HomeMy WebLinkAboutTenakee Inlett Geothermal Application
Renewable Energy Fund Round 3
Grant Application
AEA 10-015 Application Page 1 of 14 10/7/2009
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
P.O. 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
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 3
AEA10-015 Grant Application Page 2 of 14 10/7/2009
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 2000 census lists the populations as: 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.
This project is to investigate the potential of using the known geothermal resource at Tenakee
Inlet to supply a geothermal power plant. 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 indicate 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. Using geophysical and geochemical exploratory methods, we propose to conduct a field
exploration of this resource in order to choose a location for two exploratory wells. This phase
of the project will culminate with the drilling and testing of two exploratory wells, which will
allow for an economic and technical assessment of the potential power generation from this
resource. This work is a necessary first step in determining the viability of generating region-
wide power from this resource.
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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 $0.5196/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, at each of the three
villages; space heating fuel may also be avoided by conversion to electric heating; and would
stabilize, and possibly lower, energy costs. Lower energy prices would stimulate the economy,
and the geothermal resource could bring new types of development to the island, for example
waste heat may be used for warming greenhouses. The development of the resource may also
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.
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 Phase I Reconnaissance are $2,589,200. 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. $2,589,200
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) $2,589,200
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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) $ to be determined
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.)
$ to be determined
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 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.
Amanda Kolker, or AK Geothermal will provide technical assistance to HDL, and act as the
technical coordinator and synthesizer.
Renewable Energy Fund
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AEA10-015 Grant Application Page 5 of 14 10/7/2009
IPEC’s Tenakee Inlet Project Management Structure:
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. Project scoping and contractor
solicitation would be on and off through Summer 2011, culminating in the selection of a drilling
contractor and site restoration contractor. Resource identification would encompass the field
exploration program and the exploratory well drilling and testing. It is assumed that the field
exploration may be accomplished in the summer of 2010, assuming the grant is awarded by July,
2010. The synthesis of field and existing data and the choosing of an exploratory drilling
location would be completed over the winter of 2010/2011. Drilling and testing of two
exploratory wells would be completed in the Summer of 2011. Land use, permitting, and
environmental analysis would be required for the undertaking of the field and drilling activities
in this phase 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 field
program in 2010 and be incorporated in the final report and recommendations. Final reporting
would be accomplished by the end of 2011.
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them. The
Milestones must also be included on your budget worksheet to demonstrate how you propose to
manage the project cash flow. (See Section 2 of the RFA or the Budget Form.)
1. Project Scoping and Contractor Solicitation: This task will include choosing contractors
for the resource reconnaissance. HDL geologists will undertake geological and geochemical
potions of the field work, other tasks such as the geophysical field studies and drilling will be
subcontracted. This task will end with the choice of a drilling contractor and site restoration
contractor by Summer, 2011.
AEA Grant Manager
Project Manager - Sealaska Corp.
Katherine Eldemar
Technical Manager - HDL
Lorie Dilley, PhD, PE, CPG
Drilling and other subcontractors
Tech. Assistance - AK Geothermal
Amanda Kolker, PhD
Applicant/Grant Manager-IPEC
Jodi Mitchell, CEO
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Grant Application Round 3
AEA10-015 Grant Application Page 6 of 14 10/7/2009
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 2011, and
2.2) exploratory well drilling to be completed by the end of the Summer, 2011.
2.1. Preliminary field work will include gathering existing information, including
satellite images and 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 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. AK
Geothermal, working with HDL, will assist in determining well location.
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 of this phase, as well as to identify and do
preliminary analysis of the land use, permitting, and environmental needs of the geothermal
plant through construction and use for the final report from this phase. 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 reporting at the
end of 2011. 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 and included in the final report at
the end of 2011. This preliminary design will include wells, gathering systems, necessary
roads and infrastructure, the plant itself, and transmission lines. 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 2011.
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 2011. 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 and drilling, the land use, permitting and environmental analysis, the
preliminary design analysis and costs, the market anal ysis, the simple economic analysis and
recommendations will be completed and submitted to AEA by the end of 2011.
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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 and Amanda Kolker of AK Geothermal both have extensive experience
with geothermal reconnaissance projects, in Alaska and elsewhere. HDL geologists will collect
field geological and geochemical data, and together with AK Geothermal, will provide synthesis
and analysis of the resource data. HDL and AK Geothermal 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. Both Lorie
and Amanda have 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, HDL and AK Geothermal 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. 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. 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.
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 should not be an insurmountable hurdle,
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although it likely will take some time and money to accomplish. 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. Timing is of the essence, and if notice to proceed is received
late in the season, field work may need to be delayed or the scope revisited. 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.
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.
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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. If built, a geothermal power plant at Tenakee
Inlet would serve to displace power generation by some or all of these sources. 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
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.
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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
Permits for drilling, construction, operation and other activities would be needed from the USFS,
the State of Alaska, and other bodies. A special use permit will be needed for activities in the
National Forest. We anticipate obtaining the special use permit for the first season’s field work
approximately a month from application. The process will be longer for the special use permit for
exploratory drilling, but we expect that scheduling drilling in the summer of 2011 should give
adequate time for this process. Permits needed for drilling and development will be further
investigated as part of the scope of this phase of the project. During this phase of the project we
will obtain the necessary permits for exploration and drilling, and would immediately start the
permitting process for the field activities upon award of this grant.
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.
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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. Costs for this phase are $2,589,200.
We are requesting grant funding for the entire $2,589,200 needed to fund this reconnaissance
study.
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.
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.
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.
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Grant Application Round 3
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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 addressed at part of the scope of this reconnaissance study. 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, and other industries. Energy costs would also be more stable for local communities, and
waste heat 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.
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 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 2010 with time left for Summer/early Fall field work. This would
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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.
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.
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 $2,589,200 needed for the Phase I
Reconnaissance in grant funds. 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.
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SECTION 9 – ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION:
A. Resumes of Applicant’s Project Manager, key staff, partners, consultants, and
suppliers per application form Section 3.1 and 3.4.
B. Cost Worksheet per application form Section 4.4.4.
C. Grant Budget Form per application form Section 9.
D. Letters demonstrating local support per application form Section 8.
E. An electronic version of the entire application on CD per RFA Section 1.6.
F. Governing Body Resolution or other formal action taken by the applicant’s
governing body or management per RFA Section 1.4 that:
- Commits the organization to provide the matching resources for project at the
match amounts indicated in the application.
- Authorizes the individual who signs the application has the authority to
commit the organization to the obligations under the grant.
- Provides as point of contact to represent the applicant for purposes of this
application.
- Certifies the applicant is in compliance with applicable federal, state, and local,
laws including existing credit and federal tax obligations.
G. CERTIFICATION