HomeMy WebLinkAboutConnelly Lake Hydro GrantApplication5 Final
August 23, 2011
Alaska Energy Authority
Attn: Butch White, Grants Administrator
AEA 12-001 Renewable Energy Grant Application
813 West Northern Lights Blvd
Anchorage, AK 99503
RE: Connelly Lake Hydroelectric Project Grant Application
AEA 12-001 Renewable Energy Grant Application Round V
Dear AEA:
Enclosed in response to RFA AEA 12-001 Renewable Energy Grant Application
Round V program, is an application requesting funding for the Connelly Lake
Hydroelectric Project. Enclosed with this letter are two hard copies and one CD with
the document in PDF format.
Enclosed as per the RFA,
o Grant Application Form
o Cost Worksheet (included in Section 10 – Appendices)
o Grant Budget (included in Section 10 – Appendices)
o Grant Budget Form Instructions
o Other pertinent information
If you have any questions, please call either Glen Martin (Resource Assessment &
Permits) 360-385-1733 x122, or Bob Grimm (President) 360-385-1733 x120.
Sincerely,
Glen D. Martin
Resource Assessment & Permits
Enc. (as stated)
Renewable Energy Fund Round 5
Grant Application
AEA 12-001 Application Page 1 of 22 7/1/2011
Application Forms and Instructions
The following forms and instructions are provided to assist you in preparing your application for
a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA)
and the forms are available online at: http://www.akenergyauthority.org
Grant Application
Form
GrantApp5.doc Application form in MS Word that includes an outline of
information required to submit a complete application.
Applicants should use the form to assure all information is
provided and attach additional information as required.
Application Cost
Worksheet
Costworksheet
5.doc
Summary of Cost information that should be addressed by
applicants in preparing their application.
Grant Budget
Form
GrantBudget5.
doc
A detailed grant budget that includes a breakdown of costs by
milestone and a summary of funds available and requested to
complete the work for which funds are being requested.
Grant Budget
Form Instructions
GrantBudgetIn
structions5.doc
Instructions for completing the above grant budget form.
Authorized
Signers Form
Authorized
signers
form5.doc
Form indicating who is authorized to sign the grant, finance
reports and progress reports and provides grantee information.
If you are applying for grants for more than one project, provide separate application
forms for each project.
Multiple phases for the same project may be submitted as one application.
If you are applying for grant funding for more than one phase of a project, provide
milestones and grant budget for completion of each phase.
If some work has already been completed on your project and you are requesting
funding for an advanced phase, submit information sufficient to demonstrate that the
preceding phases are satisfied and funding for an advanced phase is warranted.
If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or
proprietary company data be kept confidential subject to review and approval by the
Authority. If you want information is to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept
confidential. If the Authority determines it is not confidential it will be treated as a
public record in accordance with AS 40.25 or returned to the applicant upon
request.
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
ALASKA POWER COMPANY (APC) (a subsidiary of Alaska Power & Telephone Company (AP&T))
Type of Entity: Utility Fiscal Year End: December 31
Tax ID # 92-0153693 Tax Status: For-profit or non-profit ( check one)
Mailing Address
P.O. Box 3222
Port Townsend, WA 98368
Physical Address
193 Otto Street
Port Townsend, WA 98368
Telephone
360-385-1733
Fax
360-385-7538
Email
glen.m@aptalaska.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Glen Martin
Title
Grant Writer and Permitting/Licensing Manager
Mailing Address
c/o Alaska Power Company, P.O. Box 3222, Port Townsend, WA 98368
Telephone
360-385-1733
Fax
360-385-7538
Email
glen.m@aptalaska.com
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
X An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes
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.
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SECTION 2 – PROJECT SUMMARY
This is intended to be no more than a 1-2 page overview of your project.
2.1 Project Title – (Provide a 4 to 5 word title for your project)
Connelly Lake Hydroelectric 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 Connelly Lake Hydroelectric Project (Project) will be located in Southeast Alaska,
approximately 14 miles northwest of the City of Haines and 10 miles southwest of the City of
Skagway. Both communities were intertied by The Applicant in 1998 with a 15 mile, 34.5 kV
submarine cable. The Project would provide power to both communities as well as backup for
Haines if the submarine cable ever fails. The Applicant’s system is also intertied with the Inland
Passage Electric Cooperative (IPEC) system serving Klukwan and the Chilkat valley, and thus
the Project could benefit those communities as well.
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 X Design and Permitting
Feasibility Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
Connelly Lake is an 85 acre alpine lake, and drains into the Chilkoot River. The Project
facilities will include a dam at the lake outlet, a penstock about 6,200 feet long, a 12.0 MW
powerhouse with two generating units, a 14-mile-long 34.5 kV transmission line and a 14-mile
long access road. Field studies, permitting and final design for this Project will be completed
during Phase III. The Project will be developed by the Applicant to provide additional
generation to its interconnected Haines and Skagway electrical systems, to possibly provide
summer power to cruise ships moored at Haines, and to provide backup renewable power to
Haines should the submarine cable fail. The Project will be on state and private land, including
the Haines State Forest and Chilkat Bald Eagle Preserve.
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2.5 PROJECT BENEFIT
Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel
costs, lower energy costs, etc.)
The Project will provide additional hydroelectric generation to the Applicant’s Upper Lynn
Canal (ULC) system, which includes Haines, Skagway, and other nearby communities. The
Applicant also supplies power to Inland Passage Electric Cooperative from the ULC system.
The primary Project benefit to the Applicant would be an increase in reliability. Currently, the
primary hydroelectric generators in the ULC system are near Skagway, with only diesel
generation and two small run-of-river hydros located near Haines. If the submarine cable
between Haines and Skagway were to be damaged, nearly all generation for Haines would need
to be from diesel units. The Project will connect into the system near Haines, and so in the event
of a submarine cable outage Haines would be fully supplied with hydro generation.
The Project will also be a long-term resource to offset diesel generation. Currently, diesel
generation is necessary during low water periods; continuing load growth will make diesel
generation more frequent. The potential generation of a 12.0 MW project is estimated to be 40
GWh, which should be sufficient to meet increasing loads for many years to come, although
generation during the early years of the Project’s life would likely be fairly limited.
To provide revenue in the early years of Project operation, the Applicant proposes to sell power
during the summer months to cruise ships docked at either Haines or Skagway. The estimated
annual load from supplying one ship is estimated to be 9,000 MWh, with a peak of 11 MW. The
Applicant estimates that a power sales rate of $0.25/kWh would be attractive to the cruise lines
in 2019, and that revenue would be sufficient to offset the Applicant’s costs (assuming the
development is 80% grant funded by the State). Excess revenue could be either assigned to the
State to offset the cost of the grant funding and provide an additional revenue source to the State,
or assigned to the Applicant to lower electricity rates to the Applicant’s customers. Installation
of a larger capacity to supply two cruise ships may be possible, which would increase the
revenue to the State. The Applicant will fully evaluate the Project economics with supply of one
and two cruise ships during the current Phase II feasibility studies.
It should also be noted that the Project could supply power to new industrial loads if they occur.
Currently, mineral explorations are being conducted in the Klukwan area, and there is some
discussion that a mine on the order of the Greens Creek Mine near Juneau could be developed.
2.6 PROJECT BUDGET OVERVIEW
Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source
of other contributions to the project.
The total cost of the Project is estimated to be $46,100,000, not including costs incurred by
Haines Light & Power Co. (HL&P) in the 1990s for a preliminary design of the project. No
reconnaissance level studies (i.e. Phase I) are necessary because of the previous HL&P work.
Note that the Applicant purchased HL&P in 1998, including assets associated with the Project.
The Applicant is currently conducting feasibility, conceptual design, environmental scoping, and
preliminary environmental studies with partial funding provided through an REF Round IV
grant ($468,000). In the Round IV grant application, the Applicant indicated the expected cost
for the Phase III (permitting and final design) work would be $715,000 and Phase IV
(construction) would be $32,000,000. The Applicant has reevaluated the expected Phase III and
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IV costs, and has determined that they will likely be more than previously indicated. Therefore,
the Applicant has increased its proposed budget for the Project and is applying for increased
grant funding with this Round V application to cover the increased costs. The Applicant requests
with this application grant funding of $1,452,000, which is 80% of the estimated costs of Phase
III ($1,815,000). The Applicant will provide $363,000 in matching funds (20% match) from its
normal operating funds. The total estimated costs for each phase, including construction, are
shown below:
Phase I Reconnaissance: ......................................................................................$0
Phase II Feasibility and Conceptual Design:.............................................$585,000
Phase III: Final Design and Permitting..................................................$1,815,000
Phase IV: Construction..........................................................................$43,700,000
Total.......................................................................................................$46,100,000
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. $1,452,000
2.7.2 Other Funds to be provided (Project match) $363,000
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $1,815,000
Project Costs & Benefits
(Summary of total project costs including work to date and future cost estimates to get to a fully
operational project)
2.7.4 Total Project Cost (Summary from Cost Worksheet
including estimates through construction) $46,100,000
2.7.5 Estimated Direct Financial Benefit (Savings) $398,000,000 (1)
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.)
$ Not calculated; benefits
include increased system
reliability and reduction in
cruise ship emissions.
(1) Includes potential savings in diesel fuel costs over 50 years with projected utilization of Project
output and estimated revenue from sale of 9,000 MWh/year to cruise ships over 50 years.
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SECTION 3 – PROJECT MANAGEMENT PLAN
Describe who will be responsible for managing the project and provide a plan for successfully
completing the project within the scope, schedule and budget proposed in the application.
3.1 Project Manager
Tell us who will be managing the project for the Grantee and include contact information, a
resume and references for the manager(s). If the applicant does not have a project manager
indicate how you intend to solicit project management support. If the applicant expects project
management assistance from AEA or another government entity, state that in this section.
Vern Neitzer, The Applicant’s Chief Engineer, will be the Project Manager. Mr. Neitzer is
located in Skagway near the Project location, and has extensive experience in managing
hydroelectric development. A resume for Mr. Neitzer is included in Section 10.
3.2 Project Schedule
Include a schedule for the proposed work that will be funded by this grant. (You may include a
chart or table attachment with a summary of dates below.)
A bar schedule of the expected design, permitting and licensing, and construction sequence is
provided in Section 10. The following summarizes key activities and dates of the schedule
including time and activities related to a FERC license application.
Phase III: Permitting and Final Design:
Completion of environmental studies.................................... July - December 2012
Permit applications preparation............................................July 2012 - June 2013
Permit applications processing..............................................July 2013 - June 2015
Post-license activity..............................................................July 2015-March 2016
Stream gaging (data collection for 3 years)..........October 2012 - September 2015
Geotechnical investigations......................................... July 2014 – December 2014
Surveying and mapping................................................ July 2014 – December 2014
Final design ................................................................January 2015 – March 2016
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.)
Phase III will build on the results of the Phase II work now underway. In addition, continuation
of Project development will hinge on the results of the Schubee Lake reconnaissance study that
will be completed in early 2012. Thus, the following key tasks and decision points are for the
current Phase II as well as the proposed Phase III:
Phase II:
Conceptual design is completed by the end of 2011 to provide a basis for environmental
scoping in early 2012
Geotechnical reconnaissance completed in 2011 to provide a basis for development of a
plan for further detailed investigation for licensing and design
Environmental scoping and study plans developed by early 2012 to allow field work to
occur in summer of 2012
Feasibility analysis confirms that Connelly Lake is a superior site compared to Schubee
Lake
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Phase III:
Environmental studies are completed by the end of 2012 and provide a sufficient basis for
preparation of permit applications
Submittal of the FERC license application by mid-2013; other permit applications will be
developed and filed in concert with the FERC license application, but are expected to be
less time-consuming to obtain
Sufficient progress on permits processing by mid-2014 to warrant conducting field
investigations in 2014 as required for final design
Completion of final design early in 2016 so that construction can proceed in 2016.
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.
Key personnel of the Applicant involved in the project development and their roles will be:
Vern Neitzer, Project Manager
Bob Berreth, Electrical Design
Ben Beste, Mechanical Design
Larry Coupe, Civil Design
Glen Martin, Permits
The Applicant will prepare much of the final design in-house using its staff civil, mechanical,
and electrical engineers, who all have extensive experience in hydroelectric development. These
engineers designed the Applicant’s South Fork and Kasidaya Creek projects, which entered
service in 2005 and 2008, respectively. The Applicant will contract with a consulting
engineering firm for final design of the Connelly Lake dam; the firm will be selected on the basis
of experience with similar structures and competitive proposals.
Stream gaging at the outlet of Connelly Lake will be by the Applicant. In previous REF grant
applications, the Applicant had proposed gaging of the Chilkoot River by the USGS. The
Applicant has recently become aware of ongoing gaging of the Chilkoot River by ADF&G at the
outlet of Chilkoot Lake; the Applicant has reviewed the data from that gage and believes it will
be sufficient for its needs, therefore a gage installation by the USGS is no longer proposed.
Preliminary geotechnical investigations will be conducted by the Applicant in the current Phase
II work that will be sufficient to support the feasibility evaluation and licensing. However,
additional investigations will be necessary for the final design, and will be by contractors. The
Applicant has used the following contractors and consultants on previous similar work:
Core boring - - Crux Subsurface, Inc.
Seismic refraction surveys - - Phil Duoos
Geotechnical evaluation - - GeoEngineers, Inc.
Topographic mapping - - Aero-Metric, Inc., Dudley-Thompson Mapping
Permit applications will be prepared by the Applicant’s staff. The environmental studies and
resource assessments (begun in Phase II) will be conducted primarily by contractors. The
Applicant has used the following contractors and consultants on previous similar work:
Fish surveys - - The Shipley Group
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Water quality sampling - - Analytica Group, Inc.
Archaeological Survey - - Many to choose from in Juneau and Anchorage
Wetlands Delineation - - HDR, Inc.
Mt. Goat Survey - - ADF&G (because the regularly do surveys)
Other terrestrial animal surveys - - unknown at this time - - may hire HDR, Inc.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
During Phase III, The Applicant proposes to provide quarterly reports to AEA regarding the
status of the work and use of the grant funds. The Applicant has provided similar reports to AEA
and other grant funding agencies in the past several years on other projects, and has established
the necessary procedures for producing the reports expeditiously.
Deliverables to be provided to AEA during Phase III will include (as requested):
All permit applications
All plans developed to satisfy license and permit conditions
Final design plans, specifications, and design reports
3.6 Project Risk
Discuss potential problems and how you would address them.
Site Control – The Applicant does not yet have development rights on land to be occupied by
part of the transmission line and access road. We are working with the private land owners to
negotiate leases, easements, or sales.
Seismic – Project components will be designed appropriately for seismic activity, since the
Project will be located in a moderate-risk seismic zone. Structures will be buried as much as
possible to minimize seismic impacts. The structure with the greatest seismic risk will be the
Connelly Lake dam; the Applicant will have the dam designed by a consulting engineer with
appropriate experience. In addition, the Applicant expects that the dam design will be closely
evaluated by the FERC during its normal review and approval process.
Underground Construction – The Project as currently envisioned does not include a significant
amount of underground construction. Geotechnical investigations will be conducted at the dam
and powerhouse areas to provide an adequate level of knowledge about ground conditions at
those sites. In the current Phase II, the Applicant will evaluate the costs and benefits of using a
tunnel and shaft instead of a surface penstock. If that is chosen as the preferred alternative,
additional field investigations will be conducted to confirm the suitability of the site.
Inclement Weather – Working conditions in the dam area are very harsh during the winter. The
proposed schedule assumes no work on the dam and upper portions of the penstock during the
December-March period. Work during the winter will be limited to the powerhouse.
Environmental Opposition – The Applicant is aware that some Haines area resident may oppose
Project development, primarily because the proposed road could increase access into the
Chilkoot Valley, and because of perceived impacts from the minor flow modifications that would
occur in the Chilkoot River. The Applicant believes the environmental impacts will be
insignificant or can be prevented or adequately mitigated. Other Haines citizens have expressed
support for this project as being in the best interest of the Haines area (letters of support are
enclosed in Section 10). The Applicant will meet regularly with concerned citizens to address
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any issues with the Project, with the intent of reaching a favorable consensus. In our meetings to
date, some Haines citizens have asked us to consider development of Schubee Lake as an
alternative; The Applicant conducted a site visit to Schubee Lake in 2009, and will conduct a
reconnaissance study and feasibility analysis of that site’s potential beginning in 2011.
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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.
Potential Energy Resource: The energy generated by the Project will be derived from the inflow
to Connelly Lake and the head between the lake and the power plant. The Connelly Lake outflow
was measured by the USGS from August 1, 1993 to September 30, 1997; based on that gage
record, the Applicant expects the average annual inflow to be 39 cfs. Average daily flows will
vary from near zero during cold winter periods to several hundred cfs following intense storms.
The actual generation will vary depending on the installed capacity, reservoir size, and load to be
served. With the Applicant’s currently-proposed arrangement and preliminary modeling, the
installed capacity will be 12 MW, the reservoir will have an active storage capacity of 6,700
acre-feet, the average head will be about 2,140 feet, and the potential average annual energy will
be 40 GWh. The Applicant intends to evaluate a range of installed capacities and reservoir sizes
during the Phase II studies now in progress to select an optimum arrangement for licensing.
Alternative Energy Resources: Currently, local loads are met primarily by hydroelectric
generation, with a small amount of diesel generation required during low water periods. The
potential average annual generation from all current hydro resources is about 38.1 GWh. A load
forecast prepared for the SEIRP shows ULC loads growing from 28.8 GWh in 2011 to 49.4 GWh
in 2061. The Applicant is committed to adding renewable generation to meet future load growth
rather than increasing use of its diesel generators in order to minimize the cost of electricity to its
customers. Also, when in port, cruise ships rely on their on-board fossil-fuel generation systems,
which could be served by shore-based renewable generation, as currently occurs in Juneau and
elsewhere.
The Applicant is not aware of any alternative energy sources that would be more economical than
conventional hydroelectric generation. Wind and solar potential is very limited in the area, and
there are no identified geothermal, tidal, or wave energy sites. There are other hydroelectric
sites in the area, including:
Schubee Lake: The Applicant is in the process of evaluating Schubee Lake; it would
require a new submarine cable interconnection to Haines, and thus would not provide the
same benefits at Connelly Lake.
West Creek: The West Creek project would be located at the Skagway end of the existing
submarine cable, and thus would not provide the same benefits at Connelly Lake.
Walker Lake: The Walker Lake project would be located near Klukwan, and thus could
provide generation to Haines, however, the Applicant has evaluated the Walker Lake site
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and believes the Connelly Lake site would provide much more energy at less cost.
Yeldagalga Creek: The Yeldagalga Creek site was recently proposed by a Juneau firm to
supply power to the Kensington mine, but it could also provide power to Haines.
However, it would require a new submarine cable interconnection to Haines and would
be a run-of-river project, and thus would not provide the same benefits at Connelly Lake.
Based on the above, the Applicant believes the more likely alternative to the Connelly Lake site is
supplemental diesel generation. Compared to diesel generation, the Project will have the
following advantages:
less expensive cost of power;
reduced air emissions;
uses fewer hazardous substances.
The Project may have the following disadvantages:
As with all hydroelectric projects, the initial cost of development is much higher than for
diesel generation.
In addition, there may be environmental impacts associated with the Project, such as the
access and transmission route through a portion of the Chilkat Bald Eagle Preserve and
minor modifications of the flow in the Chilkoot River.
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.
The existing ULC energy system configuration is as follows:
Unit Type Capacity, kW Efficiency, kWh/gal Age, years
Goat Lake Hydro (storage) 4,000 N.A. 12
Dewey Lakes Hydro (storage) 943 N.A. 107
Lutak Hydro (run of river) 285 N.A. 10
10-Mile(1) Hydro (run of river) 600 N.A. 9
Kasidaya Hydro (run of river) 3,000 N.A. 1
Skagway #6 Diesel 855 14.69 23
Skagway #7 Diesel 1,100 14.80 13
Skagway #8 Diesel 500 14.89 18
Skagway #9 Diesel (refurbished) 930 ? <2
Haines #1 Diesel 800 12.64 40
Haines #2 Diesel 1,265 12.93 26
Haines #3 Diesel 1,600 14.92 20
Haines #4 Diesel 2,865 12.83 14
(1) The Applicant purchased power from Southern Energy’s 10-Mile hydro project until 2002. Purchases resumed in
2008.
Haines and Skagway are interconnected by a 15-mile-long, 34.5-kV submarine cable with a
capacity of approximately 20 MW. Skagway and Dyea are connected by a 7.3-mile long 7.2-kV
distribution line, and Haines and the IPEC system are connected by a 10-mile long 12.47-kV
distribution line.
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.
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The Applicant’s ULC system is primarily hydroelectric generation with diesel backup. In recent
years diesel has been needed for peaking operations during summers when loads are high and at
the end of some long winters when the storage in Goat Lake is low. The Applicant would use the
Project to supplement the other ULC hydro resources to eliminate diesel generation now and for
many years to come. The Project would also provide power to the cruise ships that visit Haines
and Skagway each summer; the Applicant as part of its current feasibility evaluation of the
Project will determine the costs and benefits of providing power to one or more cruise ships.
The Applicant expects the following impacts on the existing energy resources:
Run-of-river hydros - - no impact; the energy available from run-of-river hydros would
continue to be dispatched first
Storage hydros - - the Project operation would be coordinated with that of Goat Lake and
Dewey Lakes to maintain storage at comparable levels, with adjustment as necessary for
differing runoff characteristics. In the early years at least, this would probably reduce
generation by Goat Lake.
Diesels - - the diesel generators would only be operated during hydro forced outages and
as necessary to confirm their standby capability
Submarine cable - - the submarine cable linking Haines and Skagway would see less
current flow. More importantly, loss of the submarine cable due to seafloor instability or
other cause would not have a catastrophic impact since Haines loads would still be fully
served by renewable energy
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
Loads in the Applicant’s ULC system are primarily residential and commercial. Loads are
typically higher in the summer than winter due to seasonal tourism business, however, winter
peaks loads can occur due to cold weather. The Applicant to date has not experienced a
significant amount of conversion from oil or wood-fired space heating to electric space heating,
but it expects that more conversions will take place in the future as heating oil prices rise.
The Project will be able to supply loads in any of the interconnected communities in the ULC
system, as well as IPEC loads in the Chilkat valley. Currently, it is sometimes necessary for The
Applicant to use diesel generation to supplement the hydro generation, either due to low
streamflows or outages. Load increases and expansion of the system have exacerbated this
situation. When diesel generation is required, electric rates increase and cause fluctuations in
customer energy bills that can be difficult to anticipate or adjust for. Adding more hydro
capacity to the ULC grid will alleviate fluctuating electric rates for customers.
If the Project is configured to provide shore power to cruise ships docked at Haines or Skagway,
the cruise lines would see their operating costs decrease, which would be beneficial for that
industry, which in turn would help the communities because the local economy is currently so
dependent on tourism.
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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 technology specific to location – The Project will be a conventional
hydroelectric project. Hydroelectric technology is well developed, and provides most of the
renewable energy generated in the world in general, and Southeast Alaska in particular. The
Project will utilize the abundant rainfall and steep topography afforded by the Connelly Lake
basin to generate renewable energy.
Optimum installed capacity – The optimum installed capacity is estimated to be 12 MW. An
economic sizing of the installed capacity will be accomplished during the Phase II studies now in
progress.
Anticipated capacity factor – The capacity factor is estimated to be 38%, based on an installed
capacity of 12 MW and the estimated average annual generation of 40 GWh.
Anticipated annual generation – The potential annual generation is estimated to be 40 GWh (with
a 12 MW installed capacity). The actual annual energy will vary from year to year, depending on
load and precipitation.
Anticipated barriers – There are no known technological barriers to development of the Project.
Basic integration concept – The ULC system is already a hydro-based system with diesel backup.
Integrating another hydro project to the system will not present any difficulties. The run-of-river
hydros in the system (Lutak, Kasidaya) will be dispatched first, followed by storage hydros (Goat
Lake and Connelly Lake). Generally, the storage hydros will be dispatched based on their then
current storage levels and operating characteristics. In addition, one or both of the storage
hydros will always be on-line to provide system stability.
Delivery methods – The Project will be interconnected to the ULC grid at Lutak Inlet by a 14-
mile long, 34.5 kV 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 project is primarily on land owned by the State of Alaska Lands (Haines State Forest, Chilkat
Bald Eagle Preserve), with some small private landholdings along the access road/transmission
line route. The Applicant has applied for land leases from DNR and the Haines State Forest.
The Applicant is currently negotiating with private landowners.
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Due to previous FERC preliminary permit applications, there is a power site reservation on most
of the Project land per the Federal Power Act, Section 24. This reservation exists even though all
affected Federal land has been transferred to the State. The Section 24 reservation does not
jeopardize Project development, although it does trigger FERC jurisdiction.
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
Expected permits:
FERC license
404 permit (Corps of Engineers)
Water right (ADNR)
State land lease (ADNR)
Fish habitat permit (ADF&G)
State Parks Permit (including approval from Chilkat Bald Eagle Preserve)
SHPO review
Permitting Timeline: Permit applications will be filed with the various agencies in Phase III
after completion of the necessary environmental studies begun in Phase II. We currently estimate
that permit applications and the FERC license application will be filed in mid to late 2013 and
the permits and FERC license will be received by winter 2015-2016.
Potential Permitting Barriers: The Applicant is not currently aware of any permitting issues that
would preclude development of the Project. The Applicant is aware that some Haines residents
are opposed to the Project, and may use the permitting process to prevent or delay development.
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
Threatened and endangered species: The Applicant is not aware of any threatened and
endangered species in the Project area. The Applicant will conduct field studies regarding
threatened and endangered species, but impacts are not anticipated.
Habitat Issues: Habitat surveys were conducted by ADF&G in the 1990’s for fish in Connelly
Lake and in the Chilkoot River near the lake outlet stream’s confluence with the river. No fish
were found in the lake or using the outlet stream. The Chilkoot River provides anadromous
rearing and spawning habitat, and the Applicant will conduct fish surveys and analyses to
determine potential impacts. The Applicant believes the impacts will be minor because the flow
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fluctuations in the summer will be small compared to the natural flow in the Chilkoot River. In
the winter, the project will likely increase the natural flow of the Chilkoot River, which could be
beneficial.
Wetlands: The Project will affect some wetlands, including Connelly Lake and possibly small
muskeg areas along the penstock route. Wetlands along the access road may also be impacted.
However, no significant impacts are expected. The Applicant will conduct a wetland delineation
survey.
Archaeological Resources: The Applicant will conduct an archaeological survey. No significant
impacts to archeological or cultural resources are expected.
Land Development Constraints: No land development constraints are known at this time. Lease
agreements with the state will specify any necessary mitigation requirements for the Project
features. The Applicant would expect to provide gates on the access road to limit unauthorized
access.
Telecommunications Interference: The 34.5 kV transmission line will not create interference with
telecommunications. In addition, The Applicant expects to bury much of the transmission line to
avoid any impacts to bald eagles.
Aviation Considerations: The Applicant does not expect any interference or concerns regarding
aviation.
Visual, Aesthetic Impacts: The Applicant expects that most visual impacts from the Project will
be associated with the forest clearing required for the access road and penstock. Most of the
access road will be a reconstruction of an existing abandoned and overgrown logging road. The
Applicant expects to provide locked gates on the road to limit access, so the area will continue to
be rarely viewed by the public.
Other Potential Barriers: No other potential barriers are known at this time.
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
Anticipated Project costs:
Phase I (not required) ...................................................................$0
Phase II (including current Round IV grant).................... $585,000
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Phase III (proposed)........................................................$1,815,000
Phase IV (construction)................................................ $43,700,000
Total...............................................................................$46,100,000
Requested Grant Funding: $1,452,000 (80% of total cost for Phase III)
Applicant Matching Funds: $363,000 (20% of total cost for Phase III)
Other Funding Sources: Other funding sources have not been identified at this time. The
Applicant will provide the matching funds for Phase III from its normal operating funds.
Projected Capital Cost of Renewable Energy System: $43,700,000 (assumed to be the cost of
Phase IV Construction)
Projected Development Cost of Proposed Renewable Energy System: $2,400,000 (assumed to be
the sum of Phase I, II, and III costs).
These estimated costs reflect the applicant’s knowledge and experience at building hydroelectric
projects. The estimated costs have increased significantly since previous grant applications to
fully consider the expected costs of FERC licensing, as well as the costs to increase the capacity
to 12 MW to serve cruise ship loads.
Phase III: Project Costs for Final Design & Permitting
Environmental Studies (additional)........................................................... $194,000
Permit Applications Preparation ............................................................. $205,000
Permit Applications Processing.................................................................. $64,000
Post-License Activity................................................................................... $55,000
Stream Gaging (data collection for 3 years)............................................... $42,000
Geotechnical Investigations.......................................................................$527,000
Surveying and Mapping............................................................................ $156,000
Final Design............................................................................................ $572,000
Total For Phase III:.............................................................................. $1,815,000
Phase IV: Project Costs for Construction
Construction Management..................................................................... $1,200,000
Mobilization ............................................................................................$1,600,000
Access Roads and Bridges...................................................................... $3,200,000
Dam and Reservoir................................................................................. $8,900,000
Penstock ................................................................................................$11,600,000
Powerhouse ............................................................................................$9,900,000
Switchyard...............................................................................................$1,900,000
Transmission ......................................................................................... $5,400,000
Total For Phase IV: ............................................................................ $43,700,000
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.)
The Applicant estimates the following incremental annual O&M costs for the Project ($2011):
Incremental labor cost...................................................................$200,000
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Incremental expenses.....................................................................$400,000
Total...............................................................................................$600,000
The Applicant is not requesting grant funding for O&M costs.
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
The Applicant is developing this project to supply power to The Applicant’s ULC system
customers and to cruise lines that visit Haines and Skagway during the summer tourist season.
The Applicant expects that the rates to its commercial and residential customers would not
increase due to Project development. The Applicant projects that a sales price of $0.25/kWh in
2019 would be attractive to the cruise lines and the revenue from those sales would provide a
positive net income to the Applicant and the State.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Please see the attached Cost Worksheet.
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: The Applicant estimates the potential annual fuel
displacement to be about Project would displace 139,000,000 of diesel fuel over a 50 year period,
for an average annual potential displacement of about 2,800,000 gallons. The actual
displacement will vary from year to year, depending on the volume and timing of precipitation in
the Connelly Lake basin and the load growth of the interconnected system.
The fuel displacement by the Applicant would be relatively small, amounting to about
$79,000,000 over a 50 year period. Direct revenue from sales of power to one cruise ship would
amount to an additional $236,000,000 over a 50-year period. The rate of return over 50 years
would be 7.2%. The actual lifetime of the Project is indefinite; many hydro projects are still
operating after 100 years of service.
The values provided above are from the Applicant’s analysis, which is based on the following
assumptions:
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Diesel fuel costs as estimated by Black & Veatch for the Southeast Integrated Resource
Plan through 2061; for 2062-2068, fuel cost escalation assumed at 7.43% to match
SEIRP rate for 2061. Fuel prices are the average of prices for Haines and Skagway.
Load growth through 2061 as estimated by Black & Veatch for the Southeast Integrated
Resource Plan, with modifications to eliminate a large load addition in 2016. Loads for
2062-2068 are assumed to escalate at 0.3% per year to match SEIRP rate for 2036-2061.
9,000 MWh cruise ship load begins in first year of Project operation and continues
throughout the Project life.
Minimum diesel generation of 1,000 MWh/yr without Connelly Lake due to outages and
testing; minimum diesel generation of 500 MWh/y with Connelly Lake.
Average diesel efficiency of14.4 kWh/gallon.
Current diesel O&M costs of $0.010/kWh, escalating at 2.75% per year.
Sales to cruise ships at $0.25/kWh in 2019, escalating at 2.75% per year.
Anticipated annual revenue: The Applicant would expect a net decrease in its revenue, because
the Project would substitute hydro generation for diesel generation, thus decreasing the Cost of
Power Adjustment rate. At current RCA tariff rates, the Applicant would expect to obtain
$184,000,000 over a 50-term for its investment in the Project (depreciation, incremental O&M,
and regulated return on investment).
Sales to cruise ships could provide an additional $236,000,000 in revenue over a 50-term term.
That amount would be sufficient to cover the incremental costs to the Applicant so that the
Applicant’s rates would not be affected, as well as surplus revenue that could be used to reduce
the Applicant’s rates or reimburse the State for its investment. In addition, the State would spend
less on the PCE program, since the Project generation would decrease the amount of diesel
generation subject to PCE reimbursement. The Applicant estimates that this savings could
amount to about $5,000,000 over a 50 year term. If the cruise ship revenues are split 85%
Applicant / 15% State, the return would be approximately equal over the 50 year term. The PCE
savings are based on the following assumptions:
Current PCE rate .............................................................................$0.072
PCE rate escalation.....................................................................1.0%/year
Portion of incremental generation valued at PCE rate .....................100%
Potential additional annual incentives: Unknown.
Potential additional revenue streams: Unknown.
Non-economic public benefits to Alaskans: The main non-economic benefit of the Project would
be improving the reliability of the ULC system. Currently, Haines is supplied primarily by
generation near Skagway that is transmitted over a 13-year old submarine cable. The cable is
partially located in an area of loose marine sediment that is known to be unstable during seismic
events. The Project would provide hydro generation to Haines in the event the submarine cable
becomes unusable.
Another major non-economic benefit would be the reduction of emissions from on-board
generation by cruise ships while docked in Skagway or Haines. The potential Project generation
is equivalent to a reduction in emissions of about 33,000 tons per year. These environmental
benefits would maintain the desirability of Haines and Skagway as cruise ship destinations.
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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
Proposed business structure: The Applicant is a public utility regulated by the Regulatory
Commission of Alaska. The Applicant does not anticipate any change to that business structure as
a consequence of the Project.
O&M financing: The Applicant will fund the O&M costs from power sales revenues.
Potential operational issues: The Project will be designed in accordance with all applicable
standards and practices, and the design will be reviewed by FERC prior to and during
construction to minimize the potential for unusual operational issues.
The impact of climate change on the Project operation is unknown at this time; a recent study for
the State of Alaska suggests that climate change may cause more winter precipitation to be in the
form of rain than snow. This could actually be of benefit, as it would decrease the extreme
variability in the seasonal flow pattern, thus making the limited storage more effective.
O&M costs: The Applicant estimates the following incremental annual O&M costs for the Project
($2011):
Incremental labor cost...................................................................$200,000
Incremental expenses.....................................................................$400,000
Total...............................................................................................$600,000
Reporting commitment: The Applicant will provide reports to AEA on the savings and benefits in
any format and on any schedule specified by the AEA.
SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS
Discuss what you have done to prepare for this award and how quickly you intend to proceed
with work once your grant is approved.
Tell us what you may have already accomplished on the project to date and identify other grants
that may have been previously awarded for this project and the degree you have been able to
meet the requirements of previous grants.
The Applicant has considered development of the Connelly Lake site for many years. In fact, it
was the main alternative to development of the Goat Lake site. Over the years, The Applicant has
conducted several site visits to Connelly Lake and other nearby potential hydro sites in order to
confirm the technical and economic superiority of the Project. In the last couple of years, The
Applicant has been holding public meetings and one-on-one communications with Haines
residents to provide information about the Project and develop local support.
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The Applicant is currently starting Phase II feasibility work with $468,000 in REF Round IV
grant funding. That work includes the following:
Evaluation of alternative arrangements and development of a conceptual design
Installation of a stream gage at the Connelly Lake outlet
A geotechnical reconnaissance in the fall of 2011, to be followed by seismic refraction
surveys in the summer of 2012
Environmental scoping per FERC license requirements
Environmental field studies
Most of this work will be completed by the summer of 2012. In particular, the environmental
scoping will have indentified the issues that need to be addressed, and the Applicant will have
developed plans for the environmental studies required to address the issues. To be prudent, the
Applicant has budgeted for additional Round V funding to complete the environmental studies,
although without completion of the scoping process the Applicant cannot say for sure that
additional funds will be required. The Applicant will proceed with the proposed Phase III work
as soon as the funds are available, in order to maintain continuity of the field work.
The Applicant has received only the $468,000 REF Round IV grant for the Project. That grant
has only recently been awarded, but the Applicant does not expect any problems in fully meeting
the grant requirements.
SECTION 8– LOCAL SUPORT
Discuss what local support or possible opposition there may be regarding your project. Include
letters of support from the community that would benefit from this project.
The Applicant has conducted several public meetings in Haines to explain our intent with this
project. The Applicant is aware that some Haines area resident may oppose Project
development, primarily because the proposed road could increase access into the Chilkoot
Valley, and because of perceived impacts from the flow modifications that would occur in the
Chilkoot River due to Project operation. The Applicant believes the environmental impacts will
be minor or can be prevented or adequately mitigated. Letters of support are included in Section
10. The Applicant will meet regularly with concerned citizens to address any issues with the
Project, with the intent of reaching a favorable consensus. In our meetings to date, some Haines
citizens have asked us to consider development of Schubee Lake as an alternative; the Applicant
conducted a site visit to Schubee Lake in 2009, and will conduct a study of that site’s potential in
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
Amount requested in grant funds: $1,452,000 (80% of the estimated Phase III cost)
Investments to date: The Applicant has not made any investments to date in the proposed Phase
III work. The Applicant has conducted several sites visits over the years and has reconsidered
the conceptual design for the project. The total cost for that work is estimated to be on the order
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of $20,000, paid out of the Applicant’s general operating budget. For the Phase II work
currently in progress, the Applicant expects to invest $117,000 of its own funds.
Additional investment by The Applicant: AP&T will provide matching funds in the amount of
$363.000 (20% of the estimated Phase III cost).
See the attached GrantBudget3.doc for a breakdown of the costs by milestones.
I Renewable Energy Fund ALASKA
ENERGY AUTH ORITY Grant Application Round 5
SECTION 10 -ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION:
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.
B. Cost Worksheet per application form Section 4.4.4.
C. Grant Budget Form per application form Section 9.
D. Letters demonstrating local support per application form Section 8 .
E. An electronic version of the entire application on CD per RFA Section 1.7.
F. Authorized Signers Form.
G. 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
application.
Certifies the applicant is in compliance with applicable federal, state, and local,
laws including existing credit and federal tax obligations.
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
Signature
Title ·L,c.t!.IfS,,
Date
AEA 12-001 Grant Appli cation Page 22 of 22 7/1112011
CONNELLY LAKE HYDRO
APPENDICES
TABLE OF CONTENTS
1. Certificate of Public Convenience & Necessity
2. Corporate Resolution
3. Authorized Signers
4. Project Maps
5. Project Schedule
6. Letters of Support
7. Resume’s
8. Cost Worksheet
9. Grant Budget Form
10. FERC Public Notice of Preliminary Permit Application
11. Electronic Version Certification
CERTIFICATE OF PUBLIC
CONVENIENCE & NECESSITY
CORPORATE RESOLUTION
AUTHORIZED SIGNERS
Grant Documents Authorized Signers
Pl ease cl earl y p rint or ty pe all sections of this form.
Co m muni ty/Grantee Nam e : AL A SKA POWER COMPANY
Reg ul a r E lection is he ld: An nu a ll y I Date : A nnu al E lecti o n =M ay 2011
Autho rized G rant Si
P rin ted Name Title Te rm
Rob ert S. Grim m CEO / Preside nt
Gl en D. Martin
I autho rize the above person(s) to sign Grant Do cu me nts:
(H ighest ranki ng organization/com mu nity/m un icipal official)
Prin te d Name Title T e rm
Robert S. Grimm CEO / President Pe rmane nt
Gran tee Contact Inform ation:
Mailing Address: P .O. Box 3222
P ho ne Number: 360-385 -1733 x120
Fax Number: 360-385 -753 8
E-mai l Address: bob.g@aptalaska.com
Fisc a l Year E nd: December 31
Entity T~_e _(For-pro fi t or non-profit status): For Profit
Fe deral T ax ID #: 92-0 153693
Please s u bmit an updated form whenever there is a change to the abo ve information.
Pl ea se return the original completed for m to:
Al aska Energy Authority
813 W . Northern Lights Blv d.
AlASKAAnchorage, AK 9950 3 ENERGY AUTHORITYAttn: Butc h White, G rants Ad mini strator
H:\GRANTSIAEA Round V Ren ewable Energy Grants\GrantDocumentsAutho ri zedSignersS.doc
PROJECT MAPS
PROJECT SCHEDULE
Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4PHASE II: Resource Assessment, Feasibility Analysis, Conceptual DesignConceptual DesignStream Gage InstallationGeotechnical InvestigationsEnvironmental ScopingEnvironmental StudiesPHASE III: Final Design and PermittingEnvironmental Studies (additional)Permit Applications PreparationPermit Applications ProcessingPost-license activityStream Gaging (data collection)Geotechnical InvestigationsSurveying and MappingFinal DesignPHASE IV: ConstructionMobilizationAccess RoadDamPenstockGenerating Equipment ProcurementPowerhouseTransmission LineTesting and Start-UpLEGENDMajor or continuous activityMinor or intermittent activity2017 2018CONNELLY LAKE HYDROELECTRIC PROJECTDESIGN AND CONSTRUCTION SCHEDULE20162011 2012 2013 2014 2015
LETTERS OF SUPPORT
081811_Daniel Hauser Comment Letter.txt
08/18/11
I have been a resident of Haines AK for a few years now and I feel the Connelly Lake
Hydro is not just a good idea it is critical for the
survival of our town. At this time we are dependent on a fragile and aging
underwater cable to supply power to our town of over 2000. If this
cable fails our only option is to fall back to a diesel powered generator. This
dependence on a fragile cable or expensive fossil fuels makes
the future of our community very precarious. Haines desperately needs this hydro
plant and I could not be more supportive of the project. Let’s
get it built and the sooner the better.
Daniel Hauser
Haines
Page 1
081811_Scott Sunberg Comment Letter.txt
08/18/11
Hello,
My name is Scott Sundberg, I am a resident of Haines Alaska and have been for 15
years. I am in favor of this application for a hydro electric
dam and generating station. I believe it will help elevate growing costs of power in
Rural Alaska and help create more jobs, and investment
into our communities in the future.
Notably you will get many emails for people against this choice sighting salmon and
the environment as reason not to do this. These people are
of base, with no science backing them. Lynn canal conservation as well as Southeast
Alaska Conservation council will be the ones to push this
into the courts to slow the process, but I fully back this application and it merit
as a low impact high return value project here in North
Lynn canal, Chilkoot River valley Alaska.
Scott sundberg
p.o. box 1368
haines, Alaska 99827
Page 1
MUNICIPALI'IJ' O F SKAGWAY
GATEVVAY'TO TTIE GOLD RUSLI O}: "98"
POST OFFICE l]OX 415
SKAGVVAY, ALT\S KA 99S4tI
(907) 983-72e7 (PHONE)
(90?) 983-215i 0-'A,\)
I 3 .lune 2008
Steven I-i. Haagenson
Alaslia Energy A utlrori t.v
813 West Nor-tliem Lights Boulevald
Anchorage. Alaslca 9950-l
Subjcct: Munic:ipal supl)oi't of (lonnelly l.iii';r': I-lyclrol)o\\/cl Pr-oict't
Dear Mr. Haagenson,
The lVlunicipality of Slcagway suppor-ts Alasl<a Power'&'I'elepht.rrrc Conrpany's (r\l'&f) clesir.' to leusr'
or purchase land from the State o1'41aslca to develop a new hych-oelectt-ic gcneration pro.ject rrt
Connelly Lake.'l'his project is located in the Haines l3orough at a site founcl above Chill<oot l.,rl<c at
the lread of Lutal< Inlet.
As a Iicensed pLrblic Lltility in thc State o1'r\laska, AP&'l' provirics llower to the comnrunities in the
Upper Lynn Ca-nal thror-rgh an existing distlibution systum fed b-y hydr-oelcctlic ancl clir::sc) geirci'lrtiot.r
syslems. AP&'f has lead u successfirl effort in the lasl J3 years tr) r'ccluce tltc rcgiorr's titrpcndt'rtt on
diesel generated power. vvith sonrc 70% of power being ltroviderl to cltstonrcrs thloLrglr it-s
hydroel ectric lacil ities.
Development of the Connelly Lalce Hydropower Project rvould l'itt'ther reduce lJpper l.ynn (-;irnl's
dependence on fossil fuels forpowergeneration ancl ensure sr,r['{lcicnt enclg-y is availirirltr ii.rr'lrrtut'c
econonric growth within tlre regiou, AP&l is well lsrorvn in thc inclitstry lirr its innt,r'.rt.ir-tn irr
develcipmenl t-rl' small scule hydlopf)wer projt-cis.
Sincerely, .-,\
,-(tmau1!&L**
Thomas Cochr-an - Mayor'
Senatol Al berl I(ookesh
Representative lJill fhomas..tr.
HAINES BOROUGH
RESOLUTION NO. 09-01-149
A resolution of the Haines Borough Assembly recognizing the
need for a new, cost-effective, environmentally appropriate,
reliable, and renewable source of electric power for
citizens of the Haines Borough, and supporting the efforts
of Alaska Power & Telephone, Inc. (AP&T) to develop a
project to address this need.
WHEREAS, the Haines Borough is committed to replacing fossil
fuel-based energy production wherever and whenever possible with
energy produced reliably, efficiently and at a reasonable cost
from renewable sources, and
WHEREAS, at a January 20, 2009 meeting, the Haines Borough
Energy Sustainability Commission recommended that the Assembly
support efforts by AP&T to secure funding to do additional design
and data gathering for hydro electric sources including but not
limited to Connelly Lake and Schubee Lake to help inform the
public process prior to permitting, and
WHEREAS, electricity has the potential to replace petroleum
products as the energy resource used for home heating and
transportation, and
WHEREAS, current hydro-electric power production infrastructure
is inadequate to provide for present demand for power, and
therefore cannot meet potential increased demand for low cost
electric power to support new or expanded uses such as heat,
transportation, and industrial/commercial growth, and
WHEREAS, the demand for electric power in the Upper Lynn Canal
has periodically exhausted the installed capacity of the existing
hydroelectric generating system during the fall, winter, and
spring months, forcing the utility to generate power with diesel
generation equipment, resulting in higher rates for customers,
and
WHEREAS, AP&T proposes to investigate, permit, design, and
construct a hydroelectric facility in the most viable and
appropriate site in Upper Lynn Canal area, to address the energy
needs of the area, and
WHEREAS, the Haines Borough Assembly acknowledges there are risks
to any ecosystem in the vicinity of planned projects for
developing new energy resources, and
WHEREAS, AP&T has a long history of constructing hydroelectric
plants in Southeast Alaska while simultaneously providing for the
protection of the ecosystem within which the hydroelectric plant
is located;
Adopted
Resolution 09-01-149
Page Two
THEREFORE BE IT RESOLVED, that the Haines Borough Assembly
recognizes the need for increased electric power generation from
a renewable resource in the Upper Lynn Canal, and it endorses the
concept of creating new hydro-electric capacity in the region;
AND BE IT FURTHER RESOLVED, that the Haines Borough Assembly
supports the investigation, study, conceptual design, and initial
permitting of any potential projects by AP&T or others which can
be shown to provide reliable, cost effective, renewable energy in
a manner which does not adversely impact local rate payers, the
local economy, the watershed ecosystems, or the traditional uses
of the area;
AND BE IT FURTHER RESOLVED, the Haines Borough Assembly has an
interest in participating as a partner in any power generation
project that would promote and ensure the lowest possible rates
for its citizens, provide for the greatest reliability and future
growth, and create potential for the Borough to realize revenue
from the sale of excess power to commercial users.
ADOPTED BY A DULY CONSTITUTED QUORUM OF THE BOROUGH ASSEMBLY OF
THE HAINES BOROUGH, ALASKA, THIS 27th DAY OF JANUARY, 2009.
____________________________
Jerry LAPP, Deputy Mayor
ATTEST:
______________________________
Julie Cozzi, Borough Clerk
From: "Ady Milos" <a1milos@yahoo.com>
Date: January 29, 2009 3:23:10 PM AKST
To: <sscott@aptalaska.net>
Subject: Alaska Power & Telephone's Connelly Lake hydroelectric project
Dear Ms. Scott,
I am writing this to support Alaska Power & Telephone’s Connelly Lake hydroelectric
project.
AP&T has presented a plan they feel is feasible, environmentally sound, and will provide
Haines with more than three times the power it presently consumes during peak times in
winter. According to AP&T’s presentation to the Haines Energy Commission on
November 25th, 2008 the Connelly Lake site was chosen for its capacity, proximity to
Haines, and because it does not require an undersea cable – a link that, if broken, could
put Haines in the dark for several months. The project size is important so that AP&T can
sell excess power in other markets (i.e. Skagway, Canada, and cruise ships when docked,)
and therefore keep our power rates low.
You have already received some letters in opposition to this project. This vociferous
handful of opponents is ignoring a basic rule of economics – that every resource is
limited and has alternative uses. We can always wish for more wilderness, but by
developing this one low-impact hydroelectric project at Connelly Lake we can cut
hydrocarbon use in the Haines area by 30 to 50 percent. That’s less pollution in town, less
CO2 into the atmosphere, less oil burned, and therefore reduced chance of an oil spill as
less oil is transported in our marine environment. By constructing three miles of road, one
6300-foot penstock and a powerhouse we will realize an environmental net gain for the
Haines area.
And when Haines grows, or finds a new industry ( or port facility?) at its doorstep, the
existence of this ample source of power means cleaner, more energy-efficient growth.
The Chilkoot River Corridor is a beautiful and productive place, but not as untouched as
some folks would like to believe. Local loggers Don Turner and Duck Hess can both
testify that they helped log some large tracts of land at the upper end of the lake about 40
years ago, taking the logs out via a logging road along the north side of the lake – the
same roadbed that AP&T proposes repairing. That some folks are unaware of this is a
testament to the resiliency of the watershed.
During their presentation, AP&T explained how they met several environmental
challenges during construction of other projects in the Skagway area and on Prince of
Wales Island. It appears they are also ready to take every environmental precaution to
complete the Connelly Lake Project with a minimal impact. When completed it is likely
that none of the power project will be visible from the present DNR campground at the
lower end of Chilkoot Lake.
Therefore, I have no reservations about supporting AP&T as they work toward plentiful,
sustainable hydropower for Haines. And I’m convinced that after it is done, the Chilkoot
watershed will remain a beautiful and productive place.
Nearly everyone I speak with in Haines feels the same way.
Sincerely,
Stan & Ady Milos
Haines, Alaska.
From: "Marie DisBrow" <marie@wildernesswritings.com>
Date: January 31, 2009 12:03:05 PM AKST
To: <sscott@aptalaska.net>
Subject: re: Connelly Lake Project
Stephanie Scott, ESC Coordinator
Haines Borough
103 Third Avenue S.
P.O. Box1209
Haines, AK 99827
re: Connelly Lake Hydroelectric Project
Dear Ms Scott:
As a resident of Lutak, I am writing to encourage you to support Alaska Power &
Telephone’s Connelly Lake hydroelectric project.
AP&T’s environmentally sound plan will provide Haines with over three times the power
presently consumed during winter peak times. According to AP&T’s presentation to the
Haines Energy Commission on November 25th, 2008, the Connelly Lake site was chosen
for its capacity, proximity to Haines, and because it does not require an undersea cable.
Just yesterday, both Skagway and Haines lost power when heavy snow caused trees to
contact the transmission line along the Klondike Highway. In spite of the Haines diesel-
fired generator, we were without electricity for several hours. If it becomes necessary to
use the diesel power plant for a long period of time, the rate could go from $0.07 per
kilowatt hour to over $0.23 per kilowatt hour—over three times the cost of hydroelectric
power, because of the high cost of fuel.
The project size is important so that AP&T can sell excess power in other markets (i.e.
Skagway, Canada, and cruise ships when docked) and therefore keep our power rates
low. It appears that AP&T is ready to take every environmental precaution to complete
the Connelly Lake Project with a minimal impact.
Sincerely,
Marie E. DisBrow
From: "Dave DisBrow" <dave@davedisbrow.com>
Date: February 2, 2009 12:30:37 AM AKST
To: <sscott@aptalaska.net>
Subject: Connelly Lake Hydroelectric Project
Stephanie Scott, ESC Coordinator
Haines Borough
103 Third Avenue S.
P.O. Box1209
Haines, AK 99827
re: Connelly Lake Hydroelectric Project
Dear Ms Scott:
I feel it is time to step to the plate and support Alaska Power & Telephone’s Connelly Lake hydroelectric
project. Being a resident of Lutak and doing without electric and or phone service until last year, I don't see
why anyone would want to go back to the dark side of living. Our present hydro power from AP&T's
undersea (Umbilical) cable from Skagway has a limited lifetime and regression is not a viable nor logical
option.
We now have a potential future for Haines, may I mention our deep harbor possibilities? Without a quality
and quantity source of clean electricity for the docks we would stand to lose this resource.
Governor Palin has set a goal..."This guide will help us move to a future where, ideally, 50 percent of
Alaska's electricity is generated from renewable resources by 2025,". This is twice the goal President
Barack Obama has called for by 2025. Alaska can set the pace for renewal resources for our nation! ...and
Haines could be leading the way. Lets not show them how stubborn we can be on this issue.
Win Win
Dave DisBrow
RESUME’S
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. 40 GWh potential annual hydroelectric output
(amount varies depending on precipitation & load)
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 7 hydro units, 8 diesel
ii. Rated capacity of generators/boilers/other 8,828 kW hydro, 9,915 kW diesel
iii. Generator/boilers/other type Hydro and diesel
iv. Age of generators/boilers/other Varies
v. Efficiency of generators/boilers/other
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor $125,000 approx.
ii. Annual O&M cost for non-labor $40,000 approx., excluding fuel
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] 27.4 GWh generation (2010)
ii. Fuel usage
Diesel [gal] 67,000 gal/yr (2001-2010 avg.)
Other
iii. Peak Load 4,900 kW
iv. Average Load 2,900 kW (2010)
v. Minimum Load 1,500 kW
vi. Efficiency Varies (13.8-14.0 kWh/gal diesel, 80-85% hydro)
vii. Future trends Modest growth
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu]
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
vi. Other
1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric
Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power.
Renewable Energy Fund Round 5
Project Cost/Benefit Worksheet
RFA AEA12-001 Application Cost Worksheet Page 2 7-1-11
3. Proposed System Design Capacity and Fuel Usage
(Include any projections for continued use of non-renewable fuels)
a) Proposed renewable capacity
(Wind, Hydro, Biomass, other)
[kW or MMBtu/hr]
12,000 kW
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] 40,000,000 kWh potential average annual generation
ii. Heat [MMBtu]
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu]
ii. Coal [tons or MMBtu]
iii. Wood [cords, green tons, dry tons]
iv. Other
4. Project Cost
a) Total capital cost of new system $46,100,000 (est. cost of Phases I-IV)
b) Development cost $2,400,000 (est. cost of Phase II, and III)
c) Annual O&M cost of new system $600,000 (2019 est.)
d) Annual fuel cost No fuel cost
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 36,000 gallons
ii. Heat
iii. Transportation
b) Current price of displaced fuel $3.97/gal (May 2011) Haines price; with taxes = $4.07/gal.
c) Other economic benefits $2,250,000 revenue from sales to cruise ships (2019)
d) Alaska public benefits Reduced diesel emissions; reduced PCE
6. Power Purchase/Sales Price
a) Price for power purchase/sale $0.25/kWh (2019 sales to cruise ships)
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 2.2
Payback (years) 15 years
GRANT BUDGET FORM
Renewable Energy Fund Grant Round V Grant Budget Form 7-1-11 Milestone or Task Phase III – Permitting and Final Design Anticipated Completion Date RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In-kind/Federal Grants/Other State Grants/Other TOTALS Environmental Studies (additional) December 2012 $155,200 $38,800 Cash, labor & benefits $194,000 Permit Applications Preparation June 2013 $164,000 $41,000 Cash, labor & benefits $205,000 Permit Applications Processing June 2015 $51,200 $12,800 Cash, labor & benefits $64,000 Post-License Activity March 2016 $44,000 $11,000 Cash labor & benefits $55,000 Stream Gaging (data collection for 3 years) September 2015 $33,600 $8,400 Cash, labor & benefits $42,000 Geotechnical Investigations (for design) December 2014 $421,600 $105,400 Cash, labor & benefits $527,000 Surveying and Mapping December 2014 $124,800 $31,200 Cash, labor & benefits $156,000 Final Design March 2016 $457,600 $114,400 Cash, labor & benefits $572,000 TOTALS $1,452,000 $363,000 $1,815,000 Budget Categories: Direct Labor & Benefits $555,280 $138,820 $694,100 Travel & Per Diem $58,720 $14,680 $73,400 Equipment $1,600 $400 $2000 Materials & Supplies $3,600 $900 $4,500 Contractual Services $832,800 $208,200 $1,041,000 Construction Services $0 $0 $0 Other $0 $0 $0 TOTALS $1,452,000 $363,000 $1,815,000 Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction) Add additional pages as needed
Phase II$585,000 Prelim design $225,000Conceptual design 0.345% $125,000 800 160 160 160 1280 $121,600 $3,400 $3,400 $125,000 Stream gaging $72,000Stream gaging and data analysis 0.207% $75,000 60 40 60 160 $14,400 $10,000 $5,000 $600 $15,600 $30,000 Permitting $848,000Geotech investigations 0.276% $100,000$100,000 Final design $1,255,000Geotech reconnaissance10 10 $900 $28,600 $28,600 $29,500 $2,400,000Seismic refraction surveys64 16 80 $5,280 $65,000 $220 $65,220 $70,500 $2,400,000PermittingScoping & study plans300 50 20 370 $30,900 $10,000 $3,400 $10,700 $24,100 $55,000Resource assessments$275,000Fish surveys 0.345% $125,000 100 160 260 $17,600 $62,000 $46,000 $2,000 $2,400 $112,400 $130,000Wildlife surveys2525 $2,000 $30,000 $30,000 $32,000Botanical surveys 0.069% $25,000 2525 $2,000 $30,000 $30,000 $32,000Wetland survey 0.055% $20,000 2525 $2,000 $25,000 $25,000 $27,000Archaeological survey 0.207% $75,000 2525 $2,000 $35,000 $35,000 $37,000Water quality testing 0.207% $75,000 2525 $2,000 $15,000 $15,000 $17,000Phase III$1,815,000Resource assessments$194,000 $155,200 $38,800Fish surveys100 160 260 $17,600 $62,000 $46,000 $2,000 $2,400 $112,400 $130,000Wildlife surveys2525 $2,000 $30,000 $30,000 $32,000Botanical surveys2525 $2,000 $30,000 $30,000 $32,000Permit applications$205,000 $164,000 $41,000FERC license$184,500Draft application1000 500 50 50 50 1650 $140,500 $0 $140,500Final application400 100 25 525 $44,000 $0 $44,000Other permits200 50 250 $20,500 $0 $20,500Permit processing500 200 50 750 $64,000 $0 $64,000 $51,200 $12,800Post license activity (plens, etc.) 400 150 50 600 $51,500 $3,400 $100 $3,500 $55,000 $44,000 $11,000Stream gaging (3 years O&M)100 100 200 $18,000 $24,000 $24,000 $42,000 $33,600 $8,400Mapping$156,000 $124,800 $31,200Establish control monuments20 5 25 $2,400 $25,000 $600 $25,600 $28,000Alignment staking & detailed mapping20 5 25 $2,400 $125,000 $600 $125,600 $128,000Geotech investigations$527,000 $421,600 $105,400Seismic refraction surveys20 20 $1,800 $75,000 $200 $75,200 $77,000Core drilling20 20 $1,800 $294,000 $200 $294,200 $296,000Analysis and report40 40 $3,600 $150,000 $400 $150,400 $154,000Final design 550000$572,000 $457,600 $114,400Dam100 25 125 $12,000 $250,000 $250,000 $262,000Penstock800 200 100 1100 $102,000 $0 $102,000Powerhouse500 500 500 200 1700 $164,000 $0 $164,000Transmission line200 200 100 500 $44,000 $0 $44,000Phase IV$694,100 $1,041,000 $73,400 $2,000 $4,500 $1,815,000 $1,452,000 $363,000 $1,815,000Const. mgmt. 3.000%MobilizationAccess roadDam and reservoirPenstockPowerhouseTransmission facilities
RFA AEA12‐001 Grant Budget Instructions Page 1 of 5 7‐1‐11
Renewable Energy Fund Round 5
Grant Budget Instructions
NOTICE TO GRANTEES
Reimbursement to a Grantee under this program is on a cost reimbursable basis. In
accordance with the terms of the grant a Grantee is required to submit certified requests
for reimbursements that document commitments and expenditures and demonstrate
meeting milestones identified in the grant.
A proposed reimbursement schedule tied to completion of milestones must be identified
in the applicant’s proposal. The Alaska Energy Authority (“AEA” or “Authority”) will not
approve a reimbursement schedule that does not reflect costs or commitments tied to
the accomplishment of milestones identified in the grant. The final reimbursement
schedule is subject to negotiation and will be incorporated into the grant agreement.
The Authority may authorize a percentage of grant funds, up to 20% depending on the
type of grant, as an advance reimbursement at the startup of the grant.
The Authority may also withhold up to 20% of the total grant subject to completion of the
project and submission of final reports and other documentation that may be required by
the grant.
A Grantee is required to account for and document all expenditures of grant and
matching funds including documentation of expenditures on any advanced
reimbursement. All requests for reimbursement are subject to audit by the Authority.
The Grantee is also required to comply with 2.AAC.45.010, the State Single Audit
regulations.
1. Budget Form
Information concerning the proposed grant budget needs to be provided on the Grant Budget
Form. The Grantee must tie their budget request to the proposed milestones they propose in
their application. Examples of milestones for each project phase are included with the budget
form and in Section 2 of the RFA.
For the purposes of determining potential cash-flow and a reimbursement schedule Grantees
should use the form to identify the proposed date that the milestone would be met, the
anticipated amount of grant funds to be expended to meet that milestone, and the amount and
type of matching resources they intend to apply to that milestone.
The bottom part of the form includes the allowable Budget Categories and is intended to be a
summary of types of cost for each phase of the grant.
2. Allowable Costs
Allowable costs for a grant include all reasonable and ordinary costs for direct labor and
benefits, travel, equipment, supplies, contractual services, construction services, and other
direct costs identified that are necessary for and incurred as a direct result of the project.
RFA AEA12‐001 Grant Budget Instructions Page 2 of 5 7‐1‐11
Grant Budget Instructions Renewable Energy Fund Round 5
A cost is reasonable and ordinary if, in its nature or amount, it does not exceed that which would
be incurred by a prudent person under the circumstances prevailing at the time the decision was
made to incur the costs.
Allowable costs under this grant include all reasonable and ordinary costs for direct labor &
benefits, travel, equipment, supplies, contractual services, construction services, and other
direct costs identified and approved in the Project budget that are necessary for and incurred as
a direct result of the Project and are consistent with the requirements of the grant agreement.
A cost is reasonable and ordinary if, in its nature and amount, it does not exceed that which
would be incurred by a prudent person under the circumstances prevailing at the time the
decision was made to incur the costs.
Allowable costs are only those costs that are directly related to activities authorized by the Grant
Agreement and necessary for the Project. The categories of costs and additional limits or
restrictions are listed below:
a. Direct Labor & Benefits
Include salaries, wages, and employee benefits of the Grantee’s employees for that portion
of those costs attributable to the time actually devoted by each employee to, and necessary
for the Project. Direct labor costs do not include bonuses, stock options, other payments
above base compensation and employee benefits, severance payments or other termination
allowances paid to the Grantee’s employees.
b. Travel, Meals, or Per Diem
Include reasonable travel expenses necessary for the Project. These include necessary
transportation and meal expenses or per diem of Grantee employees for which expenses
the employees are reimbursed under the Grantee’s standard written operating practice for
travel and per diem or the current State of Alaska Administrative Manual for employee
travel.
c. Equipment
Include costs of acquiring, transporting, leasing, installing, operating, and maintaining
equipment necessary for the Project, including sales and use taxes. Equipment owned by
the Grantee is to be charged to the project at the monthly rates contained in the Data Quest
Blue Book. The rates for equipment owned by the Grantee for less than a month’s duration
are to be computed on an hourly charge determined by dividing the monthly rate by 176.
Equipment rented by the Grantee can be charged to the grant at actual invoiced charge
rates, subject to a maximum amount equal to the hourly rates contained in the Data Quest
Blue Book. The Authority’s Project Manager must approve all equipment charge rates to be
used by the Grantee. The Data Quest Blue Book is available to the AEA Project Managers
and grantees may contact them for current allowable rates.
Subject to prior approval of the Authority’s Project Manager, costs or expenses necessary to
repair or replace equipment damage or losses incurred in performance of work under the
grant may be allowed. However, damage or losses that result from the Grantee’s
RFA AEA12‐001 Grant Budget Instructions Page 3 of 5 7‐1‐11
Grant Budget Instructions Renewable Energy Fund Round 5
employees, officer’s, or contractor’s gross negligence, willful misconduct, or criminal conduct
will not be allowed.
d. Materials and Supplies
Include costs of material, office expenses, communications, computers, and supplies
purchased or leased by the Grantee necessary for the Project.
e. Contractual services
Include the Grantee’s cost of contract services necessary for the Project. Services may
include costs of contract feasibility studies, project management services, engineering and
design, environmental studies, field studies, and surveys for the project as well as costs
incurred to comply with ecological, environmental, and health and safety laws.
f. Construction Services
For construction projects this includes the Grantee’s cost for construction contracts, labor,
equipment, materials, insurance, bonding, and transportation necessary for the Project.
Work performed by the Grantee’s employees during construction may be budgeted under
direct labor and benefits. Contracted project management or engineering may be budgeted
under contractual services and major equipment purchases made by the Grantee may be
budgeted under equipment.
g. Other Direct Costs In addition to the above the following expenses necessary for the
Project may be allowed.
Net insurance premiums paid for insurance required for the grant Project;
Costs of permits and licenses for the grant Project;
Non-litigation legal costs for the Project directly relating to the activities; in this
paragraph, “non-litigation legal costs” includes expenses for the Grantee’s legal staff and
outside legal counsel performing non-litigation legal services;
Office lease/rental payments;
Other direct costs for the Project directly relating to the activities and identified in the
grant documents; and/or
Land or other real property or reasonable and ordinary costs related to interests in land
including easements, right-of-ways, or other defined interests.
3. Specific Expenditures not allowed
Ineligible expenditures include costs for overhead, lobbying, entertainment , alcohol, litigation,
payments for civil or criminal restitution, judgments, interest on judgments, penalties, fines,
costs not necessary for and directly related to the grant Project, or any costs incurred before the
beginning date of the grant as indicated on the signature page.
RFA AEA12‐001 Grant Budget Instructions Page 4 of 5 7‐11‐11
Grant Budget Instructions Renewable Energy Fund Round 5
Overhead costs described in this section include:
salaries, wages, applicable employee benefits, and business-related expenses of the
Grantee’s employees performing functions not directly related to the grant Project;
office and other expenses not directly related to the grant Project; and
costs and expenses of administration, accounting, human resources, training, property
and income taxes, entertainment, self-insurance, and warehousing.
4. Match and Cost Sharing
If the Applicant is providing a match, it is should be detailed either as a specific dollar amount or
as a percentage of the total project budget. The type and amount of matching contributions
should be discussed in the application under section two.
Cost sharing or matching is that portion of the Project costs not borne by the Authority. The
Authority will accept all contributions, including cash and in-kind, as part of the Applicants‟ cost
sharing or matching when such contributions meet the following criteria:
Are provided for in the Project budget;
Are verifiable from the Applicant’s records;
Third party costing sharing contributions are verifiable (with a letter of intent or similar
document);
Are not included as contributions for another state or federally assisted project or
program (i.e., the same funds cannot be counted as match for more than one program);
Are necessary and reasonable for proper and efficient accomplishment of the Project or
program objectives;
Are allowable costs;
Are not paid by the State or federal government under another award, except for
authorized by the State or federal statute to be used for cost sharing or matching;
Must be incurred within the grant eligible time period.
Any match proposed with the application will be required in the Grant award and the Grantee
will be required to document the use of the proposed matching funds or in-kind contributions
with their request for reimbursement.
Previous Renewable Energy Fund grants will not be counted as match.
5. Valuing In-Kind Support as Match
If the Applicant chooses to use in-kind support as some; or, its entire match, the values of those
contributions will be reviewed by the Authority at the time the budget is approved. The values will
be determined as follows:
The value of real property will be the current fair market value as determined by an
independent third party or a valuation that is mutually agreed to by the Authority and the
Applicant and approved in the grant budget.
RFA AEA12‐001 Grant Budget Instructions Page 5 of 5 7‐1‐11
Grant Budget Instructions Renewable Energy Fund Round 5
The value assessed to Applicant equipment or supplies will not exceed the approved
equipment rates or fair market value of the supplies at the time the grant is approved or
amended.
Equipment usage will be valued based on approved usage rates that are determined in
accordance with the item „c.‟ above. Rates paid will not exceed the fair market value of
the equipment if purchased.
Rates for donated personal services will be based on rates paid for similar work and skill
level in the recipient’s organization. If the required skills are not found in the recipient
organization, rates will be based on rates paid for similar work in the labor market.
Fringe benefits that are reasonable, allowable, and allocable may be included in the
valuation.
Transportation and lodging provided by the Applicant for non-local labor will not exceed
the commercial rates that may be available within the community or region.
6. Grant Disbursements
Applicants are reminded that they must request disbursement of grant funds in the form and
format required by the Authority with appropriate back-up documentation and certifications.
This format will be provided by the Authority.
The back-up documentation must demonstrate the total costs incurred are allowable, and reflect
the amount being billed. Documentation must include:
A summary of direct labor costs supported by timesheets or other valid time record to
document proof of payment.
Travel and per diem reimbursement documentation.
Contractor or vendor payment requests.
Invoices.
Payment of grant funds will be subject to the Applicant complying with its matching contribution
requirements of the proposed grant.
Payment of grant funds will be made by AEA to the Grantee within 30 days of receipt of a
properly completed, supported, and certified Reimbursement Request.
FERC PUBLIC NOTICE OF PRELIMINARY PERMIT
APPLICATION
UNITED STATES OF AMERICA
FEDERAL ENERGY REGULATORY COMMISSION
Goat Lake Hydro, Inc. Project No. 14229-000
NOTICE OF PRELIMINARY PERMIT APPLICATION ACCEPTED FOR FILING
AND SOLICITING COMMENTS, MOTIONS TO INTERVENE, AND COMPETING
APPLICATIONS
(August 11, 2011)
On July 15, 2011, Goat Lake Hydro, Inc., filed an application for a preliminary
permit, pursuant to section 4(f) of the Federal Power Act (FPA), proposing to study the
feasibility of the Connelly Lake Hydropower Project (Connelly Lake Project) to be
located on Connelly Lake, and an unknown tributary of the Chilkoot River, Haimes
Borough, Alaska. The sole purpose of a preliminary permit, if issued, is to grant the
permit holder priority to file a license application during the permit term. A preliminary
permit does not authorize the permit holder to perform any land-disturbing activities or
otherwise enter upon lands or waters owned by others without the owners’ express
permission.
The project will consist of the existing 90-acre Connelly Lake and the following
proposed new facilities: (1) a 60-foot-high rock-filled dam proposed to be constructed at
the outlet of Connelly Lake which would raise Connelly Lake from elevation 2,280 feet
to 2,325 feet mean sea level and increase the surface area from 90 acres to170 acres; (2)
an intake to be constructed on the left abutment of the dam; (3) a spillway (either an
ungated weir on the right abutment of the dam, or a shaft spillway on the left abutment);
(4) a 42-inch-diameter, 5,700-foot-long, above-ground penstock extending from the
outlet of the intake tunnel to the powerhouse on the west bank of the Chilkoot River; (5)
a 40-foot-long, 60-foot-wide powerhouse to contain two turbine/generating units with a
total installed capacity of 12 megawatts, with a hydraulic capacity of 90 cubic feet per
second, and an average hydraulic head of 2,120 feet; (6) an excavated, riprap-lined
channel tailrace extending about 50 feet from the powerhouse to the Chilkoot River; (7) a
14-mile-long, 34.5-kilovolt transmission line proposed to interconnect with a local,
existing utility transmission line; and (8) appurtenant facilities. The estimated annual
generation of the Connelly Lake Project would be 45 gigawatt-hours.
Applicant Contact: Mr. Robert S. Grimm, CEO/President, Goat Lake Hydro, Inc.,
c/o Alaska Power & Telephone Company, P.O. Box 3222, Port Townsend, WA 98368.
phone: (360) 385-1733 ex. 120.
FERC Contact: Patrick Murphy; phone: (202) 502-8755.
Project No. 14229-000 - 2 -
Deadline for filing comments, motions to intervene, competing applications
(without notices of intent), or notices of intent to file competing applications: 60 days
from the issuance of this notice. Competing applications and notices of intent must meet
the requirements of 18 CFR 4.36. Comments, motions to intervene, notices of intent, and
competing applications may be filed electronically via the Internet. See 18 CFR
385.2001(a)(1)(iii) and the instructions on the Commission’s website
http://www.ferc.gov/docs-filing/efiling.asp. Commenters can submit brief comments up
to 6,000 characters, without prior registration, using the eComment system at
http://www.ferc.gov/docs-filing/ecomment.asp. You must include your name and contact
information at the end of your comments. For assistance, please contact FERC Online
Support at FERCOnlineSupport@ferc.gov or toll free at 1-866-208-3676, or for TTY,
(202) 502-8659. Although the Commission strongly encourages electronic filing,
documents may also be paper-filed. To paper-file, mail an original and seven copies to:
Kimberly D. Bose, Secretary, Federal Energy Regulatory Commission, 888 First Street,
NE, Washington, DC 20426.
More information about this project, including a copy of the application, can be
viewed or printed on the "eLibrary" link of Commission's website at
http://www.ferc.gov/docs-filing/elibrary.asp. Enter the docket number (P-14229-000) in
the docket number field to access the document. For assistance, contact FERC Online
Support.
Kimberly D. Bose,
Secretary.
ELECTRONIC VERSION ENCLOSED - CERTIFICATION
ELECTRONIC VERSION ENCLOSED – CERTIFICATION
This is to certify that one electronic version of this grant application on a CD was
included with the two hard copies.
Respectfully,
Glen D. Martin
Resource Assessment, Permitting, Grant Writing
Date: August 22, 2011