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HomeMy WebLinkAboutGeo Transmission line Grant Application Signedr® ALASKA Renewable Energy Fund Round 5 ENERGVAUTHORITV Grant Application Application Forms and Instructions The following forms and instructions are provided to assist you in preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at: htto://www.akenergyauthority.org Grant Application GrantApp5.doc Application form in MS Word that includes an outline of Form information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required. Application Cost Costworksheet Summary of Cost information that should be addressed by Worksheet 5.doc applicants in preparing their application. Grant Budget GrantBudget5. A detailed grant budget that includes a breakdown of costs by Form doc milestone and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget GrantBudgetln Instructions for completing the above grant budget form. Form Instructions structions5.doc Authorized Authorized Form indicating who is authorized to sign the grant, finance Signers Form signers reports and progress reports and provides grantee information. form5.doc • If you are applying for grants for more than one project, provide separate application forms for each project. • Multiple phases for the same project maybe submitted as one application. • If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for completion of each phase. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. • If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. REMINDER: • Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority web site after final recommendations are made to the legislature. • In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information is to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. AEA 12-001 Application Page 1 of 14 7/1/2011 HORITY AENELASKA Renewable Energy Fund Grant Application Round 5 SECTION 1 —APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Chugach Electric Association, Inc. Type of Entity: Electric Utility (Cooperative) Fiscal Year End 12131 Tax ID # 92-0014224 Tax Status: —For-profit or tenon -profit ( check one Mailing Address Physical Address P.O. Box 196300 5601 Electron Drive Anchorage, Ak 99519.6300 Anchorage, Ak 99519 Telephone Fax 1 Email 907 762-4759 (907) 762.4191 ron vecera@chugachelectric.com 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Title Ronald K. Vecera Director of Project Development Mailing Address P.O. Box 196300 Anchorage, Ak 99519.6300 Telephone Fax Email (907) 762.4759 (907) 762-4191 ron_vecera@chugachelectric.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. AEA12-001 Grant Application Page 2 of 14 7/1//2011 ALASKA Renewable Energy Fund /GIND ENERGY AUTHORITY Grant Application Round 5 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) Transmission Line to Renewable Energy Resources 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. This project is to route, design and construct a transmission line to connect a potential geothermal energy resource (Mt. Spurr) to the existing Railbelt electric system. This potential resource is on the west side of Cook Inlet and the closest interconnection point is at Chugach's Beluga power plant. The nearest community to the project is the Native Village of Tyonek. The communities that could benefit from the project include all of the communities served by the Railbelt electric utilities. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind Biomass or Biofuels Hydro, including run of river X 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. Chugach is proposing to continue the process of permitting and design for a new transmission line linking a geothermal project being developed on the west side of Cook Inlet to the existing Chugach system. The specific proposal for a Round V renewable energy grant is the design of the substations at each end of the transmission line. One substation would be at Ormat's facility and the other at Beluga Power plant. Ormat Nevada, Inc. (Ormat), a wholly owned subsidiary of Ormat Technologies, Inc (NYSE "ORA"), secured 15 geothermal leases on Mt. Spurr from the State of Alaska in 2008 and has since embarked on a multi -phased exploration and development plan, with a goal to explore and AEA12-001 Grant Application Page 3 of 14 7/1//2011 r ALASKA Renewable Energy Fund Grant Application Round 5 build a utility scale 50-100 MW geothermal plant to be connected to the Railbelt power grid around 2016. Ormat has built over 1,600 MW of geothermal plants during the last 3 decades all over the western United States and several locations internationally. Ormat's Mt. Spurr project is progressing with the drilling this summer of a 3,500' deep core hole. They recently announced drilling results for this well and the results were not as positive as hoped or expected. While Ormat assesses its future development plan, Chugach is moving forward with this grant application to stay on a parallel path with Ormat. Chugach's proposed project would include one or more high voltage transmission lines which would connect to the existing substation and transmission lines at Beluga. The line would be built for a maximum operating voltage of 230 kV but could initially be operated at a lower voltage to match first stage development of 50 MW of the geothermal project. The line would cover a distance of at least 40 miles, depending on the routing. Chugach received a Round IV renewable energy grant which will soon be used for the route selection phase of this project. The plan is for Round V renewable energy grant funds to be for the design of substations at each end of the line. Subsequent phases of the project would be for final design and permitting of the transmission line and for construction. 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.) A successful geothermal development at Mt. Spurr will provide significant benefits. Geothermal is base -load generation with a very high capacity factor. It is a renewable resource that will offset fossil fuel generated electricity for the entire Railbelt. This will lower fuel costs, lower carbon emissions and enhance rate stability. It will also help diversify the mix of generation resources for the Railbelt and help conserve the declining Cook Inlet natural gas supply. In its 2009 AEA renewable energy grant application, Ormat quantified the benefit of geothermal energy production. Ormat estimated savings, assuming a 50 MW plant, of 2,925,183 Mbtu of natural gas per year for 25 years or more. The value of this gas was estimated at $22.1 million in 2016 to $41 million in 2041. Ormat also estimated carbon offset savings (compared to natural gas) of $13.7 million per year. The project is believed to have a resource potential of 50 to 100 MW. If a 100 MW plant is developed, these benefits will be doubled. Geothermal energy from Mt. Spurr will only be accessible to Railbelt utilities if there is a transmission link from the new generation to Chugach's existing system. The proposed link will provide for the reliable transport of the new renewable energy resource to the interconnected systems of Alaska's Railbelt and allow all participating utilities to realize the benefits listed above. 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. This grant application is for Phase 2 of this project. Phase 1 is being funded by a $600,000 AEA AEA12-001 Grant Application Page 4 of 14 7/1//2011 /OE ALAS�KA Renewable Energy Fund Grant Application Round 5 renewable energy grant in Round IV. The $600,000 grant for Phi selection, preliminary design and an assessment of permit requirements. I provides for route The amount requested via this grant application for Phase 2 is $1,150,000. Phase 2 consists of • Permits and right-of-way for two substations, one at the Mt. Spurr generation site and one situated within Chugach owned property at Beluga. Deliverables will be documentation specifying Chugach's rights and obligations at each location. Estimated cost is $50,000. • Geotechnical/survey work for the two substation locations. Deliverables include documentation and reports accurately describing the existing ground conditions at the two sites and any potential issues Chugach may encounter during design/construction. Estimated cost is $100,000. • Final design for a switchyard facility at Mt. Spurr and modifications at the Beluga Power Plant 138 kV yard. Deliverables include the Final Design, comprised of bid documents and construction drawings meeting Chugach contract standards. Estimated cost is $1,000,000. • Chugach will provide an estimated $110,000 of project supervision and other labor to manage these tasks. If the Mt. Spurr geothermal project proves viable, and construction of this transmission line proceeds, the funding for this major infrastructure addition would be pursued and is expected to be a combination of financing by participants and grants. The construction cost of a 45 mile transmission line and associated substation infrastructure is expected to be about $60 million, with the cost breakdown roughly $10 million for substation infrastructure and $50 million for the transmission line. 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. $1,150,000 2.7.2 Other Funds to be provided (Project match) $ 110,000 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $1,260,000 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 $61,780,000 including estimates through construction) 2.7.5 Estimated Direct Financial Benefit (Savings) $See narrative below 2.7.6 Other Public Benefit (If you can calculate the benefit in $See narrative below terms of dollars please provide that number here and explain how you calculated that number in your application (Section 5.) AEA12-001 Grant Application Page 5 of 14 7/1//2011 /ORITY � ALASAUTENERGYHKA Renewable Energy Fund Grant Application Round 5 As mentioned above, if the geothermal resource is viable, the public benefit of this project is that it allows access by Railbelt utilities to the renewable energy. All utilities will realize the benefits of reduced fuel costs, lower carbon emissions, conservation of fossil fuel resources, diversifying the generation mix and the economies of scale of a larger project. While it is difficult to quantify this as a benefit of the transmission line, because it is the geothermal energy from the Ormat project that directly creates these benefits, the transmission line is essential for its delivery to end users. SECTION 3 — PROJECT MANAGEMENT PLAN Iq 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. Contact information is as follows: Name: Jon Sinclair Address: P.O. Box 196300 Anchorage, Ak 99519-6300 Phone: (907) 762-4603 Fax: (907)762-4693 Email: ion sinclair@chueachelectric.com Other key personnel include Mr. Ed Jenkin, Chugach's Vice President of Power Delivery and Mr. Christian Vierhuff, Project Engineer. Their professional bios are attached. 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.) Phase 2 (Substation Design) 7/1/12 to 6/30/13 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 milestones for this phase of the project include: • Permits and rights -of -way acquired Complete by 12/12 • Geotechnical and survey work Complete by 12/12 AEA12-001 Grant Application Page 6 of 14 7/1//2011 /� A�S� Renewable Energy Fund GEED ENERGY AUTHORITY Grant Application Round 5 • Final Construction Design Complete by 6/13 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. Chugach has in-house expertise in its Transmission Services department and its project manager and other responsible staff are knowledgeable in transmission line projects and very capable of managing the processes described in this application. Engineering Services will be performed by consultants, who will be selected through a qualification/RFP process. All materials and construction contracts will be procured through competitive bidding. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Chugach will file project status reports that provide information on project activities, schedule and budget in a manner and frequency that conforms to AEA reporting specifications. 3.6 Project Risk Discuss potential problems and how you would address them. Project features and schedule will be driven by the progress of Ormat's geothermal project development. Cost overruns can occur due to delays, late design changes and unanticipated field conditions. Extensive field work will be directed to capture field conditions. Close coordination with participants will avoid late design changes as well as delays. Natural events such as floods, volcanic activity or earthquakes can also lead to delays. Worker safety during such events will be addressed at every stage of the project. Participant change is a risk that can be an opportunity or a threat. Loss of a participant shifts funding burdens to the remaining ones. The vicinity of coal resources may also allow other participants to join and supplement funding. 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 AEA12-001 Grant Application Page 7 of 14 7/11/2011 � i� ALASKA Renewable Energy Fund ENERGY AUTHORITY Grant Application Round 5 11 are satisfied and funding for an advanced phase is warranted. 11 4.1 Proposed Energy Resource Describe the potential extentlamount 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. Ormat has received two AEA renewable energy grants and a $12.5 million State grant to assess the geothermal potential at Mt. Spurr. Ormat has advised Chugach that a viable geothermal resource could justify development of a 50 to 100 MW project. Chugach's proposed project is the transmission line necessary to connect the geothermal energy resource to the existing Chugach system. This would allow delivery of the energy to all Railbelt utilities. The specific phase of the transmission line project that is the subject of this grant application is the substation design. 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 energy system is the combined generation resources of the Railbelt utilities. According to the AEA Regional Integrated Resource Plan, published in February 2010, the Railbelt utilities have a total of 1,276 MW of installed capacity. This includes 1,099 MW of thermal generation and 177 MW of hydro. The age, condition and efficiency of the generation units vary, but many are old and will be retired in the next few years. 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. There is no existing geothermal resource at Mt. Spurr. A new geothermal energy resource developed at Mt. Spurr, connected to the Railbelt electric system via the proposed transmission line, will augment the existing Railbelt generation. It will provide a base -load, renewable resource that will provide a material reduction in fossil fueled generation, diversify the Railbelt generation mix and allow for the retirement of older, less efficient generation units. Chugach's proposed project will extend the transmission system so that the energy from the geothermal project can be delivered to Railbelt utilities. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The existing energy market consists of the Railbelt utilities and the communities that they serve. The existing load is primarily residential and commercial. Electrical energy needs are met with generation that is primarily natural gas, supplemented by hydro, and also coal and diesel in the Fairbanks area. Successful development of renewable energy resources will allow diversification of the generation mix for existing customers and provide a source of renewable and stable priced energy for years to come. It would also reduce the need for scarcer natural gas supplies to be used for power generation. AEA12-001 Grant Application Page 8 of 14 7/1//2011 1� ALASKA Renewable Energy Fund © ENERGY AUTHORrY Grant Application Round 5 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 The system design is for the transmission link to a geothermal resource being developed at Mt. Spurr. The description of the proposed geothermal system is addressed in the renewable energy grant applications submitted by Ormat. The proposed geothermal project can be served by a single 138 kV transmission line in its initial configuration of 50 MW. Larger development of this resource, or the development of other renewable energy resources that would use the line, may result in the need for the line to be a double circuit of 230 kV to provide adequate capacity and reliability. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. The land for the Ormat substation will be on State-owned land leased by Ormat and the land for the Beluga substation will on land owned by Chugach. 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 Chugach does not expect pennitting/right-of-way requirements for the Mt. Spurr substation and the Beluga connection to be particularly onerous. The connection at Beluga is situated within Chugach -owned property and the Mt. Spurr site will be on land leased by Ormat. 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 AEA12-001 Grant Application Page 9 of 14 7/1//2011 /® ALASKA Renewable Energy Fund WIND ENERGY AUTHORITY Grant Application Round 5 • Telecommunications interference • Aviation considerations • Visual, aesthetics impacts • Identify and discuss other potential barriers Chugach does not anticipate environmental or land use issues for Phase 2 of this project. However, Phase 1 of the project, currently in progress, will determine if environmental issues exist and how to resolve them. 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 See section 2 and grantibudget forms. Chugach has constructed several transmission lines and has the experience and knowledge to rough estimate transmission line costs based on terrain and their length. The total estimated project cost is $61,780,000. The phase that is part of this grant application is permitting, geotechnical and final design for the substations at each end of the line. The requested grant amount for this phase is $1,150,000. Chugach is proposing a match of in-house project management resources estimated at $110,000. Chugach is not proposing to match with cash because this project is not solely for Chugach's benefit. It will benefit any participating electric utility in the Railbelt. Thus, while Chugach is willing to take the lead to advance the project, it is not fair to our ratepayers to fund a project that others who benefit will not have paid for in a similar fashion. 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 Maintenance of the transmission line is estimated at $250,000 per year. This expense would be funded by project participants based on their percentage shares in the project. AEA12-001 Grant Application Page 10 of 14 7/1//2011 /®ALASKA Renewable Energy Fund � ENERGVAUTHORITY Grant Application Round 5 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 Not applicable. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Download the form, complete it, and submit it as an attachment. Document any conditions or sources your numbers are based on here. The Project Cost/Benefit Worksheet is not applicable. Costs and benefits are in the context of a transmission line to deliver renewable geothermal energy from the west side of Cook Inlet. The renewable energy project allows stable priced renewable energy to be used to displace fossil fueled energy. This conserves the fuel resources, reduces carbon emissions, diversifies the generation mix, etc. These benefits are substantial. While they result from the development of the geothermal energy system, the proposed transmission line is essential to realize these benefits. 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 The primary benefit will be the delivery of renewable energy. The value of geothermal energy, as estimated by Ormat, was previously cited in the response to Section 2.5 of this application. For this project to be developed there must be a path to get the energy to the market. The proposed transmission line is essential to do so. In addition to allowing the delivery of clean, stably priced renewable energy, this project will also benefit Alaskans by helping to conserve available supplies of natural gas. Rates to recover the cost of a transmission line will be cost based and subject to review and approval by the Regulatory Commission of Alaska. A rate of return (margin) will only be earned on utility provided capital. No return will be earned on any investment financed by grants. SECTION fr SUSTAINABILITY Discuss your plan for operating the completed project so that it will be sustainable. AEA12-001 Grant Application Page 11 of 14 7/1//2011 /A�S� Renewable Energy Fund © ENERGY AUTHORITY Grant Application Round 5 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 This project is very sustainable. All Railbelt utilities who want to share in the project can receive shares similar to how it is done for Bradley Lake. Participant shares allocate energy output, costs and responsibilities. Governance is provided by all parties, similar to how the Bradley Lake Project Management Committee manages that project's operations and maintenance. This form of business organization and partnership is well understood and practiced by the Railbelt utilities. With respect to the new facilities, transmission lines and facilities have a design life of 40 to 50 years. The proposed facilities would become part of Chugach's transmission system and be operated and maintained while renewable energy projects require the service. Operating and maintenance costs consist primarily of line losses, inspections and replacement of damaged or worn parts. Cost recovery will occur via the rates participants pay to recover the net capital investment (after any grants received) and O&M expenses associated with the transmission line. Since the project would be integrated into the Railbelt electric system and costs recovered from Railbelt utilities through the life of the project, it is clear that it is a very sustainable project. 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. Chugach and Ormat have coordinated very well and have communicated regularly during the past few years. Chugach is aware that Ormat is currently evaluating its plans for further assessment the geothermal resource. Chugach has begun the work funded by the AEA renewable energy grant it recently received from Round IV, which is applicable to work to be performed from July 1, 2011 through June 30, 2012. The work contemplated by this grant application will continue that work by beginning the design process for the substations at each end of the transmission line. By the time phase 2 is complete, Ormat may have enough information to determine whether the geothermal project will be developed. 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. AEA12-001 Grant Application Page 12 of 14 7/1//2011 I ONED ALASHKA Renewable Energy Fund Grant Application Round 5 Letters of support have previously been received from: • Homer Electric Association • Matanuska Electric Association • Golden Valley Electric Association • Anchorage Chamber of Commerce 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 — GrantBudget&doc Chugach is requesting grant funding in the amount of $1,150,000. Chugach will provide in- house labor in the amount of $110,000 to manage the project and provide other support as needed. Chugach is not proposing a financial match other than internal resources because this project is not just for Chugach's benefit. While Chugach is taking the lead, and the project will connect to Chugach's existing system, this project is being undertaken on behalf of the Railbelt electric utilities, all of whom will presumably be off -takers and beneficiaries of the geothermal project. If the geothermal resource proves viable and the transmission project proceeds to construction, a financing plan including funding sources and financing on behalf of all participants will be developed. Estimates of the costs for the upcoming phase of this project (substation permitting and design) are shown in the attached Grant/Budget documents. AEA12-001 Grant Application Page 13 of 14 7/1//2011 /ORITY � ALASAUTENERGYHKA Renewable Energy Fund 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 �jp�r�l C-VN1Y Signature Title CRl{ ,T ii E-Ca (V6 6-MCt✓'l2 Date AEA12-001 Grant Application Page 14 of 14 711H2011