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HomeMy WebLinkAboutSEAPA Wind Resource Assessment and Economic Feasibility Study Grant Application - Round V Renewable Energy Fund Grant ProgramGRANT APPLICATION SEAPA WIND RESOURCE ASSESSMENT AND ECONOMIC FEASIBILITY STUDY (KETCH IKAN-G RAVI NA ISLAND) SEAPA Southeast Alaska Power Agency 1900 1"Avenue, Suite 318 Ketchikan, Alaska 99901 Ph: (907) 228-2281 • Fax: (907) 225-2287 www.seapahydro.org August 23, 2011 Delivery Via Express Mail Butch White Grant Manager Alaska Energy Authority 813 West Northern Lights Boulevard Anchorage, Alaska 99503 Re: Submittal of Application: Round V/Renewable Energy Fund Grant Program SEAPA Wind Resource Assessment and Economic Feasibility Study Dear Mr. White: The Southeast Alaska Power Agency ("SEAPA") is pleased to submit the enclosed application for Renewable Energy Grant funding. The proposed use of grant funds is to conduct Phase I Reconnaissance and Phase 11 Feasibility/Conceptual Design wind studies of the Ketchikan- Gravina Island areas. The study is proposed to determine if it is feasible to use wind power to supplement the energy needs and conserve water used for hydropower for the communities it serves, which include Ketchikan, Petersburg, and Wrangell, with the long-term objective and goal of serving the power needs of additional communities, including Kake. SEAPA is requesting $215,130 in Renewable Energy Grant funds, which SEAPA will match with a $15,570 contribution. The hard -dollar match is in addition to SEAPA staff, which will contribute an estimated 100 hours to manage this wind study effort. SEAPA acknowledges and agrees that this project and its results are for the benefit of the communities of Ketchikan, Wrangell, and Petersburg, with the long-term objective and goal of serving the power needs of additional communities, including Kake. SEAPA will not deny any person use or benefit of the project or project results due to race, religion, color, national origin, age, physical handicap, sex, marital status, changes in marital status, pregnancy, or parenthood. Eric Wolfe will serve as the Grantee Project Manager, and I will have overall authority for the project. If you have any questions regarding this submittal, please do not hesitate to call me at 907/228-2281. Thank you for your consideration of this grant application. Lzi♦ ♦ ♦ ♦ �' Mr. Butch White August 23, 2011 Page Two Sincerely, Dave Carlson, CEO The Southeast Alaska Power Agency Enclosures: Two (2) Hard Copies of SEAPA Wind Resource Assessment and Economic Feasibility Study Grant Application with Attachments and one (1) Flash Drive with Grant Application and Attachments in pdf format cc: File (wlcopy of attachments) Y2011 CORRESPONDENCE2011 0823 Letter to Butch White re Wind App for Ktn-Gravina Areas.docx /® Renewable Energy Fund Round 5 ALASKA �ENERGYAUTHORITY Grant Application Application Forms and Instructions The following forms and instructions are provided to assist you in preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at: http://www.akenergyauthority.org Grant Application GrantApp5.doc Application form in MS Word that includes an outline of Form information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required. Application Cost Costworksheet Summary of Cost information that should be addressed by Worksheet 5.doc applicants in preparing their application. Grant Budget GrantBudget5. A detailed grant budget that includes a breakdown of costs by Form doc milestone and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget GrantBudgetln Instructions for completing the above grant budget form. Form Instructions structions5.doc Authorized Authorized Form indicating who is authorized to sign the grant, finance Signers Form signers reports and progress reports and provides grantee information. form5.doc If you are applying for grants for more than one project, provide separate application forms for each project. • Multiple phases for the same project may be submitted as one application. • If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for completion of each phase. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. • If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. REMINDER: • Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority web site after final recommendations are made to the legislature. • In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information is to be kept confidential the.applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. AEA 12-001 Application Page 1 of 19 7/1/2011 /40MLV_�" ALASKA ENERGY AUTHORITY Renewable Energy Fund Grant Application Round 5 SECTION 1 - APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) The Southeast Alaska Power Agency ("SEAPA") Type of Entity: Joint Action Agency Fiscal Year End: June 30 Tax ID # 92-0174669 Tax Status: For -profit or —tenon-profit ( check one) Mailing Address Physical Address 1900 First Avenue, Suite 318 1900 First Avenue, Suite 318 Ketchikan, Alaska 99901 Ketchikan, Alaska 99901 Telephone Fax Email (907) 228-2281 (907) 225-2287 sthompson@seapahydro.org 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Title Dave Carlson Chief Executive Officer Mailing Address 1900 First Avenue, Suite 318, Ketchikan, Alaska 99901 Telephone Fax Email (907) 228-2281 (907) 225-2287 dcarlson seapah dro.or 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: (pat an X in the; appropriate box) An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer in accordance with 3 AAC107.695 (a) (1), or A local government, or A governmental entity (which includes tribal councils and housing authorities); 12.2. Attached to this application is formal approval and endorsement for its project by Yes 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 ) 12.3. As an applicant, we have administrative and financial management systems and Yes follow procurement standards that comply with the standards set forth in the grant agreement. 12.4. If awarded the grant, we can comply with all 'terms 'and conditions of the attached Yes grant form. (Any exceptions should be clearly noted and submitted with the application.) Yes 12.5 We intend to own and operate any project that may be constructed with grant funds for the benefit of the general public. AEA12-001 Grant Application Page 2 of 19 7/1//2011 Renewable Energy Fund 41KED , ENERGY AUTHORITY Grant Application Round 5 Type in your answer here and follow same format for rest of the application. SEAPA Wind Resource Assessment and Economic Feasibility Study 2.2 Project Location — Include the physical location of your project and name(s) of the community or communities that will benefit from your project. Location — latitude and longitude or street address or community / communities served: The proposed Project will take place at sites to be determined by the study in Ketchikan, Alaska, located on the western coast of Revillagigedo Island, near the southernmost boundary of Alaska, including High Mountain located at Latitude 55.360833 and Longitude -131.793611 on Gravina Island located one-half mile from Ketchikan, Alaska. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type x Wind Biomass or Biofuels 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 an that apply) x Reconnaissance Design and Permitting x Feasibility Construction and Commissioning x Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. The Southeast Alaska Power Agency ("SEAPA") requests funding of $72,630 from Round V of the Renewable Energy Fund, with a matching contribution from SEAPA of $8,070 for a total cost of $80,700, for a Phase I (reconnaissance) wind site assessment in Ketchikan and the region surrounding High Mountain on Gravina Island, and funding of $142,500 from Round V of the Renewable Energy Fund, with a cash contribution from SEAPA of $7,500, for a total cost of $150,000 for Phase 11 (feasibility analysis and conceptual design/permitting) from Round V of the Renewable Energy Fund. The total project cost for both phases is projected to be $230,700. I �* I ffQ4'_T*MVA toy& alzz!L Uomstm;4d In -se 0 rGIN01 wart" RN "OTM AEA12-001 Grant Application Page 3 of 19 7/1//2011 fww--P� ALASKA 4WED , ENERGY AUTHORITY Renewable Energy Fund Grant Application Round 5 The total cost of Phase I of this project is projected to be $80,700, of which $72,630 is requested in grant funds from the AEA, with the remaining $8,070 (10%) matched by a The total cost of Phase 11 of the project is projected to be $150,000, of which $142,500 is requested in grant funds from the AEA, with the remaining $7,500 (5%) matched by a contribution from SEAPA. 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. $215,130 2.7.2 Other Funds to be provided (Project match) $ 15,570 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $230,700 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 (feasibility study — cost including estimates through construction) unknown) 2.7.5 Estimated Direct Financial Benefit (Savings) (feasibility study — savings unknown) 2.7.6 Other Public Benefit (if you can calculate the benefit in (feasibility study — benefit terms of dollars please provide that number here and in terms of dollars explain how you calculated that number in your application unknown) (Section 5.) Type in your answer here andfollow same formatfor rest of the application. SEAPA would provide overall project management and oversight. To further support the SEAPA team in project delivery, wind resource, engineering, and environmental consultants would be selected. The bulk of the analysis effort and some of the project management at the task level, will be provided by contractors. Eric Wolfe, a SEAPA employee and current Director of Special Projects, will be the AEA12-001Grant Application Page 5uf1Q 7U//2011 Renewable Energy Fund /26- ���EwERG,AUTHORIr; Grant Application Round Project Manager. Mr. Wolfe has 20+ years of utility engineering and management experience. Mr. Wolfe has advised utilities on: hydro turbine and hydroelectric plant sizing, lost revenue effects resulting from relicensing mitigation, forward production and cost estimates, and system operations. Mr. Wolfe's resume is included with this application as Attachment A. Once the grant has been awarded, the project is expected to take approximately 16 months to complete. SEAPA will issue RFPs for the contractors as soon as possible following award of the grant, and select appropriate contractors according to our procurement policies. The wind feasibility analysis will begin soon thereafter. It is anticipated that the contractors will need two (2) months to conduct a desk top study, site visits, gather community information, and conduct the resources assessment. The report is expected three (3) months after field work is complete. We expect the feasibility analysis to be completed within six (6) months of issuing the RFP. The conceptual design will be created based on the outcome of the met tower recordings investigation. A detailed schedule for the proposed work is as follows: to Proceed August 2012 -Authorization Contractors September 2012 -Select Site Control/Right of Entry/Permits September 2012 -Obtain Ship Met Tower September 2012 Met Tower September 2012 -Erect of Met Tower October 2012 — September 2013 -Monitoring Geo-tech Field Work October 2012 Report December 2012 -Geo-tech Met Tower September 2013 -Dismantle Resource Report October 2013 -Wind Design and Cost Estimate November 2013 -Conceptuall Permits for Conceptual Design December 2013 -Finall Report and Recommendations December 2013 i;EAPA would issue an RFP and select contractors for the reconnaissance, wind feasibility, geotechnical analysis, conceptual design, and permitting immediately following AEA's authorization to proceed. To initiate the Wind Resource Analysis before winter, SEAPA would investigate AEA's met tower loan program, and if a tower is not available r oan, wou purchase, ship, and erect the met tower during September 2012. SEAPA's selected contractor would immediately seek approvals from permitting agencies, startina the orocess before the qrant is awarded to ensure that the met tower can AEA12'001Grant Application Page Oof10 7U02011 ALASKA WE-) ENERGY AUTHORITY Renewable Energy Fund be installed during this time period. The earlier the met tower is collecting data, the earlier SEAPA will have the wind resource data to ascertain the suitability of use of this renewable resource. Monitoring of the met tower would continue until September 2013, and then the met tower would be dismantled. We anticipate receiving a draft of the wind resource report by October 31, 2013. 3. Identification and Resolution of Land Issues (09/01/12 — 06/01/13) �EAPA would retain a consultant to obtain a letter of nonobjection for the placement of the met tower and geotechnicall work. Permanent site control to place turbines, if feasible, would be negotiated. 4. Detailed Analysis of Current Cost of Energy and Future Market (01/01113 02/28113) SEAPA would draft a memorandum documenting the existing and future ener costs and markets in the communities it serves, namely, Ketchikan, Wrangell, an Petersburg. The information would be based on SEAPA records and communi plans and load forecasts. Meetings will be scheduled with community leaders help determine future energy requirements. I 5. Detailed Economic and Financial Analysis (05/01/13 - 07/31/13) �n economic and financial analysis, which examines potential final design and construction costs, operating and maintenance costs, user rates, and other funding mechanisms, would be developed. 6. Conceptual Business and Operations Plan (05101/13 - 09/30/13) Wind resources would be integrated into the SEAPA generation mix and dispatched accordingly pursuant to the Power Sales Agreement which requires Ketchikan, Petersburg and Wrangell to purchase the power before any other resources, which is more particularly described in Section 4.2.3. 7. Conceptual Design and Costs Estimate (08/01/13 - 11101/13) Various wind turbines would be examined to determine which would be bes) suited to fit the high energy demand and transmission system in Ketchikan. A conceptual design and cost estimate would be prepared using information gathered from the wind study and geotechnicall fieldwork. invironmental permits would be obtained for the conceptual design of the project. 9. Final Report and Recommendations (12/31113) All of the memorandums and reports written for the project would be combined ii-- a final report and submitted to the AEA. The Final Report would include fina' drafts of the following: Wind Resource Report Site Control Memo Existing and Future Energy Costs and Markets Memorandu Economic and Financial Analysis Conceptual Business and Operating Plan Geotechnical Report Conceptual Design Analysis and Cost Estimate Environmental Permits I ALASKA Renewable Energy Fund NVLENERGY AUTHORITY Grant Application Round 5 The primary personnel •` this project will •- cons u Ita nts/contractorsprevious wind power experience, who have successfully designed and constructed wind turbines throughout rural Alaska. SEAPA staff will team up with these cons ultants/contractors to see the project through to completion. Whenever selecting consulting services, contractors, and equipment vendors, SEAPA will emphasize the use of local contractors whenever possible. Dave Carlson,Officer, would act as Projectand will maintain ultimate authority programmatically and Eric Wolfe, Director of Special Projects, would lead the project management team consisting •: ♦ . staff and f:ns u Ita nts/contracto. Together • Mr. Wolfe would provide coordination of the installation of the met tower, geotechnical work, conceptual design, and permitting. The group's resources include a project coordinator, contracts clerk, controller, and engineer. Mr. Wolfe would be responsible for reporting directly to AEA on the status of the project. Don Phillips, Operations Manager, would provide technical assistance and information on • power system and possible • project study needs. Kay Key, Controller, would provide support in accounting, payables, financial reporting, and capitalization of assets in accordance with AEA guidelines. Sharon Thompson,Assistant, would communicate consultants/contractors a• operate as the contracts Eric Wolfe would lead development of the Existing and Future Energy• •' Markets Memorandum and the Conceptual Business and Operating Plan. Dave Carlsonand Eric Wolfe• • also communicate directly with Ketchikan, Wrangell, and Petersburg residents to ensure that the communities are informed. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. SEAPA would require that monthly written progress reports be provided with each invoice submitted from consultants/contractors. The progress reports would include a summary oftaskscompleted, issuesor problems . iupcoming • the consultant's/contractor's needs from SEAPA. Project progress reports would be collected and forwarded as one package to the AEA project manager each month. It is anticipated that quarterly face-to-face meetings would occur between SEAPA and the AEA to discuss the status of all wind projects funded through the AEA Renewabl%-. Energy Grants Program. Individual project meetings would be held, as required ot requested by AEA12-001 Grant Application Page 8 of 19 7/1//2011 ALASKA Renewable Energy Fund ENERGY AUTHORITY Grant Application Round 3.6 Project Risk Discuss potential problems and how you would address them. Site Control/Access. Although at times site control for the placement of a met tower or turbines can be difficult, SEAPA does not anticipate any difficulties with gaining site control and access for placement of a met tower or turbines. Weather. Weather could delay geotechnical fieldwork and/or the erection of the met tower; however, an experienced contractor, familiar with Alaskan weather conditions, would be selected. It is unlikely that a delay in the total project schedule would occur if the fieldwork or erection of the met tower is delayed. It is possible to erect the met tower during winter months. The met tower would be installed to handle Southeast Alaska's coastal winter weather conditions. The met tower would be monitored by local SEAPA personnel to ensure it is up and functioning properly throughout the year. Construction Funding. By having the project designed and permitted, SEAPA would be prepared to capitalize on many funding opportunities. SEAPA has the ability to issue its own tax-exempt debt and will also pursue both State and Federal grant opportunities. Environmental Permitting. Permits would be acquired as a part of this project. SEAPA would hire an environmental consultant familiar with permitting wind projects in Alaska. Early consulting with agencies would occur in order to flesh out location, natural and social environment, avian concerns including specific species, and mitigation issues. The contractor would work openly with the agencies and conduct studies as appropriate. For a wind project to be successful there is a clear need to ensure that an adequate wind resource is available. Indicators of success include the use of reliable turbines, a high wind class, and favorable environmental conditions. It is critical to have a full and detailed wind site assessment to determine whether a strong wind resource is available t,l produce a high capacity factor to meet expectations. The windy, rainy climate of Southeast Alaska is strongly influenced by the Pacific Ocean and coastal mountains. According to the AEA's Alaska high -resolution win source map, the area around High Mountain on Gravina Island is rated as a Class 4 wind regime. The quality of the wind resource will be analyzed to ensure that it is compatible with wind generation development. The expected energy production would be determined in the AEA12-X}1Grant Application Page Sof1U 7U//2011 Renewable Energy Fund ALASKA ��~~�~ ENERGY AUTHORITY Grant Application Round 5 Although wind resource data provided by the AEA for Annette Island and the Ketchikan International Airport indicate average wind power density for those areas are a Class 2, which is a marginal power rating, it is prudent to consider that a wind site assessment in other areas at or near Ketchikan and Gravina Island may flesh out untapped wind While wind resources in Southeast Alaska that are conducive to generation may or may not be present, the synergistic relationship of wind with existing hydro is enticing. Hydro can pick up the load when wind falters and the wind energy contributes by allowing the hydro plants to conserve water by not operating when wind energy is available. Kodiak Electric Association has recently installed wind turbines to supplement their existing hydro from Terror Lake and this project has been remarkably successful. While development of wind and hydro are ongoing, another plausible source of energy that could be developed is geothermal; however, the closest source that could be tapped which is close enough to tie into SEAPA's existing Swan-Tyee Intertie is Bell Island. The owners of Bell Island are currently seeking a lease in the Tongass National Forest from the Bureau of Land Management (BLM), which is waiting on a supplemental environmental impact statement from the U.S. Forest Service. Actual development of geothermal could take years pending the permitting process. No geotechnical drilling to determine whether geothermal resources are present at that site has yet been undertaken. As discussed in AEA's Renewable Energy Atlas of Alaska, significant utility -scale solar generation is unlikely in Alaska due to high capital costs and low annual solar power While biomass used for heating is an exciting and welcomed technology in the SEAPA region, the production of power from biomass is questionable due to a myriad of issues including environmental and supply-side concerns. A careful look at the biomass energy pros and cons reveals that it is far from the perfect energy source, but is still very promising as a replacement for the fossil fuels currently in use for heating. Separate grant budget forms for Phases I and 11 of this project are included in this application as Attachment B hereto. 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. AEA12-001Grant Application Page 1Oof1A 7/1//2011 Renevv�b�Energy Fund ��~OWL ��' EmERGYAUTHORITY Grant Application Round Existing energy resources include the Swan Lake and Tyee Lake Hydroelectric Projects, both of which are owned by SEAPA. With the completion of the Swan-Tyee Intertie, Ketchikan, Wrangell, and Petersburg are all interconnected with a SEAPA-owned transmission system. Swan Lake and Tyee Lake are both 20 MW projects and power from those projects is delivered to the three cities pursuant to a Long -Term Power Sales KPU owns and operates Ketchikan Lakes Hydro Project, and Beaver Falls Hydro Project (which includes Silvis Lakes). Ketchikan's total hydro capacity is approximately 12 megawatts (MW). KPU maintains four peaking/standby diesel generators at Bailey Powerhouse totaling 24MW, and two other diesel generators at the North Point Higgins Substation totaling 3.2MW. The diesel generators provide power to the community in times of low reservoir levels, hydro maintenance periods, and for emergency use during outages. In addition, Petersburg owns the Blind Slough hydro project, which is a 1.8 MW facility. Wrangell and Petersburg also have back up diesel generation plants. The anticipated effect of wind power would be less usage of diesel fuel for electrical power generation during energy and capacity shortfalls. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy As stated above, SEAPA owns the Tyee and Swan Lake Hydroelectric Projects, as well as transmission lines connecting the cities of Petersburg, Wrangell, and Ketchikan. Energy is sold to the communities pursuant to a power sales agreement. Total energy capacity from hydro resources within the region is very close to being fully subscribed and Ketchikan has had to use diesel generation to supplement existing hydro availability. The cost of wind generation is unknown at this point and will be determined in this study. While SEAPA and its member utilities are currently exploring the development of new hydro resources, wind may provide an additional renewable resource at a price competitive with new hydro. Ketchihan 180.036 30.3 Petersburg 51.304 10.1 Wrangell 30.286 7.1 Kahe 2'500 .5 K8et|ahet|o °10.000 3.5 (*escalated from D. Hittle Metlakatia Intertie Report) AEA1 2-001 GrantApplication Page 11of10 7U62011 AcRenevvab|eEnergyFund ~ ENERGY AUTHORITY Grant Application Round 5 Renewable Energy Technology: Wind because of its synergistic value with hydro, is a viable option for the SEAPA region, which needs to be fully explored. Once it is determined if there are sites at which wind power can be economically developed, additional studies will be undertaken to determine the type of turbines to be installed. Outimum Installed Capacitv/Anticipated Ca acity Facto r/Antici pated Annual Generation: The purpose of soliciting grant funds is to gather background information and feasibility to plan a future alternative energy facility. Anticipated capacity and generation would be examined for a number of turbine types to determine the best option for the community. Anticipated Barriers: The potential barriers to success of this project include weather, permitting, access, and transmission infrastructure. Weather is a minor barrier and does not pose a threat to completion of this project. Permitting, based on an initial investigation, does not appear to be a significant hurdle to completing this project, although the Roadless Rule on U.S. Forest Service lands could be an obstacle. Site control should not be difficult to obtain with support of the communities of, Ketchikan, Wrangell, and Petersburg. Basic Integration Concept/Delivery Methods. The wind turbines would need to interconnect with the existing power grid. Ideally, potential wind sites need to be located as close as possible to existing transmission infrastructure. Conceptual design would detail how power from a wind turbine would be integrated and delivered into SEAPA's existing electrical system. The project team will conduct an assessment of site control requirements for the wind turbine and take steps to assure that authorization and permits can be obtained from current landowners. The met tower will be erected on the potential wind turbine site as determined by the initial phases of this study. If there is potential for a wind site on the oceanside of High Mountain on Gravina Island, initial investigations show there are two parcels of land on the ocean side (deemed a Class 4 wind source by the AEA). One of the parcels is owned by the Alaska Mental Health Trust, and currently leased to Rainbird Renewable Energy Fund ENERGY AUTHORITY Grant Application Round Community Broadcasting, and the other parcel is owned by the federal government. Access would be pursued accordingly. 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 The project team, or a retained consultant, will obtain authorizations from all applicable agencies for any use of land or resources for feasibility activities. In addition, a permitting plan will be addressed as a result of the study. SEAPA will follow the analysis as it progresses so that any permitting issues can be pursued in a timely manner, and in order not to delay further progress on the project. 4.3.4 Environmental Address whether the following environmental and land use issues apply, and if so how they will be addressed: • Threatened or Endangered species • Habitat issues • Wetlands and other protected areas • Archaeological and historical resources • Land development constraints • Telecommunications interference • Aviation considerations • Visual, aesthetics impacts • Identify and discuss other potential barriers A site -specific assessment of the above -listed resources will be conducted and a plan will be developed for addressing potential environmental impacts. SEAPA is aware that wind turbines can be an endangerment to migratory or local birds, and may require extensive and often expensive studies. The project budget includes funding for environmental consulting. SEAPA will use the Best Management Practices described by the "Guidelines for Building and Operating Wind Energy Facilities in Alaska" once the final site for th.- study is chosen. 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 AEA12-001 Grant Application Page 13of1Q 7UH2011 / A L A S K A 4WE__1 ENERGY AUTHORITY Renewable Energy Fund Grant Application Round 5 • 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 A conceptual level cost estimate for final design and construction will take form as the study progresses, but the wind feasibility analysis will need to be completed before cost and revenues can be fully developed. In addition, the study will consider more current operations and maintenance and fuel costs, along with other costs such as insurance and financing that will be needed to fully develop the project. Phase I of this wind study is projected to be $80,700 and Phase 11 is projected to be $150,000 for a total cost of $230,700. The source of the cost data is applicant's records and analysis. Detailed project development costs will be developed by the consultant as a result of the feasibility study. 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.) O&M costs will be developed during the feasibility study. SEAPA will pay for these costs, which will be included in the blended Wholesale Power Rate. 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 SEAPA sets a Wholesale Power Rate (WPR) each year, which is the rate its member utilities pay for SEAPA-dellivered energy. Any wind energy developed would be blended into the overall SEAPA resource generation portfolio. 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. A project cost worksheet is included in this application as Attachment C hereto. AEA12-001 Grant Application Page 14 of 19 711//2011 ZEE-) ALAS KA Renewable Energy Fund 4W,E) ENERGY AUTHORITY Grant Application Round 5 Potential Annual Fuel Displacement: The project could decrease diesel use by 390,000 gallons/year. We have assumed that wind penetration due to wind shear, road access, and transmission constraints will be limited to 2 MW. Using a 33%+ capacity factor, we •- future local Ketchikan wind generations not to exceed 5,800 MW-hr. Anticipated Annual Revenue: Because this project is in the wind site assessment and conceptual design stage, revenue and incentives are unknown. Non -economic Public Benefits: The anticipated benefits of installing wind turbines would • • a renewable energy alternative, decreased pollution from fossil fuel use, pilot project for other communities in the Southeast Alaska area, and understanding of the wind resource in Southeast Alaska. Data acquired from this study could assist other Southeast Alaska communities understand their potential resource. 9,EAPA through its retained consultants, has the capacity to operate this project, and is completely able to finance, operate, and maintain this project for the design life. Proposed Business Plan Structures and Concepts: The wind turbines would be incorporated into SEAPA's power plant operations. Local plant operators provide daily servicing. SEAPA retains contractors or consultants as needed to provide periodic preventative or corrective maintenance and are supported by SEAPA staff. AEA1 2-001 Grant Application Page 15 of 19 7/1//2011 Renewable Energy Fund LALASKA ^� 4WEL-)EwERGY AUTHORITY Grant Application Round Operational Issues Which Could Arise: Met tower operations could be impacted by weather or local wildlife. Those obstacles would be resolved through all available resources. Operations issues of turbines would be determined once sites are identified and analyzed. Operating Costs: Operating costs would be determined once the turbine best suited for this project is identified. Commitment to Reporting Savings and Benefits: SEAPA staff are fully committed to sharing the savings and benefits accrued from this project information with their Board of Directors, its member communities, and the AEA. SEAPA staff has spent considerable time researching wind power for both phases of the grant funding requested, and are fully capable once funding is secured to proceed with obtaining letters of non -objection through a retained consultant, and SEAPA staff m capable of providing all financinglaccounting services and responsibilities required by the AEA. SEAPA would seek cons u Ita nts1co ntractors to perform the reconnaissance, seek options of securing a met tower, and once secured, have contractors install the met tower and complete the geotechnical work before winter. Work that can be completed before the wind study is complete would occur over the winter, including analysis of the current cost of energy and future market and economic and financial analysis. SEAPA held a meeting with its board of directors on August 18, 2011. The board ol directors signed a resolution authorizing this grant request. The Resolution and Minutes of the meeting are included in the attachments to this application. AEA12'OO1Grant Application Page 1Oof19 7111/2011 / OF ZF ALASKA iiiiiV) ENERGY AUTHORITY Renewable Energy Fund Grant Application Round 5 Provide a narrative summary regarding funding sources and your financial commitment to the project. SEAPA plans to conduct a Phase I reconnaissance and Phase 11 feasibility analysis, resources assessment, conceptual design, and permitting to assess the possibility of using wind power in Ketchikan. The Phase I reconnaissance is estimated to cost $80,700 of 1 is requested from AEA with a 10% match of i 1 contribution from SEAPA. Phase 11 is estimated to cost $150,000, of which $142,500 is requested from AEA with a ' match of 1 ! contribution from Milestone or Task Grant Funds SEAPA Cash TOTALS Match 1. Project scoping and contractor $1,900 $200 $2,100 solicitation 2. Resource identification and $6,630 $2,870 $9,500 analysis 3. Land use, permitting, and $50,000 $5,000 $55,000 environmental analysis 4. Preliminary design analysis $3,500 $3,500 and cost 5. Cost of energy and market $2,600 $2,600 analysis 6. Simple economic analysis $1,400 $1,400 7. Final Report and $6,600 $6,600 Recommendations TOTALS $72,630 $8,070 $80,700 PHASE 11 (Feasibility Analysis, Resource Assessment, Conceptual Design and Permitting) BUDGET: Milestone or Task Grant Funds SEAPA Cash TOTALS Match 1. Project scoping and contractor $1,900 $100 $2,000 solicitation 2. Detailed Resource $31,350 $1,650 $33,000 Assessment (includes *purchase of met tower, monitoring and reporting) 3. Identification and resolution of $4,750 $250 $5,000 land issues 4. Detailed analysis of current $9,500 $500 $10,000 cost of energy and future market 5. Detailed economic and $4,750 $250 $5,000 financial analysis AEA12-001 Grant Application Page 17 of 19 7/1//2011 / 4KED E,7�,,ALASKA , , ENERGY AUTHORITY Renewable Energy Fund Grant Application Round 5 operations plan estimate (includes geo-tech analysis commendations *IF AMET TOWER |SAVAILABLE WITHOUT PURCHASE, ACOST SAVINGS TOTHE PROJECT WOULD BE REALIZED. SEAR4WILL INVESTIGATE THE AEA/SMET TOWER LOAN PROGRAM. A. Contact information, resumes of Applicant's Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4. Applicants are asked to separate resumes submitted with applications, if the individuals do not want their resumes posted. F. Authorized Signers Form. Governing Body Resolution or other formal action taken by the applicant's governing body or management per RFA Section 1.4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. - Provides as point of contact to represent the applicant for purposes of this - Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. �� ALAHSKA Renewable Energy Fund Grant Application Round 5 H. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations and that they can indeed commit the entity to these obligations. Print Name Dave Carlson Signature Title Chief Executive Officer Date August c3 , 2011 AEA12-001 Grant Application Page 19 of 19 7/1//2011 S E A PA Southeast Alaska Power Agency RENEWABLE ENERGY FUND GRANT - ROUND V LIST OF ATTACHMENTS A. RESUMES B. GRANT BUDGET FORMS AND SCHEDULES (PHASE I/PHASE II) C. COST WORKSHEET D. LETTERS DEMONSTRATING LOCAL SUPPORT E. ELECTRONIC VERSION OF ENTIRE APPLICATION F. GOVERNING BODY RESOLUTION NO. 2011-39 AND MINUTES G. GRANT DOCUMENTS AUTHORIZED SIGNERS FORM F-INNITITOINKNUU: �r r i 0 0 O 0 o O O O 0 0 0 0 O O O r 00 N 1- `- - LO O _ 0 O _ 0 O u0 - CO O N Cn LO Cl) N — CO CU U') O (fl CO fH <f} EA Efi f}} vi Qf l fR EFi Efi �} ui EA$ ffl. fR ffi ffi ffl fH 61) L L to Cn U co O C4 U U U O O 0 O O 0rl- 0 0 M O O O O O tq � � C/} V> � � 64 � 64 6ri H} � £fl to H) EA 61} O O O O O O 0 O � O Cl) O O O CO N CO cr_ O t 0 CO N- CO N Nt O N t CO LO M N — CO Cfl Cfl N (f} Efl W 64 64 41) FA 6-1 69 tii :4A W, 64 Efi EF} 69 03 W�[��Cs�������Cti M M M M M M M O r- N N N �- U A U cp Q Q O O _ � � C N T U) A O > 0 m O co O O Ccu coQ -0 a) U Q C O � L1I a? U E �`� tE ? c i N O a) U c O m Q m O 0 U U)'n @ O _ Q a) m N U w .0)C (D co U _0 U) O (D p 0) O C m 0 aa) OQ d O 0 N U U) U N W W (DDL �} C9 Q 0 '0CL N a) OL a) N O E G to IL w -j 0- 0 Fn iL w 4 U m J L r O _ Qi I` W N U CL QCL U) L 2 N U U) U U U N c L U O to Qh- U i 0 0 0 0 0 o i° 0 0 0 0 0 0 0 0 0 o rt O O(M ON O - O� U) PO to 00 C7 N �- 69 6q 6� 64 6+ 6� 6S 64 6) b4 ... 64 6� �} 6) d} 63 63 .0 N U n � Cco cn U cn U co Cm N C� N U N C3 N U o C) LO O CD 00 CD O _ N 0 U')) N Lo co £R EA 6r� 6, 64 6; 6 , 6} 64 69) O O O� O O O O OO .0 CDOQ C n L A CQ � N 63 � � 64 66, � � 6N4 64 NP C 2 c 2 C? co C2 M P_ c) P eo �"O P P O0 P O P P \ M CDN co coCD coc' 0') O CD N I--O �� N N O P O O O O P T- — C J (6 O (n zz a) V) N O V) Q N (n ~ U C T cn 0 C C O tB .0C C coN N O O O c Nam-;1: p O v a) En E O O O C N U � O O O 0 coCL ♦U O � a) a) U E a) �_ �� 1) L coCL U UI N "O O OU O (o p U " O C to O t6 t4 O) O En C m- U (o E S1 O a) N U N w O �'= y= a N N a) a) U N "a U L N O O N+ N O O N a o p D U U 0- iL C 0 0 LO 00 0 L tfy N N d' �t 64 d} 64 69 69 6} 64 P Efi �y L J 5 N L N >cu 0` Q W CL CL ':^3 U) T m 1lvt�^ / 76 c ` C C) 0 C O i C U O U O 0 L Q U to N O N O N Y O O m m Q N N co -D �o G U CU C/)l W 75 CCT O� O O O 70 _ to Q � EM-4 O - /ZED'ALASKA Renewable Energy Fund Round 5 ONED ENERGY AUTHORITY Project Cost/Benefit Worksheet Please note that some fields might not be applicable for all technologies or all project phases. The level of information detail varies according to phase requirements. 1. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. Wind 30% 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' grid, leave this section blank) i. Number of generators/boilers/other 7 hydro; 6 diesel ii. Rated capacity of generators/boilers/other 15 MW; 23 MW iii. Generator/boilers/other type Synchronous machines iv. Age of generators/boilers/other 30 years; 20 years v. Efficiency of generators/boilers/other .86; 15 kWh/gal. b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor .02 ($/kWh) ii. Annual O&M cost for non -labor .01 ($/kWh) 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] $75,000 ii. Fuel usage Diesel [gal] 266,000 Other iii. Peak Load 30.3 iv. Average Load 18 MW v. Minimum Load 15 MW vi. Efficiency vii. Future trends d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] N/A ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other 1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power. RFA AEA12-001 Application Cost Worksheet Page 1 7-1-11 /GwWDDALASKA EnergyFundRound ML ENProject ERGYAUTHORITY Cost/Benefit 3. Proposed System Design Capacitor and Fuel Usage (Include any projections for continued use of non-renewable fuels) 5. Project Benefits _aMI TTl Wind generators Unknown — feasibility study Unknown — feasibility study Unknown — feasibility study Unknown — feasibility study Diesel generation for general electric loads 6. Power Purchase/Sales Price $3.50/gal. Decrease in air pollution. 23 per kWh RFA AEA12-001 Application Cost Worksheet Page 2 7-1-11 August 18, 2011 Mr. Butch White Grants Administrator Alaska Energy Authority 813 West Northern Lights Boulevard Anchorage, Alaska 99503 111EKI-143 ire, III Lips 0 Pill ®ear Mr. White: I am writing to you on behalf of the City of Ketchikan. It is my understanding that The Southeast Alaska Power Agency ("SEAPA") is preparing grant applications to study the feasibility of wind power in the Ketchikan/Graving Island area, study wind feasibility along the entire SEAPA transmission corridor, and also conduct an engineering study to identify required equipment or devices that will be necessary on the existing SEAPA transmission path to ensure that the delivery of power to Ketchikan is neither compromised nor degraded with the planned intertie to Kake. In light of the many benefits that could be realized if it is determined that wind energy is feasible for these areas, the City of Ketchikan strongly supports SEAPA's efforts to conduct wind studies and also supports the engineering efforts necessary to ensure that the future intertie to Kake neither compromises nor degrades SEAPA's current delivery of power to Ketchikan and other SEAPA communities. Sincerely, THE CITY OF KETCHIKAN, ALASKA s By Lew Williams, Mayor 334 Front Street / Ketchikan, AK 99901 / PH: 907-225-31 11 / FX: 907-225-5075 . August 22, 2011 Mr. Butch White Grants Administrator Alaska Energy Authority 813 West Northern Lights Boulevard Anchorage, Alaska 99503 OFFICE OF THE BOROUGH MANAGER Lefter of Support for Renewable Energy Fund Grant (Round YJ SEAPA Wind Resource Assessment and Economic Feaskillity Studies and Kake-Petersburg Intertie Engineering Stud FOUTU a � a I am writing to you on behalf of the Ketchikan Gateway Borough. It is my understanding that the Southeast Alaska Power Agency ("SEAPA") is preparing grant applications to study the feasibility of wind power in the Ketchikan/Gravina Island area, study wind feasibility along the entire SEAPA transmission corridor, and conduct an engineering study concerning the planned Kake intertie. The latter is intended to identify required equipment or devices that will be necessary on the existing SEAPA transmission path to ensure that the delivery of power to Ketchikan and other SEAPA communities is neither compromised nor degraded with the planned intertie to Kake. In light of the many benefits that could be realized if it is determined that wind energy is feasible for these areas, the Ketchikan Gateway Borough strongly supports SEAPA's efforts to conduct wind studies and also supports the engineering efforts necessary to ensure that the future intertie to Kake neither compromises nor degrades SEAPA's current delivery of power to Ketchikan and other SEAPA communities. Sincerely, Dan Bockhorst, Borough .• Ketchikan Gateway Borough U —D-WnWZ August 19, 2011 Mr. Butch White Grants Administrator Alaska Energy Authority 813 West Northern Lights Boulevard Anchorage, Alaska 99503 CITY AND BOROUGH OF WRANGELL INCORPORATED MAY30,2008 P.O. BOX 531 (907)-874-2381 Wrangell, AK 99929 FAX (907)-874-3952 RE: Letter of Support for Renewable Energy Fund Grant (Round V) SEAPA Wind Resource Assessment and Economic Feasibility Studies and Kake-Petersburg Intertie Engineering Study Dear Mr. White: I am writing to you on behalf of the City and Borough of Wrangell. It is my understanding that The Southeast Alaska Power Agency ("SEAPA") is preparing grant applications to study the feasibility of wind power in the KetchikanfGravina Island area, study wind feasibility along the entire SEAPA transmission corridor, and also conduct an engineering study to identify required equipment or devices that will be necessary on the existing SEAPA transmission path to ensure that the delivery of power to Wrangell and other SEAPA communities is neither compromised nor degraded with the planned intertie to Kake. In light of the many benefits that could be realized if it is determined that wind energy is feasible for these areas, the City and Borough of Wrangell strongly supports SEAPA's efforts to conduct wind studies and also supports the engineering efforts necessary to ensure that the future intertie to Kake neither compromises nor degrades SEAPA's current delivery of power to Wrangell and other SEAPA communities. If you have any questions, please do not hesitate to contact me at (907) 874-2381. Sincerely, h of Wrangell � � � � � � i �` � � � � i RESOLUTION TYE • .; WHEREAS, Southeast Alaska Power Agency is a Joint Action Agency organized pursuant to State Statute; and, WHEREAS, Southeast Alaska Power Agency owns the Tyee Lake and Swan Lake Hydroelectric Projects in Southeast Alaska, which provides renewable hydroelectric power to Ketchikan, Wrangell, and Petersburg; and, WHEREAS, Southeast Alaska Power Agency recognizes that additional renewable resources will be needed in the future to meet loads in Petersburg, Wrangell, and Ketchikan; and, WHEREAS, Southeast Alaska Power Agency recognizes that wind power is a renewable resource and desires to determine the feasibility of utilizing wind turbines to supplement existing hydro resources that provide power and energy to the communities of Ketchikan, Petersburg, and Wrangell, and, WHEREAS, Southeast Alaska Power Agency also recognizes that additional interties may be built to serve communities, including Kake and Metlakatla, and additional generation resources may also be required to serve those loads, and WHEREAS, -ast Alaska Power Agency recognizes inter-connectionconnection to Kake will require an electrical engineering • I recommends steps to be taken to ensure the delivery of power to existing customers is not degraded nor compromised; and WHEREAS, Southeast Alaska Power Agency is in compliance with all federal, state, and local laws including credit and federal tax obligations; RESOLVED, that the Southeast Alaska Power Agency Board of Directors approves the application for project funding from Round V of the Alaska Energy Authority Renewable Energy Grant Program in the amount of $142,500 of which the Southeast Alaska Power Agency will provide a 5% match of 7 500 for Phase I (Reconnaissance) and Phase 11 (Feasibility Analysis, Resource Assessment, and Conceptual Design) of a Wind Study for the areas of Ketchikan and Gravina Island; and, RESOLVED, that the Southeast Alaska Power Agency Board of Directors approves the application for project funding from Round V of the Alaska Energy • Renewable Energy Grant Program in the amount • $80,700 • which Southeast Alaska Power Agency will provide a 10% match of $8,070 for Phase (Reconnaissance) of a Wind Study, for all areas from the Bailey Power Plant Petersburg; and, ]I IVI'41=401111 j AL� I ug-ga Ili! a I a u�l lawgif I a noi 4 fescribed herein, and to commit SEAPA to the obligations under the grants, and ft -rthkl-.F,- PASSED AND APPROVED by a duly constituted quorum of the Southeast Alaska Power Agency this I b�� day of August, 2011. rA k Mc- C10 FrIl TIVT�, AITEST: A P A Southeast Alaska Power Agency SOUTHEAST ALASKAA POWER AGENCY BOARD MEETING MINUTES (AUGUST 18, 2011) 1900 13'Avenue, Suite 318 Ketchikan, Alaska 99901 Ph: (907) 228-2281 • Fax: (907) 225-2287 www.seapahydro.org Approval of Resolution to submit three (3) AEA Renewable Grant Applications for Wind Studies and Electricai-Engineering Inter -Connection Study for Proposed Inter -Connection to Kake9 authorization for CEO to sign grant applications, commit to obligations, and establishing point of contact. r -f�Gt a 13 )VE® .mac leaf—� FINAL VOTE: AYES: fX NAYS: P Richard Coose a pfhmy 14ake Win Charles Freeman Jeremy Maxand Joe Nelson Grant Documents Authorized Signers Please clearly print or type all sections of this form. Community/Grantee Name: Southeast Alaska Power Agency ("SEAPA") Regular Election is held: See attached paragraph 1.2 of SEAPA's Bylaws. Date: Annually each February Authorized Grant Signer(s): Printed Name Title Term Signature Dave Carlson Chief Executive Officer unlimited I authorize the above person(s) to sign Grant Documents: (Highest ranking organization/community/municipal official) Printed Name Title Term Signatur Charles Freeman Chairman of the Board 1 year 04��� Grantee Contact Information: Mailing Address: 1900 First Avenue, Suite 318 Ketchikan, Alaska 99901 Phone Number: 907/228-2281 Fax Number: 907/225-2287 E-mail Address: dcarlson@seapahydro.org Fiscal Year End: June 30 Entity Type (For -profit or non-profit status): Joint Action Agency (non-profit) Federal Tax ID #: 92-0174669 Please submit an updated form whenever there is a change to the above information. Please return the original completed form to: Alaska Energy Authority 813 W. Northern Lights Blvd. Anchorage, AK 99503 Attn: Butch White, Grants Administrator Y:\GRANT APPLICATIONS - ROUND VWuthorized Signers Form.dou ,GNZ:) ENERGY AUTHORITY BY-LAWS OF THE SOUTHEAST ALASKA POWER AGENCY 1.1 Duties and Voting Requirements. All powers of the Southeast Alaska Power Agency (the "Agency) shall be exercised by or under the authority of the Board of Directors and the business and affairs of the Agency, including all matters related to the Long Term Power Sales Agreement between the Agency and the Member Utilities, as defined therein, shall be managed by or under the direction of the Board of Directors. Except as otherwise provided, the Board shall make decisions by majority vote of all of its Directors. 1.2 Appointment and Term of Office. The Agency shall have a total of five Directors. Each Project shall be represented by two Directors. The Tyee Lake Project shall be represented by one Director, and one alternate from Petersburg and one Director, and one alternate from Wrangell. The Swan Lake Project shall be represented by two Directors and two alternates from Ketchikan. Each Member Utility shall notify all other Member Utilities in writing of its designated Director and alternate to the Board. Directors and alternates shall serve for a one-year term commencing on January I and ending on December 31 of each calendar year, provided that a Director or an alternate to the Board shall continue to serve until his or her successor is appointed. The fifth Director and one alternate shall be selected and approved, on an alternating annual basis, between the two Projects. When the Swan Lake Project is to select the fifth Director, the Member Utility from Ketchikan shall make the selection. In the year that the Tyee Lake Project is to select the fifth Director, the selection shall alternate between the Member Utilities of Petersburg and Wrangell.' The selection of the initial fifth Director shall be determined randomly in a manner unanimously agreed upon by the Member Utilities. In the event the Member Utility from Ketchikan, on behalf of the Swan Lake Project, is randomly determined to select the initial fifth Director, there shall be a second random selection between Wrangell and Petersburg to determine which Member Utility will select the initial fifth Director to represent the Tyee Lake Project. The fifth Director may serve one or more additional terms, with the consent of all Directors from each Project. Such a selection shall not alter the alternation of the selection of the fifth Director. I By way of example only, if Ketchikan selected the fifth Director in Year I (representing Swan Lake Project), in Year 2 Petersburg would select the fifth Director (representing the Tyee Lake Project). In Year 3 Ketchikan would select the fifth Director (representing Swan Lake). In Year 4 Wrangell would select the fifth Director (representing the Tyee Lake Project). Page 1 — BYLAWS OF SOUTHEAST ALASKA POWER AGENCY