HomeMy WebLinkAboutAngoon Scenery Lake Hydro Grant Round 3 Final 10-9-09
Renewable Energy Fund Round 3
Grant Application
AEA 10-015 Application Page 1 of 29 10/7/2009
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-III.html
Grant Application
Form
GrantApp3.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
Costworksheet3
.doc
Summary of Cost information that should be addressed by
applicants in preparing their application.
Grant Budget
Form
GrantBudget3.d
oc
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
GrantBudgetInst
ructions3.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 3
AEA10-015 Grant Application Page 2 of 29 10/7/2009
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
City of Angoon, Alaska
Type of Entity:
Municipality
Mailing Address
P.O. Box 189 Angoon, AK 99820
Physical Address
Angoon, Alaska
Telephone
907-788-3653
Fax
(907) 788-3821
Email
alclhoward99@yahoo.com
1.1 APPLICANT POINT OF CONTACT
Name
Albert Howard
Title
Mayor
Mailing Address
P.O. Box 189 Angoon, AK 99820
Telephone
907-788-3653
Fax
907-788-3821
Email
alclhoward99@yahoo.com
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
X 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.
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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)
Type in your answer here and follow same format for rest of the application.
SCENERY LAKE HYDROELECTRIC PROJECT
2.2 Project Location –
Include the physical location of your project and name(s) of the community or communities that will
benefit from your project.
Answer here.
THOMAS BAY, ALASKA. ANGOON AND ALL CURRENT AND FUTURE INTERTIED
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
X Hydro, including run of river Transmission of Renewable Energy
Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing sources Hydrokinetic
Solar Storage of Renewable
Other (Describe)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Reconnaissance X Design and Permitting
Feasibility Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
On February 3, 2009, the City of Angoon (Angoon) filed an application with the Federal Energy
Regulatory Commission (FERC) for a three-year preliminary permit under Section 4(f) of the
Federal Power Act (FPA) to study the feasibility of the proposed Scenery Lake Hydroelectric
Project No. 13365-000. On October 2, 2009, the City of Angoon received the FERC preliminary
permit for the project. The project would be located on Scenery Creek and Scenery Lake near
Petersburg, Alaska. The project would be located within the Tongass National Forest, which is
administered by the U.S. Forest Service (Forest Service). The proposed project would consist of:
(1) a 15-foot-high concrete dam with a spillway impounding Scenery Lake; (2) a lake tap or
siphon; (3) a 13,000-foot-long by 8-foot-diameter buried steel penstock; (4) a powerhouse
containing two to four new generating units having a total installed capacity of 30 megawatts; (5)
a 7-mile-long, 69-kilovolt (kV) and a 22-mile-long, 138-kV transmission line; and (6)
appurtenant facilities. The proposed Scenery Lake Hydroelectric Project would have an
estimated average annual generation of 130 gigawatt-hours. On October 2, 2009, the City of
Angoon received the FERC preliminary permit for Scenery Lake.
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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.)
The project would provide exceptional public benefit by providing primary or back up renewable
hydropower electricity to all Southeast Alaska intertie connected communities (currently
Petersburg, Wrangell, and Ketchikan, but soon Kake and then Sitka and Angoon) and would
provide low cost power to Angoon for the 50 year life of the project plus renewals. The City of
Angoon’s electrical demand is currently 100% met by diesel fueled generation. In addition to
the existing electrical loads, the City would also like to reduce all diesel usage in home heating,
schools and municipal buildings.
Quantifying the benefit to Angoon: This project, along with the City of Angoon’s proposed Ruth
Lake hydroelectric project, will eliminate PCE subsidies to the City of Angoon from the State of
Alaska upon the completion of construction. In 2008 this amounted to $236,577.84 (source
AEA PCE Program). Further, Hoonah and Kake which are two other PCE subsidized
communities will be able to receive low cost hydropower from this development at some point in
the future. The communities received $641,212.24 and $299,887.90 in 2008 PCE respectively.
The Net Present Value of eliminating PCE payments to these communities will provide
$30,301,376 in savings to the citizens of the State of Alaska over the 50 year life of this project.
(PCE subsidy per year based on 2008 IPEC subsidy for Angoon, Kake and Hoonah: $1,177,678
NPV @ 3% for 50 years = $30,301,376 assuming the price of delivered electricity is at the PCE
break even rate. However, it is anticipated that Scenery and Ruth lake will be able to produce
and deliver substantially lower cost power than the current PCE rate, so these savings to the State
of Alaska are underrated.
If we calculate the total benefit to the ratepayers by taking the 52.5 cents per kWh IPEC rate and
reduce it to the anticipated 7 cents per kWh rate produced by Scenery Lake, the Net Present
Value for the citizens of Angoon, Kake and Hoonah balloons: Total kWh sold by IPEC to
Angoon, Hoonah, and Kake in 2008 was 8,772,408 kWh(source AEA 2008 PCE report).
8,772,408 (52.5-7) = $3,991,445 in annual savings to Angoon, Hoonah, and Kake ratepayers
NPV @ 3% for 50 years = $102,698,937.90.
IPEC currently sells electricity in Angoon for a non-subsidized rate at over 52.5 cents per kWh.
This dramatic reduction in electrical rate that would put the City of Angoon on par with the
white urban hydropower connected communities of Southeast Alaska and would result in annual
savings in Angoon of over $850,000 annually (using Angoon 2005 kWh IPEC production
figures). Angoon has a population of roughly 470 people, so the beneficial economic impact
would be savings of approximately $1,808 per Angoon resident annually!
Consider in this grant application that Angoon has 87% unemployment and has one of the
lowest per capita incomes for an Alaskan community of $11,357. City of Angoon revenues
from the project will assist the City of Angoon in direct and subsidized reduced energy costs as
well as provide economic opportunities that are competitively impossible (fish processing) with
high cost energy as compared to urban SE Alaska communities. For example, the City of
Angoon would be able to offer the local fish plant a competitive energy rate for the first time in
years. Ice (energy intensive to produce) would be available to local fishing operations increasing
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economic activity in what is now an economic stagnant community. Low cost energy that is
competitive with urban communities is the only viable economic option to rebuild Angoon to a
thriving rural Southeast Community. The City of Angoon’s recent portfolio of energy assets
insures not only Angoon’s success but other SE communities as well, thereby exponentially
creating additional public benefit for each new community that reduces diesel consumption and
is able to backstop or reduce their ratepayer cost for electricity through these projects.
Further, the benefits of this project and grant transcend the purely economic value but enter the
socio economics of quality of life, economic self sufficiency and the reduction of alcoholism and
other social problems incumbent in high unemployment communities. It is difficult to
economically quantify the socio-economic benefits, but the Cold Climate Housing Research
Center estimates that 1 of 5 homes in rural Alaska is unable to maintain warm and sufficient
temperatures during winter months. The City of Angoon is taking steps so its citizens do not
have to make the tough choice of whether to “eat or heat”.
The economic and socio-economic benefits produced by the City of Angoon’s portfolio of
energy assets are a game changer for Southeast Alaska.
2.6 PROJECT BUDGET OVERVIEW
Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source
of other contributions to the project.
The City of Angoon requests $1,624,240 from AEA for Phase II Feasibility Analysis,
Conceptual Design and initial FERC Permitting requirements under federal guidelines for
Scenery Lake Hydroelectric Project. The City of Angoon is applying for federal matches and
collaborative investments and contributions from municipal and private interests that will be
made available to the City of Angoon on or before the July 1, 2010 AEA funding date. The City
of Angoon has received approximately $205,000 of in kind pre-engineering, regulatory scoping,
and assistance from a private party dedicated to bringing low cost power to Angoon and rural
Native Southeast 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. $1,624,240
2.7.2 Other Funds to be provided (Project match) $411,060
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $2,055,300
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)
$98,626,186
2.7.5 Estimated Direct Financial Benefit (Savings) $1,752,831,605
2.7.6 Other Public Benefit (If you can calculate the benefit in $ $30,301,376.50 PCE
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 6 of 29 10/7/2009
terms of dollars please provide that number here and
explain how you calculated that number in your application
(Section 5.)
elimination over 50 year
life.
Associated reduction in
GHG emissions, improved
economic base, increase in
standard of living and
disposable income.
Minimum $1808 annual
savings per IPEC Angoon,
ratepayer.
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.
Type in your answer here and follow same format for rest of the application.
The City of Angoon has contracted with Cascade Creek, LLC for Development Management
services for the Scenery Lake Hydroelectric Project. The project management team will hire
competent and qualified businesses and contractors to perform the regulatory permitting and
license application for our FERC license. Included is a resume and background support for
Cascade Creek, LLC, their qualifications and references.
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.)
Phase I Reconnaissance
2nd Qtr 2008 through 2nd Qtr 2009
Phase II Licensing & Feasibility
2nd Qtr 2009 (preliminary Permit Application) through 4th Qtr 2012 (License
Application)
Phase III Final Design
2nd Qtr 2012 through 1st Qtr 2013
Phase IV Construction & Startup
2nd Qtr 2013 through 1st Qtr 2015
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them. The
Milestones must also be included on your budget worksheet to demonstrate how you propose to
manage the project cash flow. (See Section 2 of the RFA or the Budget Form.)
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3rd Qtr 2010
Prepare and distribute Preliminary Application Document (PAD), distribute Notice of Intent
(NOI) to file an application for license, conduct initial consultation meetings.
Adopt the Alternative Licensing Process (ALP), make request, distribute draft Communications
Protocol, solicit acceptance and agreement from stakeholders to participate.
Apply for USFS Special Use Permit to install stream gages.
4th Qtr 2010
Conclude first year environmental studies, geographical assessment, office studies, plant &
animal inventories, geologic assessment.
1st & 2nd Qtr 2011
Initiate the scoping process, draft & distribute SD1(Scoping Document 1), draft & distribute
study plans, hold public meetings, review comments on SD1 draft & issue SD2. Update the
preliminary project design.
3rd Qtr 2011
Carry out second year environmental studies (as required). Conclude Geotechnical Study
4th Qtr 2011
Conclude environmental study reports. Draft environmental assessment report. Draft license
application.
1st Qtr 2012
Draft license application & environmental assessment report and distribute to agencies,
stakeholders and others as required.
2nd Qtr 2012
Prepare final license application based on comments & corrections including all exhibits.
3rd Qtr 2012
FERC accepts application, requests for additional information & corrections, Request for final
terms & conditions. FERC consult & legal review.
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.
The City of Angoon has retained the services of Cascade Creek, LLC of Juneau Alaska as its
Development Manager for this project. Cascade Creek will assist the City of Angoon in
managing the project in a financially prudent manner based on their team member’s extensive
experience in building hydropower projects in Southeast Alaska on time, under budget and with
environmental certification.
Criteria for selection: Proven experience in building Southeast hydropower facilities and
Southeast Alaska transmission lines; designing and permitting Low Impact Hydropower Institute
certified hydropower facilities; proven experience in completing Southeast hydropower and
transmission line construction on time and under budget.
Cascade Development team will assist City of Angoon to provide regulatory support, design,
management support, engineering support and management of third party contractors. Cascade
Creek Development team will also assist the City of Angoon in securing funding for all phases of
the project and advise in power sales agreements.
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3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
Primary contact:
Mayor Albert Howard
City of Angoon
PO Box 189
Angoon, AK 99820
Phone 907-788-3653
e-mail: alclhoward99@yahoo.com
Supplementary contact:
Duff Mitchell
Cascade Creek, LLC
PO Box 23000
Juneau, AK 99802
Phone 907-586-3333
e-mail: duff.mitchell@thomasbayhydro.com
3.6 Project Risk
Discuss potential problems and how you would address them.
There are three primary risks with the project: Market risk, Political risk, and Environmental and
Permitting risk.
Market risk is related to overall project costs where lower costs will produce a lower per unit
kWh cost. Full utilization and full sales of anticipated generation also decrease market risk.
This risk is mitigated by negotiating with regional municipal and private power companies to
provide primary and back-up power for their systems. This risk is mitigated by the AEA award
of funds to our Native community and the timeline. It is expected that Southeast Alaska demand
for low cost hydropower will outstrip demand as home heating oil conversions reach critical
mass and tipping point occurs during licensing and construction phase of the project..
The Political risk is that there are some parties reluctant to allow our Native community to own
and operate power generation as evidenced by the comments directed at Angoon through the
FERC permitting processes. This risk will be mitigated by our open and continued request for
participation by all neighboring communities, tribal entities and those entities that understand
that Southeast Alaska needs to create new and large generation today to provide unfettered low
cost power to our region in the next decades. The political risk is mitigated by AEA and the
legislature awarding and supporting our projects in the same manner as they have invested
millions of hydropower infrastructure dollars into predominately white and urban communities
in Southeast Alaska.
Environmental and Permitting risk is present as studies required by federal and state agencies
that will need to be initiated and completed to submit a FERC license application that is issued
with minor or no restrictions. The Environmental and Permitting risk is mitigated by the timely
issuance of AEA funding to execute work schedule.
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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 Scenery Lake Hydroelectric Project as proposed consists of a powerhouse containing two to
four new generating units having a total installed capacity of 30 megawatts that would have an
estimated average annual generation of 130 gigawatt-hours.
The amount of energy from this project will produce high volumes of low cost primary power for
the Native communities of Southeast Alaska and provide low cost back up power for all
regionally intertie connected utility systems. This project, along with other Thomas Bay Projects,
create economies of scale that will stabilize electrical power prices in Southeast Alaska for the
next 50 years. Other smaller scale alternatives will lead to escalating electrical prices that will
further demean and economically impact Native communities already suffering from energy
disparities between Southeast communities already achieving low cost power from large
hydropower versus communities that do not have large hydropower. If our community cannot
achieve delivered power at the rate equal to, or lower than, urban Southeast communities, then we
will not be able to compete economically with fish processing or other traditional industry.
Revenues generated from our projects will decrease our dependence on State of Alaska PCE
subsidies and community revenue sharing that will become increasingly difficult as the State’s oil
money runs out.
4.2 Existing Energy System
4.2.1 Basic configuration of Existing Energy System
Briefly discuss the basic configuration of the existing energy system. Include information about
the number, size, age, efficiency, and type of generation.
The community of Angoon is serviced by the Inside Passage Electrical Cooperative with four
diesel generators.
Generators (#2 diesel fuel engines)
Caterpillar 3456ATAAC 475 kW
Caterpillar 3508DI 550 kW (existing)
Caterpillar 3508DITA 560 kW (existing)
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Angoon’s electric generation facility consists of three diesel generator sets (genset) with a total
capacity of approximately 1,500 kW. The community’s load is typically between 250kW and
400kW. Their voltage output is 480v 3-phase which feeds three -250kW overhead transformers.
These transformers boost to a 7,200V distribution voltage and a majority of the community
receives power by an overhead distribution system.
This project will also beneficially impact Hoonah, Kake, Petersburg, Wrangell and Ketchikan
because it will produce 130 GWh to provide primary low cost hydropower or backstop existing
systems that rely on diesel back up.
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.
The 2005 Angoon annual electric generation was approximately 2,021,000 kWh (source CHP
center). This electrical generation is entirely borne from the burning of diesel. However, more
disturbing is that there is no use of electricity for space heating in Angoon due to the high cost of
electricity. Therefore over 95% of the energy usage for space heating for homes and businesses is
produced through diesel fired generated heat. Approximately 5% of the homes use firewood or
are supplemented with firewood.
The CBJ Greenhouse Gas Emission study released in March 2009 reveals that Juneau is 81%
dependent on diesel in its total non-transportation use of energy. Naturally, Angoon does not
have hydropower so it is 100% diesel dependent. However if we convert the BTU requirements
for Angoon using an 86% CCHRC figure, we find that Angoon would convert its diesel usage to
electrical usage if the price of electricity provided the economic incentive to convert to lower cost
electrical heat. Theoretically, (based on the 2005 number of 2,021,000 kWh IPEC figure) the
community of Angoon would need 14,435,714 kWh (2,021,000/(1-86%) if it completely
converted its home heating and diesel fuel usage to electrical generation from low cost methods.
Note CCHRC (Cold Climate Housing Research Center denotes in their 2009 Alaska housing
assessment that Sealaska Region villages are 86% diesel dependent for home heating fuel.
Theoretically, the community of Angoon currently needs the equivalent of 14,435 MWh for its
current needs. This usage fails to incorporate the price elasticity of demand in which energy
usage, demand, and growth rates will occur with the advent of low cost power to the community
of Angoon.
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The power provider in Kake, Angoon, and Hoonah would be able to completely idle their
expensive diesel generation capacity to a stand by status reducing the cost of operating existing
infrastructure. The advent and intertie connections of the City of Angoon’s portfolio of energy
projects would change the power providers business model in that it would become a cheaper,
more efficient, non PCE subsidized utility. The power provider would need to build and expand
its distribution system in each community because the “elasticity of demand” of lower cost power
would create unprecedented power demand in converting home heat fuel from diesel to cheap
hydropower electricity which, in turn would justify line upgrades and line expansion to new areas
and rural land allotments in these communities.
Petersburg, Wrangell, and Ketchikan use an assortment of hydropower and diesel back up assets.
This project will beneficially impact the diesel back up infrastructure of these communities
because the advent of this project power will idle these assets so diesel is never burned again in
these communities except for the rare power line failure.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The community of Angoon has the highest unemployment rate of 87% (source TANF program,
Central Council of Tlingit and Haida Indians of Alaska) and the lowest per capita income in
Southeast Alaska. The per capita income for Angoon was $11, 357. About 27% of families and
27.9% of the Angoon population is below the poverty line (source US Census Bureau Fact finder
for Angoon, Alaska). Alaska ranks number one in energy use per capita. According to the Cold
Climate Housing Research Center 2009 Alaska Housing Assessment, the average Sealaska
household (of which Angoon belongs) consumes $6,072 of energy per year. From these statistics
over one half of the average household per capita income of Angoon residents is spent on energy.
The impact of this project to bring low cost hydropower to the community of Angoon and energy
customers is profound since energy customers are making decisions to either heat their homes or
feed their household. This project will take a period to permit, license and construct. An
investment in this project is needed now in order to save the community energy customers for the
long term and to provide economic development with low cost power so that the economy of
Angoon can be rebuilt and jobs provided.
The current power provider currently sells electricity in a non-subsidized rate at over 52.5 cents
per kWh. This dramatic reduction in electrical rate that would put the City of Angoon on par with
the white urban hydropower connected communities of Southeast Alaska would result in direct
out of pocket annual savings to Angoon ratepayers of over $850,000 annually (using Angoon
2005 kWh IPEC production figures). Angoon has a population of roughly 470 people so the
beneficial economic impact would be $1,808 in savings per Angoon resident annually! ($850,000
savings/ 470 Angoon residents = $1808.51 annual prorated energy savings per resident). This
annual savings will significantly impact the livelihood and disposable income in a community
with one of the lowest per capita incomes in Alaska.
Similar savings are replicated in Hoonah and Kake dramatically increasing the standard of living
and providing a beneficial increase in the non-energy disposable income for these rural Southeast
Alaska residents.
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Although water management and power management schemes between the Tyee Hydropower
facility and the Swan Lake Hydropower facility will temporarily negate the need for diesel, it is
just that, temporary. Home heat oil conversions will require that all three communities seek and
need new generation as evidenced by recent FERC competitive filings. All three communities
currently are over 80% diesel dependent for home and commercial heating needs. Further the
recent advent of electrical vehicles will require more electrical generation as traditional fuel based
transportation is converted to electrical means. Southeast Alaska already has a high per capita
ownership of hybrid vehicles and it is likely that there will be early adoption of electrical vehicles
due to short road distance and relatively high comparative fuel costs in Southeast Alaska.
The only community in Southeast Alaska to evaluate the energy oil dependency phenomena is the
City and Borough of Juneau. In the CBJ Greenhouse Gas Emission Inventory, it is made clear
that Juneau is 81% diesel dependent for all its non transportation energy needs. Based on current
energy consumption if one half of Juneau converted to electrical heat (premised on hyper oil price
increase) Juneau would need the electrical equivalent of 1 ¼ Snettisham hydropower facilities. If
Juneau over time converted one half of its consumption of petroleum fuel used in transportation
to electrical, Juneau would need the equivalent of another Snettisham hydropower facility.
Extrapolating the City and Boroughs equivalent future energy needs to Ketchikan, Petersburg and
Wrangell, demonstrates that Southeast Alaska is underserved in current and constructed
hydropower resources and that the regions is at energy risk in the advent of hyper oil inflations.
Unfortunately, hydropower and transmission projects take time to plan, permit, license and build.
The probability of high oil prices based on the Energy Information Agency of the Department of
Energy exceeds the regions current planned and existing capacity.
Therefore the existing Energy market is fluid and highly dependent (risk) on the price of
petroleum and is therefore primed for disruption with the energy price outlook for the next decade
(planning and construction of hydropower horizon).
Project Impact on Energy Customers
• Reduce reliance on diesel generated power
• Increase power reliability during power outages
• Reduce energy cost for customers
• Enable new economic development in Angoon and other communities
• Improve quality of life for customers facing high energy costs from diesel generation
• Improve local environmental conditions by reducing greenhouse gas emissions
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
Renewable Energy Fund
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AEA10-015 Grant Application Page 13 of 29 10/7/2009
• Basic integration concept
• Delivery methods
The proposed project is a hydropower project first identified in the early 1900’s and listed in the 1924 and 1947
Water Power Studies conducted by the federal government. Our intended design it to meet the criteria set
forward by the Low Impact Hydropower Institute in order for the project to be certified.
The project will consist of:
(1) a 15-foot-high concrete dam with a spillway impounding Scenery Lake; (2) a lake tap or siphon with fish
screen; (3) a 13,000-foot-long by 8-foot-diameter buried steel penstock; (4) a powerhouse containing two to
four new generating units having a total installed capacity of 30 megawatts; (5) a 7-mile-long, 69-kilovolt (kV)
and a 22-mile-long, 138-kV transmission line; and (6) appurtenant facilities. The proposed Scenery Lake
Project would have an average annual generation of 130 gigawatt-hours.
The City of Angoon filed and was awarded a Federal Energy Regulatory Commission preliminary permit on
Scenery Lake Hydroelectric Project (FERC Project No. 13365-000) on Oct 2, 2009.
Optimum installed capacity – 30 MW
Anticipated plant factor – 50%
Anticipated annual generation – 130 GWh
Anticipated development barriers include the funding and construction of a transmission line from Thomas Bay
to the proposed Kake to Petersburg Intertie that will traverse the Northern side of Kupreanof Island. The
Thomas Bay Kake Petersburg Intertie (TBKP) will be developed simultaneously with the other City of Angoon
portfolio of energy projects. Failure to receive a license to construct and operate the project is a barrier to
developing any new non-federal hydropower resource in the US.
Basic integration concept – Electric power from Scenery Lake would be integrated to PMPL’s, WMLP, IPEC
and KPU resources to serve current and future loads. Power would be delivered to PMPL’s system by a
distribution segment. Project power would flow on SEAPA publicly financed Swan Tyee Intertie. Power
surplus to City of Angoon’s needs could be delivered to SEAPA for use within the region.
Delivery methods - Electric power from the project would be combined with other Thomas Bay generated
power and transmitted by overland and submarine transmission segments to the Scow Bay Substation on
Mitkof Island. Power would be delivered to PMPL’s system by a distribution segment and to other southern
Southeast Alaska utilities by the interconnected transmission system operated by the Southeast Alaska Power
Agency (SEAPA) comprised of PMPL, WMLP, & KPU. Basic Integration concept. Scenery Lake will
become integrated into the growing components of the Southeast Intertie. A connection point in Petersburg is
approximately 17 miles, but a connection point that ties into the proposed Kake to Petersburg Intertie with a
proposed Thomas Bay to Kake Petersburg (TBKP) is significantly shorter and more cost effective.
Renewable Energy Fund
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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 land in which the project is situated is entirely on US Forest Service administered land. The land is not in
a wilderness designation and hydropower development is a permitted use in the land designation claimed by
our project.
There are no land ownership and access issues impacting our ability to permit, license, construct and operate a
municipal owned federally licensed hydropower project at Scenery Lake and Scenery Cove. The project land
ownership/control issue will be awarded to the City of Angoon upon successful completion of the FERC
licensing process. In the interim, based on the City of Angoon’s award of its FERC preliminary permit, the
City will obtain a Special Use Permit from the US Forest Service to conduct its regulatory requirements.
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
The primary authorization will be through a license issued by the Federal Energy Regulatory
Commission (FERC), which will be lead agency for federally required environmental reporting
and impact analysis under the National Environmental Policy Act (NEPA). The FERC license
will contain Articles implementing terms and conditions from other resource agencies such as US
Forest Service (USFS), US Fish and Wildlife Service (USFWS), Alaska Department of Fish and
Game (ADF&G), Alaska Department of Natural Resources (ADNR), among others. Prior to
construction, the City will require, among others, the following permits, certifications and
authorizations:
• Special Use Permit, USFS;
• Coastal Zone Consistency Determination, ADNR;
• Title 41 Fish Habitat Permit, ADF&G;
• Clean Water Act Section 404 Dredge and Fill Permit, US Army Corps of Engineers
(USACOE);
• State Water Right for Diversion and Impoundment of Water, ADNR;
• Biological Assessment or Evaluation, USFWS;
• Various fuel and hazardous substance spill avoidance, containment and cleanup plans, US
Environmental Protection Agency, USACOE, Alaska Department of Environmental
Conservation.
Applications for these permits will occur at times specified by the respective agencies. USFS Special Use
Permits may be necessary to conduct stream gaging, geotechnical, cultural resources and other surveys,
beginning in mid 2010. Construction-related permits will be required before construction could commence.
Licensing and permitting has been shown to be one of the most critical elements of hydro project development.
The Angoon development team will work to address environmental conditions throughout the preconstruction
period. This will involve negotiation of permit conditions well in advance of the construction start date to avoid
adverse cost and schedule effects.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 15 of 29 10/7/2009
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
•The City of Angoon will conduct consultations with federal and state agencies during the pre-filing
development of the Application for License. These agencies will submit recommended terms and conditions
for inclusion in any License issued by the FERC. • Threatened or Endangered species – Angoon will consult
with ADF&G, FWS, NMFS & USFS, conduct required studies to identify any species of concern in Alaska
and/or Federal sensitive species, and implement measures to avoid and/or protect any species during
construction and Project operation.
• Habitat issues – Angoon will consult with ADF&G, FWS, NMFS & USFS regarding aquatic and terrestrial
species and habitat use within the Project area, conduct required studies, and implement measures to protect
habitat of concern during construction and Project operation.
• Wetlands and other protected areas -Angoon will consult with the USACE, ADF&G, and the FWS and
conduct an on-site wetland delineation to identify wetland acreage, types, and functional assessments within
the proposed Project boundary and consult with the agencies regarding any potential effects of constructing and
operating the Project.
• Archaeological and historical resources - Angoon will conduct consultations and studies;
and prepare reports required to address Section 106 of the National Historic Preservation
Act. Angoon will consult with tribes that have historical use in Thomas Bay
Land development constraints – Angoon will consult with the BLM regarding any mineral
claims; consult with agencies and the public regarding any effects on recreational use;
consult with private land-owners, and consult with the USFS regarding the Land Use
Designation for National Forest Lands that would be occupied by the Project. Measures
addressing land use will be incorporated in easements and the USFS Special Use
Authorization.
• Telecommunications interference – Not applicable
• Aviation considerations – Not applicable
• Visual, aesthetics impacts – Angoon will consult with the USFS and other federal/state
agencies, conduct studies and develop management plans to protect the visual and
aesthetic resources at Scenery Lake
• Identify and discuss other potential barriers – none identified at present
Under FERC licensing regulations, environmental issues must be identified and addressed in the framework of
a list of Stakeholders including state and federal resource agencies, interest groups, the public and affected
tribes and Native Corporations. Issue identification, impact analysis and mitigation planning represent major
components of a major project such as Scenery Lake. Through the required resource consultation process,
Angoon will address environmental and land use issues including, but not limited to, the following:
Fish and aquatic resources;
Wildlife and botanical resources, including wetlands and sensitive plants;
Renewable Energy Fund
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AEA10-015 Grant Application Page 16 of 29 10/7/2009
Water use and quality;
Cultural resources;
Recreation resources;
Aesthetics;
Threatened and endangered species;
Subsistence resources;
Land use and ownership.
Among potential barriers in the environmental area are FERC regulations which afford significant authority by
the US Forest Service to condition any eventual FERC license. Angoon will work closely throughout the
development process with USFS to develop conditions acceptable to USFS, the City and FERC.
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
At this time, the City of Angoon proposes to operate its portfolio of FERC hydropower facilities on a regulated
basis. Surplus energy sales for energy that is not fully utilized by Alaskan municipal or regulated utilities could
be sold in lower 48 markets at a time that an international interconnection is made.
Total anticipated project costs and cost for all phases to include contingencies interest and bonding is
$100,861,486. The cost for the permitting and licensing phase is highlighted in green in the spreadsheet below.
The following spreadsheet identifies and breaks down the cost for Phase II permitting and licensing is
$2,030,300 and $25,000 for travel associated with elected leaders of Angoon to attend and address FERC
scoping meeting, which is the funding less match that is being sought after through the AEA Renewable
Energy Fund. Requested Grant Funding for Phase II of this project is $1,644,240.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 17 of 29 10/7/2009
Scenery Creek Hydro
30 MW - Project Cost Estimate, w/Storage Nov 07, 2009
FERC
Acct. No Description Quantity y/n Unit Unit Price Amount ($)
300 LICENSING AND DESIGN
.1 FERC License and all permits (Ph II) 1 0 LS 0 0
.2 Project Design (Ph III) 1 0 LS 0 0
.3 Construction Inspection (Ph IV) 1 1 LS 480,000 480,000
.4 Quality Control & Inspection (Ph IV) 1 1 LS 520,000 520,000
.5 Construction Management (Ph IV) 1 1 LS 500,000 500,000
1,500,000
330 LAND AND LAND RIGHTS
.1 Land Rights - Gen Plant & Transm Line (Ph IV) 1 1 LS 150,000 150,000
.2 USFS Special Use Permit (Ph II) 1 0 LS 0 0
.3 Surveying For Construction (Ph III) 1 0 LS 0 0
.4 Governmental Agencies (Ph III) 1 0 LS 0 0
.5 FERC 1 1 YR 15,000 15,000
Total - Acct. No. 330 165,000
331 STRUCTURES AND IMPROVEMENTS
.1 POWERHOUSE
.1 Excavation 4,153 1 CY 75 311,475
.2 Concrete Foundation (including reinforcing) 1,389 1 CY 1,000 1,389,000
.3 Building Superstructure 1 1 LS 350,000 350,000
.4 Mechanical, HVAC, Plumbing 1 1 LS 300,000 300,000
.5 Hydraulic Power Units 2 1 EA 75,000 150,000
.6 Miscellaneous Metals 1 1 LS 200,000 200,000
.7 Inlet Valves 2 1 EA 200,000 400,000
.2 DOCK and BULKHEAD
.1 Dock and Bulkhead 1 1 LS 2,000,000 2,000,000
Total - Acct. No. 331 5,100,475
332 RESERVOIRS, DAMS, AND WATERWAYS
.1 DAM, INTAKE, SPILLWAY
.1 Intake foot bridge 1 1 LS 95,000 95,000
.2 Siphon House 1 1 EA 100,000 100,000
.3 Temporary Siphon to lower Scenery Lake 1 1 EA 350,000 350,000
.4 Diversion Weir Excavation 3,000 1 CY 75 225,000
.5 Rock Drilling (foundation treatment) 5,000 1 LF 60 300,000
.6 Grout Curtain 500 1 CY 1,000 500,000
.7 Diversion Dam 2,460 1 CY 1,000 2,460,000
.8 Submerged Intake 1 1 LS 200,000 200,000
.9 Intake Screens, Inline Valve and Hardware 1 1 LS 550,000 550,000
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AEA10-015 Grant Application Page 18 of 29 10/7/2009
.1 Access Roads 2,500 1 LF 60 150,000
.2 Penstock Road, upper 7,000 1 LF 60 420,000
.3 Penstock Road, lower 6,000 1 LF 60 360,000
.4 Rock Bolting/Stabilization 7,000 1 LF 100 700,000
.5 Electrical Powerhouse to Intake 13,000 1 LF 20 260,000
.6 96" Steel Penstock Material, upper 7,000 1 LF 574 4,018,000
.7 96" Steel Penstock Material, lower 6,000 1 LF 1,044 6,264,000
.8 Installation (Buried) 12,700 1 LF 1,200 15,240,000
.9 Penstock Bedding Material 11,289 1 CY 20 225,778
.10 Penstock bridge 1 1 LS 300,000 300,000
.11 Bifurcation at Powerhouse (manifold) 1 1 LS 200,000 200,000
.12 Couplings 1 1 LS 150,000 150,000
Total - Acct. No. 332 33,067,778
333 TURBINES AND GENERATORS
.1 Supply (15 MW each) 2 1 EA 5,250,000 10,500,000
.2 Install 2 1 LS 400,000 800,000
Total - Acct. No. 333 11,300,000
334 ACCESSORY ELECTR ICAL EQUIPMENT
.1 Switchgear and Controls 1 1 LS 1,000,000 1,000,000
.2 Electrical Wiring in Power House 1 1 LS 300,000 300,000
.3 Startup & Testing 1 1 LS 250,000 250,000
.4 Miscellaneous Electrical 1 1 LS 50,000 50,000
Total - Acct. No. 334 1,600,000
335 MISCELLANEOUS MECHANICAL EQUIP
.1 Overhead Crane 1 1 LS 250,000 250,000
.2 Standby Generator, Backup Batteries 1 1 EA 200,000 200,000
Total - Acct. No. 335 450,000
353 SUBSTATION EQUIPMENT & STRUCTURES
.1 Main Transformer 38 MVA (4kV to 69kV) 1 1 EA 800,000 800,000
.2 Accessory Switchgear Equipment 1 1 LS 150,000 150,000
.3 Labor to Install Transfmr, Sw Gear & Bus 1 1 LS 200,000 200,000
.4 Substation Foundations 1 1 LS 200,000 200,000
.5 Oil Spill Containment 1 1 LS 30,000 30,000
.6 Grounding Grid 1 1 LS 50,000 50,000
Total - Acct. No. 353 1,430,000
356 FIXTURES, CONDUCTORS & DEVICES
.1 Submarine Transmission Line @ 69kV 7.0 0 MI 1,056,000 0
.2 Underground cable @ 69 kV 1,500 0 LF 75 0
.3 Connection to Utility 1 1 LS 200,000 200,000
Total - Acct. No. 356 200,000
357 HOUSING
.1 Operator's Residence, shop fac. incl bldg, fnd, sept 1 1 EA 250,000 250,000
.2 Temporary Work Camp for Construction 18 1 Mo 40,000 720,000
Total - Acct. No. 357 970,000
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 19 of 29 10/7/2009
358 OTHER MISCELLANEOUS
.1 Freight, barge, trucking, air 1 1 EA 2,500,000 2,500,000
.2 Insurance 1 1 LS 1,500,000 1,500,000
.3 Fuel & Oil 1 1 LS 1,800,000 1,800,000
.4 Site Cleanup, Demob 1 1 LS 450,000 450,000
.5 Site Access with boat, helicopter, plane 1 1 LS 300,000 300,000
Total - Acct. No. 353 6,550,000
359 MOBILIZATION
.1 Freight, barge, trucking, air 1 1 LS 5,000,000 5,000,000
Total - Acct. No. 359 5,000,000
Total Direct Construction Costs 67,333,253
SUMMARY
DEV PHASE 1 COMPLETED TASKS 205,000
DEV PHASE 2 AEA GRANT FUNDED TASKS THIS ROUND 3 APPLICATION 2,030,300
DEV PHASE 3 TO BE FUNDED TASKS 1,451,000
300 LICENSING AND DESIGN 1,500,000
330 LAND AND LAND RIGHTS 165,000
331 STRUCTURES AND IMPROVEMENTS 5,100,475
332 RESERVOIRS, DAMS, AND WATERWAYS 33,067,778
333 TURBINES AND GENERATORS 11,300,000
334 ACCESSORY ELECTRICAL EQUIPMENT 1,600,000
335 MISCELLANEOUS MECHANICAL EQUIP 450,000
353 SUBSTATION EQUIPMENT & STRUCTURES 1,430,000
356 FIXTURES, CONDUCTORS & DEVICES 200,000
357 HOUSING 970,000
358 OTHER MISCELLANEOUS 6,550,000
359 MOBILIZATION 5,000,000
Total Direct Development Costs 3,686,300
Total Direct Construction Costs 67,333,253
TOTAL DIRECT COSTS 71,019,553
Contingency and Development Risk estimated at 20.0%13,466,651
Alaska Sales Tax estimated at 0.0%0
Construction Bond estimated at 2.0%1,346,665
Overhead estimated at 7.0%4,713,328
Profit and Risk Fee estimated at 12.0%8,079,990
2009 ESTIMATED PROJECT COST 98,626,186
FERC Project Number 13566 Constr Cost Scenery r3.xls
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 20 of 29 10/7/2009
PHASES I, II, Cost Estimate SCENERY LAKE
Total
Cost State AEA 20% Match
PHASE I INITIAL FEASIBILITY
1010 Prepare and complete FERC filing application
1020 Negotiate development agreement
1030 Perform Feasibility and Market Study
1040 Conduct Field Reconnaissance and Site Visits
1050 Initial Political Efforts, local, state, federal
1060 Work Plan Review and Coordination
1070 Gather and Review Existing Data
1080 Conceptual Design & Layout
1090 Assist to Secure Funding for PHASE II
Phase I Subtotal 205,000 00% COMPLETED
PHASE II PERMITTING & LICENSING
STAGE 1 - CONSULTATION
2110 PAD and NOI (Pre-Application Document & Notice of Intent)
2011 Prepare & Distribute PAD 35,000 28,000 7,000
2012 Conduct Initial Consultation meetings 15,000 12,000 3,000
2013 Written Comments back on PAD 1,000 800 200
2014 Draft Study Plans for Agency Review 35,000 28,000 7,000
2015 Agency Review of Draft Study Plans 1,500 1,200 300
2016 Final Study Plans 20,000 16,000 4,000
2120 ALP Request (Alternative Licensing Process)
2021 Prepare & Distribute Draft Communication Protocol 1,000 800 200
2022 Agency Comments on Draft CP 200 160 40
2023 Submit CP & Request to ALP to FERC 500 400 100
2024 FERC Acceptance of Request to use ALP 100 80 20
STAGE 2 - CONSULTATION
2210 First Year Environmental Studies
2211 IFIM Studies 70,000 56,000 14,000
2212 Fisheries Studies 150,000 120,000 30,000
2213 Wildlife / Terrestrial Studies 30,000 24,000 6,000
2214 Water Quality Studies 30,000 24,000 6,000
2215 Geotechnical Studies 45,000 36,000 9,000
2216 Cultural Resources Studies 40,000 32,000 8,000
2217 Recreation and Aesthetic Studies 15,000 12,000 3,000
2218 Socio Econ/Land Use/CZM Cert.20,000 16,000 4,000
2219 First Year Field Study Reports 60,000 48,000 12,000
2220 Scoping
2221 Prepare and distribute SD1 30,000 24,000 6,000
2222 Scoping Meetings and Site Visit 25,000 20,000 5,000
2223 Comments on SD1 2,500 2,000 500
2224 Revise SD1 into SD2 20,000 16,000 4,000
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AEA10-015 Grant Application Page 21 of 29 10/7/2009
2230 Preliminary Design
2231 Install Stream Gages 30,000 24,000 6,000
2232 Aerial Survey, Mapping, Layout, Site Visits 50,000 40,000 10,000
2240 Second Year Environmental Studies (as required)
2241 IFIM Studies 70,000 56,000 14,000
2242 Fisheries Studies 250,000 200,000 50,000
2243 Wildlife / Terrestrial Studies 50,000 40,000 10,000
2244 Water Quality Studies 30,000 24,000 6,000
2245 Second Year Field Study Reports 60,000 48,000 12,000
2250 Draft License Application Package
2251 Prepare Preliminary Draft EA 120,000 96,000 24,000
2252 Draft License Application Exhibits A, B, C, D, H 21,000 16,800 4,200
2253 F Exhibit 50,000 40,000 10,000
2254 G Exhibit and Transmission Line 60,000 48,000 12,000
2260 Draft License Application to Agencies, Mailing List 2,000 1,600 400
2270 Comments From Agencies, Public, NGO's 2,500 2,000 500
2280 Revise Application Material 20,000 16,000 4,000
2290 Prepare Final License Application Exhibits
2291 Prepare Draft EA (Applicant's)90,000 72,000 18,000
2292 Final License Application Exhibits 35,000 28,000 7,000
STAGE 3 - CONSULTATION
2310 Final License Application Package to FERC 20,000 16,000 4,000
2320 Submit Ancillary Permits 30,000 24,000 6,000
FERC ACTIONS ON LICENSE APPLICATION
2330 FERC Accepts Application
2331 Additional Information Request From FERC (if necessary)2,000 1,600 400
2332 Response to Additional Information Request 50,000 40,000 10,000
2333 Intervention Notice & Request for Final Terms & Conditions 2,000 1,600 400
2334 Final Comments and Terms & Conditions 5,000 4,000 1,000
2335 Applicant Comments on Final Terms (if necessary)20,000 16,000 4,000
2340 FERC's Draft EA
Comments on Draft EA, 10-J negotiations (if necessary)15,000 12,000 3,000
2350 FERC issues Final EA 1,500 1,200 300
2360 FERC Order Issuing License with Associated Articles 1,500 1,200 300
OTHER MISCELLANEOUS PHASE II EXPENSES
2410 Project Management 95,000 76,000 19,000
2420 FERC Consultation 21,000 16,800 4,200
2430 Legal - FERC Coordination 55,000 44,000 11,000
2440 Political Efforts, local, state, federal 40,000 32,000 8,000
2450 Reimbursable Exp., Misc. & FERC 55,000 44,000 11,000
2460 Assist to Secure Funding for PHASE III 30,000 24,000 6,000
Phase II Subtotal 2,030,300 1,624,240 406,060
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The City of Angoon is eligible for several federal grant programs from the USDA and DOE and will be
applying to these agencies during open periods. Discussions with federal agencies confirm that the City of
Angoon is eligible for federal funding for this and future phases of the project.
The City of Angoon is under discussions with other communities in Alaska and will be considering and
negotiating other community participation in this project. The City of Angoon is eligible for extremely low
interest rate federally guaranteed loans (less than AIDEA rates) through both the USDA and DOE for
construction financing. Further, the City of Angoon will entertain private funding to meet any match shortfall
from federal sources. The City of Angoon will consider providing direct funding for the project that is
dependent on City finances and resolutions from the City Council.
The projected direct capital cost of the proposed Scenery Lake renewable energy system less interest,
contingencies, and financing: $67,333,253
Projected development cost of proposed renewable energy system for all pre construction phases:
$3,686,300. The development costs are included in the direct capital cost.
4.4.2 Project Operating and Maintenance Costs
Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant.
(Note: Operational costs are not eligible for grant funds however grantees are required to meet ongoing
reporting requirements for the purpose of reporting impacts of projects on the communities they serve.)
It is premature to determine specific O&M costs for the project at this time. The City of Angoon anticipates
that the O&M costs of this project will be below $300,000 annually.
The City of Angoon will not request grant funding for any O&M costs for these new facilities. O&M costs will
be funded through the electric rates.
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
Identification of potential buyers and customers: Southeast intertie integrated utilities to include IPEC Inside
Passage Electrical Cooperative which serves Kake, Angoon, and Hoonah.
Proposed Power Purchaser(s). The City of Angoon would sell power to local utilities serving the
communities of Petersburg and Wrangell. The City of Ketchikan is now connected to the same power grid and
serves as a potential customer via the Swan/Tyee S.E. Intertie. Eventually the community of Kake will also
have access to the S.E. Alaska power grid under a northern intertie route of the Kake to Petersburg Intertie
presently under study by the State of Alaska. Power generated from the Scenery Lake Project would be
available to these communities allowing them to abandon their diesel back-up generation systems as well as
accommodate future long term growth demand. These SEAPA (Southeast Alaska Power Authority)
communities are presently served by the Tyee Lake hydroelectric facility. Revenues from project power sales
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would assist Angoon in reducing the cost of power to Angoon residents by subsidizing the Angoon diesel based
generation system operational costs under the City of Angoon municipal formed energy department.
Eventually Angoon would be connected to the same S.E. power grid and have direct access to hydropower.
In previous AEA grant applications from Petersburg (PMPL Ruth Lake) Ketchikan (KPU-assorted hydro) and
Wrangell (WLP Sunrise) all three communities have documented the need for current, mid- term and long term
low cost energy for their ratepayers. The City of Angoon has a resolution of support from the City and
Borough on the development of Scenery Lake and will work with the City and Borough of Wrangell to provide
equity energy and or favorable power sales agreements.
The 2007 Green House Gas Emission Inventory (released March 2009) Figure 5 indicates that the community
of Juneau, Alaska is 81% diesel dependent for its total non transportation energy needs.
Most communities in Southeast Alaska have fewer all electric homes than Juneau so most SE communities
would be more than 81% diesel dependent.
The Energy Information Agency March 2009 report predicts that oil will be at $112.79 per barrel in 2017 which
coincides when it is anticipated the Scenery Lake Hydroelectric Project will come on line.
At this time, it is premature to dedicate a fixed power sales price. Based on experience with development team
members, the price range would be between 7 and 11 cents per kWh for Alaska purchasers. The range and
potential power purchase/sales price is dictated by several variables: definition of costs related to regulatory
restrictions on water flow and timing; demand for power outside Alaska at higher Lower 48 rates that could be
used to subsidize local power sales; amount of grant financing versus debt financing. The projected price to
communities of Angoon, Kake, Hoonah and any community that participates with this project will receive most
favorable rates of a price range.
Proposed rate of return from grant-funded project.
The rate of return on the project is financially viable to be able to obtain federally guaranteed loans for the
construction phase on the project. However, until the regulation process is complete, and FERC license issued,
it is undeterminable to calculate an accurate rate of return. For example, a specific FERC condition applied as
a condition of licensing could materially impact the specific rate of return. The goal is to achieve a financially
viable hydropower project with a fair rate of return for the City of Angoon.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered in evaluating
Renewable Energy Fund
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AEA10-015 Grant Application Page 24 of 29 10/7/2009
the project.
Download the form, complete it, and submit it as an attachment. Document any conditions or sources your
numbers are based on here.
See Attached Project Cost Worksheet.
Sources are federal grants for match, followed by limited City of Angoon funds, followed and backstopped by
private and or other municipal community investment into the project.
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
• Annual fuel displacement. In 2008, Angoon used 147,994 gallons of diesel to produce electricity
annually. In addition, during the life of the project all three Native diesel dependent communities of
Kake, Angoon and Hoonah will become hooked to an integrated SE Intertie allowing cheap project
electricity to flow to these communities to displace oil. These communities have combined diesel fuel
consumption (2008 AEA PCE program) of 714,664 gallons with a 2008 cost of $2,144,248. This
project can displace 100% of this diesel cost
BASED ON 2008 DOLLARS THE NET PRESENT VALUE OF THESE FUEL for KAKE ANGOON
AND HONAH SAVINGS:
npv= $2,144,248, 3%, 50 YEARS=55,170,995.01
• Due to the high likelihood of SEAPA becoming resource insufficient from their internal generation or
from generation from nearby facilities in the midterm outlook of 7 years, SEAPA regional savings
would be significant with addition of Ruth Lake as power delivered from Ruth Lake would replace
current use of diesel generation. Regional cost savings are substantial and will be firmed throughout the
FERC licensing process. The Ruth Lake project would allow PMPL to displace approximately 75,000
gallons of fuel per year which equates to approximately $260,000 per year at today’s fuel prices. The
lifetime for well operated and maintained hydro projects can exceed 100 years. This information was
obtained from the Petersburg Municipal Power and Light application and therefore is based on PMPL
certified analysis.
BASED ON 2008 DOLLARS THE NET PRESENT VALUE OF THESE FUEL SAVINGS:
npv= $260,000, 3%, 50 YEARS =6,689,738.64
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 25 of 29 10/7/2009
According to the AK BC Intertie Feasibility Study SE Alaska report 2007, an electricity Price threshold conversion for
SE Alaska was determined. The community already pays over $5.00 a gallon for home heating fuel and the conversion
rate at this cost is that it would be cost effective to switch from diesel home heating to the low cost hydropower produced
by this hydropower project.
Figure 3-2-1 AK-BC Intertie Feasibility Study SE Alaska 2007
The City of Angoon plans to sell all in State sales of electricity at a cost plus basis. As a comparison, the
PMPL prior proposal indicated that without full grant subsidies that their anticipated cost of power will be 18
cents per kWh (Source AEA PMPL Round 1 & Round 2 applications).
Annual Revenue generated by the project is anticipated to be approximately $14,000,000.
Green House Gas Emission reduction, cap and trade, future environmental attributes.
Diesel generation pollutes Angoon’s otherwise pristine environment and community. Per a July 9, 2007 letter
submitted the US Forest by the Inside Passage Electric Cooperative (IPEC), the utility discharged 3,437,981
pounds of CO2 emissions in 2006. One key benefit of this development would be to mitigate this discharge of
CO2 emissions in our community that impacts the health and safety of our shareholder, tribal and community
members – all of whom are residents of Alaska in Angoon. The economic benefits of this reduction are the
subject of several EPA studies at least one of which was recently made public.
The non-economic benefits of displacing oil, reducing green house gas emissions as well as the socio-economic
impacts that are associated with poverty and energy poverty are substantial and have been defined in part in
this grant application.
For a large picture analysis and comparison in determining values to the public. Consideration of value must
consider the State value of this project versus the past historical costs of Tyee which was built with State and
federal funds for a construction cost of $129,040,000 ($5,863/kW) and the KPU operated Swan facility for
$96,626,000 ($4,831/kW) (Source: As of Dec 31, 1992, Alaska Department of Revenue. Treasury Division
Policies and Procedures Manual Appendix AR). The expected total cost to build Scenery through construction
all costs inclusive to include debt financing is $100,861,486 ($3,362/kW) even though the previous funded
projects are now 30 plus years old. The economic benefit to the State of Alaska and the Alaska public is
profound.
Renewable Energy Fund
Grant Application Round 3
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SECTION 6– SUSTAINABILITY
Discuss your plan for operating the completed project so that it will be sustainable.
Include at a minimum:
• Proposed business structure(s) and concepts that may be considered.
• How you propose to finance the maintenance and operations for the life of the project
• Identification of operational issues that could arise.
• A description of operational costs including on-going support for any back-up or existing systems that
may be require to continue operation
• Commitment to reporting the savings and benefits
The City of Angoon has entered into a Development Management Agreement with Cascade Creek, LLC of
whose principals have built three hydropower projects and over 50 miles of transmission line in Southeast
Alaska on time and under budget. Their projects: Goat Lake, Black Bear Lake, and Power Creek all provide
low cost power while meeting Low Impact Hydropower Institute or Green-E standards (and resulting
environmental attributes).
The City of Angoon will own and operate its projects as a municipality owned hydropower generation facility
as its business structure.
The City of Angoon proposes to finance the operations and maintenance of the project through the revenue
stream generated. Unlike other heavily subsidized (Federal and State) that do not fully utilize the hydropower
resource; Angoon plans to sell excess power to meet full utilization of the resources.
The City of Angoon enjoys superb relations with the largest project in Thomas Bay, privately owned Cascade
Creek hydropower. The City of Angoon will achieve economies of scale for its projects for transmission line
O&M, substation O&M, and shared infrastructure by the prorated share of these costs that would otherwise be
borne by one project. These economies of scale result in lower delivered electrical rates to Alaska consumers
and our community.
Specific operational costs will be determined throughout the FERC process due to changes of plan and
conditions that might evolve through the process.
As a municipality owned hydropower facility, the City of Angoon is committed to reporting the savings and
benefits derived from its municipally owned projects.
Renewable Energy Fund
Grant Application Round 3
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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.
The City of Angoon has worked diligently to secure agreements to file our municipal FERC
Preliminary Permit application and has responsibly secured site control through the FERC
preliminary permit process before engaging in fund raising and grant activities. The City of
Angoon has worked closely with interested parties in preparing this grant application and will
proceed with this project with or without State funding although its chances of success are
exponentially increased by AEA participation.
To date, we have conducted our initial feasibility and are now ready to move to permitting and
licensing. As of this date, we have not applied to other grant sources and we have not received
previous grant resources on this project.
SECTION 8– LOCAL SUPORT
Discuss what local support or possible opposition there may be regarding your project. Include
letters of support from the community that would benefit from this project.
The City of Angoon by virtue of its federally filed FERC permits demonstrates local support for
Angoon’s strategic energy planning. Angoon would be the primary beneficiary of this energy
generation but common sense will dictate that the entire Southeast region to include all current
and future connected communities will benefit.
The City of Angoon has the local support of all ANB camps of Southeast Alaska as illustrated by
the Grand Camp Alaska Native Brotherhood and Sisterhood 2009 resolutions supporting our
projects. The ANB and ANS represent 26,000 Native Alaskans in Southeast Alaska. These
specific resolutions are: Resolution #28-09 Support for Angoon's Renewable Energy
Developments that specifically support the City of Angoon’s development of Scenery and
Ruth Lakes; Resolution #33-09 Title: Support for Native participation in building, constructing
and management of Energy Infrastructure in Southeast Alaska. This resolution specifically
supports the City of Angoon’s development of Scenery and Ruth Lakes.
The City of Angoon has the local support of the Central Council of Tlingit and Haida Indians of
Alaska. Resolution TA/09-46 Title Renewable Energy and Alternative Fuels for our
Communities. This resolution specifically endorses the City of Angoon’s development of
Scenery Lake.
The City of Angoon has the local support from the City and Borough of Wrangell. The City and
Borough of Wrangell has passed a resolution supporting the City of Angoon’s development and
construction of Scenery Lake. The City and Borough of Wrangell is the closest organized Alaska
Borough to the project. Resolution 06-09-1160. Resolution of the Assembly of the City and
Borough of Wrangell, Alaska supporting the City of Angoon, Alaska in obtaining their FERC
Permit and ongoing hydropower project. Scenery Lake.
Renewable Energy Fund
Grant Application Round 3
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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
Provide a narrative summary regarding funding sources and your financial commitment to the
project.
The City of Angoon is using a proven FERC licensing milestone and timeline developed by
experienced and successful applications for license. Our milestone chart is therefore a little bit
different from the Grant Budget3.doc which is generic for all types of generation projects.
To date, the City of Angoon has received approximately $205,000 of services provided in-kind
to the City of Angoon from private sources. The feasibility, initial concept and FERC
preliminary permit have been secured. In order to execute this project to FERC license, the City
of Angoon is requesting the cost effective (competitively compared to smaller but more
expensive hydropower projects submitted in Round 1 and Round 2) amount of $1,624,240 with a
City of Angoon match of $406,060. This match will be made from City of Angoon resources,
federally matching resources, other community resources, utility participation resources and
private resources. The City of Angoon reserves the right to maximize its match with cooperative
communities and entities but has sent letters to Wrangell and made it abundantly clear that the
City of Angoon welcomes other community participation for mutual benefit and long term
energy security for all of Southeast Alaska that 130 GWh from this project can provide.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 29 of 29 10/7/2009
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.
F. CERTIFICATION
The undersigned certifies that this application for a renewable energy grant is truthful
and correct, and that the applicant is in compliance with, and will continue to comply
with, all federal and state laws including existing credit and federal tax obligations.
Print Name Albert Howard
Signature
Title Mayor
Date 11-10-09