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HomeMy WebLinkAboutElfin Cove REFund GrantApp ALASKA RENEWABLE ENERGY FUND GRANT APPLICATION Round IV – FY 2012 For PHASE 3 OF ELFIN COVE HYDROPOWER PROJECT Submitted to Alaska Energy Authority 813 West Northern Lights Boulevard Anchorage, Alaska 9503 By Elfin Cove Utility Commission Community of Elfin Cove Non-Profit Corporation PO Box 2 Elfin Cove, Alaska 99825 September 15, 2010 Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 2 of 27 9/14/2010 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Community of Elfin Cove Non-Profit Corporation, Elfin Cove Utility Commission Type of Entity: Public Electric Utility Mailing Address PO Box 1, Elfin Cove, AK 99825 Physical Address Community Building, Elfin Cove Telephone 907-239-2226 Fax 907-239-2226 Email janedbutton@gmail.com 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Jane Button Title Project Administrator Mailing Address PO Box 2, Elfin Cove, AK 99825 Telephone 907-723-8514 Fax 907-239-2226 Email janedbutton@gmail.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. Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 3 of 27 9/14/2010 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) Elfin Cove Hydroelectric Project 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project. The project will be located on Crooked Creek and Jim’s Lake, located approximately one mile south of Elfin Cove. The project will benefit Elfin Cove. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind Biomass or Biofuels X Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Reconnaissance X Design and Permitting Feasibility Construction and Commissioning Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. The project will include a run-of-river hydroelectric project between Crooked Creek and Jim’s Lake (the upper project), and a second storage hydroelectric project between Jim’s Lake and tidewater (the lower project). According to Polarconsult’s June 2010 Reconnaissance Study, the upper project would have an estimated installed capacity of 50 kW, and the lower project would have an estimated installed capacity of 150 kW. These projects will meet an estimated 97% of Elfin Cove’s existing electrical demand, and also provide a substantial amount of interruptible excess electricity. Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 4 of 27 9/14/2010 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.) Based on current studies, we will be able to meet our energy needs solely with hydroelectric power from this project for nearly all of the year. The diesel power plant would only need to be used during hydro maintenance episodes, or during long droughts in the summertime. The estimated fuel savings will be 27,400 gallons of diesel fuel per year. Using the average 2010 fuel price in Elfin Cove of $4.00/gallon, this equates to an annual savings of $109,600 in power plant fuel alone. Over the course of the next 20 years, if fuel prices remained constant, this savings would amount to over $1.6 million. The mid range EIA energy forecast for Elfin Cove prepared by AEA in 2010 projects a heating fuel cost in Elfin Cove of $3.99 a gallon in 2010 which is consistent with current prices for diesel fuel for the power plant. AEA’s heating fuel price projections are therefore used for calculating project benefits. Using these fuel cost projections, the present worth of avoided fuel purchases for the electric utility over the project's 50 year life is over $4 million. Much of the analysis of benefits of this project depends on the price of fuel. Because of the high cost of transporting fuel to Elfin Cove’s remote location, and its limited selection of fuel suppliers, the decline in fuel prices in 2009 was barely felt in Elfin Cove. Yet long-term fuel price increases, such as we saw in 2008, are magnified in Elfin Cove. Therefore, fuel savings from this project are likely to remain important in Elfin Cove. Changes in the federal requirements for vessels transporting fuel on water will be implemented within the next five years, likely resulting in even higher costs for diesel fuel used to generate electricity. Saving fuel is not the only benefit of this project. Maintenance and repair costs on the diesel generators will also be substantially diminished. Reduced loads on the newly renovated power plant will greatly extend the life of those diesel generators, thereby reducing replacement costs. This green energy source will further benefit the Alaskan public with cleaner air, less noise pollution, diminished fossil fuel deliveries to Elfin Cove, a more pristine environment, etc. All these factors will help to keep Alaska unspoiled, maintaining its desirability as a tourist destination. Tourism is important as a fundamental economic engine, in many parts of Alaska, and it contributes considerably to the economy of Elfin Cove. 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. For Phase 3 – Permitting and Design (proposed here) the total funds needed are $395,000, which would consist of $347,000 in grant funding, and $48,000 in local matching funds. In addition, there will be in- kind contributions of local labor, grant management, materials, tools, and logistical support (i.e., transport by boat, and other access to the project site). The estimated costs for the full project (Phase 3 and Phase 4 - Construction) are shown in Table 1, on the following page. These estimates are based on the assumption that Phase 3, including the FERC permitting process, will take three years, beginning in 2011, and that Phase 4, the construction, can begin in 2014. Phase 3 (Design & Permitting) Phase 4 (Construction) Recon Cost Estimate Work Item Estimate (2010$)in 2014$ FERC Licensing & Permitting 185,000 Geotech, Hydrology, Surveys, Site Control 60,000 Design 134,800 Local Project Administration 15,200 Phase 3 Subtotal 395,000 Transmission / Communications 210,000 Access Trails 250,000 Intake Structures 150,000 Penstocks 150,000 Powerhouses 725,000 Equipment 145,000 Freight 68,000 Construction Subtotal 1,698,000$ 2,008,000$ Design and Construction Engineering 125,000 148,000 Construction Management & Administration 60,000 71,000 Project Subtotal -$ 1,883,000$ 2,227,000$ 15% Contingency 282,450 334,000 Phase 4 Subtotal 395,000$ 2,165,450$ 2,561,000$ Proposed funding sources for Phase 3 Alaska Renewable Energy Fund grant 347,000$ Local matching funds 48,000$ Totals 395,000$ Table 1. Crooked Creek/Jim's Lake Hydroelectric Generation Cost Estimate Summary Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 5 of 27 9/14/2010 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. $ 347,000 2.7.2 Other Funds to be provided (Project match) $ 48,000 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 395,000 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.4 Total Project Cost (Summary from Cost Worksheet including estimates through construction) $3,100,000 2.7.5 Estimated Direct Financial Benefit (Savings) $4,023,176 (fuel offset, O&M savings, and space heating fuel offsets from interruptible energy usage.) 2.7.6 Other Public Benefit (If you can calculate the benefit in terms of dollars please provide that number here and explain how you calculated that number in your application (Section 5.) Incalculable, but valuable. See third paragraph of Section 2.5, above. Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 6 of 27 9/14/2010 SECTION 3 – PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully completing the project within the scope, schedule and budget proposed in the application. 3.1 Project Manager Tell us who will be managing the project for the Grantee and include contact information, a resume and references for the manager(s). If the applicant does not have a project manager indicate how you intend to solicit project management support. If the applicant expects project management assistance from AEA or another government entity, state that in this section. The Community of Elfin Cove uses an open process to solicit applications and select personnel for local project positions, so we cannot say for certain who will be the project manager(s). For recent electric power-related projects in Elfin Cove, Jane Button and Hap Leon have served as local project administrators, and they have managed the recent and on-going efforts to develop this project. Ms. Button and Mr. Leon both have experience in project management, most recently including coordinating the power plant replacement, the power distribution system improvements, and Phase 2 of the Community’s hydroelectric project (currently underway). Resumes for Ms. Button and Mr. Leon are attached to this grant application. During these recent projects, we have also benefited from project management support that AEA provides to rural Alaskan communities, and we would welcome that support in this next phase as well. 3.2 Project Schedule Include a schedule for the proposed work that will be funded by this grant. (You may include a chart or table attachment with a summary of dates below.) A schedule for Phase 3, as proposed here, is shown in Table 2, on the following page. This schedule is based on the assumption that a grant agreement can be in place by July 1, 2011. We have an engineering firm retained under Phase 2 of this project (reconnaissance and feasibility study), which will be completed by the end of 2010, so we can give the engineers notice to proceed shortly after the grant is awarded. The engineers are scheduled to have the feasibility study completed this November, and will file permit applications on the community’s behalf by the end of 2010. Project design would proceed in pace with the permitting process under the requested Phase 3 funds. The schedule for permitting will be determined by the FERC process. If the projects are eligible for a <5 MW exemption from licensing, a FERC exemption could be obtained in as little as one year. Obtaining a FERC license could take three years. At this time, it is assumed that the project will require a FERC license, which would be issued in 2014. The project would be constructed during 2014, possibly extending into 2015. If unexpected issues should arise during the FERC process, the schedule might need to be extended somewhat beyond that shown in Table 2. We are aware that sometimes resource concerns require that changes be made in the design or operation of power plants. Although we have seen no evidence that Crooked Creek or Jim’s Lake are fish habitat, new information may arise during the course of Phase 3, and there may be other concerns which require modifications to the system design. For this reason, Table 2 shows possible additional engineering work (indicated by the cross-hatched bar) during the first half of 2013. Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 7 of 27 9/14/2010 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.) A detailed schedule for Phase 3 of this project, including key tasks and milestones, is shown in Table 2, on the preceding page. The key tasks are design and engineering, and coordinating the permitting process for the hydroelectric power project. This latter task includes resolving any environmental issues that are identified. These tasks are broken out in more detail in Table 2, along with relevant milestones for the project. 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. The Community of Elfin Cove has contracted with Polarconsult Alaska, Inc., as the engineering firm to work with us as part of Phase 2 of this project. One of our criteria for selecting this firm was that they will be able to work with us through Phase 3 (proposed here) and be available for construction engineering in the construction in Phase 4. Joel Groves of Polarconsult is the project manager working on Phase 2. A brief resume with references is attached to this application. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Our local project administrators, in collaboration with the engineers, will prepare quarterly reports to the Alaska Energy Authority. These reports will summarize the progress of the project, as well as its financial status. We have been able to work well with Joel Groves of Polarconsult as we conclude Phase 2 of the project. He is readily available by phone or e-mail and is very responsive to requests for information or assistance. We look forward to a continuation of our working relationship with Polarconsult on this project. 3.6 Project Risk Discuss potential problems and how you would address them. The bulk of potential problems arise from natural hazards such as flooding, earthquakes, active faults, tsunamis, landslides, ice movement, snow avalanches and erosion. The primary natural hazard risk factor identified to date is the potential for mass wasting events (land slides and rock falls) that could impact an intake at Crooked Creek or the power line to Elfin Cove. Power line risk can be mitigated by selecting an alignment that avoids the toe of the mountains to the east of the project. The risk at the Crooked Creek intake is not readily mitigated. This is a low probability event over the life of the project that would require repair to the intake. Environmental or cultural resources could be identified in the course of the project that could affect the project cost. These will be identified and addressed in the Phase 3 permitting project. Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 8 of 27 9/14/2010 SECTION 4 – PROJECT DESCRIPTION AND TASKS Tell us what the project is and how you will meet the requirements outlined in Section 2 of the RFA. The level of information will vary according to phase(s) of the project you propose to undertake with grant funds. If you are applying for grant funding for more than one phase of a project provide a plan and grant budget form for completion of each phase. If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. As part of the current Phase 2 effort, Polarconsult completed a reconnaissance study of the hydropower resources available to Elfin Cove which is the source of information in this proposal. Polarconsult is currently completing a feasibility study for the Crooked Creek / Jim’s Lake hydroelectric project. The findings of this study, expected in November 2010, will be shared with AEA. Reliable back-up diesel generation is in place with the Elfin Cove powerhouse upgrade project completed in 2007. Additionally a distribution system upgrade was completed in summer 2009. Some of the pros of this project include 1. Reduced dependence upon costly diesel fuel; 2. Reduced air pollution from diesel exhaust; 3. Reduced noise from the diesel power plant, which is located in the middle of the community; 4. Reduced hazardous waste from lubricants and system maintenance, and potential of land or water pollution in the event of fuel spills; and 5. Greatly reduced cost for power generation. Because southeast Alaska is a temperate rainforest with abundant precipitation, the energy source is completely renewable. Hydropower is a proven alternative energy technology. We have considered alternatives to hydropower, including wind power and tidal power. The potential for wind power around Elfin Cove has been assessed and found to be inadequate. Tidal power, however, offers more potential in our area. The passes between Cross Sound and Icy Strait, about two miles from the entrance to Elfin Cove, offer a great potential for tidal power generation. We are interested in exploiting this resource, and would welcome the opportunity to become a model community powered by tidal energy. Tidal energy is a nascent technology, however. While it offers great potential, getting it operational might be many years off. We would like to reduce our dependence on diesel fuel as soon as possible and as much as is possible, given the seasonal nature of our demand for electricity. The only significant negative impact of the use of hydropower would be during the winter months when the community would lose the heat that is currently recovered from the diesel generators as the source for heat for the Community Building and the Community Shop. Installing a waste oil heater is a possible solution to building heat requirements. This option would also solve the problem of disposition of waste oil, which currently must be transported out of Elfin Cove. Electric heating in these two buildings can also be used as a “dump-load” to utilize surplus power generated by this project in the winter. Under this scenario, interruptible electric heating could be tied into the existing waste heat loop to heat these buildings and also maintain the generators at temperature for back up power. Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 9 of 27 9/14/2010 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. Elfin Cove’s powerhouse, originally constructed in 1985, was upgraded in 2007. Three new diesel generators were installed at that time, sized at 67 kW, 101 kW and 179 kW, for a total installed capacity of 347 kW. Parallel switchgear, improved ventilation and fire suppression and alarm systems were part of the project. Our most recent data show generation efficiencies of 12 to 13 kWh per gallon of diesel burned. Our electrical distribution system also dates from the mid-1980’s. The system was expanded, with most components replaced, in spring and summer 2009 with funding from a Denali Commission grant, administered by AEA. The upgrade replaced distribution lines to residential and commercial buildings in Elfin Cove, and installed conveniently located pedestals for power to boats in the Inner Harbor, on the dry dock grid and on the government float on the northwest side of the Cove. 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. The Elfin Cove diesel power plant is newly upgraded (2007) and the distribution system is newly upgraded (2009). The bulk fuel facility is also new and in good condition. These assets would be used as a backup generation source to the hydroelectric project. A hydropower project will significantly extend the life of the newly installed diesel generators by greatly reducing the number of hours they run each year. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Elfin Cove’s electric utility customers currently pay approximately 52 cents per kilowatt-hour for the energy they consume. Residential and community customers get a significant reduction in that rate, thanks to the Power Cost Equalization program. Commercial and federal customers get no relief from the high rates charged. If we were able to cut out the fuel cost for much of the year, the energy price to all electric power consumers in Elfin Cove could be reduced considerably. Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 10 of 27 9/14/2010 4.3 Proposed System Include information necessary to describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues. 4.3.1 System Design Provide the following information for the proposed renewable energy system: A description of renewable energy technology specific to project location Optimum installed capacity Anticipated capacity factor Anticipated annual generation Anticipated barriers Basic integration concept Delivery methods The best current renewable energy technology for our location is hydropower. Phase 2, currently underway, has led the community to select a project at Crooked Creek and Jim’s Lake. This fall, the feasibility study will provide more detailed information about this project. The Crooked Creek / Jim’s Lake hydroelectric facility will include: A diversion structure on Crooked Creek at 480’. An approximately 1,400-foot long 14-inch penstock from Crooked Creek to Jim's Lake. An approximately 50 kW powerhouse on Jim’s Lake at 335’ to recover energy between Crooked Creek and Jim’s Lake. An approximately 12-foot tall dam at the outlet to Jim’s Lake and a siphon intake to provide 95 acre-feet of storage in Jim’s Lake (regulated elevation from 330 to 350 ft). An approximately 2,000-foot long 14-inch penstock from Jim's Lake to tidewater in Port Althorp. An approximately 150 kW powerhouse at tidewater (elevation of 25 ft.). Approximately 6,600 feet of power line to tie into the existing distribution system. Approximately 9,600 feet of communications cable back to the diesel powerhouse. Approximately 8,200 feet of access corridors. The proposed installed capacity will be 200 kW. This estimate is based on reconnaissance analysis completed by Polarconsult in 2009. A more refined estimate will be included in the feasibility study, based on an additional year of hydrology data for the project collected in 2010. Annual estimated generation potential of this project is 716,000 kWh. Of this, 344,000 kWh is estimated to meet current system demand, and an additional 372,000 kWh is estimated to be available for interruptible loads. Based on these estimates, the project would have a capacity factor of 41%. These estimates will be refined in the feasibility study later this year. To maximize the utilization of energy from the project, the run-of-river hydro from Crooked Creek to Jim’s Lake would be the governing generator, with the storage hydro and any diesels following to meet load. Excess energy would be dispatched by a load governor to dump loads in the community. Dedicated electric meters and an interruptible tariff could be used to fully utilize the excess energy from the hydros. The remote location of the watersheds will likely require that the work be completed mainly with hand or small power tools after staging of materials by helicopter drop. There is no road access to either Elfin Cove or Port Althorp. Integration of the hydropower into the existing grid will be via an on-ground transmission line to the newly renovated distribution system. There will be a communication cable between the hydroelectric powerhouse and the diesel power plant in Elfin Cove. Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 11 of 27 9/14/2010 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. Most of the elements of the proposed project (the proposed diversion, pipeline, penstock, powerhouse and most of the transmission line) would be on Tongass National Forest land, managed by the U.S. Forest Service. We expect that, given the close coordination we have already initiated, we can obtain the necessary permits from the Forest Service to develop this project. The Community of Elfin Cove has a good working relationship with the USFS Hoonah Ranger District, having several years ago negotiated with the Forest Service for a transfer of land in Elfin Cove. More recently, we procured U.S. Forest Service permits to place stream gages on both Crooked Creek and Jim’s Lake, under Phase 2 of this project. We have been informed that the USFS is very interested in cooperating with Elfin Cove to move the project along. Once it reaches Elfin Cove, the transmission line will tie into the existing distribution system. To access the distribution system, the transmission line will need to cross a short length of privately-owned land near the head of the inner cove. The landowner in question is very supportive of this project (including participating in the development of this proposal) and we do not expect any problems in obtaining the necessary permission to cross that land. 4.3.3 Permits Provide the following information as it may relate to permitting and how you intend to address outstanding permit issues. List of applicable permits Anticipated permitting timeline Identify and discussion of potential barriers The Federal Energy Regulatory Commission (FERC) has informed us that because of the small size and the Alaska location of this project, our license should come from the Regulatory Commission of Alaska (RCA) rather than from FERC; however the RCA has not enacted regulations necessary to assume licensing jurisdiction. We therefore expect that we will have to go through the FERC licensing process. While the projects could be eligible for an exemption from FERC licensing under FERC’s <5 MW exemption rule, the development of Jim’s Lake into a reservoir is expected to require FERC licensing. This process will involve coordination with a number of resource agencies, including, but not limited to, the following: U.S. Forest Service The Forest Service manages the land at both the Crooked Creek/Jim's Lake and Roy's Creek project sites, because they are in the Tongass National Forest. We will have to coordinate with the Forest Service and obtain necessary permission from them to develop either project. Our relationship with the Forest Service was discussed in more detail in the previous section (4.3.2) of this proposal. Alaska Department of Natural Resources The State of Alaska owns tidelands and bottomlands, which it manages through the Department of Natural Resources (DNR). We will need to obtain permits from DNR for structures installed in creeks or across tidelands. DNR would also need to issue water rights for the project. Army Corps of Engineers If we install pilings, a floating dock, or any other structure on the beach or in the waters of Port Althorp or at the Inner Cove, we would require a permit under Section 404 of the Clean Water Act, and/or Section 10 of the Rivers and Harbors Act, from the U.S. Army Corps of Engineers. Obtaining these permits also Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 12 of 27 9/14/2010 involves a public review and comment period. The Corps has issued these permits fairly routinely for docks and similar projects in and around Elfin Cove in recent years. The Corps of Engineers also would need to issue permits for wetlands disturbance / fill. Given their scale, either project would likely qualify for a nationwide permit #17 for small hydroelectric projects. Alaska Department of Fish and Game Alaska Statute 16.05.841, the Fishway Act, and Alaska Statute 16.05.871, the Anadromous Fish Act, both would require that we provide prior notification and obtain permit approval from the Department of Fish and Game (ADFG) Habitat Division to construct a hydraulic project or to use, divert, obstruct, or change the natural flow or bed of a body of water. This permit approval will be necessary even though neither Crooked Creek nor Roy’s Creek is listed by ADFG as an anadromous fish-producing stream. They are not listed in the Catalog of Waters Important for Spawning, Rearing, or Migration of Anadromous Fishes – Southeastern Region (ADFG, Special Publication 08-06, June 2, 2008). Still, it is likely that certain sampling and surveys will be required as part of Phase 3 of this project in order to confirm the presence or absence of fish in these streams. One of the consultants working with us on Phase 2 of this project has a good working relationship with ADFG permitting staff, and has experience in the sampling and surveying needed to determine whether a stream supports anadromous fish, or other resources of concern. One of our community members is also a fishery biologist with extensive experience in fish surveys and sampling. We expect that we can smoothly coordinate our project with any concerns that may arise about natural resources. 4.3.4 Environmental Address whether the following environmental and land use issues apply, and if so how they will be addressed: Threatened or Endangered species Habitat issues Wetlands and other protected areas Archaeological and historical resources Land development constraints Telecommunications interference Aviation considerations Visual, aesthetics impacts Identify and discuss other potential barriers To the best of our knowledge, the hydroelectric project would not impact any threatened or endangered species. There are no significant habitat issues, designated critical habitat, or protected areas in the geographic area under consideration. The proposed projects do not present threats to any fish, plant life, wildlife or marine life. No archaeological or historical resources will be disturbed by the project. The only buildings to be constructed are two powerhouses which will be located within the Tongass National Forest and thus present no land development issues. There will be no interference to telecommunications. Due to the remote location of the project, and the small size of the structures, there are no aviation considerations. The powerhouse and any dock will be visible from the water at close range, but their small size is not likely to cause significant negative aesthetic impact. Any public concerns will be addressed during a public meeting process. We realize, however, that during the permitting process, we will likely be required to conduct surveys to document the presence or absence of species of concern, and to determine whether there will be any impact of the project on them. 4.4 Proposed New System Costs and Projected Revenues Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 13 of 27 9/14/2010 (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following: Total anticipated project cost, and cost for this phase Requested grant funding Applicant matching funds – loans, capital contributions, in-kind Identification of other funding sources Projected capital cost of proposed renewable energy system Projected development cost of proposed renewable energy system The total project cost, including Phase 1 (completed) Phase 2 (which is underway), Phase 3 (which we are proposing here) and Phase 4 (construction) is estimated to be $3,100,000. The development costs (Phases 1 thorough 3) total $539,000, while the construction cost in the year 2014/5 is estimated to be $2,561,000. These cost estimates are detailed in Table 1, and are based on the Hydroelectric Reconnaissance Study for Elfin Cove, completed in 2010 by Polarconsult. It is likely that, over the next four years, actual construction inflation will vary from that used in this estimate. Costs will also differ as additional information is analyzed to refine the project size and construction methods. Given the current economic conditions, at this time it is premature to speculate on the details of construction costs that will not be incurred until at least four years from now. 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. (Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing reporting requirements for the purpose of reporting impacts of projects on the communities they serve.) AEA’s estimate for O&M costs is $.021/kWh which would amount to about $6,700 annually. There will also be a savings from displaced diesel O&M costs if the project is built; AEA estimates those savings to be $.02/kWh. These two figures nearly cancel each other out with virtually no net change. Our existing electric utility has a fee structure adequate to finance all of our O&M costs. 4.4.3 Power Purchase/Sale The power purchase/sale information should include the following: Identification of potential power buyer(s)/customer(s) Potential power purchase/sales price - at a minimum indicate a price range Proposed rate of return from grant-funded project The Elfin Cove Utility Commission, which has been operating for 23 years, has an existing customer base. This project would provide power to them at the rates that are in effect at the time the hydroelectric power is generated and used. Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 14 of 27 9/14/2010 Currently, the rates are $0.52 per kWh. Because our electric power is currently generated entirely with diesel generators, and because the cost of fuel is so variable, it is too early to speculate on what the rates might be when the plant is constructed, which is estimated to occur in 2014. However, when the hydroelectric system is in operation, we will, at the very least, be able to remove the fuel surcharge from electric power generated by that system. The reconnaissance study considered the variables that go into electric rates, and estimated that electric rates with the hydros in service could range from $0.12 to $0.64 per kWh, depending largely on how the project is financed. Higher rates are associated with debt-financing for the project. 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 Cost Worksheet is attached at the end of this application. Note that the cost estimates in that form agree with those in Table 1, earlier in this document. As described above the estimates are derived from the recently completed reconnaissance study. In developing these cost estimates, we are also assuming that the design and permitting in Phase 3 will take approximately three years, and that Phase 4 construction will begin in 2013. 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 estimated fuel displacement, is 27,400 gallons per year. Over a 50-year project lifetime, this savings would total 1.37 million gallons. At average 2010 fuel prices in Elfin Cove, this amounts to a savings of $109,600 per year. Using the mid-range EIA energy forecasts developed by AEA, the net present worth of electric utility fuel savings from the project is over $3 million, and total fuel savings from the project is over $4 million. Because the hydro project would be owned by the utility, revenues are not applicable. The hydro project is expected to allow the utility to decrease rates, reducing total revenues to the utility. Utility rates will be determined by the continuing fixed costs of the utility (for O&M, G&A, etc.), the capital cost and financing means used for the hydro (loans, grants, etc.), and the continuing (much reduced) fuel purchases for diesel generation. If the hydro is 100% grant funded, is it expected that utility rates could be reduced to the range of $0.12 to 0.17 per kWh. Elfin Cove Utility Commission is owned by the Community of Elfin Cove Non-Profit Corporation and is Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 15 of 27 9/14/2010 not subject to federal income tax, so tax credits will not be realized by this project. However, if renewable energy subsidies become available in our region we will be well placed to take advantage of them to further reduce utility rates. In addition to the economic benefits, the people of Alaska will benefit from cleaner air (including reduced emissions of carbon dioxide), reduced noise, and the pride in knowing that we can rely more on our own locally available renewable resources to support our economy and community. SECTION 6– SUSTAINABILITY Discuss your plan for operating the completed project so that it will be sustainable. Include at a minimum: Proposed business structure(s) and concepts that may be considered. How you propose to finance the maintenance and operations for the life of the project Identification of operational issues that could arise. A description of operational costs including on-going support for any back-up or existing systems that may be require to continue operation Commitment to reporting the savings and benefits When the hydroelectric project is completed, it will be integrated into the overall power generation system for Elfin Cove. The Community of Elfin Cove Non-Profit Corporation, through its subsidiary, the Elfin Cove Utility Commission (ECUC) already has a system in place for operation and maintenance of our system, setting price structures, billing and reporting, all of which allow us to operate our electrical system in a sustainable manner. We already have personnel on staff to implement our existing system; those personnel are competent to deal with the expanded responsibility brought on by the addition of a hydroelectric power plant. ECUC operates in the black and has no debt burden. The addition of the hydroelectric power plant should allow us to continue operating in that manner, and to save for future infrastructure needs. By providing for most of our electric power needs for nine months of the year, and a smaller proportion of those needs for the remaining three months, this project will allow us to reduce our consumption of diesel fuel, and thereby to reduce the effect of fuel price variability on our operations. Among other benefits, it will allow us to reduce our electric rates. As a working business plan, we have the Business Operating Plan of the Elfin Cove Utility Commission Electric Utility Upgrade Project. The plan, prepared in 2007, is still in review, but it is a blueprint for sustainable operations and management of our electric utility and we are following it. This proposed hydroelectric project, when integrated into our Community power system, will therefore bring increased affordability, stability and predictability to the financial operation of our electric utility. This will tend to increase the desirability of Elfin Cove as a place to live and work, improving the community's long term sustainability and security. Excess energy from the hydro may be used for other economic development activities, such as installing an ice machine to provide ice to the local commercial fishing fleet or other beneficial uses. 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. Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application Page 16 of 27 9/14/2010 The proposed project is the third phase of an ongoing effort to develop hydroelectric power for Elfin Cove. The project began over 25 years ago, with a reconnaissance study by the Alaska Power Authority. In 2008, the Community of Elfin Cove began Phase 2, which focuses on stream-gauging to collect data needed for design and engineering of the project. Under Phase 2, the community has produced a new reconnaissance study to confirm that the Crooked Creek / Jim’s Lake project is still the best project for the community, and the community will have a feasibility study of this project later in 2010. These studies are drawing upon continuing stream gauging efforts and other data collection activities completed under the Phase 2 funding. The community is successfully meeting all of the requirements for previous grants for this project. We have a hydroelectric engineering firm, and stream-gauging expert under contract as part of Phase 2, and our working relationship with these consultants is a productive one, so we have the expertise ready to continue with this project immediately, once the grant is approved. Prior to Phase 2, we have received no other grants or other funding for this hydroelectric project; however, we have received federal grant funding from the USDA Rural Utilities Service to upgrade our diesel generator power plant, and portions of the electric distribution system. That project, which was administered partially on the local level, is substantially complete. The project is in operation, and is already successful in improving the fuel efficiency of our electric power system. SECTION 8– LOCAL SUPORT Discuss what local support or possible opposition there may be regarding your project. Include letters of support from the community that would benefit from this project. The community’s on-going efforts to obtain funding for hydroelectric development have met with enthusiastic support (including unanimously-approved resolutions) from the Community of Elfin Cove. 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 – GrantBudget3.doc Provide a narrative summary regarding funding sources and your financial commitment to the project. For Phase 3 (proposed here), the total funds needed are $395,000, which would consist of $347,000 in grant funding and $48,000 in local matching funds. In addition, there will be in-kind contributions of local labor, materials, tools, and logistical support (i.e., transport by boat and other access to the project site). For Phase 2, the stream gauging, reconnaissance study, and feasibility study now in progress, we have committed $44,000 in community funds to match the $100,000 in grant money we were awarded in Grant Number 2195343, Elfin Cove Hydro Assessment. Renewable Energy Fund Round IV Grant Application Elfin Cove Hydroelectric Project – Design and Permitting AEA 11-005 Application ATTACHMENTS 9/14/2010 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 subje cted 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 construct ion 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 wit h 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 Refer ence 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 per mitting 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 Recon naissance 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. Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application ATTACHMENTS 9/14/2010 ATTACHMENT B – COST WORKSHEET Renewable Energy Fund Round 4 Project Cost/Benefit Worksheet RFA AEA11-005 Application Cost Worksheet Page 1 7-21-10 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 The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. 716,000 kWh 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 3 ii. Rated capacity of generators/boilers/other 67 kW, 101 kW, 179 kW iii. Generator/boilers/other type Diesel generators iv. Age of generators/boilers/other 3 years old (new power plant, 2007) v. Efficiency of generators/boilers/other Net powerplant efficiency 12.5 kWh/gallon (per PCE data, 2008-2010) b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor FY 09 $21,650 ii. Annual O&M cost for non-labor FY 09 $165,221 (90% of this amount is fuel) c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid, leave this section blank) i. Electricity [kWh] 340,000 kWh ii. Fuel usage Diesel [gal] 31,500 gal Other none iii. Peak Load 240 kW iv. Average Load 50 kW v. Minimum Load 20 kW vi. Efficiency Net utility efficiency approx 11 kWh per gallon (per PCE data, 2008-2010) vii. Future trends Likely flat with diesels, increasing with hydro. d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] Unknown ii. Electricity [kWh] Included in utility numbers iii. Propane [gal or MMBtu] Unknown iv. Coal [tons or MMBtu] Zero v. Wood [cords, green tons, dry tons] Unknown vi. Other Unknown 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 7-21-10 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] 200 kW total hydro capacity 50 kW run-of-river project and 150 kW storage project. b) Proposed annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 716,000 kWh ii. Heat [MMBtu] - c) Proposed annual fuel usage (fill in as applicable) i. Propane [gal or MMBtu] - ii. Coal [tons or MMBtu] - iii. Wood [cords, green tons, dry tons] - iv. Other - 4. Project Cost a) Total capital cost of new system $2,561,000 b) Development cost $395,000 c) Annual O&M cost of new system $17,300 d) Annual fuel cost zero 5. Project Benefits a) Amount of fuel displaced for i. Electricity 27,400 gal ii. Heat 8,300 gal iii. Transportation - b) Current price of displaced fuel $4.00 per gal (actual price, 2010) $3.99 per gal (2010 AEA model price for heating fuel – used for benefits calculations) c) Other economic benefits Value of other economic benefits, such as carbon taxes, are included in AEA’s fuel cost projections. d) Alaska public benefits No quantifiable benefits. Numerous indirect and intangible benefits. 6. Power Purchase/Sales Price a) Price for power purchase/sale Est. retail utility rate with the project is $0.12 to 0.64 per kWh 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio $4.02M / $3.10M = 1.30 Payback (years) $3.10M / $162,435 = 19.1 years Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application ATTACHMENTS 9/14/2010 ATTACHMENT C – GRANT BUDGET FORM Renewable Energy Fund Grant Round IVGrant Budget Form8/30/2010 Elfin Cove Hydroelectric Project - Design and PermittingRE- Fund Grantee Matching Source of Matching Funds: Grant Funds FundsCash/In-kind/Federal Grants/Other State Grants/Other1. FERC LICENSING12/31/2013 $228,581 $31,619 Cash and In-Kind Services $260,200 1.1 FERC Licensing Process" $140,733 $19,467 Cash and In-Kind Services $160,200 1.2 State Permits" $17,570 $2,430 Cash and In-Kind Services $20,000 1.3 COE and other Federal Permits, Land Authorizations " $17,570 $2,430 Cash and In-Kind Services $20,000 1.4 Environmental & Technical Studies " $52,709 $7,291 Cash and In-Kind Services $60,0002. FINAL DESIGN12/31/2013 $118,419 $16,381 Cash and In-Kind Services $134,800 2.1 Project Design" $92,065 $12,735 Cash and In-Kind Services $104,800 2.2 Engineer's Cost Estimate" $8,785 $1,215 Cash and In-Kind Services $10,000 2.3 Updated economic and financial analysis " $8,785 $1,215 Cash and In-Kind Services $10,000 2.4 Final business and operational plan " $8,785 $1,215 Cash and In-Kind Services $10,000TOTALS$347,000 $48,000$395,000Direct Labor & Benefits$0 $48,000 Cash and In-Kind Services $48,000Travel & Per Diem$0 $0$0Equipment$0 $0$0Materials & Supplies$0 $0$0Contractual Services$347,000 $0$347,000Construction Services$0 $0$0Other$0 $0$0 TOTALS$347,000 $48,000$395,000TASK TOTALSBudget Categories:Sub-Task TotalsMilestone or TaskAnticipated Completion Date Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application ATTACHMENTS 9/14/2010 ATTACHMENT D – LOCAL SUPPORT To Whom It May Concern: This letter is in support of the Elfin Cove Community Hydro-electric grant application. The Cove Lodge is a destination lodge and charter operation that has been in Elfin Cove since 1992. I have been an owner since 1994. During my tenure as a business owner in Elfin Cove there has been continuous support for developing renewable electrical energy using hydro generation. Reducing the high cost of energy while reducing dependence on fossil fuels is seen as not only an environmental responsibility but is essential for any sustainable economic development. Our business is dependent on a dependable, cost effective source of energy. This hydro project will provide a basis for development not only for our business but also for new and expanding businesses. The proposed project is well researched. The feasibility study clearly points to a project that will have long term returns for the community and state. We have unconditional support for this grant application. Sincerely, Gordy Wrobel, CEO P.O. Box 17 Elfin Cove, AK 99825 800-382-3847 907-239-2221 www.covelodge.com Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application ATTACHMENTS 9/14/2010 ATTACHMENT E – ELECTRONIC COPY OF APPLICATION Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application ATTACHMENTS 9/14/2010 ATTACHMENT F – AUTHORIZED SIGNERS FORM Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application ATTACHMENTS 9/14/2010 ATTACHMENT G – GOVERNING BODY RESOLUTION AUTHORIZING APPLICATION Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11-005 Grant Application ATTACHMENTS 9/14/2010 ATTACHMENT I – MAPS AND SUPPLEMENTAL INFORMATION Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11 -005 Grant Application ATTACHMENTS 9/14/2010 PROJECT LOCATION MAP Renewable Energy Fund Grant Application Round IV Elfin Cove Hydroelectric Project – Design and Permitting AEA11 -005 Grant Application ATTACHMENTS 9/14/2010 PROPOSED PROJECT CONFIGURATION AERIAL IMAGERY DATED AUGUST 11, 1990. OBTAINED FROM ELFIN COVE FILES, COLLECTED BY USFS. polarconsult alaska, inc. 1503 West 33rd Avenue, Suite 310 Anchorage, Alaska 99503-3638 Phone: (907) 258-2420 FAX: (907) 258-2419 T RIP R EPORT 100915-TRIPREPORT.DOC DATE: 9/15/2010 TO: Jane Button, Non-Profit Community of Elfin Cove (CEC) FROM: Joel Groves, P.E. RE: August 9 to 14 Trip Report CC: Project File PURPOSE AND BACKGROUND The CEC retained Polarconsult Alaska, Inc. (PCA) to conduct reconnaissance and feasibility studies of hydropower resources for Elfin Cove in 2009. PCA provided CEC the completed reconnaissance study in March 2010, and CEC selected a project at Crooked Creek and Jim’s Lake for feasibility assessment in May 2010. This field visit was performed to collect additional field data necessary to complete a feasibility study of a hydroelectric project at Crooked Creek and Jim’s Lake. FIELD ACTIVITIES Polarconsult engineer Joel D. Groves, P.E. mobilized from Anchorage to Elfin Cove on August 9th, 2010. Primary objectives of the trip were: 1. Perform maintenance on the stream gauges, including downloading data, upgrading power supplies, and measuring stream flows. 2. Collect more detailed data at the diversion sites on Crooked Creek and Jim’s Lake, penstock routes, and powerhouse sites. SCHEDULE The feasibility study will be completed and a draft issued to CEC for review and comment by November 1st. Polarconsult will finalize the feasibility study 30 days after receipt of CEC comments. ACTION ITEMS Stream Gauging Maintenance 1. The gauging stations at Roy’s Creek and Crooked Creek will need new power supplies before this winter. Because of inadequate ambient light at the gauge locations, solar power has been excluded as a suitable solution. Polarconsult will provide new batteries for the stations. 2. High flow measurements at all three gauging stations would be useful to improve station calibrations. Polarconsult has furnished the CEC with a HOBO conductivity data logger and sufficient salt to complete these measurements. Polarconsult will coordinate with CEC to complete these measurements this October. 3. The Roy’s Creek desiccant canister needs to be refreshed. This should occur before winter. POLARCONSULT TRIP REPORT ELFIN COVE HYDRO FEASIBILITY STUDY SEPTEMBER 15, 2010 PAGE 2 OF 4 2008-10 Crooked Creek Stage Data 7.4 7.6 7.8 8.0 8.2 8.4 8.6 8.8 9.0 9.2 9.4 8/1/08 11/1/08 2/1/09 5/4/09 8/4/09 11/4/09 2/4/10 5/7/10 8/7/10 Measured Stage Recorded Stage (2008-09) Recorded Stage (2009-10) STREAM GAUGES Stream gauges are installed at the Crooked Creek intake site, Roy’s Creek intake site, and at the outlet of Jim’s Lake. Stream flow measurements made this trip are summarized in Table 1. Table 1: Flow Measurements Date/Time Method Location Flow (cfs) Stage at Gauge (ft) 8/10/10 10:35 Sudden salt dose Jim’s Lake - 15 yds below gauge 0.421 3.73 8/10/10 10:47 Sudden salt dose Jim’s Lake - at gauge 0.422 3.73 8/10/10 11:37 Sudden salt dose Crooked Creek - at gauge 2.41 7.62 8/10/10 12:17 Sudden salt dose Crooked Creek - 30 yds ab. gauge 2.25 7.62 8/13/10 11:30 Sudden salt dose Roy’s Creek - 10 yds below gauge 1.05 1.15 8/13/10 12:20 Sudden salt dose Roy’s Creek - at gauge 1.07 1.15 Crooked Creek Intake Site Gauge The Crooked Creek gauge installation and pool where the gauge is inst alled appear unchanged from the last Polarconsult visit in October 2009. Current flow measurements are summarized in Table 1. The station was successfully downloaded. The station is equipped with a Sutron Monitor-4 datalogger powered by 4 D-cell lithium thionyl batteries. The current batteries will be exhausted in approximately January or February 2011. A solar panel was tested during this visit, but received insufficient light to reliably power the data logger. A seven Ah lead acid battery and regulator were installed in the data logger enclosure to support future solar power, but the logger remains on the lithium batteries. New lithium batteries will be shipped to Elfin Cove this fall. The desiccant canister inside the datalogger cabinet was refreshed during this field visit. 2008 – 2010 stage data at the Crooked Creek gauging station is presented in Figure 1. Stage-discharge curves and calculated flow data will be reported in the feasibility study to be issued later this year. Figure 1: Stage Data at Crooked Creek Gauging Station POLARCONSULT TRIP REPORT ELFIN COVE HYDRO FEASIBILITY STUDY SEPTEMBER 15, 2010 PAGE 3 OF 4 2008-10 Jim's Lake Stage Data 3.40 3.60 3.80 4.00 4.20 4.40 4.60 4.80 8/1/08 10/31/08 1/30/09 5/1/09 7/31/09 10/30/09 1/29/10 4/30/10 7/30/10 Recorded Stage Recorded Stage Measured Stage Measured Stage Jim’s Lake Outlet Gauge The Jim’s Lake outlet gauge installation and pool where the gauge is installed appear unchanged from the last Polarconsult visit in October 2009. Current flow measurements are summarized in Table 1. The station was successfully downloaded. The station is equipped with HOBO water pressure and barometric data loggers. These loggers have 5 to 10 year battery lives, and have been in service for approximately 2 years. The barometric data logger is installed in an enclosure with a large can of desiccant to help avoid barometric datalogger problems during freezing weather. This desiccant appears to have successfully prevented the cold weather problems experienced by the barometric datalogger in the winter of 2008 – 2009. The desiccant was refreshed during this site visit. 2008 – 2010 stage data at the Jim’s Lake outlet gauging station is presented in Figure 2. Stage-discharge curves and calculated flow data will be reported in the feasibility study to be issued later this year. Figure 2: Stage Data at Jim’s Lake Outlet Gauging Station POLARCONSULT TRIP REPORT ELFIN COVE HYDRO FEASIBILITY STUDY SEPTEMBER 15, 2010 PAGE 4 OF 4 2009-10 Roy's Creek Stage Data 1.0 1.2 1.4 1.6 1.8 2.0 2.2 2.4 10/1/09 11/1/09 12/2/09 1/2/10 2/2/10 3/5/10 4/5/10 5/6/10 6/6/10 7/7/10 8/7/10 9/7/10 Recorded Stage Measured Stage Roy’s Creek Intake Site Gauge The Roy’s Creek gauge installation and pool where the gauge is installed appear unchanged from the last Polarconsult visit in October 2009. Current flow measurements are summarized in Table 1. The station was successfully downloaded. The station is equipped with a Sutron Monitor-4 datalogger powered by 4 D-cell lithium thionyl batteries. The current batteries will be exhausted in approximately January or February 2011. A solar panel was tested during this visit, but received insufficient light to reliably power the data logger. A seven Ah lead acid battery and regulator were installed in the data logger enclosure to support future solar power, but the logger remains on the lithium batteries. New lithium batteries will be shipped to Elfin Cove this fall. The desiccant canister inside the datalogger cabinet was refreshed during this field visit. 2008 – 2010 stage data at the Crooked Creek gauging station is presented in Figure 3. Stage-discharge curves and calculated flow data will be reported in the feasibility study to be issued later this year. The desiccant canister inside the datalogger cabinet was not refreshed during this field visit. Although the CEC selected the Crooked Creek / Jim’s Lake project for feasibility assessment, Polarconsult will keep the Roy’s Creek gauge in service through the winter of 2010-11 in order to collect an adequate period of record at this creek to support future consideration of this resource. This data will be included as an appendix to the feasibility study. Figure 3: Stage Data at Roy’s Creek Gauging Station DATA COLLECTION Mr. Groves, assisted by Jane Button, completed a survey of key project features in order to index these project features relative to local land boundaries, sea level, and existing utility infrastructure. This will improve the accuracy of information used for the feasibility study. Concurrently, Mr. Groves reviewed prospective penstock routes and access routes from tidewater up to the project as well as overland between the project and Elfin Cove.