HomeMy WebLinkAboutOld Harbor Hydroelectric Final Design Round IV Grant ApplicationAlaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Final Design and Permitting
Renewable Energy Fund-Round IV
Grant Application
Submitted by:
Alaska Village Electric Cooperative, Inc
4831 Eagle Street
Anchorage, Alaska 99503
Submitted to:
Alaska Energy Authority
813 West Northern Lights Blvd.
Anchorage, AK 99503
September 15, 2010
ALASKA VILLAGE ELECTRIC COOPERATIVE,INC.
Renewable Energy Fund Round IV
Grant Application
AEA 11-005 Application Page 1 of 17 7/21/2010
Old Harbor Hydroelectric Design and Permitting
SECTION 1 –APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Alaska Village Electric Cooperative, Inc.
Type of Entity:
Electric Utility
Mailing Address
4831 Eagle Street
Anchorage, AK 99503
Physical Address
Telephone
(907) 565-5531
Fax
(907) 562-4086
Email
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Brent Petrie
Title
Manager, Community Development Key
Account
Mailing Address
4831 Eagle Street
Anchorage, AK 99503
Telephone
(907)565-5531
Fax
(907)562-4086
Email
BPetrie@avec.org
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application would 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.
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 2 of 17 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)
Old Harbor Hydroelectric Phase III Final Design and Permitting
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.
Old Harbor (pop. 193) is located on the southeast coast of Kodiak Island, 70 miles southwest of
the City of Kodiak and 322 miles southwest of Anchorage.
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 Alaska Village Electric Cooperative (AVEC), the electrical utility provider in Old Harbor,
Alaska, is proposing to complete final design and permitting of hydroelectric project in Old
Harbor, Alaska.The proposed project is a 300 kW run of the river hydroelectric plant with a
diversion structure, pipeline, powerhouse, and electric line. The project involves collecting up
to 7 cfs of water year round from Mountain Creek tributary of Barling Bay Creek and
transporting it to a tributary of Lagoon Creek. The project would meet the existing electricity
demand of the community.
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 3 of 17 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 primary benefit of this project would be to prepare the final design and obtain permits for a
hydroelectric facility in Old Harbor. Once this work is completed, AVEC would be able to seek
and likely acquire funding for construction of the project.
In 2009, Old Harbor used about 54,000 gallons of fuel.The project would displace an estimated
95% of the fuel consumed.At ISER’s projected fuel costs, the project would save savings of
about $165,000 during its first year of operation (2014). Over the life of the project, 30 years,
this savings has a present value of $4.0 million using a net rate of 3% (5% discount, 2%
inflation).Over the life of the project, 30 years, this savings has a present value of $4.0 million
using a net rate of 3% (5% discount, 2%inflation).
Detailed benefits are listed in Section 5.0.
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 project cost for the project is $250,000 of which $237,500 is requested in grant funds
from AEA. The remaining $12,500 (5%)would be matched in cash by AVEC.
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.$237.500
2.7.2 Other Funds to be provided (Project match)$12,500
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2)$250,000
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)$4,100,000
2.7.5 Estimated Direct Financial Benefit (Savings)$4,000,000
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.)
$
SECTION 3 –PROJECT MANAGEMENT PLAN
Describe who would 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.
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 4 of 17 7/21/2010
3.1 Project Manager
Tell us who would 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.
AVEC would provide overall project management and oversight.AVEC is the electric utility
serving Old Harbor.To support the AVEC team,the current engineering and environmental
consultants would continue to work on the project.
Brent Petrie, Manager, Community Development and Key Accounts, would lead the project
management team consisting of AVEC staff, consultants, and contractors.He has worked for
Alaska Village Electric Cooperative since 1998, where he manages the development of
alternatives to diesel generation for AVEC such as using wind, hydropower, and heat recovery.
He also manages relationships with AVEC’s largest customers and is the project manager for
AVEC’s many construction projects as an energy partner of the federally funded Denali
Commission.
Mr. Petrie has worked in the energy and resource field for more than thirty years, having
worked for the federal and state governments as consultant, planner, and project manager. He
has been a utility manager or management consultant since 1993. As General Manager of
Iliamna-Newhalen-Nondalton Electric Cooperative from 1994 to 1998, he reported to a seven-
member, elected board of directors, and served as project manager on its hydroelectric project
development. He is an elected member of the Board of Directors of the Utility Wind Interest
Group representing rural electric cooperatives and serves on the Power Supply Task force of
the National Rural Electric Cooperative Association. Mr. Petrie has a Master’s Degree in Water
Resource Management and a Bachelor's degree in Geography. His resume is attached.
3.2 Project Schedule
Include a schedule for the proposed work that will be funded by this grant. (You may include a
chart or table attachment with a summary of dates below.)
Authorization to Proceed:September 2011
Select Contractors:September 2011
Permit applications prepared and submitted: January 2012
Final environmental assessment and mitigation plans:January 2012
Resolution of land use, right of way issues:August 2012
Permit approvals:May 2012
Final system design:December 2012
Engineers cost estimate:December 2012
Updated economic and financial analysis:January 2012
Final business and operational plan:August 2012
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.)
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 5 of 17 7/21/2010
1.Select Contractors (September 2011)
The engineering and environmental consultants are already working the Federal Energy
Regulatory Commission (FERC) licensing aspect of this project; therefore there would be no
need to advertise or select contractors.
2.Permit applications prepared and submitted (September 2011-January 2012)
The permit applications for the project would be prepared between when the project is funded
and January 2012. Information on wetlands and fisheries and project impacts acquired during
the previous phase would be incorporated into the permit applications. The environmental
consultant would meet with agencies prior to submitting the applications to ensure that the
needed information is provided.
3.Final environmental assessment and mitigation plans (September 2011-January 2012)
The FERC license application, including the environmental document for the FERC to complete
their environmental assessment (EA), would be completed. AVEC would assist the FERC with
any questions regarding their EA. In addition, AVEC would assist the U.S. Fish and Wildlife
Service (USFWS) to complete their required environmental document for issuing project right-
of-way through the Kodiak Island Refuge.
4.Resolution of land use, right of way issues:(September 2011-August 2012)
AVEC would work with the USFWS to gain right of way through the Kodiak Island Refuge.
AVEC’s engineering contractor would prepare all needed project/right of way exhibits. AVEC
would also work with the Old Harbor Native Corporation and the City of Old Harbor to acquire
right of way for the project components on their lands.
5.Permit approvals (May 2012)
It is expected that the permits would be issued within 5 months of application submissions.
Once the applications are approved, a mitigation requirements memorandum would be drafted
to ensure that the construction contractor would abide by all requirements
6.Final system design (May 2012-December 2012)
The engineering consultant would prepare the final design based on the conceptual design
licensed by the FERC and permitted by the agencies.
7.Engineers cost estimate (November 2012-December 2012)
The engineering consultant would prepare an engineer’s cost estimate based on the final
design.
8.Updated economic and financial analysis (November 2012-December 2012)
A final economic and financial analysis, which examines final design and construction costs,
operating and maintenance costs, user rates, and other funding mechanisms,would be
developed.
9.Final business and operational plan (January 2012-August 2012)
Final business and operational plans would be developed working with the City of Old Harbor
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 6 of 17 7/21/2010
and the Old Harbor Native Corporation.
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.
AVEC would use a project management approach that has been used to successfully plan,
design,and construct projects throughout rural Alaska: A team of AVEC staff and external
consultants.
AVEC staff and their role on this project includes:
Meera Kohler, President and Chief Executive Officer,would act as Project Executive and
would maintain ultimate authority programmatically and financially.
Brent Petrie, Manager, Community Development and Key Accounts, would lead the
project management team consisting of AVEC staff, consultants, and contractors.
Together with his group, Brent would provide coordination of the project. The group’s
resources include a project coordinator, contracts clerk, accountant, engineer,and a
community liaison.Brent would be responsible for reporting directly to AEA on the
status of the project.
Mark Teitzel, Vice President/Manager of Engineering,would provide technical
assistance and information on the existing power system and possible issues and project
study needs.
Debbie Bullock, manager of administrative services,would provide support in
accounting,payables, financial reporting, and capitalization of assets in accordance with
AEA guidelines.
Anna Sattler, community liaison,would lead development of the Economic Analysis and
the Business and Operating Plan. Ms. Sattler would also communicate directly with Old
Harbor residents to ensure that the community is informed
The current project manager for the project, Robin Reich of Solstice Environmental Consulting,
would lead day to day work on the project, including ensuring that:
Project schedule and budget adherence
Permit applications are submitted, agencies questions are answered, and the
environmental process is completed.
Final design consultants questions are answered and agencies’ concerns are addressed
in the final design
AVEC’s Community Liaison has the most current project information to provide to the
community
Contractors for this project would include:
o Geotechnical consultant.AVEC would select and employ an experienced geotechnical
consultant who would:
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 7 of 17 7/21/2010
o Conduct a geotechnical and natural hazards field study and report of the project
area
Engineering consultant.AVEC would continue to employ an engineering consultant who
would:
o Provide final design and cost estimate for the project
Environmental Consultant.AVEC currently has an on-call contract with Solstice Alaska
Consulting, Inc for environmental permitting. Solstice would:
o Consult with agencies
o Develop and submit permit applications
o Document mitigation requirements
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
AVEC would require that monthly written progress reports be provided with each invoice
submitted from contractors. The progress reports would include a summary of tasks
completed, issues or problems experienced, upcoming tasks, and contractor’s needs from
AVEC. Project progress reports would be collected and forwarded as one package to the AEA
project manager each month.
Quarterly face-to-face meetings would occur between AVEC and AEA to discuss the status of all
wind projects funded through the AEA Renewable Energy Grants program. Individual project
meetings would be held, as required or requested by AEA.
3.6 Project Risk
Discuss potential problems and how you would address them.
Land Issues.Because the project is on Kodiak Island Refuge conservation lands,obtaining site
control for this project would take time and a concerted effort. AVEC has already started
working with the USFWS and would continue to involve the Service in project planning to
ensure that all the Service’s questions and concerns are addressed. The Old Harbor Native
Corporation and their legal counsel are also assisting with this effort. Because AVEC is working
together with the Corporation (the former landowner) early in the process, and because the
Refuge issued an easement for a previous project alignment, it is expected that site control
would be issued for the project.
Environmental Permits.A number of permits would be needed in order to construct this
project. These permits would take time and consideration of agencies’ issues to obtain. AVEC
designed the 2010 environmental field effort with agency involvement and would be meeting
with the agencies to report results. The agencies would continue to be involved in the next
stages of the project to ensure that they are “brought along” and that their issues and concerns
are understood and addressed.
Construction Funding.By having the project designed and permitted, AVEC would be able to
capitalize on many funding opportunities.Because the Old Harbor Native Corporation and the
City of Old Harbor are involved and actively investigating funding options, it is expected that
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 8 of 17 7/21/2010
this important community project would be funded.
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 Project would utilize water taken from the East Fork of Mountain Creek at an elevation of
approximately 840 feet. Stream gauging efforts by the State of Alaska Department of Natural
Resources water division from July 1993 to May 1996 and by Polarconsult from June 1998 to
August 2000 indicate that there is adequate water to meet Old Harbor's energy needs year
round. The median minimum stream flow observed in the spring was about 3 cfs. The project is
currently sized to utilize a maximum of 7 cfs although this may change after completion of the
feasibility analysis.
The powerhouse is located at an elevation of about 80 feet. This gives a net head of about 760
feet and results in a 300 kW peak output. Minimum power spring would be about 140 kW.
Clearly this resource is able to provide a significant benefit to the community. The only
drawback with this resource is the lower power output during the winter and spring. However,
given the Old Harbor's current peak load is about 100 kW, this is currently not an issue.
A wind meteorological tower installed on Sitkalikak Island near Old Harbor to assess the wind
resource found that wind would not be suitable for community power.
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.
AVEC currently provides power to the community of Old Harbor with diesel generators.With
the combined capacity of 703 kW,the Old Harbor power plant has one Detroit Diesel generator
(235 kW,overhauled in 2003 and two Caterpillar generators (235 kW,overhauled in 2005,and
236 kW,overhauled in 2005).The transmission and distribution system consists primarily of
overhead lines operating at 7200 volts.
The data indicates that peak demands in Old Harbor have remained relatively constant over the
past five years with a maximum one-minute average peak of 169 kW occurring in 2005. Average
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 9 of 17 7/21/2010
demand over the same period was approximately 83 kW.
The Old Harbor plant generated 13.30 kWh for each gallon of fuel consumed in 2009.
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.
Old Harbor relies exclusively on diesel fuel for their electrical and heating needs.In 2009,
54,174 gallons of diesel fuel was consumed to generate 720,618 kWh.The hydroelectric project
would almost completely eliminate the use of diesel fuel for electrical generation. Additionally,
the hydro project would have the potential to significantly cut the amount of heating fuel used if
the significant amount of excess energy from the hydro is utilized.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The primary impact of this project would be the stabilization of energy rates. If a significant
portion of construction is eventually funded then the impact on the local energy market would
be a significant reduction in electrical rates.
Construction of a hydroelectric system in Old Harbor would decrease the amount of diesel fuel
used for power generation.The diesel generator use in Old Harbor would be decreased thereby
decreasing generator operations and maintenance costs and enabling generators to last longer
and need fewer overhauls.
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 project is a small run of river hydroelectric project. A small weir would impound
water to divert it through the intake structure where leaves and sediment would be filtered out.
The water would then enter the pipeline,which consists of HDPE in the upper section. Steel
pipe would be used in the downhill section to handle the higher pressures. The majority of the
pipeline would have a diameter of 12 inches. Utilizing 7 cubic feet per second of water with the
gross head of 760 feet would result in an installed capacity of about 300 kW. At a 300 kW size,
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 10 of 17 7/21/2010
annual generation would be 2,000,000 kWh representing a capacity factor of 77%. In 2009,Old
Harbor sold 669,340 kWh.
Extensive feasibility, permitting, and FERC licensing in the past confirmed this project as a
feasible alternative to diesel fuel. However, the two factors that suspended the project
development, which continue to represent a risk to the project development, are the cost of
diesel fuel and the monitoring conditions imposed on the project by regulators. The cost of
diesel, delivered in Old Harbor, dropped to less than $1.00 per gallon. Secondly, the monitoring
requirements effectively negated all benefits, especially at the low cost of diesel fuel.
Once completed, this project would easily integrate into the diesel generation system. The
hydroelectric project, with its output generally exceeding all needs,would be the prime
generation asset and would be controlled by an electronic governing system allowing for rapid
changes in the output.
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 project intake, pipeline, and powerhouse, and portions of the transmission line are located
on U.S.Fish and Wildlife Service, Kodiak National Wildlife Refuge land. Additionally, the
pipeline, powerhouse, and portions of the transmission line are located on an Exxon Valdez
Conservation Easement.During a previous project effort,an easement was secured from all
parties for a slightly different project alignment on these lands.The USFWS would have to
conduct an environmental assessment in order to grant the easement.Since AVEC continues to
involve the USFWS in the planning for this project, it is expected that the there would be no
outstanding issues and the easement would be granted.
Portions of the transmission line are located on Old Harbor Native Corporation land and City of
Old Harbor land.The Corporation and City are working in tandem with AVEC on this project and
no problems with site control are expected with these entities.
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
Federal Energy Regulatory Commission (FERC)-Hydropower Project License:Originally issued
December 12, 2000, the FERC License expired four years later because construction did not
begin. Barriers to construction at that time were primarily economic due to low diesel fuel costs
and high environmental monitoring costs imposed on AVEC.AVEC is currently working through
the FERC licensing process again, which is expected to be completed with funding secured
through this grant.
US Army Corps of Engineers (USACE)-Wetlands Permit:This project was previously permitted.
A modification to the existing permit would be sought, once design details are completed.
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 11 of 17 7/21/2010
National Marine Fisheries Service (NMFS)-Essential Fish Habitat Consultation:The previous
FERC process met the requirements of the Magnuson-Stevens Fishery Conservation and
Management Act.Using fisheries information collected during the 2010 summer field season,
AVEC would consult with the agency regarding impacts to anadromous fish (salmon).
Consultation would begin once the field data has been reported.
State of Alaska,Department of Natural Resources (ADNR)Division of Mining, Land, and Water
-Water Rights Permit:ADNR attended agency scoping and study plan meeting for this project.
The agency has started a file on the project and is expecting an application for water rights.The
application for water rights would be submitted once more design details are completed.
US Fish and Wildlife Service (USFWS)-Right of Way Permit:The USFWS right of way permit
was essentially completed during the last effort. The USFWS would have a significant role in the
development of this project. Past approval by the agency and recent discussions with the real
estate department indicate that a new permit is obtainable for the alternate project, which
would have fewer overall impacts.
State of Alaska, Department of Environmental Conservation -Water Quality Certificate. DEC A
Water Quality Certification would be sought once more design details are completed in
conjunction with wetlands permitting.
State of Alaska,ADNR, Division of Coastal and Oceans Management –Coastal Management
Plan Consistency Determination.A determination would be sought once more design details
are completed.
State of Alaska, Alaska Department of Fish and Game –Fish Habitat Permit:A Fish Habitat
Permit would be sought once more design details are completed. Fisheries information
gathered during the 2010 field effort would assist with this effort.ADF&G was involved with the
design of the fisheries field effort and would be involved with the project design as AVEC moves
forward.
State of Alaska, Department of Transportation and Public Facilities -Utility and Road permits.
DOT&PF approvals would be sought once more design details are completed.
4.3.4 Environmental
Address whether the following environmental and land use issues apply, and if so how they
would 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
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 12 of 17 7/21/2010
Identify and discuss other potential barriers
Threatened or endangered species.The USFWS would be formally consulted to ensure that
the construction of the hydroelectric project would have no affect on threatened or endangered
species. Construction would be timed to avoid impacts to migratory birds in compliance with
the Migratory Bird Treaty Act.
Habitat issues.Further consultation with agencies would determine whether issues exist;
however, based on project scoping and the data gathered during the summer 2010 field work, it
is expected that the project would have to consider fish habitat and wetlands. No bald eagle
nests are within the project area.
Wetlands and other protected areas.Based on the 2010 field effort, wetlands exist in the
project area.A Corps Wetlands Nationwide Permit could be needed to construct the project.
Archaeological and historical resources.Compliance with the National Historic Preservation Act
and in consultation with the State Historic Preservation Officer would be conducted prior to
construction of the wind turbines.Based on an archeological survey conducted during the
summer 2010, no cultural or historic resources are located in the project area.
Land development constraints.As discussed throughout this application, an easement would
be needed within the Kodiak National Wildlife Refuge and across Old Harbor Native Corporation
land and City of Old Harbor land. Because AVEC continues to involve the USFWS in project
planning and because the Corporation and City are project partners, site control should not be
an issue.
Aviation considerations.FAA airspace issues are not expected with this project.
Visual, aesthetics impacts.Because this project is outside of Old Harbor and because it is
supported by the community, visual and aesthetic resources are not expected to be an issue.
4.4 Proposed New System Costs and Projected Revenues
(Total Estimated Costs and Projected Revenues)
The level of cost information provided would 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
Total Anticipated Cost
Total anticipated cost of this project is $4.1 M. The details of this cost follow.
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 13 of 17 7/21/2010
Materials Est. Cost
Pipe $ 400,000
Turbine $ 200,000
Controls $ 100,000
Intake $ 100,000
Powehouse $ 150,000
Access Road $ 250,000
Transmission $ 150,000
Labor $ 400,000
Equipment $ 350,000
Shipping $ 250,000
Subtotal $ 2,350,000
Contingency (25%)$ 575,000
Profit/Overhead (25%)$ 575,000
Permitting $ 250,000
Design and Inspection $ 250,000
Administrative $ 100,000
Total $ 4,100,000
Requested grant funding/Applicant matching funds.The total project cost for this phase is
$250,000 of which $237,500 is requested in grant funds from AEA. The remaining $12,500 (5%)
would be matched in cash by AVEC.
Identification of other funding sources.The next phase of this project would be final design
and construction.It is possible that the funding for this work could come from a USDA Rural
Utility Service program, the Denali Commission, or another grant program, or a combination of
grants and AVEC funding.
Projected capital cost of proposed renewable energy system/projected development cost of
proposed renewable energy system.The final phase of this project would be Construction and
Commissioning. AVEC estimates that this phase could cost $4.1 million assuming installation.
AVEC would provide a 10% cash match ($410,000)for the construction project.
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.)
Because the hydroelectric project would displace most of the diesel generation in the
community,the operations and maintenance costs for the electric utility should decrease. The
hydroelectric project would not require the major overhaul and rebuilding expenses associated
with the diesel plant. However, there may be some monitoring and troubleshooting costs
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 14 of 17 7/21/2010
during the first years of the hydroelectric operation. For this reason, AVEC is assuming that the
entire maintenance budget would simply be applied to the hydroelectric project. Thus, rates
would not be affected by the project.
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
Because AVEC, the local utility,would own and operate the project there won't be a
requirement for a power purchase agreement. AVEC may be required to obtain bonds or other
financing to build the project. The savings in fuel costs from the displaced diesel operations
would fund the necessary financing.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that would be
considered in evaluating the project.
Please see cost/benefit sheet under Tab C.
SECTION 5–PROJECT BENEFIT
Explain the economic and public benefits of your project.Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
Potential annual fuel displacement (gal and $) over the lifetime of the evaluated
renewable energy project
Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff,or cost based rate)
Potential additional annual incentives (i.e. tax credits)
Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
Discuss the non-economic public benefits to Alaskans over the lifetime of the project
The primary benefit of the project is to significantly reduce Old Harbor's reliance on diesel fuel
for electrical generation.In 2009, Old Harbor used about 54,000 gallons of fuel. The project
would displace an estimated 95% of the fuel consumed. At ISER’s projected fuel costs, the
project would save savings of about $165,000 during its first year of operation (2014). Over the
life of the project, 30 years, this savings has a present value of $4.0 million using a net rate of 3%
(5% discount, 2%inflation). Over the life of the project, 30 years, this savings has a present
value of $4.0 million using a net rate of 3% (5% discount, 2% inflation).
Anticipated annual revenue/Potential additional annual incentives/Potential additional
annual revenue streams.The added public benefit of the project, in addition to immediate fuel
savings, is potentially using the additional power available and marketing the renewable aspect
of the project. A conservative estimate of the present value of the excess power is about $2
million.Because this project is in the feasibility and concept design stage, revenue and
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 15 of 17 7/21/2010
incentives are unknown at this time.
Non-economic public benefits.The anticipated benefits of installation of the wind turbines
would be reducing the negative impact of the cost of energy by providing a renewable energy
alternative.This project could help stabilize energy costs and provide long-term socio-economic
benefits to village households.Locally produced, affordable energy would empower community
residents and could help avert rural to urban migration, which would help larger Alaska
communities.
Once the hydro project is constructed and heat recovery systems are in place,the costs
to operate important facilities in Old Harbor including the water treatment plant and
school,would be decreased, enabling managing entities (city government, tribe, school
district) to operate more economically.
This project would help with the understanding of the water resource on Kodiak Island. Data
acquired from this study assist nearby communities, like Akhiok, Karluk, and Larsen Bay,to
understand their potential water resources.
The Kodiak Island Borough Comprehensive Plan Update (Kodiak Island Borough, 2008) lists the
need for hydroelectric power as one of four priority issues facing Old Harbor. Developing a
hydroelectric facility is one of the policies under Old Harbor’s Public Facilities, Health, and Safety
goal.Constructing this project would make this goal a reality.
This project would stabilize energy cost and allow the City, Tribe, and Village Corporation to plan
and budget for important community infrastructure projects listed in the comprehensive plan
and the City of Old Harbor Community Plan (City of Old Harbor, 2006), including a new ferry
dock and a new community multipurpose building.
Old Harbor residents health and safety would benefit from the environmental benefits resulting
from a reduction of hydrocarbon use, including:
Reduced potential for fuel spills or contamination during transport, storage, or use (thus
protecting vital water and subsistence food sources)
Improved air quality
Decreased contribution to global climate change from fossil fuel use
Other secondary benefits include lower costs associated with diesel storage, less noise, lower
diesel maintenance costs, and future reductions in state power cost equalization assistance.
SECTION 6–SUSTAINABILITY
Discuss your plan for operating the completed project so that it would 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
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 16 of 17 7/21/2010
As a local utility that has been in operation since 1968, AVEC completely able to finance, operate,
and maintain this project for the design life. AVEC has capacity and experience to operate this
project. AVEC has operating wind projects throughout the state and is very familiar with
planning, constructing, operating, and maintaining wind systems.
Business Plan Structures and Concepts which may be considered:The hydro facility would be
incorporated into AVEC’s power plant operation. Local plant operators provide daily servicing.
AVEC technicians provide periodic preventative or corrective maintenance and are supported by
AVEC headquarters staff, purchasing, and warehousing.
How O&M would be financed for the life of the project:The costs of operations and
maintenance would be funded through ongoing energy sales to the villages.
Operational issues which could arise:Winter operations of the hydro facility may have some
issues due to icing; however, because the project is on Kodiak Island, deep freezes are not
expected.
Operating costs:Because the hydroelectric project would displace most diesel generation the
operations and maintenance costs for the electric utility should decrease. The hydroelectric
project would not require the major overhaul and rebuilding expenses associated with the diesel
plant. However, there may be some monitoring and troubleshooting costs during the first years
of the hydroelectric operation. For this reason, AVEC is assuming that the entire maintenance
budget would be applied to the hydroelectric project. Thus, rates would not be affected by the
project.
Commitment to reporting the savings and benefits:AVEC is fully committed to sharing the
savings and benefits accrued from this project information with their shareholders and sharing
the information regarding project savings and benefits with AEA.
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.
AVEC is currently working to obtain the FERC license for this project. Funding secured through
this grant would enable AVEC to complete the process. There would be no start up period or
delay, work, including finalizing the FERC license application, final design, and permitting would
continue to move forward with the funding.
AVEC received $225,000 during the first round of AEA Renewable Energy Program. AVEC has
completed steps towards obtaining a FERC license for the project, including developing a
Alaska Village Electric Cooperative, Inc.
Old Harbor Hydroelectric Design and Permitting
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 17 of 17 7/21/2010
Preliminary Application Document and a Study Plan, and conducting field work. AVEC would
continue this work this winter by completing much of the FERC license application.For the first
FERC licensing effort in the 1990s, AVEC received AEA and federal funds.This funding helped
AVEC to secure the original FERC license for the project
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 Kodiak Island Borough Comprehensive Plan Update (Kodiak Island Borough, 2008)and the
City of Old Harbor Community Plan (City of Old Harbor,2006) list the hydroelectric power as a
community priority. The Corporation has been working with AVEC on land issues using their
own funds. The City has attended all project meetings and voiced support for the project.
Letters of have been received from the Old Harbor Native Corporation and the City of Old
Harbor in support of this project. (See Tab D.)
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 would make as an
applicant.
Include an estimate of budget costs by milestones using the form –GrantBudget3.doc
AVEC plans to complete final design and permitting of the Old Harbor Hydroelectric Project.
The total project cost for the project is $250,000 of which $237,500 is requested in grant funds
from AEA. The remaining $12,500 (5%)would be matched in cash by AVEC.
A detail of the grant budget follows. Also see Tab C.
Milestone or Task Grant Funds AVEC Funds Total
1.Project scoping and contractor solicitation for
planning and design $0 $0 $0
2.Permit applications $6,650 $350 $7,000
3.Final environmental assessment and mitigation
plans $17,100 $900 $18,000
4.Resolution of land use, right of way issues $25,650 $1,350 $27,000
5.Permit approvals $3,800 $200 $4,000
6.Final system design $166,250 $8,750 $175,000
7.Engineers cost estimate $14,250 $750 $15,000
8.Updated economic and financial analysis $1,900 $100 $2,000
9.Negotiated power sales agreements with approved
rates $0 $0 $0
10.Final business and operational plan 1,900 $100 $2,000
TOTALS $237,500 $12,500 $250,000
AVEC will seek funding to construct this project once final design and permitting are complete.
AVEC would provide a 10% cash match to any obtained funding for construction of the project.
Tab A
Resumes
Tab B
Cost Worksheet
Renewable Energy Fund Round 4
Project Cost/Benefit Worksheet
RFA AEA11-005 Application Cost Worksheet Page 1 7-21-10
Old Harbor Hydro Design and Permitting
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.84%
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 Three diesel generators
ii.Rated capacity of generators/boilers/other 235 kW,235kW, and 236kW
iii.Generator/boilers/other type Detroit Diesel and Caterpillar (2)
iv.Age of generators/boilers/other 235 kW (overhauled 2003),235kW (overhauled
2005), and 236kW (overhauled 2005)
v.Efficiency of generators/boilers/other 13.30 kWh generated per gallon (2009)
b)Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i.Annual O&M cost for labor 140,000 (labor and non-labor combined)
ii.Annual O&M cost for non-labor N/A
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]720,618 kWh (2009)
ii.Fuel usage
Diesel [gal]54,172 (2009)
Other
iii.Peak Load 152 kW (2009)
iv.Average Load 83 kW (2009)
v.Minimum Load
vi.Efficiency 13.30 kWh generated per gallon
vii.Future trends
d)Annual heating fuel usage (fill in as applicable)
i.Diesel [gal or MMBtu]N/A
ii.Electricity [kWh]
iii.Propane [gal or MMBtu]
iv.Coal [tons or MMBtu]
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
v.Wood [cords, green tons, dry tons]
vi.Other
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]
300 kW (hydro)
b)Proposed annual electricity or heat production (fill in as applicable)
i.Electricity [kWh]588,672 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 $4,100,000
b)Development cost $500,000
c)Annual O&M cost of new system No change
d)Annual fuel cost 0
5.Project Benefits
a)Amount of fuel displaced for
i.Electricity 43,063 gallons
ii.Heat
iii.Transportation
b)Current price of displaced fuel $3.27/gallon
c)Other economic benefits
d)Alaska public benefits
6.Power Purchase/Sales Price
a)Price for power purchase/sale
7.Project Analysis
a)Basic Economic Analysis
Project benefit/cost ratio 1.09
Payback (years)21 years
Tab C
Budget Form
Renewable Energy Fund Grant Round IV Grant Budget Form 7-21-10
OLD HARBOR HYDRO DESIGN/PERMITTING
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
1.Project scoping and contractor solicitation
for planning and design
Sept 2011 $0 $0 n/a $0
2.Permit applications Jan 2012 $6,650 $350 Cash $7,000
3.Final environmental assessment and
mitigation plans
Jan 2012 $17,100 $900 Cash $18,000
4.Resolution of land use, right of way issues Aug 2012 $25,650 $1,350 Cash $27,000
5.Permit approvals May 2012 $3,800 $200 Cash $4,000
6.Final system design Dec 2012 $166,250 $8,750 Cash $175,000
7.Engineers cost estimate Dec 2012 $14,250 $750 Cash $15,000
8.Updated economic and financial analysis Dec 2012 $1,900 $100 Cash $2,000
9.Negotiated power sales agreements with
approved rates
N/A $0 $0 n/a $0
10.Final business and operational plan Dec 2012 $1,900 $100 Cash $2,000
TOTALS $237,500 $12,500 $250,000
Budget Categories:
Direct Labor & Benefits $$9,00 $9,000
Travel & Per Diem $$2,500 $2,500
Equipment $$$
Materials & Supplies $$1,000 $1,000
Contractual Services $237,500 $$237,500
Construction Services $$$
Other $$$
TOTALS $237,500 $12,500 $250,000
Tab D
Letters of Support
Tab E
Authorized Signers Form
Tab F
Authority