HomeMy WebLinkAboutFourth of July Creek GrantApp
Prepared by:
INDEPENDENCE POWER, LLC
1503 West 33rd Avenue, #211A
Anchorage, Alaska 99503
Tel: (907) 258-2420
Fax: (907) 258-2419
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
AEA-11-005 RENEWABLE ENERGY GRANT APPLICATION
ROUND 4 – FY 2012
SEPTEMBER 15, 2010
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
SEPTEMBER 15, 2010 PAGE i
Table of Contents
SECTION 1. - APPLICANT INFORMATION............................................................................ 3
1.1. Applicant point of contact.................................................................................................... 3
1.2. Applicant Minimum Requirements...................................................................................... 3
SECTION 2. - PROJECT SUMMARY........................................................................................ 4
2.1. Project Title.......................................................................................................................... 4
2.2. Project Location................................................................................................................... 4
2.3. Project Type......................................................................................................................... 4
2.4. Project Description............................................................................................................... 4
2.5. Project Benefit ..................................................................................................................... 5
2.6. Project Budget Overview..................................................................................................... 5
2.7. Costs and Benefits................................................................................................................ 5
SECTION 3. - PROJECT MANAGEMENT PLAN..................................................................... 6
3.1. Project Manager................................................................................................................... 6
3.2. Project Schedule................................................................................................................... 6
3.3. Project Milestones................................................................................................................ 6
3.4. Project Resources................................................................................................................. 6
3.5. Project Communications...................................................................................................... 7
3.6. Project Risk.......................................................................................................................... 7
SECTION 4. - PROJECT DESCRIPTION AND TASKS............................................................ 8
4.1. Proposed Energy Resource..................................................................................................8
4.2. Existing Energy System....................................................................................................... 9
4.2.1. Basic configuration of Existing Energy System........................................................... 9
4.2.2. Existing Energy Resources Used.................................................................................. 9
4.2.3. Existing Energy Market................................................................................................ 9
4.3. Proposed System................................................................................................................ 10
4.3.1. System Design ............................................................................................................ 10
4.3.2. Land Ownership..........................................................................................................11
4.3.3. Permits........................................................................................................................ 11
4.3.4. Environmental............................................................................................................. 11
4.4. Proposed New System Costs (Total Estimated Costs and proposed Revenues) ............... 13
4.4.1. Project Development Cost......................................................................................... 13
4.4.2. Project Operating and Maintenance Costs.................................................................. 13
4.4.3. Power Purchase/Sale................................................................................................... 13
4.4.4. Cost Worksheet........................................................................................................... 14
SECTION 5. - PROJECT BENEFIT........................................................................................... 15
5.1. Financial Benefits.............................................................................................................. 15
5.2. Other Public Benefits......................................................................................................... 15
5.3. Estimated Fuel Displacement ............................................................................................ 16
5.4. Estimated Annual Revenue................................................................................................ 17
5.5. Other Annual Revenue Streams......................................................................................... 17
5.6. Indirect Project Benefits .................................................................................................... 17
SECTION 6. - SUSTAINABILITY............................................................................................ 18
SECTION 7. - READINESS & COMPLIANCE WITH OTHER GRANTS............................. 19
SECTION 8. - LOCAL SUPPORT............................................................................................. 19
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
SEPTEMBER 15, 2010 PAGE ii
SECTION 9. - GRANT BUDGET.............................................................................................. 19
SECTION 10. - ADDITIONAL DOCUMENTATION AND CERTIFICATION..................... 20
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 3 OF 28
SECTION 1. - APPLICANT INFORMATION
Name: Independence Power, LLC
Type of Entity: Independent Power Producer
Mailing/Physical
Address:
1503 West 33rd Avenue, Suite 211A
Anchorage, AK 99503
Telephone: 258-2420
Fax: 258-2419
Emai:l dave@polarconsult.net
1.1. Applicant point of contact
Name: David Ausman, PE
Title: Project Manager
Mailing Address: 1503 West 33rd Avenue, Suite 211A
Anchorage, AK 99503
Telephone: 258-2420
Fax: 258-2419
Email: dave@polarconsult.net
1.2. Applicant Minimum Requirements
As an Applicant, we are: (put an X in the appropriate box)
An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
X An independent power producer in accordance with 3 AAC 107.695, or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Endorsements:
Yes Attached to this application is formal approval and endorsement for its project by its
board of directors, executive management, or other governing authority. If a
collaborative grouping, a formal approval from each participant’s governing authority is
necessary.
Yes 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 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 We intend to own and operate any project that may be constructed with grant funds for
the benefit of the general public.
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 4 OF 28
SECTION 2. - PROJECT SUMMARY
2.1. Project Title
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
2.2. Project Location
The proposed project is located on Fourth of July Creek near Seward, Alaska. The project and
appurtenances would occupy portions of Sections 7, 8, 9, 16, 17, 18 of Township 1S, Range 1E,
Seward Meridian (USGS quad map Seward D7SE). The project powerhouse would be located at
approximately 6005'24" N, 14916'41" W.
The project would most directly benefit Seward, Alaska, and surrounding communities. More
generally, the project would benefit railbelt communities.
2.3. Project Type
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
X Feasibility Construction and Commissioning
X Conceptual Design
2.4. Project Description
The Fourth of July Creek Hydroelectric Project is a low-impact run-of-river renewable energy
project proposed near Seward, Alaska. The project would be located east of the Spring Creek
Correctional Facility and Fourth of July Creek Industrial Park, across Resurrection Bay from the
City of Seward. The project is anticipated to have an installed capacity of 5.4 MW and provide
an estimated 21,700 MWh of energy annually. The project would supply approximately 1/3rd of
Seward Electric System's annual energy requirements.
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 5 OF 28
2.5. Project Benefit
This project would provide the following financial benefits:
Item Value
Displaced Fuel (Cook Inlet Natural Gas / Diesel Fuel)
Est. Annual Value of Displaced Fuel ($ / year) $1.68 million
Estimated Present Value of Displaced Fuel (50 years) $43.0 million
Increased SES / CEA Grid Efficiency
Estimated Annual Value of Grid Efficiency $66,300
Estimated Present Value of Grid Efficiency (50 years) $1.7 million
Environmental Attributes
Estimated Annual Value of Environmental Attributes $200,000
Estimated Present Value of EAs (50 years) $3.9 million
Capacity
Estimated Present Value of Capacity $1.6 million
TOTAL ESTIMATED PROJECT BENEFITS $50.2 million
The project would provide the following public benefits:
1. Local jobs and economic activity from project construction and operations.
2. Improved reliability and stability of the local power grid.
3. Increased diversity of energy sources in Seward and on the railbelt.
4. Reduced demand for Cook Inlet natural gas.
5. Additional local capacity to enable SES to take on new industrial loads, such as
furnishing shore power to cruise ships.
6. Opportunity for educational curriculum with AVTEC.
2.6. Project Budget Overview
IP requests FY11 grant funds to complete the feasibility study phase of the project. The total
budget for the feasibility phase is $198,000. IP requests $136,500 in grant funds (69%), and will
provide the remaining $61,500 as cash and/or in-kind services.
2.7. Costs and Benefits
Grant Costs
(Summary of funds requested)
2.7.1 Grant Funds Requested in this application. $ 136,500
2.7.2 Other Funds to be provided (Project match) $ 61,500
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 198,000
Project benefits are summarized below.
2.7.4 Total Project Cost (Summary from Cost Worksheet
including estimates through construction) $16,700,000
2.7.5 Estimated Direct Financial Benefit (Savings) $50,380,000
2.7.6 Other Public Benefit See Narrative
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 6 OF 28
SECTION 3. - PROJECT MANAGEMENT PLAN
3.1. Project Manager
The Project Manager is David Ausman, PE. Mr. Groves has experience evaluating, designing,
permitting, and operating hydroelectric projects similar to the proposed project in southcentral
Alaska. Resumes and references are included in Attachment A.
No project management assistance from AEA or other government entities is expected for this
project.
3.2. Project Schedule
IP has completed a reconnaissance study and initial feasibility assessment of the project.
Feasibility studies would be completed in 2012; permitting, design, and power sales negotiations
would be completed by 2013; and construction would be completed by 2014.
3.3. Project Milestones
IP will continue to evaluate the viability of the project throughout the upcoming feasibility
phase. Key factors such as hydrology, expected power generation, power sales, construction
cost, construction feasibility, and similar issues will be reviewed and refined to validate that the
project is feasible. Key project milestones are summarized in the table below.
Milestone Scheduled Completion
Reconnaissance Phase
Year 1 Hydrology Report Completed October 2010
Initial Feasibility Assessment Completed October 2010
Major Permit Applications Completed October 2010
Reconnaissance Study Completed October 2010
Feasibility Phase July 2011
Year 2/Year 3 Hydrology November 2011
Geotech investigations November 2011
Topographic survey December 2011
Land and regulatory issues March 2012
Permitting and environmental issues March 2012
Conceptual Design & Cost Estimate May 2012
Economic / Financial Analysis June 2012
Concept Business / Operating Plans June 2012
Final Report / Recommendations July 2012
Permitting / Design / Contracting July 2013
Construction Fall 2014
Project Commissioning Winter 2014
3.4. Project Resources
IP's members are all professional civil engineers with extensive experience in designing,
constructing, and operating small run-of-river hydroelectric projects in Alaska, such as the
Fourth of July project. IP will manage and/or conduct all pre-construction activities, such as the
feasibility study, conceptual design and final design. Some activities may be completed by
appropriately qualified entities under subcontract to IP.
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 7 OF 28
In the construction phase of the project, IP will retain bids from multiple vendors/contractors for
construction and major equipment supply. IP will select vendors/contractors based upon the best
interests of the project.
3.5. Project Communications
IP will keep AEA apprised of pre-construction project status by issuing quarterly project status
reports that conform with AEA’s standard reporting templates. The reports will include a brief
(1 page) report including a narrative of current project status, activities in the current quarter,
problems encountered, and anticipated activities in the following quarter. The report will also
include a budget status summary.
As warranted, IP may also advise the AEA grant manager of upcoming events such as field visits
on an as-needed basis.
3.6. Project Risk
Major project risk items that IP has identified to date are listed and discussed below:
1) Resource Hydrology. Fourth of July Creek has a significant bed load, and is prone to
frequent flooding. The intake structure will be designed to reliably handle frequent
flooding and high-volume sediment transport. IP has already collected one year of
discharge data for Fourth of July Creek, capturing one significant flood event in July
2009. This hydrology data will enable IP to better characterize flood hazards and
appropriate design parameters for the project. Review of the project site and available
information indicates this risk can be addressed by proper project design.
2) Overall project cost and economic feasibility. IP will develop a project cost estimate as
part of the feasibility study. The feasibility-phase field investigations will allow
preparation of a detailed cost estimate to evaluate project cost and economic feasibility.
3) Permit Risk. Initial consultations and permit application review with resource agencies
have not identified any resource issues that may jeopardize project viability.
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 8 OF 28
0
1,000
2,000
3,000
4,000
5,000
6,000
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
DateDaily Average Power Generation (kW)Expected Power Generation
(From Hydrology Model)
Expected Power Generation
(From 2008-09 Discharge Data)
SECTION 4. - PROJECT DESCRIPTION AND TASKS
4.1. Proposed Energy Resource
The proposed energy resource is a run-of-river hydropower resource located along Fourth of July
Creek near Seward. Development of the resource would consist of:
¾ An intake structure, which may include a dam up to 40 feet tall, located on Fourth of July
Creek at an elevation of about 750 feet (dam spillway elevation of 790 feet), which is at
the head of a prominent canyon located about three river-miles from tidewater;
¾ A 6,100 foot long, 48-inch diameter penstock to convey 120 cubic feet per second (cfs) of
water;
¾ A powerhouse with 5.4 MW of installed generating capacity located at an elevation of
about 120 feet, located near the outlet of the same canyon;
¾ A tailrace to return project waters to Fourth of July Creek;
¾ A transmission line to connect the powerhouse to the City of Seward’s electrical system;
¾ Access roads and trails; and
¾ Appurtenant facilities.
Based on one year of hydrology data on Fourth of July Creek and analysis of long term
hydrology data for adjacent basins, the resource is estimated to provide approximately 21,700
megawatt-hours (MWh) of energy in a typical water year. This equates to roughly 1/3rd of the
Seward Electric System (SES)’s annual energy requirements. Power output from the project
calculated from 2008-09 hydrology and expected hydrology based on hydrology data for nearby
basins are presented in the figure below.
Expected Fourth of July Creek Power Generation
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 9 OF 28
Alternative energy resources available to this market include all alternatives available to the
railbelt energy grid, which principally include: natural gas, diesel/oil, coal, storage hydro, run-of-
river hydro, hydrokinetic, wind, geothermal, and tidal. Many of these resources are not in the
immediate Seward vicinity. Currently, local generation in Seward is limited to diesel generation.
There is a small hydro project just west of town that is not operational.
Overall, this project is competitive with other renewable and nonrenewable generation options
available to the railbelt.
4.2. Existing Energy System
4.2.1. Basic configuration of Existing Energy System
The project would be connected to the SES grid, which is interconnected with the railbelt energy
grid. Seward has diesel generators located in town to provide firm capacity for the town during
episodes when the transmission line is down or CEA interrupts service to SES.
4.2.2. Existing Energy Resources Used
Under normal operating conditions, SES purchases wholesale power from Chugach Electric
Association (CEA) and through CEA the Alaska Energy Authority (AEA, Bradley Lake
Hydroelectric Plant). Seward receives one percent of the output from Bradley Lake, and the
balance of its power is normally provided by CEA. SES' supply contract with CEA allows CEA
to interrupt service under certain conditions. When energy is not provided by CEA, SES relies
100% on local diesel generation.
The project would not significantly impact existing energy infrastructure. The project would
interconnect with the SES grid at a point where that system is capable of receiving the full
project output. This project is expected to improve voltage and frequency stability on the SES
system.
Under normal operating conditions, the project would offset natural gas-fired generation in the
Cook Inlet basin. This would incrementally reduce the demand for Cook Inlet natural gas,
extending the life of the Cook Inlet gas fields. This would directly benefit the residents of the
railbelt, which rely on that gas supply for affordable electricity and heating requirements. The
volume of natural gas offset by this project is a significant benefit to the public.
When the transmission line to CEA is out of service (outage), this project would displace diesel
fuel burned by SES's diesel generators. During the summer months, this project could serve
approximately 30 to 50% of SES average system load. During the winter months, the project
could serve approximately 5 to 20% of SES average system load. The actual load that could be
served would depend on the size of the system load, installed project capacity, and water
availability at the time of the outage.
4.2.3. Existing Energy Market
The existing energy market is the six railbelt utilities, SES, CEA, Homer Electric Association
(HEA), Matanuska Electric Association (MEA), Municipal Light & Power (MLP), and Golden
Valley Electric Association (GVEA). SES is the logical customer for the electrical output of this
project. Sale to other railbelt utilities is possible, but would need to consider (1) wheeling costs
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 10 OF 28
over SES, CEA, and other transmission lines, (2) capacity limitations on certain transmission
lines within the railbelt grid, and (3) transmission interruptions.
4.3. Proposed System
4.3.1. System Design
Technical parameters of the Fourth of July Creek Project are summarized and discussed below.
Parameter Value
Intake Elevation (ft) 790'
Powerhouse Elevation (ft) 120'
Gross Head (ft) 670'
Net Head (ft) 636'
Penstock Length (ft)
and diameter (inches)
6,100’ of
48” pipe
Design Flow (cfs) 120
Installed Capacity (kW) 5,400 kW
Plant Capacity Factor 47%
Minimum Annual Output (kW) 240 kW
Net Annual Energy Generation (kWh) 21,700,000 kWh
Transmission Length (mi) 2 miles
¾ Intake structure. The intake structure will be located at about the 750’ elevation on
Fourth of July Creek. The structure will be 40 feet tall and will divert water from the
creek up to the design flow of 120 cfs. Water will pass through a settling basin, screens,
and other apparatus to remove deleterious materials from the water and discharge clean
water to the penstock. Filtered materials would be returned to the creek below the intake
structure. The intake structure will be designed to handle the significant bed loads and
frequent flooding characteristic of Fourth of July Creek.
¾ Penstock. The penstock will be approximately 48 inches in diameter, and will convey
water from the intake 6,100 feet to the powerhouse. The penstock will be constructed
above ground, partially buried, or fully buried depending on geotechnical conditions
along the penstock route. Power and communications between the intake and
powerhouse will be co-located with the penstock. The penstock alignment will generally
serve as the access route to the intake for construction, maintenance and operations.
¾ Powerhouse. The powerhouse will accommodate the turbines, generators, switchgear,
controls, and associated equipment for the project. It will be located at an elevation of
approximately 120 feet near Fourth of July Creek.
¾ Generation equipment. The project would have two 2.7 MW two-jet pelton turbines.
Each turbine would drive a synchronous generator.
¾ Tailrace. Water from the powerhouse will be discharged via a short tailrace back into
Fourth of July Creek.
¾ Transmission Line. Power generated by the project will be transmitted via a new
transmission line approximately two miles to SES’s existing substation at the
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 11 OF 28
intersection of Nash Road and Jellison Avenue. The point of interconnection with the
SES system will be at the end of this transmission line.
¾ Access. Access to the project will be via approximately one mile of new unpaved road
extending east from either the Correctional Center or City Quarry.
The project will have an installed capacity of 5.4 MW. The installed capacity may be adjusted as
additional hydrology data is collected and project feasibility studies are completed. Final
installed capacity will depend largely on the outcome of hydrology studies, final gross head,
economic evaluation to optimize project cost and resource utilization, and efficiency of the
selected turbine-generator package.
Based on existing hydrology information, a 5.4 MW project on Fourth of July Creek will have a
capacity factor of 0.47.
4.3.2. Land Ownership
The project intake, penstock, and powerhouse are all located entirely on state lands. Most of the
access road and transmission line would be located on land owned by the City of Seward.
IP has filed applications with the Alaska Department of Natural Resources for land easements for
the linear features of the project (access roads, power line, penstock), and land leases for the
powerhouse and intake locations. IP has held informal discussions with the Seward City
Manager regarding an access agreement for the project, and does not anticipate that the access
agreement will be problematic. Formal discussions for the access agreement would be advanced
as part of the feasibility study.
4.3.3. Permits
The following permits and approvals have been identified as being required for this project:
¾ Water Use Permit / Water Rights (ADNR)
¾ Land Lease/easement (ADNR)
¾ Fish Habitat Permit (ADFG)
¾ Corps of Engineers wetlands permit
¾ Alaska Coastal Management Program Consistency Review (ACMP)
¾ Utility certification or exemption (RCA)
¾ Finding of non-jurisdiction (FERC)
¾ Archeological consultation (SHPO)
Permit applications for key permits have been submitted by IP.
4.3.4. Environmental
Compatibility of the project with environmental considerations has been reviewed. Key initial
findings are summarized below.
¾ Fish Habitat. The project is located above fish habitat as designated on the Atlas of
Waters Important to the Rearing and Spawning of Anadromous Fishes. ADFG has
not yet made a fish habitat determination on this project, but IP's site reconnaissance
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 12 OF 28
indicates that the project is unlikely to have any adverse impact on anadromous fish
habitat. IP is working with ADFG to schedule a site visit to the project.
¾ Threatened or Endangered Species. U.S. Fish and Wildlife Service and National
Marine Fisheries Service were contacted as part of completing the Coastal Project
Questionnaire. Neither agency has designated the project vicinity as critical habitat
for threatened or endangered species.
¾ Aesthetics. The project will have negligible if any adverse aesthetic impact. The
project’s most visible feature will be roads and power lines, which are common sights
in the general vicinity. The project is located in a part of Seward that is used for
industrial and institutional (correctional facility) purposes. The project would be
mostly located in an undeveloped area in the mountains east of the state prison. The
project would not be visible from the city of Seward or from Resurrection Bay. The
project would be visible from the air in the project’s immediate vicinity.
¾ The project is not expected to fill a significant area of wetlands. The project would
be permitted either under a nationwide permit #17 or an individual permit.
¾ No archeological or cultural resources are known to be in the project vicinity. SHPO
will be consulted as part of the feasibility study.
¾ Land development constraints. None known.
¾ Telecommunications Interference. None known.
¾ Aviation Considerations. None known.
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 13 OF 28
4.4. Proposed New System Costs (Total Estimated Costs and proposed
Revenues)
Insufficient information exists to prepare a detailed cost estimate for the project. Unknown cost
related items on the project hydrology, geology, permit conditions, financing arrangements,
contractual arrangements, operating costs, and other factors preclude developing a meaningful
cost estimate at this time. The next step in development of this project is a feasibility study to
provide answers for these unknowns.
4.4.1. Project Development Cost
IP has prepared an opinion of probable cost for the project of $16.7 million, or $3,100 per kW of
installed capacity.
4.4.2. Project Operating and Maintenance Costs
Project operation and maintenance costs are projected to be approximately $300,000 annually. A
detailed financial management plan would be part of the business plan that would be developed
in the design phase of the project.
No grant funding is requested for operations and maintenance costs.
4.4.3. Power Purchase/Sale
Formal negotiations for a power purchase contract have not been initiated. The most logical
purchaser would be the local utility, SES. If a contract cannot be negotiated with SES, CEA
would be the next most logical utility to purchase the project's output.
It is anticipated that the power purchase price would be a fixed price based on cost-of-service.
This would provide adequate revenue to cover debt service, annual operating, maintenance,
repair, and replacement costs, and a reasonable return on equity for the project owners and
investors.
The cost-of-service-based power purchase price will depend on several factors that remain
unknown. These include:
¾ Equity level and allowed return on equity
¾ Grant level
¾ Debt term and rate
¾ Installed cost of the project
¾ Annual project costs
Based on what are believed to be a reasonable range of assumptions for the above parameters,
the power purchase price is estimated to be in the range of $0.05 to $0.12 per kWh.
Based upon existing estimates and available information, the estimated return on equity for the
project would be in the range of 10 to 15% annually. The project would not earn a return on
grant funds.
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 14 OF 28
4.4.4. Cost Worksheet
Assumptions used in completing the attached AEA cost worksheet are summarized below.
N/A
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 15 OF 28
SECTION 5. - PROJECT BENEFIT
5.1. Financial Benefits
1. Avoided fuel costs. The project will predominately displace energy generated by burning
Cook Inlet natural gas. Using an assumed long term railbelt average turbine heat rate of
8,500 btu/kWh and long term natural gas cost of $9.00 per MCF, the financial benefit of
avoided natural gas costs is estimated at $1,650,000 annually.
SES is assumed to rely on diesel generation for an average of one week per year for the
long term. This is due to transmission outages and/or CEA interruptions. At a diesel
generation efficiency of 14 kWh per gallon and fuel cost of $3.50 per gallon, the avoided
diesel costs are $23,100 annually.
The total avoided fuel cost is $1,673,100 annually.
2. Increased railbelt grid efficiency. CEA tariff filings with the RCA indicate that CEA's
system losses for energy delivered to SES are about 3%. Local generation near Seward
will displace these losses. Additionally, losses on the SES system for energy purchased
from CEA are estimated at 1.5%. Comparable losses for energy delivered from the
Fourth of July Creek project are estimated at 0.5%, for an estimated 1% net gain in
efficiency on the SES system. The estimated total net gain in railbelt grid efficiency is
4.0%. Using the same assumptions in (1) above, this is worth $66,300 annually.
3. Environmental Attributes. The environmental attributes of this low-impact, renewable,
and sustainable energy resource can be marketed to generate additional revenue. Markets
for environmental attributes remain uncertain, subject to expected federal or state
environmental legislation that may impose new regulations upon these markets. The
environmental attributes from the project are valued at $0.009 per kWh, or $200,000
annually.
4. Capacity. The project will provide 5,400 kW of additional capacity to the SES system.
At an installed cost of $300 per kW for diesel generation, this capacity is estimated to be
worth $1,620,000. Prorated over the project's 50-year life, this capacity has an equivalent
annual value of $13,500.
5.2. Other Public Benefits
1. A significant portion of the project funding will go towards hiring local residents and
businesses to perform the work, thus boosting the local economy.
2. The project will help to improve reliability and stability of the local power grid.
3. The project will increase the diversity of fuel sources in the Seward vicinity, as well as on
the railbelt energy grid.
4. Reduced demand for Cook Inlet natural gas. This project will offset natural-gas fired
power generation, reducing natural gas consumption and incrementally extending the life
of the existing Cook Inlet gas fields, to the benefit of the substantial population that relies
upon these gas fields for electricity and heating needs.
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 16 OF 28
5. The project's summertime capacity and energy may be helpful in enabling SES to provide
shore power for cruise ships when in port, and would reduce air quality impacts from
cruise ships that self-generate electricity while in port.
6. The project will present an opportunity for the Alaska Vocational Technical Center
(AVTEC) to develop a curriculum around hydroelectric power. This would benefit
AVTEC, the City of Seward, and the state at large, by developing a workforce that is
proficient in the special skills required to build, operate, maintain, and repair
hydroelectric systems.
5.3. Estimated Fuel Displacement
The project would primarily displace Cook Inlet natural gas burned by Chugach Electric for
power generation. The project would also offset some diesel fuel burned during transmission
outages. Estimated fuel displacement and assumptions used to generate the estimates are
summarized in the following table.
Fuel Type Natural Gas
Annual Displaced Energy 21,607,600 kWh
Displacement 100%
Efficiency of Displaced Generation (Heat Rate) 8,500 btu/kWh
Average Annual Displaced Fuel (Natural Gas) 184 MMCF
Displaced Fuel over 50 Years 9,200 MMCF
Average Market Value of Displaced Fuel $9.00/MCF
Annual Value of Displaced Fuel $1,650,000
Inflation Rate 2%
Discount Rate 5%
Present Value of Displaced Natural Gas Fuel over 50 years $42,500,000
Fuel Type Diesel
Annual Displaced Energy 92,400 kWh
Displacement 100%
Efficiency of Displaced Generation 14 kWh/gal
Average Annual Displaced Fuel (diesel) 6,600 gal
Displaced Fuel over 50 Years 330,000 gal
Average Market Value of Displaced Fuel $3.50/gal
Present Value of Displaced Diesel over 50 years $594,400
TOTAL PRESENT VALUE OF DISPLACED FUEL $43,094,400
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 17 OF 28
5.4. Estimated Annual Revenue
Estimated annual revenue from power sales and assumptions used to generate the estimates are
summarized in the following table.
Contract Item Proposed Terms
Contract pricing Avoided Cost
Average avoided cost over 50 years (Power Sales Rate) $0.071/kWh
Average Annual Energy Sales 21,700,000 kWh
Average Annual Gross Revenue From Power Sales $1,540,700
5.5. Other Annual Revenue Streams
Additional annual revenues from sale of the project's environmental attributes (EAs) is possible.
At a sales rate of $0.009 per kWh, this would generate $200,000 in annual revenue.
Programs for tax credits and other revenues / tax benefits are proposed but none are yet in law.
Many of these proposed programs would discriminate against renewable hydroelectric resources,
so no additional benefits from these proposed programs is assumed. Additionally, it is unclear
that tax credits could be claimed without encumbering the project's renewable attributes
(effectively double counting the EAs), so only one revenue stream is considered.
5.6. Indirect Project Benefits
IP has identified several indirect public benefits that may result from the project. These are
summarized and briefly discussed below.
1. The project will be connected to the railbelt electrical grid. This provides desirable
operational enhancements to this transmission and distribution system. There is an
increase in stability, reliability, and redundancy. These gains can only be obtained by
providing multiple, distributed generation sources which is generally not feasible with
typical large utility generation facilities. This new generation asset also improves the
diversity of fuel sources powering the grid through the addition of renewable energy.
2. This new generation asset will offset generation from existing natural gas-burning
facilities in Southcentral Alaska. This will reduce consumption of Cook Inlet basin
natural gas. Cook Inlet gas production from existing developed fields is declining, and
shortages are already occurring during periods of peak gas demand. By offsetting natural
gas demand for electricity generation, this project will be extending the useful life of the
Cook Inlet gas fields to the benefit of the public.
3. A significant portion of the project funding will go towards hiring local construction
firms to perform the work, thus providing local jobs and experience in building a
hydroelectric project. Current unemployment in the area is at 6.5% compared with a state
average of 6.0%1.
1 August 2008, State of Alaska, Department of Labor and Workforce Development,
http://www.labor.state.ak.us/research/monthlyunemprate/sep08map.pdf
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 18 OF 28
4. A local firm is performing the design and development. This benefits Alaska by
promoting local experience and can be used to develop additional future projects thus
providing even more economic development and jobs for Alaskans.
5. The project access road and penstock trail have the potential to be recreational resources
for non-motorized recreation. Such a use would need to be coordinated with the State
Department of Corrections, City of Seward, and ADNR, as the access route to this
potential recreational opportunity would pass closely to the state prison and city property,
and would affect lands managed by the City and ADNR.
6. City officials in Seward have expressed an interest in providing shore power to cruise
ships when they are in port. This is a large short duration load, typically on the order of
10 MWs for 24 hours or so per ship. The project’s summer capacity of up to 4.5 MW
would be available to help meet this large transient load and keep the grid stable as these
ships come on and off line, and could considerably improve the feasibility of providing
shore power to cruise ships.
7. The project can coordinate with the curriculum at AVTEC to educate Alaskans on
hydroelectric power, construction, operations, maintenance, repair, and similar aspects.
This would help grow a local workforce that is skilled and knowledgeable in working
with renewable energy systems. As Alaska builds more renewable energy projects, a
workforce well-trained with these unique mechanical and electrical systems will be
critical to reducing construction costs and maximizing operational life for these projects.
SECTION 6. - SUSTAINABILITY
Over 100 years of experience in Alaska have proven hydroelectric projects to be the most
sustainable power generation technology and investment available. No other generation
technology has come close to having the historical longevity and the future potential of
hydroelectric projects. Once the hurdle of the initial capital cost is overcome, the projects are
successfully maintained and renewed by all classes of communities in Alaska.
This project will be operated by IP. IP's members have the experience, capability, and
willingness to operate the project for the long term. Also, IP will explore potential economies or
synergies that may be possible by partnering or working with the City of Seward's electric and
public works utilities to reduce operating costs for the project.
Annual O,M,R & R costs for the project will be funded by project revenues. In the design phase,
a financial management plan will be developed to project long term cash flow requirements for
project operations. This plan may include the following elements:
¾ An operating fund to pay for routine operating, maintenance, repair and replacement costs
on a sustainable basis from annual project revenues. The operating fund may be designed
to provide adequate cash reserves for annual cash flow fluctuations and also for low water
years and other causes of revenue volatility.
¾ Dedicated sinking fund(s) for certain large infrequent expenses, such as turbine overhauls.
¾ Contingency funds, lines of credit, and/or insurance policies to cover expenses from
infrequent events, such as floods or natural disasters.
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009 PAGE 19 OF 28
IP commits to reporting savings and benefits from the project for the project's economic life, or
shorter period as desired by the Alaska Energy Authority and its successor agencies.
SECTION 7. - READINESS & COMPLIANCE WITH OTHER GRANTS
IP has already demonstrated its commitment to this project by completing a reconnaissance study
and initial feasibility assessment for the project, which will be issued in November 2009. These
studies were funded mostly by IP, with a grant from State of Alaska under the Renewable
Energy Grant Program. IP will continue to advance the project so its benefits may be enjoyed by
the current and future residents of Seward and the railbelt population generally.
IP is in compliance with existing grants.
SECTION 8. - LOCAL SUPPORT
IP has actively engaged the local government and community in Seward to educate them about
the project. IP has given several presentations to the Ports and Commerce Advisory Board
(PACAB) and Seward City Council, and has also met with the City's elected officials and key
administration personnel on a number of occasions to discuss the project. Seward officials and
PACAB members have all expressed an interest in the project, and are very interested to learn
more about the project's details and probable costs. A resolution supporting continued study of
the project is on the PACAB’s agenda for their December 2, 2009 meeting.
Additionally, IP has kept Chugach Electric Association, Inc. (CEA) informed about the project.
As a potential customer for all or part of the project's output, CEA remains interested in the
project's continued progress.
The Seward Chamber of Commerce recently passed a resolution supporting continued study of
the Fourth of July Creek project. The resolution is attached.
SECTION 9. - GRANT BUDGET
To date, IP has invested over $30,000 in study of the Fourth of July Creek Project. Additionally,
the State of Alaska has invested $20,000 in grant funds under the Renewable Energy Grant
Program.
IP is requesting $136,500 in FY 2012 grant funds to complete the feasibility phase of study for
the project. IP will provide $61,500 in matching funds as cash and in-kind services.
As demonstrated in the recently completed reconnaissance phase, IP is committed to advancing
this project in an efficient and expeditious manner, and will cover additional costs that IP
considers necessary or appropriate to advance the project.
The Grant Budget Form is attached to this application.
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009
A. ATTACHMENT A – CONTACT INFORMATION AND RESUMES
REPRESENTATIVE HYDROELECTRIC PROJECTS
polarconsult alaska, inc.
OOLLAARRCCOONNSSUULLTT AALLAASSKKAA,, IINNCC.., has extensive experience designing, permitting, constructing and
operating hydroelectric plants in Alaska. Our design professionals have been involved in hydro
in Alaska since 1966, and collectively have over 95 years of exper ience in the field.
SSEELLEECCTTEEDD HHYYDDRROO PPRROOJJEECCTTSS BBYY PPOOLLAARRCCOONNSSUULLTT EENNGGIINNEEEERRSS
P
Project Design
Capacity
Type of
Project Location Services Rendered
Mc Roberts
Creek 100 kW Run of River Palmer, AK Design, Permitting, Construction, Operation,
Owner.
Roy's Creek /
Crooked Creek 80 kW Run of River Elfin Cove, AK Reconnaissance and Feasibility Study,
Preliminary Design, FERC Permitting.
Knutson Creek 125 kW Run of River Pedro Bay, AK Reconnaissance Study.
Fourth of July
Creek 5,400 kW Run of River Seward, AK Reconnaissance and Feasibility Study, Owner.
Fishhook Creek 2,000 kW Run of River Hatcher Pass, AK Reconnaissance and Feasibility Study,
Permitting, Design, Construction, Owner.
Indian River 125 kW Run of River Tenakee Springs, AK Feasibility Study, Preliminary Design,
Permitting.
Glacier Fork 80,000 kW Storage Knik, AK Reconnaissance and feasibility study.
Indian Creek 60 kW Storage Chignik, AK Permitting, FERC Relicense.
Larsen Bay 475 kW Run of River Larsen Bay, AK Design, Permitting.
Old Harbor 500 kW Run of River Old Harbor, AK Feasibility Study, Design, FERC Permitting.
O’Brien Creek /
5 Mile Creek 400 kW Run of River Chitna, AK Feasibility Study, Preliminary Design.
Lace River 4,950 kW Storage Near of
Juneau, AK Preliminary Design, FERC Permitting.
Chuniisax
Creek 280 kW Storage Atka, AK Feasibility Study, Preliminary Design,
Permitting.
Angoon 600 kW Storage Angoon, AK Feasibility Study, Preliminary Design.
IINNDDIIAANN CCRREEEEKK HHYYDDRROO FFEERRCC LLIICCEENNSSIINNGG
PPOOLLAARRCCOONNSSUULLTT managed the FERC licensing process for
the owner of Indian Creek Hydro, a 60-kW installation
located in Chignik, Alaska. The multi-year FERC
licensing process required significant effort and
coordination relating to the development of the
Environmental Assessment. Key activities included:
Ø NEPA scoping meetings,
Ø Stream gauging and fish surveys,
Ø Geomorphological surveys of Indian Creek, and
Ø Preparation of License Application and EA.
REPRESENTATIVE HYDROELECTRIC PROJECTS
MMccRROOBBEERRTTSS CCRREEEEKK HHYYDDRROO
PPOOLLAARRCCOONNSSUULLTT principals designed, built, own
and operate the McRoberts Creek Hydro, located
near Palmer, Alaska. The 100-kW run-of-river
project has delivered power to the Matanuska
Electric Association grid since 1991.
The McRoberts Project is an excellent example
of renewable energy systems benefiting Alaskan
communities. The project has improved
recreational access to the Matanuska Peak area,
operates in harmony with the environment, and
provides renewable energy to local homes and
businesses.
OO’’BBRRIIEENN CCRREEEEKK HHYYDDRROO
PPOOLLAARRCCOONNSSUULLTT completed a conceptual design for
the Alaska Energy Authority to evaluate a run-of-
river hydroplant on O’Brien Creek to serve the
communit y of Chitina, Alaska on the Copper River.
Key activities included:
Ø Paper study to define project parameters,
Ø Handling and analysis of large LIDAR data set
to finalize a conceptual design,
Ø Field reconnaissance to evaluate intake
locations and penstock corridors, and
Ø Preliminary project cost estimate.
CCHHUUNNIIIISSAAXX CCRREEEEKK HHYYDDRROO
PPOOLLAARRCCOONNSSUULLTT designed and permitted a 280-kW run-of -river
hydro plant to offset costly diesel-electric power for the village of
Atka in the Aleutian Islands. Key project features include:
Ø A small concrete dam,
Ø 1,000-foot HDPE penstock, and
Ø Cross-flow turbine.
The project, to be completed in 2010, is expected to significantly
reduce power rates in the village.
polarconsult alaska, inc.
energy systems – environmental services – engineering design
1503 West 33rd Avenue, Suite 310 tel: 907.258.2420
Anchorage, Alaska 99503 fax: 907.258.2419
Internet Website: http://www.polarconsult.net
REPRESENTATIVE PROJECTS - HYDROELECTRIC
1
RECENT POLARCONSULT PROJECTS & PROJECT REFERENCES
Polarconsult has extensive experience working on all aspects of hydroelectric development.
From reconnaissance, feasibility, permitting, design, construction, inspection, operation,
maintenance, monitoring, and retrofitting, Polarconsult’s professional staff understands all
aspects of hydroelectric projects. Engineering budgets for past and current projects range from
tens of thousands to over a million dollars.
Polarconsult principals designed, built, own and operate the McRobert’s Creek Hydro, located
near Palmer, Alaska. The many lessons learned from owning and operating our own
hydroelectric project translates into valuable experience that pays off immensely for other
projects. One of the biggest obstacles to proper operation of a hydroelectric facility is intake
design. After numerous refinements, Polarconsult has designed and constructed an intake for the
McRobert’s project that operates automatically and virtually maintenance free even when
subjected to the onslaught of debris brought about by floods and seasonal changes.
Another successful project, located in Pelican, Alaska, involved designing a steel support system
for an aging timber crib dam. Limited by helicopter access and narrow construction windows,
the location required a design that not only withstood the large forces of floods but needed to be
light enough and simple enough to be airlifted and quickly put into permanent place. Accurate
surveying, 3-D design, and close coordination with the project owner all resulted in a unique and
successful solution without an extravagant budget.
The experience and knowledge that Polarconsult’s professionals bring to a project are
exemplified by our work on the Kasidaya Creek hydroelectric project. Brought in by Alaska
Power and Telephone due to excessive costs on a tunnel and intake for a project that was in the
midst of construction, Polarconsult spent half a day in the field at the project site and provided
valuable insight and advice that changed the course of the construction to reduce project costs
and maintenance. Polarconsult’s recommendations to provide an access route up the creek to the
intake site were ultimately adopted into the now completed project.
All of Polarconsult’s core professionals have been involved in the numerous engineering
challenges surrounding hydroelectric projects for many years. Any one of our professional
engineers is more than capable of successfully identifying all the issues in a hydroelectric project
and using our comprehensive background and knowledge to forge solutions that aren’t narrowly
focused or short sighted.
SELECTED PROJECT PROFILES
Project: Pelican Dam Reinforcement and Penstock Design
Client: Pelican Seafoods
Reference Contact: Tom Whitmarsh, Pelican Seafoods, 907-735-2204
Engineering Budget: $175,000
Description
The Pelican Hydroelectric Power Plant was first constructed around 1946 to supply water and
power to the Pelican Seafoods Cannery constructed around the same time. A Dam Safety Review
determined that there was potential for failure of the existing timber crib dam during flood stages.
A field investigation was conducted to prepare an as-built of the existing timber crib dam, intake
structure, timber flume, wood stave penstock, and power plant. A unique design was arrived at to
shore up the existing dam to be stable under flood stages, and upgrade the existing intake to cut
down head losses.
REPRESENTATIVE PROJECTS - HYDROELECTRIC
2
Additionally, Polarconsult recently completed a design for replacement of the original flume,
surge tank, and elevated penstock. The design includes a new surge tank, new penstock, and
modifications to the intake and dam wing walls.
Project: Chignik Relicense
Client: Trident Seafoods
Reference Contact: Mike Duckworth, Trident Seafoods, 206-617-6612
Engineering Budget: $150,000
Description
Included in a Federal Energy Regulatory Commission (FERC) License are significant efforts and
coordination relating to the development of the Environmental Assessment. Activities include:
• National Environmental Protection Act (NEPA) scoping meetings
• Stream Gauging
• Fish Surveys
• Geomorphological surveys of Indian River including fish habitat analysis
• Dissemination of all data and correspondence through the development of a Project web
page and through traditional hard copy to over 50 particpants
The entire relicensing process was completed under the “applicant prepared EA” process in less
than 2 years (typically licensing time is 3 to 5 years).
Project: Larsen Bay Hydroelectric
Client: CRW Engineering Group, LLC
Reference Contact: Lenny Landis, AEA, 440-9320
Engineering Budget: $16,000
Description
Performed original design of 475 kW project with a gross head of 665 feet and a flow of 11 cfs.
Subsequent work included site inspection and analysis of existing hydroelectric system with
recommendations for upgrades to existing intake and penstock, addition of drainage diversion to
increase water flow to plant for increased power production, and consulting on controls upgrades
to interconnect hydro plant to community diesel generation plant.
The work activities also included the following:
• Analysis of hydrologic data to determine maximum potential power output on a monthly
basis
• Development of a parts list and the performance of ultrasonic thickness testing of the
penstock in the powerhouse
• Inspection of cracked turbine blades for hydroelectric plant
• Recommendations for repair of turbine as appropriate to the City and AEA
Project: Atka Hydro
Client: Alaska Energy Authority and CRW Engineering Group, LLC.
Reference Contact: Julie Dirks, City of Atka, 907-581-6226
Engineering Budget: $200,000
Description
Designed the 270 kW hydroelectric facility in Atka that is currently under construction.
Activities include the following:
• Topographic surveying to layout project features and tie into known monuments
• Development of legal descriptions based on survey data and final design for necessary
easements
REPRESENTATIVE PROJECTS - HYDROELECTRIC
3
• Investigation and description of anadromous fish affected by and in the project area
(including fish habitat assessments and setting of fish traps to capture and identify
species)
• Design of 1,060 feet of 30-inch diameter High Density Polyethylene Pipe (HDPE)
penstock
• Design of a cable stayed bridge spanning 100 feet
• Design of the 7.2/12.4 kV electrical cable connecting to the existing system
• Design of the powerhouse
• Specification of the turbine and generator
• Design of the 13-foot-high impoundment dam
Project: Fishhook Hydroelectric Project
Client: Fishhook Renewable Energy, LLC
Engineering Budget: $125,000
Description
Currently in the permitting phase, this project includes completion of a feasibility study,
permitting, and design of 2.0 MW run-of-river hydroelectric plant located on Fishhook Creek in
Hatcher Pass, Alaska. Performed surveying utilizing RTK GPS equipment and developed cost
estimates and a feasibility study by the fall of 2006.
Project: Kasidaya (Otter) Creek Intake
Client: Alaska Power & Telephone Company
Reference Contact: Vern Neitzer, AP&T, 907-983-2202
Engineering Budget: $15,000
Description
Site Inspection and project review. Provided a brief letter report to assist AP&T in seeking a
lower cost alternative for the intake and penstock tunnel that were in the original design. Project
was well into construction at the time. Made recommendations on an alternative for a dam,
intake configurations, access routes, and permitting actions. AP&T ultimately reconfigured the
original design based on our recommendations.
Project: Lace Hydro
Client: Lace River Hydro
Reference Contact: Bob Grimm, AP&T, 360-531-0320
Engineering Budget: $800,000
Description
Currently in the FERC licensing phase, this project involves feasibility investigation, FERC
permitting, and design of a 5 MW hydroplant in southeast Alaska. The Project intake is located
at an unnamed lake that would be used for storage. The lake has a surface area of approximately
384 acres. The dam intake is located at an elevation of 3,180 feet. From the intake, there would
be 7,600 feet of 21-inch diameter steel pipe leading to the powerhouse. The net hydraulic head is
3,000 feet. The project flow is estimated to be approximately 27 cfs. The total estimated energy
production of this project is 34,164,000 Kilowatt hours. Power transmission would consist of 5
miles of 14.4/24.9 kV buried cable and 7.1 miles of overhead transmission lines.
Project: McRobert's Creek Hydroelectric Project
Client: Earle Ausman, Enerdyne
Engineering Budget: $60,000
Description
REPRESENTATIVE PROJECTS - HYDROELECTRIC
4
McRobert's Creek Hydroelectric Plant is an excellent example of how cost effective a small
hydroelectric plant in Alaska can be. McRobert's Creek is located three miles to the east of
Palmer and is fed by the rock glaciers that lay below Matanuska Peak. The mountainous and
rugged terrain required PCA to use non-conventional construction techniques to complete the
project. Due to the terrain it was not feasible or environmentally desirable to build a road to the
power plant. The project was completed in an environmentally sound and aesthetically pleasing
manner. Hikers and horseback riders now use the trail for access to Matanuska Peak. The "run
of the river" facility consists of a rock gabion diversion to funnel the water into a 4,200-foot,
twelve-inch-diameter polyethylene pipeline. A 7,000-gallon storage tank is used to regulate the
system so that a large dam and associated reservoir are not necessary. Other physical features
include 8,800 feet of phone line, 4,600 feet of 7,200 kVA power cable, 8,600 feet of access trail,
and a 12-foot by 12-foot concrete block powerhouse. The plant operates at 445 feet of gross head
and runs year round delivering 100 kW to the Matanuska Electric Authority grid. The plant was
designed and built by Polarconsult at a cost of $2,000 per kW. Polarconsult President Earle
Ausman is the owner of the facility.
Project: Southfork Hydro Plant
Client: South Fork Construction
Reference Contact: Phyllis Janke, South Fork Construction, 694-4351
Engineering Budget: $80,000
Description
Currently under construction and permitting, this project involves feasibility, design, and
permitting of a 1.2 MW hydroplant on the south fork of Eagle River.
The South Fork Hydro project is a run-of-river plant with a capacity of 1,200 kW. Scheduled to
be completed in 2009, the project will use water from the South Fork of Eagle River which drains
a 26-square-mile area. The project will divert 53 cfs from the South Fork. The elevation of the
intake pool is 1,180 feet and the elevation of the draft tube pool where the turbines discharge is
803 feet for a gross head of 377 feet. The pipe will be 32-inch, SDR 32.5 high density
polyethylene pipe (HDPE). About 3,175 feet from the intake, the pipe will change to SDR 26.
This HDPE pipe continues for the next 175 feet where it transitions to 300 feet of 30-inch steel
pipe. There will be four 300 kW turbine-generator sets. One turbine will be a Pelton wheel with
4 jets which will turn at 1200 rpm. The turbine will drive a 300 kW induction generator. This
unit will be used to operate at all of the intermediate flows as it is an excellent partial load device.
The other 3 units will be pump-turbines which are centrifugal pumps run as turbines. They will
be vertical assemblies and will turn at 1800 rpm.
REPRESENTATIVE PROJECTS - HYDROELECTRIC
5
SELECTED PROJECT LIST
In addition to the projects listed under Selected Project Profiles, Polarconsult has performed
numerous feasibility studies and designs as the following list indicates.
Job Name Client Year
Knutson Creek Hydro Feasibility Study Pedro Bay Tribal Council 2009-10
Packer’s Creek Hydro Design and Permitting Chignik Lagoon Power Utility 2009-10
Burro Creek Hydro Study Burro Creek Holdings, LLC 2009-10
Old Harbor FERC Licensing Alaska Village Electric Cooperative, Inc. 2009-10
Indian River Hydro Feasibility Study, Conceptual
Design and Permitting City of Tenakee Springs 2009-10
Elfin Cove Reconnaissance and Feasibility Study Community of Elfin Cove 2009-10
Pedro Bay Reconnaissance Study Pedro Bay Tribal Council 2009
Pelican Hydroelectric Upgrade Design Alaska Energy & Engineering, Inc. 2008-10
Fourth of July Creek Reconnaissance Study Independence Power, LLC 2008
Glacier Fork Hydro Reconnaissance Study Glacier Fork Hydro, LLC 2008
Pelican Hydroelectric Retrofit Alaska Energy Authority 2007
Archangel Creek Hydro Jill Reese Investments & Brokerage 2007
O'Brien Creek Reconnaissance Survey Alaska Energy Authority 2007
Fishhook Hydroelectric Project Fishhook Renewable Energy, LLC 2007
Allison Lake Hydro Project Green Power Development, LLC 2007
Atka Hydro Cost Estimate Alaska Energy Authority 2007
Chitina Conceptual Design Alaska Energy Authority 2006
Kasidaya (Otter) Creek Intake Alaska Power & Telephone Company 2006
Larsen Bay Alaska Energy Authority 2006
Chuniisax Hydro Phase 3 Alaska Energy Authority 2006
Chignik Bay Scoping Field Trip Alaska Energy Authority 2005
Atka Hydro Design Changes and Inspection Alaska Energy Authority 2005
Larsen Bay Turbine Repair City of Larsen Bay 2005
Old Harbor Archiving Alaska Village Electric Cooperative, Inc. 2005
Chignik Dam Inspection Norquest Seafoods Inc 2004
Larsen Bay Hydroelectric Upgrade Alaska Energy Authority 2004
Chignik Stream Gauge Installation Alaska Energy Authority 2004
Atka Revisions Alaska Energy Authority 2004
Chignik Relicense Trident Seafoods 2003
Atka Hydro Design City of Atka 2003
Old Harbor Project Review Alaska Energy Authority 2002
Atka Hydro F&G City of Atka 2002
Scammon Stream Gauging Alaska Village Electric Cooperative, Inc. 2002
Old Harbor - Alternate Powerhouse Location Alaska Village Electric Cooperative, Inc. 2002
Old Harbor Project Comparison Alaska Village Electric Cooperative, Inc. 2001
Pelican Penstock Design Pelican Seafoods 2001
Old Harbor Hydro Project - Design Alaska Village Electric Cooperative, Inc. 2000
Old Harbor Hydro Project - FERC Licensing Alaska Village Electric Cooperative, Inc. 1999
Chignik Dam Survey Norquest Seafoods Inc 1999
Southfork Hydro Plant South Fork Construction 1998
REPRESENTATIVE PROJECTS - HYDROELECTRIC
6
Job Name Client Year
Lace Hydro Lace River Hydro, LLC 1997
Atka Hydro Investigation City of Atka 1996
Chignik Lagoon Hydro Study Chignik Lagoon 1995
Old Harbor Hydropower Feasibility Study Alaska Village Electric Cooperative, Inc. 1995
Terror Lake desander Tango Construction Co 1994
Tenakee Springs/Indian River Hydro City of Tenakee Springs 1993
Pelican Seafoods Hydroelectric Renovation Pelican Seafoods 1993
Angoon Hydroelectric Investigation Alaska Energy Authority 1992
Humpback Creek Hydroelectric Cordova Electric 1992
Snyder Falls Hydroelectric Study Earl Ellis & Associates 1990
McRobert’s Creek Hydroelectric Project Earle Ausman 1990
Larsen Bay Hydroelectric Plant City of Larsen Bay 1990
Snettisham Hydroelectric Project US Army Corps of Engineers, Alaska District 1989
Chitina Micro Hydro Project Chitina Village Council 1989
Burnett Inlet Hydroelectric Plant Design Alaska Aquaculture 1988
Ouzinkie Hydroelectric Plant City of Ouzinkie 1986
In addition, Polarconsult’s project team has extensive experience with design and force account
construction of many types of rural projects in addition to hydro. These include utility design
and construction management of water, sewer, and electrical projects. Much of this work was
performed for the City of St. Paul, and our experience extends to many other communities
throughout Alaska as well. It is important to emphasize that most of the work is performed by
force account using local labor and other resources.
Polarconsult believes it is important to have people build their own projects so they can operate
and repair them. It is also important to make them economical and keep the maximum amount of
money in the community.
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009
B. COST WORKSHEET
Renewable Energy Fund Round 4
Project Cost/Benefit Worksheet
RFA AEA11-005 Application Cost Worksheet Page 1 9-15-10
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: Fourth of July Creek Hydroelectric Project
The Applicant should demonstrate that the renewable energy resource is available on a
sustainable basis.
Annual average resource availability. 120 cfs at 47% availability = 21.7 GWh of net
energy output for average water year.
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 Railbelt1 grid, leave this section blank)
i. Number of generators/boilers/other N/A – on railbelt
ii. Rated capacity of generators/boilers/other N/A – on railbelt
iii. Generator/boilers/other type N/A – on railbelt
iv. Age of generators/boilers/other N/A – on railbelt
v. Efficiency of generators/boilers/other N/A – on railbelt
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor N/A – on railbelt
ii. Annual O&M cost for non-labor N/A – on railbelt
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] N/A – on railbelt
ii. Fuel usage
Diesel [gal] N/A – on railbelt
Other N/A – on railbelt
iii. Peak Load N/A – on railbelt
iv. Average Load N/A – on railbelt
v. Minimum Load N/A – on railbelt
vi. Efficiency N/A – on railbelt
vii. Future trends N/A – on railbelt
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] N/A – on railbelt
ii. Electricity [kWh] N/A – on railbelt
iii. Propane [gal or MMBtu] N/A – on railbelt
iv. Coal [tons or MMBtu] N/A – on railbelt
v. Wood [cords, green tons, dry tons] N/A – on railbelt
vi. Other N/A – on railbelt
1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric
Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power.
Renewable Energy Fund Round 4
Project Cost/Benefit Worksheet
RFA AEA11-005 Application Cost Worksheet Page 2 9-15-10
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]
5.4 MW of installed capacity
Run-of-river hydroelectric installation
47% capacity factor
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] 21,700,000 kWh/year
ii. Heat [MMBtu] -
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu] N/A
ii. Coal [tons or MMBtu] N/A
iii. Wood [cords, green tons, dry tons] N/A
iv. Other N/A
4. Project Cost
a) Total capital cost of new system $16,700,000
b) Development cost $ 850,000
c) Annual O&M cost of new system $ 300,000
d) Annual fuel cost zero
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 184,000 MCF of Natural Gas per year
ii. Heat N/A
iii. Transportation N/A
b) Current price of displaced fuel $1,676,000 per year (at $9.00 per MCF)
c) Other economic benefits $ 280,000 per year
d) Alaska public benefits $0 in quantifiable economic terms
6. Power Purchase/Sales Price
a) Price for power purchase/sale $0.071/kWh
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 50,200,000 / 16,700,000 = 3.01
Payback (years) 16,700,000 / 1,956,000 = 8.5 years
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009
C. GRANT BUDGET FORM
Renewable Energy Fund Grant Round 4Grant Budget FormFourth of July Creek Hydroelectric Project09/15/10RE- Fund Grantee MatchingSource of Matching Funds: Grant Funds FundsCash/In-kind/Federal Grants/Other State Grants/Other1. Subcontractor Solicitations (1)Aug-10$28,265 $12,735 Cash $41,0002. Feasibility Study Activities 2.1 Hydrology Study (Year 2, start Year 3)Nov-10$25,508 $11,492 Cash / In-Kind Services $37,000 2.2 Geotechnical InvestigationsNov-10$13,098 $5,902 Cash / In-Kind Services $19,000 2.3 Site Topographic SurveyDec-10$8,273 $3,727 Cash / In-Kind Services $12,000 2.4 Identify Land and Regulatory IssuesMar-12$11,720 $5,280 Cash / In-Kind Services $17,000 2.5 Permitting and Environmental IssuesMar-12$11,030 $4,970 Cash / In-Kind Services $16,000 2.6 Conceptual Design Analysis and Cost EstimateMay-12$17,235 $7,765 Cash / In-Kind Services $25,000 2.7 Detailed Economic and Financial AnalysisJun-12$4,826 $2,174 Cash / In-Kind Services $7,000 2.8 Conceptual Business and Operations PlansJun-12$8,273 $3,727 Cash / In-Kind Services $12,0003. Final Report and RecommendationsJul-12$8,273 $3,727 Cash / In-Kind Services $12,000TOTALS$136,500 $61,500 $198,000Direct Labor & Benefits $78,591 $35,409 In-Kind Services $114,000Travel & Per Diem$3,447 $1,553 Cash / In-Kind Services $5,000Equipment$2,068 $932 Cash / In-Kind Services $3,000Materials & Supplies $6,894 $3,106 Cash / In-Kind Services $10,000Contractual Services $28,265 $12,735 Cash $41,000Construction Services $0 $0 - $0Other$17,235 $7,765 Cash $25,000 TOTALS$136,500 $61,500 $198,000Budget Categories:Milestone or TaskAnticipated Completion DateTOTALSApplications should include a separate worksheet for each project phase (reconnaissance, feasibility, design permitting, and construction)Add additional pages as needed.
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009
D. LOCAL SUPPORT
Date: October 22, 2009
Action: Passed
Vote: Unanimous
SEWARD CHAMBER OF COMMERCE, CVB
BOARD OF DIRECTORS
RESOLUTION 2009-02
A RESOLUTION TO SUPPORT CONTINUED STUDY OF THE LOW-IMPACT
RUN_OF_RIVER HYROELECTRIC FACILITY PROPOSED AT FOURTH OF JULY
CREEK.
WHEREAS, Independence Power, LLC, and Alaska corporation based in Anchorage and owned
by Alaskans, has proposed to construct a low-impact run-of-river hydroelectric facility on Fourth
of July Creek within the City of Seward; and
WHEREAS, Independence Power, LLC believes, based upon available information, that the
hydroelectric project would not negatively affect: 1. fish habitat in Fourth of July Creek; 2. public
drinking water supplies in the Fourth of July Creek vicinity; 3. aesthetics in the project vicinity;
or 4. flood hazards to existing developments in the Fourth of July Creek area; and
WHEREAS, Independence Power, LLC believes, based upon available information, that the
hydroelectric project would have an installed capacity of 4.0. to 5.0 megawatts, and produce
17,000 to 23,000 megawatt-hours of energy annually; equal to about 1/3rd of the community’s
current annual electrical energy needs; and
WHEREAS, the hydroelectric project would provide local renewable energy to the Seward
vicinity, reducing long-term energy costs, improving long-term price stability, and increasing
reliability of electrical service to the commity.
NOW THEREFORE, BE IT RESOLVED BY THE SEWARD CHAMBER OF
COMMERCE/CVB BOARD OF DIRECTORS, that:
The Seward Chamber of Commerce endorses and supports the continued study of the proposed
hydroelectric project on Fourth of July Creek, and recognizes that the project has potential to
provide numerous direct and indirect long-term benefits to the City of Seward and the railbelt
population generally.
PASSED AND APPROVED BY THE SEWARD CHAMBER OF COMMERCE/CVB
BOARD OF DIRECTORS THIS 22d DAY OF OCTOBER, 2009.
__________________________
President
ATTEST:
_________________________
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009
E. ELECTRONIC COPY OF APPLICATION
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009
F. AUTHORIZED SIGNERS FORM
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009
G. GOVERNING BODY RESOLUTION AUTHORIZING
APPLICATION
INDEPENDENCE POWER, LLC RENEWABLE ENERGY FUND GRANT APPLICATION
FOURTH OF JULY CREEK HYDROELECTRIC PROJECT
NOVEMBER 10, 2009
I. MAPS AND SUPPLEMENTAL INFORMATION