HomeMy WebLinkAboutBlack Bear Lake Hydro Storage Increase Grant Application 5 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: BBL Hydro Project Storage Increase 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 BBL Hydro Project
Storage Increase. 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
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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: Error! Hyperlink reference not valid.
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)
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
Fax
360-385-7538
Fax
360-385-7538
Fax
360-385-7538
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)
BBL Hydro Project – Storage Increase
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.
Sections 1 and 12; T73S, R82E, CRM. On Prince of Wales Island (POW) in southeast Alaska, 8.6 miles
east of Klawock. Approximate latitude 55°33’ and longitude 132°53’. The Project will benefit the
communities of Coffman Cove, Craig, Hydaburg, Hollis, Klawock, Kasaan, Naukati, South Thorne Bay,
and Thorne Bay.
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.
The Applicant proposes to construct a 17-foot-high by 100 feet long rockfill dam and spillway at the
outlet of Black Bear Lake (BBL) to raise the lake 12 feet and increase the active storage by 2,420 acre-
feet (from 2,870 acre-feet to 5,290 acre-feet). The storage increase will provide for additional generation
during the winter and spring when diesel generation is often required currently due to low lake inflows
during those periods. In addition, the storage increase will allow the Applicant to more easily meet the
minimum instream flow requirements of the FERC license for the project, which has become difficult with
normal operation. The incremental average annual generation is estimated to be 1,264 MWh/yr.
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.)
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Raising the lake level with a dam would store more water for hydroelectric generation. Currently water
is spilled during most summers that could be stored for generation during the winter and spring. In the
last few years, low inflows rates to BBL have resulted in complete exhaustion of the existing storage and
the commensurate need to use diesel generation to meet loads. The Applicant has conducted a study of
the direct economic benefit of the proposed storage increase. Based on the following assumptions, the
project will provide a savings of $34,500,000 over a 30-year evaluation period; the actual life of the
structure would much longer than 30 years:
Diesel fuel costs as estimated by Black & Veatch for the Southeast Integrated Resource Plan,
POW interconnected load as forecast by Black & Veatch for the Southeast Integrated Resource
Plan, mid scenario, modified to eliminate a large load increment in 2018 and to decrease the
load growth rate after 2035,
Average diesel efficiency of 13.8 kWh/gallon,
An additional benefit of increasing the BBL storage is that the minimum instream flow requirements
would be more easily met. In several of the last few years, the Applicant has had to release less than the
full amount of the minimum instream flow requirement in the spring after normal winter operations due
to a late start to the annual snowmelt. This may jeopardize the salmon resources in Black Bear Creek
that the instream flow requirements are meant to protect. Due to the vagaries of weather on POW, the
Applicant has not been able to reliably predict when to alter operations to adhere to the instream flow
requirements without requiring excessive amounts of diesel generation. This situation has become of
increasing concern to both the Applicant and the fisheries agencies.
Other minor benefits will be 1) a decrease in the O&M costs of the diesel generators due to decreased
usage, 2) a decrease in air emissions and noise by the diesel generators, and 3) a decrease in the use of
the vacuum pumps at the existing intake, with a corresponding decrease in cost and increase in
reliability.
The proposed Reynolds Creek Hydro Project near Hydaburg would also supply the POW system with
additional hydro energy (note that the Applicant’s parent company, Alaska Power & Telephone, is a 25%
owner in the Reynolds Creek development). However, the Reynolds Creek Project will have a very small
storage capacity and may not provide the same benefits as the proposed storage increase at BBL. The
Applicant intends to conduct a study in the fall of 2011 to determine the potential benefits of the Reynolds
Creek project on its own and in combination with the proposed storage increase at BBL.
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 to license, design, and construct the proposed dam and spillway is estimated to be
$3,040,000. The cost is relatively high for a small dam because: 1) an amendment to the FERC license
will be necessary, which requires a lengthy and expensive consultation process, and 2) there is no road
access to the dam site, so helicopters may be required for transportation of materials, equipment, and
personnel.
The estimated cost to permit and design the Project is $357,500 (i.e., Phase III). The Applicant has to
date expended about $20,000 to evaluate the feasibility of the Project and to develop a preliminary
design. The Applicant expects to spend an additional $20,000 in the remainder of 2011 to complete the
feasibility evaluation and document the results, for a total Phase I & II cost of $40,000; bringing the total
Phase I-111 costs to $397,500.
The Applicant has funded its internal studies to date from its normal operating revenues. To fund the
licensing, design, and construction, the Applicant intends to use a combination of grants, loans, and
operating revenues. The Applicant’s goal is to fund 80% of the total cost through grants. The Applicant
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has not specifically identified grants from any sources other than the Renewable Energy Fund.
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. $ 318,000
2.7.2 Other Funds to be provided (Project match) $ 79,500
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 397,500
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)
$ 3,040,000
2.7.5 Estimated Direct Financial Benefit (Savings)
Fuel Displacement Savings
Diesel O&M Savings
Total Savings
$ 34,000,000
$ 450,000
$ 34,500,000
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.)
$ 3,450,000 PCE Savings
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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, Alaska, and has extensive experience in managing hydroelectric development, including
feasibility, construction and operation phases. A resume for Mr. Neitzer is included in Section 10 –
Appendices.
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.)
The following summarizes key activities and dates of the estimated schedule including time and activities
related to a FERC license amendment, design, and construction. This schedule assumes a moderate level
of difficulty in obtaining the license amendment; all activities could proceed more expeditiously if there is
little agency resistance to the proposal.
Phase III: Permitting and Final Design:
Geotechnical investigations........................................July 2012 – September 2012
Revise preliminary design......................................August 2012 – September 2012
Environmental scoping.........................................October 2012 – December 2012
Environmental studies...............................................April 2013 – September 2013
Permit application preparation ........................................July 2013 – March 2014
Permit processing.....................................................April 2014 – September 2015
Final design ............................................................... October 2015 – March 2016
Phase IV: Construction..........................................................April 2016 – September 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.)
The key tasks and decision points for Phase III are as follows:
Geotechnical investigations: Previous studies of the site have determined the existence of an old
lake outlet that is now buried under a talus slope on the left abutment of the existing lake outlet.
The proposed geotechnical investigations will define the depth and extent of the old lake outlet,
which in turn will define the maximum height of the new dam and the extent of work required to
construct the dam. Based on existing information, the Applicant believes the old lake outlet will
limit the lake raise to 12 feet. The geotechnical investigations are scheduled to provide an early
decision point regarding the technical feasibility of the project.
Following the geotechnical investigations, the Applicant will review the existing preliminary
design to incorporate the findings of the investigations. The Applicant will also review the
existing cost estimate and economic analysis to provide a decision point regarding the economic
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feasibility of the Project.
Environmental scoping and studies: The Applicant has not yet approached the agencies to get an
indication of their concerns or recommendations for environmental studies. The Applicant
believes it prudent at this time to assume some studies will be required, particularly regarding
the existing rainbow trout population in BBL. The environmental scoping and environmental
studies will provide a decision point regarding the environmental feasibility of the project.
Permits: The most time-consuming permit is expected to be the FERC license amendment. The
Applicant will have only limited ability to accelerate the amendment process; the schedule
assumes processing will take 18 months. A longer processing time could delay the start of
construction; because of the lakes elevation, all construction work must occur during the brief
summer season.
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 Applicant personnel involved in the project development and their roles will be:
Vern Neitzer, Project Manager/Senior Engineer
Bob Berreth, Electrical Design
Ben Beste, Mechanical Design
Larry Coupe, Civil Design
Glen Martin, Resource Assessment and Permits
Resumes for the above-mentioned individuals are included in Section 10.
Phase III: Permitting and Final Design
Permitting and final design will be by the Applicant’s staff.
Phase IV: Construction
The Applicant will likely use local contractors for most of the construction, with the Applicant’s staff
providing supervision and electrical/mechanical installation. The Applicant will obtain competitive
prices for any major equipment purchases and construction contracts; there are no existing contracts,
partnerships or commitments with any entities.
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. The Applicant has provided similar reports to AEA and other grant funding agencies in the past
years on other projects, and has established the necessary procedures for producing the reports
expeditiously. At the completion of Phase III, the Applicant will provide AEA with a copy of the final
design documents, permit applications and received permits.
3.6 Project Risk
Discuss potential problems and how you would address them.
Site Control : The Applicant does not expect any problems with site control. Land to be occupied by the
dam and raised lake is owned by Sealaska Corporation and the Tongass National Forest. The Applicant
has an existing agreement with Sealaska Corporation for profit sharing from the sale of electricity which
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should provide an incentive for Sealaska Corporation to allow the proposed project. The FERC license
amendment process will provide the mechanism for obtaining the rights to use the small amount of USFS
land involved. A map showing land ownership is provided in under Project Maps.
Inclement Weather: Working conditions in the Project area can be very harsh during the fall, winter, and
spring. The Applicant believes the dam can be constructed in one summer construction seasan, however,
an unusually inclement summer could delay work enough that a second season would be required.
Foundation Conditions: As noted earlier, previous studies of the site have determined that an old outlet
channel exists on the left abutment. If the proposed geotechnical investigations determine that the old
outlet channel is deeper than currently expected, then a smaller storage increase may be necessary.
Environmental Issues: The Applicant believes the most significant environmental issues will be potential
impacts to the rainbow trout population in BBL and lake encroachment on the existing USFS cabin at the
north end of BBL. The Applicant believes that these environmental issues can be resolved readily;
however, it has not approached the agencies to determine their perspective. If the agencies (ADF&G and
USFS in particular) have serious concerns about these issues, then permitting could take longer than
expected or mitigation costs could increase.
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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.
The Applicant has modeled the existing BBL project operation, and estimates that on an average annual
basis, currently 74% of the lake inflow is utilized for generation and 26% is spilled, primarily in the
summer. If the storage increase as proposed herein were constructed, with load conditions forecast for
2016, the spillage would decrease to 24% and generation would increase by 1,280 MWh. The Applicant’s
modeling indicates that the incremental generation would decrease only slightly as loads grow.
Pros: The Applicant is not aware of any other renewable energy resources appropriate to POW that
would be more economical than the proposed storage increase, except possibly the Reynolds Creek Hydro
project as discussed below. The Applicant expects that any loads that cannot be met by the hydro projects
will be met by diesel generation for the foreseeable future. If loads grow substantially, such as due to new
industrial loads, then the Applicant would likely pursue development of another hydro project on POW.
Compared to diesel generation, the project will have the following advantages:
• less expensive cost of power;
• reduced air emissions;
• uses fewer hazardous substances.
Cons: As with all hydroelectric projects, the initial cost of development is quite high.
Reynolds Creek Project: Haida Energy has a license to construct the 5.0 MW Reynolds Creek Hydro
project near Hydaburg. However, there is little storage associated with the Reynolds Creek project, and
its generation during the winter will be limited. The Applicant’s parent company is a 25% owner of
Haida Energy, Haida Corporation (the village corporation for Hydaburg) owns 75% and is spearheading
the development. In the years since Haida Energy was formed, the estimated cost of the Reynolds Creek
project has increased substantially and grants have not been obtained to cover the increased cost. In
addition, the management of Haida Corporation (and therefore Haida Energy) has been unsettled.
Therefore, the Applicant is concerned that the Reynolds Creek project may not get built soon. If Reynolds
Creek is not constructed, then based on the Applicant’s studies to date, there is no question that the BBL
storage increase is feasible. The Applicant will conduct an internal study in the fall of 2011 to determine
how much additional firm generation will be available from the Reynolds Creek project and whether the
BBL storage increase is justifiable if the Reynolds Creek does get built. The results of that study will be
made available to AEA prior to its analysis and recommendation for Round 5 grant funding.
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
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the number, size, age, efficiency, and type of generation.
There are two hydroelectric projects currently supplying power to the POW grid:
Black Bear Lake Hydro, 4.5 MW, storage mode of operation, began operation in 1995;
South Fork Hydro, 2.0 MW, run-of-river mode of operation, began operation in 2005.
There are fourteen diesel generators on the POW grid with a total generating capacity of 9,780 kVa.
These generators are dispersed in all of the interconnected communities to provide backup generation.
The average age of the diesel generators is approximately 21 years, and the average efficiency is
approximately 13.8 kWh/gallon.
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.
Hydropower is the main source of energy for the POW grid (Black Bear Lake Hydro and South Fork
Hydro), with diesel generation used occasionally during 1) hydro outages, 2) low BBL storage periods,
and 3) peak load periods. The following summarizes the generation mix during the past five years:
Black Bear Lake Hydro ................................................................... 19,612,259 kWh/yr (71%)
South Fork Hydro.............................................................................. 6,052,394 kWh/yr (22%)
Diesel generators.............................................................................. 1,981,578 kWh/yr (7%)
Total................................................................................................. 27,646,231 kWh/yr (100%)
The Project would increase the amount of energy generated by the Black Bear Lake project and reduce the
use of diesel generation that is currently required during low BBL storage periods. The project would
also reduce the frequency of maintenance of the diesel generators.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The Applicant provides power to its residential, commercial, and industrial customers on the POW grid.
The interconnected communities include Craig, Hydaburg, Hollis, Klawock, Kasaan, South Thorne Bay,
and Thorne Bay. The North POW Intertie project currently under construction will add Coffman Cove in
2011 and Naukati in 2013. For the past five years, total energy sales have averaged 24,271,556 kWh/yr.
During low BBL storage periods, the Applicant must use diesel generators to supplement the reduced BBL
generation. The additional cost of diesel generation is passed on to the Applicant’s customers through an
automatic surcharge. Increasing the storage in BBL will reduce the frequency of the low storage periods,
thus reducing the diesel surcharge cost to the Applicant’s customers.
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
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Renewable energy technology specific to location – The Project will be a storage increase at the Black
Bear Lake Hydroelectric Project achieved by raising the lake 12 feet with a dam and spillway at the lake
outlet. The existing facilities will not be modified.
Optimum installed capacity – No incremental capacity (4.5 MW existing capacity)
Anticipated capacity factor – 66.8% (63.6% existing capacity factor) (Values are 30-year averages
assuming loads grow in accordance with the recent SEIRP load forecast [mid scenario], with AP&T
modifications)
Anticipated annual generation – 1,264 MWh/yr incremental generation (21,000 MWh/yr existing
generation) (Values are 30-year averages assuming loads grow in accordance with the recent SEIRP load
forecast [mid scenario], with AP&T modifications)
Anticipated barriers – No technological barriers are anticipated, although foundation conditions may
limit the amount of the storage increase, and environmental constraints may increase the cost.
Basic integration concept – The Project will increase the generation of the existing Black Bear Lake
Hydro project, which is already fully integrated.
Delivery methods – The Project will deliver the incremental generation via the existing Black Bear Lake
Hydro 34.5 kV transmission line to the existing 34.5 kV grid on the island.
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.
Half of the lake is within the USFS jurisdiction (north half) and half of the lake is within Sealaska
Corporation ownership. Construction will take place on Sealaska Corporation lands at the lake outlet,
but raising of the lake will affect both land owners. The Applicant will negotiate with both the USFS and
Sealaska Corporation regarding the storage increase, but neither party has been approached to date.
The Applicant anticipates that the necessary access rights with Sealaska Corporation will be obtained
through an amendment to the existing agreement for the Black Bear Lake Project. That agreement
provides for payment to Sealaska Corporation based on the amount of energy generated. Since the
Project will increase the generation, Sealaska Corporation will receive a direct financial benefit, so the
Applicant does not anticipate any significant issues with Sealaska Corporation.
The Applicant will obtain the necessary access rights from the USFS through the FERC license
amendment process and by amendment of the existing Special Use Permit.
4.3.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
outstanding permit issues.
List of applicable permits
Anticipated permitting timeline
Identify and discussion of potential barriers
The following permits (or amendment of existing permits) will be necessary for construction of the
Project:
FERC license
COE 404 permit
ADF&G habitat permit
DNR submerged lands lease
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DNR water use permit
Of these permits, the Applicant expects the FERC license amendment to require the most time to obtain.
The Applicant’s anticipated schedule includes 12 months for preparation of the permit application
(including scoping, environmental studies, and document preparation) and 18 months for FERC
processing of the application. All of the other permits will require less time to obtain, generally on the
order of 3 to 6 months.
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
The following is based on the Applicant’s existing knowledge gained from licensing, constructing, and
operating the existing Black Bear Lake Hydro project.
Threatened and Endangered Species: The Applicant does not expect any impacts to any species listed as
threatened or endangered.
Habitat issues: Rainbow trout were stocked in Black Bear Lake in the 1940s, and a self-sustaining
population has become established. Because of the difficult access to the lake, fishing pressure on the
population is light. The Project may cause impacts to the population through inundation of important
habitat. The Applicant anticipates conducting additional studies during the FERC license amendment
process to assess these impacts and developed mitigation plans if required.
Wetlands: The Applicant anticipates an insignificant amount of existing wetlands around the shore of the
existing lake may be lost due to raising the lake. The Applicant will identify such wetlands during the
FERC license amendment process to assess these impacts and developed mitigation plans if required.
Archaeological and historical resources: No archaeological and historical resources were found at the
lake during licensing of the existing project. The Applicant expects that those past studies will provide an
adequate basis for the assessment required by the FERC license amendment process.
Land development constraints: The Applicant does not expect any problematic land development
constraints.
Telecommunications interference: The Applicant does not expect any telecommunications interference
from the Project.
Aviation considerations: The Applicant does not expect any problematic aviation considerations with this
Project.
Visual and aesthetic impacts: The Applicant expects that minor visual and aesthetic impacts will occur due
to loss of about 10 acres of vegetation in the inundated area of the shoreline. More of this denuded area
will be visible when the lake is drawn down. When the lake is full, it will have substantially the same
appearance as the existing lake when full. A lightly-used USFS recreation cabin at the south end of the
lake will be the primary viewpoint for visitors to the lake, and that cabin is used primarily in the summer
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when the lake will usually be full or nearly full.
Other potential barriers: As noted above, there is some recreational use of the lake, primarily associated
with the USFS cabin at the north end of the lake. The Applicant does not anticipate any significant
impacts to that recreational use, as the cabin is thought to be above the raised lake level. Construction of
the dam may result in increased operations costs for compliance with either FERC or State dam safety
regulations. No other potential barriers are known or expected.
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 – Reconnaissance & Phase II – Feasibility/Conceptual Design...............$40,000
Phase III – Permitting & Final Design:.................................................................$357,500
Phase IV – Construction ......................................................................................$2,642,500
Total Project Cost.................................................................................................$3,040,000
The anticipated project costs noted above are all based on the Applicant’s analysis, except for a portion of the
Phase I & II costs, which is based on the Applicant’s records of labor costs to date.
Requested grant funding: The Applicant requests $318,000 in grant funding for Phase III activity.
Applicant matching funds: The Applicant has spent approximately $20,000 in labor costs and expenses to
date in its Phase I & II evaluation of the costs and benefits of raising Black Bear Lake. The Applicant
anticipates an additional expense of $20,000 in the fall of 2011 to conduct further evaluation of the benefits if
the Reynolds Creek Project is also constructed. For calculation of the proposed matching funds, the
Applicant has assumed an overall match of 20%, and has deducted its existing and anticipated Phase I & II
expenses from that amount. The Applicant’s matching funds for the proposed Phase III work is then proposed
to be $39,500, for a total match for Phases I, II, and III of 79,500.
Other sources of funding: The Applicant will fund its matching contribution for the proposed Phase III work
from normal operating revenues. It will fund its match for the construction cost from reserves or loans.
Projected capital cost: $2,642,500 (assumed to be the Phase IV – Construction cost).
Projected development cost: $397,500 (assumed to be the total cost of Phases I, II, and III).
4.4.2 Project Operating and Maintenance Costs
Include anticipated O&M costs for new facilities constructed and how these would be funded by
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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 expects that the only significant incremental O&M cost associated with increasing the
storage in Black Bear Lake will be the costs for compliance with either FERC or State dam safety
regulations. The Applicant will fund the incremental costs from power sales revenues. No grant funding
is requested for operation and maintenance.
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 incremental generation from the Project will ultimately be sold to the residential, commercial, and
industrial customers of the Applicant at rates established by RCA tariff. Current rates are:
Base rate...................................................................................................$0.1272/kWh
Cost of power adjustment........................................................................$0.1534/kWh 1
Power cost equalization............................................................................$0.1275/kWh
The current RCA Tariff for the Applicant authorizes a 9.78% rate of return based on the weighted average
cost of capital.
1 This current rate is about 0.07 cents higher than normal due to heavy diesel use early in the year. The
rate is expected to drop to about 0.085 cents in October 2011.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
The Cost Worksheet is attached in Section 10 – Appendices.
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 Project will displace on average about 95,000 gallons of diesel
fuel annually. The amount of the displacement will vary from year to year, depending on the volume and
timing of precipitation in the BBL basin and the load growth of the interconnected system. The Applicant
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AEA12-001 Grant Application Page 15 of 18 7/1//2011
estimates the Project would provide a savings of $34,500,000 over a 30 year period, which is about the
expected term of the FERC license amendment. The rate of return based on the fuel displacement over 30
years is 21.7%. The actual lifetime of the Project is indefinite; many hydro projects are still operating
after 100 years of service.
In addition, the Project would result in a small decrease in diesel O&M costs, valued at $455,000 over a
30-year term.
The values provided above are from the Applicant’s analysis, which is based on the following
assumptions:
Diesel fuel costs as estimated by Black & Veatch for the Southeast Integrated Resource Plan,
Load growth of as estimated by Black & Veatch for the Southeast Integrated Resource Plan, with
modifications to eliminate a large load addition in 2016 and to decrease the growth rate after
2035.
Average diesel efficiency of 13.8 kWh/gallon.
Current diesel O&M costs of $0.010/kWh
Diesel O&M escalation at 3.0%/yr
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 $1,255,000 over a 30-term for its
investment in the Project (depreciation, incremental O&M, and regulated return on investment).
Potential additional annual incentives: Unknown.
Potential additional revenue streams: Unknown.
Non-economic public benefits to Alaskans:
The Project will provide the ability to more frequently comply with the full amount of the Black Bear Lake
Hydro project instream flow requirements, which may enhance the fisheries of Black Bear Creek. In
addition, the reduction in diesel generation associated with the Project would also reduce air emissions
and noise, and decrease the potential for diesel fuel spills.
The State of Alaska 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 $3,450,000 over a 30 year term; the rate of return to the State based solely on PCE
savings would be about 6.6%. The values are based on the following:
Current PCE rate........................................................................................... $0.1275
2
PCE rate escalation.....................................................................................1.0%/year
Portion of incremental generation valued at PCE rate...................................... 100%
In the short term the local economy may benefit due to local hire for construction and construction
materials. In the long term, lower and more stable electric rates could lead to more residential and
commercial development, which in turn would add more income to these communities.
1 The PCE will be reduced in October 2011 when rates go down after COPA balancing account is
replenished.
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.
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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 expects that the only significant incremental O&M cost associated with
increasing the storage in Black Bear Lake will be the costs for compliance with either FERC or State dam
safety regulations. The Applicant will fund the incremental O&M costs from power sales revenues.
Potential operational issues: The Project will be designed in accordance with all applicable standards and
practices, and 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 suggest that climate change may cause more winter precipitation to be in the form of rain than
snow, which might offset some of the Project benefits.
O&M costs: The Applicant estimates the following incremental annual O&M costs for the Project
($2011):
Incremental labor cost................................................................................................$0
Incremental expenses..............................................................................................$500
Equivalent annual dam safety costs.....................................................................$5,000
Total.....................................................................................................................$5,500
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.
An in-house feasibility analysis and preliminary project design have been developed by the Applicant. The
results of that analysis have been used in preparation of this grant application. The Applicant intends to
expand on this previous study during the fall of 2011 to determine the Project benefits if the Reynolds
Creek hydro project comes to fruition.
No previous grants have been awarded for the Project.
SECTION 8– LOCAL SUPORT
Discuss what local support or possible opposition there may be regarding your project. Include
letters of support from the community that would benefit from this project.
The Applicant has not yet publicly indicated its consideration of the Project, therefore, the Applicant does
not know the degree of support or opposition from the communities. The Applicant does not expect there
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AEA12-001 Grant Application Page 17 of 18 7/1//2011
to be significant opposition, and since the Project will decrease the cost of power by the ratepayers, the
Applicant believes there will be significant support for the Project once it becomes more widely known.
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
The Applicant requests $318,000 in grant funds for Phase III Design & Permitting Costs. The Applicant
will provide matching funds of $79,500, including $20,000 in labor and expenses expenditures to date
and $20,000 in labor and expenses expected to be incurred in the fall of 2011. The Applicant will provide
its future matching funds from its general operating funds.
I Renewable Energy Fund )ALASKA
; ENE RG Y AUTHO RITY 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 t he
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
Date
L:,evlS"
7/1//2011AEA12-001 Grant Application Page 18 of 18
BBL HYDRO STORAGE INCREASE
APPENDICES
TABLE OF CONTENTS
1. Certificate of Public Convenience & Necessity
2. Corporate Resolution
3. Authorized Signers
4. Project Maps
5. Project Schedule
6. Resume’s
7. Cost Worksheet
8. Grant Budget Form
9. 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
PHASE III: Permitting & Final DesignGeotechnical InvestigationsRevised Preliminary DesignEnvironmental ScopingEnvironmental StudiesPermit Application PreparationPermit ProcessingFinal DesignPHASE IV: Construction BBL HYDRO STORAGE INCREASE PROJECTDESIGN AND CONSTRUCTION SCHEDULE2014Q3 Q42018Q1 Q2Q3 Q42015Q3 Q4Q4Q3Q1 Q2Q1 Q2Q1Q420162017Q1 Q2Q1 Q2 Q3Q2Q3 Q4 Q120122013Q2 Q3 Q4
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. 1,264 MWh/year incremental hydropower 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 14 Diesel units and 2 hydro units
ii. Rated capacity of generators/boilers/other 9780 kVa Diesel and 6500 kW Hydro
iii. Generator/boilers/other type
iv. Age of generators/boilers/other Average diesel age is 20 years, average hydro age
is 12 years
v. Efficiency of generators/boilers/other 13.8 kWh/gal diesel units, 83.5% hydro units
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor
ii. Annual O&M cost for non-labor
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] Diesel = 1,982 MWh/yr Hydro= 25,665 MWh/yr (2006-2010 average)
ii. Fuel usage
Diesel [gal] 152,343 gallons (2006-2010 average)
Other
iii. Peak Load 6480 kVa
iv. Average Load 3460 kVa
v. Minimum Load 1980 kVa
vi. Efficiency 13.8 kWh/gal diesel units, 83.5% hydro units
vii. Future trends
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] N/A
ii. Electricity [kWh] N/A
iii. Propane [gal or MMBtu] N/A
iv. Coal [tons or MMBtu] N/A
v. Wood [cords, green tons, dry tons] N/A
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.
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Project Cost/Benefit Worksheet
RFA AEA12-001 Application Cost Worksheet Page 2 7-1-11
vi. Other N/A
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]
Storage increase capacity at existing hydro project, no
generating capacity increase
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] 1,264 MWh/yr
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 $3,040,000
b) Development cost $397,500
c) Annual O&M cost of new system $5,500 (incremental O&M cost)
d) Annual fuel cost $0
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 95,000 gallons annually
ii. Heat
iii. Transportation
b) Current price of displaced fuel $3.80/gallon
c) Other economic benefits Diesel O&M savings $0.01/kWh
d) Alaska public benefits PCE program savings, less diesel emissions
6. Power Purchase/Sales Price
a) Price for power purchase/sale RCA tariff ($0.1272/kWh base, $0.1534/kWh COPA,
$0.1275/kWh PCE)
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 11.3 (fuel displacement & diesel O&M savings only)
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Project Cost/Benefit Worksheet
RFA AEA12-001 Application Cost Worksheet Page 3 7-1-11
Payback (years) 5.2 years
GRANT BUDGET FORM
Renewable Energy Fund Grant Round V Grant Budget Form 7-1-11 Milestone or Task Anticipated Completion Date RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In-kind/Federal Grants/Other State Grants/Other TOTALS Phases I & II – Reconnaissance & Feasibility December 2011 $0 $40,000 Cash (labor & expenses) $40,000 Phase III – Design & Permitting Geotechnical Investigations September 2012 $58,263 $7,237 Cash (labor & expenses) $65,500 Revise preliminary design September 2012 $12,275 $1,525 Cash (labor & expenses) $13,800 Environmental scoping December 2012 $13,076 $1,624 Cash (labor & expenses) $14,700 Environmental studies September 2013 $120,084 $14,916 Cash (labor & expenses) $135,000 Permit application preparation March 2014 $75,253 $9,347 Cash (labor & expenses) $84,600 Permit application processing September 2015 $5,871 $729 Cash (labor & expenses) $6,600 Final design March 2016 $33,179 $4,121 Cash (labor & expenses) $37,300 Subtotal, Phase III $318,000 $39,500 $357,500 TOTAL, PHASES I, II & III $318,000 $79,500 $397,500 Budget Categories: Direct Labor & Benefits $153,782 $57,902 $211,684 Travel & Per Diem $4,123 $1,712 $5,835 Equipment $0 $0 $0 Materials & Supplies $0 $0 $0 Contractual Services $160,095 $19,886 $179,981 Construction Services $0 $0 $0 Other $0 $0 $0 TOTALS $318,000 $79,500 $397,500 Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)- Add additional pages as needed
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.
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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.
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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.
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