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HomeMy WebLinkAboutSigned Grant Application - Battle Creek/EALASKA Renewable Energy Fund Round IV ENERGY AUTHORRY Grant Application Application Forms and Instructions The following forms and instructions are provided to assist you in preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at: http://www.akener_qvauthority.org/RE Fund-IV.html Grant Application GrantApp4.doc Application form in MS Word that includes an outline Form of information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required. Application Cost Costworksheet4.doc Summary of Cost information that should be Worksheet addressed by applicants in preparing their application. Grant Budget Form GrantBudget4.doc A detailed grant budget that includes a breakdown of costs by milestone and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget Form GrantBudgetlnstructions4.pdf Instructions for completing the above grant budget Instructions form. • If you are applying for grants for more than one project, provide separate application forms for each project. • Multiple phases for the same project may be submitted as one application. • If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for completion of each phase. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. • If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. REMINDER: • Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority web site after final recommendations are made to the legislature. • In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information is to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. AEA 11-005 Application Page 1 of 15 7/21/2010 /� ALASRGY HKA Renewable Energy Fund Grant Application Round IV SECTION 1 —APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Chugach Electric Association, Inc. Type of Entity: Electric Utility (Cooperative) Mailing Address Physical Address P.O. Box 196300 5601 Minnesota Drive Anchorage, Ak 99519-6300 Anchorage, Ak 99519 Telephone Fax Email 907 762-4759 907 762-4191 ron_vecera chugachelectric.com 1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER Name Ronald K. Vecera FD,,ectrofProject Development Mailing Address P.O. Box 196300 Anchorage, Ak 99519.6300 Telephone Fax Email (907) 762-4759 (907) 762-4191 ron_vecera@chugachelectric.com 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) X An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer in accordance with 3 AAC 107.695 (a) (1), or A local government, or A governmental entity (which includes tribal councils and housing authorities); 1.2.2. Attached to this application is formal approval and endorsement for its project by Yes 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 ) 1.2.3. As an applicant, we have administrative and financial management systems and Yes follow procurement standards that comply with the standards set forth in the grant agreement. 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached Yes 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. AEA11-005 Grant Application Page 2 of 15 7/21/2010 /EALASKA Renewable Energy Fund ENERGVAUTHORrrV Grant Application Round IV SECTION 2 — PROJECT SUMMARY IL 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) Battle Creek Diversion 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. Battle Creek is located two miles to the west of the Bradley Lake hydroelectric project on the Kenai peninsula. The Bradley Lake project is located at the northeast end of Kachemak Bay, about 27 miles from the city of Homer. The communities that will benefit from the project include all the communities served by the six Railbelt electric utilities that receive a share of the Bradley Lake project 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 X Feasibility Construction and Commissioning X Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. This is a project to divert water from the upper watershed of the middle branch of Battle Creek into Bradley Lake. Based on Battle Creek stream flow measurements from 1991 to 1993, diverting a portion of the stream flow to Bradley Lake has the potential to increase annual energy output by 27,000 to 45,000 MWh, depending on the amount of flow diverted. Environmental, geotechnical, preliminary engineering and analytical work is needed to evaluate fish habitat, the potential energy resource, and diversion dam and conveyance (i.e., tunnel, pipe, open channel) alternatives to divert the water. AEA11-005 Grant Application Page 3 of 15 7/21/2010 ALASKA4111D Renewable Energy Fund /4EED ENERGY AUTHORITY Grant Application Round IV 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.) An increase in energy of 36,000 MWh (mid point of the estimated range) is a significant benefit to the Railbelt utilities, particularly since this increase in renewable energy output would be produced by the Bradley Lake project without any additional investment in generation or transmission facilities. This low cost, stable priced renewable energy would offset thermal generation, reducing natural gas usage and carbon emissions, and helping to conserve Cook Inlet gas supplies. Further, since the water can be stored, it provides additional flexibility to dispatch Bradley Lake power. 2.6 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. The estimated cost of a completed project is $34,530,000. Chugach, on behalf of the Bradley Project Management Committee (BPMC), is requesting $500,000 from AEA to assist with the early stages of the project.. The BPMC is comprised of representatives of the six Railbelt electric utilities (Chugach, Anchorage Municipal Light & Power, Homer Electric, Matanuska Electric, Golden Valley and the Seward Electric System) that purchase the Bradley Lake output. The work that would be funded include a variety of tasks related to the resource, permitting, environmental and fish studies, preliminary engineering and design and preparing a Federal Energy Regulatory Commission (FERC) license amendment. In addition to grant funds, the six utilities that are members of the BPMC will provide a matching contribution of $500,000 to fund this work. The participating utilities will contribute the $500,000 in matching funds in amounts proportional to their share of the Bradley Lake project. 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. $ 500,000 2.7.2 Other Funds to be provided (Project match) $ 500,000 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $1,000,000 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 $34,530,000 including estimates through construction) 2.7.5 Estimated Direct Financial Benefit (Savings) $73,368,384 2.7.6 Other Public Benefit (If you can calculate the benefit in $ terms of dollars please provide that number here and AEA11-005 Grant Application Page 4 of 15 7/21/2010 /� ALASKA Renewable Energy Fund E) ENERGY AUTHORITY Grant Application Round IV explain how you calculated that number in your application (Section 5.) SECTION 3 — PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully completlno the project within the scone. 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 entitv. state that in this section. The project manager, on behalf of the BPMC, is Bryan Carey P.E., of the Alaska Energy Authority. His professional bio is attached and his contact information is as follows: Bryan Carey, P.E. AEA & AIDEA 813 West Northern Lights Blvd. Anchorage, Ak 99503 Phone: (907) 771-3065 Fax: (907) 771-3044 bcarey@aidea.org 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 detailed schedule of project activities is attached. The tasks that will be funded by the grant are those that begin in July 2011. 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.) Milestones for the complete project are as follows, but grant funds requested are only for the initial items. Milestone Completion Date Engineering and Geotechnical Investigation and 65% Design Feb 2012 Environmental Studies and Permits Apr 2012 Water Rights and Related Permits Nov 2012 FERC License Amendment Dec 2012 Final Engineering and Construction Documents Dec 2012 Bidding Phase including Engineering and Project Mgmt. Feb 2013 Construction of Diversion Facilities Nov 2013 Commissioning of Diversion Facilities Jul 2014 AEA11-005 Grant Application Page 5 of 15 7/21/2010 ALASKA Renewable Energy Fund ENERGY AUTHORITY Grant Application Round IV 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. Project resources are provided by the BPMC and include a mix of AEA staff, utility staff and outside consultants. Consultants who have and are working on the project include: • HDR Alaska, Inc., - Fisheries investigation • R&M Consultants, Inc. — Geotechnical evaluation, topographic mapping, terrain unit mapping, analysis and design, construction documents and cost estimation • Environmental Compliance Assistance — Environmental compliance and permitting 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Project status reports will include the content and be filed at any interval required by AEA grant reporting requirements. Reports will cover project status including activities, schedule and budget information. 3.6 Project Risk Discuss potential problems and how you would address them. Risks associated with the siting and alignment of the project facilities and conveyance can be dealt with in design and these would include seismic, foundations, geotechnical factors for underground and aboveground structures, access road location and alignment and environmental restrictions. There could be a significant cost risk in the construction of the facilities due to the seismicity, topography, geology, hydrology, remoteness of the diversion site(s), conveyance design and construction phase regulatory considerations, as well as operational phase regulatory matters such as minimum stream flow releases from the diversion facilities to Battle Creek below the diversion facility. Project risks associated with operation of the proposed diversion include the effects of low temperatures, ice and snow and restricted access to facilities in winter months. These risks will be "designed out' to the extent possible and operational procedures will be defined that minimize the effect of the winter conditions on the operation of the diversion and associated conveyance system. 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. AEA11-005 Grant Application Page 6 of 15 7/21/2010 ENERGY AUTHORITY Renewable Energy Fund Grant Application Round IV • 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 fundino for an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. The proposed energy resource is the water that can be diverted into Bradley Lake. The additional water yields an expected increase in hydroelectric energy production of about 36,000 MWh per year. This is a preliminary estimate based on water flow measurements from 1991 to 1993. Stream gauging is currently taking place to get an up-to-date estimate of the amount of water that can be diverted for energy production. This energy would be available to offset thermal generation and would be produced and delivered by existing generation and transmission facilities at Bradley Lake. 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. Bradley Lake was energized in 1991 and has two 63 MW units for a total of 126 MW of installed hydroelectric capacity. The project includes a 125 foot high concrete faced, rock filled dam structure, three diversion structures, a 19,063 foot long power tunnel and vertical shaft, generating plant, interior substation, 20 miles of transmission line and substation. 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. According to the AEA Railbelt Integrated Resources Plan report, the volume of water in Bradley Lake allows the generation of an average of about 394,000 MWh of energy per year. Diversion of additional water from Battle Creek into Bradley Lake will have the positive impact of increasing the energy output of the existing infrastructure and should not have any negative impact on the existing infrastructure or existing resources. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Bradley Lake energy is delivered to the six Railbelt electric utilities. Increasing Bradley Lake output would offset some of the thermally generated energy required to serve this market. The increase in hydroelectric energy has a very positive impact on Railbelt consumers because it will offset fossil fueled generation, reduce carbon emissions, conserve available gas supplies and be a AEA11-005 Grant Application Page 7 of 15 7/21/2010 I� ENERGY AUTHORITY HORITY ALASKA Renewable Energy Fund Grant Application Round IV stable priced, long-term energy source. 4.3 Proposed System Include information necessary to describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues. 4.3.1 System Design Provide the following information for the proposed renewable energy system: • A description of renewable energy technology specific to project location • Optimum installed capacity • Anticipated capacity factor • Anticipated annual generation • Anticipated barriers • Basic integration concept The proposed system, still to be designed, will include a dam, intake diversion structure(s) and conveyance system including possible tunneling, penstock and open channels, to divert water from Battle Creek into Bradley Lake. There will be no new generation or transmission facilities added at Bradley Lake, so there will not be any increase in capacity. The diverted water will allow for increased energy production currently estimated at 27,000 to 45,000 MWh per year, which would be delivered to the Railbelt with existing facilities. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. The diversion site appears to be on State 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 Major permitting activities and permit requirements for this project include: • Submittal of a non -capacity license amendment to the Bradley Lake Project FERC license (AK-8221). • Application for a Section 404 Permit from the U.S. Army Corps of Engineers. • Completion of the Alaska Department of Natural Resources (ADNR) Division of Coastal & Ocean Management Consistency Review. • Completion of the National Marine Fisheries Service's Essential Fish Habitat Consultation process. • Application for a water rights permit from ADNR. • Application for a material sale contract from ADNR. • Application for a ADNR land use permit and/or lease agreement for access to the project AEA11-005 Grant Application Page 8 of 15 7/21/2010 �� ALASKA Renewable Energy Fund 4END ENERGY AUTHORRY Grant Application Round IV site and use of State lands for the project. • Application for a Title 16 fish habitat permit from Alaska Department of Fish &Game (ADF&G). • A contractor provided Stormwater Pollution Prevention Plan (SWPPP). The anticipated timeline for permitting activities is shown on the attached project schedule. A critical component of the permitting and license process will be the negotiation of a minimum flow release regime to protect anadromous fish habitat in lower Battle Creek. This will involve the FERC, the ADF&G, ADNR Division of Mining, Land and Water, the U.S. Fish and Wildlife Service and the National Marine Fisheries Service. Currently, fish presence and habitat use studies are being conducted to verify/update information published in ADF&G's catalog of anadromous waters. Additional environmental study plans will be developed in consultation with the resource agencies in early 2011 and carried out over the summer of that year. This information will be utilized in preparing an environmental assessment for inclusion into the application for amendment submitted to the FERC. FERC, in turn, will perform a NEPA analysis of the proposed development and, as appropriate, prepare either an EA or EIS for the project. 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 Threatened or Endangered (T&E) species will be addressed during environmental studies carried out by the applicant and will include consultation with U.S. Fish and Wildlife Service and a survey of the project area by the applicant's environmental contractor. FERC's NEPA analysis will include evaluation of the project's effects on T&E species, as needed. 2. Habitat issues will include quantification of the size of and habitat characteristics and values of areas disturbed by project constructions and he effects of flow diversion on salmon spawning and rearing habitat in lower Battle Creek. Fisheries studies developed in consultation with ADF&G are currently underway and will be continued in 2011. 3. Wetlands and other protected areas will be identified during 2011 field studies and plans to avoid impacts to these areas or to mitigate losses due to the project will be developed as a part of the environmental land developed by the applicant. 4. Initial contact with the State Historic Preservation Office indicates that there is little AEA11-005 Grant Application Page 9 of 15 7/21/2010 /� ALASKA Renewable Energy Fund OEMD ENERGYAUTHORITY Grant Application Round IV potential for historic properties to be affected by this project. Neither is the project located in an area with a high probability of containing significant archaeological resources. Contract documents developed for the project will stipulate that should any suspected archaeological resources be discovered, work in the area of discovery shall immediately cease and a qualified expert be brought in to evaluate the find an develop a plan to protect any resource judged to be of significance. 5. No land development constraints are anticipated. The project is located on State land and land use permits and/or leases will be obtained from ADNR. As a part of the amendment process the project lands will be incorporated into the FERC project boundary for the Bradley Lake Project. 6. Telecommunication interference is not anticipated. 7. The project will have no affect on aviation. 8. The project is located in an area not heavily used by the public. Best management practices will be required both during and post -construction operational phase of the project to avoid erosion or other land use practices that would render the area visually unattractive. The major environmental issue identified to date is maintenance of minimum flows in lower Baffle Creek to protect the anadromous fish habitat in the lower stream. Preliminary analysis indicates that sufficient flow is available to provide acceptable levels of discharge in the lower river, including 100% of the critical winter flows, while still diverting enough water to Bradley Lake to obtain a significant increase in energy output from that project. 4.4 Proposed New System Costs and Projected Revenues (Total Estimated Costs and Projected Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer's estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following: • Total anticipated project cost, and cost for this phase • Requested grant funding • Applicant matching funds — loans, capital contributions, in -kind • Identification of other funding sources • Projected capital cost of proposed renewable energy system The project is currently estimated to cost $34,530,000. The cost to finish feasibility work, secure permits and complete engineering and geotechnical investigations and 65% design is $2.7 million. Chugach is requesting a grant of $500,000. The BPMC will provide matching funds in the amount of $500,000 to fund a total of $1 million of project related costs. 4.4.2 Project Operating and Maintenance Costs AEA11-005. Grant Application Page 10 of 15 7/21/2010 ALASKA Renewable Energy Fund ,® ENERGY AUTHORITY Grant Application Round IV 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.) O& M costs are estimated at $100,000 per year. Labor will be required to operate the facilities, perform routine maintenance to ensure that the structures perform in accordance with design requirements and respond to malfunctions and system failures. There will also be an annual start- up and shutdown of the facility. hi addition, a budget would be established for annual replacement of worn or broken equipment, surveying and dam inspections and stream gauging. These costs would be included in the annual revenue requirement of the Bradley Lake project and recovered from the rates charged to project participants. 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 G The purchasers of the incremental energy output from Bradley Lake will be the six Railbelt electric utilities that participate in the project. The allocation of incremental energy will be in proportion to existing participation shares. The power purchase rate for Bradley Lake energy is set an amount sufficient to operate and maintain the facility and maintain an adequate financial reserve. This rate is currently about 5.4 cents/kwh. With the addition of Battle Creek facilities, there would be an increase in overall project cost. There will also be an increase in the amount of energy sold, so it is difficult to say what the effect on the overall rate would be, but it would likely still be in the 5 to 6 cent/kwh range. Each utility passes purchased power costs on to its consumers, without mark-up, via a fuel and purchased power cost adjustment factor. All utilities, with the exception of the City of Seward, are regulated by the Regulatory Commission of Alaska. No rate of return is earned on the portion of any capital investment paid for with grant funds. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Download the form, complete it, and submit it as an attachment. Document any conditions or sources your numbers are based on here. The project cost worksheet is attached. The estimated cost for the project is $34,530,000. To determine financial benefits, Chugach's production costing model was used to determine how the additional hydroelectric energy would affect system costs. The model will economically dispatch system resources and calculate the reduction in total production cost including fuel, AEA11-005 Grant Application Page 11 of 15 7/21/2010 /� ALASRGY Renewable Energy Fund Grant Application Round IV operations and maintenance, and emissions. The cost of gas assumed in the analysis is $7.91/Mcf in 2015 with an escalation rate of 2.5% per year. The reduction in gas consumed as a result of the incremental hydroelectric energy is 422,289 Mcf /year. The average annual cost savings over the 50 year period analyzed is $8,060,679. 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 projected fuel displacement from an increase of 36,000 MWh in incremental hydroelectric energy is 422,289 Mcf/year. The average annual cost savings from being able to offset thermal generation and economically dispatch the increased hydroelectric generation is $8,060,679. The significant increase in energy allows not only significant fuel savings, but also reduced unit starts and operations and maintenance expense for thermal units, and reduced emissions. The rate charged for Bradley Lake power is the amount needed to fund the project's operations and maintenance. It may need to adjusted, up or down, if the Battle Creek diversion is constructed. While there would be additional costs to recover, there would also be additional energy sales to the participating utilities. If the 36,000 MWh of additional energy were sold to utilities at the recent Bradley Lake energy rate of 5.4 cents/kwh, the increase in revenue would be $1,944,000. This additional revenue, paid by participating utilities, would offset amounts that utilities were previously paying for fuel and other thermal generation costs. Each utility, via fuel and purchased power cost adjustment factors, recovers its actual cost for Bradley Lake power from its consumers. Non -economic benefits include protecting, and possibly improving, the fish habitat and environment affected by the project. 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 AEA11-005 Grant Application Page 12 of 15 7/21/2010 /4MIDALASKA Renewable Energy Fund GEE) ENERGY AUTHORITY Grant Application Round IV systems that may be require to continue operation • Commitment to reporting the savings and benefits This project is very sustainable. The Bradley Lake project is one of the most successful renewable energy projects in Alaska's history. The dam and diversion structures to route Battle Creek water into Bradley Lake will increase energy output with no additional investment in generators or transmission facilities. Further, the increased energy output will be very easy to electrically integrate into the existing Railbelt energy supply. The governance of the project and participation by utilities is well established and this project would only require a straight -forward allocation of incremental energy production and costs to project participants. Savings and benefits will be reported to the AEA, as required. 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. Work that has been done includes feasibility and analysis of energy and environmental impacts. Some topographical work has been completed and stream gauging is currently taking place. Further environmental, analytical and preliminary engineering work will proceed immediately once the grant is received. No other grants have been solicited or received. 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 six Railbelt utilities that participate in the Bradley Lake project are all fully supportive of this project as evidenced by the attached resolution from the BPMC. Fish and environmental studies will be performed to ensure that there is minimal disturbance to fish habitat and the environment. 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. AEA11-005 Grant Application Page 13 of 15 7/21/2010 �� ALASRGY HORITY KA Renewable Energy Fund Grant Application Round IV Include an estimate of budget costs by milestones using the form — GrantBudget3. doc Approximately $300,000 has been spent to -date on reconnaissance studies and feasibility studies. These funds have been provided by the participating utilities. At this time, a $500,000 grant is being requested from AEA to continue with feasibility, permitting, fish studies, geotechnical and preliminary engineering and design work. The participating utilities will contribute a matching amount of $500,000 so that a total of $1 million will be available for continued work on this project. AEA11-005 Grant Application Page 14 of 15 7/21/2010 /� AENELASKA Renewable Energy Fund Grant Application Round IV SECTION 9 — ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Contact information, resumes of Applicant's Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4. B. Cost Worksheet per application form Section 4.4.4. C. Grant Budget Form per application form Section 9. D. Letters demonstrating local support per application form Section 8. E. An electronic version of the entire application on CD per RFA Section 1.6. F. Authorized Signers Form. G. Governing Body Resolution or other formal action taken by the applicant's governing body or management per RFA Section 1.4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. - Provides as point of contact to represent the applicant for purposes of this application. - Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. H. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations. Print Name Bradley W. Evans Signature Title hief Executive Officer Date September 15, 2010 AEA11-005 Grant Application Page 15 of 15 7/21/2010