HomeMy WebLinkAboutTriangle Lake Hydro Grant Round4-Final
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 2 of 19 7/21/2010
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Metlakatla Indian Community (MIC)
Type of Entity:
MIC is a federally recognized Indian Tribe organized under the provisions of Section 16 of the Indian Reorganization
Act, 25 U.S.C. Section 476. Electric power is provided to the community by Metlakatla Power & Light (MP&L), a
community owned utility.
Mailing Address
P.O. Box 8
Metlakatla, AK 99926
Physical Address
8th and Upper Milton Street
Metlakatla, AK 99926
Telephone
907-886-4441
Fax
907-886-4471
Email
info@metlakatla.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Paul Brendible
Title
Director of Contracts and Grants
Mailing Address
P.O. Box 8
Metlakatla, AK 99926
Telephone
907-886-4441
Fax
907-886-4471
Email
paul.brendible@metlakatla.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)
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
X 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
AEA11-005 Grant Application Page 3 of 19 7/21/2010
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)
Triangle Lake 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 proposed project is the Triangle Lake hydroelectric project, a new generating plant to be
located on Annette Island. The 4.0 MW project will provide electric power to be transmitted
over the proposed transmission line between Metlakatla and Ketchikan that will be used to offset
diesel generation in Ketchikan and other interconnected communities. The Triangle Lake project
has been studied somewhat in the past and MIC is requesting a grant for Feasibility Analysis and
Conceptual Design.
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 Design and Permitting
X Feasibility Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
The proposed Triangle Lake hydroelectric project will be located on the west side of Annette
Island near the route of the proposed Metlakatla – Ketchikan Intertie. The project as presently
envisioned will be comprised of a small embankment dam at the outlet of Triangle Lake, a 1.3
mile long penstock and a powerhouse containing a single horizontal Francis turbine generating
unit with a capacity of 4.0 MW. The Triangle Lake project will provide additional hydroelectric
power to Metlakatla and, with construction of the Metlakatla – Ketchikan Intertie, to the
interconnected electric systems of Ketchikan, Wrangell and Petersburg. MIC will develop and
own the Triangle Lake project.
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Grant Application Round IV
AEA11-005 Grant Application Page 4 of 19 7/21/2010
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.)
The Triangle Lake hydroelectric project, when combined with the Metlakatla – Ketchikan
Intertie will produce electric power to be used to offset diesel generation in the interconnected
communities of Ketchikan, Wrangell and Petersburg. The project is estimated to be capable of
producing 17,324,000 kWh per year on an average annual basis. This amount of energy would
offset approximately 1,195,000 gallons of diesel fuel per year in Ketchikan, Wrangell and
Petersburg. At $2.50 per gallon (2010 Dollars), the Triangle Lake project would result in
savings of about $3.4 million per year in diesel power production costs, net of new hydroelectric
O&M costs. This cost savings is expected to be shared by electric consumers in Metlakatla,
Ketchikan, Wrangell and Petersburg. The reduction in pollutants emitted from diesel oil
combustion will provide benefits to the general public and the regional environment.
In addition, the project will provide greater flexibility in the operation of the hydroelectric
projects in the interconnected Metlakatla, Ketchikan, Wrangell and Petersburg electric systems
improving total hydroelectric generation overall and improving system reliability.
An important benefit to the Ketchikan area will be that the Triangle Lake project will provide
power from a source that is not dependent on the existing transmission line to Swan Lake. When
the Swan Lake transmission line is unavailable for any reason, Ketchikan is isolated from much
of its hydroelectric generation. The Triangle Lake project will still be available to provide power
from an alternative direction and as such, adds another source of backup generation in the event
of failure of the Swan Lake transmission line.
A further benefit of the Triangle Lake project is that permitting of the Triangle Lake project will
be much easier when compared to other potential hydroelectric developments in southern
Southeast Alaska. Annette Island is a federally recognized Indian Reservation inhabited and
owned in its entirety by the MIC. Accordingly, any upgrade to existing hydroelectric projects or
construction of new hydroelectric projects is not subject to State or Federal regulations.
Therefore, development of projects on Annette Island can be expedited without being subject to
the lengthy Federal Energy Regulatory Commission (FERC) review process that other
hydroelectric projects must undergo.
2.6 PROJECT BUDGET OVERVIEW
Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source
of other contributions to the project.
The total estimated cost of the Triangle Project through construction is $18,530,700. At this
time, MIC is requesting a grant of $500,000 to conduct the Feasibility Analysis and Conceptual
Design. No other funds are presently available or anticipated for the Triangle Lake project.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 5 of 19 7/21/2010
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. $ 500,000
2.7.2 Other Funds to be provided (Project match) $ 0
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 500,000
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)
$ 18,530,700
2.7.5 Estimated Direct Financial Benefit (Savings) $ 3,400,000 per year
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.)
Not available
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Grant Application Round IV
AEA11-005 Grant Application Page 6 of 19 7/21/2010
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 Project Manager for the Triangle Lake hydroelectric project will be Paul Brendible, MIC
Director of Contracts and Grants. Mr. Brendible will be assisted by C. Paul Bryant, General
Manager of Metlakatla Power & Light. Consultants and contractors will be retained as needed.
No project management assistance will be needed from AEA or any other government entity.
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.)
As presently proposed, the feasibility analysis and preliminary design of the Triangle Lake
hydroelectric project will be conducted in 2011. If the project is deemed technically and
economically feasible and the Metlakatla – Ketchikan Intertie is developed as planned, detailed
design of the Triangle Lake project will be conducted in 2012. Construction of the Triangle
Lake project will be conducted in 2013 and 2014 with commercial operation beginning in 2015.
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.)
Scheduled project milestones are as follows:
Select Consultant for Feasibility Analysis April 1, 2011
Complete Study and Preliminary Design September 30, 2011
Select Consultant for Detailed Design March 1, 2012
Complete Field Research and Studies June 30, 2012
Complete Design October 31, 2012
Request Bids for Materials & Construction January 15, 2013
Select Construction Contractor February 28, 2013
Begin Construction April 15, 2013
Complete Construction December 15, 2014
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 7 of 19 7/21/2010
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.
MIC will retain consultants and engineers as needed to provide design and construction services.
These contractors will be retained through a process of solicitation of proposals, evaluation of
proposals by MIC and MP&L and final selection by MIC.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
MIC will provide written monthly summary reports of progress on the project. The monthly
reports will include status of activities presently underway, selection of contractors, budget status
and schedule progress. Achievement of milestones will be reported as will commitments for
material and construction services procurement. In addition, MIC will provide ongoing status
reports on its website and will remain in regular telephone contact with the Authority’s project
representative.
3.6 Project Risk
Discuss potential problems and how you would address them.
The Triangle Lake hydroelectric project is expected to be a low risk project. Various studies
will be conducted early in the design process to determine the design specifications for the
project.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 8 of 19 7/21/2010
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.
The hydroelectric energy resources available in Metlakatla at the present time are the 1.0 MW
Chester Lake project and the 3.0 MW Purple Lake project. The two plants are capable of
generating 25,045 MWh per year on average of which about 8,758 MWh is presently estimated to
be surplus to the needs of MP&L. Studies have been conducted in the past that have identified
potential expansions to the existing hydroelectric facilities as well as a new hydroelectric facility
at Triangle Lake. It is estimated that these potential new hydroelectric resources could generate
an additional 20,700 MWh on an average annual basis.
Ketchikan Public Utilities (KPU) owns and operates 11.7 MW of hydroelectric generating
capacity at three separate facilities located relatively close to Ketchikan and 23.0 MW of diesel
generation capacity located in its Bailey power plant. The 22.5 MW Swan Lake hydroelectric
project, owned by the Southeast Alaska Power Agency (SEAPA), is also available to KPU and
provides a significant amount of the total power supply requirement in Ketchikan. The total
amount of energy available from the Swan Lake project and KPU-owned hydroelectric resources
is about 137,000 MWh on an average annual basis.
The Swan-Tyee Intertie (STI) has recently been completed by SEAPA. This transmission line
interconnects the electric systems of Ketchikan, Wrangell and Petersburg and provides for the
delivery of power from the 22.5 MW Tyee Lake hydroelectric project to Ketchikan. A significant
amount of the generating capability of the Tyee Lake project has been surplus to the needs of
Petersburg and Wrangell in the past. With the STI, surplus generation from the Tyee Lake
project is available to KPU to offset some of KPU’s diesel generation. To the extent that the
combined hydroelectric resources are not sufficient to supply the entire power supply requirement
at any time, diesel generation will continue to be used as a supplement.
With the high price of heating oil, there is a significant change to the use of electric space heat by
the residential, commercial and public building customers in Ketchikan. The switch to electric
space heat is causing a noticeable increase in electric loads and as a result, more demand is being
placed on KPU’s diesel generators to meet the growing need for electricity. The present cost of
diesel generation in Ketchikan is estimated to be approximately 17 cents/kWh, a cost that is much
higher than was experienced just a few years ago when fuel prices were lower.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 9 of 19 7/21/2010
The primary purpose of the Triangle Lake project will be to make additional existing
hydroelectric generation available to serve loads in Ketchikan, Wrangell and Petersburg. KPU
has evaluated several alternative energy resources in recent years including the Whitman Lake
and Mahoney Lake hydroelectric projects, a municipal solid waste to energy project, bio-diesel
generation, and new diesel generators. In order to fully utilize the output of the Triangle Lake
project it will be necessary to complete the proposed Metlakatla – Ketchikan Intertie.
There are many advantages to the Triangle Lake hydroelectric project when compared to the
other alternatives being considered. Principal among the benefits of the project are that no fuel of
any kind is needed and the environmental impacts of are very low compared to building new
generating plants elsewhere. In using hydroelectric energy to supplant diesel generation, the
Intertie project will reduce CO2 and NOx emissions in the region. Further, the reduction of diesel
generation will reduce the amount of diesel fuel that must be barged into Ketchikan thereby
providing an incremental reduction in the probability of fuel spills and other fuel handling
mishaps.
A noticeable benefit of the Triangle Lake project will be that it will provide clean, hydroelectric
energy to Ketchikan, Wrangell and Petersburg that can then be used to offset the use of oil for
space heating. Many residents, schools and businesses in these communities are considering
converting to electric space heat but the high cost of electricity produced with diesel generation is
a deterrent to this transition. Replacing oil heat with electric heat will reduce the amount of
pollutant emissions in the area including CO2, SO2 and NOx.
4.2 Existing Energy System
4.2.1 Basic configuration of Existing Energy System
Briefly discuss the basic configuration of the existing energy system. Include information about
the number, size, age, efficiency, and type of generation.
The electric system in Metlakatla includes 4.0 MW of hydroelectric capacity and 3.3 MW of
diesel generating capacity. The diesel generator, a 4,500 hp Caterpillar unit, is used primarily as
a backup emergency reserve. A 1.0 MW Battery Energy Storage System (BESS) was installed in
1997 to provide emergency backup power for a limited time as well as balance out frequency and
voltage fluctuations on the MP&L system.
The Chester Lake hydroelectric project was constructed in 1986. It includes a 40 foot high
concrete arch dam, a 20 inch diameter steel penstock approximately 3,521 feet long and a
powerhouse with a single 1,042-kW Pelton turbine generating unit.
The Purple Lake hydroelectric project is comprised of a dam, reservoir, tunnel, penstock and
powerhouse containing three horizontal Francis type turbine generating units, each rated at 1,000-
kW during normal operation. The project was originally built in 1956, however a new control
system was installed in 1997, the generators were all rewound in the 1990’s and the turbine
runners were refinished in the 1990’s as well.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 10 of 19 7/21/2010
The existing generating units in Ketchikan are shown in the following table:
Year
Installed
Rated
Capacity(kW)(1)
Energy Generation
Capability (MWh)(2)
KPU Owned Hydroelectric
Silvis Lake 1968 2,100 10,300
Beaver Falls Unit #1 1947 1,000 37,800 (3)
Beaver Falls Unit #3 1954 2,200 -
Beaver Falls Unit #4 1954 2,200 -
Ketchikan Unit #3 1923 1,400 18,000 (3)
Ketchikan Unit #4 1938 1,400 -
Ketchikan Unit #5 1957 1,400 -
Subtotal 11,700 66,100
Swan Lake Hydroelectric 1983 22,500 71,400
KPU-Owned Diesel(4)
Bailey Unit #1 1970 3,500 -
Bailey Unit #2 1970 3,500 -
Bailey Unit #3 1976 5,500 -
Bailey Unit #4 1998 10,500 -
Subtotal 23,000 -
Total 57,200 137,500
(1) The rated capacity may exceed the normal maximum operating capacity from the generating units.
(2) Energy generation capability for hydroelectric resources is based on average water conditions and load levels
similar to those experienced in 2000. Hydroelectric energy generation varies from year to year.
(3) Energy generation for the KPU-owned hydroelectric resources is not differentiated by unit.
(4) Diesel generators are shown as capacity resources only, although they are used to provide energy supplemental to
that provided by the hydroelectric facilities. At a 70% annual plant factor, the annual energy generation capability
of the four diesel units is 141,040 MWh.
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.
At the present time, MP&L uses its hydroelectric generating resources, the Chester Lake and
Purple Lake projects, to meet its own load. Additional energy generation capability, surplus to
the needs of MP&L, exists at these plants.
In Ketchikan, KPU fully utilizes the generating capability of its City-owned hydroelectric
generating facilities. Power is then purchased from the Swan Lake project to meet the remaining
energy requirement. At certain times, the generating capability of the combined hydroelectric
facilities is insufficient to supply the total load in Ketchikan. This hydroelectric shortage can
actually last for an extended time if local precipitation is low. During the times when
hydroelectric energy is insufficient, diesel generation is used to meet the remaining load
requirement.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 11 of 19 7/21/2010
With the Triangle Lake project, additional hydroelectric energy generation will be available to
KPU to supply loads and avoid all or a portion of the amount of diesel generation that would be
needed otherwise. Another advantage of the project will be that the hydroelectric facilities of the
Metlakatla, Ketchikan, Petersburg and Wrangell electric utilities can be operated in a coordinated
fashion so as to maximize the capability of all the facilities. This operating improvement is
typical of larger systems where individual generating units can be operated within their most
efficient ranges and the various reservoirs can be operated most effectively.
With the Metlakatla-Ketchikan Intertie and the recently completed Swan-Tyee Intertie, a
significantly larger southern Southeast Alaska interconnected electric system will exist. The
various hydroelectric facilities within this four community system can be operated on an
integrated basis for overall maximum efficiency. Reliability in the four communities will be
improved through additional backup options and maintenance on various generating units and
transmission lines can be effectively coordinated to reduce outage impacts to electric consumers.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
In 2009, the total energy sales in Metlakatla were approximately 17,000 MWh of which 7,400
MWh, or 43%, was to residential customers. As previously indicated, the total annual
hydroelectric energy generation capability of the existing hydroelectric resources in Metlakatla is
about 25,000 MWh.
Total energy sales in Ketchikan in 2009 were about 158,100 MWh. Energy sales in Ketchikan
are expected to increase noticeably in the immediate future as various residential, public authority
and commercial customers switch to electric heat in response to continuing high oil prices. The
Metlakatla-Ketchikan Intertie will contribute to lower power costs in Ketchikan. As a municipal
electric utility, KPU sets rates based on its costs. Lower power costs will mean lower electric
rates, a direct benefit to electric consumers.
It is expected that the benefits of the Triangle Lake project in offsetting diesel generation costs
will be jointly shared by Ketchikan, Petersburg, Wrangell and Metlakatla. In Ketchikan,
Petersburg and Wrangell, the benefits will mean lower electric rates to consumers. In Metlakatla,
the benefits can also mean lower electric rates to electric consumers. The benefits in Metlakatla
can also be utilized in paying the costs of repairs, replacements and improvements to MP&L’s
electric system.
With the Swan-Tyee Intertie in operation, KPU is obligated pursuant to contract to use power
from the Tyee Lake project, as available, before it makes purchases from Metlakatla. This issue
may limit the amount of power KPU can purchase from MP&L.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 12 of 19 7/21/2010
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 proposed Triangle Lake hydroelectric project will be located on the west side of Annette
Island near the route of the proposed Metlakatla – Ketchikan Intertie. The project as presently
envisioned will be comprised of a small embankment dam at the outlet of Triangle Lake, a 1.3
mile long penstock and a powerhouse containing a single horizontal Francis turbine generating
unit. The dam would raise the normal maximum pool elevation from 383 feet to 400 feet, msl,
and allowing for up to 7 percent losses a 4.0 MW turbine generating unit could be installed.
Access to the proposed powerhouse site would be via a new 2.7 mile extension from a logging
road that connects the Base Camp with the Dash Point Road staging area. An additional 1.3 mile
access road would be needed along the penstock route to the dam site. The transmission line
from the powerhouse switching station would be about 2.7 miles long and would operate at 34.5-
kV.
For purposes of preparing a preliminary cost estimate, it is assumed that the dam would be
constructed at El. 395 and would be 300 feet long at its crest and 50 feet wide at its base. Crest
width would be 12 feet with rock embankment slopes of approximately 34 degrees. The dam
would have an impervious clay core and a 50 foot wide spillway would be excavated from one of
the abutments and would have an un-gated concrete crest.
The drainage area of the project is estimated to be 5.5 square miles and the inflow to Triangle
Lake is estimated at 77.9 cfs, which corresponds to an annual average runoff of 193 inches over
the watershed. The site is assumed to have no in-stream flow downstream of the embankment
dam. With an average net head of 370 feet and an allowance of 5% for outages, the estimated
annual generation would be 17,324 MWh from the 4.0MW generating unit.
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 Triangle Lake hydroelectric project will be located entirely on Annette Island and as such,
MIC will have authority over all aspects related to land ownership and site approval. MIC has
studied the project in the past and will work with its consultants, engineers and advisors to
determine its most optimal configuration.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 13 of 19 7/21/2010
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
A significant benefit of the Triangle Lake project is that permitting will be much easier when
compared to other potential hydroelectric developments in southern Southeast Alaska. Annette
Island is a federally recognized Indian Reservation inhabited and owned in its entirety by the
MIC. Accordingly, any upgrade to existing hydroelectric projects or construction of new
hydroelectric projects is not subject to State or Federal regulations. Therefore, development of
projects on Annette Island can be expedited without being subject to the lengthy Federal Energy
Regulatory Commission (FERC) review process that other hydroelectric projects must undergo.
MIC will have authority over all other necessary permits and approvals.
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
It is not expected that these environmental issues will be significant.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 14 of 19 7/21/2010
4.4 Proposed New System Costs and Projected Revenues
(Total Estimated Costs and Projected Revenues)
The level of cost information provided will vary according to the phase of funding requested and
any previous work the applicant may have done on the project. Applicants must reference the
source of their cost data. For example: Applicants Records or Analysis, Industry Standards,
Consultant or Manufacturer’s estimates.
4.4.1 Project Development Cost
Provide detailed project cost information based on your current knowledge and understanding of
the project. Cost information should include the following:
Total anticipated project cost, and cost for this phase
Requested grant funding
Applicant matching funds – loans, capital contributions, in-kind
Identification of other funding sources
Projected capital cost of proposed renewable energy system
Projected development cost of proposed renewable energy system
A cost estimate has been prepared for the Triangle Lake project based on estimates from previous
engineering studies adjusted for current labor and material prices and other factors.
Triangle Lake Hydroelectric Project
Estimated Project Total Cost and Grant Funding Request
Direct Construction
Mobilization 135,100$
Construction Camp 1,013,200
Land and Land Rights -
Structures and Improvements 1,334,300
Reservoirs Dams and Waterways 3,864,800
Turbines and Generators 2,123,200
Accessory Electrical Equipment 1,080,700
Miscellaneous Power Plant Equipment 270,200
Roads, Railways and Bridges 1,621,100
Station Equipment & Structures 262,400
Transmission Line Poles & Fixtures 374,600
Transmission Line Conductor & Devices -
Subtotal Direct Construction 12,079,600$
Engineering
Design 1,087,400
Geotechnical, Borings & Seismic 362,500
Licensing -
Construction Management 724,900
Subtotal 2,174,800
Subtotal - Direct Construction and Engineering 14,254,400$
Contingency at 30%4,276,300
Total Project Cost 18,530,700$
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 15 of 19 7/21/2010
The total grant requested at this time is $500,000 to conduct necessary feasibility assessments, preliminary
design and conduct basic onsite investigations. The feasibility assessment will involve a detailed
evaluation of regional power supply needs and resources in the future. Discussions will be conducted with
utility management in the communities to establish reasonable estimates of future power supply options
and costs.
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.)
It is estimated that annual O&M costs will be relatively low. No grant funds will be needed for
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
Power generated at Triangle Lake will be sold over the Metlakatla – Ketchikan Intertie to
Ketchikan Public Utilities (KPU), Wrangell and Petersburg. The power sales price will be
negotiated between MIC and these utilities and is expected to be reflective of the cost of power
available to KPU, Wrangell and Petersburg from other alternatives.
At the present time, KPU, Petersburg and Wrangell pay 6.8 cents per kWh for Swan Lake and
Tyee Lake power that is purchased from the Southeast Alaska Power Agency (SEAPA). Other
new hydroelectric alternatives for KPU are estimated to have a cost of power in the range of 7.0
cents per kWh and the cost of diesel generation for KPU is about 17 cents per kWh when diesel
fuel is at $2.50 per gallon. It is estimated that the sales price of power from the Triangle Lake
project would be in the range of 4.5 to 8.0 cents per kWh.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
See attached application worksheet.
It is important to note the in the estimation of benefits for the Triangle Lake project, only the net
fuel and incremental diesel O&M savings have been included. Additional “capacity” benefits
will be realized by Ketchikan in that the project will provide additional reserve benefits to KPU.
The value of this capacity benefit has not been estimated at this time.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 16 of 19 7/21/2010
Fuel savings have been estimated assuming that the full amount of hydroelectric generation from
the project will be sold to KPU, Petersburg and Wrangell. Energy loads in Ketchikan, Petersburg
and Wrangell are expected to increase significantly as more emphasis is placed on electric space
heat in the community.
The calculation of the Benefit Cost ratio shown in the Cost worksheet is based on the net present
value of estimated net benefits over a 30 year project life assuming a 5.5% discount rate.
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 net present value savings of the net benefit of the Triangle Lake hydroelectric project is
$56,427,000 over the life of the project (30 years for this analysis). This benefit will be derived
almost entirely from the savings in fuel costs for diesel generation.
A detailed analysis of the benefits of the Triangle Lake project has been developed assuming full
utilization of the generating capability of the project to offset diesel generation. The analysis
estimates the amount of diesel fuel offset on a yearly basis assuming a fuel use rate of 14.5 kWh
per gallon. Based on an assumed present cost of diesel fuel of $2.50 per gallon and assumed
escalation in diesel fuel of 3% per year, the annual savings in fuel costs is estimated. The
incremental savings in diesel generator O&M is also estimated based on an O&M cost of 1.5
cents per kWh.
The estimated annual savings in fuel costs are reduced by the O&M costs for the Triangle Lake
project.
The total net present value savings of the estimated net benefits of the Intertie over a 30-year
analysis period has been calculated assuming a 5.5% discount rate. The net present value savings
based on this analysis is $56,457,000 resulting in a benefit to cost ratio of 3.05 for the project cost
of $18,530,700.
Other economic benefits that have not been evaluated yet include the capacity benefit that KPU
will realize with the Triangle Lake project since the project will be available to serve loads in
Ketchikan even when the Swan Lake project or the Swan Lake transmission line are unavailable.
It is also important to note that with the Triangle Lake project, KPU, Petersburg and Wrangell
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 17 of 19 7/21/2010
will be able to provide lower power costs in their communities than could be realized with diesel
generation. These lower power costs will then help local residents, public facilities and
businesses realize greater savings if they choose to transition from oil to electric space heat. The
lower electric rates will consequently serve as an additional incentive to convert to electric heat.
The amount that local consumers would save in heating bills by converting to electric heat has not
been evaluated as part of this application.
Other benefits of the Triangle Lake hydroelectric project include:
More efficient use of the area’s hydroelectric generating resources
Relatively minor negative environmental impacts related to installation and operation of
the project
Reduced oil consumption in the area
Reduced air pollution from burning of oil
Incrementally lower risks of fuel handling mishaps
Incrementally lower need for fuel deliveries in and transport through Southeast Alaska
Lower greenhouse gas emissions
Greater electric system reliability
More encouragement to convert to electric space heat in the area
Additional construction jobs in the Metlakatla area
Creation of additional power plant operator jobs in the Metlakatla area
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
The Triangle Lake hydroelectric project will be operated by MP&L in coordination with KPU and
SEAPA. Agreements will be established to assure effective maintenance and operating standards
are in place and administered. Further, standard utility operating procedures to assure safe and
reliable operation will be identified in contracts between MP&L, KPU and SEAPA and will be
adhered to.
MP&L, KPU and SEAPA currently own, operate hydroelectric facilities similar to the Triangle
Lake project and are very familiar with what will be needed to assure a long, useful life for the
project.
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Grant Application Round IV
AEA11-005 Grant Application Page 18 of 19 7/21/2010
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.
MIC is prepared to begin the feasibility study of the Triangle Lake project as soon as grant funds
are made available.
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.
MIC fully supports the Triangle Lake hydroelectric project. No local opposition to the project is
expected.
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
The Triangle Lake project is expected to be fully grant funded. Detailed costs are provided in
the attached budget form.
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. 70% estimated
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 4
ii. Rated capacity of generators/boilers/other 23,000 kW
iii. Generator/boilers/other type Diesel generators
iv. Age of generators/boilers/other Varies – 1970 through 1998
v. Efficiency of generators/boilers/other Approximately 14.5 kWh per gallon of diesel fuel
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor $220,000
ii. Annual O&M cost for non-labor $30,000
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] 171,800,000 kWh (2009 actual for Ketchikan Public Utilities)
ii. Fuel usage
Diesel [gal] 950,000 (approx. for 2009 for KPU)
Other
iii. Peak Load NA
iv. Average Load 19,600 kW (2009 actual for KPU)
v. Minimum Load NA
vi. Efficiency NA
vii. Future trends Increasing loads with conversion to electric space heat.
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] Unknown
ii. Electricity [kWh] Unknown
iii. Propane [gal or MMBtu] Unknown
iv. Coal [tons or MMBtu] Unknown
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]
17,324,000 hydroelectric
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] 17,324,000
ii. Heat [MMBtu] None
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu] None
ii. Coal [tons or MMBtu] None
iii. Wood [cords, green tons, dry tons] None
iv. Other None
4. Project Cost
a) Total capital cost of new system $18,530,700
b) Development cost $18,530,700
c) Annual O&M cost of new system $ 250,000
d) Annual fuel cost None
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 1,195,000 gallons per year
ii. Heat
iii. Transportation
b) Current price of displaced fuel $ 2,987,000 per year (at $2.50 per gallon)
c) Other economic benefits $ 287,000 per year in diesel generator O&M
d) Alaska public benefits $ 3,274,000 per year
6. Power Purchase/Sales Price
a) Price for power purchase/sale Assumed 8.5 cents/kWh (price to be negotiated later)
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 3.1
Payback (years) 5
Renewable Energy Fund Grant Round IV Grant Budget Form 7-21-10 Milestone or Task Anticipated Completion Date RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In-kind/Federal Grants/Other State Grants/Other TOTALS Triangle Lake – Feasibility Assessment Sept. 30, 2011 $ 500,000 $ 0 $ 500,000 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ TOTALS $ 500,000 $ 500,000 Budget Categories: Direct Labor & Benefits $ 40,000 $ $ 40,000 Travel & Per Diem $ $ $ Equipment $ $ $ Materials & Supplies $ $ $ Contractual Services $ 460,000 $ $ 460,000 Construction Services $ $ $ Other $ $ $ TOTALS $ 500,000 $ $ 500,000 Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)- Add additional pages as needed
Renewable Energy Fund Grant Round IV Grant Budget Form 7-21-10 Project Milestones that should be addressed in Budget Proposal Reconnaissance Feasibility Design and Permitting Construction 1. Project scoping and contractor solicitation. 2. Resource identification and analysis 3. Land use, permitting, and environmental analysis 5. Preliminary design analysis and cost 4. Cost of energy and market analysis 5. Simple economic analysis 6. Final report and recommendations 1. Project scoping and contractor solicitation. 2. Detailed energy resource analysis 3. Identification of land and regulatory issues, 4. Permitting and environmental analysis 5. Detailed analysis of existing and future energy costs and markets 6. Assessment of alternatives 7. Conceptual design analysis and cost estimate 8. Detailed economic and financial analysis 9, Conceptual business and operations plans 10. Final report and recommendations 1. Project scoping and contractor solicitation for planning and design 2. Permit applications (as needed) 3. Final environmental assessment and mitigation plans (as needed) 4. Resolution of land use, right of way issues 5. Permit approvals 6. Final system design 7. Engineers cost estimate 8. Updated economic and financial analysis 9. Negotiated power sales agreements with approved rates 10. Final business and operational plan 1. Confirmation that all design and feasibility requirements are complete. 2. Completion of bid documents 3. Contractor/vendor selection and award 4. Construction Phases – Each project will have unique construction phases, limitations, and schedule constraints which should be identified by the grantee 5. Integration and testing 6. Decommissioning old systems 7. Final Acceptance, Commissioning and Start-up 8. Operations Reporting