HomeMy WebLinkAboutTenakee Geothermal Recon Grant
Alaska Renewable Energy Fund
Grant Application Round 4
Inside Passage Electrical Cooperative
Reconnaissance Study of Tenakee Inlet
Geothermal Resource
Renewable Energy Fund Round IV
Grant Application
AEA 11-005 Application Page 1 of 19 7/21/2010
Application Forms and Instructions
The following forms and instructions are provided to assist you in preparing your application for
a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA)
and the forms are available online at: http://www.akenergyauthority.org/RE_Fund-IV.html
Grant Application
Form
GrantApp4.doc Application form in MS Word that includes an outline
of information required to submit a complete
application. Applicants should use the form to assure
all information is provided and attach additional
information as required.
Application Cost
Worksheet
Costworksheet4.doc Summary of Cost information that should be
addressed by applicants in preparing their application.
Grant Budget Form GrantBudget4.doc A detailed grant budget that includes a breakdown of
costs by milestone and a summary of funds available
and requested to complete the work for which funds
are being requested.
Grant Budget Form
Instructions
GrantBudgetInstructions4.pdf Instructions for completing the above grant budget
form.
· If you are applying for grants for more than one project, provide separate application
forms for each project.
· Multiple phases for the same project may be submitted as one application.
· If you are applying for grant funding for more than one phase of a project, provide
milestones and grant budget for completion of each phase.
· If some work has already been completed on your project and you are requesting
funding for an advanced phase, submit information sufficient to demonstrate that the
preceding phases are satisfied and funding for an advanced phase is warranted.
· If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
· Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
· All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
· In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or
proprietary company data be kept confidential subject to review and approval by the
Authority. If you want information is to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept
confidential. If the Authority determines it is not confidential it will be treated as a
public record in accordance with AS 40.25 or returned to the applicant upon
request.
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)
Inside Passage Electric Cooperative
Type of Entity:
Electric Utility
Mailing Address
PO Box 210149, Auke Bay, AK 99821
Physical Address
12480 Mendenhall Loop Road, Juneau, AK
Telephone
907-789-3196
Fax
907-790-8517
Email
JMitchell@Alaska.com
1.1 APPLICANT POINT OF CONTACT / GRANTS MANAGER
Name
Jodi Mitchell
Title
CEO
Mailing Address
P.O. Box 210149, Auke Bay, AK 99821-0149
Telephone
907-789-3196
Fax
907-790-8517
Email
JMitchell@Alaska.com
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
X An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes
1.2.2. Attached to this application is formal approval and endorsement for its project by
its board of directors, executive management, or other governing authority. If the
applicant is a collaborative grouping, a formal approval from each participant’s
governing authority is necessary. (Indicate Yes or No in the box )
Yes
1.2.3. As an applicant, we have administrative and financial management systems and
follow procurement standards that comply with the standards set forth in the grant
agreement.
Yes
1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached
grant form. (Any exceptions should be clearly noted and submitted with the
application.)
Yes
1.2.5 We intend to own and operate any project that may be constructed with grant
funds for the benefit of the general public.
Renewable Energy Fund
Grant Application Round IV
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)
Reconnaissance Study of Tenakee Inlet Geothermal Resource
2.2 Project Location –
Include the physical location of your project and name(s) of the community or communities that will
benefit from your project.
The project is located at the head of Tenakee Inlet, Chichagof Island (approximately at 57° 59’
24” N, 135° 56’ 20” W) in Southeast Alaska. Communities that may benefit include Hoonah,
Tenakee Springs, and Pelican. IPEC currently provides power for Hoonah, which is the largest
community on Chichagof. The populations of: Hoonah - 860, Pelican - 163, and Tenakee
Springs - 104. We anticipate that all 3 communities would benefit from this project. Market
analysis completed during this phase of the project would more completely determine the extent
to which these communities will benefit from this project.
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
Wind Biomass or Biofuels
Hydro, including run of river Transmission of Renewable Energy
X 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)
X Reconnaissance Design and Permitting
Feasibility Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
The purpose of this project is to investigate the potential of using the known geothermal resource
at Tenakee Inlet to produce power and evaluate alternative uses of the source. Springs near the
head of Tenakee Inlet have the highest recorded surface temperature (176° F) of any of the
numerous geothermal springs tested on Chichagof Island and listed on the Geothermal Resources
of Alaska Map. Geochemistry of the spring waters indicates a maximum subsurface temperature
of 243° F. The surface flow rate of the spring has been measured at 90 L/min and the convective
heat discharge estimated at 0.5 MW. We request funding for a two-phase reconnaissance study
of the resource with a planned timeline of approximately 18 months. Phase I will include
mapping, remote sensing, aerial and ground based geophysics, and geochemical sampling. If
justified by the first phase, we will commence with Phase II - exploratory well drilling. In this
second phase, two wells would be drilled, although the second would have to be justified by the
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 4 of 19 7/21/2010
combined results of Phase I and the first well. This is the complete scope of work we are
requesting funding for with this grant, but if this work is successful and promising, future work
would include additional drilling necessary to confirm and develop the resource, necessary
permitting, and power plant and infrastructure construction.
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.)
Chichagof Island is a rural island with high electric and heating costs. According to the State’s
FY 2008 PCE Statistical Report residential rates in Hoonah averaged $0.52/kWh and in Tenakee
Springs averaged $0.54/kWh. The springs at Tenakee Inlet are located approximately 10 miles
from Pelican, 20 miles from Hoonah, and 30 miles from Tenakee Springs. Geothermal power, as
base load power, would offset diesel fuel costs and emissions for the region; space heating fuel
would also be avoided by conversion to electric heating; and would stabilize and lower energy
costs. As seen on the chart below, geothermal power cost is comparable to hydro, which is
relevant in this area where hydropower is utilized or being investigated to be utilized to provide
power to local communities.
Lower Energy Costs:
According to Jacob and Company Securities estimates in B.C. Hydro - Challenges and Choices
(2006) (below), Geothermal’s cost per MWh is competitive with every other method of energy
generation, even large hydro and conventional sources such as natural gas and coal plants. Only
conservation initiatives are significantly cheaper.
Reliability:
Geothermal power producing technology is tried and reliable. Ormat’s binary power plants are
guaranteed at 95% reliability, and are proven to be 99% reliable. United Technology (UTC)
plants have been field tested and proven in the harsh climate of Chena Hot Springs. Most other
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 5 of 19 7/21/2010
forms of renewable energy do not offer base load power. Geothermal provides base load
generation with a capacity factor of over 90 percent.
Low environmental impact:
Geothermal power production produces almost no emissions, and has a low visual impact and
small surface occupancy comparative to other technologies per MW generated. Reinjection of
production fluids and air cooling protect the resource and minimize water needs. Public and
environmental health, are both enhanced. The project will offset CO2 and other greenhouse gas
emissions from the existing fossil fuel base plants. This offset could provide a significant offset
credit to the project.
Local development and enhanced community sustainability:
The greatest challenge will be fully utilizing the potential benefits of geothermal in this area.
The power available from the resource maybe greater than the current electric demand of the
area. The solution to this imbalance involves changes in the entire energy picture for the area
and growth of certain industries that would further the sustainability of the area.
Specifically, space heating from fossil fuel sources could be replaced by electric heating or
perhaps by direct use of the geothermal fluids of the resource. A transition to electric or
hybrid/electric vehicles could further reduce the local dependence on expensive fossil fuels and
more fully utilize the resource.
The importance of local food security is gaining increased attention. Otherwise unused
geothermally produced electricity or heat (even at temperatures too low for economic power
production) can be used to grow food. Greenhouses are a proven revenue stream at several
geothermal locations around the world including climates similar to Alaska. Chena Hot Springs
is a good model of this on a small scale in an even harsher climate.
Stable and lower energy prices would stimulate the economy, and the geothermal resource could
bring new types of development to the island. Waste heat may be used for warming greenhouses
or drying food. Stable and low energy prices may stimulate growth in the troubled fish
processing industry in the area. The development of the resource may also help spur the building
of a planned road between Hoonah and Pelican, a road which would pass within a few miles of
the resource. With lower energy costs, a more robust power transmission system, and a more
connective road system, the island would be able to draw and support tourists to its spectacular
scenery; and potentially generate additional economic resource bases. As at Chena Hot Springs,
the existence of geothermal power itself may be an attractant for tourism. Geothermal power is a
novelty without many of the negative connotations of hydro power among environmental or
ecotourists. Communities or resorts could use this as a draw to generate a significant income
source.
According to a 2006 Geothermal Energy Association publication, A Handbook on the
Externalities, Employment, and Economics of Geothermal Energy, geothermal power generates
4.25 full time direct, indirect and induced jobs per MW produced and 16 person-years of
construction and manufacturing employment per MW. A 5 MW plant at Tenakee would, by
these figures, be expected to provide 21 full time jobs in the area and 80 person-years of
construction work.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 6 of 19 7/21/2010
Benefits from Exploration Phase:
The reconnaissance phase of the project has its own benefits. In addition to creating jobs and
injecting money into the local economy, it will also test out geothermal prospecting and
exploration techniques in the unique environment of Alaska. The majority of previous
geothermal reconnaissance has been carried out in arid environments. Much of Alaska and the
Pacific Northwest are (like Tenakee) vegetated and wet with temperate to sub-arctic conditions.
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.
Total funds needed for this project is $2,579,200. Since there has been very little basic research
on the geothermal resources of Southeast Alaska in general, and Tenakee Inlet in particular, we
are asking for this project to be fully funded by the Alaska Renewable Energy Grant Fund.
Given the uncertainty of the nature of the resource, it is very difficult to acquire financing for this
phase of an exploratory project. However, if the project is successful, the experience could be
used to leverage funding not only for follow-on stages of this project, but also others in
Southeast Alaska.
This project has a number of go/no-go points including the completion of fieldwork, drilling
Well 1 and then drilling Well 2. These decision points assist in limiting unnecessary spending of
grant funds.
A total development cost of the resource at Tenakee Inlet has yet to be estimated. This proposed
reconnaissance study would be needed to help estimate possible development costs. However,
following the methodology of Hattenburg Dilley & Linnell’s 2008 Geothermal Cost Matrix for
AEA, total costs through construction, not including transmission, are estimated at $27,000,000.
These total costs assume 5 wells to less than 2000 feet; a 5 MW binary power plant; and
associated infrastructure. The transmission line costs would be dependent on routing and
possible construction of roads and interties planned between the communities.
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. $2,579,200
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) $2,579,200
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)
$27,000,000
2.7.5 Estimated Direct Financial Benefit (Savings) $3.7 M to $4 M / year for
30 years
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
$1.44 M / year carbon
credit @$33/MWhr for 5
MW plant; greenhouse
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 7 of 19 7/21/2010
(Section 5.) revenue @ $150,000 to
$200,000 / year crop
dependent.
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.
Inside Passage Electric Cooperative (IPEC) has chosen an experienced team to manage the
project. Jodi Mitchell, CEO of IPEC will be the grant manager, but due to limited resources, will
use the project management team of Sealaska Corporation. Katherine Eldemar, Assistant to the
President and CEO of Sealaska Corporation will be the project manager and be the main point of
contact for the AEA Grant Manager.
With regards to the performance of the grant, Katherine will have final word over all decisions
and will uphold the fiduciary responsibility of Sealaska for the management of the grant. Lorie
Dilley, a principal of Hattenburg Dilley & Linnell (HDL) Engineering, will manage the technical
aspects of the project. She will organize the consultants and vendors to ensure the success of the
project. She may also interact with the AEA Grant Manager on technical aspects of the project.
IPEC’s Tenakee Inlet Project Management Structure:
AEA Grant Manager
Project Manager - Sealaska
Corp.
Katherine Eldemar
Technical Manager - HDL
Lorie Dilley, PhD, PE, CPG
Drilling and other subcontractors
Applicant/Grant Manager-IPEC
Jodi Mitchell, CEO
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 8 of 19 7/21/2010
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.)
An estimated schedule is attached and summarized below. This reconnaissance study will be
approached in 2 phases. Phase I will include the necessary work to complete the geologic,
geophysical, and geochemical exploration of the resource. Phase II will consist of the
exploratory well drilling, if the results of the previous surveys warrant.
Phase I: Project scoping and contractor solicitation would be on and off through summer 2012,
culminating in the selection of a drilling contractor and site restoration contractor, if appropriate.
It is assumed that the field exploration may be accomplished in the fall of 2011, assuming the
grant is awarded by July, 2011. We have already collected existing large scale aeromagnetic and
gravity data for the region, and this and other existing data will allow us to choose locations for
additional, finer-scale aeromagnetic, gravity, electrical and geochemical surveys. Focused
LIDAR and aerial photography will be collected as well, if deemed useful for this work. The
synthesis of field and existing data and the choosing of an exploratory drilling location would be
completed by March 2012. At this go/no-go decision point, if the data supports further work,
phase II would commence. Land use, permitting, and environmental analysis would be required
for the undertaking of the field and drilling activities in both phases of the project, in addition to
the analysis in support of the continuing geothermal development of this project. This work, as
well as the other reconnaissance-level analyses (Preliminary design and costs, market analysis
and economic analysis), would start after the fall field program in 2011 and be incorporated in
the final report and recommendations. Final reporting would be accomplished by the end of
2012.
Phase II: Drilling and testing of two exploratory wells would be completed in the summer of
2012. The final report would incorporate the results of the drilling and would be completed by
the end of 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.)
1. Project Scoping and Contractor Solicitation: This task will include choosing contractors
for the resource reconnaissance. HDL geologists will undertake geological and geochemical
portions of the field work, other tasks such as the geophysical field studies, drilling and
perhaps some of the analyses will be subcontracted. This task will encompass the choice of a
drilling contractor and site restoration contractor by summer, 2012 and end with final
contractors needed for project analyses by fall, 2012.
2. Resource Identification and Analysis: This task can be broken up into two parts -
2.1) preliminary field work and synthesis to be completed before the summer of 2012 for
Phase I, and 2.2) exploratory well drilling to be completed by the end of the summer, 2012
for Phase II.
2.1. Preliminary field work will include gathering existing information, including
satellite images, aeromagnetic and other data as available, as well as a field campaigns to
gather new geophysical and geochemical data in the region. Field work planned at this
time includes a CSAMT (controlled source audio-frequency magnetotelluric) survey to
search for areas of low electrical resistance, a geochemical analysis of springs and soils
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 9 of 19 7/21/2010
in the area, and a shallow temperature probe survey. The data acquired in this step will
be gathered into a GIS project, where features and anomalies from the various surveys
can be spatially correlated and compared. This will allow for the development of a
conceptual model of the geothermal resource, including inflow and outflow of
geothermal fluids. A first exploratory well site will be chosen by the strongest
correlation of anomalies. This is a go/no go point, as the strength of the correlation of
anomalies may or may not warrant the drilling of an exploratory well.
2.2. Drilling will include the obtaining of necessary permits for access and drilling at the
chosen site. Wells drilled will be exploratory core - thermal gradient wells. A vendor
specializing in geothermal drilling will conduct the drilling using industry best practices
to minimize risks. The target depth of the well will be determined by the exploratory
studies, but is anticipated to not exceed 2000 feet in depth. Testing of the well will
include standard test such as pressure and temperature, as well as fluid inclusion
stratigraphy, a low-cost technique developed for geothermal systems by Lorie Dilley,
and useful for gathering information on reservoir processes, flow paths, and
permeability. This is another go/no-go decision point, where results would have to
warrant the drilling of a second well. If they do, the previous information will be used to
site a second well, whose drilling process and testing will mirror the first. These wells
will then be subjected to an extended flow test lasting approximately 10 days to better
characterize the resource.
3. Land Use, Permitting, and Environmental Analysis: This task will include work both to
permit the exploration and drilling activities as well as to identify and do a more thorough
analysis of the land use, resource issues, permitting, and environmental needs of the
geothermal plant through construction. Permitting for this exploration phase will, of course,
need to be completed before exploration activities detailed above can commence. Analysis
for reporting purposes will continue through drilling until the end of 2012. HDL, working
with IPEC and Sealaska, will conduct this task.
4. Preliminary design analysis and cost: A preliminary design for a geothermal field to use
this resource along with estimated costs will be analyzed. This preliminary design will
include wells, gathering systems, necessary roads and infrastructure, the plant itself, and
transmission lines. This will be included in the reporting in 2012. HDL will complete this
task.
5. Cost of Energy and Market Analysis: To be completed as per the outline in Section 2.3 of
the RFA and included in the final reporting at the end of 2012.
6. Simple Economic Analysis: To be completed as per the outline in Section 2.3 of the RFA
and included in the final reporting at the end of 2012. IPEC and HDL will complete Tasks 5
and 6. If necessary, a subcontractor will be selected to assist with these two tasks.
7. Final Report and Recommendations: A final report including data and results of the
resource exploration, the land use, permitting and environmental analysis, the preliminary
design analysis and costs, the market analysis, the simple economic analysis and
recommendations will be completed and submitted to AEA by the end of 2012.
IDTask NameDurationStartFinish1Task 1 Project Scoping & Contractor Solicitation300 daysMon 8/15/11Fri 10/5/122Task 2 Resource Indification & Analysis290 days?Mon 8/22/11Fri 9/28/123Fieldwork - geology, geochemistry, & geophysics45 days?Mon 8/22/11Fri 10/21/114Drilling 2 wells80 days?Mon 6/11/12Fri 9/28/125Task 3 Land Use, Permitting, & Environmental Analysis306 days?Mon 8/22/11Mon 10/22/126Task 4 Preliminary Design Analysis & Cost281 days?Mon 10/3/11Mon 10/29/127Task 5 Cost of Energy & Market Analysis61 days?Mon 8/6/12Mon 10/29/128Task 6 Simple Economic Analysis35 days?Mon 8/6/12Fri 9/21/129Task 7 Final Report & Recommendations70 days?Mon 9/10/12Fri 12/14/12Qtr 2Qtr 3Qtr 4Qtr 1Qtr 2Qtr 3Qtr 4Qtr 120122013TaskSplitProgressMilestoneSummaryProject SummaryExternal TasksExternal MilestoneDeadlinePage 1RECONNAISSANCE STUDYTENAKEE INLETGEOTHERMAL RESOURCE
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 10 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.
Lorie Dilley of HDL has extensive experience with geothermal reconnaissance projects, in
Alaska and elsewhere. HDL geologists will collect field geological and geochemical data, and
will provide synthesis and analysis of the resource data. HDL will select experienced industry
vendors to carry out the CSAMT survey and to drill and test the exploratory wells. The cost
estimate for drilling was provided by the Geothermal Resource Group, a well known firm in the
geothermal drilling industry in the western United States. HDL has experience in performing
reconnaissance level designs, costs and economic analyses of geothermal systems for AEA, and
has in-house environmental, surveying and engineering teams to complete the tasks. Lorie has
ties to both University of Alaska Fairbanks, Alaska Center for Energy and Power, Energy and
Geoscience Institute at University of Utah and other academic and industry leaders in exploring
and developing geothermal resources. IPEC and Sealaska can provide data for the cost of energy
and market analysis. If necessary, firms specializing in market and economic analyses may be
subcontracted for portions of this work.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
The project team, including IPEC, Sealaska, and HDL plan to communicate regularly (at least
weekly) with each other via phone and email to coordinate all aspects of the project. Katherine
at Sealaska will be the primary point of contact for the AEA grant manager on budget and
scheduling issues. Lorie at HDL will be the primary point of contact for AEA on technical
issues and reporting. The team will prepare monthly progress reports for AEA, and also
welcomes AEA’s contact at any time to resolve questions on scheduling, budget, scope, or other
issues.
3.6 Project Risk
Discuss potential problems and how you would address them.
Geothermal exploration carries significant risk of financial expenditure without success, even in
areas of a known geothermal resource. Sufficiently hot fluids as well as permeability of the
source rock are both necessary for conventional geothermal development. Although the resource
at Tenakee Inlet is known to exist, due to surface expression and geothermometry of the springs,
very little is known about the fundamental characteristics of this resource including temperatures
and permeabilities at depth. This is the main reason we are asking the Alaska Renewable Energy
Fund to completely fund this phase of the project. We propose to carry out an intelligent
exploration utilizing industry-recognized methods of geothermal investigation. There are
multiple go/no-go decision points in the project to protect against unwise expenditures if the
resource does not look promising for further study at these points. If the anomalies pointing to
areas of geothermal interest are not strong or significantly correspondent, or if the reservoir
model produced from the initial phase of field exploration does not warrant well drilling, the
project may be stopped at this point. If the first exploratory well does not intersect a favorable
resource, the plans to drill a second well may be abandoned.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 11 of 19 7/21/2010
The known surface expression of the resource, and thus the targeted area of exploration, is
located on National Forest Service lands. Given the recent PEIS and work by the federal
agencies to streamline geothermal development on certain federal lands (including USFS lands),
we anticipate that permitting this phase of the project can be accomplished within the timeframe
given. Our budget and timeline for this activity, with drilling taking place the second summer
after the grant is awarded, should give us time to deal with access, permitting, and environmental
issues. Field work in this remote and rugged area will be challenging. The members of the team
have experience working in remote Alaskan locations, delivering projects to AEA, and are well
prepared to deal with the challenges of keeping a project of this nature on budget and on
schedule, and dealing with contingencies.
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 amount of energy resource available is the main target of this phase of the project. A
geochemical analysis of the spring has yielded a possible maximum temperature of the source
water at depth of 243° F (117° C). A temperature gradient reported by Economides in 1982 for
the separate resource (investigated by shallow wells) approximately 30 miles away at Tenakee
Springs indicates a temperature gradient of 13° C/100 feet, with a surface temperature of 16° C.
At this gradient, temperatures of 243° F would be reached by 800 feet in depth. Using a
calculation from a DOE paper by Hanse from 2005, each well at this temperature may produce
over a megawatt of electricity. The exploratory wells in this phase of the project are planned to
confirm the existence, depth, temperature and flow rate of geothermal fluids, which is necessary
to better constrain the size of the resource. An estimate for the potential developable size of this
resource is from 3 to 6 MW.
Other alternatives to the market may include other geothermal resources on the Island, such as
those at Tenakee Springs. The springs at Tenakee Inlet, however, have a much higher surface
temperature and thus are a better prospect to produce power for the region. They are also closer
to Hoonah, which is the major population center on the island. Hydro power exists in Pelican and
is being explored for Hoonah and Tenakee Springs. Biomass generation may be possible as well,
fish oil and trees being regionally available, though accessible quantities and USFS protections
may be prohibitive. The economic and market analysis of this project would compare the
potential benefits of and cost effectiveness of the alternatives. It is of note that the cost of
geothermal power can compare favorably even with hydro power (see section 2.5 of this
application), while being a clean, low impact, reliable, mature technology capable of delivering
baseload power with no fuel costs.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 12 of 19 7/21/2010
4.2 Existing Energy System
4.2.1 Basic configuration of Existing Energy System
Briefly discuss the basic configuration of the existing energy system. Include information about
the number, size, age, efficiency, and type of generation.
IPEC operates three diesel-powered generators in Hoonah. Their sizes are 610 kW, 855 kW, and
1000 kW, with ages of 31, 17, and 11 years. Overall efficiency is 14.25 kWh/gallon of fuel.
Pelican’s power is provided by Pelican Utility Company, and consists of 2,660 kW capacity
combined from hydro and diesel generation. The City of Tenakee Springs provides electricity for
that community from a 226 kW capacity diesel generation system. More information on the
existing energy systems would be gathered as part of this reconnaissance project.
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.
Existing energy resources include diesel electricity generation at Hoonah, Pelican and Tenakee
Springs, and hydro power generation at Pelican. Existing systems also rely on fossil fuels for
heating, transportation, and the importation of food. If built, a geothermal power plant at Tenakee
Inlet would serve to displace power generation by some or all of these sources. The resource
would likely be adequate to displace fossil fuel use beyond that currently used to generate power
in the area. Diesel fuel use would be less, by an amount to be determined by the size of the
resource - which will be investigated in this phase of the project. Although geothermal provides
base load power, back up in the form of hydro or diesel may still be warranted.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
It is anticipated that geothermal power from this project would supply the electricity needs for the
communities of Hoonah, Pelican and Tenakee Springs. Power costs would be more stable than
relying on diesel fuel for generation, and would likely be cheaper over the long run as well. This
question will be more fully answered by the analysis to be conducted in this reconnaissance phase
of the project.
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
This information will be developed as part of the preliminary design analysis to be carried out in
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 13 of 19 7/21/2010
this reconnaissance. Due to the geochemically assumed temperature of the resource (243° F), we
anticipate that a binary geothermal power plant will be the design plant. Depending on the size of
the resource and the power needs, this binary plant could be of the UTC type, such as is utilized at
Chena Hot Springs, or a custom binary plant. The anticipated generation would be 3 to 6 MW.
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 geothermal spring at Tenakee Inlet is on USFS lands. Permits and leases will have to be
obtained from the Forest Service and any other land owners impacted by development. This will
be further investigated as part of the scope of this phase of the project.
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
IPEC working with HDL will obtain necessary authorizations from relevant permitting
authorities. To our knowledge, the description below constitutes the major permits required for
the reconnaissance activities.
The key permit required for the Summer 2011 and 2012 exploration is a Geophysical Exploration
Permit from the Alaska Division of Oil and Gas. The permit takes 50-90 days to process. This
permit will be based on IPEC’s Plan of Exploration, which will be submitted July, 2011
(assuming this work is funded and able to proceed at that time) and presents a plan essentially
identical to the one depicted in this grant application.
Other applicable permits that may need to be secured prior to the Summer 2011 and 2012
exploration program include:
DNR Division of Mining Land & Water (DMLW)
· Land use permit [11 AAC 96] – for staging areas
· ROW [AS 38.05.850] –for roads, trails, ditches, or field gathering lines
DNR Division of Oil and Gas (DO&G) [or potentially, the Alaska Oil and Gas Conservation
Commission]
· Drilling Permits
Office of Habitat Management & Permitting (ADFG)
· Fish habitat permits [AS 16.05.841] for activities within or across a stream listed in the
Atlas of Waters Important for Spawning, Rearing, or Migration of Anadromous Fishes.
Office of Project Management & Permitting (OPMP)
· ACMP Coastal Zone consistency determination
US Forest Service (USFS)
· Special use permit – for activities in the National Forest
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 14 of 19 7/21/2010
Additional permits that may need to be secured prior to Summer 2012 exploration program
include:
Alaska Department of Environmental Conservation (ADEC)
· Temporary storage of drilling waste
· Oil discharge prevention and contingency plan
· Certificate financial responsibility
· Domestic water and wastewater permits
· Minor air permit
US Army Corps of Engineers (ACOE)
· Any dredging or filling of wetlands – 404 permit
Other general permits
· Permits may be required for establishing man camps and for transporting equipment into
the field site.
· Lease sale requirements if applicable.
Regulatory; Permitting barriers
· At this time, we have not identified any major regulatory barriers that would effect the
resource assessment. We intend to work with local partners, including Native
Corporations, to assist with the permitting to ensure permits are obtained in a timely
manner.
· As progress is made during resource assessment, we will ascertain barriers to
construction and interconnection. However, these barriers are not within the scope of this
application.
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
This will be investigated as part of the scope of this phase of the project. A PEIS (programmatic
environmental impact statement) has been prepared for geothermal leasing on federal lands in the
western United States and Alaska, which should help in facilitating the environmental process for
the overall project.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 15 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
This project is estimated to cost approximately $27,000,000 through construction, based on our
preliminary evaluation (using the same methodology used by HDL Engineering to construct the
Geothermal Cost Matrix for AEA, 2009).
Total costs for this reconnaissance study is $2,579,200. We are requesting grant funding for the
full amount.
Capital and development costs of the resource will be investigated as part of the scope of this
phase of the 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.)
This will be investigated as part of the scope of this phase of the project. O&M costs for a
geothermal power plant include routine oversight of plant operation and visual inspections by
plant operators and maintenance to clean, repair and replace parts as needed. Routine calibration
and resupply of consumables is also needed. Ormat estimates the O&M costs for Mt. Spur to lie
in the range of $0.03 to $0.06 / kWh, which is in the expected range for geothermal power plants.
A plant at Tenakee would likely have O&M costs at the high end of this range due to the
economy of scale benefiting Mt. Spur (assumed to be a much larger plant). Both plants are
relatively remote. Tenakee is in a less geologically hazardous area and this may lower its relative
operations 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
This will be investigated as part of the scope of this phase of the project.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 16 of 19 7/21/2010
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
The cost worksheet is attached. The simplified cost/benefit analysis in the worksheet is based on
the $27 million capital costs spread out across 8 years plus an annual O&M cost of $0.06/ kWh
for a 5 MW plant. The fuel cost displaced was for Hoonah only. This number will be higher
once the other communities are included. A carbon offset based on $33/MWh was considered as
a benefit. Not included in the analysis are the other benefits that may be derived from this project
including
· Greenhouses ($150,000 to $200,000 depending upon crop and production facilties)
· Ecotourism/Resorts
· 10 to 20 full time jobs created at annual average salary $50,000 which would provide
$500,000 to $1,000,000 in the local economy.
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 above points will all be further addressed at part of the scope of this reconnaissance study.
There are several non-economic benefits of this project:
This Reconnaissance Study has several benefits to the people of Alaska, including a greater
knowledge of the geothermal resources of Southeast Alaska, which are generally poorly
understood and characterized at this time. It will also help determine which industry approved
geothermal exploration techniques are most effective in prospecting for geothermal in the wet,
vegetated, and harsh conditions of much of Alaska.
The development of geothermal at promising sites in Alaska would provide stable, base load
power which could spur economic development in fishing, canning, tourism and other industries.
Energy costs would also be more stable for local communities, and waste heat and excess power
generation could be used in various ways such as in greenhouses to establish greater local food
security. By offsetting diesel fuel generation and the resulting emissions, geothermal
development would also lead to cleaner air and reduced greenhouse gas emissions. In
combination with electric/plug-in vehicles, clean geothermal power could be used to offset the
need for petroleum transportation fuels, which could enhance national security, protect the
environment from the effects of oil exploration, drilling, spills, and carbon emissions and other
pollutants from combustion.
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 17 of 19 7/21/2010
Geothermal development would also provide local jobs, both directly and indirectly (see section
2.5). Based on the Geothermal Energy Association publication referenced in section 2.5, a 5
MW plant could provide and stimulate 10 to 21 full time local jobs, as well as 80 person-years of
construction and manufacturing work during construction. Geothermal provides more jobs than
conventional power plants, and these jobs are quality and long term. People with a variety of job
skills from pipe fitters to geologists to spa developers, with many in between, find long term local
income potential from geothermal development.
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
IPEC proposes to own and operate the geothermal plant. Maintenance and operations would be
funded by customer utility payments. IPEC has been a stable utility and was formed in the 1970’s
as the Tlingit and Haida Regional Electrical Authority (THREA). In 2004 THREA was
reorganized as a member-owned electric cooperative. IPEC would certainly commit to reporting
savings and benefits. Operational issues and costs would be addressed by this and further phases
of the project.
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.
A team has been assembled that would be able to begin immediately upon award with this
project. Permitting and field work planning activities and vendor solicitations could begin
immediately, and we anticipate mobilizing field crews within a month of approval, assuming
approval is granted in July of 2011 with time left for Summer/early Fall field work. This would
give an entire winter for data analysis and synthesis by the assembled team, and permitting and
soliciting a vendor for drilling services for the succeeding summer. This is the first work to be
done on this project, but the team members have past experience meeting the requirements of
other grants and projects.
No previous significant research has been done on this site. Resources such as Makushin and Mt.
Spur have benefited from state and university funded and led research in the 1980’s. Smaller
resources or those with smaller nearby communities have in general only been further
investigated due to the existence of a highly motivated interested owner, such as at Chena.
Despite favorable signs of a developable local resource and the existence of nearby communities,
Tenakee has no self-interested owner and is small and remote enough to have been neglected in
Renewable Energy Fund
Grant Application Round IV
AEA11-005 Grant Application Page 18 of 19 7/21/2010
the past. This is a perfect point in history to begin a more in depth look at this resource. Fuel
costs are high and likely to increase in the future. The world and governments are gaining
awareness of the negative effects of carbon and the exploitation and importation of oil. Electric
and plug-in hybrid cars are being released in general production. The importance of local food
security is becoming understood. All of these factors make it more likely that this resource could
be effectively utilized to provide maximum benefit to the local communities than at any time in
the past.
We have gathered existing aeromagnetic, gravity, and geochemical data. These data sets are
sparse and on a large scale in the area, but give us the needed background to effectively and
quickly begin the resource evaluation needed before any other stages of resource development
can occur, including securing other sources of funding. Specific areas for further field
investigation and geophysical studies can be quickly selected based on this previous work.
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.
So far in our plan to investigate the development of geothermal at Tenakee Inlet we have
encountered nothing but support for this clean, reliable energy source.
IPEC is the member owned electrical cooperative providing power to Hoonah, which is by far the
largest community that would benefit from this project. Tenakee Springs as a community
supports geothermal and is investigating the potential locally. Attached are letters of support
from Sealaska-Southeast Alaska Native regional corporation; Huna Totem Corporation – Village
Native Corporation for Hoonah; and the Central Council Tlingit and Haida Indian Tribes of
Alaska.
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
At this early point in the project, additional funding sources and matching funds are not
available, therefore IPEC is asking for the entire $2,579,200 needed for this reconnaissance
study. It is assumed that positive analysis of the project potential from this phase could be used
to leverage funds from investors for additional phases of the project. Other funding and grant
sources, such as future funding opportunities from the Department of Energy, will be sought and
applied for as they become available.
Page 19 of 19
Additional Documentation
.
____________________________
____________________________
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. Up to 100%
Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel)
2. Existing Energy Generation and Usage
a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank)
i. Number of generators/boilers/other 3 (all info is for IPEC in Hoonah)
ii. Rated capacity of generators/boilers/other 610 KW, 855 KW, and 1000 KW
iii. Generator/boilers/other type Diesel Generators
iv. Age of generators/boilers/other 31, 17, 11 years
v. Efficiency of generators/boilers/other 14.25 kWh/gallon
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor $93,825
ii. Annual O&M cost for non-labor $1,085,066
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] 5,011,674 in 2008
ii. Fuel usage
Diesel [gal] 348,703 in 2008
Other
iii. Peak Load 900 KW
iv. Average Load 845 KW
v. Minimum Load 780 KW
vi. Efficiency 14.25 kWh per gallon of diesel consumed
vii. Future trends
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu]
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
vi. Other
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]
Unknown until further study is done, but at assuming 3-
6MW of geothermal energy
b) Proposed annual electricity or heat production (fill in as applicable)
i. Electricity [kWh] 26,280,000 kWh – 52,560,000 kWh @ 95% availability
ii. Heat [MMBtu] Unknown
c) Proposed annual fuel usage (fill in as applicable)
i. Propane [gal or MMBtu] Not applicable
ii. Coal [tons or MMBtu] Not applicable
iii. Wood [cords, green tons, dry tons] Not applicable
iv. Other Not applicable
4. Project Cost
a) Total capital cost of new system Estimated at $27,000,000 plus transmission
b) Development cost Included above
c) Annual O&M cost of new system Unknown but expected to be order of $0.06/kWh
d) Annual fuel cost -0-
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 348,703 gallons or more
ii. Heat Unknown until resource is better defined
iii. Transportation Unknown until resource is better defined
b) Current price of displaced fuel Approximately $1,085,000 (for Hoonah) for electric
c) Other economic benefits Greenhouse - $150,000 to $200,000 /year depending upon
vegetables and production.
d) Alaska public benefits 10 to 20 full time jobs @ $50,000 / year = $500,000 (for 10
jobs), Carbon Credit at $33/MWh generates $1,445,400/yr
6. Power Purchase/Sales Price
a) Price for power purchase/sale Unknown until resource is better defined
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 1.11
Payback (years) 21
Renewable Energy Fund Round 4
Project Cost/Benefit Worksheet
RFA AEA11-005 Application Cost Worksheet Page 3 7-21-10
Year Fuel Cost O&M Costs Carbon Credit Total O&M & Devel
Displaced Displaced $33/MWh Benefit Costs
2015 $ 1,085,000 $ 1,178,891 $ 1,445,400 $ 3,709,291 $ 4,628,000
2016 $ 1,095,850 $ 1,178,891 $ 1,445,400 $ 3,720,141 $ 4,628,000
2017 $ 1,106,809 $ 1,178,891 $ 1,445,400 $ 3,731,100 $ 6,628,000
2018 $ 1,117,877 $ 1,178,891 $ 1,445,400 $ 3,742,168 $ 6,628,000
2019 $ 1,129,055 $ 1,178,891 $ 1,445,400 $ 3,753,346 $ 6,628,000
2020 $ 1,140,346 $ 1,178,891 $ 1,445,400 $ 3,764,637 $ 6,628,000
2021 $ 1,151,749 $ 1,178,891 $ 1,445,400 $ 3,776,040 $ 6,628,000
2022 $ 1,163,267 $ 1,178,891 $ 1,445,400 $ 3,787,558 $ 5,628,000
2023 $ 1,174,900 $ 1,178,891 $ 1,445,400 $ 3,799,191 $ 2,628,000
2024 $ 1,186,649 $ 1,178,891 $ 1,445,400 $ 3,810,940 $ 2,628,000
2025 $ 1,198,515 $ 1,178,891 $ 1,445,400 $ 3,822,806 $ 2,628,000
2026 $ 1,210,500 $ 1,178,891 $ 1,445,400 $ 3,834,791 $ 2,628,000
2027 $ 1,222,605 $ 1,178,891 $ 1,445,400 $ 3,846,896 $ 2,628,000
2028 $ 1,234,831 $ 1,178,891 $ 1,445,400 $ 3,859,122 $ 2,628,000
2029 $ 1,247,180 $ 1,178,891 $ 1,445,400 $ 3,871,471 $ 2,628,000
2030 $ 1,259,651 $ 1,178,891 $ 1,445,400 $ 3,883,942 $ 2,628,000
2031 $ 1,272,248 $ 1,178,891 $ 1,445,400 $ 3,896,539 $ 2,628,000
2032 $ 1,284,970 $ 1,178,891 $ 1,445,400 $ 3,909,261 $ 2,628,000
2033 $ 1,297,820 $ 1,178,891 $ 1,445,400 $ 3,922,111 $ 2,628,000
2034 $ 1,310,798 $ 1,178,891 $ 1,445,400 $ 3,935,089 $ 2,628,000
2035 $ 1,323,906 $ 1,178,891 $ 1,445,400 $ 3,948,197 $ 2,628,000
2036 $ 1,337,145 $ 1,178,891 $ 1,445,400 $ 3,961,436 $ 2,628,000
2037 $ 1,350,517 $ 1,178,891 $ 1,445,400 $ 3,974,808 $ 2,628,000
2038 $ 1,364,022 $ 1,178,891 $ 1,445,400 $ 3,988,313 $ 2,628,000
2039 $ 1,377,662 $ 1,178,891 $ 1,445,400 $ 4,001,953 $ 2,628,000
2040 $ 1,391,439 $ 1,178,891 $ 1,445,400 $ 4,015,730 $ 2,628,000
2041 $ 1,405,353 $ 1,178,891 $ 1,445,400 $ 4,029,644 $ 2,628,000
2042 $ 1,419,407 $ 1,178,891 $ 1,445,400 $ 4,043,698 $ 2,628,000
2043 $ 1,433,601 $ 1,178,891 $ 1,445,400 $ 4,057,892 $ 2,628,000
2044 $ 1,447,937 $ 1,178,891 $ 1,445,400 $ 4,072,228 $ 2,628,000
2045 $ 1,462,416 $ 1,178,891 $ 1,445,400 $ 4,086,707 $ 2,628,000
$ 39,204,023 $ 36,545,621 $ 44,807,400 $ 120,557,044 $ 108,468,000
Benefit $ 120,557,044
Cost $ 108,468,000
Ratio 1.11
Simplified zero inflation model assuming 1) Hoonah only fuel displaced with increase of 1%/yr;
2) O&M costs displaced based on 2b above; 3) Carbon credit available at $33/MWh (various
literature sources GRC Bulletin, and industry analysts); 4) Geothermal O&M costs of $0.06/kWh
for 5 MW plant and $27million development costs in first 8 years.
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 Phase I: RECONNAISSANCE: 1. Project scoping and contractor solicitation 10/2012 $ 92,800 $ 0 $ 92,800 2. Resource identification and analysis 9/2012 $2,200,400 $ 0 $2,200,400 Field Work 10/2011 $ 599,200 $ 0 $ 599,200 Drilling 9/2012 $1,601,200 $ 0 $1,601,200 3. Land use, permitting, and environ. analysis 10/2012 $ 73,800 $ 0 $ 73,800 4. Preliminary design analysis and cost 10/2012 $ 86,000 $ 0 $ 86,000 5. Cost of energy and market analysis 10/2012 $ 31,000 $ 0 $ 31,000 6. Simple economic analysis 10/2012 $ 22,800 $ 0 $ 22,800 7. Final Report & Recommendations 12/2012 $ 72,400 $ 0 $ 72,400 TOTALS $2,579,200 $ 0 $2,579,200 Budget Categories: Direct Labor & Benefits $ 89,200 $ 0 $ 89,200 Travel & Per Diem $ 6,400 $ 0 $ 6,400 Equipment $ $ 0 $ Materials & Supplies $ $ 0 $ Contractual Services $2,027,600 $ 0 $2,027,600 Construction Services $ $ 0 $ Other (Camp and Helicopter Services) $ 456,000 $ 0 $ 456,000 TOTALS $2,579,200 $ 0 $2,579,200 Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)-
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
TEL. 907-586-1432 www.ccthita.org TOLL FREE 800-344-1432
CENTRAL COUNCIL
Tlingit and Haida Indian Tribes of Alaska
Office of the President
Andrew Hope Building
320 West Willoughby Avenue • Suite 300
Juneau, Alaska 99801-1726
November 10, 2009
Alaska Energy Authority (AEA)
813 West Northern Lights Blvd
Anchorage, Alaska 99503
Re: IPEC Geothermal Renewable Energy Fund Grant Application - Round 3
Dear Alaska Energy Authority:
The Central Council Tlingit & Haida Indian Tribes of Alaska (Central Council) writes in support
of the IPEC geothermal grant application for the Hoonah and Tenakee geothermal project. The
Central Council is the federally recognized tribe of Tlingit and Haida Indians in Southeast Alaska
representing more than 26,000 tribal members. As the Tribe, we are concerned about the
continued extraordinary energy costs within our rural Southeast communities, including the
village of Hoonah. Inside Passage Electric Cooperative (IPEC) is the only utility in Hoonah.
IPEC’s electricity is entirely generated by diesel generators. Because the diesel prices have been
extremely expensive and unpredictable it has created an extreme burden on the Hoonah
community residents and businesses.
The Central Council supports IPEC’s AEA geothermal grant application and asks AEA to award
the geothermal grant to them. If proven to be a viable geothermal project, IPEC anticipates
serving both Hoonah and Tenakee with the reliable source of energy. The grant will enable the
parties to take the first step in ascertaining the viability of the geothermal site. IPEC’s geothermal
grant application should receive the AEA award to assist rural communities in their efforts to shift
from expensive diesel fuel dependency to renewable energy. If you have any questions please feel
free to contact me. Thank you very much for your consideration in assisting Hoonah and Tenakee
with renewable alternatives to diesel energy.
Sincerely,
William E. Martin
President