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HomeMy WebLinkAboutGrantApp-IPEC-HOONAH-FinalIPEC INSIDE:PASSAGE:ELECTRIC COOPERATIVE: P.O.Box 210149,Auke Bay,AK 99821 (907)789-3196 ext 24 --790-8517 FAX November 9,2009 Renewable Energy Grant Fund Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage,AK 99503 Re:Inside Passage Electric Cooperative -Renewable Energy Fund Round 3 Grant Application -Letter of Commitment Application Review Committee: Inside Passage Electric Cooperative (IPEC)is pleased to submit the attached application for a Renewable Energy Fund Grant for a Hydroelectric Project,an eligible renewable energy project as defined under AS 42.45.045.!PEC is authorized by the Regulatory Commission of Alaska to provide power to the community of Hoonah under Certificate of Public Convenience and Necessity,CPC&N No.244. The attached Application documents and describes the proposed hydroelectric project.The total estimated cost of design,permitting,construction,and development is $8,525,000.The estimated fuel savings as a result of this project is in excess of 250,000-gallons/year.!PEC commits to this project a Match of up to $30,000 in direct labor costs (wages and benefits),and a Match of $450,000 from the Department of Energy. IPEC strives to keep electric costs as low a possible by maximizing operating efficiencies and reducing operating costs.This project will provide a significant improvement toward meeting this continued goal, and will greatly benefit the community of Hoonah. IPEC welcomes and fully supports this opportunity to work with the Alaska Energy Authority to implement this essential renewable energy project,and requests the Review Committee carefully consider the merits of this application. We welcome your review and evaluation of our proposal,and look forward to working with you on this project.Please feel free to contact me at (907)789-3196,ext 24 with questions. Sincerely, 7TI~;WtclJ4- G&li ~itchell CEO/General Manager,IPEC Renewable Energy Fund Round 3 Grant Application AEA 10-015 Application Page 1 of 21 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 21 10/7/2009 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Inside Passage Electric Cooperative, Inc. Type of Entity: Non-profit electric cooperative. Mailing Address P.O. Box 210149, Juneau, Alaska, 99821 Physical Address Auke Bay, Alaska Telephone 907-789-3196 Fax 907-790-8517 Email jmitchell@alaska.com 1.1 APPLICANT POINT OF CONTACT Name Jodi Mitchell Peter Bibb Title CEO/ General Manager Operations Manager Mailing Address PO Box 210149, Auke Bay, AK 99821 Telephone 907-789-3196 Ext. 24 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 3 of 21 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) Hoonah-IPEC Hydro 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. Hoonah is a Tlingit community located on the northeast shore of Chichagof Island, 40 air miles west of Juneau. Hoonah's maritime climate is characterized by cool summers and mild winters. Hoonah is the largest Tlingit village in Alaska. Commercial fishing and logging have supported the population, and most residents maintain a subsistence lifestyle. The City of Hoonah was incorporated in 1946 and has a population of 823 (2008). The proposed hydroelectric project is located approximately 2.5-miles southeast of the Hoonah airport, and accessible via existing logging roads. The community of Hoonah is the primary beneficiary 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 X Construction Conceptual Design The IPEC Hoonah power plant is an existing facility in operation prior to August 20, 2008. The proposed hydroelectric project is a new project that is not in operation. 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. IPEC proposes to construct a run-of-the-river 1,300 kW hydroelectric project powered by Gartina Creek and Water Supply Creek (Project). The Project will supplement existing IPEC- Hoonah diesel generation capacity and reduce annual diesel fuel consumption by almost 60% - over 250,000-gallons/year. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 4 of 21 10/7/2009 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.) Local economic benefits IPEC’s Energy Plan 2009 identifies three major initiatives to providing long term low cost reliable electric power. Chief among them is “Independence from Diesel Generation”. This initiative will benefit all communities IPEC serves, including Hoonah, by reducing costly diesel generation, the need to transport and handle large quantities of diesel fuel, and reducing exhaust emissions and noise within the community. The May 29, 2009 Hoonah Energy Projects Conceptual Design Report, prepared by Alaska Energy and Engineering, Inc. for the Alaska Energy Authority, estimates the avoided fuel cost of the project to be over $1 million dollars annually, based on a long term average fuel price of $5.00/gallon. Reliable hydropower will also support the use of smaller, more efficient diesel generators to augment the hydroelectric capacity, which will provide improved fuel efficiencies over existing diesel generating capacity. The high cost of energy in rural Alaska is among the most significant obstacle to community sustainability. Providing reliable, lower cost and efficient hydro energy will benefit residential and commercial customers of Hoonah. Benefits to Alaskan public Additional benefits include the development of an emission-less renewable energy resource and a reduction in carbon footprint, as well as local economic development during the design, permitting and constructions phases of the project. 2.6 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. IPEC proposes to implement Phase III – Design and Permitting and Phase IV – Construction, of the Hoonah-IPEC Hydro Project. Since 1977, several reconnaissance and feasibility level studies have been completed that individually evaluate the hydro resources of this project. The May 2009 Concept Design and Construction Cost Estimate Report for Hoonah contains several of these prior studies, and includes an updated analysis that innovatively combines the two separate water sources into a single power house to reduce cost and improve operations and efficiency. The total estimated costs for the combined Project are as follows: Phase III: Final Design and Permitting..........................................$ 1,300,000 Phase IV: Construction ..................................................................$7,225,000 $8,525,000 The Department of Energy has notified IPEC that $450,000 of grant funding is available from the Juneau to Hoonah Intertie Project - Grant DE-FG07-06ID14791 (refer to Appendix C for the DOE funding Project Management Plan). These funds will be used as a cash match for Phase III – Final Design and Permitting. Due to significant cost increases for the Juneau to Hoonah Intertie Project, the State of Alaska and the Federal Government have recommended that alternative projects with significantly reduced cost and risk be evaluated to meet Hoonah’s electric needs. The proposed Hoonah-IPEC Hydro Project accomplishes this goal. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 5 of 21 10/7/2009 Phase III efforts will commence immediately upon receipt of the Federal DOE grant funds. This Renewable Energy Fund grant will fund completion of Final Design and Permitting and initiate a phased construction approach under Phase IV. Additional funding to fully fund and complete the Project will be secured from other State or Federal sources (CDBG, HECG, legislative appropriation, Alaska Power Project Loan Fund), or low-interest RUS loans. Refer to Section 3.3. 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. $ 4,000,000 2.7.2 Other Funds to be provided (Project match) Secured $ 450,000 Other Funds to be provided (Project match) Unsecured $ 4,075,000 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 8,525,000 Project Costs & Benefits (Summary of total project costs including work to date and future cost estimates to get to a fully operational project) 2.7.4 Total Project Cost (Summary from Cost Worksheet including estimates through construction) $ 8,525,000 2.7.5 Estimated Direct Financial Benefit (Savings) $ 32,200,000 2.7.6 Other Public Benefit (If you can calculate the benefit in terms of dollars please provide that number here and explain how you calculated that number in your application (Section 5.) $ 129,760 (annually) For estimated project costs and benefits refer to the attached Hoonah Energy Projects Concept Design Report (located in Appendix F – Technical Data): • Appendix B – Construction Cost Estimates – Sheets B-7 thru B-9, and • Appendix G - Supplement to June 2002 Hydroelectric Study by AP&T, May 21, 2009 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 6 of 21 10/7/2009 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. IPEC is the single point of contact and will execute all grant, contractual and administrative responsibilities. AE&E will provide all interface design, permitting, system integration, and construction management. Peter Bibb, IPEC Operations Manager, is the Grant Manager. He is the single point of contact with AEA and will execute all grant contractual and administrative responsibilities. Mr. Bibb has 18 years of experience in the electric power generation field. He is skilled in tracking grants, communications, and in his ability to deal smoothly and professionally with executive officers, upper management, employees, vendors, and customers in day-to-day and occasionally adverse situations. Steven J. Stassel, P.E., AE&E president, will serve as the Project Manager. He will work with the Grant Manager to commit essential engineering disciplines to ensure a successful project. He will establish specific man hour and reimbursable budgets, and schedule the necessary technical staff. He will track specific contractual deliverables against the schedule to ensure adequate resources are available to meet critical milestones. He will analyze all relevant issues such as available shipping options, permitting and site control issues, and procurement requirements. Drawing on the expertise of our team, he will assign specific project tasks to responsible team members. Mr. Stassel will oversee all technical work and coordinate the efforts of our team to ensure the efficient and cost effective production of project designs. He will develop a realistic project schedule to address critical issues in proper sequence to minimize cost and maximize construction resources. Mr. Stassel will be directly responsible for the quality of all work produced by our team. He will oversee and review all critical tasks and provide input and support on all significant design issues. He will ensure that design review comments from the Authority and IPEC are adequately addressed and incorporated into final design documents, and he will manage the logistics of construction support. His working relationship with Authority staff and IPEC dates to the early 1990s. As president of AE&E, Mr. Stassel has the authority to assign the technical personnel and resources necessary to successfully complete this project. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 7 of 21 10/7/2009 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.) Task/Year 2010 2011 2012 PHASE III – TASK 1 1st Qrtr 2nd Qrtr 3rd Qrtr 4th Qrtr 1st Qrtr 2nd Qrtr 3rd Qrtr 4th Qrtr 1st Qrtr 2nd Qrtr 3rd Qrtr 4th Qrtr RECEIVE DOE GRANT X STREAMFLOW DATA X----------------------------------------- SURVEY & TOPO GRAPHIC MAPPING X SITE CONTROL X----------------------------X INITIATE NEPA REVIEW X-------------- FERC NOI APPLICATION X-----X Task/Year 2012 2013 2014 PHASE IV 1st Qrtr 2nd Qrtr 3rd Qrtr 4th Qrtr 1st Qrtr 2nd Qrtr 3rd Qrtr 4th Qrtr 1st Qrtr 2nd Qrtr 3rd Qrtr 4th Qrtr PREPARE MTRL LIST / COMPLETE BID DOCS X-----------X PROCURE EQUIP/ MTLS X---------------------------------------------- CONST ACCESS ROADS X CONST DIVERSION STRUCS / PWR HOUSE X-----------X INSTALL PENSTOCK X--------------------X COMPLETE DIVERSION STRUCS/ PWR HOUSES X STARTUP / TESTING X SYSTEM INTEGRATION / FINE TUNING X PROJ CLOSE-OUT X OPERATIONS REPORTING X----------------------------------------- Task/Year 2010 2011 2012 PHASE III – TASK 2 1st Qrtr 2nd Qrtr 3rd Qrtr 4th Qrtr 1st Qrtr 2nd Qrtr 3rd Qrtr 4th Qrtr 1st Qrtr 2nd Qrtr 3RD Qrtr 4TH Qrtr REF FUNDING AWARDED X UPDATE DESIGN X------------------------------ UPDATE COST EST X UPDATE ECON ANALY / DEVELOPE BUS PLAN X COMPLETE NEPA REVIEW -----------------------X COMPLETE FINAL DESIGN X SELECT SUPER/ CONTRACTORS X---------X OBTAIN FERC LICENSE X Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 8 of 21 10/7/2009 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.) Phase III: Final Design and Permitting ($1,300,000) Task 1 – funded by $450,000 Match ƒ Obtain stream flow data & confirm generation capacity ƒ Perform site surveying and topographic mapping ƒ Perform geotechnical investigation ƒ Obtain Site Control authorizations ƒ Initiate NEPA Project Level Environmental Review ƒ Apply for FERC License ƒ Produce summary report of findings Task 2 – funded by REF Grant - $850,000 ƒ Update design based on Task 1 work ƒ Update construction cost estimate ƒ Update economic analysis/develop business plan ƒ Complete NEPA Review ƒ Complete final design plans and specifications ƒ Identify construction superintendent & contractors ƒ Obtain FERC License Phase IV: Construction/Commissioning/Operation & Reporting ($7,255,000) ƒ Prepare Material Lists / Complete Bid Documents ƒ Procure equipment and materials ƒ Construct access roads (powerhouse and diversion structures) ƒ Construct diversion structures and powerhouse ƒ Install penstock ƒ Complete powerhouse & install turbine and controls ƒ Startup and testing ƒ System integration and fine tuning ƒ Project Closeout ƒ Operations Reporting Full funding for construction of the combined Project has not been identified. This Grant Request is for $4,000,000 to complete Phase III Final Design and Permitting, and initiate Phase IV construction. The project is designed to support a phased construction approach so that either the Gartina Creek or Water Supply Creek portions of the project may be constructed with available grant funding. Funding to complete the combined project will be secured via other state or federal grants, or through the Alaska Power Project Loan Fund or RUS low-interest loans. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 9 of 21 10/7/2009 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. IPEC has teamed with the engineering firms of HDR Alaska and Alaska Energy and Engineering, Inc. for design, permitting, construction management, and system integration. The Project will be constructed using primarily utility and local force account labor. An experienced superintendent will perform and oversee local labor and specialty trades. Locally available contractors will be used for the earthwork and electric line extension. All major purchases and construction contracts will be in accordance with IPEC procurement policies. Alaska Energy & Engineering, Inc. John Dickerson, EIT, AE&E, will provide design, construction management and system integration support. He has more than 25 years of Alaska construction, engineering, project management, and business management experience. For the past twelve years, he has served as project engineer for the design and construction of over $50-million worth of rural power system and fuel storage projects in Alaska communities. Responsibilities have included site investigations, design, drafting, cost estimation, procurement, logistics, and construction management. As a design engineer, Mr. Dickerson has prepared construction documents for heating, ventilation, plumbing, refrigeration, fuel storage and ASME B31.3 process piping systems for a range of commercial and industrial facilities. He has developed a long working relationship with the community of Hoonah and IPEC as well as the Authority. Steven J. Stassel, P.E., AE&E president, in addition to project management responsibility will also provide design and permitting support. He has more than 21 years of engineering experience, including rural Alaska energy projects in more than 125 communities. He has been responsible for permitting and fulfilling all regulatory and environmental compliance requirements (Wetlands, Flood Mitigation, Coastal Zone, NEPA Environmental review) and state and federal agency coordination. He has successfully permitted more than 40 energy- related projects in rural Alaska. Duane Miller Associates, LLC Duane L. Miller, P.E., DMA, will provide Geotechnical Services as a subconsultant to AE&E. He has more than 36 years of experience as a geotechnical engineer on a variety of projects onshore and offshore in Alaska, California, and Guam. He has special training and experience in arctic engineering, engineering geology, and coastal and earthquake engineering. Mr. Miller has provided geotechnical engineering services on architectural, civil, mining, petroleum, and military projects across Alaska since 1973 and has worked extensively with the Authority and AE&E. HDR HDR provides unmatched in-depth expertise and real-world experience in the full range of hydropower-related disciplines. • Hydrologic and basin modeling experts for the development of stream flow models, energy generation projections, and basin operation/unit dispatch models. • Design engineers and specialists with proven track records in project design, construction management, and project startup. • Current expertise in the licensing, relicensing, and regulatory processes of the FERC and other agencies. • Current expertise in NEPA environmental assessments, reports, and impacts statements, including Applicant-Prepared Environmental Assessments. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 10 of 21 10/7/2009 • Effective and cooperative working relationships with federal, state and local agencies, tribes, and native corporations nationwide. • Proven performance leading licensing and design teams on major new hydroelectric projects and plant upgrades. • Complete in-house civil, structural, mechanical, and electrical design engineers; along with environmental, licensing, regulatory, and permitting specialists. HDR’s project experience list includes hundreds of operational facilities in the hydroelectric, power, and energy arena. IPEC’s proposed Project organization chart (below) introduces and identifies key members of our team and shows the lines of authority. Each engineering discipline is led by a professional engineer registered in the State of Alaska. All engineering documents will be stamped by Alaska registered engineers. Refer to Appendix A for resumes of key personnel. Project Organization Chart 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Alaska Energy and Engineering Inc. communicates with AEA staff on nearly a daily basis. The Authority Project Manager will be kept up to date on the project status by periodic email and/or verbal status reports, in addition to written quarterly reports submitted by the IPEC Grant Manager. Periodic reports will provide general information regarding project status and any unforeseen circumstances that need to be resolved. The quarterly Grant Manager reports will include specific information on project completion status vs. project schedule; project labor reports – including hours, rates and costs; and current project expenditures relative to budgeted project costs. In addition to regular email updates and quarterly reports, we propose to keep the City of Hoonah and involved agencies updated. Possible information briefings include: • an initial kickoff briefing of the detail project implementation plan, • a review at completion of final design and permitting, • and a final briefing of all project results. Grant Manager Peter Bibb I.P.E.C. Project Manager Steve Stassel A.E.& E. AEA Projects David Lockard A.E.A. Design/CM John Dickerson A.E.& E. Geotechnical Duane L. Miller Duane Miller Assoc. Hydro Specialist Mike Stimac HDR/DTA Inc. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 11 of 21 10/7/2009 AE&E has provided design and construction support services on over 80 energy infrastructure- related projects throughout Alaska over the past 15-years. Our long-term working relationship with the Authority assures well-tested monitoring methods and seamless channels of communication. 3.6 Project Risk Discuss potential problems and how you would address them. Risk mitigation will be accomplished by implementing a risk identification and mitigation program for the duration of the project. At this proposal stage, the primary risks and our proposed mitigation plan are as follows: Risk of increased project cost – the cost estimate to design, construct and operate the hydroelectric facility is currently at the preliminary design stage of development. There is a risk that the cost estimate will increase during the final design and permitting stage of development. This risk will be mitigated by carefully monitoring the scope and scale of the project, ensuring that cost effective measures are implemented to hold costs down, and by developing a detailed and thorough conceptual design that accurately reflects the scope of the project. Risk of measurable environmental affects – It is anticipated that the project will require a FERC license. The Project will prepare a NEPA Project Level Environmental Review to mitigate or confirm there is no harm to the human environment. There are additional elements of risk that arise in any rural Alaska construction project; however, the risk associated with this project is well managed. A highly competent team of professionals has been assembled with the skills and motivation necessary to see this project through to successful completion. The project has been devised to proceed in distinct phases, with carefully planned go/no go decision intervals. IPEC understands the potential risks associated with this project, but seeks to realize the benefit of reduced diesel fuel consumption by utilizing a readily available renewable resource. Demonstration of increased cost certainty and minimal environmental effects at Hoonah will benefit other villages in the state of Alaska. IPEC is willing to accept these risks. 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. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 12 of 21 10/7/2009 On May 29, 2009 the Alaska Energy Authority-Rural Energy Group published a final Concept Design Report (CDR) and Construction Estimate for Energy Projects in the Community of Hoonah. The report was prepared by Alaska Energy and Engineering, Inc. of Anchorage, Alaska. The CDR is included in Appendix F – Technical Data. Proposed Energy Resource: The CDR identifies the Combined Gartina Creek and Water Supply Creek project as the optimum hydro project to develop (page 11 of CDR). ƒ Gartina Creek is rated at 500 kW with an estimated annual generation of 1,758,000 kWh . ƒ Water Supply Creek is rated at 800 kW with an annual generation of 2,476,000 kWh. ƒ The maximum estimated annual generation of the combined project is 4,344,000 kWh, including 110,000 kWh from a 13 kW energy recovery turbine at the City water connection. Phase III, Task I will confirm the estimated annual generation and rated hydro capacity based on recorded stream flow data. Energy Resource Alternatives: The Alaska Energy Authority/Alaska Industrial Development and Export Authority Rural Alaska Energy Plan (April 2004), and previously released Screening Report of Alaska Rural Energy Plan (April 2001), evaluated a dozen alternative energy technologies. Diesel generation efficiency/heat recovery, end-use efficiency, and wind energy were identified as alternative energy technologies warranting further evaluation. A separately funded project is currently underway to upgrade the IPEC-Hoonah diesel power plant to improve fuel efficiency, reduce emissions, and utilize available recovered heat to reduce community facility heating fuel consumption. Residents and commercial entities continue to implement cost effective end-use efficiency conservation. According to the Wind Energy Resource Atlas of the United States the community of Hoonah is located within a class 3 wind regime and is not a viable candidate for a wind energy program using currently available technologies. There are no other identified available energy sources; such as solid fuel, natural gas, or geothermal that are currently viable at Hoonah. Pros of Project: ƒ Help fulfill IPECs long-term renewable energy initiatives. ƒ Project simple payback -just over 8 years. ƒ Introduce a viable and intelligent means to produce energy locally ƒ Demonstrate State and IPEC commitment to renewable energy resource development ƒ O&M costs estimated to remain level or reduced slightly ƒ Reduced dependence on diesel fuel and potential for fuel spills ƒ Reduced noise when operating 100% on hydroelectric power ƒ Reduced emissions and air pollution ƒ Produce jobs and help provide a sustainable economy for local people and businesses ƒ Help stabilize electric rates Cons of Project: ƒ Hydro development capital cost is expensive compared to diesel generation ƒ Project research, development, construction, and management requires substantial time and effort from many organizations and IPEC staff Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 13 of 21 10/7/2009 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. Existing Diesel Power plant The IPEC Hoonah power plant was built in 1977 and partially renovated after a fire in 1990. Generation equipment consists of four diesel generator sets (gensets) with a total generation capacity of 2,465 kW. The generation system is a 4160-volt wye three-phase system. All generators are equipped with KATO generators and operate at 1200 RPM. • Unit #1 is a 1976 vintage CAT D398PC rated at 610 kW • Unit #2 is a 1997 vintage CAT 3512 rated at 1,000 kW • Unit #3 is a 1991 vintage CAT 3512 rated at 855 kW Power is distributed throughout the community via 7.2/12.47kV overhead three-phase distribution system. The power plant produces 14.25 kWh per gallon of diesel. The average cost per gallon of diesel fuel during 2009 is $2.51 per gallon. The May 2009 Concept Design Report includes recommendations and cost estimates for the replacement of the existing diesel power plant, installation of generation heat recovery, and minor upgrades to the existing distribution system. Refer to Appendix F – Technical Data for the a description of the planned improvements. 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. Fuel is delivered via barge to Hoonah year round and stored in bulk at the Hoonah Trading Company tank farm. Fuel is delivered by truck to IPEC daily and to local businesses and residents. IPEC has recently received an RUS High Energy Cost Grant to replace their oldest diesel generator with a new 3512C, to increase the plants reliability and efficiency. The displacement of diesel fuel with hydroelectric power will reduce the total fuel throughput of the Hoonah Trading Company (HTC) fuel terminal. Although this project will result in reduced fuel sales for HTC, the net benefit realized by this project will benefit the entire community. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. IPEC uses annually approximately 350,000 gallons of diesel fuel to provide 5-million kWh of electricity to customers in Hoonah. The hydroelectric system will eliminate up to 211,000 gallons* of this diesel consumption, and reduce the fuel-cost portion of electricity by more than $0.12/kWh. By utilizing surplus hydroelectric power to provide interruptible electric space heat to major commercial and community facilities, the hydroelectric project will be further reduce diesel fuel consumption by as much as 42,250-gallons/year**. At today’s fuel price of $3.00/gallon the combined savings equate to over $750,000 annually. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 14 of 21 10/7/2009 With increasing global demand for diesel fuel and dwindling supplies, the long term outlook is for higher diesel fuel prices – which will further increase project savings. *Calculation: Useable annual hydroelectric production of 3,009,000 kWh converted to gallons of diesel fuel using 14.25 gallons/kWh conversion efficiency **Calculation: Unused annual excess hydroelectric production of 1,331,000 kWh converted to gallons of diesel fuel (140,000 btus/gallon) with an estimated 75% conversion efficiency. 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 Renewable Energy Technology Specific to Location The Project is a conventional run-of-river hydroelectric operation that uses the natural flow of both Gartina and Water Supply Creek. This is proven technology that exists throughout Alaska and the world. The technology uses little to no impoundment and the natural creek flow is used with seasonal variations with the watershed run off. Creek flows are diverted into a penstock, through a generator turbine installed in a powerhouse, and returned to the stream. Optimum Installed Capacity: 1,300 kW Anticipated Capacity Factor: 71% Anticipated Annual Generation: 4,344,000 kWh Anticipated Barriers Winter operation hampered by freezing creek flow and powerhouse discharge Winter maintenance for road access to powerhouse Basic Integration Concept AEA/AE&E use proven and reliable technology to integrate remote generation sources Hydroelectric and diesel systems are in operation throughout Alaska and the world IPEC will work with AEA/AE&E to maximize the hydro-diesel system efficiency Delivery Methods Project generation will intertie with the existing Hoonah distribution via an overhead transmission line, approximately 4.5 miles long Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 15 of 21 10/7/2009 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 hydroelectric site is located on land owned by Sealaska Corporation, the southeast Alaska regional native corporation. Sealaska has authorized IPEC to enter onto its lands to collect field data and perform reconnaissance level studies (refer to Appendix E). A portion of the transmission line will be located on City land within the community of Hoonah. IPEC has a long term relationship with the City of Hoonah, including rights-of-ways and long term lease agreement for operating the existing IPEC power generation and distribution facilities. IPEC will secure long term land interests from both Sealaska and the City of Hoonah early in the Final Design and Permitting phase. 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 proposed project is subject to regulations of both State and Federal agencies including the Alaska Coastal Management Program, the Alaska Department of Environmental Conservation (ADEC), the U.S. Environmental Protection Agency, U.S. Coast Guard, U.S. Army Corps of Engineer, Alaska Department of Natural Resources (DNR), Alaska Department of Fish and Game (ADF&G) and the Federal Energy Regulatory Commission (FERC) regulations as well as tideland survey requirements. FERC has previously stipulated that the Gartina Creek hydroelectric project is subject to FERC jurisdiction and licensure. In addition to the FERC licensing process, a NEPA project level environmental review will be performed to demonstrate and confirm the project will not have a negative impact on the human environment. Wetlands in the project area will be avoided to the extent practicable, an evaluation will be made to ensure there are no known archaeological or historic properties within the area of potential effect, and that no birds or mammals listed as endangered or threatened that will be impacted by the project. It is anticipated the FERC and NEPA environmental review for the pilot project will be completed in 2011, with final FERC license and project permitting is anticipated to be completed in 2012. 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 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 16 of 21 10/7/2009 Environmental Considerations There are no listed Threatened or Endangered species known within the project area. Gartina Creek is stream number 114-13-10090 in the Alaska Department of Fish and Game’s Catalog of Waters Important for Spawning, Rearing or Migration of Anadramous Fishes. Projects that affect Anadramous fish water bodies require an AS 16.05 Fish Habitat Permit. Projects that have the potential to impact fish passage require a Title 16 permit. Gartina Creek supports populations of all pink salmon, chum salmon, coho salmon, sea-run Dolly Varden char, and cutthroat trout. Habitat and wetlands areas will be avoided to the extent practicable, and potential harm mitigated where not practicable. There are no known archaeological or historic resources in the immediate area of the proposed project. Telecommunications, aviation, and visual impacts are not anticipated. The primary environmental concern is expected to be fish migration and spawning habitat of pink salmon. None of the fish species are endangered or threatened, but pink salmon and salmonid species such as trout are vital economically and culturally to the region. AE&E has provided NEPA project level environmental permitting on over 40 energy related projects throughout Alaska during the past 10 years. Our understanding of the NEPA process and potential environmental impacts of our projects allows us to mitigate possible negative affects early in the design stage. Environmental permitting for the hydroelectric project is anticipated to be completed in 2011. 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 Detailed estimated project costs are included in the Hoonah CDR (Appendix F) and are based on the 2002 HydroWest Group study of three potential hydro sites near Hoonah. The HydroWest study for the three sites was reviewed and updated by HDR Alaska, Inc. in November 2007. In May 2009 AP&T provided a supplement to the 2002 HydroWest study that evaluated a combined development of the two water sources utilizing a single power house near the base of Gartina Falls. The cost and benefit data included in this application reflects the 2009 AP&T supplement to the 2002 HydroWest study. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 17 of 21 10/7/2009 Total Anticipated Project Cost: Phase III: $1,300,000 Phase IV: $7,225,000 $8,525,000 Requested Grant Funding: $4,000,000 This funding will complete Phase III and fund the initial phase of construction under Phase IV. Applicant Matching Funds: $450,000 $450,000 available from the Department of Energy Juneau to Hoonah Intertie Project (Grant DE- FG07-06ID14791) will be used as Match for Phase III Final Design and Permitting. Other Funding Sources: $4,075,000 Addition funding to complete Project Construction will come from State or Federal sources, including CDBG, RUS HECG, Alaska PPLF, or low-interest RUS loans for which IPEC is eligible. Project Capital Costs: $7,225,000 Phase IV, Project construction Project Development Cost: $1,300,000 Phase III, Design and Permitting 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.) A Business Operating Plan will be developed during the final design phase to accurately quantify operating and maintenance, and renewal and replacement costs for the hydroelectric facility. IPEC has successfully demonstrated its sustainability as a regional electric utility serving five remote communities in southeast Alaska. The addition of hydroelectric power to the current mix of IPEC generating facilities will further enhance IPECs sustainability. 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 IPEC is the certificated electric utility for Hoonah and will also be the project grantee and operator; therefore, a power purchase agreement is not required. IPEC anticipates the development of an interruptible rate agreement for utilization of surplus hydroelectric heat for commercial and community facility space heating. This rate agreement is subject to RCA review and approval, as IPEC is an economically regulated utility. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 18 of 21 10/7/2009 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Refer to Appendix B for the Cost Worksheet. 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 Potential Fuel Displacement The avoided fuel costs over a 30 year period is estimated at $38.2 million. This figure includes the combined hydroelectric projects and planned heat recovery for the diesel generation and Excess hydroelectric Energy Recovery System (refer to CDR in Appendix F). Anticipated Annual revenue IPEC is economically regulated by the Regulatory Commission of Alaska. As such, electric rates and revenue changes are subject to the RCA review and approval. Potential additional annual incentives and revenue streams: Unknown at this time Non-economic Public Benefits to Alaskans ƒ Help fulfill IPECs long-term renewable energy initiatives. ƒ Develop a viable and renewable means to produce energy locally ƒ Demonstrate State and IPEC commitment to renewable energy resource development ƒ Reduced dependence on diesel fuel and potential for fuel spills ƒ Reduced noise when operating 100% on hydroelectric power ƒ Reduced emissions and air pollution 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 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 19 of 21 10/7/2009 IPEC will own and operate the hydroelectric facility. IPEC owns, operates, and maintains electric utilities in five small rural communities and provides reliable cost effective electric power year- round. As a member owned cooperative, IPEC is a non-profit entity focused on delivering reliable, low cost electric energy. The Project will operate at the same level of detail and consistency as all IPEC power plant operations. As discussed in Section 4.2.2, a Business Operating Plan will be prepared for the project that identifies long term operations and maintenance, as well as renewable and replacement costs for the useful life of the project. IPEC has a proven record of operating and maintaining sound power plant operations and electric distribution systems. IPEC will commit to monitoring and reporting the Project savings and benefits as required by the REF grant funding, and to demonstrate the viability of this renewable 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. Interest in developing hydroelectric power in the Hoonah area dates back possibly to the early 20th century. Numerous more recent studies have been completed since 1977. The historical interest to identify and develop a cost effective renewable energy source for Hoonah is clear. The September 1977 R.W. Retherford Associates, “Preliminary Appraisal Report on the Hydroelectric Potential for the villages of …Hoonah…” considered Gartina Creek for a hydroelectric site due to the existence of a moderate height waterfall (Gartina Falls). The October 1979 Harza Engineering Company, “Report for the Gartina Creek” for the State of Alaska recommended a feasibility study and application to FERC for a project license. The June 2002 Hydro West Group, LLC, “Reconnaissance of Three Potential Hydroelectric Sites near Hoonah” for the City of Hoonah stated the Gartina Falls and Water Supply Creek sites have been the subject of previous feasibility studies, but no hydroelectric development has seriously been pursued. They further conclude that the identified sites could produce power at a cost comparable to or less than the cost from existing diesel generators (based on 2002 fuel costs), depending on the financing arrangements. The December 2005 Sealaska Corporation “Comprehensive Renewable Energy Feasibility Study” covered hydroelectric development in the Hoonah community. The report supported the conclusions from the past reports. IPEC has consulted with the Alaska Energy Authority and AE&E during the past year to further refine the project elements and identify the steps needed to move project development forward. Activities accomplished in 2009: ƒ Two field recon visits to the potential diversion structure sites. An IPEC crew brushed trails and cleared a portion of the abandoned Forest Service logging road to allow easier Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 20 of 21 10/7/2009 access ƒ Research conducted to identify prior FERC jurisdictional determinations and potential project impediments ƒ IPEC has submitted a jurisdiction request to FERC for Gartina Creek ƒ AEA/AE&E produced a final CDR for the proposed Project identifying the scope and estimated cost of the project ƒ IPEC has integrated a hydro project in their 2009 Energy Plan with a major initiative to incorporate renewable energy such as hydro to their energy production mix ƒ IPEC, Alaska Electric Light and Power Company (AEL&P), AEA/AE&E have spent time researching other funding sources to perform additional preliminary investigation and conclusions ƒ A field survey has been completed to refine elevation data for the diversion structures and power house locations 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 Hoonah strongly supports the development of renewable energy in Hoonah. IPEC has worked cooperatively with the City to further refine and define this Project. The community of Hoonah is eager to develop a locally available renewable energy resource that will reduce dependency on diesel fuel, and help reduce and stabilize long term electric rates. Refer to letters of support from the City of Hoonah included in Appendix E. 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 Total estimated project cost for the combined hydro Project is $8,525,000. The grant request for Phases III and IV is $4,000,000. IPEC will provide a cash match in the amount of $450,000 from a DOE Grant utilizing funding available from the prior Juneau to Hoonah Intertie Study. Refer to Grant Budget worksheet in Appendix C. Renewable Energy Fund Grant Application Round 3 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 Jodi Mitchell Name Signature 1~}{iftLvU- IL/ Title CEO/General Manager Date ll-tt-J.<Joq AEA10-015 Grant Application Page 21 of 21 10/7/2009 APPENDIX A PROJECT RESUMES APPENDIX B COST WORKSHEET   Renewable Energy Fund Round 3 Project Cost/Benefit Worksheet   RFA AEA10-015 Application Cost Worksheet Page 1 10-7-09 Please note that some fields might not be applicable for all technologies or all project phases. The level of information detail varies according to phase requirements. 1. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. 4,344,000 kwh (1,300 kw) Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel) 2. Existing Energy Generation and Usage a) Basic configuration (if system is part of the Railbelt1 grid, leave this section blank) i. Number of generators/boilers/other 3 ii. Rated capacity of generators/boilers/other 610 Kw, 855 Kw, 1000 Kw iii. Generator/boilers/other type iv. Age of generators/boilers/other 31, 17, 11 years v. Efficiency of generators/boilers/other 14.25 kwh per gallon b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor $93,825 ii. Annual O&M cost for non-labor $1,085,066 c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid, leave this section blank) i. Electricity [kWh] 5,011,674 (yr 2008) ii. Fuel usage Diesel [gal] 348,703 (yr 2008) Other iii. Peak Load 900 Kw iv. Average Load 845 Kw v. Minimum Load 780 Kw vi. Efficiency 14.25 kwh per gallon of diesel consumed vii. Future trends d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] n/a ii. Electricity [kWh] n/a iii. Propane [gal or MMBtu] n/a iv. Coal [tons or MMBtu] n/a v. Wood [cords, green tons, dry tons] n/a vi. Other n/a                                                              1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden Valley Electric  Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage Municipal Light and Power.      Renewable Energy Fund Round 3 Project Cost/Benefit Worksheet   RFA AEA10-015 Application Cost Worksheet Page 2 10-7-09 3. Proposed System Design Capacity and Fuel Usage (Include any projections for continued use of non-renewable fuels) a) Proposed renewable capacity (Wind, Hydro, Biomass, other) [kWh or MMBtu/hr] 1,300 kw b) Proposed Annual electricity or heat production (fill in as applicable) i. Electricity [kWh] 4,344,000 kwh ii. Heat [MMBtu] c) Proposed Annual fuel Usage (fill in as applicable) i. Propane [gal or MMBtu] ii. Coal [tons or MMBtu] iii. Wood [cords, green tons, dry tons] iv. Other 4. Project Cost a) Total capital cost of new system $ 7,225,000 b) Development cost $1,300,000 c) Annual O&M cost of new system $ 100,000 d) Annual fuel cost 5. Project Benefits a) Amount of fuel displaced for i. Electricity 250,000 gallons ii. Heat iii. Transportation b) Price of displaced fuel $1,075,000.00 c) Other economic benefits rate stabilization, reduce CO2 emissions, reduced change of fuel spill, help with economic growth d) Amount of Alaska public benefits 6. Power Purchase/Sales Price a) Price for power purchase/sale 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio Payback 8 years with diesel fuel at $5/gallon APPENDIX C GRANT BUDGET Renewable Energy Fund Grant Round III Grant Budget Form 10-7-09 Milestone or Task Anticipated Completion Date RE- Fund Grant Funds Grantee Matching Funds Source of Matching Funds: Cash/In-kind/Federal Grants/Other State Grants/Other TOTALS (List milestones based on phase and type of project. See Attached Milestone list. ) $ $ $ Phase I-Investigation and Field Work May 2009 CDR-Appendix F $ 0 $ 0 $ 0 Phase II-Hydro Assessment and Feasibility May 2009 CDR-Appendix F $ 0 $ 0 $ 0 Permitting and Final Design  Task 1 – funded by ($450,000 Match) ƒ Obtain stream flow data & confirm generation capacity ƒ Perform site surveying and topographic mapping ƒ Perform geotechnical investigation ƒ Obtain Site Control authorizations ƒ Initiate NEPA Project Level Environmental Review ƒ Apply for FERC License ƒ Produce summary report of findings     Task 2 – funded by REF Grant – ($850,000) ƒ Update design based on Task 1 work ƒ Update construction cost estimate ƒ Update economic analysis/develop business plan ƒ Complete NEPA Review ƒ Complete final design plans and specifications ƒ Identify construction superintendent & contractors ƒ Obtain FERC License December 2009- July 2012 $ 850,000 $ 450,000 Federal Grant DE-FG07-06ID14791 $ 1,300,000 Renewable Energy Fund Grant Round III Grant Budget Form 10-7-09 Phase IV:  Construction / Commissioning / Operation & Reporting ($7,255,000) ƒ Prepare Material Lists / Complete Bid Documents ƒ Procure equipment and materials ƒ Construct access roads (powerhouse and diversion structures) ƒ Construct diversion structures and powerhouse ƒ Install penstock  ƒ Complete powerhouse & install turbine and controls ƒ Startup and testing ƒ System integration and fine tuning ƒ Project Closeout ƒ Operations Reporting  January 2012-October 2013 $3,150,000 $0 $3,150,000 TOTALS $4,000,000 $ 450,000 $4,450,000 Budget Categories: Direct Labor & Benefits $ $ 30,000 $ 30,000 Travel & Per Diem $ $ 20,000 $ 20,000 Equipment $ 25,000 $ 20,000 $ 45,000 Materials & Supplies $ 25,000 $ 20,000 $ 45,000 Contractual Services $ 350,000 $280,00 $ 630,000 Construction Services $ 100,000 $ 60,000 $ 160,000 Other $ $ 20,000 $ 20,000 Access Road $ 172,000  $ 172,000 Diversion Structure $ 956,000  $ 956,000 Power Conduit $1,600,000  $ 1,600,000   Renewable Energy Fund Grant Round III Grant Budget Form 10-7-09 Powerhouse Structure $ 450,000  $ 450,000 Generating Equipment $  $  Control System $  $  Switchyard $  $  Transmission $  $  Contingency $ 322,000 $ 322,000  TOTALS $4,000,000 $450,000 $4,450,000 Applications should include a separate worksheet for each project phase (Reconnaissance, Feasibility, Design and Permitting, and Construction)- Add additional pages as needed A detailed cost estimate of the Project is located in the May 2009 CDR, Appendix E, 2007 HDR Report and Appendix G, Supplement to June 2002 Study by AP&T, Inc. GARTINA/WATER SUPPLY CREEK HYDROElECTRIC PROJECT FOR HOONAH,ALASKA PROJECT MANAGEMENT PLAN 1.PROJECT SUMMARY 1.1 Project Purpose Approximately $450,000 is left in the DEcFG07-061D14791 grant,for the Juneau to Hoonah Intertie.KWETICO would like to redirect all remaining funds for the purpose of investigation,design and permitting oftwo identified potential hydroelectric energy projects to service Hoonah.Inside Passage Electric Cooperative is the certificated utility servicing Hoonah and a member of KWETICO with Alaska Electric Light &Power. KWETICO has previously met the cost measure requirements with the Juneau to Hoonah Intertie project. The reason for requesting redirection of remaining funds for this grant are due to the significant increased costs for the Juneau to Hoonah Intertie estimated to be approximately $45 million and recommendations from potential funding sources including federal and state to find other alternative projects that are significantly reduced in cost and risk. The Alaska Energy Authority completed a Concept Design Report (CDR)dated May 29, 2009.Three potential hydroelectric projects have been identified in the Hoonah area which are: 1.Gartina Creek Hydroelectric Project (600 kW)$4,710,000 2.Water Supply Creek Hydroelectric Project (600 kW)$4,078,000 3.Combined Gartina Creek and Water Supply Creek Hydroelectric Project (1,300 kW)$8,788,000 The Gartina Creek component is estimated to have an annual energy production of 1,758,000 kWh and rated output of 500 kW.The Water Supply Creek component is estimated to have an annual energy production of 2,476,000 kWh with a rated output of 800 kW.The maximum potential annual generation of the combined Gartina and Water Supply Creek projects is estimated to be 4,344,000 kWh including 110,000 kWh from a 13 kW energy recovery turbine at the city water connection.To validate and confirm the expected production output,Stage I and II must be completed.During these stages the project capacity will be evaluated based on recorded stream flow data. Option three will cover 57%of Hoonah's electrical load but is five times less costly than the Juneau to Hoonah Intertie with no high risk associated with submarine cable involved.Option three also promotes development of alternative,clean energy resources for the community of Hoonah which are sustainable.This is the same objective that would have been achieved through construction of the Juneau to Hoonah Intertie,the original project of the grant funding. 1 I Hoonah Hydroelectric Management Plan 1.2 Proposed Facilities Construct a 1.3 MW combined Gartina Creek and Water Supply Creek hydroelectric project on Chichagof Island with an annual anticipated generation of 4,344,000 kWh for service to Hoonah and surrounding areas. The project consists of two diversion structures,approximately 8,700 feet of penstock,a power house with two turbines and generators,tailrace,substation,and approximately 4.5 miles of 12.5 Kv three-phase overhead transmission line that will connect with the existing system.This project is a run-of-the-river operation that will displace 119,100 gallons of Hoonah's fuel consumption of 348,704 gallons annually.Overall,this project will offset the majority of fossil fuel consumption in electrical generation while providing a clean source of renewable electricity and stabilizing rates for Hoonah,the largest customer of Inside Passage Electric Cooperative.Additionally,this project will lower rates for all 1,300 customers since IPEC is on a postage stamp rate for all its service areas.This in turn will enhance economic development,encourage growth and significantly reduce C02 emissions. 1.4 Project Budget Overview The total estimated cost of the Gartina/Water Supply Creek Hydroelectric project is approximately $8,788,000.The costs for this grant can be broken down as follows: Stage I -Investigative Field Work $50,000 Stage II -Hydrological Assessment $100,000 Stage III -Hydro Evaluation and Feasibility $100,000 Analysis Stage IV -Permitting and Design $200,000 Total $450,000 The direct financial benefit (savings)is estimated to be $32,200,000 over 30 years. 1.5 Points of Contact Jodi Mitchell,CEO/General Manager,Inside Passage Electric Cooperative Phone:(907)789-3196 ext.24 Fax:(907)790-8517 E-mail:jmitchell@alaska.com Ms.Mitchell will have authoritative approval over all stages of the project. Jerry Medina,Administrative Officer,Inside Passage Electric Cooperative Phone:(907)789-3196 ext.35 Fax:(907)790-8517 E-mail:jmedina@ak.net 2 I Hoonah Hydroelectric Management Plan Mr.Medina will be responsible for reporting and communication with DOE. Peter Bibb,Operations Manager,Inside Passage Electric Cooperative Phone:(907)789-3196 ext.30 Fax:(907)790-8517 E-mail:pbibb@ak.net Mr.Bibb will serve as the Project Manager. David Lockhard,P.E.Program Manager,Alaska Energy Authority Phone:(907)771-3062 Fax:(907)771-3044 E-mail:dlockard@aidea.org Mr.Lockard will provide technical assistance with the project. ,'.\, I. 3 I Hoonah Hydroelectric Management Plan APPENDIX D ELECTRONIC COPY OF APPLICATION (REFER TO ENCLOSED DISC) APPENDIX E RESOLUTION & SUPPORTING LETTERS CITY OF HOONAH P.O.Box 360 •Hoonah,Alaska 99829 •(907)945-3663 •FAX (907)945-3445 November 9,2009 Renewable Energy Grant Fund Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage,AK 99503 Subject:Inside Passage Electric Cooperative -Renewable Energy Fund Grant Application -Letter of Support Application Review Committee: This letter is written to provide support of the Inside Passage Electric Cooperative Renewable Energy Fund grant application for the design and construction of local hydroelectric generation in Hoonah.As you are aware,the high cost of diesel fuel has created significant economic hardship in rural Alaska communities.The cost of energy for the City of Hoonah and its people is a significant recurring monthly cost,which affects the community in all aspects of day-to-day operations. The people of Hoonah require the benefits of stable and lowerer cost energy sources to maintain a good standard of living and receive the economic benefits.It is important for the cooperative members of Hoonah to know that the electric utility is willing to control their costs wherever practical.The City of Hoonah welcomes and fully supports this opportunity to implement this beneficial hydroelectric project,and requests the Review Committee carefully consider the merits of this application. If you have any questions please call me at (907)945-3663,or fax your comments to (907)945-3445. Sincerely, X~& Mayor of Hoonah cc:Jodi Mitchell,IPEC August 5,2009 Peter Bibb Operations Manager Inside Passage Electric Cooperative P.O.Box 210149 Auke Bay,AK 99821 Re:Letter Authorization for Access to Sealaska Corporation Property Dear Mr.Bibb: Sealaska Corporation (Sealaska)has no objection to your proposed early entry upon Sealaska's property located in the Hoonah area and more particularly described in Exhibit 1,attached hereto and incorporated herein by this reference (Hoonah Area Lands),provided that the following terms and conditions are fully complied with by Inside Passage Electric Cooperative (IPEC): 1.This Letter of Authorization Agreement (Agreement)shall be valid for the period of August 5,2009,through December 31,2009.This Agreement may be renewed upon application to Sealaska by IPEC. 2.Sealaska grants access to IPEC for the sole purpose of performing creek elevation measures in the Hoonah Area Lands.The scope of allowed work is as follows: a)access area using existing logging roads; b)foot traffic from the logging road to both Gartina Creek and Water Supply Creek; c)mark foot traffic trail with flagging for easier entrance/exit; d)minimum brushing for survey work;and e)placement of survey control markers in ground for future reference. 3.IPEC shall be responsible for the activities and conduct of its agents,contractors,and employees connected with its performance under the access and use provisions granted by Agreement in accordance with applicable law.IPEC shall be responsible for losses, Sealaska Corporation One Sealaska Plaza,Suite 400,Juneau,Alaska 99801-1276 Tel:907.586.1512 Fax:907.586.2304 Peter Bibb - 2 -August 5,2009 damages,liabilities,excesses,claims and demands,direct and indirect, arising out of or in any way connected with an act or omission of IPEC, or any agent,contractor,employee,or other representative of IPEC relating to IPEC's performance under the terms of this Agreement. 4.IPEC acknowledges that this agreement is non-exclusive and neither implies nor conveys any preferential rights to the Hoonah Area Lands. 5.This Agreement shall not be assignable by either party. 6.This Agreement shall be construed in accordance with the laws of the State of Alaska. 7.The parties may execute this Agreement in counterparts.A signature sent by facsimile is as effective as an original signature. Sincerely, Ronald R.Wolfe Natural Resources Manager Attachment:Exhibit 1 ACKNOWLEDGED AND ACCEPTED this S-day of August,2009, Inside Passage Electric Cooperative Its: cc:Michele Metz Peter Bibb Operations Manager - IPEC INSIDE PASSAGE ELECTRIC COOPERATIVE INSIDE PASSAGE ELECTRIC COOPERATIVE,INC. BOARD OF DIRECTOR'S MEETING MINUTES February 6,2009 1.CALL TO ORDER,OPENING PRAYER &ROLL CALL A special telephonic meeting of the Inside Passage Electric Cooperative Board of Directors convened at the Auke Bay headquarters located at 12480 Mendenhall Loop Road in Auke Bay,Alaska on February 6,2009.Chainnan Michael See called the meeting to order at 2:08 p.m.Wilbur Brown offered the invocation. A roll call of the Board showed the following members present:Chaimlan Michael See (by phone)representing Hoonah,Richard George (by phone) representing Angoon,Wilbur Brown (by phone)representing Kake, Kimberley Strong (by phone)representing Klukwan and Jim Cox (in person) representing the Chilkat Valley.A quorum of the Board was established.Also present were CEO and General Manager Jodi Mitchell (in person),Steve Pratt (by phone)and Administrative Officer Jerry Medina (in person). II.APPROVAL OF AGENDA Richard George moved to approve the agenda.Jim Cox seconded the motion which passed unanimously. III.GENERAL MANAGER'S REPORT •Hoonah Power Supply Options: Jodi Mitchell met with David Lockhard from AEA.Mr.Lockhard indicated that AEA cannot and will not suppOli the Hoonah intertie however AEA is willing to help IPEC develop the local hydro sources around Hoonah including the Pelican intertie and road as well as filing the FERC pennits for the three hydro sources;look into geothennal;and help with the third party valuation of the Pelican utility.The Hoonah Mayor is onboard with these projects. •2009 Energy Plan Review and Adoption: P.O.Box 210149 Auke Bay,Alaska 99821 (907)789-3196 Fax (907)790-8517 Inside Passage Electric Cooperativl. Board of DireclOrs Special Meeting Febnlary 6,2009 Page 2 or 4 Richard George moved to amend the priority of the Hoonah intertie due to the lack of support of the Hoonah Intertie by AEA in exchange for AEA's support of developing the Hoonah -Pelican intertie;geothermal research and development;development of the three small hydro projects Gartina Creek, Water Supply Creek and Elephant Falls;and to accept AEA's offer of assistance in lieu ofthe Hoonah intertie to develop our own resources rather than depending on other resources.The motion died for lack of a second. Kimberley Strong moved to amend the document entitled Inside Passage Electric Cooperative 2009 Energy Plan table on page S under Hoonah,placing the Greens Creek Intertie last on the list and moving the other projects up. Richard George seconded the motion which passed unanimously. Kimberley Strong moved to add the wording "with AEA full support"to the end of the Gartina Creek,Water Supply Creek,Elephant Falls Creek hydro projects sentence;insert Mud Bay after Elephant Falls Creek hydro and add geothermal to the sentence.Richard George seconded the motion which passed unanimously. Kimberley Strong moved to amend the document on page 6 by placing the Greens Creek Intertie last moving Pelican Intertie and Elfin Cove projects up; to reflect the Greens Creek Intertie as a funding strategy;to amend the paragraph title from Hoonah Intertie Strategy to Hoonah Alternative Energy Strategy;and to amend the paragraph entitled Kake Intertie Strategy to Kake Alternative Energy Strategy.Wilbur Brown seconded the motion which passed unanimously. Kimberley Strong moved to amend page 7 paragraph S(a)(ii)Green's Creek Intertie to S(a)(v)and moving the other projects up adding Mud Bay to paragraph S(a)(i).Richard George seconded the motion which passed unanimously. Kimberley Strong moved to add on page 7 explore geothermal sites in the Hoonah area to paragraph Sea).Richard George seconded the motion which passed unanimously. Kimberley Strong moved to adopt the Inside Passage Electric Cooperative 2009 Energy Plan as amended.Jim Cox seconded the motion which passed unanimously. •Lobbying Plans IPEC submitted federal appropriation requests for debt relief to the DC Congressional delegation.Ms.Mitchell will be traveling to Washington DC next week.A visit to the FERC office is planned to determine if permits are available for the hydro projects IPEC is interested in.Ms.Mitchell plans to - -.. INSIDE PASSAGE ELECTR1C COOPERATIVE Resolution 2008-8 Inside Passage Electric Cooperative Inc. September 12,2008 ENTITLED:2008-8 AUTHORIZING THE CEO/GENERAL MANAGER TO APPLY FOR GRANT FUNDI G DER THE RE EWABLE E ERGY FUND A D E DORSI G THE APPLICATIO OF SAID FU DING UNDER RFA AEA-09-004 \VHEREAS,Alaska Statute AS 42.45.045 established the Renewable Energy Gran I Recommendation Program;and WHEREAS,under this program,the Alaska Energy Authority (ABA)is soliciting competitive applications from qualified applicants in order to make recommendations to the Alaska State Legislature for funding ofrene\able energyprojects' OW THEREFORE BE IT RESOLVED THAT,the Board of Commissioners of Inside Passage Electric Cooperative,Incorporated hereby authorizes this application for project funding at the match amounts as indicated in the application;and authorizes Jodi Mitchell the CEO/General Manager to serve as the point of contact to represent the applicant for purposes of the grant application;and states that Inside Passage Electric Cooperative is compliant with all federal,state,and local laws including existing credit and federal tax obligations. PASSED,APPROVED A D ADOPTED by a vote of -.£.Yeas,e-ays and ..f:J'Absent this 12th day of September,2008. Micha See,ChaIrman ATTEST: ilbur Brown,Secretary/Treasurer PO.Box 210149 Auke Bay,Aldska 99821 (907)789-3196 fax (907)790-8517 Inside Passage Electric Cooperative An Overview of the Company and 2009 Energy Plan Initiatives Jodi Mitchell General Manager and CEO Inside Passage Electric Cooperative 2009 Energy Plan Page] IPEC Energy Plan Overview Inside Passage Electric Cooperative is a non-profit member-owned electric cooperative currently serving five rural southeast Alaska communities.The Board of Directors directs the operations of the utility solely for the benefit of members of the cooperative,i.e.its customers. IPEC owns and operates diesel generation facilities in 3 commUllltJes - Angoon,Kake,and Hoonah.The Chilkat Valley and Klukwan are served using power purchased from hydro facilities owned and operated by Southern Energy and Alaska Power and Telephone.In the latter 2 communities,IPEC owns and operates diesel plant that is used when power from Southern Energy and APT is unavailable. Board Objectives IPEC's Board of Directors consists of members elected from the communities we serve.Representation from each community ensures all members have a voice in fulfilling our obligations.IPEC's energy vision goes beyond the parochial concems of the isolated rural communities we serve.Rather,we see ourselves as playing a role in the development of southeast Alaska at large.In concert with the Southeast Conference,IPEC advocates for regional infrastructure and integrated corridor development linking together the economic destiny of peoples throughout southeast with a network of roads,communication systems, and electrical interties. IPEC operations are designed to provide safe,reliable,and adequate power at the lowest possible price consistent with good business practices.We pride ourselves on the quality of our plant,the dedication of our staff,and the role we play in the economic development of the communities we serve.Recent fluctuations in world commodity plices have challenged our ability to offer our members price stability or forward-looking price certainty for family and business planning purposes.In response to these circumstances,we are committed to an Inside Passage Electric Cooperative 2009 Energy Plan Page 2 energy vision that overcomes these deficiencies and our energy plan is designed to provide power supplies that are financially and environmentally sustainable for the foreseeable future. Threats to Meeting Objectives [PEC has reviewed its commitments to members,its desire to actively promote the best interest of the communities it operates in,its past and its future. Our energy vision is threatened on three fronts - I.Continued reliance on isolated local diesel generation. 2.Continued reliance on generation owned by other private entities. 3.Substantial debt associated with the Chilkat Valley distribution sytem. Diesel generation has provided the only cost effective way to provide power in many rural Alaska communities for decades.It has been a blessing and a curse. Easily and cheaply installed,diesel generators provided an option for communities to obtain power,albeit at the expense of creating costly fuel supply chains, environmental issues with fuel handling and storage,and an irreconcilable conflict -a necessary evil,if you will -with a desire of the community to reduce both the use offossil fuels and release of harmful emissions into the air. [PEC delivered fuel costs are highly dependent on the commodity costs of the fuel itself and the delivery cost of local suppliers and vendors.2008 saw delivered fuel costs range from $2.68 per gallon to $4.69 per gallon.Until the company moves away from diesel generation we will continue to be exposed to the volatility of world commodity markets which we have no control over.Combined with generators that need to be replaced on occasion,and the inherent community and environmental concerns noted above,IPEC has determined it needs to move away from reliance on diesel generators. One advantage of the existing diesel generation systems is that they are owned and operated by IPEC.As a nonprofit cooperative,IPEC's financial objectives are to provide margins consistent with good business practices but low enough to provide the best value for our members.In the Chilkat Valley and Klukwan we are cUITently dependent on purchased hydro power from Southern Inside Passage Electric Cooperative 2009 Energy Plan Page 3 Energy and APT.Because the price we are charged provides both a return on investment (profit)to the owners and dollars to cover a portion of their general and administrative costs,IPEC member dollars end up strengthening the financial standing of other entities. IPEC,as a fiscally responsible entity,needs to be positioned to take advantage of marketplace opp011unities as they arise.One burden we have is debt associated with an $I 8,000 per customer investment in the Chilkat Valley area compared to $4,000 in other service areas.With millions of dollars of debt,and the associated monthly debt service,our ability to move forward with energy plan objectives is compromised.Because the cost of providing service varies between communities,IPEC is reviewing the possibility of moving to community based rates.While this would allow us to provide better price signals to customers than the current postage stamp rate structure,double digit rate increases could cause rate shock for Chilkat Valley members. Meeting the Challenges Our strategy for meeting these challenges is comprehensive.First,we want to be independent of diesel by 20 I 5.This will be accomplished by identifying new local alternative energy options and pushing forward with planned interties between area communities and existing or proposed alternative energy options. Secondly,we will be prepared financially and administratively to take advantage of opp011unities to own and operate generation facilities.In addition,we will be prepared to participate in the governance of regional publicly owned infrastructure as it is developed.Thirdly,we will seek assistance for debt relief associated with the Chilkat distribution system.Fourth,we will prepare to move to community- based rates to ensure that costs associated by each community are reflected in the prices we charge to provide service.Fifth,in the short term,we will investigate options to enter into bulk fuel purchasing arrangements with others to lower the delivered cost of fuel,and hedging options to stabilize the cost of fuel. While all fOims of alternative energy are on the table,abundant rainfall in southeast Alaska creates conditions where hydro potential is attractive throughout the region.If cost or potential ecological disruptions were not issues,it is likely Inside Passage Electric Cooperative 2009 Energy Plan Page 4 that southeast Alaska would be dotted by far more hydroelectric facilities than currently exist.Not surprisingly,therefore,this technology has a primary place in IPEC's energy vision for the region and its energy plan for its members. Below is a Table highlighting various options for IPEC to become diesel independent by 2015. Hydro Tidal Biomass Geothermal Angoon Thayer Creek Project -PaJ1ner with Potential Primarily Limited Kootznoowoo/AEAlSEC technologies are Evergreens potential. under review by available. otbers.No specific Logistical issues project proposed exist.No economic study exists Kake Petersburg Intertie -100%of needs.No potential Kake Tribal Possible source Integrated COITidor synergies.identified.Waste Wood.of untested Logistics,supply quality. Cathedral Falls -75%of needs.chain,economics Secondary priority to Tyee intel1ie.have not been demonstrated. Hoonah Potential Logistics,supply Possible Gartina Creek,Water Supply Creek,technologies are chain,economics sources exist in Elephant Falls Creek hydro projects.under review by have not been the area.IPEC others.No specific demonstrated.will investigate Mud Bay Hydro a possibility.project proposed in concert with theAEA. Hoonah/Pelican interconnection Green's Creek Intertie.Shown 111 SEC regional intertie plan. Chilkat!Current purchases from Southern No potential Logistics,supply No potential Klukwan Energy and APT.identified.chain,economics identified. bave not been Walker Lake Hydro demonstrated. Inside Passage Electric Cooperative 2009 Energy Plan Page 5 Just as impOliant as a long range vIsIon for generating facilities is an appropriate and well thought out intertie strategy.Advancing a regional view to displace diesel,increase reliability,take advantage of economies of scale,and provide for new load growth benefits IPEC members directly and IPEC community objectives indirectly.Towards that end,we have identified the following inteliie projects that IPEC will support and advocate the development of. Alternative Energy Strategy Various Generation Intiatives -Hoonah The Alaska Energy Authority has committed to further development of,and filing the FERC permits for,Gartina,Water Supply,and Elephant Falls Creek hydro projects.In addition,AEA has agreed to investigate geothermal potential in the area. Pelican Intertie -Hoonah An electrical inteliie between Hoonah and Pelican would allow for the sharing of the Pelican hydro facility and new hydro facilities in Hoonah.In addition to increased electrical reliability,connecting these communities through an integrated corridor enables synergies with road,communications,and improved transportation access for Pelican residents (via the Alaska Marine Highway and the Hoonah Airport).AEA has agreed to move forward with this project and assist IPEC on integrating inteliie operations with the Hoonah system. Elfin Cove -Hoonah Completion of an inteliie to Elfin Cove would increase reliability and provide access to alternative energy sources for Elfin Cove.The costs and benefits of an intertie here need to be reviewed.IPEC does not expect to take CUlTent action on this inteliie,but this should remain in regional planning. Green's Creek -Hoonah Intertie (Juneau) This project has been approved by the U.S.Congress as part of the overall strategy to link major southeast hydroelectric facilities at Dorothy Lake to rural communities.lPEC has moved this project down its immediate priority list recognizing the Alaska Energy Authority's suppOli for initiatives shown above in Inside Passage Electric Cooperative 2009 Energy Plan Page 6 lieu of Green's Creek.fPEC will once again pursue this project once it becomes a part of AEA's short-range goals. Kake/Petersburg Intertie (to Tyee Lake Hydro) This project has been recommended for legislative approval for funding by the AEA.It will provide 100%of power to Kake and allow diesel generation to be maintained strictly for backup security in case power is not available through the intertie.IPEC would like AEA to move forward aggressively with this project. 2009 Action Plan IPEC intends on taking several specific actions during 2009 to implement its energy plan and move towards its energy vision for the cooperative. 1.Pennit Acquisition -apply for site pennits for identified hydroelectric resource locations. 2.Application for Debt Relief -Make a capital appropriation request via state representatives for debt relief to avoid a 40%increase in rates to Chilkat Valley customers. 3.Partnership Development -Seek out relationships with other major fuel purchasers in the region,and watch for pminering opportunities to reduce fuel supply cost and risk.Continue work with Southeast Conference and AEA in regional planning and development,and continued interaction with the Tlingit-Haida Tribal Energy Department. 4.Regionallnfi'astructure Development -SuppOli Integrated Con'idor concepts advanced by the Southeast Conference. 5.Specific projects to be aggressively supported during 2009 a.Hoonah I.Gartina Creek,Water Supply Creek,Elephant Falls and Mud Bay hydro projects;AEA has committee to the first three. 11.With AEA resources,explore geothennal potential in the area. 111.Heat recovery system w/new power plant IV.Power plant replacement to be fully functional by Dec 20 I0 v.Pelican intertie -enter into discussions with AEA/Pelican Utility about the potential.Ask for SEC suppOli. VI.Green's Creek Intetiie (Consistent with long range planning) Inside Passage Electric Cooperative 2009 Energy Plan Page 7 Specific projects to be aggressively supported in 2009 (Continued) b.Angoon i.Actively pursue Thayer Creek project with Kootznoowoo c.Kake I.Pursue Petersburg intel1ie along with road and communications systems upgrade 11.Ask AEA to continue investigation of Cathedral Falls hydro potential d.Chilkat Valley,KJukwan I.Look for opportunities to participate in ownership of generating facilities serving these areas 11.Ask the Alaska Energy Authority to analyze the potential for new hydro facilities like Walker Lake 111.Ask legislature for debt relief e.Corporate -Constantly seek out opp0l1unities for potential acquisitions,mergers,and pm1nerships to strengthen and diversify the cooperative,and reduce the unit cost ofthe company's operations. f.Corporate -Perform cost of service study detennining the cost of service in each community JPEC serves.FulJy investigate the impacts,advantages,and disadvantages of moving to community- based rates. Inside Passage Electric Cooperative 2009 Energy Plan Page 8 APPENDIX F TECHNICAL DATA CONCEPT DESIGN REPORT AND CONSTRUCTION COST ESTIMATE FOR ENERGY PROJECTS IN THE COMMUNITY OF: HOONAH PREPARED FOR: STATE OF ALASKA ALASKA ENERGY AUTHORITY/ RURAL ENERGY GROUP PREPARED BY: Alaska Energy and Engineering, Inc. Mailing Address - P.O. Box 111405 Anchorage, AK 99511-1405 (907) 349-0100 349-8001 FAX May 29, 2009 Hoonah Energy Projects May 29, 2009 Concept Design Report Alaska Energy and Engineering i EXECUTIVE SUMMARY This report has been prepared by Alaska Energy and Engineering, Inc. (AE&E) for the Alaska Energy Authority / Rural Energy Group (AEA/REG). The purpose of this study is to provide a concept design and construction cost estimate for the following potential local energy projects for the community of Hoonah: • Diesel Power Plant Replacement. • Three Potential Hydroelectric Generation Projects. • Diesel Generation Heat Recovery System. • Excess Hydroelectric Energy Recovery Participants in the project include the City of Hoonah and the Inside Passage Electric Cooperative (IPEC). On Thursday October 19 and 20, 2006, David Lockard of the Alaska Energy Authority / Rural Energy Group (AEA/REG) and John Dickerson of Alaska Energy and Engineering (AE&E) traveled to Hoonah. The purpose of this site visit was to meet with local officials as well as representatives of local and regional organizations to identify and discuss potential energy infrastructure projects within the community as well as to gather reconnaissance level information for preparation of a Conceptual Design Report (CDR) for any identified energy infrastructure projects. The IPEC (originally THREA) power plant was constructed in 1977 and was partially renovated after a fire in 1990. Existing generator No. 1 is an antiquated Caterpillar model 398. Generators No. 2 and 3 are Caterpillar model 3512's with approximately 75,000 total hours each. The interior walls are covered with painted plywood up to a height of 8' with vinyl-encased fiberglass batt insulation exposed above the plywood and across the ceiling. The exterior metal siding is in fair condition but the exterior paint is in very poor condition and is peeling badly. The area around the plant is poorly drained and the plant is prone to flooding, especially during spring breakup. A new power plant is proposed to be constructed on a raised gravel pad next to the existing power plant. The new power plant will include two new generators, one existing low-hour generator, one existing high-hour generator in good condition (3,100kW total), state of the art automatic start/stop/paralleling switchgear, remote radiators with variable speed control, a fire suppression system, critical grade exhaust silencers and all required engine coolant piping and ventilation equipment. Three potential hydroelectric generation facilities are identified, one on Gartina Creek, one on Water Supply Creek as well as one that is located on both Gartina Creek and Water Supply Creeks (Combined G&WS Hydro). The proposed site locations are all in close proximity to each other and are all located within four miles of the community of Hoonah on or near existing gravel logging roads. Each proposed hydroelectric facility includes: diversion structure(s); penstock(s); hydroelectric power house(s); programmable automatic start/stop/paralleling switchgear; approximately four miles of 12.5kV three-phase overhead transmission line with fiber optic communication cable; and access roads to the power house(s) and diversion structure(s). The proposed generation heat recovery project would deliver recovered generation heat to the swimming pool/gymnasium, school classroom building, fire hall, senior center, senior apartments, and clinic, offsetting as much as 57,000 gallons of space heating diesel fuel annually. The project would include a total of approximately 6,500 feet of buried 4” diameter arctic pipe as well as heat exchangers, pumps and associated equipment located in the power plant and the six identified community buildings. Hoonah Energy Projects May 29, 2009 Concept Design Report Alaska Energy and Engineering ii The proposed excess hydroelectric energy recovery system would capture otherwise wasted hydroelectric potential by using an electric boiler to add heat to the diesel heat recovery system during times when excess hydroelectric potential is available. The proposed power plant and heat recovery system project schedule calls for design and permitting to be completed by November 2009 and for construction to occur between April and November 2010, with the new power plant fully functional by December 2010. The proposed hydroelectric facility and transmission line project schedule calls for design and permitting to be completed by July 2011 and for construction to occur between March and November 2012, with the hydroelectric facility fully functional by December 2012. Separate cost estimates have been prepared for the Power Plant Replacement and Diesel Generation Heat Recovery System as well as each of the three potential Hydroelectric Generation projects and the Excess Hydroelectric Energy Recovery System. The estimated total project cost including all design, supervision, inspection, permitting, with a 15% to 25% contingency for each component is: • $2,791,000 Power Plant Replacement (3,100kW @ $900/kW) • $905,000 Generation Heat Recovery System • $4,710,000 Gartina Creek Hydroelectric Project (600kW) • $4,078,000 Water Supply Creek Hydroelectric Project (600kW) • $8,645,000 Combined G&WS Hydroelectric Project (1,300kW) • $100,000 Excess Hydroelectric Energy Recovery System The following table summarizes the avoided fuel costs and simple payback periods for the potential hydroelectric projects with and without energy recovery: AVOIDED FUEL COST & SIMPLE PAY BACK OF POTENTIAL PROJECTS Project Project Cost Annual Avoided Fuel, Gallons Annual Value of Avoided Fuel, $/Year (1) Simple Pay Back Period Fuel Cost Avoided Over 30 Years Excess Hydro ER $.10M 12,500 $62,000 1.6 yrs $1.88M Diesel HR $.91M 57,000 $285,000 3.2 yrs $8.55M Gartina Hydro $4.71M 130,000 $650,000 7.3 yrs $19.5M Gartina Hydro w/ Diesel HR $5.61M 176,000 $881,000 6.4 yrs $26.4M Water Supply Hydro $4.08M 134,000 $670,000 6.1 yrs $20.1M Water Supply Hydro w/ Diesel HR $4.98M 180,000 $900,000 5.5 yrs $27.0M Combined Hydro $8.65M 215,000 $1,075,000 8.0 yrs $32.2M Combined Hydro w/ Diesel HR & Excess Hydro ER $9.65M 257,000 $1,285,000 7.5 yrs $38.5M 1) Assume a future fuel cost of $5.00/Gallon Hoonah Energy Projects May 29, 2009 Concept Design Report Alaska Energy and Engineering iii INDEX Executive Summary......................................................................................Page i Index .........................................................................................................Page iii Acronyms and Abbreviations .......................................................................Page v 1.0 Introduction .......................................................................................... Page 1 1.1 Program Overview.........................................................................Page 1 1.2 Community Description ................................................................. Page 2 1.3 Site Investigation ........................................................................... Page 3 1.4 Code Analysis & Deficiencies ........................................................ Page 3 2.0 Existing Facilities..................................................................................Page 4 2.1 Power Plant................................................................................... Page 4 2.2 Power Distribution .........................................................................Page 5 3.0 Community Power Demand ................................................................. Page 5 3.1 Estimated Future Load Growth ...................................................... Page 5 3.2 Alternative Energy/Efficiency Improvements .................................Page 5 4.0 Proposed Energy Infrastructure Project Descriptions...........................Page 6 4.1 Diesel Power Plant Replacement .................................................. Page 6 4.1.1 Generator Selection ................................................................ Page 7 4.1.2 Switchgear & SCADA .............................................................. Page 8 4.1.3 Power Plant Fuel System ........................................................ Page 9 4.2 Three Potential Hydroelectric Projects ..........................................Page 9 4.2.1 Gartina Creek.........................................................................Page 10 4.2.2 Water Supply Creek...............................................................Page 11 4.2.3 Combined Gartina and Water Supply .....................................Page 11 4.2.4 Hydroelectric Power Utilization ...............................................Page 12 4.2.5 Permitting...............................................................................Page 12 4.3 Heat Recovery System.................................................................Page 14 5.0 Site Selection & Control ......................................................................Page 15 5.1 Power Plant Site...........................................................................Page 15 5.2 Hydroelectric Project Area ............................................................Page 15 5.3 Hydroelectric Intertie Route ..........................................................Page 15 5.4 Heat Recovery Pipeline Route ......................................................Page 16 5.5 Site Control ...................................................................................Page 16 6.0 Permitting and Spill Response ............................................................Page 16 6.1 Environmental Assessment..........................................................Page 16 6.2 Fire Code......................................................................................Page 17 6.3 Spill Response..............................................................................Page 17 Hoonah Energy Projects May 29, 2009 Concept Design Report Alaska Energy and Engineering iv 6.4 Air Quality Permit..........................................................................Page 17 6.5 Hydroelectric Project Permitting ...................................................Page 17 7.0 Construction Plan................................................................................Page 18 7.1 Local Job Skills .............................................................................Page 19 7.2 Local Equipment...........................................................................Page 19 7.3 Material Sources...........................................................................Page 19 8.0 Schedule .............................................................................................Page 19 8.1 Power Plant Replacement & Heat Recovery System Schedule ..Page 20 8.2 Hydroelectric Project Schedule.....................................................Page 20 9.0 Cost Estimate......................................................................................Page 20 Concept Design Drawings.....................................................................Appendix A Construction Cost Estimates.................................................................Appendix B Site Control Documents ......................................................................Appendix C Electrical Load Data............................................................................. Appendix D 2007 Hydroelectric Analysis and Revised Cost Estimate by HDR Inc............................................................................................Appendix E 2002 Reconnaissance of Three Potential Hydro Sites Near Hoonah by HydroWest Group LLC ...............................................Appendix F Supplement to June 2002 Hydroelectric Study By AP&T.....................Appendix G Hoonah Energy Recovery Worksheet and Graphs.............................. Appendix H Community Correspondence .................................................................Appendix I Hoonah Energy Projects May 29, 2009 Concept Design Report Alaska Energy and Engineering v ACRONYMS AND ABBREVIATIONS ADCCED AK Department of Commerce, Community and Econ. Development ADEC Alaska Department of Environmental Conservation AEA/REG Alaska Energy Authority/Rural Energy Group AIDEA Alaska Industrial Development and Export Authority CDR Conceptual Design Report COE U. S. Army Corps of Engineers DC Denali Commission DOT (Alaska) Department of Transportation and Public Facilities EPA U.S. Environmental Protection Agency F Degrees Fahrenheit FERC Federal Energy Regulatory Commission GPM Gallons Per Minute HUD Housing and Urban Development IBC International Building Code ICDBG Indian Community Development Block Grant IFC International Fire Code NEC National Electric Code NFPA National Fire Protection Association NFS Non-frost susceptible RPSU Rural Power System Upgrade SHPO State Historic Preservation office SPCC Spill Prevention Control and Countermeasures USCG United States Coast Guard USCOE United States Army Corps of Engineers USS United States Survey Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 1 1.0 INTRODUCTION This report has been prepared by Alaska Energy and Engineering, Inc. (AE&E) for the Alaska Energy Authority / Rural Energy Group (AEA/REG). The purpose of this study is to provide a concept design and construction cost estimate for the following potential local energy projects for the community of Hoonah: • Diesel power plant replacement. • Four potential hydroelectric generation projects. • Generation heat recovery system. Participants in the project include the City of Hoonah and the Inside Passage Electric Cooperative (IPEC). 1.1 Program Overview The Alaska Energy Authority (AEA), Rural Energy Group is pursuing grant funds to upgrade rural bulk fuel tank farms and electric power systems. All project components are dependent on available funding. Following is a brief outline of the program: • Most of the funds are federal and provided through the Denali Commission (DC). Other federal funding may be available from HUD (ICDBG) and the Environmental Protection Agency (EPA). Additional funds may be available from the State of Alaska, USDA, and loan financing. • In order to receive grant funds, each community must demonstrate that the proposed facility will be sustainable by accepting a business plan. The business plan shall describe who will own the facility, and how it will be operated, maintained and replaced. • New energy projects are funded, designed, and constructed in three phases: Phase 1, Conceptual Design; Phase 2, Design Completion; and Phase 3, Construction. • During Phase 1, Conceptual Design, staff from AEA will visit a community, discuss the program, and work with residents and the local government to select sites for the new facilities. • At the completion of Phase 1 Conceptual Design, the community will be requested to review and approve the location, capacity, and basic configuration of the facilities as well as a draft business plan. • During Phase 2, Design Completion, the design for the new energy projects will be completed. An environmental assessment will be prepared and site control documented. A business plan will be prepared for signing. • Each community will be requested to provide “in kind” contributions as available. • Project may include local hire and construction trade training programs, subject to Denali Commission funding. • If the Denali Commission approves the business plan it will be circulated for signature and construction procurement will start. Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 2 • Ineligible Projects: Funding is not available through AEA for buildings, propane facilities, fuel tank trucks or trailers, fuel to fill the tank farm, operation & maintenance costs, or residential tank upgrades. Loans for fuel tank trucks and trailers may be available through USDA. • Training Available: AEA has several training programs available for communities. 1.2 Community Description Hoonah is located on the northeast coast of Chichagof Island, 40 air miles west of Juneau. It lies at approximately 58.11° North Latitude and -135.44° West Longitude. (Sec. 28, T043S, R061E, Copper River Meridian.) The area encompasses 6.6 sq. miles of land and 2.1 sq. miles of water. Hoonah's maritime climate is characterized by cool summers and mild winters. Summer temperatures average 52 to 63; winter temperatures average from 26 to 39. Temperature extremes have been recorded from -25 to 87. Annual precipitation averages 100 inches, with 71 inches of snowfall. The population was estimated at 861 residents in 2005. Local governments include a first class city and an IRA council. Hoonah is located in the Sitka Recording District, the Hoonah City School District, and the Sealaska Regional Native Corporation but is not within an organized borough. LOCATION MAP Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 3 1.3 Site Investigation On Thursday October 19 and 20, 2006, David Lockard of the Alaska Energy Authority / Rural Energy Group (AEA/REG) and John Dickerson of Alaska Energy and Engineering (AE&E) traveled to Hoonah. The purpose of this site visit was to meet with local officials as well as representatives of local and regional organizations to identify and discuss potential energy infrastructure projects within the community as well as to gather reconnaissance level information for preparation of a Conceptual Design Report (CDR) for any identified energy infrastructure projects. In addition to the field investigations, available information was obtained and analyzed from the following sources: • Gartina Creek Project Reconnaissance Report, Harza Engineering, 1979 • Concept Review Report, Gartina Creek Hydroelectric Project, HDR, 1998 • Reconnaissance of Three Potential Hydroelectric Sites Near Hoonah Alaska, Hydro West Group, LLC, 2002 • Gartina Creek Hydrology & Power spreadsheet, AP&T, 2002 • Comprehensive Renewable Energy Feasibility Study for Sealaska Corporation, Springtyme Company, LLC, 2005 • Hoonah Power Cost Equalization (PCE) fuel use data, FY2005-2007 • Hoonah Power Plant SCADA system data, IPEC, 2005-2007 • AEA Rural Utility Circuit Rider Field Trip Report • Other relevant data. Additional information and input was obtained from the following individuals: • Windy Skaflestad, Mayor, City of Hoonah 945-3633 • David Richards, Administrator, City of Hoonah 945-3663 • Jan Supler, Vice President Retail Operations, Wards Cove (206) 323-3200 • Steve Brown, General Manager, Hoonah Trading 945-3211 • Tim McLeod, General Manager, AEL&P 463-6317 • Corry Hildenbrand, Energy Resource Developer, AEL&P 463-6317 • Jody Mitchell, General Manager, IPEC 789-3196 • Keith Berggren, Generation Manager, IPEC 789-3196 • Peter Bibb, Distribution Manager, IPEC 789-3196 • Bob Butera, P.E., HDR 644-2000 • Larry Coupe, P.E., AP&T (360) 385-1733 1.4 Code Analysis & Deficiencies The following is a summary of existing power plant code analysis and deficiencies observed during the site investigations. • Poor site drainage at existing power plant building causing seasonal flooding. • Antiquated / inefficient diesel genset #1 – expensive to maintain and operate. • Extremely high hours on gensets #2 & #3 – due for replacement soon. • Manual paralleling switchgear only. Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 4 • Exposed interior vinyl-encased fiberglass batt insulation absorbs oil vapors, is difficult to clean and is a potential fire hazard. • No operational fire suppression system • Power plant building previously incurred severe fire damage The concept design for all energy projects have been prepared to meet current code and regulatory requirements, which include: • The 2006 Edition of the International Building Code (IBC). • The 2006 Edition of the International Fire Code (IFC) and currently adopted Alaska State Fire Marshal Fire and Safety Regulations. • The 2006 Edition of the National Electrical Code (NEC). • The 2006 Edition of the National Electrical Safety Code (NESC). • 40 CFR, Part 112.1-12, U.S. Environmental Protection Agency Spill Prevention Requirements 2.0 EXISTING FACILITIES The existing power plant and electrical distribution system were visually examined to determine suitability for re-use. The following paragraphs summarize findings for the community. 2.1 Power Plant The IPEC (originally THREA) power plant was constructed in 1977 and was partially renovated after a fire in 1990. It is located on the eastern edge of town at the intersection of Gartina Highway and White Alice Site Road. The building is a 40'Wx100'L metal-sided, pre-engineered steel frame structure that houses three generators, an office and a warehouse. The interior walls are covered with painted plywood up to a height of 8' with vinyl-encased fiberglass batt insulation exposed above and across the ceiling. The exterior metal siding is in fair condition but the exterior paint is in very poor condition and is peeling badly. The concrete foundation, steel frame members and horizontal steel girts appear to be in fair condition. According to the operator, the finish grade around the plant does not drain well and the plant is prone to flooding, especially during spring breakup. Previous attempts at grading the site to improve drainage have been thwarted by the shallow bedrock associated with the rock quarry bottom on which the plant was built. There are three Caterpillar generators currently installed in the power plant. Unit #1 is a model 398 with a capacity of 600kW at 1,200RPM. The 398 is an antiquated pre-combustion design with poor fuel economy and increasingly difficult availability of parts. This unit is used for emergency backup only and is slated for replacement. Unit #2 is a model 3512 with a prime capacity of 1,100kW at 1,200RPM. Unit #3 is a model 3512 with a prime capacity of 855kW at 1,200RPM. Units #2 and #3 each have approximately 75,000 total engine hours. Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 5 Engine cooling is with three remote radiators located outside at the front of the power plant. Each generator is on a stand-alone cooling system with one radiator. There is currently no generation heat recovery equipment installed. Station service is provided by a metered 480V three phase load center as well as an un-metered 120/208V three phase load center. The 5kV manual paralleling switchgear was installed new in 1990 after a fire in the power plant damaged the existing switchgear and one of the generators. The switchgear includes a section for each of the three generators and a feeder/station service section. 2.2 Power Distribution Power generation is currently at 4160V 3-phase and distribution is at 7200/12.47kV 3-phase. There are two separate community feeders with a 750kVA bank of pole-mounted transformers feeding the community grid to the east of the power plant and a 750kVA pad-mount step-up transformer feeding the community grid to the west of the power plant. The transformers and main community feeder pole are located within the fenced area adjacent to the power plant. These transformers appear to be original equipment with visible surface rust and are probably due for replacement. Overall, the community overhead distribution system is in good condition and no other distribution deficiencies were identified. 3.0 COMMUNITY POWER DEMAND Power consumption data was obtained from the Power Cost Equalization (PCE) program and from the IPEC SCADA system for fiscal years 2005 through 2007. Graphs are included in Appendix D. During these years total annual generation ranged between 5.1 and 5.5 million kWhrs with an average annual load of between 607kW and 628kW. Annual fuel consumption averaged 366,000 gallons. According to the SCADA data daily peak demand in FY 2007 ranged from a low of 832kW to a high of 920kW. Daily minimum (nighttime) loads in FY 2007 ranged between 340kW and 460kW. Monthly and peak data were not available for FY 2008 from either source. According to available PCE data, total annual generation for FY 2008 was 5.0 million kWhrs. 3.1 Estimated Future Load Growth It is important to evaluate the impact of planned infrastructure improvement projects on an existing power generation system. New construction and other community improvements can adversely impact the adequacy of existing facilities. Steady growth in Hoonah's summer peak loads and annual generation are likely over time due to expected increases in tourism, a planned new subdivision development and possible increases in the local wood processing industry. It is possible that annual generation requirements could grow to over 6,000,000kWH and peak demand loads could reach 1,000kW within five years. 3.2 Alternative Energy / Efficiency Improvements Careful sizing and selection of new generators with advanced technology in conjunction with the installation of new fully automatic paralleling switchgear and Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 6 a continuous off-line engine preheat system will maximize the fuel efficiency of the new diesel power plant. An analysis of four potential hydroelectric projects is included in Section 4.2. Analysis of a potential energy recovery/district heating project is included in Section 4.3. Used motor oil from a variety of sources including the power plant is currently used for space heating at the City shop building. The Alaska Energy Authority/Alaska Industrial Development and Export Authority published a draft Rural Alaska Energy Plan dated December 31, 2002 as a follow-up report to the previously released Screening Report of Alaska Rural Energy Plan dated April 2001. The Screening Report evaluated a dozen alternative energy technologies other than diesel engine heat recovery. Only wind energy was identified as alternative energy technology warranting further evaluation in the draft Rural Alaska Energy Plan. According to the Wind Energy Resource Atlas of the United States the community of Hoonah is located within a class 3 wind regime and is not a viable candidate for a wind energy program using currently available technologies. There are no other known practical energy sources, such as solid fuel or natural gas, currently available at Hoonah. At this time, it appears that supplemental hydroelectric generation, generation heat recovery and possibly additional end- use conservation are the only viable fuel-saving technologies available for Hoonah. 4.0 PROPOSED ENERGY INFRASTRUCTURE PROJECT DESCRIPTIONS The following proposed facility descriptions are separated into three sections: • Section 4.1, "Diesel Power Plant Replacement" describes the proposed construction of a new IPEC diesel power plant including a new building new and refurbished generation equipment, switchgear, and controls. • Section 4.2, "Potential Hydroelectric Projects", describes three potential local hydroelectric projects located near Hoonah. It also describes a potential excess hydroelectric energy recovery system. • Section 4.3, "Diesel Generation Heat Recovery System", describes a potential generation heat recovery project serving the school complex and other community buildings. 4.1 Diesel Power Plant Replacement Historically, the IPEC power plant has been the sole source of power generation for Hoonah and it will likely continue to be the prime power source even if hydroelectric or other alternative energy projects are developed. Due to the age, condition and drainage issues of the existing building as well as the total hours on the existing generators and equipment, the power plant should be replaced. Keeping the existing plant on-line during construction of the new plant will provide power to the community and will eliminate the project cost of providing temporary power during construction. The new power plant building Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 7 will be a pre-engineered metal building with concrete slab-on-grade foundation co-located on the same lot and approximately 50 feet southwest of the existing power plant. The operator’s room, switchgear room, and bathroom will be located in the north end of the building. Radiators will be located on the west side of the building beneath a covered area. An area site plan, power plant floor plan and typical section are provided in Appendix A. The following proposed items will modernize the power plant and the reliability, fire prevention/protection, noise control, and operations of the electric utility: • Provide new electronically controlled diesel-generating units. • Provide new automatic paralleling switchgear and SCADA system with load sharing/control capabilities for possible integration of hydroelectric generation. • Provide critical grade silencers on all generators. • Provide sound-insulated air intake and exhaust fan ducting. • Provide new radiators with variable speed motor controls. • Provide heat recovery / engine cooling system. • Provide redundant generator cooling systems to enhance plant reliability. • Provide fire suppression system. • Provide sound insulated control room. A new code compliant 12,000-gallon double wall day tank with overfill protection was installed in 2007 and will be used at the new plant. 4.1.1 Generator Selection IPEC was recently notified that the have been awarded an RUS grant of approximately $735,000 for purchase of a new generator for the Hoonah power plant. It is our recommendation to apply these funds to the installation of a new Caterpillar 3512C generator. If funding is available for spring 2010 construction it would be most cost effective to install this unit directly into the new IPEC Hoonah power plant. These grant funds could be considered a like-kind contribution by IPEC to the RPSU project. Proper sizing and selection of the diesel generators is critical to meet the electric loads while minimizing fuel consumption. To meet the anticipated future electric demands and to optimize the use of future hydroelectric power (if constructed), the new diesel power plant will be equipped with four diesel generators. Based on the projected loads the following generating units have been selected: • Unit No. 1: 550 kW, Caterpillar C18 Marine (new) • Unit No. 2: 550 kW, Caterpillar C18 Marine (new) • Unit No. 3: 1000 kW, Caterpillar 3512C (new RUS funded unit) • Unit No. 4: 1000 kW, Caterpillar 3512 (best unit from old power plant) Benefits of this new generator combination include: • Provides adequate capacity to meet current and future peak loads. Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 8 • Units #1 or #2 will operate efficiently for nighttime loads as well as operating efficiently in parallel with potential future hydroelectric. • Units #1 and #2 in parallel will meet present and near future peak loads. • Units #1 and #2 produce recoverable heat due to wet manifolds. • Units #2 or #3 are both capable of independently meeting the present and near term peak load. • Any combination of generators can be operated in parallel to meet high future peak loads. • Commonality of parts between units. 4.1.2 Switchgear & SCADA The switchgear will be metal-clad switchgear with draw-out vacuum circuit breakers consisting of six separate 36” wide sections. There will be one section for each of the four generating units. The upper compartment will house the generator controls and relays and the lower compartment will house the vacuum breaker. There will be one separate section for the two feeders with the feeder breakers “stacked”. There will also be one separate master section with the master controls and metering. The new switchgear will provide automatic paralleling and load control of the four generating units. The load control system will monitor the electrical demand on the generators and provide automatic selection of the most efficient generating unit or combination of generating units to meet the demand. The switchgear will automatically start the most suitable engine, bring it up to speed, automatically synchronize the unit, and close the engine circuit breaker. When a unit is taken off line, either for maintenance or due to a reduction in electric load, the switchgear will automatically remove the unit from the bus and allow the engine to cool down before shutdown. Generator controls and relaying will provide complete protection and monitoring of each engine and generator. The new switchgear controls and distribution connection will be designed for incorporation and communication with any future alternative energy sources. IPEC has recently standardized on a common utility supervisory control and data acquisition (SCADA) system for all of its facilities. The new switchgear will include the IPEC standard SCADA system for generation and distribution monitoring. A desktop PC will be provided in the new plant operator’s office to allow operator access and control of the different systems. Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 9 4.1.3 Power Plant Fuel System Based on historic fuel use and estimated future electric loads, it is proposed that the power plant fuel storage system provide a nominal 7-day fuel supply based on the following: HOONAH POWER FUEL CONSUMPTION Current Average Daily Use for Peak Month in Gallons (1) 1,200 Current Peak 7 Day Use in Gallons (1) 8,400 Approximate Net Usable Capacity of 12,000 Gallon Day Tank (2) 10,000 (1) From Hoonah Power FY07 PCE data – peak month August. (2) 90% Maximum Fill, 12" Minimum Fuel Level. The existing 12,000-gallon double wall day tank, piping and appurtenances, installed new in summer 2007, will be reused for the new power plant. The day tank is a shop built double wall, horizontal, welded steel tank built and labeled in accordance with UL 142 and equipped with steel saddles and skids. The tank is equipped to comply with EPA requirements for redundant overfill protection for alternative secondary containment systems, and is equipped with a fill limiter, clock gauge, gauge hatch, pressure vacuum whistle vent, and emergency venting. The tank is top filled and equipped with a ground-level quick connect and spill catch basin. The tank will be truck filled from the Wards Cove tank farm typically once per week. All piping will be schedule 80 steel. Each isolated section of piping will be provided with pressure relieving devices to account for thermal expansion of product caused by temperature fluctuations. Provisions for movement of the piping caused by thermal expansion and contraction will be included. All valves will be steel body industrial grade valves intended for use with fuels. The new power plant, tanks, and piping will be enclosed within a chain link fence with barbed wire top. Two each three foot wide man gates will be provided for ingress and egress. 4.2 Potential Hydroelectric Projects In June, 2002, Larry Coupe, P.E. of HydroWest Group, LLC, a subsidiary of AP&T, published a report titled "Reconnaissance of Three Potential Hydroelectric Sites Near Hoonah, Alaska". This report was commissioned by the City of Hoonah and is included in Appendix F of this report. It was preceded by a previous study titled "Gartina Creek Project - A Reconnaissance Report" performed in 1979 by Harza Engineering for the Alaska Power Authority. A review and update of the 1979 report titled "Concept Review Report, Gartina Creek Hydroelectric Project" was performed in 1998 by HDR for the City of Hoonah. The three hydroelectric prospects included in the 2002 HydroWest report are identified as Gartina Creek, Water Supply Creek and Elephant Falls. Water Supply Creek and Elephant Falls are both tributaries of Gartina Creek. All flow data for these three drainages is transposed from the stream gage records of the Kadashan River drainage near Tenakee which is very similar in geology, precipitation, orientation and elevation to the three Hoonah sites. Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 10 All available data regarding these potential hydroelectric projects, including the mentioned reports, was forwarded to hydroelectric generation specialist Bob Butera, P.E. at HDR, Inc. Mr. Butera was tasked with analyzing the information along with available stream data and providing a cursory opinion on the feasibility, constructability and reliability for each of the proposed projects. He was also tasked with providing an updated and inflation adjusted cursory budgetary cost estimate for the hydroelectric projects. The HDR, Inc. analyses and revised 2009 cost estimates are included in Appendix E of this report. After analyzing the reconnaissance studies and the HDR report, another potential hydroelectric project was identified. The new project is a combination of Gartina and Water Supply projects described in the 2002 HydroWest report with additional modifications. Larry Coupe of AP&T performed an analysis and cost estimate of this potential project in May, 2009. His report titled “Supplement to the June 2002 Hydroelectric Study” is included in Appendix G of this report. The following sections contain a cursory description of the three potential hydroelectric projects identified as the most feasible and cost effective to construct. The Elephant Falls site mentioned in the HydroWest report is not being considered for development at this time primarily due to the fact that it is located in the Tongass National Forest. This would require a land swap with the federal government and necessitate FERC licensing, both of which would add delay and cost to the project. 4.2.1 Gartina Creek The Gartina Creek project as described in the 2002 HydroWest report consists of the following components: • A fifteen feet high concrete and rockfill diversion dam. • A concrete intake structure and sluiceway • A 54-inch diameter steel pipeline approximately 200 feet long from the intake structure to the powerhouse. • A 20'x20'x25' high two level reinforced concrete powerhouse • A single turbine with 600kW three-phase generator. • Programmable automatic paralleling switchgear with remote control and unattended operation capability. • A pad-mount disconnect switch and step-up transformer bank adjacent to the powerhouse. • Approximately four miles of 12.5kV three-phase overhead transmission line to an interconnection near the Hoonah airport. • An approximately 0.3 mile long access road to the intake structure and powerhouse from an existing Forest Service road. • The Gartina Creek site is estimated to have an average annual flow of around 66 CFS, a maximum divertible flow of 140 CFS and a net head of 61 feet. Using a flow-duration method, the maximum potential annual generation of Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 11 this site was estimated in the HydroWest report to be 1,880,000kWH. The estimated construction cost for the Gartina Creek site is $5.63 million based on 2012 construction. See “Hoonah Hydroelectric Study Review”, Appendix E and “2002 Reconnaissance of Three Potential Hydro Sites Near Hoonah”, Appendix F for a more detailed analysis of this potential hydroelectric project. 4.2.2 Water Supply Creek The Water Supply Creek project as described in the 2002 HydroWest report consists of the following components: • An eight feet high concrete and rockfill diversion dam. • A concrete intake and sluiceway • A 5,500 feet long combination 24" diameter HDPE and 20" diameter steel pipeline from the intake structure to the powerhouse. • A 20'x40'x15' high single story pre-engineered metal building powerhouse. • A single turbine with 600kW three-phase generator. • Programmable automatic paralleling switchgear with remote control and unattended operation capability. • A pad-mount disconnect switch and step-up transformer bank adjacent to the powerhouse. • Approximately four miles of 12.5kV three-phase overhead transmission line to an interconnection near the Hoonah airport. • An approximately 0.25 mile long access road to the intake structure and powerhouse from an existing Forest Service road. • The Water Supply Creek site is estimated to have an average annual flow of around 9 CFS, a maximum divertible flow of 20 CFS and a net head of 400 feet. Using a flow-duration method, the maximum potential annual generation of this site was estimated in the HydroWest report to be 1,820,000kWH. The estimated construction cost for the Water Supply Creek site is $4.83 million based on 2012 construction. See “Hoonah Hydroelectric Study Review”, Appendix E and “2002 Reconnaissance of Three Potential Hydro Site Near Hoonah”, Appendix F for a more detailed analysis of this potential hydroelectric project. 4.2.3 Combined Gartina Creek and Water Supply Creek The Combined Gartina Creek and Water Supply Creek (Combined G&WS) project as described in the Supplement to the June 2002 Hydroelectric Study consists of the following components: • The diversion dam and intake structure for Water Supply Creek as previously described. • The pipeline/penstock for Water Supply creek as previously described except extended 3,200 feet to the Gartina Creek powerhouse. Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 12 • The diversion dam and intake structure for Gartina Creek as previously described. • The penstock for Gartina Creek as previously described except downsized to 48” diameter. • The powerhouse for Gartina Creek as previously described except enlarged to house the turbine and control system for Water Supply Creek. • An Ossberger-type impulse turbine for Gartina Creek as previously described except down-sized to 500kW. • A twin-jet Pelton unit for Water Supply Creek as previously described except increased to a capacity of approximately 800kW. • The rock weir and diffuser tailrace as previously described for Gartina Creek. • The substation and transmission line as previously described for Gartina Creek except upgraded for the increased generating capacity. • Access roads as previously described for Gartina Creek and Water Supply Creek except for the elimination of the Water Supply powerhouse access road. • A 13kW energy recovery turbine at the City water tap on the Water Supply penstock. • The Gartina component is estimated to have an average annual flow of around 55 CFS, a maximum divertible flow of 120 CFS, a net head of 61 feet and annual potential generation of 1,758,000kWhrs. The Water Supply component is estimated to have an average annual flow of around 9 CFS, a maximum divertible flow of 20 CFS, a net head of 581 feet (to be verified) and annual potential generation of 2,476,000kWhrs. The maximum potential annual generation of the combined G&WS project was estimated to be 4,344,000kWH, including 110,000kWhrs from the city water connection energy recovery turbine. The estimated construction cost for the combined G&WS project is $8.95 million based on 2012 construction. See “Supplement to June 2002 Study”, Appendix G and “2002 Reconnaissance of Three Potential Hydro Site Near Hoonah”, Appendix F for a more detailed analysis of this potential hydroelectric project. 4.2.4 Hydroelectric Power Utilization The design output for proposed hydroelectric installations must be compared to actual community demand curves in order to determine the percent of potential hydroelectric power that can be utilized. Community load profile data from the IPEC power plant SCADA system was provided to AP&T in order to make this determination for the various proposed projects. The design hydroelectric output was compared against actual demand curves at 1% incremental values (10,000 comparisons per month). See “Supplement to the June 2002 Hydroelectric Study”, Appendix G for a more complete description of the methodology used. The comparison of design output to community load profile verified the assumptions in the 2002 report that virtually all of the potential generation from Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 13 either Gartina Creek (1,880,000kWhrs) or Water Supply Creek (1,820,000kWhrs) would be utilized if only one of these projects were constructed. The combined Gartina & Water Supply design output was also incrementally compared to the community demand curves. The result of that comparison shows an annual utilization of 3,009,000kWhrs or 71.7% of the 4,334,000kWhr total potential generation. This leaves an un-used annual excess hydroelectric capacity of approximately 1,331,000kWhrs. A portion of the excess hydroelectric generation potential can be utilized to offset heating fuel use by installing an electric boiler in the power house and feeding the electrically heated water into the proposed diesel heat recovery system (see Section 4.3 below). The boiler would be controlled by the switchgear PLC and would come on only when excess hydroelectric generation was available. An analysis of excess hydroelectric energy recovery in conjunction with the combined Gartina & Water Supply project was conducted as part of the Hoonah Energy Recovery Worksheet, Appendix H. This analysis assumes that the swimming pool/gymnasium, high school, elementary school, fire hall, senior center, senior apartments, and clinic are connected to the proposed diesel generation heat recovery system. This electric boiler installation also enables enhanced control of the hydroelectric system during transfers of load from hydroelectric to diesel generation. The following table summarizes hydroelectric utilization and excess hydroelectric energy recovery for the proposed projects: HYDROELECTRIC UTILIZATION & EXCESS HYDRO ENERGY RECOVERY Potential Annual Hydroelectric Generation, kWH Hydroelectric Generation Utilized Annually, kWH Heating Fuel Offset By Excess Hydro Energy Recovery, Gallons/Yr Percent of Annual Diesel Generation Offset Annually (1) Gartina Creek 1,820,000 1,820,000 0 34.5% Water Supply Creek 1,880,000 1,880,000 0 35.7% Combined G&WS 4,344,000 3,009,000 0 57.1% Combined G&WS With Excess Hydroelectric Energy Recovery 4,344,000 3,514,000 12,000 --- (1) Assuming Average Annual Community Generation of 5,270,000kWhrs Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 14 4.2.5 Permitting The HydroWest report addresses permitting issues for each of these sites. The Gartina Creek and Water Supply Creek projects would fall under the State of Alaska small hydroelectric project exemption from Federal Energy Regulatory Commission (FERC) jurisdiction. The HydroWest report also addresses environmental issues for each of these sites. The primary environmental concern is the possible impact on anadromous and resident fish populations due to reduced in-stream flows between the intake structure and the power house. Because Water Supply Creek is located above Gartina Falls, no anadromous fish will be present and only resident fish populations are of concern. The bypassed reach of stream for the Gartina Creek project does include salmon pools at the base of the falls. This could result in increased bypass flow requirements or significant increases in construction costs. 4.3 Diesel Generation Heat Recovery An analysis of available diesel heat recovery was conducted for the various proposed projects as part of the Hoonah Energy Recovery Worksheet, Appendix H. The proposed diesel heat recovery project consists of the following components: • Heat recovery supply and return buried arctic pipe (approximately 6,500 feet total of 4” diameter piping) located along Douglas Drive between the IPEC power plant and the school complex. • Heating connections to the swimming pool/gymnasium, school classroom building, fire hall, senior center, senior apartments, and clinic. These six public facilities use approximately 60,000 gallons of diesel annually for space and water heating • Six port heat exchanger, pumps and associated equipment in power plant. • Recovered heat BTU meter in the power plant. • Individual heat exchangers and associated equipment in each of the six identified facilities’ boiler rooms. • Alarms for loss of flow, loss of pressure, and no load/backfeed condition with annunciation in the power plant switchgear. An overall area site plan showing the proposed heat recovery pipeline routing is provided in Appendix A. Appendix H, Graph 1 shows the estimated annual and monthly heating fuel saved by including diesel heat recovery in the various proposed projects. The following table lists the estimated diesel heat recovery heating fuel offsets when coupled with the various proposed power generation projects: Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 15 DIESEL HEAT RECOVERY Heating Fuel Saved, Gallons/Yr Diesel Heat Recovery With No Hydro Installation 57,000 Diesel Heat Recovery with Gartina Creek Hydro Installation 46,000 Diesel Heat Recovery with Water Supply Creek Hydro Installation 46,000 Diesel Heat Recovery with Combined G&WS Hydro Installation 30,000 5.0 SITE SELECTION & CONTROL Work for this project will be performed in four general areas: (1) The “Power Plant Site”; (2) The "Hydroelectric Project Area"; (3) The “Hydroelectric Intertie Route”; and (4) The “Heat Recovery Pipeline Route”. There are no known flood hazards at any of these locations. 5.1 Power Plant Site The proposed new power plant site is within a potion of Lot 2, U.S. Survey No. 4539, near the existing power plant as shown in Appendix A, Sheet M3. The new power plant will be located approximately where the old abandoned IPEC tank farm currently sits. The abandoned tank farm will be demolished by others prior to the start of this project. The site will be leveled prior to construction of the power plant building. It is unknown if an environmental site assessment of the site will be required. See Appendix A, Sheet M3 5.2 Hydroelectric Project Area All three identified potential hydroelectric projects, including drainages, access roads, diversion dams and pipelines are located within an area encompassed by Sections 11, 12, 13 & 14 of Township 44 South, Range 61 East, Copper River Meridian. The proposed power house locations are all between three and four miles from the center of Hoonah. See Appendix A, Sheet M1 and Appendix F, Figures 1 & 3. 5.3 Hydroelectric Intertie Route The proposed overhead transmission intertie will be routed cross country along existing logging roads within Sections 34 and 35, Township 43 South, Range 61 East and Sections 2 and 11, Township 44 South, Range 61 East from the end of the existing overhead distribution system near the airport to the powerhouse sites. See Appendix A, Sheet M1 and Appendix F, Figures 1 & 3. Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 16 5.4 Heat Recovery Pipeline Route The proposed generation heat recovery pipeline mains are routed within the Douglas Drive and Hemlock Drive road right-of-ways. Branch pipelines to the senior housing complex and the clinic are within Lots 3 and 4 of Hillside Subdivision. The branch pipeline to the fire hall is within Lot 3 of U.S. Survey 4539. Branch pipelines to the school building and gymnasium/pool complex are within the school reserve parcel and Lot 9 of US Survey 736. See Appendix A, Sheet M2 5.5 Site Control A sight control opinion letter was written on February 18, 2008. A copy of the letter is included in Appendix C. The proposed new power plant site is vested in the City of Hoonah with a long tern lease to IPEC and a sublease of a portion of the site to the State of Alaska, Department of Military Affairs. According to the HydroWest report, the proposed hydroelectric project(s) area is vested in the Seaalaska Corporation. Ownership of the hydroelectric intertie route is currently unknown but it is expected that the City of Hoonah, the State of Alaska Department of Transportation and the Seaalaska Corporation are among the vested owners. The City of Hoonah has jurisdiction over the Douglas Drive and Hemlock Drive dedicated rights of way for the entire route of the buried heat recovery pipeline. The fire hall and clinic sites are vested in the City of Hoonah. The senior housing complex appears to be vested in the Tlingit-Haida Regional Housing Authority but further research will be required. The school/pool/gymnasium complex appears to be vested in the Presbytery of Alaska but further research will be required. 6.0 PERMITTING AND SPILL RESPONSE The proposed projects are subject to regulations of both State and Federal agencies including the Alaska Coastal Management Program, the Alaska Department of Environmental Conservation (ADEC), the Division of Fire Prevention, and the U.S. Environmental Protection Agency. 6.1 Environmental Assessment An Environmental Assessment (EA) will be completed prior to construction of the proposed projects. An EA is required for all projects that are federally funded or require a federal permit (such as a Corps of Engineers Wetlands Permit). The EA determines whether there is a significant impact to the environment caused by the project. As part of the EA, a Coastal Zone Management Project Questionnaire will be completed and submitted to the Alaska Coastal Management Program. The Coastal Zone Management Project Questionnaire helps to identify state or federal permits that may be required. Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 17 6.2 Fire Code A Plan Review permit from the State Fire Marshal is required for the proposed diesel and hydroelectric power plant projects. Final stamped design drawings will be submitted to the Fire Marshal for review prior to construction. Plans will be reviewed for conformance with the International Fire Code and related codes including the International Building Code and the National Electrical Code. The review process can take anywhere between 3 weeks to 6 months. 6.3 Spill Response Because the power plant day tank has oil storage tanks in excess of 1,320 gallons it is subject to U.S. Environmental Protection Agency regulations. The Spill Prevention Control and Countermeasures (SPCC) plan will be reviewed and updated as required as part of this project. 6.4 Air Quality Permit The existing plant operates under a Title V permit. A Title V permit is required for facilities with potential to emit >250tpy of hazardous air contaminants (NOx) and for Prevention of Significant Deterioration (PSD) facilities. The existing Hoonah power plant consumes more than 330,000-gallons but less than 825,000-gallons of diesel fuel annually, and therefore, does not emit >250tpy of NOx. As such, the Hoonah plant does not need to operate under a Title V permit. DEC has a General Permit that is intended for facilities that emit between 100 and 250tpy annually. The new power plant should be permitted as a GPA facility rather than a Title V facility. A GPA permit is less costly than a Title V permit and the operational requirements are less intrusive. The following actions are recommended: • Continue to operate the existing power plant under the existing Title V permit. • Apply for a Title I construction permit for the new power plant. • Apply for a GPA Operating Permit for the new plant. • Once the new plant is online and operational, and the old plant decommissioned, IPEC will notify DEC of the "shut down" and the existing Title V permit will be rescinded. 6.5 Hydroelectric Project Permitting In addition to the EA requirements listed above, the hydroelectric portion of this project will require the following separate permits/review process if built: • Alaska Department of Natural Resources o Water Rights Permit o Fish Habitat Permit o Coastal Zone Management Consistency Review Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 18 • Federal Energy Regulatory Commission (FERC) license or waiver • Site control permits and/or easements for access to the site(s) and for electric transmission line right of way. 7.0 CONSTRUCTION PLAN The AEA/REG has a history of administering similar projects on a "modified" force-account basis. Force-account construction involves the owner or grantee acting as the employer and utilizing primarily local labor. This method tends to achieve a higher percentage of local hire and is strongly supported by many communities and funding agencies. The highly technical nature of power generation and distribution projects requires a limited number of workers with specific experience and expertise to be brought in for the project when not available locally. All work must be supervised and managed by a superintendent with extensive experience in the construction of rural power generation and distribution systems. All specialty work, such as pipe welding and electrical installation must be performed by skilled craftsmen with appropriate certifications. An experienced construction manager will be required to recruit the necessary skilled labor, coordinate the construction team, and oversee procurement and project logistics. The design engineer will provide quality control through communication with the construction manager and periodic on-site inspections. The nature of the projects identified will allow most of the projects to be constructed independently from the other. The power plant, generation heat recovery system and hydroelectric projects are separate and will not necessarily need to be constructed using the same construction management teams. Because it will replace the existing power plant, the new power plant can be fully completed, tested and energized with minimal impact to the existing power system. There are at least two options for shipping project construction materials and equipment into Angoon: • Hoonah is on the Alaska Marine Highway (AMH) ferry system. Roll-on, roll- off containers not exceeding 40 feet in length and 13 feet 6 inches in height can be delivered by the ferry and off-loaded at the ferry dock. However, this option would require the project to procure the rolling stock and to pay full fair for the return leg of any empty trailers. • Alaska Marine Lines provides seasonal containerized freight service direct from Seattle to Hoonah. Freight is off-loaded with a large fork lift at the marine industrial center in the vicinity of the ferry dock. The cost estimate and the project schedule have been developed on this basis. Containers are available in 20, 24 and 40 foot lengths. Transporting the freight from the marine industrial center to the construction site is the responsibility of the project. IPEC has a tilt-bed winch trailer that would be available to the project. Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 19 7.1 Local Job Skills The City was not able to provide information regarding the availability of specialty skilled labor in Hoonah. Due to the relatively large population of this community it is likely that there are a number of local residents with specialty skills and general labor experience in various types of construction. It should be assumed that at a minimum a project superintendent, a pipe welder/mechanical foreman, a journeyman electrician, and a journeyman lineman will need to be brought into Hoonah for this project. 7.2 Local Equipment The City was not able to provide an inventory of locally available heavy equipment. Calls to local contractors confirmed that there is a considerable amount of heavy equipment in the community, including several 200 class excavators, small and medium sized dozers, a 25-ton track crane and 10 yard dump trucks. It is likely that a skid steer loader is the only piece of equipment that will need to be imported into Hoonah. Prior to the start of construction, an experienced fleet service mechanic will need to go through the equipment with a local mechanic to ensure the equipment is in proper operating condition. 7.3 Material Sources Gravel will be required for pad development and finish grading at the proposed diesel and hydroelectric power plant sites, for access roads to the hydroelectric sites, for bedding material for heat recovery arctic pipe and for concrete aggregate. There are stockpiles of blast material available in Hoonah. A small screen is available locally that is capable of producing relatively small quantities of structural fill as well as 1” minus gravel for arctic pipe bedding and finish grading. No concrete aggregate is available in large quantities locally and will need to be purchased in one yard super sacks and delivered to Hoonah by barge from Seattle or Juneau. 8.0 SCHEDULE The proposed project schedule is separated into two sections: Section 8.1, "Power Plant Replacement and Diesel Heat Recovery System Schedule"; and Section 8.2, "Hydroelectric Project Schedule". The schedules have been set to take advantage of the best seasonal weather for most work. All schedules are contingent on timely approval of the plan by all project participants and funding agencies. Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 20 8.1 Power Plant Replacement and Diesel Heat Recovery System Schedule The following schedule has been developed on the basis of performing the majority of the work on the power plant replacement and generation heat recovery project during Spring/Summer 2010. This schedule is contingent on approval of the plan by the project participants as well as on funding availability. • June-Nov 2009: Design, permitting, and site control. • Nov 2009 -Feb 2010: Order building, generators, switchgear, radiators, etc... • April 2010: Mobilization. • May-Dec 2010: Project construction. • Jan 2011: Project completion, power plant commissioning & operator training. • Feb 2011: O&M manuals and project close out. 8.2 Hydroelectric Project Schedule The following schedule has been developed on the basis of performing the majority of the work for the hydroelectric project during early spring through summer 2012. This schedule assumes only one of the three potential hydroelectric projects is funded and is contingent on timely approval of the plan by the project participants as well as on funding availability. • June 2009-July 2011: Stream gauging, design, permitting, and site control. • Aug 2011: Order turbine, switchgear, building materials, etc. • Feb 2012: Project mobilization, startup. • Mar-Nov 2012: Project construction. • Dec 2012: Project completion, commissioning & operator training. • Jan 2013: O&M manuals and project close out. 9.0 COST ESTIMATE The construction cost estimates have been developed based on a "modified" force-account approach utilizing a combination of local labor, certified craftsmen, and specialty sub-contractors under the direction of an experienced construction manager. Labor rates are based on Title 36 equivalent wages for certified specialty labor and prevailing local force-account wage rates for general labor and equipment operation. Hoonah Energy Projects June 1, 2009 Concept Design Report Alaska Energy and Engineering 21 Detailed cost estimates are included in Appendix B. Separate estimates have been prepared for the Power Plant Replacement, Heat Recovery System and each of the three potential hydroelectric projects. The estimated total project cost including all design, supervision, inspection, permitting, and a 15% contingency (power plant and heat recovery projects) or 25% to 33% contingency (hydroelectric projects) is: • $2,791,000 Power Plant Replacement (3,100kW @ $900/kW) • $905,000 Diesel Generation Heat Recovery System • $4,710,000 Gartina Creek Hydroelectric Project (600kW) • $4,078,000 Water Supply Creek Hydroelectric Project (600kW) • $8,645,000 Combined G & WS Hydroelectric Project (1,300kW) • $100,000 Excess Hydroelectric Energy Recovery System It is assumed that the operation and maintenance costs of hydroelectric power generation and energy recovery systems will be comparable to that for diesel generation. Therefore, the various project costs need to be compared to the primary benefit, which is the avoided fuel cost. The following table summarizes the avoided fuel costs and simple payback periods for the potential hydroelectric projects with and without energy recovery: AVOIDED FUEL COST & SIMPLE PAY BACK OF POTENTIAL PROJECTS Project Project Cost Annual Avoided Fuel, Gallons Annual Value of Avoided Fuel, $/Year (1) Simple Pay Back Period Fuel Cost Avoided Over 30 Years Excess Hydro ER $.10M 12,500 $62,000 1.6 yrs $1.88M Diesel HR $.91M 57,000 $285,000 3.2 yrs $8.55M Gartina Hydro $4.71M 130,000 $650,000 7.3 yrs $19.5M Gartina Hydro w/ Diesel HR $5.61M 176,000 $881,000 6.4 yrs $26.4M Water Supply Hydro $4.08M 134,000 $670,000 6.1 yrs $20.1M Water Supply Hydro w/ Diesel HR $4.98M 180,000 $900,000 5.5 yrs $27.0M Combined Hydro $8.65M 215,000 $1,075,000 8.0 yrs $32.2M Combined Hydro w/ DHR & EHER $9.65M 257,000 $1,285,000 7.5 yrs $38.5M 1) Based on an assumed future fuel cost of $5.00/Gallon APPENDIX A CONCEPT DESIGN DRAWINGS APPENDIX B CONSTRUCTION COST ESTIMATES ALASKA ENERGY ANDENGINEERINGHOONAH ENERGY PROJECTSDIESEL POWER PLANT COST ESTIMATE SUMMARY MAY 29, 2009CONCEPT DESIGN REPORTPOWER GENERATION UPGRADES $1,776,800MISCELLANEOUS $15,400OVERHEAD $146,858FREIGHT $95,880CONSTRUCTION SUB-TOTAL $2,034,938DESIGN AND CONSTRUCTION ADMIN. $200,000CONSTRUCTION MANAGEMENT $200,000PROJECT SUB-TOTAL $2,434,938CONTINGENCY $365,241 15 %TOTAL PROJECT COST (ROUNDED) $2,800,000TOTAL INSTALLED KW CAPACITY3,100 kWCOST PER KW OF INSTALLED CAPACITY $903B-1 ALASKA ENERGY ANDENGINEERINGHOONAH ENERGY PROJECTSDIESEL POWER PLANT COST ESTIMATEMAY 29, 2009CONCEPT DESIGN REPORTITEM QUAN UNIT UNIT MATLUNIT LAB LAB LABORCONTRFREIGHT TOTALUNIT TOTAL COST COST HRS HRS RATE COST COST COST COST WT WT(#)POWER GENERATION UPGRADESClear & Prep Site 1 lump $0 $0 250 250 $80 $20,000 $20,000 0Power Plant Foundation 125 cu.yd. $300 $37,500 4 500 $80 $40,000 $77,500 375,00044'x60' Metal Building 1 lump $150,000 $150,000 1000 1000 $80 $80,000 $230,000 43,000 43,000Water & Sewer Service to Bldg 1 lump $20,000 $20,000 200 200 $80 $16,000 $36,000 5,000 5,000Install Existing Cat 3512's 2 ea. $0 $5,000 200 400 $80 $32,000 $37,000 0550 kW Genset (Cat C18 Marine) 2 ea. $250,000 $500,000 120 240 $80 $19,200 $519,200 0125 VDC Battery Rack 1 ea. $15,000 $15,000 20 20 $80 $1,600 $16,600 5,000 5,000Switchgear 1 lump $250,000 $250,000 100 100 $80 $8,000 $258,000 30,000 30,0001000 kVA Step Up XFMR 2 ea. $30,000 $60,000 20 40 $80 $3,200 $63,200 14,000 28,00075 kVA Station Service XFMR 1 ea. $5,000 $5,000 10 10 $80 $800 $5,800 5,000 5,000Generation/Distribution Wiring 1 lump $20,000 $20,000 200 200 $80 $16,000 $36,000 5,000 5,000Fire Suppression 1 lump $100,000 $100,000 200 200 $80 $16,000 $116,000 2,000 2,000Ventilation 1 lump $30,000 $30,000 150 150 $80 $12,000 $42,000 3,000 3,000Radiators/Aftercoolers 6 ea. $20,000 $120,000 40 240 $80 $19,200 $139,200 3,000 18,000Engine Coolant Piping 1 lump $20,000 $20,000 250 250 $80 $20,000 $40,000 6,000 6,000Exhaust Silencers 3 ea. $5,000 $15,000 27 80 $80 $6,400 $21,400 500 1,500Exhaust Thimbles, Pipe, Etc 3 ea. $2,000 $6,000 27 80 $80 $6,400 $12,400 333 1,000Stn Service/Lighting/Wiring 1 lump $30,000 $30,000 240 240 $80 $19,200 $49,200 1,500 1,500Gen Fuel/Lube Oil Pipe & Fittings 1 lump $8,000 $8,000 60 60 $80 $4,800 $12,800 700 700Misc Strut, Hangers, Fasteners 1 lump $16,000 $16,000 80 80 $80 $6,400 $22,400 700 700Paint & Insulate Piping 1 lump $5,000 $5,000 60 60 $80 $4,800 $9,800 700 700Fill Coolant & Lube 1 lump $7,500 $7,500 60 60 $80 $4,800 $12,300 6,000 6,000MISCELLANEOUSSigns & Valve Tags 1 lump $1,000 $1,000 30 30 $80 $2,400 $3,400 100 100Misc Hardware 1 lump $2,000 $2,000 0 0 $80 $0 $2,000 500 500Misc Tools & Safety Gear 1 lump $5,000 $5,000 0 0 $80 $0 $5,000 500 500Welding Rod, Gases, Etc. 1 lump $5,000 $5,000 0 0 $80 $0 $5,000 1000 1000B-2 ALASKA ENERGY ANDENGINEERINGHOONAH ENERGY PROJECTSDIESEL POWER PLANT COST ESTIMATEMAY 29, 2009CONCEPT DESIGN REPORTITEM QUAN UNIT UNIT MATLUNIT LAB LAB LABORCONTRFREIGHT TOTALUNIT TOTAL COST COST HRS HRS RATE COST COST COST COST WT WT(#)OVERHEADAudit Grants 1 lump $6,000 $6,000ROW Legal Work 1 lump $5,000 $5,000 0Construction Insurance 1 lump $1,513 $1,513 0First Year Operation Insurance 1 lump $3,226 $3,226 0CM Prof. Liability Insurance 1 lump $4,450 $4,450 0Rent Heavy Equip 1 lump $20,000 $20,000 0Skid Steer Rent 6 mo. $12,000 $12,000 0Pickup Rent 6 mo. $3,600 $3,600 0Welder/Compr/Misc Tool Rent 1 lump $20,000 $20,000 0Project Diesel Fuel/Gasoline 1 lump $5,000 $5,000 0Load Test 40 hr 1 40 $90 $3,600 $3,600Commission/Train Operators 40 hr 1 40 $90 $3,600 $3,600Superintendent Overhd Off-Site 100 hr 1 100 $90 $9,000 $9,000Superintendent Overhd On-Site 100 hr 1 100 $90 $9,000 $9,000Crew Travel Time 120 hr 1 120 $90 $10,800 $10,800Crew Airfares 12 trips $10,800 $10,800Crew Per Diem 245 mn.dy $10,269 $10,269Housing Rent 6 mo. $9,000 $9,000FREIGHT539,200Barge Freight Seattle-Hoonah539200lb. $0.15 $80,880Misc Small Freight & Gold Streaks 1 lump $15,000 $15,000CONSTRUCTION SUB-TOTAL $1,433,000 4,890$395,200 $110,858$95,880 $2,034,938Engineering (Design & CCA) 1 lump$200,000Construction Management 1 lump$200,000PROJECT SUB-TOTAL $1,433,000$395,200 $510,858$95,880 $2,434,938Contingency15 %$365,241TOTAL PROJECT COST$2,800,178B-3 ALASKA ENERGY ANDENGINEERINGHOONAH ENERGY PROJECTSDIESEL HEAT RECOVERY SYSTEM COST ESTIMATE SUMMARY MAY 29, 2009CONCEPT DESIGN REPORTHEAT RECOVERY SYSTEM $494,200MISCELLANEOUS $101,900OVERHEAD $89,723FREIGHT $21,340CONSTRUCTION SUB-TOTAL $707,163DESIGN AND CONSTRUCTION ADMIN. $40,000CONSTRUCTION MANAGEMENT $40,000PROJECT SUB-TOTAL $787,163CONTINGENCY $118,074 15 %TOTAL PROJECT COST (ROUNDED) $905,000B-4 ALASKA ENERGY ANDENGINEERINGHOONAH ENERGY PROJECTSDIESEL HEAT RECOVERY SYSTEM COST ESTIMATEMAY 29, 2009CONCEPT DESIGN REPORTITEM QUAN UNIT UNIT MATLUNIT LAB LAB LABORCONTRFREIGHT TOTALUNIT TOTAL COST COST HRS HRS RATE COST COST COST COST WT WT(#)HEAT RECOVERY SYSTEMArctic Pipe & Fittings 6,500 ft. $45 $292,500 0.20 1300 $80 $104,000 $396,500 10 65,000PP Expansion Tank 1 lump $3,000 $3,000 10 10 $80 $800 $3,800 600 600PP Heat Exchanger 1 ea. $15,000 $15,000 80 80 $80 $6,400 $21,400 5,000 5,000PP HR Pumps, Piping & Devices 1 lump $15,000 $15,000 40 40 $80 $3,200 $18,200 800 800PP BTU Meter 1 ea. $4,500 $4,500 10 10 $80 $800 $5,300 100 100Secondary HX's, Piping & Devices 5 ea. $5,000 $25,000 60 300 $80 $24,000 $49,000 100 500MISCELLANEOUSContract Repair & Repave Roads 1 lump $0 $0 0 0 $80 $0 $75,000 $75,000 0 0Signs & Valve Tags 1 lump $2,000 $2,000 30 30 $80 $2,400 $4,400 100 100Misc Hardware 1 lump $5,000 $5,000 0 0 $80 $0 $5,000 500 500Misc Tools & Safety Gear 1 lump $7,500 $7,500 0 0 $80 $0 $7,500 500 500Welding Rod, Gases, Etc. 1 lump $10,000 $10,000 0 0 $80 $0 $10,000 2500 2500OVERHEADAudit Grants 1 lump $6,000 $6,000ROW Legal Work 1 lump $5,000 $5,000 0Construction Insurance 1 lump $1,513 $1,513 0CM Prof. Liability Insurance 1 lump $4,450 $4,450 0Heavy Equip Rent 1 lump $20,000 $20,000 0Skid Steer Rent 2 mo. $4,000 $4,000 0Pickup Rent 2 mo. $1,200 $1,200 0Welder/Compr/Misc Tool Rent 1 lump $20,000 $20,000 0Project Diesel Fuel/Gasoline 1 lump $5,000 $5,000 0Commission/Train Operators 20 hr 1 20 $90 $1,800 $1,800Superintendent Overhd Off-Site 40 hr 1 40 $90 $3,600 $3,600Superintendent Overhd On-Site 40 hr 1 40 $90 $3,600 $3,600Crew Travel Time 40 hr 1 40 $90 $3,600 $3,600Crew Airfares 4 trips $3,600 $3,600Crew Per Diem 80 mn.dy $3,360 $3,360Housing Rent 2 mo. $3,000 $3,000B-5 ALASKA ENERGY ANDENGINEERINGHOONAH ENERGY PROJECTSDIESEL HEAT RECOVERY SYSTEM COST ESTIMATEMAY 29, 2009CONCEPT DESIGN REPORTITEM QUAN UNIT UNIT MATLUNIT LAB LAB LABORCONTRFREIGHT TOTALUNIT TOTAL COST COST HRS HRS RATE COST COST COST COST WT WT(#)FREIGHT75,600Barge Freight Seattle-Hoonah 75600 lb. $0.15 $11,340 $11,340Misc Small Freight & Gold Streaks 1 lump $10,000 $10,000 $10,000CONSTRUCTION SUB-TOTAL $379,500 1,910 $154,200 $152,123 $21,340 $707,163Engineering (Design & CCA) 1 lump $40,000 $40,000Construction Management 1 lump $40,000 $40,000PROJECT SUB-TOTAL $379,500 $154,200 $232,123 $21,340 $787,163Contingency15 %$118,074TOTAL PROJECT COST$905,237B-6 ALASKA ENERGY ANDENGINEERINGHOONAH ENERGY PROJECTSGARTINA FALLS HYDROELECTRIC PROJECTCOST ESTIMATE SUMMARYMAY 29, 2009CONCEPT DESIGN REPORT1. ACCESS ROADS $89,0002. DIVERSION STRUCTURE $682,0003. POWER CONDUIT $203,0004. POWERHOUSE $1,116,0005. TRANSMISSION $341,0006. CONSTRUCTION SUB-TOTAL $2,431,0007. CONTINGENCY $608,000 25 %8. CONSTRUCTION + CONTINGENCIES $3,039,0009. DESIGN, SURVEYING, GEOTECHNICAL $455,850 15 %10. LISCENSING/PERMITTING $303,900 10 %11. CONSTRUCTION MANAGEMENT $151,950 5 %12. ESCALATION 2007 to 2012 (5 YR @ 5%/YR) $759,750 25 % See Note 213. CONSTRUCTION FINANCING (2 YR @ 10%/YR) $0 0 % See Note 314. TOTAL PROJECT COST (ROUNDED) $4,710,000Notes: 1. See Hydroelectric Analysis and Revised Cost Estimate, Appendix E for additional cost estimate information. 2. Cost Estimate in Appendix E prepared for 2007construction. This estimate assumes 2012 construction.3. Cost Estimate in Appendix E includes 2 years of conventional financing. This estimate assumes grant funding.B-7 ALASKA ENERGY ANDENGINEERINGHOONAH ENERGY PROJECTSWATER SUPPLY CREEK HYDROELECTRIC PROJECTCOST ESTIMATE SUMMARYMAY 29, 2009CONCEPT DESIGN REPORT1. ACCESS ROADS $74,0002. DIVERSION STRUCTURE $158,0003. POWER CONDUIT $614,0004. POWERHOUSE $910,0005. TRANSMISSION $349,0006. CONSTRUCTION SUB-TOTAL $2,105,0007. CONTINGENCY $526,000 25 %8. CONSTRUCTION + CONTINGENCIES $2,631,0009. DESIGN, SURVEYING, GEOTECHNICAL $394,650 15 %10. LISCENSING/PERMITTING $263,100 10 %11. CONSTRUCTION MANAGEMENT $131,550 5 %12. ESCALATION 2007 to 2012 (5 YR @ 5%/YR) $657,750 25 % See Note 213. CONSTRUCTION FINANCING (2 YR @ 10%/YR) $0 0 % See Note 314. TOTAL PROJECT COST (ROUNDED) $4,078,000Notes: 1. See Hydroelectric Analysis and Revised Cost Estimate, Appendix E for additional cost estimate information. 2. Cost Estimate in Appendix E prepared for 2007 construction. This estimate assumes 2012 construction.3. Cost Estimate in Appendix E includes 2 years of conventional financing. This estimate assumes grant funding.B-8 ALASKA ENERGY ANDENGINEERINGHOONAH ENERGY PROJECTSCOMBINED GARTINA WATER SUPPLY HYDROELECTRIC PROJECTCOST ESTIMATE SUMMARYMAY 29, 2009CONCEPT DESIGN REPORT1. ACCESS ROADS $172,0002. DIVERSION STRUCTURES $956,0003. POWER CONDUIT $1,636,0004. POWERHOUSE $2,027,0005. TRANSMISSION $409,0006. CONSTRUCTION SUB-TOTAL $5,200,0007. CONTINGENCY $1,300,000 25 %8. CONSTRUCTION + CONTINGENCIES $6,500,0009. DESIGN, SURVEYING, GEOTECHNICAL $195,000 15 %10. LISCENSING/PERMITTING $650,000 10 %11. CONSTRUCTION MANAGEMENT $325,000 5 %12. ESCALATION 2009 to 2012 (3 YR @ 5%/YR) $975,000 15 % See Note 213. CONSTRUCTION FINANCING $0 0 % See Note 314. TOTAL PROJECT COST (ROUNDED) $8,645,000Notes: 1. See Supplement to 2002 Hydroelectric Study, Appendix G for additional cost estimate information. 2. Cost Estimate in Appendix G prepared for 2009 construction. This estimate assumes 2012 construction.3. Cost Estimate in Appendix G includes 5% for conventional financing. This estimate assumes grant funding.B-9 ALASKA ENERGY ANDENGINEERINGHOONAH ENERGY PROJECTSEXCESS HYDRO ENERGY RECOVERY SYSTEM COST ESTIMATE SUMMARY MAY 29, 2009CONCEPT DESIGN REPORTELECTRIC BOILERS, EQUIPMENT & INSTALLATION $45,000CONTROLS $15,000OVERHEAD $5,000FREIGHT $2,000CONSTRUCTION SUB-TOTAL $67,000DESIGN AND CONSTRUCTION ADMIN. $10,000CONSTRUCTION MANAGEMENT $10,000PROJECT SUB-TOTAL $87,000CONTINGENCY $13,050 15 %TOTAL PROJECT COST (ROUNDED) $100,000Notes: 1. Assumes 2012 construction B-10 APPENDIX C SITE CONTROL DOCUMENTS APPENDIX D ELECTRICAL LOAD DATA HOONAH PCE DATA Community Fisc Month Fisc Year Month KWH Gen Fuel Used Avg Load (kW) Peak Load (kW) Efficiency (kWH/Gal Hoonah 1 2005 Jul 431,510 29,613 580 852 14.6 Hoonah 2 2005 Aug 443,879 30,904 597 824 14.4 Hoonah 3 2005 Sep 458,899 31,698 637 864 14.5 Hoonah 4 2005 Oct 418,215 28,976 562 820 14.4 Hoonah 5 2005 Nov 474,663 32,163 659 856 14.8 Hoonah 6 2005 Dec 443,462 30,080 596 900 14.7 Hoonah 7 2005 Jan 509,111 37,191 684 892 13.7 Hoonah 8 2005 Feb 443,292 28,562 660 864 15.5 Hoonah 9 2005 Mar 435,346 27,689 585 780 15.7 Hoonah 10 2005 Apr 430,065 26,805 597 812 16.0 Hoonah 11 2005 May 415,703 29,295 559 760 14.2 Hoonah 12 2005 Jun 414,147 28,712 575 800 14.4 ANNUAL TOTALS / AVERAGES 5318292 361688 607 835 14.7 Hoonah 1 2006 Jul 398,400 27,697 535 824 14.4 Hoonah 2 2006 Aug 462,325 31,378 621 848 14.7 Hoonah 3 2006 Sep 426,332 29,277 592 880 14.6 Hoonah 4 2006 Oct 449,975 28,112 605 776 16.0 Hoonah 5 2006 Nov 418,601 31,694 581 840 13.2 Hoonah 6 2006 Dec 424,994 29,126 571 832 14.6 Hoonah 7 2006 Jan 433,294 29,834 582 820 14.5 Hoonah 8 2006 Feb 444,085 30,063 661 868 14.8 Hoonah 9 2006 Mar 421,673 29,040 567 880 14.5 Hoonah 10 2006 Apr 434,842 30,189 604 740 14.4 Hoonah 11 2006 May 393,336 26,959 529 780 14.6 Hoonah 12 2006 Jun 396,675 32,277 551 800 12.3 ANNUAL TOTALS / AVERAGES 5104532 355646 583 824 14.4 Hoonah 1 2007 Jul 392,585 27,065 528 884 14.5 Hoonah 2 2007 Aug 530,755 36,045 713 900 14.7 Hoonah 3 2007 Sep 476,422 34,966 662 944 13.6 Hoonah 4 2007 Oct 472,728 33,067 635 832 14.3 Hoonah 5 2007 Nov 466,555 31,813 648 920 14.7 Hoonah 6 2007 Dec 483,615 31,399 650 860 15.4 Hoonah 7 2007 Jan 457,170 34,274 614 860 13.3 Hoonah 8 2007 Feb 423,287 28,510 630 876 14.8 Hoonah 9 2007 Mar 474,803 34,546 638 864 13.7 Hoonah 10 2007 Apr 454,991 30,333 632 796 15.0 Hoonah 11 2007 May 422,790 28,609 568 844 14.8 Hoonah 12 2007 Jun 444,061 29,543 617 832 15.0 ANNUAL TOTALS / AVERAGES 5499762 380170 628 868 14.5 D-1 D-2Hoonah Monthly kWH Generated 0100,000200,000300,000400,000500,000600,000Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May JunMonthkWH Generated200520062007 D-3Hoonah Peak kW Load01002003004005006007008009001000Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May JunMonthkW200520062007 D-4Hoonah Average kW Load0100200300400500600700800Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May JunMonthkW200520062007 D-5Hoonah Annual kWH Generated01,000,0002,000,0003,000,0004,000,0005,000,0006,000,0002005 2006 2007YearkWH APPENDIX E 2007 HYDROELECTRIC ANALYSIS AND REVISED COST ESTIMATE BY HDR, INC. HDR Alaska, Inc. 2525 C Street Suite 305 Anchorage, AK 99503 Phone (907) 644-2000 Fax (907) 644-2022 www.hdrinc.com Page 1 of 4 Memo To: Steve Stassel, AE&E From: Bob Butera, HDR Project: Hoonah Hydroelectric Study Review, Hoonah RPSU CDR-106 FINAL CC: Date: November 8, 2007 Job No: 201662/61482 Introduction A 2002 hydroelectric study by HydroWest Group, LLC (HydroWest) titled "Reconnaissance of Three Potential Hydroelectric Sites near Hoonah, Alaska" analyzed the feasibility of a 3 separate hydroelectric projects for the community of Hoonah. Alaska Energy and Engineering (AE&E) requested HDR Alaska, Inc. (HDR) to: 1. Review report and assess feasibility of proposed development of the three sites based on the included hydrology, power calculations, permitting requirements and conclusions/recommendations. 2. Review construction cost estimates for each of the three identified projects. Provide opinion of constructability and recommended improvements to proposed construction. Update construction costs as necessary to reflect hard-dollar bid with bonding and prevailing wage rates. Cost estimate to be escalated for construction in 2009. Background The HydroWest report analyzed the feasibility of a 3 separate hydroelectric projects for the community of Hoonah. Table 1 summarizes information on these three sites which was presented in the HydroWest report. Table 1 – Summary of Proposed Projects Gartina Falls Water Supply Creek Elephant Falls Location At 50 foot falls, 3 miles upstream from tidewater. Tributary of Gartina Creek Tributary of Gartina Creek Drainage Area 10.1 square miles 1.39 square miles 0.66 square miles Land Ownership Sealaska Corporation Sealaska Corporation US Forest Service Diversion Elevation 200 feet 800 feet 1100 feet Dam Height 15 feet 8 feet 8 feet Capacity 600 kW 600 kW 600 kW Net Head 61 feet 400 feet 800 feet Design Flow 140 cfs 20 cfs 9.3 cfs Penstock Diameter 54 inches 24/20 inches 18/15 inches Penstock Length, Type 200 feet 5500 feet, HDPE/steel 3900 feet, HDPE/steel Turbine Type Ossberger impulse Turgo or Ossberger or Pelton Turgo or Ossberger or Pelton Transmission Line 4 miles, 12.5 kV, OHE 4 miles, 12.5 kV, OHE 4 miles, 12.5 kV, OHE Access roads 0.3 miles 0.25 miles 2.2 miles Average annual generation (assumes 0 instream flow requirement) 1,880 MWh 1,820 MWh 1,780 MWh 2002 Estimated Construction Cost $3,271,000 (2002 Dollars) $2,786,000 (2002 Dollars) $3,337,000 (2002 Dollars) HDR Alaska, Inc. 2525 C Street Suite 305 Anchorage, AK 99503 Phone (907) 644-2000 Fax (907) 644-2022 www.hdrinc.com Page 2 of 4 Hydrology The method used by HydroWest to estimate the flows for the three projects was to use drainage area and elevation correction factors to the existing streamflow record from Kadashan River above Hook Creek near Tenakee (The HydroWest report incorrectly names this site Kadashan River near Tenakee which is a different site with a larger drainage area.). Kadashan River above Hook Creek near Tenakee at the gage site has a drainage area of 10.2 square miles and a period of record of 10 years from 1968 to 1978. The HydroWest report states that it has similar basin characteristics to the three evaluated watersheds. A previous evaluation of the Gartina Falls project (HDR, 1998) used flow data collected at Tonalite Creek near Tenakee Springs. Tonalite Creek near Tenakee Springs is 20 miles south of Gartina Creek and is very similar to Gartina Creek in all of its basin characteristics. Tonalite Creek at the gage site has a drainage area of 14.5 square miles and a period of record of 20 years from 1968 to 1988. Using data from Kadashan River above Hook Creek near Tenakee, the HydroWest report estimated the average annual flow at the Gartina Creek site to be 66 cfs. Using data from Tonalite Creek near Tenakee estimates the average annual flow at the Gartina Creek site to be 69 cfs. The two estimates are very close. Further design work should use the Tonalite Creek record as it has twice the period of record of the Kadashan River above Hook Creek site. It is not necessary to collect streamflow information from Gartina Creek at any of the three proposed sites. The existing long term record from nearby similar stream basins is sufficient for hydroelectric planning and design. Power Calculations Data was not available to review the power calculations in detail. The method described appears satisfactory. For the Gartina Falls site, the power output estimated by HydroWest was nearly identical to the power output estimated by HDR. Permitting Requirements Permitting requirements described in the HydroWest report are correct. One permit not mentioned is a State of Alaska Dam Safety permit that will be required for dams over 10 feet in height. This will apply to the Gartina Falls project. This permit also requires inspection on a regular basis depending on the classification of the dam leading to additional long term O&M costs. General Discussion The Gartina Creek project is a low head project on a fairly deeply incised stream that has a high peak flow and high potential for bedload issues. All of these factors will lead to increased construction and O&M costs. This project also has the potential for disruption of fish and mammal habitat and the increased scrutiny and permitting issues that this will bring. An additional permit consideration is that this project will have a dam with a height greater than 10 feet which will cause it to be regulated under state jurisdiction, leading to increased operations costs. The Water Supply Creek project is a moderate head project on a stream that is easily accessible and appears not to have significant environmental issues. During design it should be investigated whether the intake can be located at a higher elevation for additional power. During design tapping the hydroelectric penstock for the city water supply should also be considered. This will allow the powerhouse to be located at a lower elevation for greater head and will eliminate the increased O&M HDR Alaska, Inc. 2525 C Street Suite 305 Anchorage, AK 99503 Phone (907) 644-2000 Fax (907) 644-2022 www.hdrinc.com Page 3 of 4 costs of a second intake. The construction of this project will need to consider provision of continuous water supply to the City. The Elephant Falls project is a higher head project with its intake at high elevation. This higher elevation may cause difficult winter access and may be more problematic due to increased snowfall at this elevation. This project has a significantly smaller drainage basin, with the potential to have periods when the flow is insufficient for project operation. It is located on Forest Service land which will require an FERC permit for construction. Estimate of Cost HydroWest provided an estimated cost for each of the proposed projects. These estimates were updated based on the following assumptions: • The construction estimate and contingency factors provided by HydroWest in 2002 are reasonable and accurate and were based on contractor bid and prevailing wage rates. • An inflation factor of 1.22 based on Engineering News Record construction cost index. (Year 2002 = 6538, July 2007 = 7959) is applied to the 2002 construction costs. • Design costs of 15%, construction management of 5%, and permitting varying from 5% to 15% for the three projects depending on expected complexity of permitting. • Estimate includes escalation for construction in 2009 at a rate of 5% per year which is an average of the past five years of construction cost escalation. • Estimate includes construction financing costs at a rate of 10% per year for 2 years. • Value of displaced diesel fuel is based on fuel price of $3.00 per gallon. Table 2 – Estimate of Cost Gartina Falls Water Supply Creek Elephant Falls 2007 Estimated Construction Cost $4,900,000 $4,200,000 $4,700,000 Annual Debt Service (30 yrs @ 6%) $350,000 $300,000 $320,000 Project Annual Energy (MWh/yr) 1750 1820 1780 First Year Energy Cost per kWh $0.23 $0.19 $0.22 Value of Displaced Diesel Fuel $404,000 $420,000 $411,000 Details of this estimate are attached. With a fuel price of $3.00 per gallon and assuming a typical diesel generator efficiency of 13 kWh/gallon, the fuel cost for diesel generation is $0.23/kWh. Neglecting diesel generator operational and maintenance costs, all of these projects will produce power for less than or equal to the cost of diesel generation. Conclusions and Recommendations • It is not necessary to collect additional streamflow data for the Gartina Falls or Water Supply Creek projects. The existing 20-year record from Tonalite Creek is sufficient for hydroelectric planning and design. If the Elephant Falls project were to be constructed, additional streamflow data should be collected to verify that the flows from this basin were not too small to be usable. • All projects benefit from the existence of logging roads that provide some access to the sites. Water Supply Creek and Gartina Creek require only short segments of road to access the intake and powerhouse sites. Elephant Falls requires significant additional access roads. • Estimated project costs were increased 122 % since 2002 due to inflation. Diesel fuel costs have increased 240% since 2002. A simple economic analysis shows that all of the sites will produce power at a rate that is less than or equal to the current cost of diesel power. HDR Alaska, Inc. 2525 C Street Suite 305 Anchorage, AK 99503 Phone (907) 644-2000 Fax (907) 644-2022 www.hdrinc.com Page 4 of 4 • Hydroelectric projects provide communities with a reliable, alternative energy source that does not require the use or handling of fossil fuels. • The cost of power generated from a hydroelectric facility will remain relatively constant over time whereas diesel costs may continue to increase. • The Water Supply Creek site is the preferred site of the three sites. It is preferred for the following reasons: o It provides the least cost per kWh of power, o The intake and powerhouse sites are easily accessible and appear to support straightforward construction, o The environmental issues associated with this project appear to be the least of the three sites, o The height of the dam will be lower than the threshold for dam safety regulation, and o Combining this project with the city water supply could reduce overall operations cost for the city. • Issues regarding the Water Supply Creek site that should be resolved in the next phase of this project are o Estimate of annual power using data from Tonalite Creek at Tenakee. o Explore potential for locating an intake at a higher elevation. o Consider providing city water supply from the hydroelectric penstock. o Perform evaluation of fish resources in Water Supply Creek. o Perform a jurisdictional wetlands analysis for the proposed site. o Explore the issues of FERC jurisdiction over this project. • Subsequent construction of either of the Gartina Falls or the Elephant Falls sites would benefit from the transmission line constructed for the Water Supply Creek project. Analysis of power requirements should be done to ensure that the power generated by these additional projects would be needed by the City. HOONAH "GARTINA FALLS" HYDROELECTRIC PROJECT RECONNAISSANCE LEVEL COST ESTIMATE 2002 2007 Item Description Estimate Factor Estimate 1 Access Roads 73,000$ 122% $89,000 2 Diversion Structure 560,000$ 122% $682,000 3 Power Conduit 167,000$ 122% $203,000 4 Powerhouse 4.1 Structures and Improvements 292,000$ 122% $355,000 4.2 Generating Equipment 250,000$ 122% $304,000 4.3 Control System 375,000$ 122% $457,000 5 Transmission 280,000$ 122% $341,000 TOTAL DIRECT CONSTRUCTION COSTS 1,997,000$ 2,431,000$ Contingency 25% 499,000$ 608,000$ TOTAL DIRECT CONSTRUCTION COSTS + CONTINGENCIES 2,496,000$ 3,039,000$ Design Engineering, Surveying & Geotechnical 15% 455,850$ Licensing/Permitting 10% 303,900$ Construction Management 5% 151,950$ Escalation 2007 to 2009 (2 years at 5% per year)10% 303,900$ Construction Financing (2 years at 10% per year)20% 607,800$ TOTAL OTHER COSTS 1,823,400$ TOTAL CONSTRUCTION COSTS (2007 DOLLARS, ROUNDED)4,900,000$ Plant Max. Output (kW)600 Project Annual Energy (MWh/yr)1,750 Cost per installed kW $8,167 Annual Debt Service (30 yr @ 6%, 100% financing of entire project cost) $352,536 Annual O&M Allowance $50,000 First Year Energy Cost per kWh $0.23 Diesel Fuel Cost 3.00$ Gallon Diesel Efficiency 13.0 kWh/gallon Value of Displaced Diesel Fuel 403,846$ 8/31/2007 HOONAH "WATER SUPPLY CREEK" HYDROELECTRIC PROJECT RECONNAISSANCE LEVEL COST ESTIMATE 2002 2007 Item Description Estimate Factor Estimate 1 Access Roads 61,000$ 122% $74,000 2 Diversion Structure 130,000$ 122% $158,000 3 Power Conduit 504,000$ 122% $614,000 4 Powerhouse 4.1 Structures and Improvements 122,000$ 122% $149,000 4.2 Generating Equipment 250,000$ 122% $304,000 4.3 Control System 375,000$ 122% $457,000 5 Transmission 287,000$ 122% $349,000 TOTAL DIRECT CONSTRUCTION COSTS 1,729,000$ 2,105,000$ Contingency 25% 432,000$ 526,000$ TOTAL DIRECT CONSTRUCTION COSTS + CONTINGENCIES 2,161,000$ 2,631,000$ Design Engineering, Surveying & Geotechnical 15% 394,650$ Licensing/Permitting 10% 263,100$ Construction Management 5% 131,550$ Escalation 2007 to 2009 (2 years at 5% per year)10% 263,100$ Construction Financing (2 years at 10% per year)20% 526,200$ TOTAL OTHER COSTS 1,578,600$ TOTAL CONSTRUCTION COSTS (2007 DOLLARS, ROUNDED)4,200,000$ Plant Max. Output (kW)600 Project Annual Energy (MWh/yr)1,820 Cost per installed kW $7,000 Annual Debt Service (30 yr @ 6%, 100% financing of entire project cost) $302,173 Annual O&M Allowance $50,000 First Year Energy Cost per kWh $0.19 Diesel Fuel Cost 3.00$ Gallon Diesel Efficiency 13.0 kWh/gallon Value of Displaced Diesel Fuel 420,000$ 8/31/2007 HOONAH "ELEPHANT FALLS" HYDROELECTRIC PROJECT RECONNAISSANCE LEVEL COST ESTIMATE 2002 2007 Item Description Estimate Factor Estimate 1 Access Roads 313,000$ 122% $381,000 2 Diversion Structure 132,000$ 122% $161,000 3 Power Conduit 350,000$ 122% $426,000 4 Powerhouse 4.1 Structures and Improvements 102,000$ 122% $124,000 4.2 Generating Equipment 250,000$ 122% $304,000 4.3 Control System 375,000$ 122% $457,000 5 Transmission 287,000$ 122% $349,000 TOTAL DIRECT CONSTRUCTION COSTS 1,809,000$ 2,202,000$ Contingency 33% 597,000$ 727,000$ TOTAL DIRECT CONSTRUCTION COSTS + CONTINGENCIES 2,406,000$ 2,929,000$ Design Engineering, Surveying & Geotechnical 15% 439,350$ Licensing/Permitting 10% 292,900$ Construction Management 5% 146,450$ Escalation 2007 to 2009 (2 years at 5% per year)10% 292,900$ Construction Financing (2 years at 10% per year)20% 585,800$ TOTAL OTHER COSTS 1,757,400$ TOTAL CONSTRUCTION COSTS (2007 DOLLARS, ROUNDED)4,700,000$ Plant Max. Output (kW)600 Project Annual Energy (MWh/yr)1,780 Cost per installed kW $7,833 Annual Debt Service (30 yr @ 6%, 100% financing of entire project cost) $338,146 Annual O&M Allowance $50,000 First Year Energy Cost per kWh $0.22 Diesel Fuel Cost 3.00$ Gallon Diesel Efficiency 13.0 kWh/gallon Value of Displaced Diesel Fuel 410,769$ 8/31/2007 APPENDIX F 2002 RECONNAISSANCE OF THREE POTENTIAL HYDROELECTRIC SITES NEAR HOONAH BY HYDROWEST LLC APPENDIX G SUPPLEMENT TO JUNE 2002 HYDROELECTRIC STUDY BY AP&T, INC. May 21, 2009 Mr. John Dickerson Project Engineer Alaska Energy and Engineering PO Box 111405 Anchorage, AK 99511 Subject:Supplement to the June 2002 Hoonah Hydroelectric Study Dear John: This letter provides our supplement to the June 2002 report titled “Reconnaissance of Three Potential Hydroelectric Sites Near Hoonah, Alaska” as authorized by your letter dated May 1, 2009. For this supplement, we have evaluated a fourth small hydro alternative that is a combined development of the Water Supply Creek and Gartina Creek alternatives. We have also evaluated the utilization of the generation based on actual Hoonah loads. General Arrangement The suggested general arrangement for the combined alternative includes the following principal features (see also Figure 1): The diversion dam and intake structure on Water Supply Creek as described in the June 2002 report. The pipeline/penstock for the Water Supply Creek alternative as described in the June 2002 report, except that the steel portion would be extended 3,200 feet (from 5,500 feet to 8,700 feet) to the Gartina Creek powerhouse. The extension would cross Water Supply Creek at the existing bridge and generally parallel the courses of Water Supply Creek and Gartina Creek along the edge of an extensive muskeg. Note that we have continued with using steel pipe, although other pipe materials could be used. We have continued with a 20 inch diameter for the steel pipe, as that provides for about a 10% head loss at maximum flow, which is reasonable. The diversion dam and intake structure for the Gartina Creek alternative as described in the June 2002 report. The penstock for the Gartina Creek alternative as described in the June 2002 report, except downsized from 54-inch diameter to 48-inch diameter because of the bypassing of the Water Supply Creek flow (120 cfs hydraulic capacity rather than 140 cfs). The powerhouse for the Gartina Creek alternative as described in the June 2002 report, except the structure would be expanded to also house the turbine, generator, and control system for the Water Supply Creek alternative. The expanded powerhouse would be a two-level structure approximately 20 feet by 40 feet in plan dimensions and 25 feet high. The generating unit for the Gartina Creek component would be the Ossberger-type impulse turbine as described in the 2002 report, except with a 500-kW capacity rather than 600-kW due to the smaller hydraulic capacity. The generating unit for the Water Supply Creek component would be a twin-jet Pelton unit similar to the 600-kW unit described in the 2002 report except the generator would have a capacity of approximately 800-kW due to the increased generating head. Supplement to June 2002 Report May 21, 2009 Hoonah Hydroelectric Study 2 The rock weir and diffuser tailrace for the Gartina Creek alternative as described in the June 2002 report. The switchyard and transmission line for the Gartina Creek alternative as described in the June 2002 report, upgraded for the increased generating capacity. The access roads for both the Water Supply Creek and Gartina Creek alternatives as described in the June 2002 report. There is some discrepancy regarding the elevations near Gartina Falls. The USGS topo mapping shows Gartina Falls between the 200 and 300 foot contours; the 1979 Harza report on the Gartina Creek Project shows the base of the falls at about El 150 and the top of the falls at about El 200, but the report does not indicate the basis for those values. For the 2002 study, we took handheld GPS measurements above and below the falls to determine the available head. Those measurements were not sufficiently accurate to confirm the actual elevations, but tended to support the lower elevations of the 1979 Harza report rather than the USGS map. For this report, we have continued with the lower elevations; if development is pursued, an early task will be acquisition of detailed topography that will confirm the actual elevations. Hydrology For the June 2002 report, the streamflows in both Gartina Creek and Water Supply Creek were estimated by adjusting the flow record of the USGS gage on the Kadashan River above Hook Creek near Tenakee (USGS gage number 15106920). In a November 8, 2007 memorandum reviewing the 2002 report, HDR Alaska suggested using the USGS gage record for Tonalite Creek near Tenakee (USGS gage number 15106980) because they believed it had a longer record (1968-1988 vs. 1968-1978). In reality, the record for the Kadashan River above Hook Creek is longer (1968-1978, 1980-2006), although only the peak flow record is apparently currently available for download from the USGS website. For this study, we have continued using the record of the Kadashan River above Hook Creek. Average, maximum, and minimum monthly flows are summarized in Table 1. Tables of estimated average daily flows for Gartina Creek and Water Supply Creek are provided in Tables 2 and 3 respectively. Table 1 Gartina Creek and Water Supply Creek Flow Data GartinaCreek Water SupplyCreek Month Average Maximum Minimum Average Maximum Minimum January 47 792 3.8 6.6 113 0.5 February 48 577 4.0 6.9 82 0.6 March 43 396 5.1 6.1 56 0.7 April 69 357 9.9 9.8 51 1.4 May 101 448 28 14.4 64 3.9 June 65 347 7.6 9.249 1.1 July 31 308 3.24.4 44 0.5 August 32 371 3.6 4.5 53 0.5 September 70 733 4.5 10 104 0.6 October 120 1347 9.3 17 192 1.3 November 77 587 8.9 11 84 1.3 December 60 748 4.5 8.5 106 0.6 Annual 641347 3.2 9.0 192 0.5 Table 2Gartina Creek Average Daily Flow, cfs(based on 1968-1998 data)DayJan Feb MarAprMayJunJulAugSepOctNovDec1 46 52 46 52 99 103 42 23 45 101 101 672 70 50 42 50 102 99 40 23 44 113 118 633 43 47 41 58 114 93 38 32 46 115 106 524 44 55 41 56 112 91 36 40 64 113 103 485 39 44 40 53 103 88 33 29 52 146 96 586 42 51 35 47 105 79 33 26 54 146 77 897 46 56 31 50 108 77 42 25 72 133 61 678 38 43 37 50 97 72 37 28 63 161 65 709 43 42 42 53 97 73 35 27 64 139 78 6210 36 37 49 63 112 68 39 26 73 98 74 5511 40 31 42 59 120 69 34 30 85 121 65 5012 37 30 43 66 102 65 31 28 68 114 56 6813 42 33 49 57 99 70 30 32 67 101 59 9114 51 42 38 53 97 71 30 32 68 94 87 5715 36 46 37 64 96 65 30 26 78 122 84 5116 50 42 40 75 94 58 39 29 49 113 66 4917 53 36 48 72 96 63 30 35 44 154 64 6418 46 45 50 70 92 59 25 31 58 143 78 7619 52 66 42 68 108 54 27 35 70 113 73 5920 51 59 42 73 102 50 29 25 62 93 63 5521 52 61 44 81 99 49 26 39 63 87 68 5022 43 58 43 80 100 52 26 37 79 115 68 5123 49 56 44 75 101 57 29 42 85 128 62 5924 44 54 37 71 102 50 30 38 80 141 63 7425 50 54 46 81 109 49 29 37 97 144 71 7326 45 49 43 94 98 44 24 43 69 121 68 6127 46 58 41 102 97 41 23 32 82 111 86 4728 43 52 44 92 100 41 23 28 97 85 106 5429 41 43 49 94 93 44 22 33 109 99 79 5030 53 52 97 91 49 21 34 124 145 72 4331 71 58 101 22 44 103 46Average47 48 43 69 101 65 31 32 70 120 77 60 Table 3Water Supply Creek Average Daily Flow, cfs(based on 1968-1998 data)DayJan Feb MarAprMayJunJulAugSepOctNovDec1 6.5 7.5 6.6 7.5 14.1 14.6 6.0 3.3 6.5 14.4 14.4 9.62 10.0 7.1 6.0 7.1 14.5 14.1 5.7 3.2 6.3 16.1 16.7 8.93 6.2 6.8 5.9 8.2 16.2 13.3 5.4 4.6 6.5 16.4 15.0 7.44 6.3 7.9 5.9 8.0 15.9 12.9 5.1 5.7 9.1 16.0 14.7 6.85 5.6 6.3 5.6 7.6 14.7 12.6 4.7 4.1 7.5 20.8 13.7 8.36 6.0 7.2 5.0 6.6 14.9 11.3 4.7 3.7 7.7 20.8 11.0 12.67 6.6 7.9 4.5 7.1 15.4 11.0 6.0 3.6 10.2 18.9 8.7 9.58 5.4 6.2 5.2 7.2 13.9 10.3 5.2 4.0 9.0 22.9 9.3 9.99 6.1 6.0 5.9 7.6 13.8 10.4 5.0 3.8 9.1 19.7 11.1 8.810 5.1 5.3 6.9 9.0 15.9 9.7 5.5 3.7 10.4 14.0 10.5 7.811 5.7 4.5 5.9 8.4 17.1 9.8 4.8 4.2 12.2 17.3 9.2 7.112 5.3 4.2 6.2 9.4 14.5 9.2 4.4 4.0 9.7 16.3 7.9 9.713 6.0 4.7 7.0 8.1 14.1 10.0 4.3 4.6 9.6 14.4 8.4 13.014 7.3 6.0 5.3 7.5 13.8 10.1 4.3 4.6 9.6 13.3 12.4 8.215 5.1 6.5 5.2 9.1 13.6 9.3 4.2 3.7 11.2 17.3 11.9 7.216 7.1 6.0 5.7 10.7 13.4 8.2 5.6 4.2 7.0 16.1 9.3 7.017 7.6 5.1 6.9 10.3 13.6 8.9 4.2 5.0 6.3 22.0 9.1 9.118 6.6 6.3 7.1 9.9 13.0 8.4 3.5 4.4 8.3 20.3 11.1 10.819 7.4 9.3 5.9 9.7 15.4 7.7 3.8 4.9 10.0 16.1 10.4 8.420 7.3 8.4 5.9 10.4 14.4 7.0 4.1 3.6 8.9 13.2 8.9 7.821 7.5 8.7 6.3 11.5 14.2 7.0 3.7 5.5 9.0 12.4 9.7 7.222 6.1 8.3 6.1 11.5 14.2 7.3 3.7 5.3 11.3 16.4 9.7 7.223 6.9 8.0 6.3 10.7 14.4 8.1 4.1 5.9 12.1 18.2 8.8 8.424 6.2 7.6 5.3 10.1 14.5 7.1 4.2 5.4 11.4 20.1 8.9 10.625 7.2 7.6 6.5 11.6 15.5 6.9 4.1 5.3 13.8 20.5 10.1 10.326 6.4 6.9 6.1 13.4 14.0 6.2 3.4 6.2 9.8 17.2 9.7 8.727 6.5 8.3 5.8 14.5 13.8 5.8 3.3 4.5 11.7 15.8 12.2 6.728 6.1 7.4 6.2 13.0 14.2 5.8 3.2 4.1 13.9 12.0 15.0 7.729 5.8 6.1 7.0 13.4 13.2 6.2 3.1 4.7 15.6 14.1 11.3 7.030 7.5 7.4 13.8 13.0 6.9 3.0 4.8 17.6 20.7 10.2 6.131 10.2 8.2 14.4 3.1 6.2 14.7 6.5Average 6.6 6.8 6.1 9.8 14.4 9.2 4.4 4.5 10.0 17.0 11.0 8.5 Supplement to June 2002 Report May 21, 2009 Hoonah Hydroelectric Study 5 The HDR memorandum also states that “It is not necessary to collect streamflow information from Gartina Creek at any of the three proposed sites”. We disagree with that opinion, particularly regarding Water Supply Creek. The drainage area at the Water Supply Creek diversion site is only 1.89 mi2, and with such a small drainage area it can be expected to have “flashier” flows. A stream gage on Water Supply Creek would be invaluable in quantifying that difference and its effect on generation. It has also been our experience that permitting agencies want some amount of actual flow data when a stream is proposed for development. In 2003, we helped the City of Hoonah install stream gages on Water Supply Creek near the existing diversion dam and on Gartina Creek just below the confluence with Water Supply Creek. We taught City personnel how to download the data from the data logger and how to take measurements to develop a rating curve, but there has been no data sent to us since 2003 so we are skeptical whether there is any usable data from that effort. City Water Supply The City of Hoonah’s domestic water is obtained from a diversion on Water Supply Creek at about El 350 shortly upstream of the existing bridge. For the alternatives considered in the 2002 study, the domestic water diversion rate was not important since the Water Supply Creek alternative was configured to return water to the creek just upstream of the domestic water diversion. With the combined alternative, the discharge from the Water Supply Creek diversion would be into Gartina Creek well below the domestic water diversion, and some means of continuing the domestic water supply would need to be incorporated into the development. The simplest method would be a tap off the Water Supply Creek component penstock near the existing bridge into the existing water supply conduit. Because of the high pressure at that point, a pressure reducing station would be necessary. For this study, we have assumed the pressure reducing station would include an energy recovery turbine/generator and a parallel pressure reducing valve. The City has indicated the domestic water flow is 304,000 gallons per day (0.47 cfs). At that flow, the energy recovery unit would have a capacity of 13 kW and an annual generation of 110 MWh. Note that 304,000 gallons per day is equivalent to about 400 gallons per capita-day (the Hoonah population is about 750). That is an extraordinarily high rate, and it may be that much of the diversion is simply overflow that could be conserved. For purposes of this study, no adjustment has been made to the diversion rate. Power Output For the 2002 report, we calculated the power output for the various alternatives at 5% increments on the flow duration curve. For the current evaluation, we have calculated the power output based on each day of the flow record, which provides a more rigorous estimate. Otherwise, the power output calculations are similar to those described in the 2002 report, except for adjustments for hydraulic capacity and penstock length as described above. As with the 2002 report, no instream flows have been assumed for either diversion, since they both are above the Gartina Falls anadromous fish barrier. An adjustment has been made for the Water Supply Creek component because of the diversion for the City of Hoonah water supply, as described above. Supplement to June 2002 Report May 21, 2009 Hoonah Hydroelectric Study 6 The power output, assuming unlimited utilization, is estimated to be as follows: Table 4 COMBINED ALTERNATIVE GENERATION SUMMARY (UNLIMITED UTILIZATION) Water Supply component Gartina Creek component Energy Recovery Combined Alternative Hydraulic capacity, cfs 20 120 0.5 140.5 Net head at capacity, feet 581 61 400 N.A. Generator capacity, kW 800 500 13 1,313 Januarygeneration, MWh 138 96 9 243 Februarygeneration, MWh 136 96 9 241 March generation, MWh 141 102 9 252 April generation, MWh 256 188 9 453 Maygeneration, MWh 385 275 9 669 June generation, MWh 235 170 9 413 Julygeneration, MWh 93 67 9 169 August generation, MWh 94 65 9 168 September generation, MWh 211 147 9 367 October generation, MWh 355 247 9 611 November generation, MWh 244 173 9 426 December generation, MWh 189 133 9 331 Annual generation, MWh 2,476 1,758 110 4,344 Power Utilization The 2002 report included the following statement: “If one site were developed, all or nearly all of its potential generation would be usable. If two sites were developed, not all of the potential generation would be usable (assuming both sites are run-of-river sites).” Since the fourth alternative evaluated by this supplement combines two of the sites, it is important to quantify this utilization. The utilization has been calculated by the following procedure: Tables of Hoonah loads at 15 minutes intervals for January 2005-May 2005, July 2005- December 2005, and June 2006 were provided by AE&E. This data was aggregated into average daily values and demand duration values (i.e. load vs. percent time greater than). Where months were missing some data for a few days, the available data was assumed to be representative for the entire month. The potential generation was calculated for each 1% increment of the flow duration curve, and each generation value was compared to the demand at each 1% increment of the demand duration curves (i.e. 10,000 comparisons for each month). For each comparison, the utilized generation was the lesser of the generation or demand. The 10,000 utilized generation values were then averaged to find the utilization for the month. The calculated utilization is as shown below: Gartina Creek component only - - 99.1% utilization Water Supply Creek component only - - 90.9% utilization Combined Gartina Creek and Water Supply Creek components - - 71.7% utilization Supplement to June 2002 Report May 21, 2009 Hoonah Hydroelectric Study 7 These results are valid to the extent that the 2005-06 historical loads represent future loads. Load growth would result in higher utilization values. Monthly values of utilized generation and surplus generation are provided in Tables 5 and 6 and Figure 2. Table 5 COMBINED ALTERNATIVE GENERATION SUMMARY (71.7% ANNUAL UTILIZATION) Water Supply component (1) Gartina Creek component (2) Combined Alternative (3) Januarygeneration, MWh 130 96 186 Februarygeneration, MWh 128 96 185 March generation, MWh 131 102 196 April generation, MWh 237 187 326 Maygeneration, MWh 332 269 404 June generation, MWh 202 166 282 Julygeneration, MWh 84 66 149 August generation, MWh 92 64 135 September generation, MWh 199 146 254 October generation, MWh 317 245 370 November generation, MWh 206 170 286 December generation, MWh 167 131 236 Annual generation, MWh 2,225 1,739 3,013 (1) Assumes only the Water Supply component is constructed. (2) Assumes only the Gartina Creek component is constructed. (3) Assumes both the Water Supply and Gartina Creek components are constructed. Table 6 COMBINED ALTERNATIVE SURPLUS GENERATION SUMMARY (71.7% ANNUAL UTILIZATION) Water Supply component (1) Gartina Creek component (2) Combined Alternative (3) Januarygeneration, MWh 8 <1 56 Februarygeneration, MWh 8 <1 56 March generation, MWh 9 <1 56 April generation, MWh 19 1 127 Maygeneration, MWh 53 6 265 June generation, MWh 32 4 131 Julygeneration, MWh 10 1 20 August generation, MWh 2 <1 33 September generation, MWh 12 1 112 October generation, MWh 37 2 240 November generation, MWh 38 3 140 December generation, MWh 23 2 95 Annual generation, MWh 251 19 1,331 Supplement to June 2002 Report May 21, 2009 Hoonah Hydroelectric Study 8 Budgetary Cost Estimate The estimated construction cost for the Combined Alternative is $7,800,000. The cost estimate is based on the cost estimates for the Gartina Creek and Water Supply Creek alternatives in the 2002 report, updated by inflation factors published by the US Bureau of Reclamation to a start of construction date of 2009 and adjusted for the changes in layout as described above. Considering the time required to obtain the necessary permits and design the facilities, the earliest practical start of construction is estimated to be 2012. Adding 3 years of 3% annual inflation and 5% for financing costs results in an estimated total capital requirement of $8,950,000. A summary of the construction cost estimate is shown in Table 7. The estimate includes a contingency allowance of 25%, which is considered to be reasonable for this early stage of analysis. The contingency allowance is to account for minor items not explicitly estimated, normal contracting variations in cost, environmental mitigation costs, and costs for unknown conditions that may occur. The estimate also includes $325,000 for permitting costs and $975,000 for engineering costs (design and construction management), which are based on AP&T’s experience and current understanding of the probable permitting process. Table 7 CONSTRUCTION AND CAPITAL COST ESTIMATE COMBINED ALTERNATIVE ITEM Water Supply Creek Gartina Creek Pressure Reducing Station Total 1 ACCESS ROAD $59,000 $113,000 $172,000 2. DIVERSION STRUCTURE 180,000 776,000 956,000 3. POWER CONDUIT 1,377,000 234,000 25,000 1,636,000 4. POWERHOUSE 4.1 Structures and Improvements 473,000 15,000 488,000 4.2 Generating Equipment 448,000 320,000 50,000 818,000 4.3 Control System 502,000 10,000 512,000 4.4 Switchyard 204,000 5,000 209,000 5. TRANSMISSION 388,000 21,000 409,000 SUBTOTAL $5,200,000 Contingency (25%) 1,300,000 Permitting & Design 1,300,000 CONSTRUCTION COST (2009 bid level) $7,800,000 Escalation (at 3%) 725,000 CONSTRUCTION COST (2012 bid level) $8,525,000 Financing Cost (5%) 425,000 TOTAL CAPITAL COST $8,950,000 Supplement to June 2002 Report May 21, 2009 Hoonah Hydroelectric Study 9 Cost of Power The annual cost for a hydroelectric project includes the cost of debt service and various operation and maintenance costs. Because of the relatively high cost of construction for a hydro project, the debt service component is generally much higher than the operation and maintenance component. Therefore, financing conditions have a very great impact on a hydro project’s feasibility. Low interest loans and/or grant funding are frequently available to promote the development of hydro facilities in rural Alaska communities, and should be pursued. Figure 3 and the following table illustrate the impact of these two factors on the cost of power from the combined alternative, assuming all of the power could be utilized. Table 8 COST OF POWER FOR VARIOUS FINANCING CONDITIONS (¢/KWH) COMBINED ALTERNATIVE, 100% UTILIZATION Percent Funding by Grants Loan Interest Rate 0%25%50%75%100% 0% 9.5 7.7 5.9 4.2 2.4 4% 14.7 11.6 8.5 5.5 2.4 8% 21.3 16.6 11.9 7.1 2.4 The cost of power values shown above are based on annual operating costs of $100,000 and a loan term of 30 years. The operating costs are incremental costs, and assume that the same operators run the hydro plant and the existing diesel plant. The operating costs also include a royalty payment to Sealaska Corporation for use of their lands. Note that the cost of power values shown above are the productions costs, and must be compared to the production costs for the existing diesel generators to determine if the hydro project is feasible. The production cost for the existing diesel generators varies primarily with the cost of diesel fuel. At $2.50 per gallon and a typical efficiency of about 13 kWh/gal, the fuel cost for the existing diesel generators is about 19.2 ¢/kWh. Variable operation and maintenance costs are typically about 2.5 ¢/kWh, for an avoided cost of 21.7 ¢/kWh. This value is also shown in Figure 3 as a solid horizontal line - - financing grant/interest rate combinations that result in a cost of power below the diesel line indicate a feasible project. If all of the power could be utilized, then the hydro project would be economical under all financing conditions considered. Table 9 and Figure 4 show the situation with the calculated utilization of 71.7% based on 2005- 06 loads: Table 9 COST OF POWER FOR VARIOUS FINANCING CONDITIONS (¢/KWH) COMBINED ALTERNATIVE, 71.7% UTILIZATION Percent Funding by Grants Loan Interest Rate 0%25%50%75%100% 0% 13.2 10.8 8.3 5.8 3.3 4% 20.5 16.2 11.9 7.6 3.3 8% 29.7 23.1 16.5 9.9 3.3 Supplement to June 2002 Report May 21, 2009 Hoonah Hydroelectric Study 10 The hydro generation could also reduce the cost of periodic overhauls of the diesel units; however, no amount for overhaul deferral has been included in the avoided cost rate because it is not certain that the hydro generation would decrease the number of hours of operation of the diesels. It should be recognized that costs estimated above are for the initial year of the hydro project operation. The production cost for the hydro project would be relatively stable, whereas the production cost for the diesels will likely rise over time as the cost of diesel fuel escalates. Permitting Requirements As noted in the 2002 report, the Federal Energy Regulatory Commission has determined that they would not have jurisdiction over development of the Gartina Creek site. A determination for the Water Supply Creek site has not been requested, but since the Water Supply Creek site is upstream of Gartina Falls, it can be expected they would determine a lack of jurisdiction there also. As of this date, the State of Alaska has still not instituted a hydro permitting process as allowed by 2000 federal legislation and 2003 state legislation, and it is not clear whether it ever will. Absent FERC jurisdiction and a state hydro permitting process, the anticipated permitting process would be as follows: Coastal Zone Certification (Alaska Division of Coastal and Ocean Management) for the portion of the project in the coastal zone (which would only be part of the transmission line) Fish Habitat Permit (Alaska Department of Fish and Game) Water Right (Alaska Department of Natural Resources) Water Quality Certification (Alaska Department of Environmental Conservation) Section 404 Permit (U.S. Army Corps of Engineers) Of these permits, only the Fish Habitat Permit could be very problematic. Dolly Varden char are present in Gartina Creek above Gartina Falls, and ADF&G could want to screen the intake to prevent loss of fish in the creek just above the falls. Intake screens can be very expensive, and could make the Gartina Creek development uneconomic. Also, as noted in the 2002 report, ADF&G commented during the FERC jurisdictional determination that they would request evaluation of a fish passage structure to allow anadromous fish to move around Gartina Falls, which would undoubtedly make the Gartina Creek development uneconomic. The November 8, 2007 HDR Alaska memorandum reviewing our 2002 report indicated the Gartina Creek development would require an Alaska Dam Safety Permit because the diversion dam height would be greater than 10 feet. We believe that is incorrect. The Alaska dam safety regulations indicate a permit would be required if 1) a dam is over 10 feet high and impounds more than 50 acre-feet, or 2) a dam is over 20 feet high. The Gartina Creek dam would be about 15 feet high, but it would impound less than 50 acre-feet, therefore, a dam safety permit should not be required. Summary and Conclusions 1. Combining the development of the Gartina Creek and Water Supply Creek projects by extending the Water Supply Creek penstock and construction of a single powerhouse provides a modest increase in the potential generation (4,344 MWh vs. 3,700 MWh). Figure 2Hoonah Demand and Hydro Generation0100200300400500600700800JanuaryFebruaryMarchAprilMayJuneJulyAugustSeptemberOctoberNovemberDecemberDemand and Generation, Avg. kWDemandPotential HydroUtilized HydroSurplus Hydro Figure 3COMBINED ALTERNATIVE (100% UTILIZATION)EFFECT OF FINANCING CONDITIONS ON COST OF POWER0.05.010.015.020.025.00% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Percent Grant FundingProduction Cost of Power, c/kWh8% Interest Rate4% Interest Rate0% Interest RateDiesel Units Figure 4COMBINED ALTERNATIVE (71.7% UTILIZATION)EFFECT OF FINANCING CONDITIONS ON COST OF POWER0.05.010.015.020.025.030.035.00% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%Percent Grant FundingProduction Cost of Power, c/kWh8% Interest Rate4% Interest Rate0% Interest RateDiesel Units APPENDIX H HOONAH ENERGY RECOVERY WORKSHEET AND GRAPHS HOONAH ENERGY RECOVERY WORK SHEET ====================================== =========Analysis of Diesel HR (No Hydro Installation) ANNUAL FUEL SAVINGS:Annual O&M cost:0$/year. [ =============================================]Cost Estimate$ [ Diesel HR, Gallons:56936]Fuel heat value:138000Btu/gall. [ =============================================]Fuel cost0.00$/gallonFuel cost escal.0/yearPower increase0/yearDiscount rate0/yearGEN DATA: Jacket Water OnlySYSTEM LOSS DATA: Heat rate at kw-load above0 2800Btu/kwhConstant losses:Heat rate at kw-load above114 2800Btu/kwh Plant piping:15000Btu/hr. Piping main insulated, branch piping & flexes bareHeat rate at kw-load above152 2800Btu/kwh Buried Arctic piping:195000Btu/hr.(6500' of 4" @ 0.25)*(170F-50F)Heat rate at kw-load above176 2800Btu/kwhGenset Eng. Preheat:20000Btu/hr. Pre-heat 2 offline enginesHeat rate at kw-load above205 2800Btu/kwhTotal constant:230000Btu/hr.Heat rate at kw-load above255 2800Btu/kwhHeat rate at kw-load above375 2800Btu/kwhVariable losses:Heat rate at kw-load above465 2800Btu/kwh Radiators/Exter Pipe100Btu/hr.xFAmot normally closed, 1/2" normally open bypassHeat rate at kw-load above400 2800Btu/kwh Plant Heating:75Btu/hr.xFControl only, gen room heated by running engineHeat rate at kw-load above4502200Btu/kwhOther0Btu/hr.xFHeat rate at kw-load above5002200Btu/kwhGENERATION DATA:WEATHER DATA: NOTES:Kwh/month:HDD/Month: HonnahJanuary498,0001108February438,000944March433,000961April420,000756May410,000531June397,000330July436,000249August428,000242September455,000423October428,000695November416,000933December447,00010365206000 8208BUILDING DATA:Fuel use, Non- BoilergallonsSeasonalSeasonalEfficiency Building in use, 1=yes, 0=noOPER.HDDBuildings35600 2800 75%111110011111107630Pool14400 7200 75%111111101111117967H-1 HOONAH ENERGY RECOVERY WORK SHEET ====================================== =========Analysis of Gartina Creek Hydro & Diesel HR ANNUAL FUEL SAVINGS:Annual O&M cost:0$/year. [ =============================================]Cost Estimate$ [ Diesel HR, Gallons:46316]Fuel heat value:138000Btu/gall. [ Excess Hydro Energy Recovery, Gallons0]Fuel cost0.00$/gallon [ Diesel Generation Fuel Savings, Gallons130000]Fuel cost escal.0/year [ Total Potential Fuel Savings176316]Power increase0/year [ =============================================]Discount rate0/yearGEN DATA: Jacket Water OnlySYSTEM LOSS DATA: Heat rate at kw-load above0 2800Btu/kwhConstant losses:Heat rate at kw-load above114 2800Btu/kwh Plant piping:15000Btu/hr. Piping main insulated, branch piping & flexes bareHeat rate at kw-load above152 2800Btu/kwh Buried Arctic piping:195000Btu/hr.(6500' of 4" @ 0.25)*(170F-50F)Heat rate at kw-load above176 2800Btu/kwhGenset Eng. Preheat:20000Btu/hr. Pre-heat 2 offline enginesHeat rate at kw-load above205 2800Btu/kwhTotal constant:230000Btu/hr.Heat rate at kw-load above255 2800Btu/kwhHeat rate at kw-load above375 2800Btu/kwhVariable losses:Heat rate at kw-load above465 2800Btu/kwh Radiators/Exter Pipe100Btu/hr.xFAmot normally closed, 1/2" normally open bypassHeat rate at kw-load above400 2800Btu/kwh Plant Heating:75Btu/hr.xFControl only, gen room heated by running engineHeat rate at kw-load above4502200Btu/kwhOther0Btu/hr.xFHeat rate at kw-load above5002200Btu/kwhDIESEL GENERATION DATA:WEATHER DATA: HYDROELECTRIC GENERATION DATAGENERATION FUEL SAVINGSKwh/month:HDD/Month: HoonahKwh/month:(@14kWhr/gallon diesel efficiency)January397,4711108January100,5297181February337,471944February100,5297181March326,188961March106,8127629April224,177756April195,82313987May128,309531May281,69120121June223,168330June173,83212417July366,886249July69,1144937August360,980242August67,0204787September302,112423September152,88810921October171,441695October256,55918326November237,979933November178,02112716December309,8181036December137,18297993386000 8208 1820000kWhr130000gallonsBUILDING DATA:Fuel use, Non- BoilergallonsSeasonalSeasonalEfficiency Building in use, 1=yes, 0=noOPER.HDDBuildings35600 2800 75%111110011111107630Pool14400 7200 75%111111101111117967H-2 HOONAH ENERGY RECOVERY WORK SHEET ====================================== =========Analysis of Water Supply Creek Hydro & Diesel HR ANNUAL FUEL SAVINGS:Annual O&M cost:0$/year. [ =============================================]Cost Estimate$ [ Diesel HR, Gallons:45767]Fuel heat value:138000Btu/gall. [ Excess Hydro Energy Recovery, Gallons0]Fuel cost0.00$/gallon [ Diesel Generation Fuel Savings, Gallons134286]Fuel cost escal.0/year [ Total Potential Fuel Savings180053]Power increase0/year [ =============================================]Discount rate0/yearGEN DATA: Jacket Water OnlySYSTEM LOSS DATA: Heat rate at kw-load above0 2800Btu/kwhConstant losses:Heat rate at kw-load above114 2800Btu/kwh Plant piping:15000Btu/hr. Piping main insulated, branch piping & flexes bareHeat rate at kw-load above152 2800Btu/kwh Buried Arctic piping:195000Btu/hr.(6500' of 4" @ 0.25)*(170F-50F)Heat rate at kw-load above176 2800Btu/kwhGenset Eng. Preheat:20000Btu/hr. Pre-heat 2 offline enginesHeat rate at kw-load above205 2800Btu/kwhTotal constant:230000Btu/hr.Heat rate at kw-load above255 2800Btu/kwhHeat rate at kw-load above375 2800Btu/kwhVariable losses:Heat rate at kw-load above465 2800Btu/kwh Radiators/Exter Pipe100Btu/hr.xFAmot normally closed, 1/2" normally open bypassHeat rate at kw-load above400 2800Btu/kwh Plant Heating:75Btu/hr.xFControl only, gen room heated by running engineHeat rate at kw-load above4502200Btu/kwhOther0Btu/hr.xFHeat rate at kw-load above5002200Btu/kwhDIESEL GENERATION DATA:WEATHER DATA: HYDROELECTRIC GENERATION DATAGENERATION FUEL SAVINGSKwh/month:HDD/Month: HoonahKwh/month:(@14kWhr/gallon diesel efficiency)January388,1581108January109,8427846February329,848944February108,1527725March322,313961March110,6877906April219,749756April200,25114304May129,480531May280,52020037June226,322330June170,67812191July365,025249July70,9755070August350,266242August77,7345552September286,857423September168,14312010October160,154695October267,84619132November241,942933November174,05812433December305,8871036December141,113100803326000 8208 1880000kWhr134286gallonsBUILDING DATA:Fuel use, Non- BoilergallonsSeasonalSeasonalEfficiency Building in use, 1=yes, 0=noOPER.HDDBuildings35600 2800 75%111110011111107630Pool14400 7200 75%111111101111117967H-3 HOONAH ENERGY RECOVERY WORK SHEET ====================================== =========Analysis of Combined Hydro, Diesel HR and Excess Hydro Energy Recover ANNUAL FUEL SAVINGS:Annual O&M cost:0$/year. [ =============================================]Cost Estimate$ [ Diesel Heat Recovery, Gallons29606]Fuel heat value:138000Btu/gall. [ Excess Hydro Energy Recovery, Gallons0]Fuel cost0.00$/gallon [ Diesel Generation, Gallons214929]Fuel cost escal.0/year [ Total Potential Fuel Savings244535]Power increase0/year [ =============================================]Discount rate0/yearGEN DATA: Jacket Water OnlySYSTEM LOSS DATA: Heat rate at kw-load above0 2800Btu/kwhConstant losses:Heat rate at kw-load above114 2800Btu/kwh Plant piping:15000Btu/hr. Piping main insulated, branch piping & flexes bareHeat rate at kw-load above152 2800Btu/kwh Buried Arctic piping:195000Btu/hr.(6500' of 4" @ 0.25)*(170F-50F)Heat rate at kw-load above176 2800Btu/kwhGenset Eng. Preheat:20000Btu/hr. Pre-heat 2 offline enginesHeat rate at kw-load above205 2800Btu/kwhTotal constant:230000Btu/hr.Heat rate at kw-load above255 2800Btu/kwhHeat rate at kw-load above375 2800Btu/kwhVariable losses:Heat rate at kw-load above465 2800Btu/kwh Radiators/Exter Pipe100Btu/hr.xFAmot normally closed, 1/2" normally open bypassHeat rate at kw-load above400 2800Btu/kwh Plant Heating:75Btu/hr.xFControl only, gen room heated by running engineHeat rate at kw-load above4502200Btu/kwhOther0Btu/hr.xFHeat rate at kw-load above5002200Btu/kwhDIESEL GENERATION DATA:WEATHER DATA: HYDROELECTRIC GENERATION DATAGENERATION FUEL SAVINGSKwh/month:HDD/Month: HoonahKwh/month:(@14kWhr/gallon diesel efficiency)January313,0001108January186,00013286February253,000944February185,00013214March238,000961March196,00014000April93,000756April326,00023286May68,000531May404,00028857June115,000330June282,00020143July287,000249July149,00010643August293,000242August135,0009643September201,000423September254,00018143October58,000695October370,00026429November130,000933November286,00020429December211,0001036December236,000168572260000 8208 3009000kWhr214929gallonsBUILDING DATA:Fuel use, Non- BoilergallonsSeasonalSeasonalEfficiency Building in use, 1=yes, 0=noOPER.HDDBuildings35600 2800 75%111110011111107630Pool14400 7200 75%111111101111117967H-4 5/30/2009 excess hydro GWS Page 5HOONAH ENERGY RECOVERY WORK SHEET ====================================== =========Analysis of Energy Recovery From Excess Hydro Only (Combined G&WS Hydro With Electric Boiler in Power Plan ANNUAL FUEL SAVINGS:Annual O&M cost:0$/year. [ =============================================]Cost Estimate$ [ Diesel Heat Recovery, Gallons0]Fuel heat value:138000Btu/gall. [ Excess Hydro Energy Recovery, Gallons12497]Fuel cost0.00$/gallon [ Diesel Generation, Gallons0]Fuel cost escal.0/year [ Total Potential Fuel Savings12497]Power increase0/year [ =============================================]Discount rate0/yearGEN DATA: Jacket Water OnlySYSTEM LOSS DATA: Heat rate at kw-load above0 3412Btu/kwhConstant losses:Heat rate at kw-load above114 3412Btu/kwh Plant piping:15000Btu/hr. Piping main insulated, branch piping & flexes bareHeat rate at kw-load above152 3412Btu/kwh Buried Arctic piping:195000Btu/hr.(6500' of 4" @ 0.25)*(170F-50F)Heat rate at kw-load above176 3412Btu/kwhGenset Eng. Preheat:20000Btu/hr. Pre-heat 2 offline enginesHeat rate at kw-load above205 3412Btu/kwhTotal constant:230000Btu/hr.Heat rate at kw-load above255 3412Btu/kwhHeat rate at kw-load above375 3412Btu/kwhVariable losses:Heat rate at kw-load above465 3412Btu/kwh Radiators/Exter Pipe100Btu/hr.xFAmot normally closed, 1/2" normally open bypassHeat rate at kw-load above400 3412Btu/kwh Plant Heating:75Btu/hr.xFControl only, gen room heated by running engineHeat rate at kw-load above4503412Btu/kwhOther0Btu/hr.xFHeat rate at kw-load above5003412Btu/kwhGENERATION DATA:WEATHER DATA: NOTES:Kwh/month:HDD/Month: HoonahJanuary56,0001108February56,000944March56,000961April127,000756May265,000531June131,000330July20,000249August33,000242September112,000423October240,000695November140,000933December95,00010361331000 8208BUILDING DATA:Fuel use, Non- BoilergallonsSeasonalSeasonalEfficiency Building in use, 1=yes, 0=noOPER.HDDPool, bldgs27564 2148 75%111110001111973880075%11111000111197388H-5 H-6Graph 1: Hoonah Estimated Energy Recovery Versus Heating Demand020004000600080001000012000 JanuaryFebruary March April May June July AugustSeptember OctoberNovemberDecemberMonthDiesel Saved (Gallons Per Month)60,000 Gal/Yr - Estimated District Heating Demand (Pool, Schools and Other Buildings)56,936 Gal/Yr - Heating Fuel Saved From Diesel HR (Diesel Generation Only - No Hydro)46,316 Gal/Yr - Heating Fuel Saved With Gartina Creek Hydro & Diesel HR 45,767 Gal/Yr - Heating Fuel Saved With Water Supply Creek Hydro & Diesel HR 42,103 Gal/Yr - Heating Fuel Saved With Combined Hydro & Diesel HR/Excess Hydro H-7Graph 2: Total Estimated Diesel Savings Comparisons of Potential Projects010000200003000040000 JanuaryFebruary March April May June July AugustSeptember OctoberNovemberDecemberMonthTotal Diesel Saved (Gallons Per Month)257,031 Gal/Yr - Total Fuel Saved With Combined Hydro & Diesel HR/Excess Hydro 180,053 Gal/Yr - Total Fuel Saved With Water Supply Creek Hydro & Diesel HR176,316 Gal/Yr - Total Fuel Saved With Gartina Creek Hydro & Diesel HR 56,936 Gal/Yr - Total Fuel Saved With Diesel HR Installation Only (No Hydro Project) APPENDIX I COMMUNITY CORRESPONDENCE Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information November 13, 2006 On Thursday October 19 and 20, 2006, David Lockard of the Alaska Energy Authority / Rural Energy Group (AEA/REG) and John Dickerson of Alaska Energy and Engineering (AE&E) traveled to Hoonah. The purposes of this site visit were to: 1) meet with local officials as well as representatives of local and regional organizations to identify and discuss potential energy infrastructure projects within the community; 2) to gather reconnaissance level information for preparation of a Conceptual Design Report (CDR) for any identified energy infrastructure projects and; 3) to collect field data for the installation of a new 12,000 gallon double wall fuel tank at the IPEC power plant. After a short weather delay in Juneau we arrived in Hoonah b y plane around 1 PM. After a tour of the community we met Keith Berggren, Peter Bibb and Thomas Jack of Inside Passage Electrical Cooperative (IPEC) at the power plant. We spent the afternoon inspecting the IPEC facility and as-builting the site in order to determine a suitable location for the proposed new fuel tank. A meeting was held the next morning at 8 AM to discuss potential energy infrastructure projects in Hoonah. David Lockard discussed the AEA/REG rural energy programs as well as Denali Commi ssion (DC) funding requirements. Much of the meeting was spent discussing the proposed AEL&P Hoonah intertie extension as well as potential local hydro projects, the proposed City/Hoonah Trading consolidated bulk fuel storage project and the potential use of generation heat recovery in Hoonah. Meeting a ttendees included: · Dennis H. Grey, Sr., Mayor, City of Hoonah · Jerry Medina, Administrator, City of Hoonah · Jan Supler, Vice President Retail Operations, Wards Cove/Hoonah Trading · Steve Brown, General Manager, Hoonah Trading · Tim McLeod, General Manager, AEL&P · Corry Hildenbrand, Energy Resource Developer, AEL&P · Vern Rauscher, General Manager, IPEC · Keith Berggren, Generation Manager, IPEC · Peter Bibb, Distribution Manager, IPEC · Dick Somerville, P.E., PND Engineers · Don Reid, Alaska Marine Lines Following the meeting we reviewed plans for the new Hoonah Marine Industrial Center and visited the site where phase I of the project is currently under construction. Discussions were held regarding the preferred location and layout of the proposed consolidated bulk fuel storage facility, automotive gas station, truck loading/bulk transfer facility, marine dispensing float, large vessel marine fuel dock and marine header. The following report is based on reconnaissance level information gathered during and subsequent to this site visit. It includes preliminary information on: 1) Proposed AEL&P Hoonah intertie extension 2) AC vs HVDC transmission technology for the Hoonah Intertie 3) Three p otential local hydroelectric projects near Hoonah Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 2 of 13 4) Potential g eneration heat recovery project 5) Existing IPEC power plant 6) Estimated future community power demand 7) Proposed IPEC power plant upgrades 8) Replacement generator selection 9) Proposed IPEC distribution upgrades 10) Existing IPEC tank farm 11) New IPEC power plant fuel tank 12) Existing Hoonah Trading bulk fuel storage facility 13) Required community fuel storage capacity 14) Proposed new tank farm, bulk transfer and dispensing facilities 15) Alternative energy This report along with comments from project participants will outline the issues to be addressed in the CDR. 1) AEL&P Hoonah I ntertie Extension: The proposed Hoonah intertie extension is part of a long term effort by AEL&P, IPEC, The Southeast Conference and the City of Hoonah to construct a transmission link between Juneau and Hoonah. The intertie would allow the community of Hoonah to take advantage of AEL&P's excess hydroelectric generation capacity and eliminate diesel generation in the community. The first leg of the intertie to the Greens Creek mine was completed in July, 2006 at a cost of approximately $9 million. This leg included a 9.5 mile long submarine cable between Douglas and Admiralty Island s as well as six mile s of overhead transmission line to the Greens Creek Mine . According to AEL&P current average loads at the mine are running around 8 megawatts and near term total annual energy requirements are expected to be in excess of 70GWh, higher than originally anticipated. If constructed, the Hoonah intertie extension would include a 25 mile long submarine cable between Admiralty and Chichagof Island s as well as a 3 mile long overhead transmission line to Hoonah. According to a recently updated estimate by AEL&P the cost of the Hoonah Intertie would be approximately $29 million for design, permitting and construction. The long term annual energy requirements of Hoonah are expected to be 6 to 7GWh. Permitting would likely take one to two years. Engineering completed to date includes a power flow analysis by Power Engineers, Inc. and a preliminary submarine cable design by Nexans and BC Hydro. An amount of $1 million was recently awarded to IPEC by DOE for submarine cable route bathymetric studies and permitting . According to AEL&P, if the Hoonah intertie were constructed today the rate to IPEC would be $.10/KWh and would include all O&M as well as a contingency for cable repairs and replacement. This rate would be "interruptible" in that Juneau area customers would receive first priority in times of limited hydroelectric generation while Hoonah would have priority of usage over the Greens Creek mine. It is assumed that if constructed the Hoonah intertie would provide virtually all the power required by the community of Hoonah and that Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 3 of 13 no upgrade to the existing IPEC power plant or new lo cal hydroelectric projects would be considered. An economic analysis of the Hoonah Intertie titled "Hoonah Intertie Extension - Economic Considerations" was recently prepared for AEA by Emerman Consulting , LLC and will be included as an appendix in the final Hoonah Energy Infrastructure Upgrade Projects CDR. Four separate scenarios were analyzed using different fuel prices, project schedules and Hoonah energy requirement estimates. The benefit to cost ratios of the four scenarios calculated over the estimated 30 year economic life of the intertie ranged from 0.78 to 0.50. Additional research on the proposed intertie will be conducted and will be included in the final Hoonah Energy Infrastructure Projects CDR. 2) AC v ersus HVDC transmission technolo gy for the Hoonah Intertie : Appendix E of the "Southeast Alaska Intertie Study Phase I Final Report" prepared by D. Hittle & Associates for the Southeast Conference in 2003 includes a report on alternate energy transmission technologies study conducted for the proposed interties. The study concluded that an HVDC (High Voltage Direct Current) system would be feasible but more expensive than an AC system for the Hoonah Intertie. The following are some comparisons of HVDC and AC transmission technology for the proposed Hoonah intertie: · Submarine cable lengths are limited to between 40 and 50 miles in AC transmission systems due to capacitive currents. HV DC systems make much longer submarine crossings possible because they do not generate capacitive currents. With a crossing length of only around 25 miles the Hoonah intertie is well within the limits for submarine cables in AC systems. · HVDC systems can carry more current on a given size cable than with an AC system. However, the size of the submarine cable specified for the Hoonah intertie is controlled by the strength requirement of the cable rather than by the conductive capacity. This offsets any potential savings of an HVDC system due to conductor size advantages for the Hoonah intertie. · Low cost extruded polymer cable has recently been developed for use in HVDC systems. Extruded cables are less expensive than other cable technologies but have little history in submarine applications. There is also as yet no proven technology for repairing a damaged submarine extruded cable . · HV DC systems can be constructed with a single cable where ground return is used. However a single cable HVDC system is not considered an option for the Hoonah intertie due to environmental, permitting and reliability issues. Therefore a two -cable HVDC system would be required. Three-phase AC submarine cable is available as a bundled unit while the HVDC system would require two separate cables. The per unit cost of the HVDC submarine cable would be less than the bundled thr ee-phase AC cable but the total submarine cable cost for the Hoonah intertie would be higher for the HVDC system due to the requirement of two separate cables. · An HVDC intertie would require a total of two voltage source converters (V SC) for conversion of AC to HVDC and then back to AC. In 2003 the price estimate of each VSC was $3.2 million. Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 4 of 13 Additional research into the latest HVDC technology available will be conducted and will be included in the final Hoonah Energy Infrastructure Projects CDR. 3) Three Potential Local Hydroelectric Projects Near Hoonah: In June, 2002 HydroWest Group, LLC, a subsidiary of AP&T, published a report titled "Reconnaissance of Three Potential Hydroelectric Sites Near Hoonah, Alaska". This report was commissioned by the City of Hoonah. It was preceded by a previous study titled "Gartina Creek Project - A Reconnaissance Report" performed in 1979 by Harza Engineering for the Alaska Power Authority. A review and update of the 1979 report titled "Concept Review Report, Gartina Creek Hydroelectric Project" was performed in 1998 by HDR for the City of Hoonah. The three identified hydroelectric prospects in the Hoonah area are identified as Gartina Creek, Water Supply Creek and Elephant Falls . Water Supply Creek and Elephant Falls are both tributaries of Gartina Creek. All flow data for these three drainages is transposed from the stream gage records of the Kadashan River drainage near Tenakee which is very similar in geology, precipitation, orientation and elevation to the thr ee Hoonah sites. Gartina Creek The Gartina Creek project as described in the 2002 HydroWest report consists of the following components: · A fifteen feet high concrete and rockfill diversion dam. · A concrete intake structure and sluiceway · A 54-inch diamete r steel pipeline approximately 200 feet long from the intake structure to the powerhouse. · A 20'x20'x25' high two level reinforced concrete powerhouse · A single turbine with 600kW three-phase generator. · Programmable automatic paralleling switchgear with remote control and unattended operation capability. · A pad-mount disconnect switch and step-up transformer bank adjacent to the powerhouse. · Approximately four miles of 12.5kV three-phase overhead transmission line to an interconnection near the Hoonah airport. · An approximately 0.3 mile long access road from an existing Forest Service road to the intake structure and powerhouse. · The Gartina Creek site is estimated to have an average annual flow of around 66 cfs, a maximum divertible flow of 140 cfs and a net head of 61 feet. Using a flow-duration method, the maximum potential annual generation of this site was estimated in the HydroWest report to be 1,880,00kWH. The estimated construction cost for the Gartina Creek site is $3.75 million based on 2006/2007 construction. Water Supply Creek The Water Supply Creek project as described in the 2002 HydroWest report consists of the following components: · An eight feet high concrete and rockfill diversion dam. Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 5 of 13 · A concrete intake and sluiceway · A 5,500 feet long combination 24" diameter HDPE and 20" diameter steel pipeline from the intake structure to the powerhouse. · A 20'x40'x15' high single story pre-engineered metal building powerhouse. · A single turbine with 600kW three-phase generator. · Programmable automatic paralleling switchgear with remote control and unattended operation capability. · A pad-mount disconnect switch and step-up transformer bank adjacent to the powerhouse. · Approximately four miles of 12.5kV three-phase overhead transmission line to an interconnection near the Hoonah airport. · An approximately .25 mile long access road from an existing Forest Service road to the intake structure and powerhouse. · The Water Supply Creek site is estimated to have an average annual flow of around 9 cfs, a maximum divertible flow of 20 cfs and a net head of 400 feet. Using a flow- duration method, the maximum potential annual generation of this site was estimated in the HydroWest report to be 1,820,00kWH. The estimated construction cost for the Water Supply Creek site is $3.1 million based on 2006/2007 construction. Elephant Falls The Elephant Falls project as described in the 2002 HydroWest report consists of the following components: · An eight feet high concrete and rockfill diversion dam. · A concrete intake and sluiceway · A 3,900 feet long combination 18" diameter HDPE and 15" diameter steel pipeline from the intake structure to the powerhouse located on Gartina Creek. · A 20'x40'x15' high single story pre-engineered metal building powerhouse. · A single turbine with 600kW three-phase generator. · Programmable automatic paralleling switchgear with remote control and unattended operation capability. · A pad-mount disconnect switch and step-up transformer bank adjacent to the powerhouse. · Approximately four miles of 12.5kV three-phase ove rhead transmission line to an interconnection near the Hoonah airport. · An approximately 4,000 feet long access road from an existing Forest Service road to the intake structure and an approximately 7,500 feet long access road from an existing Forest Service road to the powerhouse. · The Elephant Falls site is estimated to have an average annual flow of around 4 cfs, a maximum divertible flow of 9.3 cfs and a net head of 800 feet. Using a flow-duration method, the maximum potential annual generation of this site was estimated in the HydroWest report to be 1,780,00kWH. The estimated construction cost for the Elephant Falls site is $3.76 million based on 2006/2007 construction. Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 6 of 13 The potential annual generation capacity calculated for each of these sites is only available if the local load is always in excess of the available hydroelectric generation. During seasonally high stream flow periods, the nighttime community loads will fall below the anticipated 600kW hydroelectric generation capacity. This will result in the usable annual generation capacity being less than the potential annual generation capacity quoted for each site . If two of these sites are developed even less of the potential annual generation would be usable , especially during high flow periods. The annual usable generation from a single and two -site hydroelectric project was estimated using available transposed stream flow data , five percent flow duration charts and IPEC community average load data . The results indicate that if only one of these hydroelectric sites were developed it would provide approximately 30% of Hoonah's near term projected annual generation demand. If two of these sites were developed they would provide approximately 50% of Hoonah's annual generation demand. The HydroWest report addresses permitting issues for each of these sites. The Gartina Creek and Water Supply Creek projects would fall under the State of Alaska small hydroelectric project exemption from Federal Energy Regulatory Commission (FERC) jurisdiction. Because the Elephant Falls site is within the Tongass National Forest, it would fall under FERC jurisdiction unless a land exchange with the City of Hoonah or Sealaska Corporation could be arranged. The HydroWest report also addresses environmental issues for each of these sites. The primary environmental concern is the possible impact on anadromous and resident fish populations due to reduced in-stream flows between the intake structure and the power house. Because Water Supply Creek and Elephant Falls are located above Gartina Falls, no anadromous fish will be present and only resident fish populations are of concern. The bypassed reach of stream for the Gartina Creek project does include salmon pools at the base of the falls . This could result in increased bypass flow requirements or significant increases in construction costs. 4) Potential Generation Heat Recovery Project : The IPEC Hoonah power plant has burned an average of 360,000 gallons of diesel annually over the past two years. An efficient generation heat recovery system will recover the heating energy equivalent of approximately 20% of the fuel burned by the generators. Using this rule of thumb, the IPEC generators have the potential to provide the heating equivalent of over 70,000 gallons of diesel fuel in recovered generation heat annually. The swimming pool, school building s, fire hall, senior center, senior apartments, and clinic are all located in the same general vicinity. These six public facilities use approximately 60,000 gallons of diesel annually for space heating . Ideally the power plant should be located as close as possible to the recovered heat end use facilities to minimize conductive heat looses in the buried pipe. However the existing power plant is located approximately one half mile from the school site where the bulk of the recovered heat would be used and no suitable sites for power plant relocation have been identified. Assuming four inch diameter arctic pipe and a total buried length of one mile for supply and return piping, the conductive heat losses would be the equivalent of approximately 20,000 gallons of diesel annually, reducing the net available recovered generation heat to the equivalent of around 50,000 gallons of diesel. Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information November 13, 2006 On Thursday October 19 and 20, 2006, David Lockard of the Alaska Energy Authority / Rural Energy Group (AEA/REG) and John Dickerson of Alaska Energy and Engineering (AE&E) traveled to Hoonah. The purposes of this site visit were to: 1) meet with local officials as well as representatives of local and regional organizations to identify and discuss potential energy infrastructure projects within the community; 2) to gather reconnaissance level information for preparation of a Conceptual Design Report (CDR) for any identified energy infrastructure projects and; 3) to collect field data for the installation of a new 12,000 gallon double wall fuel tank at the IPEC power plant. After a short weather delay in Juneau we arrived in Hoonah b y plane around 1 PM. After a tour of the community we met Keith Berggren, Peter Bibb and Thomas Jack of Inside Passage Electrical Cooperative (IPEC) at the power plant. We spent the afternoon inspecting the IPEC facility and as-builting the site in order to determine a suitable location for the proposed new fuel tank. A meeting was held the next morning at 8 AM to discuss potential energy infrastructure projects in Hoonah. David Lockard discussed the AEA/REG rural energy programs as well as Denali Commi ssion (DC) funding requirements. Much of the meeting was spent discussing the proposed AEL&P Hoonah intertie extension as well as potential local hydro projects, the proposed City/Hoonah Trading consolidated bulk fuel storage project and the potential use of generation heat recovery in Hoonah. Meeting a ttendees included: · Dennis H. Grey, Sr., Mayor, City of Hoonah · Jerry Medina, Administrator, City of Hoonah · Jan Supler, Vice President Retail Operations, Wards Cove/Hoonah Trading · Steve Brown, General Manager, Hoonah Trading · Tim McLeod, General Manager, AEL&P · Corry Hildenbrand, Energy Resource Developer, AEL&P · Vern Rauscher, General Manager, IPEC · Keith Berggren, Generation Manager, IPEC · Peter Bibb, Distribution Manager, IPEC · Dick Somerville, P.E., PND Engineers · Don Reid, Alaska Marine Lines Following the meeting we reviewed plans for the new Hoonah Marine Industrial Center and visited the site where phase I of the project is currently under construction. Discussions were held regarding the preferred location and layout of the proposed consolidated bulk fuel storage facility, automotive gas station, truck loading/bulk transfer facility, marine dispensing float, large vessel marine fuel dock and marine header. The following report is based on reconnaissance level information gathered during and subsequent to this site visit. It includes preliminary information on: 1) Proposed AEL&P Hoonah intertie extension 2) AC vs HVDC transmission technology for the Hoonah Intertie 3) Three p otential local hydroelectric projects near Hoonah Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 2 of 13 4) Potential g eneration heat recovery project 5) Existing IPEC power plant 6) Estimated future community power demand 7) Proposed IPEC power plant upgrades 8) Replacement generator selection 9) Proposed IPEC distribution upgrades 10) Existing IPEC tank farm 11) New IPEC power plant fuel tank 12) Existing Hoonah Trading bulk fuel storage facility 13) Required community fuel storage capacity 14) Proposed new tank farm, bulk transfer and dispensing facilities 15) Alternative energy This report along with comments from project participants will outline the issues to be addressed in the CDR. 1) AEL&P Hoonah I ntertie Extension: The proposed Hoonah intertie extension is part of a long term effort by AEL&P, IPEC, The Southeast Conference and the City of Hoonah to construct a transmission link between Juneau and Hoonah. The intertie would allow the community of Hoonah to take advantage of AEL&P's excess hydroelectric generation capacity and eliminate diesel generation in the community. The first leg of the intertie to the Greens Creek mine was completed in July, 2006 at a cost of approximately $9 million. This leg included a 9.5 mile long submarine cable between Douglas and Admiralty Island s as well as six mile s of overhead transmission line to the Greens Creek Mine . According to AEL&P current average loads at the mine are running around 8 megawatts and near term total annual energy requirements are expected to be in excess of 70GWh, higher than originally anticipated. If constructed, the Hoonah intertie extension would include a 25 mile long submarine cable between Admiralty and Chichagof Island s as well as a 3 mile long overhead transmission line to Hoonah. According to a recently updated estimate by AEL&P the cost of the Hoonah Intertie would be approximately $29 million for design, permitting and construction. The long term annual energy requirements of Hoonah are expected to be 6 to 7GWh. Permitting would likely take one to two years. Engineering completed to date includes a power flow analysis by Power Engineers, Inc. and a preliminary submarine cable design by Nexans and BC Hydro. An amount of $1 million was recently awarded to IPEC by DOE for submarine cable route bathymetric studies and permitting . According to AEL&P, if the Hoonah intertie were constructed today the rate to IPEC would be $.10/KWh and would include all O&M as well as a contingency for cable repairs and replacement. This rate would be "interruptible" in that Juneau area customers would receive first priority in times of limited hydroelectric generation while Hoonah would have priority of usage over the Greens Creek mine. It is assumed that if constructed the Hoonah intertie would provide virtually all the power required by the community of Hoonah and that Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 3 of 13 no upgrade to the existing IPEC power plant or new lo cal hydroelectric projects would be considered. An economic analysis of the Hoonah Intertie titled "Hoonah Intertie Extension - Economic Considerations" was recently prepared for AEA by Emerman Consulting , LLC and will be included as an appendix in the final Hoonah Energy Infrastructure Upgrade Projects CDR. Four separate scenarios were analyzed using different fuel prices, project schedules and Hoonah energy requirement estimates. The benefit to cost ratios of the four scenarios calculated over the estimated 30 year economic life of the intertie ranged from 0.78 to 0.50. Additional research on the proposed intertie will be conducted and will be included in the final Hoonah Energy Infrastructure Projects CDR. 2) AC v ersus HVDC transmission technolo gy for the Hoonah Intertie : Appendix E of the "Southeast Alaska Intertie Study Phase I Final Report" prepared by D. Hittle & Associates for the Southeast Conference in 2003 includes a report on alternate energy transmission technologies study conducted for the proposed interties. The study concluded that an HVDC (High Voltage Direct Current) system would be feasible but more expensive than an AC system for the Hoonah Intertie. The following are some comparisons of HVDC and AC transmission technology for the proposed Hoonah intertie: · Submarine cable lengths are limited to between 40 and 50 miles in AC transmission systems due to capacitive currents. HV DC systems make much longer submarine crossings possible because they do not generate capacitive currents. With a crossing length of only around 25 miles the Hoonah intertie is well within the limits for submarine cables in AC systems. · HVDC systems can carry more current on a given size cable than with an AC system. However, the size of the submarine cable specified for the Hoonah intertie is controlled by the strength requirement of the cable rather than by the conductive capacity. This offsets any potential savings of an HVDC system due to conductor size advantages for the Hoonah intertie. · Low cost extruded polymer cable has recently been developed for use in HVDC systems. Extruded cables are less expensive than other cable technologies but have little history in submarine applications. There is also as yet no proven technology for repairing a damaged submarine extruded cable . · HV DC systems can be constructed with a single cable where ground return is used. However a single cable HVDC system is not considered an option for the Hoonah intertie due to environmental, permitting and reliability issues. Therefore a two -cable HVDC system would be required. Three-phase AC submarine cable is available as a bundled unit while the HVDC system would require two separate cables. The per unit cost of the HVDC submarine cable would be less than the bundled thr ee-phase AC cable but the total submarine cable cost for the Hoonah intertie would be higher for the HVDC system due to the requirement of two separate cables. · An HVDC intertie would require a total of two voltage source converters (V SC) for conversion of AC to HVDC and then back to AC. In 2003 the price estimate of each VSC was $3.2 million. Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 4 of 13 Additional research into the latest HVDC technology available will be conducted and will be included in the final Hoonah Energy Infrastructure Projects CDR. 3) Three Potential Local Hydroelectric Projects Near Hoonah: In June, 2002 HydroWest Group, LLC, a subsidiary of AP&T, published a report titled "Reconnaissance of Three Potential Hydroelectric Sites Near Hoonah, Alaska". This report was commissioned by the City of Hoonah. It was preceded by a previous study titled "Gartina Creek Project - A Reconnaissance Report" performed in 1979 by Harza Engineering for the Alaska Power Authority. A review and update of the 1979 report titled "Concept Review Report, Gartina Creek Hydroelectric Project" was performed in 1998 by HDR for the City of Hoonah. The three identified hydroelectric prospects in the Hoonah area are identified as Gartina Creek, Water Supply Creek and Elephant Falls . Water Supply Creek and Elephant Falls are both tributaries of Gartina Creek. All flow data for these three drainages is transposed from the stream gage records of the Kadashan River drainage near Tenakee which is very similar in geology, precipitation, orientation and elevation to the thr ee Hoonah sites. Gartina Creek The Gartina Creek project as described in the 2002 HydroWest report consists of the following components: · A fifteen feet high concrete and rockfill diversion dam. · A concrete intake structure and sluiceway · A 54-inch diamete r steel pipeline approximately 200 feet long from the intake structure to the powerhouse. · A 20'x20'x25' high two level reinforced concrete powerhouse · A single turbine with 600kW three-phase generator. · Programmable automatic paralleling switchgear with remote control and unattended operation capability. · A pad-mount disconnect switch and step-up transformer bank adjacent to the powerhouse. · Approximately four miles of 12.5kV three-phase overhead transmission line to an interconnection near the Hoonah airport. · An approximately 0.3 mile long access road from an existing Forest Service road to the intake structure and powerhouse. · The Gartina Creek site is estimated to have an average annual flow of around 66 cfs, a maximum divertible flow of 140 cfs and a net head of 61 feet. Using a flow-duration method, the maximum potential annual generation of this site was estimated in the HydroWest report to be 1,880,00kWH. The estimated construction cost for the Gartina Creek site is $3.75 million based on 2006/2007 construction. Water Supply Creek The Water Supply Creek project as described in the 2002 HydroWest report consists of the following components: · An eight feet high concrete and rockfill diversion dam. Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 5 of 13 · A concrete intake and sluiceway · A 5,500 feet long combination 24" diameter HDPE and 20" diameter steel pipeline from the intake structure to the powerhouse. · A 20'x40'x15' high single story pre-engineered metal building powerhouse. · A single turbine with 600kW three-phase generator. · Programmable automatic paralleling switchgear with remote control and unattended operation capability. · A pad-mount disconnect switch and step-up transformer bank adjacent to the powerhouse. · Approximately four miles of 12.5kV three-phase overhead transmission line to an interconnection near the Hoonah airport. · An approximately .25 mile long access road from an existing Forest Service road to the intake structure and powerhouse. · The Water Supply Creek site is estimated to have an average annual flow of around 9 cfs, a maximum divertible flow of 20 cfs and a net head of 400 feet. Using a flow- duration method, the maximum potential annual generation of this site was estimated in the HydroWest report to be 1,820,00kWH. The estimated construction cost for the Water Supply Creek site is $3.1 million based on 2006/2007 construction. Elephant Falls The Elephant Falls project as described in the 2002 HydroWest report consists of the following components: · An eight feet high concrete and rockfill diversion dam. · A concrete intake and sluiceway · A 3,900 feet long combination 18" diameter HDPE and 15" diameter steel pipeline from the intake structure to the powerhouse located on Gartina Creek. · A 20'x40'x15' high single story pre-engineered metal building powerhouse. · A single turbine with 600kW three-phase generator. · Programmable automatic paralleling switchgear with remote control and unattended operation capability. · A pad-mount disconnect switch and step-up transformer bank adjacent to the powerhouse. · Approximately four miles of 12.5kV three-phase ove rhead transmission line to an interconnection near the Hoonah airport. · An approximately 4,000 feet long access road from an existing Forest Service road to the intake structure and an approximately 7,500 feet long access road from an existing Forest Service road to the powerhouse. · The Elephant Falls site is estimated to have an average annual flow of around 4 cfs, a maximum divertible flow of 9.3 cfs and a net head of 800 feet. Using a flow-duration method, the maximum potential annual generation of this site was estimated in the HydroWest report to be 1,780,00kWH. The estimated construction cost for the Elephant Falls site is $3.76 million based on 2006/2007 construction. Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 6 of 13 The potential annual generation capacity calculated for each of these sites is only available if the local load is always in excess of the available hydroelectric generation. During seasonally high stream flow periods, the nighttime community loads will fall below the anticipated 600kW hydroelectric generation capacity. This will result in the usable annual generation capacity being less than the potential annual generation capacity quoted for each site . If two of these sites are developed even less of the potential annual generation would be usable , especially during high flow periods. The annual usable generation from a single and two -site hydroelectric project was estimated using available transposed stream flow data , five percent flow duration charts and IPEC community average load data . The results indicate that if only one of these hydroelectric sites were developed it would provide approximately 30% of Hoonah's near term projected annual generation demand. If two of these sites were developed they would provide approximately 50% of Hoonah's annual generation demand. The HydroWest report addresses permitting issues for each of these sites. The Gartina Creek and Water Supply Creek projects would fall under the State of Alaska small hydroelectric project exemption from Federal Energy Regulatory Commission (FERC) jurisdiction. Because the Elephant Falls site is within the Tongass National Forest, it would fall under FERC jurisdiction unless a land exchange with the City of Hoonah or Sealaska Corporation could be arranged. The HydroWest report also addresses environmental issues for each of these sites. The primary environmental concern is the possible impact on anadromous and resident fish populations due to reduced in-stream flows between the intake structure and the power house. Because Water Supply Creek and Elephant Falls are located above Gartina Falls, no anadromous fish will be present and only resident fish populations are of concern. The bypassed reach of stream for the Gartina Creek project does include salmon pools at the base of the falls . This could result in increased bypass flow requirements or significant increases in construction costs. 4) Potential Generation Heat Recovery Project : The IPEC Hoonah power plant has burned an average of 360,000 gallons of diesel annually over the past two years. An efficient generation heat recovery system will recover the heating energy equivalent of approximately 20% of the fuel burned by the generators. Using this rule of thumb, the IPEC generators have the potential to provide the heating equivalent of over 70,000 gallons of diesel fuel in recovered generation heat annually. The swimming pool, school building s, fire hall, senior center, senior apartments, and clinic are all located in the same general vicinity. These six public facilities use approximately 60,000 gallons of diesel annually for space heating . Ideally the power plant should be located as close as possible to the recovered heat end use facilities to minimize conductive heat looses in the buried pipe. However the existing power plant is located approximately one half mile from the school site where the bulk of the recovered heat would be used and no suitable sites for power plant relocation have been identified. Assuming four inch diameter arctic pipe and a total buried length of one mile for supply and return piping, the conductive heat losses would be the equivalent of approximately 20,000 gallons of diesel annually, reducing the net available recovered generation heat to the equivalent of around 50,000 gallons of diesel. Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 7 of 13 The final CDR will include a proposed heat recovery pipeline routing plan and cost estimate for supplying recovered heat to the previously mentioned public facilities. 5) Status of Existing Hoonah IPEC Power Plant: The IPEC (originally THREA) power plant was constructed in the 1977. It is located on the eastern edge of town at the intersection of Gartina Highway and White Alice Site Road. The building is a 40'Wx100'L metal-sided, pre-engineered steel frame structure that houses three generators, an office and a warehouse. The interior walls are covered with painted plywood up to a height of 8' with vinyl-encased fiberglass batt insulation exposed above and across the ceiling . The exterior metal siding is in good condition but the exterior paint is in very poor condition and is peeling badly. The concrete foundation, steel frame members and horizontal steel girts appear to be in good condition. According to the operator, the finish grade around the plant does not drain well and the plant is prone to minor flooding, especially during spring breakup. There are three Caterpillar generators installed in the power plant. Unit #1 is a model 3 98 with a capacity of 600kW at 1,200RPM. The 398 is an antiquated pre-combustion design with poor fuel economy and increasingly difficult availability of spare parts. This unit is used for emergency backup only and is slated for replacement. Unit #2 is a model 3512 with a prime capacity of 1,100kW at 1,200RPM. Unit #3 is a model 3512 with a prime capacity of 855kW at 1,200RPM. Units #2 and #3 each have approximately 66,000 total engine hours. With the current schedule of a top-end overhaul every 11,000 hours and a major overhaul every 22,000 hours, IPEC expects to get at least an additional 54,000 hours each from existing uni ts #2 and #3, barring any unforeseen circumstances. Engine cooling is with three remote radiators located outside at the front of the power plant. Each generator is on a stand -alone cooling system with one radiator. There is currently no generation he at recovery equipment installed. Power generation is at 4160V 3-phase. There are two separate community feeders with one pole -mounted and one pad-mount step-up transformer bank within the fenced area adjacent to the power plant. Station service is provided by a metered 480V three phase load center as well as an un-metered 120/208V three phase load center. The 5kV manual paralleling switchgear was installed new in 1990. It includes a section for each of the three generators and a feeder/station service section. 6) Estimated Future Community Power Demand According to IPEC data, the current annual peak generation load in Hoonah is around 900kW, the average demand is around 596kW and the annual generation requirement has averaged 5.2 GWh over the past two years. IPEC load data indicates that current seasonal load variations in Hoonah are minor, with summer and winter loads being very even. Steady growth in summer peak loads and annual generation are likely over time due to expected increases in touri sm, with annual generation requirements likely to grow to over 6GWh within five years. It appears that both generators #2 and #3 are adequately sized to handle the estimated near term growth in community demand. Additional research will be conducted into potential community peak load and generation requirement growth and will be included in the final CDR. Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 7 of 13 The final CDR will include a proposed heat recovery pipeline routing plan and cost estimate for supplying recovered heat to the previously mentioned public facilities. 5) Status of Existing Hoonah IPEC Power Plant: The IPEC (originally THREA) power plant was constructed in the 1977. It is located on the eastern edge of town at the intersection of Gartina Highway and White Alice Site Road. The building is a 40'Wx100'L metal-sided, pre-engineered steel frame structure that houses three generators, an office and a warehouse. The interior walls are covered with painted plywood up to a height of 8' with vinyl-encased fiberglass batt insulation exposed above and across the ceiling . The exterior metal siding is in good condition but the exterior paint is in very poor condition and is peeling badly. The concrete foundation, steel frame members and horizontal steel girts appear to be in good condition. According to the operator, the finish grade around the plant does not drain well and the plant is prone to minor flooding, especially during spring breakup. There are three Caterpillar generators installed in the power plant. Unit #1 is a model 3 98 with a capacity of 600kW at 1,200RPM. The 398 is an antiquated pre-combustion design with poor fuel economy and increasingly difficult availability of spare parts. This unit is used for emergency backup only and is slated for replacement. Unit #2 is a model 3512 with a prime capacity of 1,100kW at 1,200RPM. Unit #3 is a model 3512 with a prime capacity of 855kW at 1,200RPM. Units #2 and #3 each have approximately 66,000 total engine hours. With the current schedule of a top-end overhaul every 11,000 hours and a major overhaul every 22,000 hours, IPEC expects to get at least an additional 54,000 hours each from existing uni ts #2 and #3, barring any unforeseen circumstances. Engine cooling is with three remote radiators located outside at the front of the power plant. Each generator is on a stand -alone cooling system with one radiator. There is currently no generation he at recovery equipment installed. Power generation is at 4160V 3-phase. There are two separate community feeders with one pole -mounted and one pad-mount step-up transformer bank within the fenced area adjacent to the power plant. Station service is provided by a metered 480V three phase load center as well as an un-metered 120/208V three phase load center. The 5kV manual paralleling switchgear was installed new in 1990. It includes a section for each of the three generators and a feeder/station service section. 6) Estimated Future Community Power Demand According to IPEC data, the current annual peak generation load in Hoonah is around 900kW, the average demand is around 596kW and the annual generation requirement has averaged 5.2 GWh over the past two years. IPEC load data indicates that current seasonal load variations in Hoonah are minor, with summer and winter loads being very even. Steady growth in summer peak loads and annual generation are likely over time due to expected increases in touri sm, with annual generation requirements likely to grow to over 6GWh within five years. It appears that both generators #2 and #3 are adequately sized to handle the estimated near term growth in community demand. Additional research will be conducted into potential community peak load and generation requirement growth and will be included in the final CDR. Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 8 of 13 7) Proposed IPEC Power Plant Upgrades As mentioned previously, if the proposed AEL&P Hoonah intertie extension is constructed then it is assumed tha t no upgrades will be performed at the IPEC plant other than the new fuel tank (see item 11). If the community remains reliant exclusively on diesel generation or if a combination of local hydroelectric and diesel generation is the long term solution then the following upgrades to the existing IPEC power plant are proposed. These upgrades are intended to modernize the power plant and to improve the overall fuel efficiency, reliability, fire prevention/protection, noise control and operations at the facili ty: · Re -grade area around plant to improve area drainage · Replace existing generator #1 with new generator · Replace existing switchgear and relays with new automatic paralleling switchgear · Replace all exterior sheet metal · Replace existing ventilation louvers and ridge vent with sound -insulated air intake and exhaust fan ducting · Replace existing engine coolant piping with common cooling manifold including a heat exchanger to allow for utilization of recovered generation heat · Replace existing radiators with new radiators and variable speed motor controls · Replace existing non-operative fire suppression system with new fire suppression system · Renovate and enlarge control room to contain new switchgear · Install a used oil blender (the feasibility of this will need to be investigated more thoroughly in the Concept Design Report) 8) Replacement Generator Selection · If a major renovation of the power plant is deemed necessary it is proposed that the existing antiquated Caterpillar Model 398 generator be replaced with a ne w, more fuel efficient unit. Assuming that the two existing 3512's are capable of handling the expected near term peak loads, the new generator should be prime rated to efficiently handle night time loads and to provide efficient peak-adding with hydroele ctric power if constructed. A thorough investigation of all Caterpillar model gensets prime rated between 500kW and 600kW and available in current EPA tier ratings will be conducted prior to the Concept Design Report. 9) Proposed IPEC Distribution Upgrade s A 12.47/7.2kV overhead distribution system provides electric power to the community of Hoonah. The distribution system is in generally good condition but there is one issue that will need to be addressed in the near future. Phase I of the new Hoonah Marine Industrial Center is currently under construction along Gartina Highway, between the City dock and the ferry terminal. The existing overhead transmission line currently runs across an area that will be used for marine vessel and connex storage in the future. The City would like all distribution in this area to be buried to avoid any potential safety concerns with operating the new facility around the existing overhead power lines. 10) Existing IPEC Tank Farm: Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 9 of 13 The existing power plant tank farm was built in 1977. It consists of three old BIA style vertical tanks and two ex-military domed-end horizontal tanks in a lined earthen dike as well as a gravity-fed exterior day tank located adjacent to the power plant. The two horizontal tanks have sinc e been taken out of service. The current tank farm configuration has a gross shell capacity of approximately 26,000 gallons, including a 3,000 gallon double wall day tank. All fuel is delivered to this facility by tank truck. Deficiencies at the facility include: · aging, rusted tank s · non-liquid tight dike membrane liner · non-code compliant piping, valves and appurtenances · lack of piping pressure reli ef · lack of cathodic protection on buried pipe · lack of tank emergency venting · lack of overfill prevention on 3,000 gallon day tank · 3,000 gallon day tank too close to the power plant building · lack of surface flow containment at truck transfer area 11) New IPEC Power Plant Fuel Tank: Because there is a reliable bulk fuel facility operator and fuel delivery service in Hoonah, IPEC no longer deems it necessary to store such large quantities of fuel at the power plant. At IPEC's request, AEA has approved funding for installation of a single new double wall tank at the power plant to replace the entire existing fuel storage facility. The proposed new tank location was inspected and some preliminary measurements were made during this site visit. The tank installation project will include the following items: · excava tion of hillside at west end of building to enlarge pad for placing new tank · install new 10' diameter x 20' long 12,000 gallon gross shell capacity horizontal skid- mounted double wall tank with overfill protection · install new security fencing · re-grade yard area to provide surface flow containment around truck transfer area · install new HDPE coated welded steel fuel oil supply and return piping in below grade concrete utilidor between the new tank and power plant to allow for vehicle access to step-up transformers behind power plant - provide remova ble cover for visual inspection of pipelines See attached Sheets M1 and M2 for conceptual plans . The IPEC tank project design will be expedited for summer '07 construction. The tank fabrication drawings will be completed in time for January '07 procurement and an early spring '07 tank delivery schedule. An as-built survey of the IPEC facility with surface contours is required for final site plan development. J. W. Bean Surveying will be in Hoonah around the first of the year to do work for the City and can perform the required survey work at that time. Final design will then be completed by February '07, with permitting and procurement to be completed in time for summer '07 construction. 12) Existing Hoonah Trading Bulk Fuel Storage Facility: Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 10 of 13 The Hoonah Trading b ulk fuel storage facility provides storage for virtually all the diesel fuel and gasoline received by the community. The facility consists of six in-service vertical steel bulk storage/dispensing tanks, a three product marine header, a three product mari ne fueling station, a three product vehicle gas station, a diesel truck loading rack, and three 4" diameter barge fill/distribution pipelines. The tank farm is located on the hillside above the Hoonah Trading store. Tank farm access is by a covered wooden stairway from 1st Street. The fuel is used for local power generation, vehicle dispensing, marine dispensing and heating fuel delivery. All dispensing and bulk transfers are by gravity. The total gross shell capacity of the six bulk storage/dispens ing tanks is approximately 154,000 gallons of #2 diesel, 19,000 gallons of #1 diesel and 38,000 gallons of unleaded gasoline. The facility appears to be old but is well maintained. The tank farm is built on a two -tiered site with four tanks on the lower level and two tanks on the upper level. It is completely surrounded by chain link fence. Concrete walls on the sides and across the front of both tiers provide some surface flow containment but there is no dike membrane liner and the containment is not liquid tight. The tanks are equipped with normal vents and manways. The re are 4" flanged bottom connections with flanged steel ball valves and 1" threaded steel PRV jumpers for pipeline pressure relief. The manifold piping appears to be in good condition and is well supported but there are no flexes between tank connections. The tanks are all supported on concrete bases. There are three each 4" diameter welded steel barge fill/distribution pipelines that run from the marine header to the tank farm, supported under the dock, then buried under the road and finally above grade up the hill to the tank farm. A three product marine header is located on the end of the fuel dock. Each barge connection has a 4" quick disconnect hose coupling, a 4" flanged steel check valve, and a 4" flanged steel plug valve. There is a steel drip pan that serves all three marine header fill connections which does not appear to have adequate capacity to meet the 84 gallon containment requirement. The marine dispensers are also located under a rain shelter on the face of the fuel dock and are gravity fed with 2" welded steel branch pipelines off of the main 3" barge fill/distribution pipelines. There is a truck rack located near the Hoonah Trading store that allows for b ulk loading #1 or #2 diesel into a tank truck for fuel deliveries throughout the community. There is also a two product gasoline and #2 diesel vehicle dispenser located on the dock near the store. The following is a summary of existing facility deficiencies observed: · Improper Secondary Containment (Diking) –Tanks are not within a proper liquid tight secondary containment system of adequate capacity as required by the Fire Code and EPA regulations. · No Emergency Vents - None of the tanks have emergency vents, in violation of the Fire Code. · Improper Piping and Valves - Existing piping systems consist of steel piping with a combination of welded and threaded joints. The threaded joints are particularly prone to leaking. · Gravity Dispensing - Code requires that all fuel dispensing be by pump. · Above -Ground Dispensing Tank Capacity - State Fire Marshall requirements stipulate that the maximum size of an above ground dispensing tank is 12,000 gallons. Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 11 of 13 · Dispensing From Above -Ground Tanks Without Protective Systems - State Fire Marshall requirements stipulate protective devices and piping systems to prevent a gravity discharge of fuel in the event of a failure of the dispenser or piping. No protective devices are installed. · Cathodic Protection of Buried Pipeline s - Code requires all buried piping to have cathodic protected. · Improper Site Location - The existing bulk /dispensing tanks do not appear to meet Fire Code minimum separation distance requirements from adjacent public ways and property lines for unprotecte d tanks. This facility does not meet current code or regulation requirements and would not to be cost effective to renovate. Therefore it should be taken out of service and replaced with a new tank farm located at the new Hoonah Marine Industrial Center. 13) Required Community Fuel Storage Capacity: Hoonah is located on a year round ice free port with a deep water dock capable of receiving ocean-going barges. Fuel deliveries by barge are available from at least two different vendors and are scheduled to be in the area at least twice per month. According to fuel delivery records, the community has recently averaged approximately sixteen barge deliveries per year, spaced from two weeks to one month apart. Based on this delivery schedule and to ensure no future disruptions in fuel supply, the facility should be sized to hold an approximate one peak month supply of each product with an adequate reserve margin. The following table compares the current annual and one peak month use for each product to the proposed net useable tank capacity for the new facility: CONSUMPTION VERSUS CAPACITY Product Average Annual Use in Gallons (1) Estimt'd Peak 1 Month Use in Gallons Proposed Net Capacity in Gallons (2) % of Est. Peak 1 Month Use % of Est. Annual Use Proposed Gross Capacity in Gallons Gasoline 250,000 30,000 36,000 120% 14% 40,000 #1 Diesel 210,000 30,000 36,000 120% 17% 40,000 #2 Diesel 1,000,000 125,000 153,000 122% 15% 170,000 Avg as (3) 0 n/a 9,000 n/a n/a 10,000 Total 1,460,000 234,000 260,000 (1) Calendar years 2004 and 2005. (2) Net capacity (90% of gross shell capacity) (2) No existing avgas storage but planning to begin avgas sales at airport 14) Proposed New Tank Farm, Bulk Transfer and Dispensing Facilities: The proposed new tank farm will include a total of six each welded steel vertical bulk storage tanks, including four at 40,000 gallons for #2 diesel storage, one at 30,000 gallons for #1 diesel storage and one at 30,000 gallons for gasoline storage. There will also be two horizonta l skid-mounted welded steel dispensing tanks, with each tank divided into two Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 12 of 13 equal 10,000 gallon partitions. The partitions will provide for dispensing of the #2 diesel, #1 diesel and gasoline as well as storage and transfer of avgas. Secondary containm ent will be provided by a lined concrete dike. A drive -through truck loading facility will provide for top loading of #2 diesel, #1 diesel and avgas. It will be constructed adjacent to the tank farm and situated so that secondary containment is provided by the tank farm dike. A service station style dual product gasoline and #2 diesel dispenser in the center of a two vehicle slab will be installed near the tank farm. New 4” diameter pipelines will be installed for #2 diesel, #1 diesel and gasoline . A 2" diameter pipeline will be installed for avgas deliveries. The #2 diesel, #1 diesel and gasoline pipelines will be equipped with branch tees and isolation valves to allow them to serve as fill pipelines for barge deliveries as well as distribution pipelines for dispensing and bulk transfer operations . The pipelines will be suspended below the fuel dock and buried from the fuel dock to the new tank farm. A drip pan will be provided on the dock at the termination of the fill pipelines (marine header). A combination of centrifugal and submersible pumps will be used for bulk transfer and dispensing functions . A large vessel marine fuel transfer facility with hose stands and meters will be located near the marine header on the main fuel dock. A separate fuel float will be used for retail fuel sales to smaller vessels and will include marine dispensing of #2 diesel, #1 diesel and gasoline. See attached Sheets M3 and M4 for conceptual plans. A more detailed tank farm conceptual design will be included in the Hoonah Energy Infrastructures Project CDR to be completed by spring '07. If comments are received and a consensus is reached on a facility plan in a timely manner then final design can be completed in time for a spring '08 tank farm construction schedule. 15) Alternative Energy : The proposed AEL&P intertie as well as potential local hydroelectric and generation heat recovery projects have already been addressed in this report. The Alaska Energy Authority/Alaska Industrial Development and Export Authority published a draft Rural Alaska Energy Plan dated December 31, 2002 as a follow-up report to the previously released Screening Report of Alaska Rural Energy Plan dated April 2001. The Screening Report evaluated a dozen alternative energy technologies other than generation heat recovery. Only wind energy was identified as alternative energy technology warranting further evaluation in the draft Rural Alaska Energy Plan. According to the Wind Energy Resource Atlas of the United States the community of Hoonah is located within a class 3 wind regime and is not a viable candidate for a wind energy program using currently available technologies. Hoonah Energy Infrastructure Projects 10/20/06 Trip Report & Preliminary Information Page 13 of 13 Please review the issues presented and call David Lockard at 269-4541 to discuss or fax your comments to 269-3044. In order to keep the CDR on schedule we need to receive all community comments no later than January 31, 2007. I look forward to working with you on this project. HOONAH BULK FUEL PROJECT LOCALLY AVAILABLE EQUIPMENT LIST OWNER MAKE MODEL YEAR CAPACITY (YDS, TONS) ATTACHMENTS - (BACK-HOE, FORKS, AUGER, ETC..) CONDITION, COMMENTS DUMP TRUCKS DOZERS LOADERS TRACK HOES (EXCAVATORS) SKID-STEERS CRANES HOONAH BULK FUEL UPGRADE PROJECT LOCAL LABOR POOL Name LaborerTruck DriverHeavy Equip OperatorHeavy Equip MechanicWelders HelperCertified Welder (1)Apprentice ElectricianJourneyman Electrician (2)1) With Current API Welding Certificate 2) With Current Certificate of Fitness 5/18/2007