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Home My WebLink AboutWhitman Lake Grant Application5 Renewable Energy Fund Round 5 Grant Application AEA 12-001 Application Page 1 of 37 7/1/2011 Application Forms and Instructions The following forms and instructions are provided to assist you in preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at: http://www.akenergyauthority.org Grant Application Form GrantApp5.doc Application form in MS Word that includes an outline of information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required. Application Cost Worksheet Costworksheet 5.doc Summary of Cost information that should be addressed by applicants in preparing their application. Grant Budget Form GrantBudget5. doc A detailed grant budget that includes a breakdown of costs by milestone and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget Form Instructions GrantBudgetIn structions5.doc Instructions for completing the above grant budget form. Authorized Signers Form Authorized signers form5.doc Form indicating who is authorized to sign the grant, finance reports and progress reports and provides grantee information. • If you are applying for grants for more than one project, provide separate application forms for each project. • Multiple phases for the same project may be submitted as one application. • If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for completion of each phase. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. • If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. REMINDER: • Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority web site after final recommendations are made to the legislature. • In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information is to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 2 of 37 7/1//2011 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) City of Ketchikan dba Ketchikan Public Utilities Type of Entity: Municipal Utility Fiscal Year End: December Tax ID # 92-6000082 Tax Status: For-profit or X non-profit ( check one) Mailing Address 1065 Fair Street Ketchikan, AK 99901 Physical Address 1065 Fair Street Ketchikan, AK 99901 Telephone (907) 225-5505 Fax (907) 247-0755 Email jenniferh@city.ketchikan.ak.us 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Jennifer Holstrom Title Senior Project Engineer Mailing Address 2930 Tongass Avenue Ketchikan, AK 99901 Telephone (907) 228-4733 Fax (907) 247-0755 Email jenniferh@city.ketchikan.ak.us 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 X A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2. Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If the applicant is a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate Yes or No in the box ) Yes 1.2.3. As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement. Yes 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.) Yes 1.2.5 We intend to own and operate any project that may be constructed with grant funds for the benefit of the general public. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 3 of 37 7/1//2011 SECTION 2 – PROJECT SUMMARY This is intended to be no more than a 1-2 page overview of your project. 2.1 Project Title – (Provide a 4 to 5 word title for your project) Whitman Lake 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 Whitman Lake Project is located four miles east of Ketchikan, Alaska, within the Whitman Creek and Achilles Creek watersheds. (See Figure 2-1 on page 29.) As a hydroelectric project, it will benefit residents of the Ketchikan Gateway Borough and the municipalities connected by the Southeast Alaska Power Agency (SEAPA) transmission line. As a water supply system for the Southern Southeast Regional Aquaculture Association (SSRAA) Whitman Lake Hatchery, it will provide a significant economic benefit for the commercial fishing, seafood processing and sportfishing industries of the Southeast Alaska region. 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 Whitman Lake Project will install 4.6 MW of hydropower generating capacity at an existing dam, supporting near-term capacity demand increases in the Ketchikan area and displacing diesel generation as the existing Tyee Lake (SEAPA) resource becomes fully utilized. It will also replace the aging water supply system of the SSRAA Whitman Lake Hatchery, providing increased water quantity, reliability and redundancy to a facility that is critical to the region’s commercial fishing, seafood processing and sportfishing industries. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 4 of 37 7/1//2011 2.5 PROJECT BENEFIT Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel costs, lower energy costs, etc.) Ketchikan’s Next Renewable Resource Ketchikan Public Utilities’ (KPU’s) long-time mission has been to provide affordable renewable energy to the communities of Ketchikan and Saxman. With an average rainfall of over 150 inches, water is Ketchikan’s most abundant resource. The Ketchikan Lakes watershed was first developed for hydropower in 1903. As Ketchikan grew and demand increased, the Ketchikan Lakes hydroelectric project was expanded, and was followed by the Beaver Falls (1947), Silvis (1969) and Swan Lake (1984) projects. For many decades, hydropower supplied nearly all of Ketchikan’s electric needs. A new transmission line was completed in 2009 that connected Ketchikan to the Southeast Alaska Power Agency (SEAPA)-owned Tyee Lake project near Wrangell. The output of the Swan Lake and Tyee Lake projects are now shared among the communities of Ketchikan, Petersburg and Wrangell. However, SEAPA estimates that Tyee Lake energy will be fully utilized by 2015. This prediction was based on an assumed 5% load growth in the three communities. In June 2010, SEAPA estimated that Tyee Lake had only 31,400,000 kW -hr available for future load growth. While Ketchikan’s track record with hydropower is one of the longest in Alaska, we again find ourselves facing an impending energy shortfall. In 1997, anticipating this need for additional energy, the City of Ketchikan identified Whitman Lake as Ketchikan’s next source of renewable power and began the process of obtaining the required permits and licenses. On March 17, 2009, KPU was issued a license by the Federal Energy Regulatory Commission (FERC) to construct and operate the Whitman Lake Project. KPU must begin construction by February 2013 or surrender its FERC license. If the Whitman Lake Project is not constructed, it will be a significant lost opportunity for Southeast Alaska. There are no other projects that may be added to the SEAPA interconnected system that are licensed and as near to shovel-ready as the Whitman Lake Project. The environmental studies, permitting and licensing process for Whitman took 12 years. Even after identification of the next FERC jurisdictional resource, it will be at least ten years before it could be operational. Ketchikan’s and SEAPA’s available renewable energy resources will be exceeded before that time. While KPU fully supports the creation of an Integrated Resource Plan (IRP) for Southeast Alaska, Ketchikan cannot wait for completion of the IRP before moving ahead with construction of the Whitman Lake Project. If construction does not begin by February 2013, Ketchikan loses its FERC license, many years of planning, and a valuable renewable energy resource for Southeast Alaska. The alternative to construction of the Whitman Lake Project is increased operation of KPU’s diesel generators. Not only are the emissions harmful to the environment, but the cost of diesel generation is likely to remain high in comparison with hydroelectric generation. In addition, new National Emissions Standards for Hazardous Air Pollutants issued by the Environmental Protection Agency (EPA) in 2010 (40 CFR Part 63 Subpart ZZZZ) have the potential to greatly increase the cost of diesel generation. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 5 of 37 7/1//2011 Economic and Regional Benefits The Whitman Lake Project will help attract new economic development to Southeast Alaska, serving as an energy resource not only to Ketchikan, but to the other interconnected communities in Southeast Alaska. By displacing an estimated 1,100,000 gallons of diesel fuel per year, which equates to almost $4,000,000 per year at today’s price of $3.60 per gallon, it will improve the quality of life for Alaskans facing high energy costs from diesel generation. The Whitman Lake Project will provide increased capacity to support the estimated 3-4% load growth that Ketchikan is experiencing and will enhance electrical system stability. But, because of its unique connection to the Southern Southeast Regional Aquaculture Association (SSRAA) Whitman Lake Hatchery, the benefits of the Whitman Lake Project extend much farther. The Whitman Lake Hatchery is a major regional salmon production facility that also serves as a central incubation facility for other SSRA hatcheries. A not-for-profit corporation whose mission is to enhance regional common property salmon fisheries, SSRAA has a significant economic impact on Southern Southeast Alaska’s commercial fishing, seafood processing and sportfishing industries. According to a 2008 report by the McDowell Group, in 2007, the economic impacts of SSRAA operations and production were Total Output Employment Labor Income Commercial harvest of SSRAA salmon $8 million 110 $3.6 million Seafood processing of SSRAA salmon 30 million 215 4.9 million Sport harvest of SSRAA salmon 3 million 45 1.0 million SSRAA operations 5 million 50 1.9 million Total economic output from SSRAA activity $46 million 420 $11.5 million The Whitman Lake Hatchery was constructed in 1978 on a shoestring budget. At that time, some of the hatchery infrastructure, such as the water supply pipeline, was salvaged from other locations and reused. The SSRAA water supply pipeline is now in fair to poor condition and its long-term reliability is suspect. The system also lacks redundancy. A failure of the water supply system would be catastrophic to the Whitman Lake Hatchery, the fishing industry and the economy of Southern Southeast Alaska. The Whitman Lake hydroelectric project will replace and improve the SSRAA facilities that comprise the current system of water delivery from the reservoir to the hatchery, including new intakes, valves, and replacement of the existing pipeline with an improved and redundant system. These changes will provide a higher degree of reliability and longevity of water supply for the hatchery. Construction of the Whitman Lake Project will help SSRAA to continue to fulfill its mission of enhancing salmon fisheries, supporting $46 million in economic output and over 400 jobs in Southeast Alaska. Summary of Benefits In summary, the financial and public benefits of the Whitman lake Project will include: • Estimated annual displacement of approximately 1,100,000 gallons of diesel fuel, which equates to almost $4,000,000 at the current price of $3.60 per gallon. • New water supply infrastructure for the SSRAA Whitman Lake Hatchery. SSRAA’s financial contribution to the fisheries and economy of the Southern Southeast Alaska region was estimated to be $46 million annually and 420 jobs (McDowell Group, 2008). Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 6 of 37 7/1//2011 • Enhanced electrical system stability and reliability at the southern end of the interconnected grid, augmenting the spinning reserve and allowing the SEAPA- interconnected communities to better ride through system disturbances and reducing costs associated with power outages. • Increased capacity to support new construction and customer conversions from oil to electric heat. • Reduced reliance on diesel fuel to generate electric power, resulting in less greenhouse gas emissions. • A more steady and predictable source of water for the Ketchikan Gateway Borough’s Mountain Point Water Utility through improved water management in the Whitman Creek watershed. • Enhanced fish habitat through release of water to Whitman Creek. • Availability of low-cost power to attract new economic development to the borough. • New jobs created during construction. 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. KPU has completed project reconnaissance studies (Phase I), feasibility studies and licensing (Phase II) at a cost of $1,070,000. Final Design and Permitting work (Phase III) began in 2008 as is approximately 90% complete. KPU received a $1,300,000 Renewable Energy Fund grant for final design. Phase Description Schedule Cost Estimate Funds Requested I Reconnaissance Studies Completed $470,000 Funded II Licensing and Feasibility Studies Completed $600,000 Funded III Final Design and Permitting 11/2008 – 3/2012 $2,380,000 Funded IV Construction and Project Startup 11/2011 – 12/2013 $24,050,000 $3,300,000 Total $27,500,000 $3,300,000 Construction and Commissioning (Phase IV) is estimated to cost $24,050,000. KPU is seeking a Renewable Energy Fund Round V grant in the amount of $3,300,000. Combined with a Round IV grant of $700,000, the total funds requested by KPU from the AEA for construction of the Whitman Lake Project would be $4,000,000. KPU has received additional state designated grants. It will also match a $3,300,000 AEA Round V Renewable Energy Fund grant with a $11,000,000 bond issue. Figures 2-2 through 2-4 (see page 29) presents Cost Estimate Summaries (including anticipated sources of funds) for the Whitman Lake Project: • Figure 2-2: Cost Estimate with $3,300,000 AEA Round V Grant ($11,000,000 bond issue) • Figure 2-3: Cost Estimate without AEA Round V Grant ($15,000,000 bond issue) • Figure 2-4: Summary of Direct Construction Costs Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 7 of 37 7/1//2011 2.7 COST AND BENEFIT SUMARY Include a summary of grant request and your project’s total costs and benefits below. Grant Costs (Summary of funds requested) 2.7.1 Grant Funds Requested in this application. $3,300,000 2.7.2 Other Funds to be provided (Project match) $20,050,000* 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $24,050,000 * Per AEA instructions, the match does not include $700,000 AEA Round IV grant 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) $27,050,000 2.7.5 Estimated Direct Financial Benefit (Savings) $4,000,000/year 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.) $ 46,000,000/year (Regional economic benefit of SSRAA, McDowell Group, 2007) Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 8 of 37 7/1//2011 SECTION 3 – PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully completing the project within the scope, schedule and budget proposed in the application. 3.1 Project Manager Tell us who will be managing the project for the Grantee and include contact information, a resume and references for the manager(s). If the applicant does not have a project manager indicate how you intend to solicit project management support. If the applicant expects project management assistance from AEA or another government entity, state that in this section. KPU will provide project management for the Whitman Lake Project. KPU does not expect or request project management assistance from the AEA or another government entity. Project Manager: Jennifer Holstrom, P.E., Senior Project Engineer Ketchikan Public Utilities 2930 Tongass Avenue Ketchikan, Alaska 99901 (907) 228-4733 jenniferh@city.ketchikan.ak.us References: Karl R. Amylon, General Manager Ketchikan Public Utilities 334 Front Street Ketchikan, Alaska 99901 (907) 228-5603 karla@city.ketchikan.ak.us Mike Kline, P.E., Power Systems Manager Yuba County Water Agency Colgate Power Plant P.O. Box 176 Dobbins, CA 95935-0176 (530) 692-3400 mkline@ycwa.com KPU has contracted with Hatch Associates Consultants, Inc. for project management, engineering services and regulatory assistance with Phase III – Final Design and Permitting. The Hatch project manager for the Whitman Lake Project is Mr. Keith Moen. Please see Attachment A for resumes of the project managers, consultants and key staff. KPU intends to contract for construction management services or hire a construction manager, who will report to the KPU Project Manager for more general oversight. KPU will also employ an Environmental Compliance Monitor (ECM) to be on site during project construction. The ECM will report to the KPU Project Manager and will provide monthly progress reports to KPU, which will be submitted with the quarterly reports to the AEA. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 9 of 37 7/1//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.) Project Schedule Reconnaissance and feasibility studies have been completed, and KPU has received all necessary resource and land use permits. FERC issued a license for the project on March 17, 2009. A Forest Service Special Use Permit was issued on August 22, 2011. Due to uncertainties surrounding the re-imposition of the “roadless rule” in the Tongass National Forest, KPU applied for and received a two-year extension of time to commence construction. Construction on the Whitman Lake Project must begin by March 16, 2013 and be completed by March 16, 2016. The specifications for supply of turbine and generator equipment have been completed and KPU expects to award a contract for this equipment in November 2011. The construction drawings and specifications will be provided to FERC and the Forest Service for their mandatory review by January 2012. KPU expects to advertise the construction contract in March 2012 and award it in May 2012. Construction is expected to begin in June 2012, with the start-up of the hydroelectric project by August 2013. Please refer to the attached preliminary construction schedule (Figure 3, see page 29) for a detailed breakdown of tasks and sequencing. Construction Contracting Construction of the Whitman Lake Project will be accomplished under two contracts: Contract 1 – Equipment Procurement (November 2011 – November 2012) • Manufacturing and delivery of equipment with long lead times, such as turbines, generators, transformers and large valves. Contract 2 – Construction and Installation (June 2012 – August 2013) • Mobilization, surveying and clearing of road and penstock alignments • Construction of access road • Installation of diversion dam, intakes, pipelines, valve house, head tank • Construction of powerhouse and tailrace • Equipment installed in powerhouse; construction of switchyard • Testing and start-up Replacement of the Whitman Lake Hatchery piping, degassing and oxygenation system (which are not dual hydro/hatchery facilities) will be performed under a separate contract following completion of the hydro facilities. Please refer to the attached preliminary construction schedule (Figure 3, page 29) for a more detailed breakdown of tasks and sequencing. Any modifications to the final design during construction will be accomplished through a change order process. The project manager and Hatch Consultants design engineers will review modifications or proposed changes, which will also be provided to the FERC Portland Regional Office. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 10 of 37 7/1//2011 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. The Milestones must also be included on your budget worksheet to demonstrate how you propose to manage the project cash flow. (See Section 2 of the RFA or the Budget Form.) The table below lists milestones associated with construction of the Whitman Lake Project. Also see Attachment C Grant Budget Form. Milestones Activities/Description Expected Completion Date Confirm that all design and feasibility documents are complete Final review of design drawings and specifications, review and approval by the FERC Portland Regional Office March 2012 (not included in grant request) Completion of bid documents (Equipment Procurement) Approved drawings and specifications are assembled; KPU’s standard conditions are incorporated; bid package is ready to advertise September 2011 (not included in grant request) Contractor/vendor selection and award (Equipment Procurement) Approved drawings and specifications are assembled; KPU’s standard conditions are incorporated; bid package is ready to advertise November 2011 (not included in grant request) Completion of bid documents (Construction & Installation) Bid proposals will be reviewed. Contractor/vendor selection and contract award will be in accordance with the procedures set forth in the Ketchikan Municipal Code. March 2012 (not included in grant request) Contract/vendor selection and award (Construction & Installation) Bid proposals will be reviewed. Contractor/vendor selection and contract award will be in accordance with the procedures set forth in the Ketchikan Municipal Code. May 2012 (not included in grant request) Contract 1 – Equipment Procurement Large equipment with long lead times is ordered, manufactured and delivered to the project site: turbines, generators, transformers and large valves. November 2012 Contract 2 – Hydro Project Construction • Hatchery laydown area cleared; access road surveyed, cleared, constructed; penstock alignment cleared and surveyed; powerhouse area cleared and surveyed • New intakes at Whitman Dam installed; Achilles Diversion and pipeline installed; new penstocks installed; valve house and hatchery head tank completed. • Powerhouse, tailrace and switchyard completed July 2013 Integration and testing The project is performance tested August 2013 Final acceptance, commissioning and start-up Start-up tests are performed; project is commissioned and turned over to KPU August 2013 Decommissioning old systems (hatchery water supply) Replacement of hatchery supply piping, degassing and oxygenation system completed July 2014 Operations reporting Ongoing task of license compliance management August 2013 Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 11 of 37 7/1//2011 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. Construction/Procurement Contracts: Construction of the Whitman Lake Project will be performed under two contracts: • Contract 1 – Equipment Procurement • Contract 2 – Hydro Project Construction Contractor and vendor selection will be carried out in accordance with the procedures set forth in Chapter 3.12 of the Ketchikan Municipal Code (Attachment H). Contractors are required to furnish a payment and performance bond for any contract with a value greater than $50,000, and to adhere to state and federal prevailing wage requirements for public construction contracts. Existing Engineering Support Contract: Design and bid documents are being prepared by Hatch Associates Consultants, KPU’s contractor for Phase III of the Whitman Lake Project. Hatch and its subcontractors have also assisted KPU with environmental and regulatory reports and activities. Resumes of the Hatch consultant team that provides engineering support to KPU are provided in Attachment A. The consultant team includes: • Keith Moen, P.E., Project Manager • A. Richard Griffith, P.E., Project Engineer • Carl Mannheim, P.E., Project Engineer • Nan Nalder, Senior Advisor • Heidi Wahto, Regulatory Specialist Existing Contracts: • KPU with Hatch Associates Consultants • Hatch Associates Consultants with R&M Consultants, Inc. – Anchorage • Hatch Associates Consultants with R&M Engineering Ketchikan, Inc. • Hatch Associates Consultants with Northern Land Use Research, Inc. • Hatch Associates Consultants with R2 Resource Consultants, Inc. Partnerships or Commitments: The following entities are signatories of a Settlement Agreement (February 2008) associated with the FERC licensing process: • Alaska Department of Natural Resources, Division of Mining, Land & Water, Water Resources Section (ADNR Water Resources) • Alaska Department of Fish and Game (ADF&G) • Southern Southeast Regional Aquaculture Association (SSRAA) • U.S. Forest Service, Tongass National Forest, Ketchikan District (USFS) Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 12 of 37 7/1//2011 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. KPU intends to contract for construction management services or hire a construction manager, and will also assign an internal project manager for more general oversight. Weekly progress meetings will involve participation from KPU, the construction manager, design manager, contractor, and possibly agency personnel. KPU will require monthly progress reports from the contractor(s) and will submit quarterly reports to the AEA in accordance with the requirements of the Grant Agreement. As a requirement of the FERC license, KPU will employ an Environmental Compliance Monitor (ECM) to be on site during project construction. The ECM’s duties include observing construction activities, reporting violations, maintaining daily field notes and providing regular reports. The ECM will be the main point of contact concerning matters of compliance, site conditions and inspections. The ECM will provide monthly progress reports to KPU, which will be submitted with the quarterly reports to the AEA. If required by the grant agreement or requested by the AEA, KPU will submit to the AEA its final project report including as-built drawings, final budget and schedule. If required by the grand agreement or requested by the AEA, KPU will submit periodic operation and maintenance reports, including actual O&M, fuel and equipment costs; O&M measures and schedule; energy output; project availability; and efficiency. 3.6 Project Risk Discuss potential problems and how you would address them. Potential Problems Solutions to Problems Rising equipment costs Equipment costs can vary greatly with market conditions. Therefore, equipment costs are conservatively estimated and based on Hatch’s long experience in hydropower construction and monitoring of equipment cots on projects similar to Whitman Lake. Lead time on major equipment Similar to costs, lead times for major equipment also vary greatly with market conditions. Therefore, equipment lead times are conservatively estimated based on Hatch’s long experience in hydropower construction, and by monitoring lead times on projects similar to Whitman Lake. KPU will reduce the risk of long lead times by awarding a contract for major equipment supply well in advance of the construction contract. Inclement weather The construction schedule is estimated based on assumptions of periods of bad weather and shut down of work. Weather conditions will be monitored and the schedule adjusted accordingly. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 13 of 37 7/1//2011 SECTION 4 – PROJECT DESCRIPTION AND TASKS • Tell us what the project is and how you will meet the requirements outlined in Section 2 of the RFA. • The level of information will vary according to phase(s) of the project you propose to undertake with grant funds. • If you are applying for grant funding for more than one phase of a project provide a plan and grant budget form for completion of each phase. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. The total generating capacity of the Whitman Lake Project is 4.6 MW, with 16,000,000 kWh of electricity produced in an average year. Compared with other available alternatives (diesel generation), construction of the Whitman Lake Project has the following pros and cons: Pros: • KPU has been issued a FERC license to construct the Whitman Lake Project. This licensing process took more than 10 years, and the licensing and permitting of any alternative energy project is expected to take approximately 10-15 years. • Construction of the Whitman Lake Project includes much-needed improvements to the SSRAA-owned Whitman Lake Hatchery, and will provide increased water quantity, reliability and redundancy to a facility that is critical to the region’s economy. • The Whitman Lake Project provides increased capacity to meet increasing demand. (Power transmitted from Tyee Lake via the recently-competed Swan-Tyee Intertie does not provide Ketchikan with additional capacity.) • The Whitman Project utilizes existing infrastructure (Whitman Dam) which was previously used for hydropower generation from 1912 through 1957. • A very short (1,500 feet) transmission distance to connect to KPU’s existing system. • The project uses established technology. • The project will decrease Ketchikan’s dependence on imported diesel fuel, displacing approximately 1,100,000 gallons annually, and reducing greenhouse gas emissions. • Hydroelectric power is not subject to fluctuations of cost, as is diesel generation. • The cost of diesel generation is likely to rise significantly with the EPA National Emissions Standards for Hazardous Air Pollutants issued in 2010 (40 CFR Part 63 Subpart ZZZZ). • The Whitman Lake Project would ensure a more steady and predictable source of water for the Ketchikan Gateway Borough’s Mountain Point Water Utility through improved water management in the Whitman Creek watershed. Cons: • The Whitman Lake Project requires capital costs for construction compared with continued use of Ketchikan’s existing diesel generating plant. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 14 of 37 7/1//2011 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. KPU has historically operated as an islanded energy system, meaning that all of the power distributed by KPU has been generated and consumed locally. A new transmission line connecting Ketchikan to the Southeast Alaska Power Agency (SEAPA)-owned Tyee project near Wrangell was completed in late 2009. The new transmission system connects the existing Swan Lake and Tyee Lake projects, the output of which is shared between the communities of Ketchikan, Petersburg and Wrangell. However, as the energy produced by Swan Lake is first dedicated to Ketchikan, the energy produced by Tyee Lake is first dedicated to Petersburg and Wrangell. KPU systems operations, generation dispatch and system restoration are controlled via SCADA from the operations center at KPU’s Bailey Power Plant. KPU owns three hydroelectric power plants and has also operated the Swan Lake hydroelectric project, which is owned by SEAPA. The Bailey Power Plant contains four diesel generators which supplement generation when there is insufficient hydroelectric power available, to provide emergency power in the event of a transmission loss, and to provide capacity for peak loads. Existing Electric Generation Resources Type Year Installed Nominal Capacity (MW) Peak Efficiency* Average Generation (MWh) KPU-Owned Hydro Ketchikan Plant 4.2 22,500 Ketchikan Unit 3 Francis 1923 1.4 93% Ketchikan Unit 4 Francis 1938 1.4 94% Ketchikan Unit 5 Francis 1957 1.4 90% Silvis Plant Francis 1967 2.1 95% 12,800 Beaver Falls Plant 5 43,400 Beaver Falls Unit 1 Pelton 1946 (1904) 1 80% Beaver Falls Unit 3 Pelton 1954 2 85% Beaver Falls Unit 4 Pelton 1954 2 85% SEAPA-Owned Hydro Swan Lake Plant 22.5 79,300 Swan Lake Unit 1 Francis 1983 11.25 Swan Lake Unit 2 Francis 1983 11.25 Tyee Lake Plant ** Tyee Lake Unit 1 Pelton 1984 11.25 Tyee Lake Unit 2 Pelton 1984 11.25 Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 15 of 37 7/1//2011 KPU-Owned Diesel Bailey Plant 23 Bailey Unit 1 Diesel 1969 3.5 Bailey Unit 2 Diesel 1969 3.5 Bailey Unit 3 Diesel 1976 5.5 Bailey Unit 4 Diesel 1998 10.5 * Turbine efficiency only. Combined turbine and generator efficiency is approximately 5% less. ** Interconnected with Petersburg & Wrangell who have first call on all available energy from Project. The Swan Lake Hydroelectric Project is a remote (accessible only by boat or plane) facility connected to the rest of the system via a 30-ile 115 kV line that terminates at KPU’s Bailey Substation where it is stepped down to 34.5 kV. The 34.5 kV sub-transmission circuit feeds six substations that step down to the distribution voltage of 12.47 kV. The rest of the KPU-owned hydro plants operate at various locations along the 34.5 circuit. The Swan Lake and Tyee projects are connected via a 57-mile 115 kV transmission line (Swan- Tyee Intertie). The Tyee Project is owned by the Southeast Alaska Power Agency (SEAPA) and primarily serves the towns of Wrangell and Petersburg. It is important to note that the Swan-Tyee Intertie does not necessarily provide more capacity to KPU. The power sales agreements within SEAPA provide that Wrangell and Petersburg have the first call on the output from the Tyee Lake Project. Considering the requirements of Wrangell and Petersburg, there is not much additional capacity from the intertie. Also, the capacity of the convection-cooled transformers at the Bailey Substation is 25 MW. (In 2010, KPU installed improved transformer cooling, increasing capacity from nameplate 20.4 MW.) Apart from capacity issues, the rapid rate of conversions from oil heat to electric heat leads to the conclusion that Tyee power may be fully utilized by Wrangell and Petersburg by 2015 under average hydrologic conditions (SEAPA estimate). KPU is developing the hydropower potential at Whitman Lake to help support significant capacity demand increases anticipated in the short term and continuous load growth over time. 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. Existing generation resources are described in Section 4.2.1. Development of the Whitman Lake Project will have a positive impact on KPU’s existing energy infrastructure and resources. It will reduce Ketchikan’s dependence on diesel generation, increase system stability, provide emergency power in the event of a transmission loss, and add flexibility to the management of existing hydroelectric projects. It will also provide energy and capacity to the interconnected Southeast communities, as well as spinning reserve to help the communities to better ride through system disturbances and reduce costs associated with power outages. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 16 of 37 7/1//2011 Existing Energy Market KPU generates or buys and re-sells all of the electricity consumed in the City of Ketchikan and the Ketchikan Gateway Borough. Sales and generation data for the years 2000 to 2011 are summarized below. Monthly sales display consistent seasonal patterns over the years. Residential sales are markedly lower in the summer, particularly August and September; they peak in December and January. The seasonal pattern for non-residential sales is less well defined, displaying only slightly lower consumption in the summer and slightly higher in the winter. It is also influenced by summer fish processing. Residential Non-Residential Total Net Peak Ave Temp Customers Consumption Customers Consumption Consumption Generation Demand * 2000 5,602 56,769,397 1,581 102,791,027 159,560,424 166,375,424 28,100 2001 5,622 58,007,912 1,598 100,749,313 158,757,225 166,133,715 27,400 2002 5,625 56,913,013 1,546 87,355,584 144,268,597 151,502,672 26,300 2003 5,622 56,723,524 1,556 88,397,684 145,121,208 153,472,585 25,900 2004 5,603 57,332,811 1,558 88,063,078 145,395,889 150,586,782 27,600 2005 5,616 56,815,618 1,586 88,428,512 145,244,130 153,306,333 27,000 2006 5,652 59,870,257 1,599 92,289,675 152,159,932 159,543,140 28,900 43.7 2007 5,677 62,275,248 1,626 92,527,557 154,802,805 159,728,689 29,000 44.2 2008 5,731 65,977,138 1,615 93,363,129 159,340,267 166,969,117 30,400 43.9 2009 5,736 66,565,425 1,583 91,581,241 158,298,262 167,349,082 30,500 44.2 2010 5,744 64,938,484 1,594 92,196,411 157,134,895 164,316,752 30,800 46.5 2011 5,799 37,633,223 1,645 48,152,931 85,786,154 86,450,803 - * 50-year average temperature is 45.5 degrees ** 2011 data is through June. Projected 2011 total consumption: 164,000,000 kWh. Projected 2011 total generation is 172,000,000 kWh. The graph below depicts the seasonal consumption patterns for Ketchikan. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 17 of 37 7/1//2011 Ketchikan’s Need for Additional Capacity Demand on KPU’s electrical system is increasing as oil heat is converted to electric heat and as new development occurs. Figure 4-1 (see page 29) contains a list of new loads added since 2008 and known loads that are projected to be added through 2014. The list shows that, in the past three heating seasons (2008-2011), 3,466 kVa has been added to KPU’s system. This is the level at which services are installed, which is slightly above the expected peak. An additional 3,020 kVa is projected to be added in the 2011-2012 heating season, including 1000 kVA from a new community pool. These new loads could soon push peak demand to and above the 38 MW maximum combined hydro capacity of KPU and SEAPA. In 2012/2013, peak demand is expected to approach 35 MW. Heating conversions by the Ketchikan Gateway Borough School District, currently under consideration, would add 4.6 MW, pushing peak demand to 39.6 MW by 2013/2014. At present, KPU would be able to meet the shortfall only by diesel generation. It is expected that the Whitman Lake Project will come on-line by 2014, just in time to meet Ketchikan’s capacity shortfall. The hydrology of Whitman Lake fits KPU’s capacity needs well, with excess water available to support peak demands during the winter heating season. Ketchikan’s Need for Additional Generation Over the past three years, Ketchikan has experienced an estimated load growth of 3% to 5% per year, when temperature is taken into account. Figure 4-2 (see page 29) presents a graph of system loads normalized by heating-degree-days, for four representative sets of heating degree- days. These indicate a rate of increase ranging from 2.1% for days with a heating-degree-day index of 33 to 5.1% for days with a heating-degree-day index of 26. SEAPA predicts that energy from the Tyee Lake and Swan Lake projects will be fully subscribed by 2015. According to SEAPA, “the significance of the energy analysis is not that the STI system will crash into blackness in 2015… [it] means KPU will burn diesel…Why KPU? Because Petersburg and Wrangell have the rights to the dedicated output of Tyee, and Tyee supplies the energy, deemed additional dedicated, which meets KPU’s load growth above the Swan dedicated amounts.” Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 18 of 37 7/1//2011 This prediction was based on the expectation of 5% load growth in the communities of Ketchikan, Wrangell and Petersburg. However, more recent SEAPA data from 2010 shows that demand has increased at an even greater rate than anticipated. In June 2009, SEAPA predicted that in 2010, Tyee Lake would have an excess 42,600,000 kW-hr available for future load growth. However, in June 2010, the actual energy available was only 31,400,000 kW -hr. Through July 2011, SEAPA delivered loads were 5.75% above the same period in 2010. Timeline for the Whitman Lake Project vs. Other Alternatives KPU has been issued a FERC license to construct the Whitman Lake Project and must begin construction by March 16, 2013 or surrender its FERC license. If the Whitman Lake Project is not constructed, it will be a significant lost opportunity for Southeast Alaska. There are no other projects that may be added to the SEAPA-interconnected system that are licensed and bid-ready as is the Whitman Lake Project. The environmental studies, permitting and licensing process for Whitman took 13 years. Even after identification of the next FERC jurisdictional resource, it will be at least ten years before another project would be operational. Ketchikan’s and SEAPA’s available renewable energy resources will be exceeded before that time. While KPU fully supports the creation of an Integrated Resource Plan (IRP) for Southeast Alaska, Ketchikan cannot wait for completion of the IRP before moving ahead with construction of the Whitman Lake Project. If construction does not begin by March 2013, Ketchikan loses its FERC license, many years of planning, and a valuable renewable energy resource for Southeast Alaska. Expanded Energy Market Located throughout Southeast Alaska, but not yet interconnected to the region’s renewable energy resources, are communities comprising an estimated additional 56 MW of potential regional interconnected load. These communities are dependent on diesel fuel to provide firm power, as a backup source in some and as primary in others. Project Impact on Energy Customers • Reduce reliance on diesel generated power, reducing energy cost for customers • Increase system stability • Increase capacity for new economic development • Improve local environmental conditions by reducing greenhouse gas emissions 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 Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 19 of 37 7/1//2011 The Whitman Lake Project will develop hydroelectric power by utilizing an existing dam. New construction includes a powerhouse with two Francis turbine/generator units, penstocks, intake, creek diversion with pipeline, tailrace, valve house, head tank, access roads, pressurized water supply line to hatchery, switchyard and transmission line. Optimum installed capacity 4,600 kW (3,900 kW Unit 1 / 700 kW Unit 2) Anticipated capacity factor Unit 1 = 0.3, Unit 2 = 0.7 Anticipated annual generation 16,000,000 kWh Anticipated barriers None Basic integration concept Electric power from Whitman Lake will be integrated with KPU’s existing resources to serve current and future loads, both locally and in the Southeast Alaska region. Delivery methods Electric power from the Whitman Lake Powerhouse will be transmitted via a 1,500-foot-long 34.5 kV transmission line to an existing KPU-owned transmission line. 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 Whitman Lake Project boundary encompasses approximately 180 acres, the majority of which (172.3 acres) is federal land managed by the U.S. Forest Service (USFS). The project also involves 0.58acres of federal land managed by the Bureau of Land Management (BLM), and an easement of 4 acres on land owned or managed by the Alaska Department of Natural Resources (ADNR). KPU has purchased 3.67 acres of land from the Alaska Mental Health Trust. ADNR land (U.S.S. 3385 Lot 107 & State Community Grant Property) Easement ADL 107151 was issued to KPU in December 2009, and amended in March 2011. BLM land (U.S.S. 2285 Lot 106) Rights-of-Way AA-92467 and AA-92468 were issued August 2011. USFS Land (National Forest System Lands) Following authorization by the Secretary of Agriculture, a decision notice, and comment period, a Special Use Permit was issued by the Forest Service in August 2011. Alaska Mental Health Trust Land (U.S.S. 3385 Lot 112) KPU purchased this property in August 2011. 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 Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 20 of 37 7/1//2011 Permits/Approvals Received • FERC License, Project No. 11841, issued March 2009 • Easement AS 38.05.850 • Water Rights – LAS #23222 and LAS#23223 • DNR Easement ADL 107151 • USACE Nation Wide Permit No. 17, Hydropower Projects • POA-1998-1027, Whitman Lake, Ketchikan Public Utilities • Title 16 Fish Habitat Permit FH08-VII-0027 • USFS Secretary approval to construct in an inventoried roadless area (August 2010) • USFS Special Use Permit (August 2011) Approvals Pending • FERC-Portland Regional Office design approval (expected January-February 2012) No barriers are foreseen. 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 As a requirement of the FERC licensing process, KPU prepared a Draft Environmental Assessment (DEA) for the Whitman Lake Project in accordance with the Federal Power Act and the National Environmental Protection Act. FERC subsequently issued a Final Environmental Assessment (FEA) on July 2, 2008, prior to issuing a license in 2009. The environmental issues that are identified in the EA, FEA and addressed in the project license are summarized below. Threatened or Endangered Species None in vicinity of the project Habitat Issues • Whitman Lake. Whitman Lake water will continue to be delivered to the Whitman Lake Hatchery. Changes in reservoir management will not adversely affect the Dolly Varden in Deer Creek, the only significant tributary to Whitman Lake. • Whitman Creek. Whitman Creek to its confluence with Achilles Creek is currently dewatered approximately 35% of the time; however, under terms of a Settlement Agreement (February 2008), KPU will release an instream flow into Whitman Creek to enhance fish habitat. • Achilles Creek. Under terms of the Settlement Agreement, KPU will release an instream flow to Achilles Creek and implement a Terrestrial Species Connectivity Plan that has been developed for wildlife crossings along the Achilles Creek pipeline. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 21 of 37 7/1//2011 • KPU has developed a Nesting Survey Plan. The plan addresses surveying for newly constructed marbled murrelet, goshawk, and bald eagle nests prior to construction, as well as reporting, agency consultation and contingency measures for protection of avail species during project construction. Surveys conducted in May 2010 and August 2011 did not identify signs of these birds within the project area. Wetlands and other protected areas KPU provided a Jurisdictional Wetlands Delineation Report to the US Army Corps of Engineers (USACE), who determined that the project could proceed under Nation Wide Permit No. 17. We have worked with the USACE to minimize impacts to the identified wetlands. Archaeological and historic resources KPU developed and is implementing a Historic Properties Management Plan for the Whitman Lake Project. KPU prepared and filed (July 2011) a HABS/HAER for a shed potentially eligible for the National Register of Historic Places. The shed will be removed during construction. Land development constraints There are no identified constraints. The Whitman Lake Project has received a Special Use Permit from the Forest Service for construction in an inventoried roadless area, and has obtained land rights for BLM, Mental Health and State property. Telecommunications interference Not applicable Aviation considerations Not applicable Visual, aesthetics impacts KPU will comply with the terms and conditions of its easement for use of State lands, and the Special Use Permit for use of National Forest System lands. KPU has developed in consultation with state and federal agencies, and will implement, a Scenery Management Plan and Vegetation Management Plan. No potential barriers are identified at present. 4.4 Proposed New System Costs and Projected Revenues (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following: • Total anticipated project cost, and cost for this phase • Requested grant funding • Applicant matching funds – loans, capital contributions, in-kind • Identification of other funding sources • Projected capital cost of proposed renewable energy system • Projected development cost of proposed renewable energy system Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 22 of 37 7/1//2011 KPU has completed project reconnaissance studies (Phase I), feasibility studies and licensing (Phase II) at a cost of $1,070,000. Final Design and Permitting work (Phase III) began in 2008 as is approximately 90% complete. KPU received a $1,300,000 Renewable Energy Fund grant for final design. Phase Description Schedule Cost Estimate Funds Requested I Reconnaissance Studies Completed $470,000 Funded II Licensing and Feasibility Studies Completed $600,000 Funded III Final Design and Permitting 11/2008 – 3/2012 $2,380,000 Funded IV Construction and Project Startup 11/2011 – 12/2013 $24,050,000 $3,300,000 Total $27,500,000 $3,300,000 Construction and Commissioning (Phase IV) is estimated to cost $24,050,000. KPU is seeking a Renewable Energy Fund Round V grant in the amount of $3,300,000. Combined with a Round IV grant of $700,000, the total funds requested by KPU from the AEA for construction of the Whitman Lake Project would be $4,000,000. KPU has received additional state designated grants. It will also match a $3,300,000 AEA Round V Renewable Energy Fund grant with a $11,000,000 bond issue. Figures 2-2 through 2-4 (see page 29) presents Cost Estimate Summaries (including anticipated sources of funds) for the Whitman Lake Project: • Figure 2-2: Cost Estimate with $3,300,000 AEA Round V Grant ($11,000,000 bond issue) • Figure 2-3: Cost Estimate without AEA Round V Grant ($15,000,000 bond issue) • Figure 2-4: Summary of Direct Construction Costs 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.) Operating and Maintenance (O&M) costs for the Project are estimated to be $450,000, based on costs for other KPU-owned hydroelectric facilities. Items included in the overall O&M cost are equipment maintenance, administrative labor, insurance and interim replacements. KPU is not requesting grant funding for O&M costs, which will 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 Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 23 of 37 7/1//2011 Identification of potential power buyer(s)/customer(s) KPU currently supplies power to 7,444 customers in the City of Ketchikan and Ketchikan Gateway Borough. Power from the Whitman Lake Project will help meet the demand of current and future customers. Potential power purchase/sales price KPU proposes to sell power to its ratepayers under the rates approved by the City Council and published in the Ketchikan Municipal Code. Current 2011 electric rates are: • 9.58 cents/kWh residential • 8.97 cents/kWh commercial • 8.31 cents/kwH industrial In addition to the rates listed above, a diesel energy surcharge is applied to recover the cost of fuel when diesel generation is required to meet demand or peak loads. KPU has initiated a rate study to determine cost of service and other information necessary to evaluate and adjust its electric rates. KPU estimates its first year cost of power for the Whitman Lake Project to be 6.9 cents/kWh with a $3,300,000 Round V grant. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Download the form, complete it, and submit it as an attachment. Document any conditions or sources your numbers are based on here. See the Cost Worksheet in Attachment B. Notes on Cost Worksheet • Annual heating fuel usage (2d) is based on 2009 information from city-data.com. KPU believes that since 2009, the percentage of electricity used for heating has increased, while the percentage of diesel used for heating has decreased. • The project benefit/cost ratio of 5.7 was calculated using a capital cost of $24,050,000 and a project life of 50 years, which is the length of the FERC license for the project. The annual O&M costs were $450,000, and fuel costs were assumed to be those listed in the AEA’s “Renewable Energy Fund Round V Model” created by Villalobos and referenced on the AEA website. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 24 of 37 7/1//2011 SECTION 5– PROJECT BENEFIT Explain the economic and public benefits of your project. Include direct cost savings, and how the people of Alaska will benefit from the project. The benefits information should include the following: • Potential annual fuel displacement (gal and $) over the lifetime of the evaluated renewable energy project • Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate) • Potential additional annual incentives (i.e. tax credits) • Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) • Discuss the non-economic public benefits to Alaskans over the lifetime of the project Potential annual fuel displacement (gal and $) over the lifetime of the project: Generation from the Whitman Lake Project will displace approximately 1,100,000 gallons per year of diesel fuel generation, which equates to $3,960,000 at the current price of $3.60 per gallon. Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate): None Potential additional annual incentives (i.e. tax credits): KPU does not propose to apply for additional annual incentives. Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available): Not applicable Non-economic public benefits to Alaskans over the lifetime of the project: • Replacement of the aging water supply system of the SSRAA Whitman Lake Hatchery, providing increased water quantity, reliability and redundancy to a facility that is critical to regional commercial and sport fishing. • Increased capacity to support new construction and customer conversions from oil to electric heat. • Reduced reliance on diesel fuel to generate electric power, resulting in less greenhouse gas emissions. • Enhanced electrical system stability and reliability, reducing power outages. • A more steady and predictable source of water for the Ketchikan Gateway Borough’s Mountain Point Water Utility through improved water management in the Whitman Creek watershed. • Enhanced fish habitat through release of water to Whitman Creek. • Availability of low-cost power to attract new development to the borough. • New jobs created during construction Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 25 of 37 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 Business Structure: Ketchikan Public Utilities (KPU) was created in 1932 when the City of Ketchikan purchased the Citizen’s Light and Power Company, which had delivered power to Ketchikan since 1903. KPU is a municipally-owned public utility that provides municipal water supply and telecommunications services as well as electricity. A copy of the Ketchikan Municipal Code, Title 11, Public Utilities, Chapter 11.04 General Provisions is attached to this application (Attachment H). KPU will be the sole owner and operator of the Whitman Lake Project. It will be integrated into the KPU Electric Division maintenance and operations program for its existing facilities. O&M financing: KPU will fund the estimated $450,000 annual O&M costs for the Whitman Lake Project through electric rates. Items included in the overall O&M cost for the project include equipment maintenance, administrative labor, insurance and interim replacements. Operational issues: The Whitman Lake Project will be operated in a coordinated fashion with the Whitman Lake Hatchery to provide a year-round, reliable, temperature-controlled water supply to the hatchery. In order to accomplish this, Unit 2 (700 kW) will be operated for the primary purpose of supplying water to the hatchery. Unit 1 (3,900 kW) will be operated with the primary purpose of generating power. Operational costs and on-going support for back-up or existing systems: O&M costs of the project are estimated to be $450,000 annually. Items included in this cost are equipment maintenance, administrative labor, insurance and interim replacements. There are no additional costs associated with back-up or existing systems. The existing KPU system will continue to include back-up diesel generation. Reporting commitment: KPU is committed to reporting the savings and benefits from the Whitman Lake Project as a requirement of the Grant Agreement. KPU will submit periodic operation and maintenance reports, including actual O&M, fuel and equipment costs; O&M measures and schedule; energy output; project availability; and efficiency. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 26 of 37 7/1//2011 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. Project accomplishments and construction readiness All reconnaissance and feasibility studies have been completed. KPU has applied for and received all necessary resource and land use permits and was issued a FERC license for the Whitman Lake Project on March 17, 2009. A Forest Service Special Use Permit was issued on August 22, 2011. The specifications for supply of turbine and generator equipment have been completed and KPU expects to award a contract for this equipment in November 2011. The construction drawings and specifications will be provided to FERC and the Forest Service for their mandatory review by January 2012. KPU expects to advertise the construction contract in March 2012 and award it in May 2012. Construction is expected to begin in June 2012, with the start-up of the hydroelectric project by August 2013. Please refer to the attached preliminary construction schedule (Figure 3, see page 29) for a detailed breakdown of tasks and sequencing. Other Grants • AEA Renewable Energy Fund Round I Grant: $1,300,000 for final design and permitting KPU has met the requirements of this grant, including reporting and matching funds. When permitting issues required an extension of time, KPU requested a schedule adjustment, which was authorized by the AEA. • AEA Renewable Energy Fund Round IV Grant: $700,000 for construction • 2011 State Legislative Grant: $1,000,000 for the Whitman Lake Project • 2012 State Legislative Grant: $8,025,000 for the Whitman Lake Project 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. See Attachment D, which contains letters demonstrating local support for the Whitman Lake Project from the following community organizations: • Ketchikan Gateway Borough • KGB School District • Southern Southeast Regional Aquaculture Association • OceansAlaska Marine Science Center Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 27 of 37 7/1//2011 SECTION 9 – GRANT BUDGET Tell us how much you want in grant funds Include any investments to date and funding sources, how much is being requested in grant funds, and additional investments you will make as an applicant. Include an estimate of budget costs by milestones using the form – GrantBudget5.doc Provide a narrative summary regarding funding sources and your financial commitment to the project. KPU has completed project reconnaissance studies (Phase I), feasibility studies and licensing (Phase II) at a cost of $1,070,000. Final Design and Permitting work (Phase III) began in 2008 as is approximately 90% complete. KPU received a $1,300,000 Renewable Energy Fund grant for final design. Phase Description Schedule Cost Estimate Funds Requested I Reconnaissance Studies Completed $470,000 Funded II Licensing and Feasibility Studies Completed $600,000 Funded III Final Design and Permitting 11/2008 – 3/2012 $2,380,000 Funded IV Construction and Project Startup 11/2011 – 12/2013 $24,050,000 $3,300,000 Total $27,500,000 $3,300,000 Construction and Commissioning (Phase IV) is estimated to cost $24,050,000. KPU is seeking a Renewable Energy Fund Round V grant in the amount of $3,300,000. Combined with a Round IV grant of $700,000, the total funds requested by KPU from the AEA for construction of the Whitman Lake Project would be $4,000,000. KPU has received additional state designated grants. It will also match a $3,300,000 AEA Round V Renewable Energy Fund grant with a $11,000,000 bond issue. Figures 2-2 through 2-4 (see page 29) presents Cost Estimate Summaries (including anticipated sources of funds) for the Whitman Lake Project: • Figure 2-2: Cost Estimate with $3,300,000 AEA Round V Grant ($11,000,000 bond issue) • Figure 2-3: Cost Estimate without AEA Round V Grant ($15,000,000 bond issue) • Figure 2-4: Summary of Direct Construction Costs An estimate of budget costs by milestones is provided on the Grant Budget Form in Attachment C. Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 29 of 37 7/1//2011 APPLICATION FIGURES AND TABLES Figure 2-1: Project Location Map Figure 2-2: Cost Estimate with $3,300,000 AEA Round V Grant ($11,000,000 bond issue) Figure 2-3: Cost Estimate without AEA Round V Grant ($15,000,000 bond issue) Figure 2-4: Summary of Direct Construction Costs Figure 3: Construction Schedule Figure 4-1: Known Load Growth Figure 4-2: Load Growth by HDD 8/22/2011 Whitman Lake Hydroelectric Project Cost Estimate Summary (Incl. $3,300,000 AEA Round V Grant) Contingencies (%) = 15% Engineering & Owner Admin (%) = 20% Escalation Rate (%) = 3.0% Escalation years (n) = 0 Interest Rate = 5.0% Term = 30 Accnt Item 330 Land and Land Rights $370,000 331 Structures and Improvements $3,510,000 332 Reservoirs, Dams and Waterways $6,230,000 333 Turbines and Generators $4,960,000 334 Accessory Electrical Equipment $360,000 335 Miscellaneous Power Plant Equipment $110,000 353 Switchyards $1,130,000 356 Overhead Conductors and Devices $100,000 366 Poles and Fixtures Direct Construction Cost $16,770,000 Contingencies $2,520,000 Engineering & Owner Admin.$3,240,000 Hatchery Mitigation $1,290,000 Hatchery Mitigation Engineering $230,000 Indirect Construction Cost $7,280,000 Total Engineering and Construction Cost $24,050,000 AEA Round I Grant (1,300,000)$ AEA Round IV Grant (700,000)$ AEA Round V Grant (3,300,000)$ 2011 State Legislative Grant (1,000,000)$ 2012 State Legislative Grant (8,025,000)$ KPU Cash Reserves (1,400,000)$ Engineering and Construction Cost to be Financed $8,325,000 Interest During Construction $460,000 Total Investment Cost $8,785,000 Reserve Fund $900,000 Financing & Legal $400,000 Working Capital $100,000 Financing costs $1,400,000 Total Capital Requirements $10,185,000 Annual Cost Debt Service $716,000 O&M Cost $250,000 Administrative & General $100,000 Insurance $20,000 Interim Replacements $20,000 Total First-Year Annual Cost $1,106,000 Added Hydro Generation (kWh)16,000,000 First-Year Cost of Power ($/kWh)$0.069 Estimated Cost (2011 dollars) 8/22/2011 Whitman Lake Hydroelectric Project Cost Estimate Summary (Without AEA Round V Grant) Contingencies (%) = 15% Engineering & Owner Admin (%) = 20% Escalation Rate (%) = 3.0% Escalation years (n) = 0 Interest Rate = 5.0% Term = 30 Accnt Item 330 Land and Land Rights $370,000 331 Structures and Improvements $3,510,000 332 Reservoirs, Dams and Waterways $6,230,000 333 Turbines and Generators $4,960,000 334 Accessory Electrical Equipment $360,000 335 Miscellaneous Power Plant Equipment $110,000 353 Switchyards $1,130,000 356 Overhead Conductors and Devices $100,000 366 Poles and Fixtures Direct Construction Cost $16,770,000 Contingencies $2,520,000 Engineering & Owner Admin.$3,240,000 Hatchery Mitigation $1,290,000 Hatchery Mitigation Engineering $230,000 Indirect Construction Cost $7,280,000 Total Engineering and Construction Cost $24,050,000 AEA Round I Grant (1,300,000)$ AEA Round IV Grant (700,000)$ 2011 State Legislative Grant (1,000,000)$ 2012 State Legislative Grant (8,025,000)$ KPU Cash Reserves (1,400,000)$ Engineering and Construction Cost to be Financed $11,625,000 Interest During Construction $640,000 Total Investment Cost $12,265,000 Reserve Fund $1,200,000 Financing & Legal $400,000 Working Capital $100,000 Financing costs $1,700,000 Total Capital Requirements $13,965,000 Annual Cost Debt Service $976,000 O&M Cost $250,000 Administrative & General $100,000 Insurance $20,000 Interim Replacements $20,000 Total First-Year Annual Cost $1,366,000 Added Hydro Generation (kWh)16,000,000 First-Year Cost of Power ($/kWh)$0.085 Estimated Cost (2011 dollars) Sheet 1 of 1 Whitman Lake Hydroelectric Project Total Construction Cost Contingency (%) = 15% Engineering & Owner Admin (%) = 2% No.Item Cost 1 Mobilize $218,900 2 Office, Shops, Laydown $82,800 3 Survey, Roads and Penstocks $74,800 4 Clearing, Roads and Penstocks $229,100 5 Access Roads $790,000 6 Whitman Creek Bridge $172,300 7 Road/Penstock Crossings $757,900 8 Diver Survey at Dam $63,800 9 Unit 1 Intake at Dam $212,900 10 Deep Intake $364,500 11 Achilles Creek Conduit $1,053,800 12 Achilles Diversion $259,500 13 New Valve House at Dam, incl. new piping $253,100 14 Spillway Training Wall $52,500 15 Whitman Dam Conduits $3,265,700 16 Steel Walkway $383,100 17 Headtank $227,800 18 Powerhouse Foundation $435,000 19 Tailrace $390,600 20 Powerhouse $576,800 21 Powerhouse Mech/Electr/Equip $5,246,100 22 Switchyard $1,129,600 23 Transmission $104,600 24 Gauging Stations $89,300 25 Test and Startup $178,900 26 Final Cleanup $147,500 Direct Construction Cost (Bid 2011)$16,761,000 IDTask NameDurationStartFinish1CONSTRUCTION581 daysFri 9/16/11Wed 7/24/132Nesting survey12 daysFri 6/1/12Thu 6/14/123Agency notification and consultation of nesting survey results10 daysFri 6/15/12Tue 6/26/124Equipment Procurement Contract345 daysFri 9/16/11Mon 10/22/125Contract Bid Date0 daysFri 9/16/11Fri 9/16/116Bid Review Period25 daysFri 9/16/11Fri 10/14/117Contract Award0 daysFri 10/14/11Fri 10/14/118Submittals40 daysSat 10/15/11Wed 11/30/119Manufacture embedded parts90 daysThu 12/1/11Wed 3/14/1210Manufacture remaining parts280 daysThu 12/1/11Mon 10/22/1211Construction & Installation Contract489 daysMon 1/2/12Wed 7/24/1312Final Design Submittal0 daysMon 1/2/12Mon 1/2/1213FERC Drawing Review60 daysMon 1/2/12Sat 3/10/1214Contract Bid Date0 daysSat 3/10/12Sat 3/10/1215Bid Review Period45 daysMon 3/12/12Wed 5/2/1216Contract Award0 daysWed 5/2/12Wed 5/2/1217Valve procurement80 daysThu 5/3/12Fri 8/3/1218Pipe procurement80 daysThu 5/3/12Fri 8/3/1219Mobilize7 daysWed 6/27/12Wed 7/4/1220Offices and shops5 daysThu 7/5/12Tue 7/10/1221Powerhouse and Headtank (January - December)213 daysWed 7/11/12Fri 3/15/1322Site survey5 daysWed 7/11/12Mon 7/16/1223PH excavation and dewatering20 daysThu 8/9/12Fri 8/31/1224Foundation - Phase 123 daysSat 9/1/12Thu 9/27/1225Structural framing and crane runway55 daysFri 9/28/12Fri 11/30/1226Siding, roofing, architectural treatments20 daysSat 12/1/12Mon 12/24/1227Station services (mechanical & electrical)30 daysTue 12/25/12Mon 1/28/1328Hatchery headtank45 daysWed 7/11/12Fri 8/31/1229Foundation w T/G embedments - Phase 2 24 daysFri 9/28/12Thu 10/25/1230Tailrace construction20 daysFri 10/26/12Sat 11/17/1231Equipment installation and testing124 daysTue 10/23/12Fri 3/15/1332Access Roads and Laydown Areas70 daysWed 7/11/12Sat 9/29/1233Hatchery laydown area construction20 daysTue 7/17/12Wed 8/8/1234Survey Whitman Dam access road10 daysWed 7/11/12Sat 7/21/1235Survey Achilles access road5 daysMon 7/23/12Fri 7/27/1236Whitman Dam access road clearing and grubbing20 daysMon 7/23/12Tue 8/14/1237Whitman Dam access road and laydown area20 daysWed 8/15/12Thu 9/6/1238Achilles Diversion access road clearing and grubbing10 daysWed 8/15/12Sat 8/25/1239Achilles Diversion access road and laydown area20 daysFri 9/7/12Sat 9/29/1240Pipelines144 daysWed 7/11/12Tue 12/25/1241Survey penstock alignment15 daysWed 7/11/12Fri 7/27/1242Penstock alignment clearing25 daysSat 7/28/12Sat 8/25/1243Site preparation at dam (access, safety, etc)5 daysFri 9/7/12Wed 9/12/1244Unit 1 intake installation13 daysThu 9/13/12Thu 9/27/124548", 30", and 12" pipelines installation, incl. bypasses to headtank71 daysFri 9/28/12Wed 12/19/1246Pipeline pressure tests5 daysThu 12/20/12Tue 12/25/1247Connection to Existing Pipelines (June)21 daysSat 6/1/13Tue 6/25/1348Connect new piping to existing piping20 daysSat 6/1/13Mon 6/24/1349Complete connection1 dayTue 6/25/13Tue 6/25/1350Unit 2 and Deep Intake (June)51 daysSat 5/4/13Tue 7/2/1351Replace existing variable elevation intake10 daysSat 6/1/13Wed 6/12/1352Replace deep water intake34 daysSat 5/4/13Wed 6/12/1353Replace dam valve house piping (see assumptions)10 daysSat 6/1/13Wed 6/12/1354Replace dam valve house17 daysThu 6/13/13Tue 7/2/1355Achilles Diversion35 daysMon 10/1/12Fri 11/9/1256Achilles diversion conduit clearing7 daysMon 10/1/12Mon 10/8/1257Achilles diversion20 daysMon 10/1/12Tue 10/23/1258Achilles diversion conduit15 daysWed 10/24/12Fri 11/9/1259Testing and Close-out112 daysSat 3/16/13Wed 7/24/1360Equipment testing15 daysSat 3/16/13Tue 4/2/1361Whitman Creek streamgage10 daysWed 4/3/13Sat 4/13/1362Cleanup and demobilization10 daysWed 6/26/13Sat 7/6/1363Close-out15 daysMon 7/8/13Wed 7/24/1364Project Startup0 daysWed 7/24/13Wed 7/24/13SepOctNovDecJanFebMarAprMayJunJulAugSepOctNovDecJanFebMarAprMayJunJulQtr 4, 2011Qtr 1, 2012Qtr 2, 2012Qtr 3, 2012Qtr 4, 2012Qtr 1, 2013Qtr 2, 2013Qtr 3, 2013TaskCritical TaskProgressMilestoneSummaryRolled Up TaskRolled Up Critical TaskRolled Up MilestoneRolled Up ProgressSplitExternal TasksProject SummaryGroup By SummaryDeadlineWhitman Lake Hydroelectric ProjectConstruction ScheduleConstruction Schedule (2011-08-22).mpp Page 1 of 1 Notes:1) Hatchery improvement project is not included Anticipated Load Growth 2008-2014+ w/ Feeders Feeder Stage 2008-2009 Winter AMHS Maintenance 75 Bethe 2 Tongass Complete Heating Season - 826kVA Berth 3 (Seasonal) Winter Peak 400 Ketchikan 2 Complete Cedar Point 21 Jefferson Way 104 Port West 1 North Complete Cedar Point 25 Jefferson Way 172 Port West 1 North Complete Tongass Marine Store 75 Port West 1 North Complete 2009-2010 Winter Evergreen Terrace 215 Bethe 1 Jackson Complete Heating Season - 1,055 kVA Channel Electric Bldg 75 Ketchikan 3 Complete Harbormaster Condos 100 Port West 1 North Complete KGB Maintenance Facility 25 Ketchikan 3 Complete KPU Water UV Plant 200 Ketchikan 3 Complete Rhineco Inc 150 Ward Cove 1 South Complete Smart Construction 30 Lewis Reef Complete STG Vol Fire Dept 40 Mtn Pt 1 North Complete White Cliff Building 220 Port West 1 North Complete 2010-2011 Winter MUTTC Cape Fox 35 Mtn Pt 1 North Complete Heating Season - 1,585 kVA AK Rainforest Bunkhouse 150 Mtn Pt 2 South Complete Eddystone Rock & Readymix 225 Ward Cove 2 North Complete Forest Service Warehouse 300 Bethe 2 Tongass Complete KIC Elder Housing 300 Bethe 1 Jackson Complete Opportunity House 150 Bethe 1 Jackson Complete Schoenbar Park Apts 350 Ketchikan 3 Complete Saxman Water Station 75 Mtn Pt 1 North Complete 2011-2012 Winter KGB Pool (in addition to Rec Center)1000 Ketchikan 3 Construction Heating Season - 3,020 kVA*KGB Whitman Booster Station 100 Mtn Pt 2 South Complete KIC A&T Facility 100 Ketchikan 2 Complete Northland - Tongass Ave (North)225 Bethe 2 Tongass Design Northland - Tongass Ave (South)225 Bethe 2 Tongass Construction Pioneer Heights 300 Ward Cove 1 South Construction Saxman Elder Housing 300 Mtn Pt 1 North Construction OceansAlaska (Phase I)150 Mtn Pt 2 South Construction AP&T Warehouse No Data Yet*Ward Cove 1 South Construction Ketchikan Mechanical Warehouse 200 Ketchikan 3 Construction Marble Construction 300 Ward Cove 2 North Preliminary USCG Barracks 120 Ketchikan 4 Design South Tongass Alliance Church No Data Yet*Mtn Pt 1 North Construction 2012-2013 Winter AMHS Admin & Yard - Ward Cove 750 Ward Cove 2 North Design Heating Season - 9,195 kVA*ASD Facility No Data Yet*34.5kV Preliminary New City Fire Station 750 Ketchikan 2 Construction New City Library No Data Yet*Ketchikan 3 Design Northland - Stedman St No Data Yet*Ketchikan 4 Preliminary Trident Seafoods (Phase II)2400 34.5kV Construction AMHS Admin Ops 35 Ward Cove 2 North Design Seley 10-Mile Site No Data Yet*Ward Cove 2 North Design USCG Galley & Clinic 260 Ketchikan 4 Design Airport Hanger No Data Yet*Ward Cove 1 South Preliminary Cape Fox Hotel No Data Yet*Ketchikan 1 Preliminary Emerald Forest Subdivision (Phase II)No Data Yet*Mtn Pt 1 North Construction Schools 5,000 System Wide Preliminary 2013-2014 Winter & Beyond OceansAlaska (Phase II)No Data Yet*Mtn Pt 2 South Preliminary Heating Season - *No Data Yet Hospital (Various Projects)No Data Yet*Bethe 2 Tongass Preliminary Pulp Mill Site No Data Yet*34.5kV Preliminary Note: Demand kW and peak kVA are considered as singular unit Does not include individual residential or small commercial loads Completed 8/10/2011 Figure 4-2 Three-Year Load Growth Representative Heating Degree Days 5.1% growth 400 420 440 460 480 500 520 540 560 580 Kilowatt-Hours Three-Year Load Growth Heating Degree Days: 26 4.5% growth 400 420 440 460 480 500 520 540 560 580 600 Kilowatt-Hours Three-Year Load Growth Heating Degree Days: 29 4.3% growth 400 420 440 460 480 500 520 540 560 580 600 Kilowatt-Hours Three-Year Load Growth Heating Degree Days: 31 2.1% growth 400 420 440 460 480 500 520 540 560 580 600 Kilowatt-Hours Three-Year Load Growth Heating Degree Days: 33 Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 30 of 37 7/1//2011 ATTACHMENT A Resumes Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 31 of 37 7/1//2011 ATTACHMENT B Cost Worksheet 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. 700 kW at 0.7 capacity factor 3,900 kW at 0.3 capacity factor Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) 2. Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt 1 grid, leave this section blank) i. Number of generators/boilers/other Hydroelectric generators: 9 Internal combustion engines (diesel): 6 ii. Rated capacity of generators/boilers/other KPU system • Ketchikan (hydro): 3 units @1,400 kW = 4.2MW total • Beaver Falls (hydro): 1 unit @ 1,000 kW + 2 units @ 2,000 kW = 5 MW total • Silvis (hydro): 1 unit @ 2,100 kW • Bailey (diesel): 2 units @ 3.5 MW + 1 unit @ 5.45 MW + 1 unit @ 10.5 MW = 22.95 MW total • North Point Higgins (diesel, emergency only): 2 units @ 1.6 MW = 3.2 MW total SEAPA (interconnected w/Wrangell & Petersburg) • Swan Lake (hydro): 2 units @ 11.25 MW = 22.5 MW total • Tyee Lake (hydro): 2 units @ 11.25 MW = 22.5 MW total iii. Generator/boilers/other type KPU owns and operates both hydroelectric and internal combustion diesel generators iv. Age of generators/boilers/other Ketchikan (hydro): Unit 3 (installed 1923, rebuilt 1952), Unit 4 (1938), Unit 5 (1957) Beaver Falls (hydro): Unit 1 (manufactured 1904, rebuilt and installed 1947), Units 3 & 4 (1954) Silvis (hydro): 1968 Bailey (diesel): Units 1 & 2 (1969), Unit 3 (1976), Unit 4 (1998) Swan Lake (hydro): Units 1 & 2 (1983) Tyee Lake (hydro): Units 1 & 2 (1984) v. Efficiency of generators/boilers/other The peak efficiency of the hydro turbines is about 85% for Units 3&4 at Beaver Falls, 95% for Silvis and 90-94% for the units at Ketchikan 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 b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $3.98 million (2010, for KPU-owned facilities) ii. Annual O&M cost for non-labor $6.65 million (2010, for KPU-owned facilities) 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] 172,000,000 kWh (2011 projection) 164,300,000 kWh (2010) ii. Fuel usage Diesel [gal] 274,965 gal (through June 2011) 104,907 gal (2010) Other N/A iii. Peak Load 30,800 kW (2011) iv. Average Load 20,000 kW v. Minimum Load 10,500 kW vi. Efficiency Approx. 92% vii. Future trends 3-5% load growth, Winter peak load 35 kW by 2012/2013 d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] 75% (2009, decreasing) ii. Electricity [kWh] 14% (2009, increasing) iii. Propane [gal or MMBtu] 5% iv. Coal [tons or MMBtu] 0% v. Wood [cords, green tons, dry tons] 2% vi. Other 4% 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] New hydro facility with an installed capacity of 4.6 MW b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] Proposed 16,000,000 kWh average annual generation ii. Heat [MMBtu] N/A c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] 5% ii. Coal [tons or MMBtu] 0% iii. Wood [cords, green tons, dry tons] 2% iv. Other 4% 4. Project Cost a) Total capital cost of new system $24,050,000 b) Development cost $3,450,000 Renewable Energy Fund Round 5 Project Cost/Benefit Worksheet RFA AEA12-001 Application Cost Worksheet Page 3 7-1-11 c) Annual O&M cost of new system $450,000 d) Annual fuel cost $0 5. Project Benefits a) Amount of fuel displaced for i. Electricity 1,100,000 gallons/year ii. Heat N/A iii. Transportation N/A b) Current price of displaced fuel 1,100,000 gal/year x $3.60/gal = $3,960,000/year c) Other economic benefits The improved reliability of the SSRAA hatchery water supply will reduce the risk of losing the estimated $46,000,000 annual economic value and 420 jobs that SSRAA activity supports d) Alaska public benefits 6. Power Purchase/Sales Price a) Price for power purchase/sale First year cost is expected to be $0.69/kWh with AEA grant funding, $0.85/kWh without AEA grant funding 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio 5.7 (assumes 50 years, 3% discount rate, AEA diesel price projections for Ketchikan) Payback (years) $24,050,000 / ($3,960,000 - $450,000) = 7 years Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 32 of 37 7/1//2011 ATTACHMENT C Grant Budget Form 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 Confirmation that all design and feasibility requirements are complete. 3/1/2012 Completion of bid documents (Phase 1 - Equipment Procurement) 9/16/2011 $ 0 $ 0 Cash, Other State Grants $ 0 Contractor/vendor selection and award (Phase 1 - Equipment Procurement) 11/1/2011 $ 0 $ 10,000 Cash, Other State Grants $ 10,000 Completion of bid documents (Phase 2 – Construction & Installation) 3/10/2012 $ 0 $ 0 Other State Grants $ 0 Contractor/vendor selection and award (Phase 2 – Construction & Installation) 5/3/2012 $ 0 $ 10,000 Other State Grants $ 10,000 Construction Phase 1 – Equipment Procurement 11/1/2012 $ 0 $ 6,600,000 Other State Grants and AEA Round IV Grant $ 6,600,000 Construction Phase 2 – Hydro Project Construction 7/1/2013 $ 3,300,000 $ 12,400,000 Other State Grants and/or Municipal Bonds $ 15,700,000 Integration and testing 8/1/2013 $ 0 $ 200,000 Other State Grants and/or Municipal Bonds $ 200,000 Decommissioning old systems (hatchery) 7/1/2014 $ 0 $ 1,290,000 Other State Grants and/or Municipal Bonds $ 1,290,000 Final acceptance, commissioning and start-up 8/1/2013 $ 0 $ 100,000 Other State Grants and/or Municipal Bonds $ 100,000 Operations reporting 8/1/2013 $ 0 $ 140,000 Other State Grants and/or Municipal Bonds $ 140,000 TOTALS $ 3,300,000 $ 20,750,000 $ 24,050,000 Budget Categories: Direct Labor & Benefits $ 0 $ 100,000 Municipal Bonds $ 100,000 Travel & Per Diem $ 0 $ 0 $ 0 Equipment $ 0 $ 6,600,000 Other State Grants and AEA Round IV Grant $ 6,600,000 Materials & Supplies $ 0 $ 260,000 Other State Grants and/or Municipal Bonds $ 260,000 Contractual Services $ 0 $ 3,240,000 Other State Grants and/or Municipal Bonds $ 3,240,000 Construction Services $ 3,300,000 $ 9,260,000 Other State Grants and/or Municipal Bonds $ 12,560,000 Other (hatchery) $ 0 $ 1,290,000 Other State Grants and/or Municipal Bonds $ 1,290,000 TOTALS $ 3,300,000 $ 20,750,000 $ 24,050,000 Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)- Add additional pages as needed Renewable Energy Fund Grant Round V Grant Budget Form 7-1-11 Project Milestones that should be addressed in Budget Proposal Reconnaissance Feasibility Design and Permitting Construction 1. Project scoping and contractor solicitation. 2. Resource identification and analysis 3. Land use, permitting, and environmental analysis 4. Preliminary design analysis and cost 5. Cost of energy and market analysis 6. Simple economic analysis 7. Final report and recommendations 1. Project scoping and contractor solicitation. 2. Detailed energy resource analysis 3. Identification of land and regulatory issues, 4. Permitting and environmental analysis 5. Detailed analysis of existing and future energy costs and markets 6. Assessment of alternatives 7. Conceptual design analysis and cost estimate 8. Detailed economic and financial analysis 9, Conceptual business and operations plans 10. Final report and recommendations 1. Project scoping and contractor solicitation for planning and design 2. Permit applications (as needed) 3. Final environmental assessment and mitigation plans (as needed) 4. Resolution of land use, right of way issues 5. Permit approvals 6. Final system design 7. Engineers cost estimate 8. Updated economic and financial analysis 9. Negotiated power sales agreements with approved rates 10. Final business and operational plan 1. Confirmation that all design and feasibility requirements are complete. 2. Completion of bid documents 3. Contractor/vendor selection and award 4. Construction Phases – Each project will have unique construction phases, limitations, and schedule constraints which should be identified by the grantee 5. Integration and testing 6. Decommissioning old systems 7. Final Acceptance, Commissioning and Start-up 8. Operations Reporting Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 33 of 37 7/1//2011 ATTACHMENT D Letters of Support Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 34 of 37 7/1//2011 ATTACHMENT E Electronic Copy of Application on CD Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 35 of 37 7/1//2011 ATTACHMENT F Authorized Signers Form Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 36 of 37 7/1//2011 ATTACHMENT G Ketchikan City Council Resolution Renewable Energy Fund Grant Application Round 5 AEA12-001 Grant Application Page 37 of 37 7/1//2011 ATTACHMENT H Ketchikan Municipal Code Chapter 3.12 – Purchases and Sales Chapter 11.04 – Public Utilities General Provisions ------------- As to the authority of the city manager to contract for the purchase and sale of needed supplies, material and equipment, see Charter §5-16, §5-17 and §5-19. Chapter 3.12 Page 1 Ketchikan 8/2009 Title 3 REVENUE AND FINANCE Chapter 3.12 PURCHASES AND SALES Sections: 3.12.010 Contractual services defined. 3.12.012 Public improvement defined. 3.12.020 City manager or authorized personnel to make purchases. 3.12.030 When prior approval by the council is required. 3.12.035 Purchase of public improvements - when competitive bidding or quotations are required. 3.12.040 Purchases of supplies, materials, equipment or services -- when competitive bidding or quotations are required. 3.12.041 Awarding of competitive bids. 3.12.042 Competitive bid appeals process. 3.12.043 Competitive sealed proposals. 3.12.050 Purchasing--When competitive bidding or quotations are not required. 3.12.051 Professional service contracts. 3.12.055 Acquisition of real property, leases, easements and permits. 3.12.060 Sale or other disposition of real property or interest therein. 3.12.070 Sale or other disposition of personal property, or interest therein. 3.12.010 Contractual services defined. "Contractual services," for the purpose of this chapter, means services performed for the city by persons not in the employment of the city, and may include the use of equipment or the furnishing of commodities in connection with said services under express or implied contract. Contractual services include travel; freight; express, parcel post, postage; telephone; telegraph; utilities; rents; printing and binding; repairs, alterations, and maintenance of buildings, equipment, streets and bridges, and other physical facilities of the city; and other services performed for the city by persons not in the employment of the city. (Ord. 822 §l(part), 1975) 3.12.012 Public improvement defined. "Public improvement," as used in this Chapter, means the erection, building, construction, placement, creation or expulsion of an improvement to land. (Ord. 822 §l(part), 1975) 3.12.020 City manager or authorized personnel to make purchases. All purchases of supplies, materials, equipment, and contractual services for the offices, departments, and agencies of the city government, shall be made by the city manager or by other city personnel in accordance with purchase authorization issued by the city manager. (Ord. 822 §l(part), 1975) Chapter 3.12 Page 2 Ketchikan 8/2009 3.12.030 When prior approval by the council is required. Every contract for, or purchase of, supplies, materials, equipment, contractual services, or public improvements for more than fifty thousand dollars shall require the prior approval by motion or resolution of the council; and under no circumstances may such contract or purchase be made without first obtaining the approval of the council. (Ord.1151, §l, 1988: Ord. 822 §l(part), 1975) 3.12.035 Purchases of public improvements - when competitive bidding or quotations are required. (a) Purchases of or contracts for public improvements with a cost of $5,000 or less may be made on the open market without competitive bidding quotations, or solicitations, provided that such purchases or contracts are for budgeted items or items previously approved by the council. (b) Purchases of or contracts for public improvements with a cost in excess of $5,000, but not more than $50,000, shall, at the option of the purchasing authority, be awarded either by solicitation for written quotations made to at least three contractors or through the competitive bidding or proposal process described in section 3.12.040(c), section 3.12.041, section 3.12.042, and section 3.12.043. (c) Except as provided in (d) below, purchases of or contracts for public improvements with a cost in excess of $50,000 shall be awarded through the competitive bidding or proposal process described in section 3.12.040(c), section 3.12.041, section 3.12.042, and section 3.12.043. (d) Purchases of or contracts for public improvements may be awarded without notice and without competitive bidding or proposals: (1) When the public improvement can only be provided by a single contractor; (2) When the public improvement can be purchased from another unit of government at a price or rate determined by government authority; (3) When the public improvement is purchased from a public utility; (4) When the public improvements should be purchased from a specific contractor in order to prevent incompatibility with previously purchased supplies, materials, equipment or public improvements. For purposes of this subparagraph, the term "incompatibility" is defined as: (A) the inability to interconnect, combine, interchange, or join, or (B) that which causes substantial duplication in maintenance, expertise, or training or in the stocking of parts, materials, supplies or replacements. Any purchase which is to be excluded from competitive bidding by the authority of this subparagraph must be first approved by the council. (5) When the public improvements are required on an emergency basis, provided, however, that to the extent practical under the conditions of the emergency, the council shall declare the emergency; (6) When it is advantageous to the city to enter into a contract with a person, firm or corporation for the same public improvement under substantially the same terms as such person, firm or corporation is providing another municipal or state government, or the United States, where such public improvements are being provided the other unit of government on the basis of competitive bidding, or pursuant to a contract with or through such other government unit so that the benefit of the competitive bidding accrues to the city; (7) When competitive bidding has been followed, but only one, or no bids are received, or all bids are rejected. In such a case, after council approval, the manager may proceed to have the public improvements constructed without further competitive bidding; (8) When additional public improvements beyond the scope of an existing contract can be obtained by change order to the contract provided, however, that the existing contract was awarded through the competitive bidding process, that the change order for each additional public improvement does not exceed fifteen percent of the original bid price, and that the council approves the change order; Chapter 3.12 Page 3 Ketchikan 8/2009 (9) Notwithstanding any provision of this chapter, the council may also exempt any particular purchase from competitive bidding or other requirements by a non-emergency ordinance adopted pursuant to and as provided for in sections 5-16 and 5-17 of the city charter. (Ord. 1632, §1, 2009: Ord. 1291 §2, 1994) 3.12.040 Purchases of supplies, materials, equipment or services -- when competitive bidding or quotations are required. (a) Purchases of, or contracts for, supplies, materials, equip- ment, or contractual services, with a cost of ten thousand dollars or less in a single transaction may be made on the open market without competitive bidding, quotations, or solicitations, provided that such purchases or contracts are for budgeted items or items previously approved by the council. (b) Except as otherwise provided in section 3.12.043 or section 3.12.050, purchases of or contracts for supplies, materials, equipment, or contractual services, with a cost in excess of ten thousand dollars but not more than fifty thousand dollars in a single transaction shall, at the option of the city's purchasing authority, be made in the open market by written quotation or through the competitive bidding process set out in subsection (c) of this section, section 3.12.041 and section 3.12.042, the competitive sealed proposals process set out in section 3.12.043 or the professional services process set out in section 3.12.050. The city's purchasing authority shall solicit quotations or offers from at least three persons, firms or corporations. (c) Contracts over fifty thousand dollars. (1) Except as otherwise provided in section 3.12.043 or section 3.12.050, before any purchase of, or contract for, supplies, materials, equipment, or contractual services is made, when the cost thereof is estimated to exceed fifty thousand dollars, the city purchasing authority shall submit specifications and invitations to bid to at least three persons, firms, or corporations dealing in and able to supply the same, or to a lesser number if there are not three dealing in and able to supply the same. The purchasing authority shall also publish notice of the proposed purchase and invitations to bid in a newspaper of general circulation within the city. (2) When there are at least three persons, firms, or corporations that qualify as local, as defined in subsection (c)(4) of this section, the purchasing authority is not required to, but may submit invitations to bid to non-local persons, firms, or corporations. The purchasing authority shall, however, submit invitations to bid to non-local persons, firms, or corporations when the purchasing authority determines such action is necessary to secure bids or to create competitive conditions, or when such action may result in a savings for the city. (3) All bids shall be sealed and shall be opened in public at a time and place designated in the notice inviting bids. Information which would reveal the number of bids received and the identity of bidders shall not be released until after the time for submission of bids has passed. The purchasing authority may repeatedly reject any and all bids, may proceed under subsection 3.12.050(10) or may call for new bids as in the first instance, except that as an additional requirement each of the bidders whose bids were rejected shall be timely notified of a call for new bids and of the changes, if any, in the specifications or other requirements for such new bids. (4) Local Bidder Preference Award. (A) Unless contrary to federal or state law or regulation, a contract or purchase for supplies, materials, equipment or contractual services the amount of which is less than two hundred thousand dollars shall be awarded to a local bidder where the bid by such local bidder is in all material respects comparable to the lowest responsible non- local bid if the amount bid by such local bidder does not exceed the lowest responsible non-local bid by more than: (i) Ten percent (10%) of the amount bid by the lowest responsible non- local bidder if that non-local bidder’s bid is $100,000 or less; Chapter 3.12 Page 4 Ketchikan 8/2009 (ii) Seven percent (7%) of the amount bid by the lowest responsible non- local bidder or $10,000, whichever is less, if that non-local bidder’s bid is greater than $100,000 but less than or equal to $200,000. No local bidder preference will be allowed if the lowest responsible non-local bidder’s bid exceeds $200,000. The council may by motion adopted prior to bid opening exempt any contract or purchase from the local bidder preference set forth in the preceding sentence. (B) "Local bidder," for purposes of the preceding paragraph means a person who: ( i) Holds a current Alaska business license; (ii) Submits a bid for goods or services under the name appearing on the person's current Alaska business license; (iii) Has maintained a place of business within the boundaries of the Ketchikan Gateway Borough for a period of six months immediately preceding the date of the bid; and (iv) Is not delinquent in the payment of any taxes, charges or assessments owing to the city of Ketchikan or the Ketchikan Gateway Borough on account of that business. (C) The manager may require such documentation or verification by the person claiming to be a local bidder as is deemed necessary to establish the requirements of (B) above. (Ord. 1632, §2, 2009: Ord. 1379 §1 & 2, 1997: Ord. 1296 §1, 1994: Ord. 1291 §3, 1994: Ord. 1255 §1, 1993: Ord. 1241 §1, 1992: Ord. 1053 §l, 1985: Ord. 1048 §l, 1984: Ord. 1031 §l, 1984: Ord. 956 §l, 1981: Ord. 886 §2, 1977: Ord. 822 §l (part), 1975) 3.12.041 Awarding of competitive bids. (a) All requests for bids or proposals shall include clear and precise discussion of the specific evaluation factors to be used in awarding bids. (b) All requests for bids or proposals shall be as detailed as possible without preventing qualified bidders or proposers from submitting bids or proposals. Individual brand names will not be specified in requests for bids or proposals unless no functionally equivalent products exist. (c) All purchases that are competitively bid under Section 3.12.040 shall be awarded to the responsive bidder whose bid or proposal is determined to be most advantageous to the city, taking into consideration price and other evaluation factors as set out in the request for bid or request for proposal. (Ord. 1184, §l, 1990) 3.12.042 Appeals process. (a) Unless it is decided to reject all bids or proposals, all bidders or proponents under the competitive bidding or competitive sealed proposal procedures of this chapter will be given a notice of intent to award the bid or proposal. The notice shall identify the bidder or proponent whose bid or proposal is recommended for award, shall contain information relating to all submitted bids or proposals, and shall inform the bidder or proponent of the appeals process set forth in this section. (b) Any bidder or proponent which has any objection to the recommended award of bid or proposal and which claims to be the lowest responsible bidder or more qualified proponent shall file a written notification of appeal with the city clerk. The notification of appeal shall specifically state all of the reasons for the appeal, the specific action requested by the bidder or proponent, the specific parts of the bid or proposal or bid or proposal documents on which the appeal is based, the reasons the bidder or proponent claims to be the lowest responsible bidder or most qualified proponent, and all statements, documents and other relevant materials which the bidder or proponent will submit in support of its appeal. The notification of appeal shall be filed with the city clerk by either: (1) 5:00 p.m. on the Thursday one week prior to the city council meeting where the bid or proposal is to be awarded; or Chapter 3.12 Page 5 Ketchikan 8/2009 (2) within five calendar days from the date the notice of intent to award was delivered to the bidder or proponent which filed the notification of appeal, whichever is earlier. In no event, however, shall a bidder or proponent have less than two weekdays from the time it receives the notice of intent to award until the time it is required to have filed a notification of appeal. Not later than two days before the city council meeting where the bid or proposal is to be awarded, the city clerk shall notify all other bidders or proponents of the appeal and of their right to contest the appeal. (c) The council shall hear the appeal and any responses or information from other bidders or proponents. The council may then, without further opportunity for appeal, award the contract to any bidder or proponent. (d) A bidder or proponent which objects to the notice of intent to award a bid or proposal, but which fails to timely and completely file a notification of appeal with the city clerk shall have no right to appeal or contest the award of bid or proposal, and shall have no claim or cause of action relating to the bid or proposal process, the bid or proposal documents and specifi- cations, the bids or proposals themselves, or the award. A bidder or proponent which has submitted the bid or proposal recommended for award but which does not respond to a notification of appeal by either submitting a written response to each of the reasons for appeal or by presenting such response at the council meeting when the appeal is heard, shall have no right to appeal or contest the award of bid or proposal, and shall have no claim or cause of action relating to the bid or proposal process, the bid or proposal documents and specifications, the bids or proposals themselves or the award. The council may, in its discretion, consider any objection whether or not a complete or timely notification of appeal or response has been filed or presented but any such consideration shall be final and not subject to appeal, contest, claim or cause of action. (e) The council or the manager may at any time exempt any award of bid or proposal from all or any part of the appeals process set forth in this section provided that all bidders or proponents are timely notified in writing of the exemption, the reasons for exempting the particular award, the process which will be used in awarding a bid or proposal, the time at which any objection to the award may be made, and the time at which an award of bid or proposal may be made. (Ord. 1632, §3, 2009: Ord. 1291 §4, 1994: Ord. 1184, §2, 1990) 3.12.043 Competitive sealed proposals. (a) Subject to any prior approval by the council under section 3.12.030, if the manager determines that use of competitive sealed bidding or other procurement process under this chapter is not practicable, the city may procure supplies, materials, equipment, public improvements, or contractual services by competitive sealed proposals under this section. (b) The manager shall solicit competitive sealed proposals by issuing a request for proposals. The request for proposals shall state, or incorporate by reference, all specifications and contractual terms and conditions to which a proposal must respond, and shall state the factors to be considered in evaluating proposals and the relative importance of those factors. Public notice of a requested for proposals shall be published in a newspaper of general circulation within the city together with such other public notice as the manager may deem appropriate. (c) Sealed proposals shall be designated as such on an outer envelope and shall be submitted by mail or in person at the place and no later than the time specified in the request for proposals. Proposals not submitted at the place or within the time so specified shall not be opened or considered. (d) Proposals shall be received at the time and place designated in the request for proposals, and shall be opened so as to avoid disclosing their contents to competing proponents during the process of negotiation. Proposals, tabulations, and evaluations thereof shall be open to Chapter 3.12 Page 6 Ketchikan 8/2009 public inspection only after the issuance of a notice of intent to award the contract. Unless all proposals are rejected, the manager shall issue a notice of intent to award the contract. (e) In the manner provided in the request for proposals, the manager may negotiate with those responsible proponents whose proposals are determined by the manager to be reasonably responsive to the request for proposals. Negotiations shall be used to clarify and assure full understanding of the requirements of the request for proposals. The manager may permit proponents to revise their proposals after submission and prior to award to obtain best and final offers. Proponents deemed eligible for negotiations shall be treated equally regarding any opportunity to discuss and revise proposals. In conducting negotiations or requesting revisions, neither the manager nor any other city officer or employee shall disclose any information derived from proposals of competing proponents. (f) If fair and reasonable compensation, contract requirements, and contract documents can be agreed upon with the most qualified proponent, the contract shall be awarded to that proponent. (g) If fair and reasonable compensation, contract requirements, and contract documents cannot be agreed upon with the most qualified proponent, the manager shall advise the proponent of the termination of negotiations. If the proposals were submitted by one or more other proponents determined to be qualified, negotiations may be conducted with such other proponents in the order of their respective rankings. The contract may be awarded to the proponent then determined to be most advantageous to the city. (h) Awards shall be made by written notice to the proponent whose final proposal is determined to be most advantageous to the city. No criteria other than those set forth in the request for proposals may be used in proposal evaluation. If the manager determines that it is in the best interest of the city to do so, the city may reject all proposals. (Ord. 1632, §4, 2009) 3.12.050 Purchasing--When competitive bidding or quotations are not required. (a) The following may be purchased or contracted for without competitive bidding or soliciting quota- tions: (1) Supplies, materials, equipment, contractual services, the cost of which does not exceed ten thousand dollars in a single transaction; (2) Supplies, materials, equipment or contractual services which can be furnished only by a single dealer, which have a uniform price wherever purchased or which are telecommunications supplies, materials, or equipment purchased by KPU for retail sale or lease; (3) Supplies, materials, equipment or contractual services purchased from another unit of government at a price or rate determined by governmental authority; (4) Supplies, materials, equipment or contractual services purchased from a public utility at a price or rate determined by governmental authority; (5) Contractual services of a professional nature, such as engineering, architectural, legal, medical or consulting services; (6) Supplies, materials, equipment or contractual services which should be purchased from a specific source in order to prevent incompatibility with previously purchased supplies, materials, equipment or contractual services. For purpose of this subparagraph, the term "incompatibility" is defined as: (A) the inability to interconnect, combine, interchange, or join; or (B) that which causes substantial duplication in maintenance, expertise or training or in the stocking of parts, materials, supplies or replacements. Any purchase which is to be excluded from competitive bidding by the authority of this subparagraph which exceeds ten thousand dollars, must first be approved by the council; Chapter 3.12 Page 7 Ketchikan 8/2009 (7) Supplies, materials, equipment or contractual services which are required on an emergency basis, provided, however, that to the extent practical under the conditions of the emergency, the council shall declare an emergency. (8) Placement or purchase of insurance; (9) When it is advantageous to the city to enter into a contract with a person, firm or corporation for the same supplies or services under substantially the same terms as such person, firm or corporation is providing another municipal or state government, or the united States, where such supplies or services are being provided the other government unit on the basis of formal bids, price quotations or other competitive proposal procedure or pursuant to a contract with or through such other government unit so that the benefit of the price quotation or other competitive proposal accrues to the city; (10) When competitive bidding has been followed, but only one, or no bids or quotations, are received, or the bids or quotations are rejected. In such a case, after council approval, the manager may proceed to have the supplies, materials, or equipment purchased, the services performed or the public improvements constructed without further competitive bidding or quotation; (11) The purchase of used vehicles or equipment when such purchase has been determined by the manager to be in the best interest of the city; (12) The purchase of new equipment to be used at or in connection with the Ketchikan Shipyard, when and under such terms and conditions as the council, in its sole judgment, deems advantageous to the city; (13) Notwithstanding any provision in this chapter, the council may also exempt any particular purchase from competitive bidding or other requirements by a non-emergency ordinance adopted pursuant to and as provided for in Sections 5-16 and 5-17 of the city charter. (Ord. 1291 §5-8, 1994: Ord. 1104 §1-3, 1987; Ord. 1103 §l, 1987; Ord. 822 §l(part), 1975) 3.12.051 Professional service contracts. (a) Definitions. (1) Professional services as used in this section shall mean professional, technical or consultant services that are predominantly intellectual in character and that: (A) Include analysis, evaluation, prediction, planning or recommendations, and (B) Result in the production of a report, plan, drawings, or the completion of a task. Examples of professional service contractors include, but are not limited to: accountants, architects, appraisers, engineers, land surveyors, financial consultants, attorneys, planning consultants, economists, computer programmers and system analysts, insurance consultants and risk analysts, insurance providers, and other specialized consultants. (2) Request for proposals means a written solicitation for contract proposals by prospective contractors that sets out the nature of the services to be performed or product to be secured with sufficient information for a qualified prospective contractor to prepare a responsive contract proposal for consideration and evaluation by the city. (b) Professional service contracts generally; contract authority. (1) The manager may award and sign, without prior approval of the council, any contract for professional services if adequate funding is budgeted, except as provided in this subsec- tion. (2) Any proposed professional service contracts with an estimated cost in excess of fifty thousand dollars shall be awarded by the council. (3) The manager shall utilize a selection committee including the manager or manager's designee, a department head, members of the American Society of Civil Engineers, Chapter 3.12 Page 8 Ketchikan 8/2009 American Society of Mechanical Engineers, American Institute of Architecture and/or other professional organizations and interested citizens as the manager deems appropriate to evaluate proposals and select -the best qualified professional services contractor to provide the required service. All meetings of selection committees shall be open to the public. (c) Solicitation of proposals. (1) When the city proposes to enter into a contract for professional services, it shall: (A) Publish a public notice soliciting proposals for the proposed professional services contract at least two times in a newspaper of general circulation in the city and post notice in such other location as the manager deems appropriate. The first notice shall be published not less than twenty-one days before the deadline for submittal of proposals as announced in the public notice and the second notice shall be published not less than seven days thereafter. The notice shall include: (1) A brief description of the proposed project for which the city is seeking professional services; (2) The procedure by which a person or firm interested in the professional services contract may make a proposal to the city for consideration for the contract; and (3) The deadline for submittals. (2) The provisions of this section do not apply if: (A) The manager demonstrates to the council that there is a single source of the expertise or knowledge required, or that one person or firm can clearly perform the required tasks more satisfactorily because of the person's or firm's prior work; (B) The manager makes a determination that public necessity will not permit delay incident to the procedures otherwise required by this section; or (C) The service is to be provided by another government agency; or (D) The estimated cost of the contract does not exceed fifty thousand dollars. (3) In addition to other criteria set forth in the request for proposals, the following selection factors shall be considered by the city when it evaluates the proposals received: (A) Specialized experience and technical competence of the person or firm (including a joint venture or association) with the type of service required; (B) Capacity of the person or firm to perform the work including any specialized services, within the time limitations; (C) Character, integrity, reputation, judgment, experience and efficiency of the person or firm; (D) Past record and performance on contracts with the city or other governmental agencies and private industry with respect to such factors as control of costs, quality of work and ability to meet schedules; (E) Familiarity with the details of the project; (F) Degree of local employment to be provided by the person or firm in the performance of the contract by the person or firm; and (G) Estimated cost of services. (d) Professional services contract terms. Contracts may be lump sum, cost plus a fixed fee, unit price, cost times a multiplier, or on such other terms as are deemed appropriate to the project involved. (Ord. 1291 §9, 1994: Ord. 1186, §l, 1990) 3.12.055 Acquisition of real property, leases, easements and permits. (a) No real property may be acquired by the city without first being specifically approved by the council. No lease, easement or permit to use land may be acquired by the city for a payment in excess of five Chapter 3.12 Page 9 Ketchikan 8/2009 thousand dollars without first being specifically approved by the council. The manager is authorized to acquire from budgeted funds and without further council approval, leases, easements or permits priced at less than the amount set forth above. For the purposes of this section the term "price" means the cash paid to the seller plus the value of goods and services provided to the seller which: (1) Are given in consideration for the lease, easement or permit; and (2) were not otherwise needed by the city at any time for its use of the lease, permit or easement. The provisions of this section shall not apply to land exchanges under section 3.12.060. (Ord. 1266 §1, 1993) 3.12.060 Sale or other disposition of real property or interest therein. (a) No real property, or interest therein, of any value may be sold, leased, exchanged or otherwise disposed of until the council has declared by motion or resolution that the real property, or interest therein, is surplus, or unneeded, or that the transaction is otherwise in the best interest of the city. (b) Except as otherwise provided in this chapter, the manager may sell, lease, exchange or otherwise dispose of real property, or an interest therein, only after appraisal of the fair market value thereof by a qualified appraiser obtained by the city, and the price shall be not less than the fair market value plus the cost of the appraisal plus survey, platting, recording and other costs to the city attendant to the transaction. (c) Except when the disposition is otherwise exempt from competitive bidding, the proposed disposition of real property, or interest therein, shall be advertised in a newspaper of general circulation in the city to advise prospective buyers of the proposed disposition and to provide an opportunity to submit such bids. All bids shall be sealed and shall be opened in public at a designated time and place, except when the sale is by auction. The manager may repeatedly reject all bids and advertise or give notice again. If a responsive bid at the minimum price set forth in paragraph (b) is not received, the city manager may, within one year from the date bids were to be opened, dispose of the property at such minimum price without further advertisement, bidding or authorization. After one year from the date bids were to be opened, the city manager may dispose of such property without further advertising, bidding or authorization if the price for the property is not less than the fair market value as determined by an appraisal performed within one year prior to the date of disposal by a qualified appraiser plus the costs of appraisal, survey, platting, recording and other costs to the city attendant to the transaction. (d) The manager, after council approval by motion or resolution, may sell, lease, exchange or otherwise dispose of the following real property, or an interest therein, without giving an opportunity for competitive bidding, subject to compliance with the provisions of section 5-17 of the city charter: (1) Real property, or an interest therein, to be exchanged for other real property, or an interest therein, which is determined by an appraisal prepared by a qualified appraiser obtained by the city to be at least equal in value to the city property or the interest therein that is to be exchanged, or if the city's property is determined to be greater in value, if the difference is made up in cash to the city. The person receiving the city property or interest to be exchanged shall pay the cost of the appraisal, plus survey, platting, recording and all other costs to the city attendant to the transaction; (2) Sale, lease, donation, exchange or other transfer of real property, or an interest therein, to or with another municipality, a state, or the United States, when and under such terms and conditions as the council, in its sole judgment, deems advantageous to the city; (3) Parcels of real property that are substandard in size or configuration under existing zoning, which may be disposed of by sale or exchange to the legal owner of adjoining Chapter 3.12 Page 10 Ketchikan 8/2009 property, with such adjoining parcel to be then replatted to incorporate therein such substandard parcel sold or exchanged; provided, however, that the sale price or exchange value shall be at least equal to the fair market value of the city property or interest therein transferred, which may be determined by using the current assessed value of the property, or a comparable portion of such property, as established by the Ketchikan Gateway Borough assessor, plus survey, platting, recording and other costs to the city attendant to the transaction; (4) Easements may be released to the legal owner of the servient property when and under such terms and conditions as the council, in its sole judgment, deems advantageous to the city. (e) Notwithstanding any other provision herein, a sale, lease or other disposal of real property, or interest therein, the value of which is more than thirty thousand dollars, must meet and comply with all of the requirements of section 5-17 of the city charter. (f) Real property sold, traded, or exchanged shall be conveyed by the city without warranty. (g) Notwithstanding any provision in this chapter, the council may also exempt any particular contract, sale, lease, exchange, disposal or other transaction from competitive bidding or other requirements by a non-emergency ordinance adopted pursuant to and as provided for in sections 5-16 and 5-17 of the city Charter. (Ord. 1209, §1, 1991: Ord. 1142, §l, 1988: Ord. 1103, §3, 1987) 3.12.070 Sale or other disposition of personal property, or interest therein. (a) The manager may sell or otherwise dispose of any surplus, obsolete or unneeded supplies, materials, equipment or other personal property with a value of two thousand dollars or less, by giving notice of each proposed disposition in such manner as he deems reasonable and appropriate; provided, however, the manager shall not be required to give notice if the cost of giving notice exceeds the value of the supplies, materials, equipment or other personal property. (b) No supplies, materials, equipment or other personal property of a value of more than two thousand dollars other than scrap metal may be sold or otherwise disposed of until the council has declared, by motion or resolution, such property surplus, obsolete, unneeded, or that the transaction is otherwise in the best interest of the city. (Ord. 1610, §1, 2008) (c) Except as provided in subsection (a) of this section, or when the disposition is otherwise exempt from competitive bidding, the proposed disposition of personal property, or interest therein, shall be advertised in a newspaper of general circulation in the city to advise prospective buyers of the proposed disposition and to provide an opportunity to submit such bids. All bids shall be sealed and shall be opened in public at a designated time and place, except when the sale is by auction. The manager may repeatedly reject all bids and advertise or give notice again. (d) Personal property, or an interest therein, may, subject to the provisions of section 5- 17 of the city charter, be sold or otherwise disposed of without competitive bidding as follows: (1) Supplies, materials, equipment or other personal property, or any interest therein, may be sold or otherwise disposed of by the manager when the total value thereof, as estimated by the manager, does not exceed collectively two thousand dollars. (2) The manager may sell, lease, donate, exchange or otherwise dispose of personal property, or an interest therein, to or with another municipality, a state or the United States when and under such terms and conditions as the council, in its sole judgment, deems advantageous to the city. (e) Notwithstanding any other provision in this chapter, the council may also exempt any particular contract, sale, lease, exchange, disposal or other transaction from competitive bidding or other requirements by a nonemergency ordinance adopted pursuant to and as provided for in Sec- tions 5-16 and 5-17 of the city Charter. (Ord. 1103 §5, 1987) Chapter 11.04 Page 1 Ketchikan 7/2009 Title 11 PUBLIC UTILITIES Chapter 11.04 GENERAL PROVISIONS1 Sections: 11.04.010 Rates and other provisions. 11.04.020 Written contracts for electric utility service. 11.04.030 Application for utility service. 11.04.040 Deposits. 11.04.050 Rendering and payment of bills. 11.04.060 Delinquent bills. 11.04.070 Complaint and billing disputes. 11.04.080 Pretermination procedures and disconnection of service. 11.04.090 Theft or diversion. 11.04.100 Resale of service. 11.04.110 Increase in rate to compensate for taxes. 11.04.120 Interruption of service and nonliability. 11.04.130 Inspections. 11.04.140 Rules regarding telecommunications service only. 11.04.150 Description of service. 11.04.160 Substandard conditions and service refusal. 11.04.170 Protective devices on premises. 11.04.180 Power factor. 11.04.190 Interference and equipment to limit voltage and current fluctuation. 11.04.200 Increased use of electricity. 11.04.210 Meter installation and metering. 11.04.220 Meter tests. 11.04.230 Requirements for relocation, replacement or service upgrades of KPU facilities. 11.04.240 Fluoridation of city water. 11.04.010 Rates and other provisions. (a) The rates, terms, provisions and conditions specified herein for and regarding electric power, water, and telecommunications service apply to customers located, or to be located on, the electric, water, and telephone lines or systems of KPU and are subject to change at any time. Complete schedules of all rates in effect shall be filed and maintained at all times in the utilities business office and shall be available for public inspection during regular business hours. (b) In the event more than one rate schedule is applicable to any class of service, KPU will call such fact to the attention of the applicant at the time application for utility service is made, explain the several schedules, and the applicant shall designate which rate schedule is desired. The 1 For the electric, telecommunications, and water departments, see section 2.32.010. As regards to accounting for the electric, water, and telecommunications systems, see the city charter, section 8-1. Chapter 11.04 Page 2 Ketchikan 7/2009 rate schedule so designated by the customer shall remain applicable until the customer gives written notice specifying that another available rate schedule is desired, except as such schedule may thereafter be modified or abolished by KPU. Customer changes in rate schedules shall not be allowed more than once in any twelve-month period without the express approval of the utilities manager. In the event a customer desires to receive utility service under a different schedule than that under which service is currently being provided the different rate schedule shall not become applicable until after the next regular meter reading following the date written notice by the customer to change the schedule is received by KPU. (c) In the event new, additional, or modified rates or rate schedules are adopted, KPU will take such measures as may be practicable to advise the customers who may be affected by such new, additional, or modified rates or rate schedules that such rates have become effective. Such notice of change of rates will include, but is not limited to, customer publications, local media, and direct mailing. (d) All rates are based on delivery of utility service to one location of one customer unless otherwise stated in the rate schedule. Service for less than twelve months may be classified as temporary and special arrangements required. (e) The right is reserved by KPU to modify, with the approval of the city council, the approved rates and/or regulations, when such modifications are deemed necessary, beneficial, and in the public interest. Such modifications shall be for a specific reason and for a specified time period and shall not to be construed as a substitute for, or an abrogation of the regular and generally applied rates and/or regulations except during the specified period during which such modifications are to be effective. (Ord. 1065 §3(part), 1985). 11.04.020 Written contracts for electric utility service. Notwithstanding the provisions of Section 11.04.010, electric utility service provided to a single customer which is expected to be in excess of one thousand two hundred kilowatts of peak demand, or five hundred thousand kilowatt hours of energy per month, or other service requiring special expenditure, planning, or accommo- dation by KPU, shall be provided pursuant to a written contract between the customer and KPU. The terms and conditions of such contracts shall specify the rate schedule to be applied, and may include, in addition to the provisions set forth in the applicable rate schedule, such additional matters as the minimum and maximum term of service, minimum and maximum purchases, the periods of notice required to be given prior to receiving or discontinuing service, and such other terms, conditions and provisions as are deemed to be in the best interest of KPU (Ord. 1065 §3(part), 1985). 11.04.030 Application for utility service. (a) Each applicant for utility service shall be required to complete and sign an application for utility service on a form provided by KPU. (b) The application referred to in (a) above, and any information included thereon, shall be used by KPU and the city finance department for the management and administration of the customer's administrative account, financial accounting, recovery of payment for utility services, and the city's own credit records and for no other purpose except as may otherwise be required by law. (Ord. 1065 §3(part), 1985) 11.04.046 Deposits. (a) Prior to providing any utility services KPU may require a security deposit from each applicant. In lieu of a security deposit, KPU may accept a credit card, provided the credit card expires no sooner than 12 months from the date of application for service. The customer’s credit card shall be charged a refundable security deposit should the customer fail to pay his KPU bill by the due date during the first 12 months of service. The customer’s credit card number shall also be retained by KPU during the first 12 months of service and will be charged for any remaining balance due, should the customer terminate service within the first 12 months of Chapter 11.04 Page 3 Ketchikan 7/2009 service and fail to pay the final bill by the bill due date. Should the customer be unable to provide a credit card, KPU may accept in lieu of a security deposit a letter issued by the applicant's last previous utility not more than six months prior to the date of the application under consideration by KPU stating that the applicant was a customer of such utility within six months of the date of the letter and that at all times during the last six months of service the customer's utility service account was current and at no time delinquent in payment. If an applicant for service posts a security deposit and thereafter submits a letter of good credit standing to KPU and such letter is accepted by KPU, the security deposit will be refunded if the customer's KPU utility account has not been delinquent. If the customer's account has been in good standing and not delinquent during each of the immediately preceding twelve months the security deposit will be refunded. If, after acceptance of a good credit standing letter, or at any other time, a customer's account becomes delinquent, KPU may, as a condition of continuing utility service, require the customer to make the security deposits required herein. (b) Minimum deposit: The minimum security deposit shall be as follows: (1) Electric service $ 50.00 (2) Telecommunications service $ 50.00 (3) Water service (required only if applicant is not also receiving, or applying for, electrical or telecommunications service) $ 25.00 (c) Additional or new security deposits may be required when accounts become delinquent, or conditions otherwise warrant, as determined by KPU. KPU shall be the sole judge in determining the need for additional security deposits and the amount of such additional deposit. KPU reserves the right to refuse to provide new services, and to terminate existing services, in the event security deposits are not made as herein provided. (d) The security deposits provided for herein shall accrue simple interest at the rate of five percent per annum, which shall be credited to the customer's account. When utility services are discontinued the security deposit, and any accrued interest, shall be applied first to any due and unpaid amount of the customer's account, and the balance, if any, refunded by issuing a check to the customer. Endorsement of the check shall be deemed to constitute an acknowledgement by the customer of the receipt of the refund of the security deposit and to the release of KPU from Any and all further claims regarding the deposit. (Ord. 1532 §3, 2005: Ord. 1123 §l, 1987: Ord. 1065 §3(part), 1985). 11.04.050 Rendering and payment of bills. (a) Bills for utility service shall be based on meter registrations and be rendered monthly, or as may be required for opening or closing billings, or as otherwise provided under applicable rate and tariff schedules. (b) Reading of meters: (1) Meters will be read as nearly as possible at regular monthly intervals. For billing purposes each meter upon the customer's premises will be considered and billed separately and readings from two or more meters will not be combined. (2) Meter readings may be estimated a maximum of two consecutive months; provided however, for remote areas, such as Gravina and Pennock Islands, meter readings may be estimated for a maximum of three consecutive months. When estimates are made, the bill shall clearly identify that the readings are estimated. In the event KPU access to a meter is denied or is otherwise not provided, or made readily available, thereby requiring that the readings be estimated, the customer will be given a notice after the second estimate that access must be provided or service will be discontinued (see Section 11.04.210, meter installations for additional information). Nonpayment of an estimated bill shall be treated the same as any other delinquency. (c) Bills for utility services shall be mailed to the customer at the address shown on the KPU records and are due and payable not later than twenty-five days after the billing date shown on Chapter 11.04 Page 4 Ketchikan 7/2009 the bill. Such bills are the first notice to the customer that the amount shown is due and payable and the bill shall become delinquent if not paid within twenty-five days after the billing date. Payment shall be made at the KPU office or by mail. If a letter containing valid payment is postmarked within twenty-five days after the billing date, the payment will be deemed to have been received by KPU within the current period and will not be considered delinquent. (Ord. 1065 §3(part), 1985) 11.04.060 Delinquent bills. Bills not paid within twenty-five days after the date of the billing are delinquent and subject to late payment charges. The late payment charge shall be five percent of the amount of the delinquency. Accounts which are not on a special credit arrangement will receive a past due (delinquent) notice incorporated into the bill for the following month. Failure to receive mail is not a valid reason for nonpayment of the bill. Upon receipt of the delinquent notice the customer shall either pay the amount due or make acceptable payment arrangements with the city finance department. Failure to promptly pay the delinquent bill or make and comply with the terms of acceptable credit arrangements for payment will initiate action to disconnect the utility. (Ord. 1065 §3(part), 1985) 11.04.070 Complaint and billing disputes. Except as provided in (c) below, any person that feels they have not been accorded fair and equitable treatment, or that disputes the accuracy of a utility billing, may request and obtain a review of the matter pursuant to the procedure provided for in paragraph (a) below if the complaint relates to the accuracy of a utility billing, or pursuant to the procedure provided for in paragraph (b) below as to another type of utility complaint. A complaint will be reviewed only if the person submits the complaint and follows the procedures provided for herein. (a) Billing Complaint. The procedure for reviewing a complaint regarding a billing shall be as follows: (1) Step 1. The complainant requests an informal conference with the city finance department. Upon receipt of the request, a finance department employee shall be designated to schedule and conduct an informal conference with the complainant. The complainant may be accompanied to, and assisted at, the informal conference by a representative. The complainant shall state their complaint and present any documents and arguments in support of their position. The finance department employee assigned to the case shall review the matter with the complainant and shall have the authority to make adjustments to the billing amount as necessary to assure the billing is correct. (2) Step 2. If the complaint is not resolved at Step 1, the complainant may appeal the Step 1 decision to the city director of finance for further review by filing a written request therefore not later than five days after the complainant is advised of the Step 1 decision. Upon receipt of a timely request for a hearing the director of finance shall meet with the complainant, review the matter, and advise the complainant of the decision. (3) Step 3. If the dispute is not resolved at Step 2, the complainant may appeal the matter to the utilities manager by filing a written request for a hearing with the utilities manager not later than five days after the date the complainant is advised of the Step 2 decision. The utilities manager shall review the matter and advise the complainant in writing of the decision and the reasons therefore. The decision of the utilities manager shall be final. (4) Step 4. If the decision of the utilities manager is to uphold any portion of the billing, that portion of the billing that is upheld shall become due and shall be payable as determined and specified by the utilities manager in his decision. In the event the portion of the billing that is upheld is not paid as required, KPU shall proceed in the manner provided for delinquent utility bills. Chapter 11.04 Page 5 Ketchikan 7/2009 (b) Complaints not Involving Billing. Except as provided in (c) below, a customer or other person that has a complaint which is not a billing dispute reviewable under (a) above, may submit the complaint for review pursuant to the following procedure: (1) Step 1. The complaint may be made to an employee of KPU who shall either attempt to resolve the complaint or refer the matter to another employee of KPU that is responsible for the type of service, problem, or issue that is involved. (2) Step 2. If the complaint is not resolved pursuant to Step 1 the employee shall refer the matter to the head of the department that is responsible for the utility service or issue involved, who shall meet with the complainant and make every reasonable effort to resolve the matter. (3) Step 3. If the complaint is not resolved at Step 2, the complainant shall have the right to file a written request for a hearing before the utilities manager not later than five days after the date of the decision by the department head. If the complainant files a timely request for a hearing before the utilities manager, the complainant shall be advised of the date, time and location of the hearing and of the right to bring documents and witnesses to assist in the presentation of the complaint. The complainant shall also be advised that reasonably available KPU records relating to the complaint, and KPU personnel with relevant information, will be brought to the hearing if requested. (4) Step 4. The hearing before the utilities manager shall be informal. The hearing need not be recorded and the formal rules of evidence and other formal legal procedures shall not apply. The complainant shall state their complaint with particularity and present any documents, witnesses or other evidence and arguments in support of their position and may examine any documents and witnesses presented by KPU. At the conclusion of the hearing, the utilities manager shall render a written decision setting forth the reasons for the decision. The decision of the utilities manager shall be final. (c) If the grievance, dispute or complaint is a KPU personnel matter subject to the city personnel rules or a collective bargaining agreement, or if there is some other specific procedure that has been adopted or is made applicable for the review of the complaint or dispute, the provisions of such personnel rules, collective bargaining agreement or other procedure shall be applicable and govern such review and the matter shall not be reviewable or subject to the review provisions of this section. (Ord. 1065 §3(part), 1985) 11.04.080 Pretermination procedures and disconnection of service. (a) In the event utility bills are not paid as required, or any rules, regulations, standards, codes or other applicable provisions are not complied with or are violated, the service may be terminated and the utility disconnected. The pretermination and disconnect procedures shall be as hereinafter provided. (b) Nonpayment of Bills. KPU shall take the following actions prior to disconnection of utility service for nonpayment of bills: (1) A past due notice shall be incorporated into the customer's normal billing each time an account is delinquent. This notice shall inform the customer that the account is past due and that the utility service is subject to being disconnected if the billing is not paid within seven days after the date of such past due notice. (2) If the account is not paid within seven days after the date of the past due notice provided for in (1) above, a disconnect notice will be sent to the customer. (3) The disconnect notice referred to in (2) above shall state that unless payment is received within ten days after the date printed on the disconnect notice service will be disconnected. (4) A customer's electrical service will not be disconnected on a day when KPU's offices are closed or on the day preceding a day when such offices are closed. Chapter 11.04 Page 6 Ketchikan 7/2009 (5) Provisions for utility service reconnection: (A) Utility service may be reconnected upon payment of the account balance in full and the payment of any additional security deposit that may be required. (B) Where scheduling, does not permit normal service reconnection on the same day as requested, the customer may elect to pay an after-hours charge for obtaining reconnection of service that day or service will be reconnected on the next available business day. (6) Electric utility service will not be disconnected for nonpayment of bills in the following situations: (A) Life support equipment is used and is dependent on that utility service for the operation of the apparatus; (B) The customer presents evidence that establishes that such termination will seriously affect the health or safety of the customer or of a member of the customer's household provided the customer has made prior credit arrangements with KPU; (C) The customer has made prior credit arrangements for payment and is complying with the terms of such credit arrangement. Credit payment arrangements must specify the payment dates, payment amount, and review dates. The credit arrangement shall be a commitment by the customer to pay the delinquent portion of the bill on a specified date, or in equal payments over a specified period of time that is agreeable with the credit personnel of the finance department. If payments are not being made as agreed, service shall be subject to disconnection; (D) For delinquency in the payment of utility service rendered to a prior customer at the same premises where service is currently being provided, except in the instance where the prior delinquent customer continues to reside on the premises. (7) Exceptions to the provisions of this section regarding the manner, sequence, or time for payment or disconnections of utility service may be granted by the city director of finance or by the utilities manager. (c) Violations of Rules and Regulations. KPU shall have the right to disconnect any utility service that is found not to be in compliance with, or is in violation of, any rules, regulations, standards or codes. Prior to disconnection the customer shall be given written notice of the nature of the noncompliance or violation and advised that the utility service will be terminated if the violation or noncompliance is not corrected within the time period that is specified in the notice. Unless a different notice period is provided for in this title the period allowed for bringing the condition into compliance, or to correct the violation, shall be not less than thirty days. Such violations shall include, but are not limited to, the following: (1) Failure of the customer to provide KPU with access to KPU metering or other equipment, or to the property; (2) The customer fails to comply with all applicable rules, regulations, standards and codes, which pertain to the safe construction, operation and maintenance of utility facilities; (3) Meter tampering; (4) The customer impairs or interferes with utility service to others; (5) The customer's equipment, use or intended use, of utility service is determined to be substandard. (d) Disconnection of utility service as provided in this section shall be deferred during the time the grounds or basis for disconnection is being reviewed or appealed pursuant to the provisions of Section 11.04.070. (e) When the condition that resulted in the disconnection of service is corrected, KPU will, upon payment of all required charges relating to reconnection, restore utility service. (f) Notwithstanding any other provision provided for herein, KPU reserves the right to disconnect utility service without notice under the following conditions: (1) Theft or diversion of utility service; Chapter 11.04 Page 7 Ketchikan 7/2009 (2) Existence of an immediate hazard which threatens the health or safety of the customer, another person, the general public, or KPU personnel, equipment or facilities. (Ord. 1065 §3 (part), 1985) 11.04.090 Theft or diversion. (a) Tampering with meters or other facilities of KPU or theft or division of utility services is a violation of KPU rules and regulations and also a criminal offense under Alaska law. Theft or diversion of utility service shall constitute just cause for KPU to disconnect service. In the event utility service is disconnected as provided herein, the amount of estimated lost revenue, damage to KPU property, disconnect and reconnect charges, and any other costs or expenses incurred to KPU as a result of such tampering, including such damages as are provided for in AS 42.20.030, shall be determined and such amount shall be paid in full before the utility service is restored. (Ord. 1065 §3(part), 1985) 11.04.100 Resale of service. No person shall resell or redistribute any electric energy, water, or telecommunications service furnished by KPU unless specifically authorized in advance by written agreement with KPU. (Ord. 1532 §3, 2005: Ord. 1065 §3(part), 1985) 11.04.110 Increase in rate to compensate for taxes. Utility service rates contained in this title are subject to proportional increases to compensate for any gross revenue, kilowatt-hour, or other form of tax imposed by any municipal, state, or federal taxing authority. (Ord. 1065 §3 (part), 1985) 11.04.120 Interruption of service and nonliability. (a) KPU will exercise reasonable diligence and care to deliver a continuous and adequate supply of electric, water and telecommunications services to customers, but cannot, and does not, warrant or guarantee such level or quality of service will be provided and KPU, the city, and their officers and employees, shall not, except as to allowance of a credit for an outage or interruption of service as provided in (b) below, be liable for any claim, loss, injury, or damage which may be caused by reason of an outage, shortage, fluctuation, or interruption in service, and such outages, shortages, fluctuations, or interruptions shall not constitute a breach of any express or implied contract or warranty or otherwise impose any liability on KPU, the city, or their officers or employees. (b) KPU shall only be responsible for the effects of any outage or interruption of telecommunications, electric, or water service to the extent of the amount billed for the affected utility services during the period the utility service was interrupted or out of service. A prorated credit on the utility bill will be allowed for the period after such utility service interruption, shortage or outage has been reported to KPU to the time the utility service is restored, except that no credit shall be given if the utility service interruption, shortage or outage is less than forty-eight hours in duration. In no event shall credit be allowed where the cause of the interruption, shortage or outage can be traced to the fault of the customer, the premises, or to equipment or facilities that are not owned or maintained by KPU. (Ord. 1532 §3, 2005) (c) KPU shall have the right to temporarily suspend delivery of utility service whenever KPU finds such necessary for the making of repairs or improvements to its systems; provided, however, whenever practical, and time permitting, reasonable prior notice shall be given in the newspaper or other advertising media to the customers. The repairs or improvements will be prosecuted with reasonable diligence and, insofar as is reasonably feasible, at such times as will cause the least inconvenience to customers. (d) Nothing in this chapter shall be construed as placing upon KPU, the city, or their officers, employees and agents any responsibility for the maintenance, inspection or repair of any of the customer's wiring, current consuming devices, communications equipment, plumbing, or any other customer equipment or facilities; and KPU, the city, and their officers, employees and agents Chapter 11.04 Page 8 Ketchikan 7/2009 shall not be held liable for any claim, loss, damage or injury to persons, property or equipment resulting from any defects in the customer's installations or equipment, or for any damage or injury to any person or property arising from use of the service on the premises of the customer. (Ord. 1065 §3(part), 1985) 11.04.130 Inspections. (a) KPU shall be provided full, unobstructed, and free access at all reasonable times during the day to all parts of all buildings and property supplied with utility service for the purpose of inspection of utility lines, pipes, wires, conduits, fixtures, or other equipment or facilities. KPU reserves the right to close off all lines, pipes, wires, conduits, fixtures, and other equipment of facilities found to be not in compliance with all rules, regulations, standards, and codes, and service will not be resumed until satisfactory repairs and corrections have been made. (b) Written permission from KPU shall be obtained prior to attachment of any equipment, device, materials, or facilities of any nature or description to KPU owned or operated facilities. (Ord. 1065 §3(part), 1985) 11.04.140 Rules regarding telecommunications service only. (a) The rules and requirements specified in this section are in addition to any other applicable KPU rules and regu- lations. (b) Local and long distance telecommunications service is available to the general public through facilities owned and operated by KPU. Charges for this service shall be as provided in Chapter 11.12. (c) Telecommunications and other utility service is provided for the exclusive use of the customer only. The customer assumes sole responsibility for the use of this service by any and all persons. (d) Equipment and facilities furnished by KPU shall remain the property of KPU- KPU retains the right to install, maintain, inspect, sell and remove the equipment and facilities as conditions dictate. (e) Customers shall not disconnect or remove, or permit others to disconnect or remove, any apparatus owned by KPU without the prior consent of KPU. (f) Upon discontinuation of telecommunications service, the customer will be billed the actual replacement cost of each piece of telecommunications apparatus missing, damaged or destroyed. (g) The customer shall have no property right in the telephone number. KPU reserves the right to change telephone numbers as deemed necessary. (h) KPU's obligation to furnish telecommunications service is based upon, and limited by KPU's ability to procure and retain suitable facilities and rights for the construction and mainte- nance of the necessary circuits. (i) KPU may suspend any utility service and remove KPU's equipment from the customer's premises if use of the service is conducted or is exercised in such manner as to impair or interfere with service of others. (j) All network signaling and switching equipment will be furnished, installed and maintained by KPU. (k) Customer provided equipment: (1) No customer provided equipment shall be attached or connected to any facilities furnished by KPU except upon the express prior written approval of KPU. (2) Customer provided equipment and communication systems may be used with the facilities furnished by KPU, however it shall be the customers responsibility to insure that all such equipment and systems are constructed, maintained and operated in such manner as to work satisfactorily and be compatible with the facilities provided by KPU. Chapter 11.04 Page 9 Ketchikan 7/2009 (3) Any adverse effect on any equipment provided by the customer caused by a change in KPU's telephone operating characteristics shall be the responsibility of the customer and shall be corrected or remedied at no cost or expense to KPU. (4) Upon notification from KPU that the customer's equipment or system is causing interference or other problems, the customer shall immediately make such changes as are necessary to remove, prevent, or otherwise remedy the interference or problem. When a service difficulty or trouble report results from customer provided equipment the customer shall be responsible for payment to KPU for the cost of all of the time and materials expended by KPU in correcting the situation. (5) Customer provided equipment which, in the opinion of KPU, serves a location unsuitable or inaccessible will be connected by the means of a protected device furnished by KPU and paid for by the customer. (6) Where the use of any customer provided equipment involves direct connection to facilities furnished by KPU such connection shall be made through a connection device furnished, installed and maintained by KPU. (Ord. 1532 §3, 2005: Ord. 1471 §1, 2003: Ord. 1065 §3 (part), 1985) 11.04.150 Description of service. (a) General. Service installations may be either overhead or underground, however, a combined electric/telecommunications installation shall be installed either totally overhead or totally underground and may not be a combination of the two without the prior approval of KPU. KPU service installations will normally be overhead installations. All approved underground service installations shall be constructed and installed as required and described in paragraph (i), underground service connections of this section. (b) Character of Electric Service. The character of electric service available at a particular location may be ascertained by inquiry at the KPU office. Alternating current service of 60-cycle frequency, conforming to standard practices of the industry, will be supplied. Voltages referred to in this title and other official documents of KPU are nominal voltages. KPU will endeavor to operate and maintain its electrical energy within reasonable limits, but does not warrant or guarantee the same. (c) KPU Electric Voltage Standards. Standards of electric voltage shall be as follows: (1) Secondary voltages - 120/240 single phase, 120/208 wye, 120/240 delta, and 480 delta three phase or other standard secondary voltages may be available with prior approval by KPU; (2) Primary voltages - 4160/2400 and 12470/7200 grounded wye, three phase; (3) Transmission voltages - 34,500 volts and above. KPU may elect to supply a customer from lines of transmission voltages. (d) Single Phase Service. No single-phase motor larger than five horsepower, or single-phase air conditioner or heat pump with a capacity in excess of one hundred thousand BTU or thirty kW Demand or other load of fifteen kW or more may be connected without the prior approval of KPU. (e) Three Phase Four Wire Service. KPU may limit the size of the largest motor that may be operated on its system. The customer may be required to provide acceptable space to KPU on the customer's premises to accommodate the installation of KPU's facilities. (f) Special Facilities. Special facilities are considered to any existing, enlarged or new facilities that are installed and/or used by KPU at the customer's request that are in addition to the standard facilities KPU would normally install or use and represent additional costs to KPU. Instal- lation of special facilities will be made by KPU under the following conditions provided KPU determines that the type of special facilities are acceptable and agrees to the installation: (1) The applicant for special facilities is also an applicant for permanent electric service, or is a customer receiving permanent electric service at the same location; Chapter 11.04 Page 10 Ketchikan 7/2009 (2) The applicant executes a contract providing for repayment of KPU's cost of installation of the special facilities; (3) The provisions of Chapter 11.06, utility line extensions, if applicable, are complied with. (g) Miscellaneous Service Entrance Equipment. (1) The customer shall furnish the following equipment: service switches, connectors, fuses, meter housings, service termination equipment, weatherheads, wireways and similar devices that are required in accomplishing the connection of service to the load side of the customer's metering point. (2) The equipment referred to in (1) above, and the installation, shall comply with all applicable rules, regulations, codes and standards which pertain to the safe construction and operation of utility facilities. Such facilities shall be the property of, and shall be maintained in a safe and operable condition at the times by the customer. The customer shall provide a suitable means for KPU to place its meter and meter seals on covers of service enclosures and instrument transformer enclosures. (h) Overhead Service Connections. (1) KPU will furnish and install an overhead service to the nearest practical point of attachment on the customer's building or other delivery point, such point to be approved by KPU prior to construction. The customer shall provide to KPU all necessary rights-of-way or utility easements required to provide the service connection. (2) Whenever any clearance between the service conductors and the ground, or any object, becomes impaired as a result of actions of the customer and does not comply with all applicable rules, regulations, codes and standards, the customer shall, at the customer's expense, provide a new and approved support for termination of KPU's service wires. Such support shall be in a location approved by KPU prior to commencement of construction. The customer shall also provide all service entrance conductors and equipment necessitated by the change of location. (i) Underground Service Connections. (1) Where KPU maintains an underground distribution system, individual service connections (service lateral) will be underground, using the shortest practicable route to a customer's service entrance and shall be in a location satisfactory to KPU. All installations and construction shall be in accordance with all applicable rules, regulations, codes and standards. (2) Where KPU owns and maintains on the customer's property either a distribution junction box, manhole, transformer, enclosure, service lateral, or other utility equipment or facility, the customer shall provide, at no cost or expense to KPU, all necessary rights-of-way or utility easements on such forms as is approved by KPU. (3) Where the customer installs, owns, and maintains a conduit system in which KPU will install its cables, the specifications of such conduit system and related enclosures shall be subject to the prior approval of KPU. (4) Whenever KPU's underground distribution system is not complete to the point where the service lateral is to be connected to the distribution system, the system may be extended in accordance with, and shall be subject to, the provisions of Chapter 11.06, utility line extensions. (j) Primary Service Installations (600 Volts or More). (1) Wherever KPU's overhead or underground primary voltage is not completed to the point where service can be connected, the system shall be extended in accordance with, and subject to, the provisions of Chapter 11.06, utility line extensions. (2) Whenever a transformer installation is required on the customer's premises the customer shall furnish, install, own and maintain a suitable foundation or enclosure for equipment and any conduit or duct necessary within the customer's building. The customer shall Chapter 11.04 Page 11 Ketchikan 7/2009 also supply the necessary conduit or duct and provide a suitable location and route for KPU's primary and/or secondary conductors up to the building. (3) Whenever the primary cable terminates inside the customer's building, the customer shall furnish, install, own, and maintain that portion of the conduit or duct that is located inside of the outer building line. (k) Additional Telecommunications and Water Service Installations Requirements. (1) Telecommunications. The requirements and responsibilities regarding new telecommunications service installations are the same as described in paragraphs (g)(1) and (h)(1), (h)(2), (h)(3) and (h)(4) of this section and the following additional provisions and requirements: (A) At the customer's request, KPU will furnish, and will own and maintain the necessary customer termination, test facilities and customer premises equipment as required for service. The customer may be required to install protective equipment that complies with all applicable rules, regulations, codes and standards which pertain to the safe construction and operation of utility facilities. (B) Equipment furnished by the customer shall be registered with and be approved by the Federal Communications Commission, and also be registered with KPU, and shall be customer premise equipment only (i.e., basic and complex phone systems, PBX'S, answer and record devices, alarm equipment, house wiring and jacks or blocks). Such equipment shall be the property of the customer and the customer shall have the sole responsibility to maintain all such equipment at no cost or expense to KPU. The customer shall provide a suitable means for KPU to place its closure or seal on service entrances which protect access. (2) Water. In addition to the provision of (h)(1) of this section the following provisions and requirements shall apply to new water service installations: (A) New water service installations. The customer shall be responsible for installing new water service facilities from the point of connection with KPU's water main. All such facilities, whether or not located on the customer’s property, shall conform to all applicable KPU standards including standards for protection of facilities from freezing and contamination and standards governing the size, design and specifications for water service facilities. The customer shall be responsible for assuring that all facilities, including those on customer’s property, have been inspected and approved by KPU. The customer shall also be responsible for replacing all such facilities. Water service may be denied by KPU until the facilities have been inspected and approved by KPU. (B) Maintenance of new water service facilities. Except as provided in subsection (D), KPU shall maintain new water service facilities from the point of connection to KPU’s water main corp stop to and including the property curb stop valve provided that: (i) The new water service facilities meet KPU standards and have been inspected and approved by KPU; and (ii) Ownership of those new water service facilities has been conveyed to and accepted by KPU. The customer shall own and be responsible for maintaining all facilities located downstream from the property curb stop valve and all facilities that do not conform to KPU standards or that have not been inspected and approved by KPU. If no property curb stop valve exists, then KPU shall establish some other practical demarcation. (C) Maintenance of existing water service facilities. The customer shall be responsible, at its cost, for any maintenance and replacement of existing water service facilities downstream from the corp stop valve unless: (i) KPU determines that such facilities comply with its most current applicable standards; and (ii) Ownership of the facilities has been conveyed to and accepted by KPU. Chapter 11.04 Page 12 Ketchikan 7/2009 Except as provided in subsection (D), existing water service facilities which meet the requirements of both (i) and (ii) above will be maintained by KPU from the point of connection to KPU’s water main corp stop to and including the property curb stop valve. If no such property curb stop valve exists, then KPU in its sole judgment shall establish some other demarcation. The customer will in all cases be responsible for maintaining all water service facilities downstream from the property curb stop valve or other demarcation and will be responsible for replacement of water service facilities. (D) Maintenance of oversized water service facilities. Customers whose water service lines equal or exceed two inches in diameter shall be responsible, at their cost, to maintain and replace such lines and other water service facilities from the KPU water main to and including all customer premise facilities attached to such lines. (E) Thawing or water service facilities. The customer shall, at its cost, thaw all water service facilities downstream from and including the point of connection with KPU’s main. The customer shall be responsible for any damage arising from or related to its thawing of water service facilities. Thawing of water service facilities is not a maintenance function of KPU. (F) Other valves located in public rights-of-way. Sprinkler system valves at the main, and all other valves located in public rights-of-way, shall be the property of KPU and shall be operated by KPU water division personnel only. (G) Definitions. For purposes of this subsection, the following definitions apply: “New water service facilities” include all water lines, pipes, valves and connections connected to KPU’s main water lines after the effective date of this ordinance but shall not include extensions of the water mains by KPU or under KPU’s authority. “Existing water service facilities” are those water lines, pipes, valves and connections which were connected to KPU’s main water lines on or prior to the effective date of this ordinance. A property curb stop valve is that valve located underground, or suspended beneath the street, at or near the customer’s property line. Valves which are attached to building or are within buildings are not property curb stop valves unless otherwise determined by KPU. A corp stop valve is that underground or suspended valve which is immediately adjacent to the water main. (Ord. 1532 §3, 2005: Ord. 1377 §1, 1997; Ord. 1065 §3(part), 1985) 11.04.160 Substandard conditions and service refusal. In addition to disconnection because of an immediate hazard to health or safety, nonpayment of bills, or other reasons as provided in this title, KPU shall have the right to disconnect utility service, or to refuse to connect a utility service, if KPU gives the customer notice of the existence of an unsafe or substandard condition and the condition is not corrected and brought into compliance with all applicable rules, regulations, codes and standards pertaining to the safe construction and operation of utility facilities within the time specified by KPU. KPU shall have no responsibility for inspecting or repairing the customer's wiring or any other utility equipment, or any part thereof, and does not assume any liability or responsibility whatsoever therefore. (Ord. 1065 §3(part), 1985) 11.04.170 Protective devices on premises. Protective devices shall be installed by the customer whenever KPU deems it necessary to protect the property of KPU, the customer, other persons or the general public. No motor rated in excess of seven and one-half horsepower may be installed for "across-the-line" starting without the approval of KPU. (Ord. 1065 §3 (part), 1985) 11.04.180 Power factor. In the event KPU determines that a customer's average power factor is below .85 and KPU gives after written notice to install corrective equipment and the Chapter 11.04 Page 13 Ketchikan 7/2009 customer fails to do so, KPU may proceed to take corrective action and charge the customer for the cost of labor, materials and installation of the equipment necessary to improve the power factor above .90. (Ord. 1065 §3(part), 1985) 11.04.190 Interference and equipment to limit voltage and current fluctuation. Customers who operate any equipment that causes voltage fluctuations, or where the use of electric current is intermittent or subject to fluctuations, may be required to provide corrective measures which will reasonably limit such fluctuations. KPU reserves the right to refuse to supply service which KPU determines may seriously impair the service to others if a customer continues to use such equipment or apparatus after written notification from KPU. (Ord. 1065 §3 (part), 1985) 11.04.200 Increased use of electricity. A customer shall give KPU written notice before making any additions to the customer connected load that may impair the quality of service rendered by KPU. (Ord. 1065 §3(part), 1985) 11.04.210 Meter installation and metering. (a) Meter Installations. (1) All KPU meters shall be installed, sealed and removed only by KPU. No such seal shall be broken except by a representative of KPU or by a duly licensed electrician with the advance permission of KPU. (2) Meters shall be located on the outside of buildings or other delivery point as determined by KPU. In the case of temporary, or mobile home installations, the meter locations shall be on a secondary pole or meter pedestal unless otherwise approved in advance by KPU. New service entrance locations on the customer's premises shall be approved by KPU prior to installa- tion. Meters shall be placed in such manner and location as to be readily accessible for inspection, reading and testing. It shall be the responsibility of the customer to maintain a clear space of not less than thirty inches in front of the meter. Meters shall not be located over gas meters or other grounded objects or in hazardous locations. Meter sockets must be installed in a true vertical plane six feet above the ground plus or minus six inches. Sockets for potential transformer meter installa- tions shall not be equipped with circuit closing devices. (3) If an existing meter is or becomes inaccessible for inspection, reading or testing, the customer shall, at no cost or expense to KPU, provide a new and approved location for the meter in order to comply with (2) above. Failure to comply with the such requirements shall constitute cause for disconnection of utility service. (4) Buildings with multiple meters shall have the meters located at one central point unless otherwise specified and approved by KPU. Each meter location shall be clearly marked by the building owner to indicate the load it serves. (5) KPU will own, wire and maintain the necessary instrumentation transformers and meters. The customer shall be required to install the necessary instrumentation transformers to KPU's specifications. (b) Metering. (1) Each premises, including such areas as trailer spaces, apartments, dwellings, etc., shall be metered and billed separately by KPU. The owner of the premises shall install individual service entrance equipment with sufficient capacity for the proposed installation, including provisions for attachments of KPU's service conductors, and for installation of KPU's meter except as may be otherwise approved by the utilities manager. (2) At the owner's request, and at KPU's option, conversion may be made from master metering to individual metering. All service entrance equipment must be at least 100 Amp and shall be subject to approval by KPU. Replacement o: existing service entrance equipment must be with 200 Amp equipment. Chapter 11.04 Page 14 Ketchikan 7/2009 (3) Upon conversion from master metering to individual metering, all secondary and/or service equipment to the service entrance shall, upon approval of KPU, become the property of KPU which shall thereafter be responsible for maintenance thereof. (Ord. 1065 §3(part), 1985) 11.04.220 Meter tests. (a) KPU will make tests and inspections of its meters as are necessary to insure a high standard of accuracy. A meter will not be placed in service or allowed to remain in service which has an error in registration in excess of two percent under normal operating conditions. (b) A customer may, upon giving KPU not less than five working days prior written notice, require KPU to test the customer's meter with the following actions to be taken by KPU: (1) If a meter for residential service is found to be not registering or is registering less than seventy-five percent of the actual consumption under normal operating conditions, KPU may render an adjusted average billing to recover for the underbilling for a period-not to exceed the three immediately preceding months. (2) If a meter for commercial service is found to under-register greater than two percent of the actual consumption under normal operating conditions, KPU may render an adjusted billing to recover for underbilling for a period not to exceed the three immediately preceding months. (3) If a meter is found to over-register greater than two percent under normal operating conditions, the customer's past billings will be adjusted to provide a credit for a overbilling for a period not to exceed the six immediately preceding months. (4) If a meter is found to register within the two percent tolerance referred to in (a) above, a charge of fifty dollars for the testing shall be paid to KPU by the customer. (5) A report, stating the name of the customer requesting the test, the date of the test request, the date of the test, and the result of the test shall be provided to the customer within a reasonable time after completion of the test. (Ord. 1065 §3 (part), 1985) 11.04.230 Requirements for relocation, replacement or service upgrades of KPU facilities. Subject to availability of load, materials and scheduling, utility services can be relocated, replaced or upgraded subject to the following provisions: (a) KPU will replace its existing facilities if an increase in a customer's load requires such upgrading of service capacity, and the customer pays all of the costs associated therewith. (b) Upon compliance with, and subject to all of the terms, conditions and provisions of (c) below, KPU will, upon request, perform and accomplish the following relocation, replacement or service upgrades: (1) Requests for three phase service. KPU will install three phase electrical service provided three phase distribution service is currently available in the requested area. In all other instances the provisions of Chapter 11.06, Utility Line Extensions, shall be applicable. (2) Replacement of overhead with underground facilities. The customer is required to provide all trenching for any replacement of overhead with underground facilities. (3) Relocation of customer's service entrance point. Relocation of a customer's service entrance point will be made with only the appropriate service connect fee charged provided no secondary distribution pole or other equipment is required. Where underground service is presently provided, service drop relocations shall not be made without special approval from the utilities manager. (4) Requests for relocation of KPU existing facilities. All requests for relocation of KPU existing facilities shall be submitted in writing to the utilities manager. (c) Conditions. Performance by KPU of any of the relocation, replacement or service upgrade activities referred to in (a) and (b) above shall be subject to all of the following conditions: Chapter 11.04 Page 15 Ketchikan 7/2009 (1) The request is approved by KPU and is based on sound engineering practices; (2) All necessary easements and rights-of-way are granted to KPU on such form as is provided or approved by KPU; (3) The person requesting the relocation, replacement, or service upgrade obtains the approval of, and makes arrangements for, the transfer or relocation of any equipment owned by any other person or utility that will, or may be affected thereby; (4) Except as provided in (5) below, the person making the request pays in advance the total cost and expense to be incurred by KPU, including KPU overhead, less the salvage value of any KPU facilities that are to be removed. (Ord. 1568, §1, 2007: Ord. 1065 §3(part), 1985) (5) KPU may agree to pay or waive all or part of the cost amount due under (4) above for relocating existing KPU facilities if the utility manager or designee determines that the existing KPU facilities are inappropriately placed. The determination of the amount KPU may waive or pay and the appropriateness of the placement of the existing KPU facilities shall be made in the discretion of the utility manager or designee. The utility manager shall periodically report the amounts paid or waived under this subsection to the City Council. (Ord. 1568, §2, 2007) 11.04.240 Fluoridation of city water. The city of Ketchikan shall not engage in the practice of fluoridating its domestic drinking water. (Initiative Ord. 1220 §1, 1991)