. Please plan to
attend the annual meeting to give us that opportunity and to hear updates on some
of the subjects addressed in this paper. The Annual Meeting of Members is sched-
uled for Tuesday, April 12, 2011, in the Copper Basin and Thursday, April 14, 2011,
in Valdez. If you don’t wish to wait for the Annual Meeting, please direct your
comments or questions to Sharon Crisp, Manager of Member Services, at 822-5506,
835-7005, or email crisp@cvea.org.
We hope you find the CVEA Strategic Issues Paper 2011 helpful in updating you on
current issues facing CVEA, and we look forward to your feedback.
Sincerely,
Travis Million Robert A. Wilkinson
President, Board of Directors Chief Executive Officer
Page 2
Table of Contents
Page
Cost of Power and Financial Matters
Cost of Power …………………………………………….. 4
Heat Revenue ……………………………………………... 5
Rate Study ………………………………………………… 6
Financial Status …………………………………………… 6
Environmental & Regulatory Issues …….……………….. 7
Power Supply Planning - Major Projects
Allison Lake ……………………………………………….. 8
Silver Lake ………………………………………………… 10
Alyeska ……………………………………………………. 12
Alternative Energy Opportunities
Wind ………………………………………………………. 12
Tidal ………………………………………………………. 13
Geothermal ………………………………………………... 13
Biomass …………………………………………………… 14
Emerging Technology …………………………………….. 14
Keeping the Lights On
Outages ……………………………………………………. 15
Thompson Pass ……………………………………………. 17
Permafrost …………………………………………………. 17
Solomon Gulch ……………………………………………. 18
Glennallen Diesel Plant ………………………………… 19
R&R Fund ………………………………………………… 20
Beyond Our Borders
State Energy Policy ………………………………………. 21
Funding for Capital Projects……………………………… 21
CVEA Community Foundation …………………………….. 22
www.cvea.org
Copper Basin (907) 822-3211 Valdez (907) 835-4301
Page 3
Cost of Power and Financial Matters
Cost of Power
Power is generated from several sources: the Solomon Gulch hydroelectric facil-
ity (50 percent), the Cogeneration Project (25 percent), and the diesel plants in
Glennallen and Valdez (25 percent).
The Cost of Power (previously known as the Fuel & Purchased Power Charge -
FPPC) is a separate line item on the monthly bill to collect the amount CVEA pays
for fuel to generate a kilowatt-hour and for the cost of Solomon Gulch. The Cost of
Power is revised monthly to reflect the changes in these costs.
The fuel cost we
charge you is a direct
pass through from
our fuel supplier.
CVEA does not
mark up the cost of
fuel. The cost per
kWh for diesel fuel
follows the same
trend as Alaska
North Slope crude
oil, as seen on the
charts to the right.
At $80 a barrel of oil,
diesel fuel is roughly
21 cents per kWh.
This compares to
the Solomon Gulch
hydro at 6.8 cents.
Depending on the
generation mix of
power for a par-
ticular month, the
blended Cost of
Power can vary
from 9-20 cents per
kWh. As fuel costs
increase, so does the
Cost of Power.
Page 4
$60
$80
$100
$120
$140
$160
CostperBarrelAlaskaNorthSlopeCrudeOil
Jan.2005ͲJan.2011
$0
$20
$40
$60
JanuaryͲ05AprilͲ05JulyͲ05OctoberͲ…JanuaryͲ06AprilͲ06JulyͲ06OctoberͲ…JanuaryͲ07AprilͲ07JulyͲ07OctoberͲ…JanuaryͲ08AprilͲ08JulyͲ08OctoberͲ…JanuaryͲ09AprilͲ09JulyͲ09OctoberͲ…JanuaryͲ10AprilͲ10JulyͲ10OctoberͲ…JanuaryͲ11$0.12
$0.15
$0.18
$0.21
$0.24
$0.27
$0.30
$0.33
CostperkWhDieselperkWh
Jan.2005ͲJan.2011
$0.00
$0.03
$0.06
$0.09
JanuaryͲ05AprilͲ05JulyͲ05OctoberͲ05JanuaryͲ06AprilͲ06JulyͲ06OctoberͲ06JanuaryͲ07AprilͲ07JulyͲ07OctoberͲ07JanuaryͲ08AprilͲ08JulyͲ08OctoberͲ08JanuaryͲ09AprilͲ09JulyͲ09OctoberͲ09JanuaryͲ10AprilͲ10JulyͲ10OctoberͲ10JanuaryͲ11DieselperkWh Linear(DieselperkWh)
CVEA charges 6.8 cents per kWh for Solomon Gulch power, which is the same as
we paid to the Four Dam Pool when they owned the project. The cost charged for
Solomon Gulch power has not changed since 1998.
In 2010 CVEA sold 76 million kilowatt-hours of electricity. With the additional
load for the Petro Star Clean Fuels Project, CVEA is projecting to sell approximately
86 million kWhs for 2011. This increased load, and for that matter any increased
load, will impact the Cost of Power since Solomon Gulch is fully utilized. That
means any increased energy sales will be served with a fossil fuel resource.
The chart to the right com-
pares the cost per kWh
of diesel to the Cost of
Power. The blue section
of the chart is the cost per
kWh charged to mem-
bers through the Cost of
Power. The difference (in
red) represents the benefit
of the lower cost per kWh
for Solomon Gulch and
any heat revenue money
used to reduce the Cost of
Power.
CVEA has no control over
the price of oil. As you can see from the graphs, the Cost of Power fluctuates with
the price of a barrel of oil.
Heat Revenue
When the Cogeneration Project was commissioned in 2000, CVEA began to col-
lect a new source of revenue in the form of exhaust gas (heat) sold to the Petro Star
Refinery. The price Petro Star pays for heat revenue, like fuel, changes with the
price of oil.
When heat revenues have been high, CVEA has offset high fuel costs through vari-
ous fuel credit programs.
CVEA has collected nearly $19 million from Petro Star in heat revenue since 2000.
These dollars have been used for the following purposes:
- $9 million to fund operations and capital projects
- $7 million in fuel credits to offset the high cost of fuel
- $3 million in capital credits paid to members
Page 5
$0.12
$0.15
$0.18
$0.21
$0.24
$0.27
$0.30
$0.33
CostperkWhDieselvs.CostofPower
(perkWh)
$0.00
$0.03
$0.06
$0.09
JanuaryͲ05AprilͲ05JulyͲ05OctoberͲ05JanuaryͲ06AprilͲ06JulyͲ06OctoberͲ06JanuaryͲ07AprilͲ07JulyͲ07OctoberͲ07JanuaryͲ08AprilͲ08JulyͲ08OctoberͲ08JanuaryͲ09AprilͲ09JulyͲ09OctoberͲ09JanuaryͲ10AprilͲ10JulyͲ10OctoberͲ10JanuaryͲ11CostofPower(FPPC)DieselperkWh
Heat revenue is a critical part of CVEA’s finances and the Co-op relies on these
dollars to pay operating expenses. To illustrate the importance of these revenues
to CVEA’s financial well being, we only have to look as far back as December 2008
when a fire shut down the refinery and shut off heat revenues for ten months.
Overnight, CVEA margins went from a budgeted plus $950,000 to a minus
$820,000. Addressing this reliance on one revenue source is a priority for CVEA in
2011 as we move forward with conducting a rate study.
Rate Study
A rate study is a multi-step process used to determine what rates should be charged
for energy sales and tariffed services. It has been 13 years since CVEA last con-
ducted a rate study. The study completed in 1998 resulted in an average system
base rate decrease of 7.3 percent. In the intervening 13 year period, CVEA has sus-
tained that base rate decrease and only adjusted the Cost of Power portion of the
rate based on fluctuations in the price of fuel.
Since 1998 the costs of doing business has increased with inflation along with addi-
tional costs for environmental regulation. During this same period CVEA system
energy sales have not increased (and in fact have declined). As a consequence these
two events have resulted in negative operating margins for many years. Put another
way, CVEA’s expenses to operate and maintain the core business of producing and
selling electricity are greater than the electric revenues it collects to pay for those
core expenses.
Most utility companies contract an objective and unbiased third-party consultant
to conduct rate studies, CVEA is no exception. Following a competitive process in
2007, CVEA selected D. Hittle & Associates to conduct a rate study for the Co-op.
Work was done in 2007 and 2008; however, the study was put on hold pending the
acquisition of Solomon Gulch and the completion of Petro Star’s clean fuels project.
Both events have since come to fruition, and it is now time to resume the rate study
project. CVEA will provide several opportunities for members to be involved as the
project moves forward. Public meetings will occur in both districts to hear member
comments and questions.
Financial Status
CVEA is required to meet certain financial ratios to ensure the financial health of
the Co-op. By updating the rate study in 2011 and lessening the dependence on
heat revenue to pay operating expenses, CVEA will be in a stronger financial posi-
tion which is crucial to move important projects like Allison Creek (described on
page 8) forward. In October 2010 the CVEA Board of Directors approved a five
percent capital credit retirement. Checks were mailed in January 2011 and totaled
$629,000. This is one of the many benefits of belonging to a cooperative.
Page 6
Environmental & Regulatory Issues
The Environmental Protection Agency (EPA) is constantly changing pollution stan-
dards. Recent changes will have a significant economic impact on the cost of elec-
tricity. EPA’s most recent change will require CVEA to reduce Carbon Monoxide
emissions by 70 percent and will require CVEA to convert our diesel fuel to ultra
low sulfur diesel fuel. These changes involve hundreds of thousands of additional
dollars to make the same amount of electricity we are producing today. In addition,
this new requirement changes the way in which we measure and monitor emissions.
Rather than testing our emissions monthly, we will need to monitor our emissions
continuously, 24 hours a day.
Another EPA change requires CVEA to begin measuring our production of Carbon
Dioxide. If you remember from biology class, all animals exhale Carbon Dioxide.
It is a naturally occurring gas that is not hazardous to humans or animals. In fact,
Carbon Dioxide is essential for plants to live and breathe so it is an essential gas to
the environment. It is also at the center of the global warming debate. Since there
is a belief that global warming is caused by upper atmosphere ozone depletion,
EPA has decided that it wants to control all ozone depleting gases known as Green
House Gases (GHG). Carbon Dioxide is listed as a GHG under EPA’s new GHG
regulations. This means that starting in January 2011, CVEA will have to report
Carbon Dioxide production to EPA. There is currently no fee charged to CVEA
for the production of Carbon Dioxide but that could change given EPA’s earlier
attempts to pass Cap and Trade regulations. If EPA passes new GHG standards for
Carbon Dioxide, we will most probably have fees levied on us that once again raise
the cost to produce electricity for our Co-op.
EPA justifies constant changes in air emission standards using a precedent they set
years ago. EPA is given authority to require the Best Available Control Technology
(BACT) to any organization with a Title V Permit. CVEA has three Title V Permits
so EPA has authority over our emissions of the Glennallen Diesel Plant, Valdez
Diesel Plant and the Cogen Plant. Since technology changes constantly through
time, EPA can force CVEA to adopt the BACT standard as it becomes available
(even if we flawlessly meet all our Title V permit standards as written today).
Because of the methodology in place, EPA will continue to change emission stan-
dards and each time, the cost to produce electricity is likely to go up.
For new power plants, emissions get even more difficult to manage. If CVEA were
to add a new diesel generator raising our emissions higher than our Title V permits
allow, then we fall under Maximum Achievable Control Technology (MACT). This
EPA standard is normally very hard to meet since it involves only the highest con-
trol technology on the market. This was one of the consequences we faced when
we added Unit 9 to the Glennallen Diesel Plant. This new unit was required
Page 7
to operate with the highest emission standards and combust ultra low sulfur die-
sel despite no other unit using ULSD at Glennallen. That, in turn, required a new
fuel tank to hold the ULSD and higher cost for CVEA to get this more expensive
fuel. If we planned to add any new additions to CVEA today, the MACT standards
are even more stringent than installing Unit 9 in 2010. This would be extremely
important to consider if CVEA were to take part in a biomass project or other com-
bustion type power generators.
To combat the ever increasing complexities in environmental changes, CVEA hired
an engineer with expertise in regulatory compliance. This person has the role of
overseeing air quality, spill control, permitting, environmental compliance, license
renewal, Federal Energy Regulatory Commission (FERC) regulations and project
management. Most importantly, the position is intended to take a proactive stance
to changing standards among regulatory agencies.
CVEA’s response to these changing standards is to use every means available to
inform Legislators, Congressional Members, FERC, and EPA Management of the
impact from these changing standards. We have taken an aggressive approach to
learn about changing standards before they are approved as regulation and provide
statements about their impact to our members. CVEA is actively involved in the
Environmental Regulations Committee for the Alaska Power Association (APA).
Our involvement has resulted in APA-sponsored resolutions to curb some of these
costly EPA standard changes.
Power Supply Planning - Major Projects
Allison Lake
Consistent with the Vision of CVEA to significantly reduce or eliminate our depen-
dence on fossil fuel for power generation, we have aggressively pursued the hydro-
electric potential of Allison Lake.
In 2008, FERC granted CVEA a three-year preliminary permit to study the hydro-
power potential of Allison Lake. Prior to receiving the permit, CVEA initiated pre-
liminary engineering and environmental studies to complete a review of three proj-
ect alternatives.
In May 2009, the CVEA Board of Directors selected a preferred alternative which
involved constructing an earth filled dam at the lake outlet with conveyance of
water through a 9,000 foot surface and buried penstock to a four megawatt power
house near tidewater.
This alternative (Alt. 3C) became the focus of ongoing field studies and assessments
that included environmental and geotechnical investigations, avalanche hazard
assessments, and reconnaissance of a proposed project access road.
Page 8
In April 2010, a Final Feasibility Report was presented to the Board of Directors.
While it concluded that Alt. 3C was environmentally net positive and technically
feasible, it also confirmed many serious challenges including risks associated with
seepage under or around the dam structure, access to the project for construction
and maintenance, avalanche risk to personnel and project facilities, and significant
ecological release requirements.
The risk of seepage could not be fully evaluated prior to project completion. This
unacceptable risk could reduce the amount of water available for power genera-
tion. Due to site conditions, access to the project would be difficult and expensive.
Extensive road construction and maintenance to the dam would be cost prohibitive,
so no permanent road access would be maintained after project construction. This
limits access for operations, maintenance, and emergencies to air access only.
Avalanche risk to life and project property during certain times of the year is severe.
While this risk can be mitigated and managed, it may increase project costs. In
addition, fish issues remain an ongoing concern. Resident Dolly Varden, found
above the proposed power house location, would have to be addressed. To address
fish and habitat concerns in-stream ecological flow requirements would likely have
to be in the range of three-five cubic feet per second which would significantly
reduce the amount of water available for power generation. Operating require-
ments to mitigate fish and habitat issues could further interfere with efficient proj-
ect operations.
Finally, project economics were not seen as favorable. The cost of Alt. 3C in 2010
dollars is $70 million, not accounting for potential cost overruns and inflation.
While grant funding would improve the project economics, there is a lack of state
and federal funding available. At the federal level, hydro storage projects are not
defined as renewable energy for purposes of qualifying for below market federal
financing programs. At $70 million, with conventional financing, the cost to the
member would be 26 cents/kWh.
Based on the foregoing challenges, the Board of Directors undertook a re-examina-
tion of all potential development alternatives and determined to set aside Alt. 3C in
favor of a run of the river (ROR) alternative (Alternative 4).
In simple terms the ROR project will divert water from Allison Creek via a diver-
sion structure, at elevation 1,200 feet, into a penstock which will carry water to a
power house near tidewater. The ROR alternative costs $39 million and produces
an equivalent amount of energy to Alt. 3C.
Eliminating the earth filled dam reduces construction costs, lessens project access
challenges, eliminates the seepage and liquefaction risks and significantly reduces
the environmental impacts.
Page 9
The first year cost of power is estimated to be 21 cents/kWh, which is competitive
with $80/barrel oil. The ROR project is considered to be renewable for certain fed-
eral financing programs, which could serve to reduce the project cost per kWh.
One obvious downside of this alternative is that it does not produce energy in the
winter months and, as such, will not eliminate that need for diesel power generation,
but it does reduce our diesel dependence by over a million gallons per year.
The study and evaluation of the hydropower potential of the Allison Lake water-
shed has been funded by a renewable energy fund matching grant of $2.8 million
(CVEA 20 percent) and a direct state grant of $1.0 million. CVEA expects to file
the ROR development license application with FERC by September 2011.
Silver Lake
In additional efforts to evaluate opportunities to lessen the burden of fossil fuel on
electric rates, CVEA commissioned a Pre-Feasibility Study to evaluate Silver Lake as
a hydroelectric resource.
Silver Lake is located on Galena Bay approximately 15 miles southwest of Valdez.
In 1915 the US Geological Survey identified Silver Lake as the most promising
hydroelectric site on Prince William Sound. The hydroelectric potential of this
Page 10
resource had previously been
studied in 1982 and 1992 by
the State of Alaska. The lake
is approximately 3 miles long,
has a normal surface eleva-
tion of 306 feet, and a surface
area of 978 acres. The total
drainage basin is approxi-
mately 24.5 square miles
which is four times larger
than Solomon Gulch. The
lake discharges into the Duck
River through a narrow gorge
and falls 306 feet over 1-1/2
miles to the lagoon on
Galena Bay. By comparison Solomon Gulch Lake crests at elevation 685 feet and
Allison Lake crests at elevation 1,345 feet.
The configuration reviewed in the CVEA Pre-Feasibility Study included a 120 foot
high concrete dam, an intake at the existing lake level at elevation 306 feet, a 6,000-
foot long 9-foot diameter steel penstock, a steel surge tower, a 60 x 80 foot 15-mega-
watt power house at elevation 65 feet, a switchyard, approximately 25 miles of 115
kV overhead transmission line, a dock, access roads, and operator housing located
at Galena Bay.
The study concluded that while the project is technically feasible it does have chal-
lenging land usage and environmental issues. The land under and surrounding the
lake is owned by Chugach Alaska Corporation. The land where much of the pen-
stock and the proposed power house would be located, is owned by the Tatitlek
Corporation. In particular there may be some difficulty acquiring land use ease-
ments from the US Forest Service for the transmission line due to the scenic nature
of the surrounding area.
In addition, the steps required, and the probability for success, to obtain clearance
to construct and operate those portions of the project that are within the 1992
Conservation Easement (negotiated between the Exxon Valdez Oil Spill Trustee
Council and the Tatitlek Corporation) cannot be determined at this time.
Most importantly, the study concluded there is a wide variation in past and present
cost and energy estimates. The current effort indicated the project has an annual
energy potential of 38 million kilowatt-hours, but there is a gap between this
amount and past studies. Additional effort could be expended to narrow the gaps,
but with a projected capital cost of $187 million (2010 dollars) and a first year Cost
of Power at 41 cents per kWh, the CVEA Board of Directors determined not to fur-
ther pursue the Silver Lake Project at the present time.
Page 11
Silver Lake
Alyeska
Conversations between Alyeska and CVEA have taken place from time to time
about CVEA providing electric service to the Valdez Marine Terminal (VMT). The
VMT is not connected to the CVEA electric system grid. Serving an industrial load
of this size would require construction of new generating facilities and, most likely,
would be reciprocating diesel fired units.
Alternative Energy Opportunities
Wind
In 2010, a thorough review of possible locations
for wind turbines in the Valdez District was con-
ducted. CVEA staff identified two locations where
a wind resource study could be initiated. CVEA
presented the two options to the Valdez Mayor’s
Energy Task Force in September 2010 and was
asked to focus on one of the two locations, Mile 12
of the Richardson Highway.
CVEA was awarded a $100,000 grant by the State
of Alaska in the 2011 Capital Budget for the pur-
chase and installation of two meteorological (MET)
towers.
CVEA applied for permits in October 2010 to
install a MET tower near the Alpine Woods
Subdivision in order to collect wind data in the
area. CVEA expects to install one MET tower in
the Alpine Woods area as soon as possible after break-up. CVEA is also examining
possible locations in the Copper Basin to install the second MET tower.
The MET towers comprise the first step in determining the feasibility of a wind
project for a particular location.
The wind energy field is constantly undergoing technology improvements with cur-
rent prototype projects experimenting with harnessing ‘dirty’ wind. Dirty wind is
classified as the locations where the wind is not consistent in speed or direction and
may contain negative effect winds that put undue stress on the mechanical compo-
nents of the turbine. CVEA will continue to monitor the development of improved
technology but is only interested in deploying proven technology to capture wind
energy.
Page 12
Example of a MET Tower
As a final note, wind energy will not negate the need for thermal (fuel-based) gen-
eration without significant breakthroughs in energy storage devices. Due to the
very nature of wind being unpredictable and undependable, only a small percentage
of wind energy can be put into a small low inertia system like CVEA. The term for
this limitation is called maximum wind penetration and the input load generally
cannot exceed ten percent of the total system load.
Tidal
As the name implies, tidal energy is the potential energy that could be obtained
from changing sea levels or tidal flow. Using current technology, potential energy
of moving water can be converted to electric energy by one of two basic meth-
ods. The first method is called a tidal barrage. The tidal barrage is basically a dam
across an entire tidal estuary that captures energy through the difference in height
(head) of high and low tides. During the period of changing tides, the water flow
is forced through a small section of the barrage and turns a turbine very similar to
current hydroelectric turbines. This means that the turbine output is limited in the
duration that it can produce energy but, due to our scientific understanding of tidal
flows, is very predictable. Due to ecological and ocean vessel conflicts, CVEA does
not believe the tidal barrage is a viable option to pursue in our region.
The other basic method of converting tidal energy to electrical energy is called tidal
flow or tidal stream generator. The tidal flow shares many characteristics with the
concept of wind turbines but in a subsea environment. This method is gaining
popularity over the tidal barrage as it is expected to eventually be much lower in
cost and ecological impact compared to the tidal barrage. This technology is prom-
ising and will be periodically monitored to evaluate whether it has advanced to the
stage that it would be prudent for CVEA to conduct a feasibility study.
Geothermal
Geothermal energy is simply thermal energy created and captured within the Earth.
The preliminary field studies for geothermal exploration are capitally intensive and
require deep drilling to determine subsurface liquid temperatures.
At least one Alaskan utility has declared bankruptcy while pursuing potential geo-
thermal resources in an effort to reduce their dependence on fossil fuel generation.
Deep thermal wells require ‘oil and gas drilling’ protocols that are not conducive to
geothermal wells, these protocols played a large part in the recent Alaskan utility
bankruptcy.
The closest, most well known potential resources for geothermal energy for Valdez
and the Copper Basin are located in the Klawasi Hot Springs. There are two pos-
sible thermal well locations in this area that were identified by the state of Alaska.
Page 13
According to a state of Alaska geothermal resource map, the two thermal wells have
been identified as Upper and Lower Klawasi, have surface temperatures of 17ºC and
20ºC respectively (63ºF and 68ºF). A typical utility-scale geothermal generation
plant requires a steam temperature of at least 150ºC (302ºF) to turn the turbine.
With newer technologies, geothermal generation plants have been implemented
that require as little as 57ºC (135ºF) liquid temperature to turn the turbines.
The Klawasi thermal wells are located on native corporation land but are surround-
ed by the Wrangell St. Elias National Park and Preserve, which significantly limits
the ability to develop those wells as potential resources. CVEA has also been told of
a potential resource within the Copper Basin, not inside or surrounded by the Park,
which is being pursued to determine if a potentially viable resource is available.
Biomass
A potential renewable resource in the Copper Basin is wood fueled biomass genera-
tion. This could be either through a cogeneration-type operation that utilizes waste
heat from a wood product manufacturing operation or by directly utilizing wood
products in a generation plant. CVEA has been contacted by a local native corpora-
tion with significant land and timber resources that is interested in pursuing a rela-
tionship to study the economic case of a wood fueled biomass plant.
Emerging EPA regulations may require that BACT standards, mentioned earlier, be
utilized in all aspects of a generation plant. Those standards would have significant
impacts on the economic viability of a biomass plant. Even without the emerging
EPA regulations, there are significant air quality issues that must be addressed when
licensing a biomass plant.
Emerging Technology
There are many technologies that are on the cusp of becoming the ‘next best thing’
in producing energy. Our responsibility, to the member-owners of CVEA, is to
make sure each dollar is spent wisely. CVEA does not have the resources to experi-
ment on emerging technologies. We must use the members’ money on resources
that will provide reliable and predictable energy in a cost effective manner.
Above and beyond technologies already discussed, we are monitoring the progress
and costs of in-stream hydroelectric generation and generator efficiency technology.
There are a couple projects in Alaska that harness the energy of streams and rivers,
but currently the cost of the energy is not viable without research and grant-based
funding. This technology would only provide energy in non-winter months and is
not considered a year-round solution.
Page 14
With regards to generator efficiency technology, whether it is for our existing
Solomon Gulch hydroelectric turbines or our diesel-fired units, every percentage
increase in efficiency we can achieve from each unit is that much less fuel (diesel
or water) that is used to convert to electricity. The generator efficiency field is con-
stantly changing and CVEA monitors and calculates the cost-benefit analysis to
determine when it is the appropriate time to use the members’ resources to upgrade
a unit.
Keeping the Lights On
Outages
Keeping the lights on in the
Copper Valley system can be
a delicate balancing act, and it
isn’t easy when we experience
inclement weather to include
extreme snowfall, subzero
temperatures, hurricane force
winds, blowing snow, rime ice
build-up, and snow and ice
packed roads; not to mention
an avalanche now and again.
The reality is there are many
obstacles that keep the lights
from staying on. It can be as
simple as a tree or it can be very complicated where, on some occasions,
even the experts might not know why the lights go out.
A major cause of CVEA outages has to do with trees falling into the line, either
through natural decay, natural growth, wind, heavy snow, ice loading, or human
caused events. CVEA clears and maintains portions of our dedicated rights of way,
usually within 15 to 25 feet from the centerline, but due to private, state, and federal
property limitations, we can only maintain vegetation in our dedicated easement or
right-of-way permit.
A second major cause of outages is animals and birds. It doesn’t take much for
small creatures to cause big problems. Every time CVEA has an animal caused
event on our system, we consider what might be done to ensure that particular sec-
tion will not have the same problem again. We install a variety of devices including
squirrel guards, insulated conductor covers, anti perching devices, and bird flappers
(that provide a visual indicator) to prevent animal caused outages.
Page 15
Lines near Eureka loaded with heavy snow and ice
The weather in our service area is not always conducive to the reliable transmission
and distribution of electricity. While our poles and lines are designed to withstand
extreme weather, there are times when Mother Nature prevails via extreme wind,
snow, and ice caused outages.
In addition to outages beyond CVEA’s control, we also have scheduled power outag-
es. These are not typically system wide, but can affect large sections of our service
territory. While inconvenient, scheduled outages are necessary for the safety
of our employees and equipment when making repairs or upgrades to the system.
Measures are taken to notify affected members of upcoming scheduled outages.
CVEA maintains a list that includes people who use life support equipment that
requires electricity. The people on the list are notified of a scheduled power outage
so they can make alternate arrangements. If you or someone you know fits into this
category, please notify CVEA.
While we cannot guarantee 100 percent reliable power, we can guarantee that we
are doing everything possible to deliver your power through safe, reliable, cost-
effective means. In the electric utility industry, reliability refers to a utility’s ability
to provide electricity to its consumers. To ensure reliability, CVEA strives to keep
electrical outages to a minimum. CVEA’s average over the last five years is 6 outage
hours per consumer; eliminating extreme storms drops that average to 5.15 hours,
eliminating other major events (i.e., the raven outages in August 2009), drops the
average to 3.97 outage hours per consumer. Reliability is calculated as a percentage
of the total hours in a year that the power is on, which in this case is 99.95 percent
of the time (8,754/8,760=99.95%). Like a lot of things in the electric business, this
is an average. You may have experienced more or less hours out than the statistical
average.
We know many members are interested in outage statistics; who was affected,
how long they lasted, and what caused them. CVEA has recently developed an
enhanced internal and external Outage Communications Plan, and we pledge to do
a better job communicating outage information through Facebook and public ser-
vice announcements on local radio stations.
If you experience an outage, make sure you have not blown a fuse or tripped a
circuit breaker, and then call CVEA during normal business hours at 822-3211 or
835-4301. After hours, call (866) 835-2832. This will help us determine the loca-
tion and possible cause of the outage.
Page 16
Thompson Pass
The transmission line that connects
the Copper Basin and Valdez has
severe avalanche risk, particularly in
Thompson Pass. The transmission line
is part of the Solomon Gulch project
and when CVEA acquired Solomon
Gulch from the Four Dam Pool in 2009
we acquired the transmission line as
well. As part of the transaction we also
received funds to address the avalanche
problem.
In 2010 CVEA dusted off a 2003
Four Dam Pool report which evalu-
ated options to address the risk and resumed the effort. That updated work is
nearly complete. Upon completion, a final option will be selected by the Board
of Directors and the process of communicating with permitting agencies and the
CVEA membership will begin.
Permafrost Impacts to Future Maintenance
Permafrost is soil remaining at or below the freezing point of water for two or more
consecutive years. The thin layer of organic material between the ground surface
and the permafrost is called the active layer. The annual freeze and thaw cycle of
the active layer creates stress upon structures constructed on or within the active
layer.
Page 17
Jacked Transmission
Structures
Work site after an avalanche in 2003
When the active layer thaws in the spring, CVEA’s poles, equipment foundations,
and underground lines can settle, sink into the ground, or shift in any direction;
even shift upwards, which is commonly referred to as jacking.
When the pole is pushed up, it becomes out of balance and more times than not
will tilt to one side or the other. Every year CVEA personnel perform multiple line
inspections identifying the poles or sections of line that are experiencing the most
significant jacking.
Due to the weight of structures and conductors, the transmission line structures are
the most vulnerable to jacking. The most cost-effective tried-and-true methodolo-
gy is to drive steel piles as deep as possible and attach the structure to the top of the
pile. The concept is to get the piling through the active layer into the permanently
frozen layer.
CVEA is exploring other cost-effec-
tive alternatives to mitigate permafrost
jacking such as pre-drilling pile holes to
attain greater depth and pre-treating the
piles with a polymer layer to minimize
the friction between the pile and the
earth. Another concept CVEA is evalu-
ating is to float the structures on the sur-
face of the ground to avoid the jacking
issue outright.
CVEA has installed several of these
floating structures on the distribution
system with a “bog shoe” that effectively
spreads the weight of the pole and conductors over a ground based support struc-
ture. This concept is being explored for transmission line structures in heavily sus-
ceptible permafrost jacking zones.
CVEA has experienced a higher incidence of foundation jacking on the distribution
and transmission systems and in the transmission substations in recent years. It is
anticipated this will be an ongoing maintenance problem for the Co-op.
Solomon Gulch Major Maintenance
The Solomon Gulch Hydro Plant has a 13-megawatt capacity which is capable of
producing 50,000 megawatt-hours of electricity annually. The power is produced
by two 6.5 megawatt turbines. Through a series of divestitures from the State of
Alaska and the Four Dam Power Pool Power Agency, Solomon Gulch is wholly
owned and operated by CVEA. The plant has been in service for 30 years without
major maintenance to its primary mechanical components.
Page 18
Example of a Bog Shoe structure
The performance of the hydro units is
carefully monitored, and in 2009 CVEA
experienced problems with the water
control gates on Unit 1. Careful study
of these events led to the conclusion that
major failures with the gates were likely
if the issue was not addressed. The deci-
sion was made to overhaul the unit and
beginning September 1, 2010, the com-
plete turbine was totally rebuilt to factory
specifications over a 60 day period.
During the overhaul project several prob-
lems were identified that would have lead
to progressive component failures, drastically reducing the reliability of the unit.
The benefits of the overhaul project were immediate and substantial. The project
reduced vibrations overall by 25 percent and increased the unit response time by 50
percent. Unit response time is very important when dealing with rapid load losses
or gains within the system as well as with conditions which could, or ultimately do,
lead to system outages. The overhaul has also improved the interactive capabilities
between the other generation plants which have led to a more stable system in
terms of frequency and load control. This, and many other projects performed in
the CVEA system, demonstrates the Co-op is dealing in a proactive, versus a reac-
tive, approach to improve our system. A proactive approach is always less costly
compared to reacting to equipment issues. This project and approach demonstrates
that CVEA is committed to maintaining and improving the reliability of our gen-
eration portfolio to provide a sustainable source of electricity for our Co-op.
Glennallen Diesel Plant Upgrade
A new diesel engine has recently
been added to the Glennallen Diesel
Plant. This new Electro Motive
Diesel (EMD) adds 2.865 megawatts
of capacity to the CVEA system
and will help mitigate the reliance
on older engines, particularly when
the transmission line is down and
cold weather conditions exist in
Glennallen.
The physical installation of the unit
started in September 2009 and was
completed in November 2010.
Page 19
Glennallen Diesel Plant-Unit 9
Electromotive Diesel 2865KW
Rotor clear of stator
The new EMD is more efficient than any other diesel unit in the CVEA system
and is in compliance with new air quality standards for 2013. The older units will
require modifications to their exhaust system to meet the compliance standards
while the EMD will not.
The project involved retiring two small obsolete Fairbanks Morse units, moving
Unit 8 from one end of the building to the other, building new foundations for the
EMD and Unit 8, and various other steps to install the radiator cooling system and
ancillary equipment. With this work complete the EMD was moved into the plant.
The project included significant structural additions, installation of major electrical
components and equipment, installation and programming of new control systems,
and updating and integration of existing control systems into the new plant config-
uration. In addition, significant piping upgrades were required to establish a com-
mon cooling loop for all the engines along with a new plant cooling system.
The vast majority of the work was accomplished using very dedicated plant opera-
tors who added quality, value and ownership to the project, and resulted in a better
product plus the added benefits of training the operators on the new plant systems
and components. This project is a win for the Co-op, will save the members money
over the long run, and will increase the reliability and capability of the CVEA sys-
tem.
The Glennallen Diesel Plant Upgrade Project cost $4.5 million and was funded with
a US Department of Energy grant of $1.9 million and a State of Alaska grant of $2.0
million. The balance of funding was provided by CVEA members.
R&R Fund
In 2009, when CVEA acquired Solomon Gulch from the Four Dam Pool Power
Agency, we negotiated a sum of money to fund future maintenance and upgrade
projects for the hydro and transmission systems. The amount of money received in
February 2009 was $16.6 million. Interest and contributions totaling $1.0 million
have since been added to the fund and $1.9 million has been expended, leaving a
balance at December 31, 2010, of $15.7 million.
The value of the R&R Fund is that major maintenance expended from the fund
does not otherwise have to be collected from electric rates. The largest expenditure
in 2010 was the overhaul of Unit 1 at $1.3 million. Major expenses planned for
2011 include the overhaul of Unit 2 to include replacing the runner, which is esti-
mated to cost $2.0 million.
The R&R Fund also includes some dollars for avalanche mitigation once a specific
project is identified.
Page 20
Beyond our Borders
State Energy Policy
In 2010 the 26th Alaska Legislature passed two bills important to electric utilities.
HB 306 declared a state energy policy which, among other things, declared the state
should receive 50 percent of its electrical generation from renewable and alterna-
tive energy sources. SB 220 put the meat on the bones of the energy policy bill by
addressing programs relating to energy efficiency, energy conservation, alternative
energy, and emerging technology. These ambitious bills received widespread sup-
port from the electric industry, conservation groups, municipal governments, and
consumer groups. As with many authorization bills there is much work to be done,
not the least of which is providing capital funding for projects. While the legislation
establishes intended funding vehicles for capital projects, funding was not provided.
Funding for Capital Projects
In 2008 the 25th Alaska Legislature passed HB 152 authorizing the Alaska Energy
Authority to distribute renewable energy grants to assist development of Alaska’s
vast renewable energy resources. In passing HB 152 it was the intent of the
Legislature that each year for the next five years the program would be funded at
$50,000,000 per year. Funding has fallen well short of the legislative goal and under
current AEA guidelines each project is limited to $8 million in funding.
CVEA has joined the APA in urging the Alaska Legislature to fulfill the policy com-
mitments it established in 2008 and 2010 by appropriating funding for deserving
energy projects.
The outlook for federal appropriations for energy projects is not good. All three
members of Alaska’s Congressional Delegation are supporting a ban on earmarks
and are not entertaining appropriation requests from constituents. CVEA is pursu-
ing efforts to redefine Alaska hydro projects as “renewable energy” so as to qualify
for certain federal programs including Clean Renewable Energy Bonds, a below
market interest rate bond.
CVEA will continue to seek both state and federal funding opportunities that could
lower the cost of energy of future generation projects.
Page 21
CVEA Community Foundation
To further our commitment
to the community, CVEA cre-
ated the CVEA Community
Foundation (CVEACF) in 2006.
Our hope is to build a sustain-
able nonprofit foundation that
promotes and sponsors the
community support activities of
CVEA, allowing us to do more
for the people we serve.
The mission of the Foundation
is to provide scholarships for
students and contributions to
educational, scientific, and char-
itable organizations in our com-
munities. Each year the Foundation provides $9,500 in educational scholarships to
graduating high school seniors and adults who are continuing their education. The
Foundation also provides a scholarship to one student in each district to fund their
participation in a youth leadership program that includes the Idaho Youth Rally and
the National Youth Tour.
Initial funding of the Foundation came from unclaimed capital credits which
escheated to CVEA. Now we’re looking to you; our members, our vendors, and
other public and private organizations, to help us make a difference in the lives of
our friends, neighbors, and communities.
CVEA encourages all members to consider rounding up their electric bill to the
nearest dollar amount. Participants who round up their bill contribute between
$.01 and $.99 monthly, an average of only $6 a year, to the CVEACF. Individually,
this is not a large number, but combined with other CVEA members, it will make
a big difference. If half of all CVEA members round up their bills each month, the
Foundation will bring in an amazing $10,000 each year.
Members can also make a one-time donation, make a monthly donation by adding
a specific amount to their CVEA electric bill, and even donate future capital credit
disbursements.
For information or to make a contribution to the CVEA Community Foundation,
stop by your local office or visit www.cvea.org.
Page 22
2010 Copper Basin Scholarship Winners
www.cvea.org