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HomeMy WebLinkAboutChenega Bay Hydro Application Renewable Energy Fund Round 3 Grant Application AEA 10-015 Application Page 1 of 17 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 17 10/7/2009 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Chenega Corporation on behalf of Chenega IRA Council Type of Entity: Governmental entity, federally-recognized Native tribe Mailing Address 3000 C Street Ste 301 Anchorage, Alaska 99503 Physical Address same Telephone (907) 277-5706 Fax (907) 277-5700 Email chenegaira@yahoo.com 1.1 APPLICANT POINT OF CONTACT Name Deborah Daisy Title Community Development & Grants Manager Mailing Address 3000 C Street, Ste. 301, Anchorage, Alaska 99503 Telephone (907) 677-4960 Fax (907) 277-5700 Email Deborah.daisy@chenega.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 x 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 17 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) Type in your answer here and follow same format for rest of the application. Chenega Bay Hydro Design and Permitting 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project. Answer here. Chenega Bay, Alaska for the Native village of Chenega, located on Evans Island at Crab Bay, 42 miles SE of Whittier in Prince William Sound. It lies at approximately 60.065710 North Latitude and 148.010380 West Longitude (Sec. 24, T001S, R008E, SM). 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind Biomass or Biofuels x Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Reconnaissance x Design and Permitting Feasibility Construction and Commissioning Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. The vision for this project is to construction a small scale hydroelectric plant to serve the Native Village of Chenega Bay, Alaska. In 1992, Phukan Consulting Engineers and Associates, Inc. prepared a hydroelectric study for the Alaska Energy Authority which identified a viable project site and estimated costs for two alternative designs for completing the project. In 2008-09, an AEA-funded grant allowed the engineering firm of HDR Alaska, Inc to complete a reconnaissance study which confirmed a feasible development site for construction of a hydroelectric facility. This grant funding request is for the design and permitting which are the next steps for this hydroelectric generation project. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 4 of 17 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.)  The cost of diesel fuel is increasing rapidly in rural Alaska. The Chenega Bay Electrical Utility is currently charging $0.485/kWh before Power Cost Equalization. With fuel costs rising rapidly, the utility will have to increase fees for electrical generation to consumers. New electrical generators have been installed in 2009 in the village which has improved the overall power system; however, it will not significantly reduce the cost of producing electricity for the community. This project is estimated to produce power at a rate of $0.21/kWh, a savings of almost 39% of the cost of present electrical generation. This project, once constructed, would reduce the cost of power for residents. The community has changed in its economic makeup in the past eight years; dropping from 45.5% Low to Moderate income in its population to 89.9%. Paying for basic power generation has become much harder and reduction of the power costs to the consumer will provide an economic boost to individuals trying to make ends meet for their families. Reducing the cost of power will also be a boon to economic development in the community. Any project providing stimulation to the economy cannot be cost effective without reduction of utility rates to help generate revenue. 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. This project will require $252,000 in grant funds from AEA. An additional $38,500 in in-kind match will be provided by Chenega Corporation for labor, project management, travel/per diem and materials and supplies. 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. $ 252,000 2.7.2 Other Funds to be provided (Project match) $ 38,500 22.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 238,500 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 5 of 17 10/7/2009 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) $950,500 2.7.5 Estimated Direct Financial Benefit (Savings) $ 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.) $ 133,500/year 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. Deborah A Daisy, grants management and administrative oversight Brian Pillars, Operations and Project Management Resumes Attached 3.2 Project Schedule Include a schedule for the proposed work that will be funded by this grant. (You may include a chart or table attachment with a summary of dates below.) Proposed Work Schedule for Completion Responsible for Work 1.Project scoping and contractor solicitation for permitting and design 3rd Q 2010 Chenega 2.Permit applications (as needed) 4TH Q 2010 Chenega & Contractor 3.Agency negotiations and mitigation plans (as needed) 1st Q 2011 Contractor 4.Resolution of land use, right of way issues 1st Q 2011 Chenega 5.Permit approvals 2nd Q 2011 Contractor 6. Continued Stream Flow Data Collection Ongoing throughout project Chenega & Contractor 7. Survey & Geotechnical 8. Preliminary design 3rd Q 2011 Contractor 9. Updated cost and energy estimate and economic and financial analysis 3rd Q 2011 Contractor 10.Final design 4th Q 2011 Contractor 11.Negotiated power sales agreements with approved rates 4th Q 2011 Chenega & Contractor 12.Final business and operational plan 4th Q 2011 Contractor 13. 6 Quarterly Reports/Final Report @ 1,000 ea Each Q Chenega 14. Project Management Chenega Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 6 of 17 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.) Project Milestones and schedule are the same as Table Section 3.2. If a decision is made to pursue this project the next steps are: • Continue stream gaging of Anderson Creek through the winter and until design is completed. • Initiate discussions with ADF&G regarding requirements for instream flow. • Develop joint use agreement with ANTHC. • Submit permit applications. • Survey plan and profile of the pipeline route. • Perform soils exploration along pipeline and tailrace route. • Prepare preliminary design criteria and preliminary design of project. • Refine estimate of cost. • Develop business plan • Prepare final design documents. 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. As previously stated, the Chenega Corporation is making this application on behalf of the Chenega IRA Council as it has done in the past grant award which provided the current feasibility study that is now complete. Chenega Corporation and the Tribal Council (IRA) have worked in partnership for the past 15 years to perform infrastructure activities that benefit residents of the village of Chenega Bay, Alaska. Personnel of both the tribal administration and Chenega Corporation will be used as necessary to provide grant support in performance of grant activities and fiscal responsibility. The matching funds will come from both entities, as needed for specific tasks to accomplish project milestones in concert with a qualified engineering firm experienced in design and planning of hydroelectric construction projects. A copy of the most current Chenega Corporation Annual Shareholder’s Report has been included to demonstrate that Corporation’s administrative, financial and management capabilities. This information is not normally made available to the general public. It is requested that the use of this information be limited to the grant review committee’s use only. HDR Alaska, Inc. performed the reconnaissance study and it is expected that a a firm similar in experience will be contracted to perform this next phase of the project, if awarded. Chenega Corporation will develop a detailed scope of work based on grant requirements and send letters of interest to qualified engineering firms. In consideration of the returned letters of interest, a panel of three Chenega employees versed in contract negotiation will review firm qualifications and choose two or three firms to interview. Based on a written questionnaire weighted with numerical factors, Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 7 of 17 10/7/2009 employees of these firms will be interviewed about the project scope and that firms’ qualifications and after reviewer scores were tallied, a firm will be chosen for contract if this grant is awarded to Chenega Corporation. A resume of HDR is included in the Attachments as a sample. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. The project manager will work directly with the selected engineering firm to keep timelines and work plans monitored. Grants manager will perform necessary quarterly grant reporting to AEA as well as providing necessary financial and work performance documentation as required by the grant agreement. All findings, reports and engineering documents resulting from this grant funding will be provided to the AEA as required in a timely manner. 3.6 Project Risk Discuss potential problems and how you would address them. The reconnaissance report, attached, describes the primary technical challenge for the site to be the construction of the upper portion of the pipeline within the narrow confines of the creek ravine but “is not seen as insurmountable and could be accomplished with HDPE pipe” as noted on Page 5. 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. Potential capacity is estimated of 90KW with the average annual energy generation estimated at 374 MWh (See Page 11, 14- Recon study). Satisfying the intent of the Fishway Act (AS 16.05.841) to allow a sufficient quantity of water to admit free passage of fish will likely reduce generation by 15-20 MWh per year, occurring primarily in times of low natural inflow. Streamflow data, along with more accurate elevation information will provide a basis for reevaluating the potential energy from the project. Permitting for the flow modification of the creek in the reach between the intake and the tailrace will need to be done to finalize evaluation of the potential energy. There are no other alternatives for energy resource available to this small isolated rural Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 8 of 17 10/7/2009 community. It is located on an island in southwestern Prince William Sound and does not generate enough wind, wave or solar energy to be considered feasible. Reliance on fossil fuels as sole source for generation of energy is the only option at present. At the current retail charge per gallon for diesel fuel plus expensive ocean barge delivery charges, hydroelectric energy generation becomes a cost-effective and eco-friendly alternative. 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. There are three diesel generators on-line for electrical production in the existing powerhouse; two are 4045 TFM 65kW/102HP (Deere motors) and one is a 4045 DFM 40kW/62HP (Deere motor). They are all less than one year old, having been replaced via a grant funding which is just in close-out phase from Denali Commission and the State of Alaska DCCED (closed out). 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. The project will reduce the amount of diesel fuel required to run generators when there is sufficient water to generate hydroelectric power. The project would also reduce the operations and maintenance cost of the existing power generation equipment. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The village of Chenega Bay has 22 residential housing units, a clinic, airport facility, boat harbor facility, a school and tribal administrative offices requiring electricity. There are an approximate total of 68 persons residing in the village, 26 of which are school age children. Statistics show an 89% low-to-moderate income demographic which means most families are strapped to pay for the electrical bills generated by diesel-power generators here. The savings from hydroelectric generation would have enormous economic impact on residents. The Tribal Council, who runs the utility and pays for operation of tribal offices and the clinic as well as streetlights and outbuilding electricity would save money which would, in turn, be passed on to village residents in the form of increased social, cultural and infrastructure development. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 9 of 17 10/7/2009 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 Preliminary findings indicate the intake for the hydroelectric project could be located at the ANTHC water supply intake dam and the powerhouse could be located adjacent and to the north of the existing diesel powerhouse. A viable route to connect the powerhouse back to the stream (i.e., tailrace) was identified from this point to the adjacent stream channel. The primary technical challenge for the site will be the construction of the upper portion of the pipeline within the narrow confines of the creek ravine. Energy generation was estimated using HDR’s proprietary software “Hydroelectric Evaluation Program” (HEP). HEP has been specifically designed to model run-of-river operations. HEP uses tabulated daily flows, turbine and generator efficiencies, friction coefficients and physical parameters to simulate energy production through a period of record. Turbine and generator efficiencies are determined from tables. Output from HEP consists of effective capacity rating of the unit(s), simulated production in MWh, percent operating time and overall plant factor. If pump turbine equipment was selected for this project the individual units would run in either an “on” or “off” type of operation. There would be no flow regulation by the unit. As such, the energy generation for this alternative configuration was estimated by integrating the flow duration curve, net head and equipment performance data. The following assumptions were used in modeling energy production: • A minimum environmental instream flow of 0 cfs. • A quantity of 40 gallons per minute (0.09 cfs) on a continuous basis was assumed as the amount of flow used by the water treatment plant. • Diesel generators will run continuously and the hydroelectric system will offset a portion of the diesel requirements. • Losses for station service, transformers and un-scheduled downtime were estimated to reduce gross generation by 4%. Using these assumptions the average annual energy generation was estimated at 374 MWh corresponding to an annual plant factor (the average percentage of full capacity used over a given period of time) of 47% (see Site Reconnaissance Report, Appendix D, Energy Calculations). Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 10 of 17 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 proposed project area includes Sections 23 and 26, and Sections 24 and 25 are adjacent to the project area. The land within the project area has been conveyed from BLM to The Chenega Corporation/Chugach Natives, Inc. There are two DNR interests in Section 26: a lease on the school and a Temporary Water Use Permit (TWUP) issued to Chenega Bay Indian Reorganization Act (IRA) Village Council for temporary use of water from Anderson Creek for a road construction project. This TWUP does not grant rights to the water in Anderson Creek, and the water rights permit for the proposed hydroelectric project would take precedence. There appear to be no land use issues as Chenega Corporation is applying for this project. 4.3.3 Permits Provide the following information as it may relate to permitting and how you intend to address outstanding permit issues. • List of applicable permits • Anticipated permitting timeline • Identify and discussion of potential barriers The Chenega Bay hydroelectric project will go through the State of Alaska permitting process, and the following permits would be required for the proposed project: • Alaska Department of Fish and Game (ADF&G) Division of Habitat Title 16 Fish Habitat Permit • US Army Corps of Engineers Section 404 permit • Alaska Department of Environmental Conservation (ADEC) Section 401 Water Quality Certification in support of Section 404 permits • Alaska Department of Natural Resources (ADNR) Division of Coastal and Ocean Management (DCOM) Coastal Consistency Determination • ADNR Water Rights Permit The lower portion of Anderson Creek is classified as an anadromous fish stream; therefore, a Fish Habitat Title 16 permit will be required for the construction of the proposed project because there would be impacts to the creek. Dolly Varden Char were found in a portion of the creek in which flows will be altered. ADF&G will need to be consulted regarding requirements for instream flow in this reach of the creek. The construction of the project would require a Section 404 (Wetlands) permit because the project would involve fill within waters of the United States, including vegetated wetlands. In addition, an ADEC Section 401 Water Quality Certification in support of the Section 404 permit would be required. The project is located within the coastal boundaries of the State of Alaska; and a consistency determination from the Alaska Coastal Management Program and Coastal Zone Questionnaire will be required for this project. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 11 of 17 10/7/2009 A water right is a legal right to use surface or ground water under the Alaska Water Use Act (AS 46.15). A water right allows a specific amount of water from a specific water source to be diverted, impounded, or withdrawn for a specific time. The proposed project would require a water right for the use of water from Anderson Creek. Permitting documents would be prepared immediately after contracting with an engineering firm who would then submit the documents with the assistance of Chenega Corporation personnel. It is estimated that permitting would begin early in the 4rd Quarter of 2010, after grant award. Permitting documents should be submitted to the appropriate agencies no later than the end of the 4th Quarter of 2010. Issuance of documents should begin in the 2nd Quarter of 2011. Alaska Department of Fish and Game will need to be consulted regarding requirements for instream flow in altered areas of the stream that fish reside in. Issues are unclear at this time as to what would need to be done to gain permit approval. 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 Threatened or Endangered species and Habitat issues Dolly Varden char was the only fish species observed to occupy habitat in the reach between the intake and the tailrace during the surveys. Dolly Varden char were observed throughout the stream to a point approximately 0.65 miles upstream from the mouth, at the base of a natural waterfall and relict timber dam. Based on preliminary project design concepts, local knowledge, and information gained through the field surveys, Dolly Varden char is the only species occupying habitat in the reach between the intake and the tailrace and would therefore be the only species affected by the project. Wetlands and other protected areas A consideration for the sitting and selection of any new hydroelectric facilities is the presence of wetlands and other waters of the U.S. An office-based preliminary jurisdictional determination (PJD) was prepared for the project area (Appendix of Attached Reconnaissance Report). The attached PJD report describes locations within a 25.4 acre area that are preliminarily determined to be subject to the jurisdiction of the U.S. Army Corps of Engineers (USACE) under authority of Section 404 of the Clean Water Act. By federal law (Clean Water Act) and associated policy, it is necessary to avoid project impacts to wetlands wherever practicable, minimize impact where impact is not avoidable, and in some cases compensate for the impact. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 12 of 17 10/7/2009 The PJD report is an office-based study; no formal field verification was conducted. Off-site identification of wetlands and other waters of the U.S. were completed using readily available aerial photographs, natural resource mapping, and existing documentation. Based on the findings of the PJD, it has been preliminarily determined that areas displayed as wetlands on Figure 8.2 meet the USACE criteria for being classified as wetland. Approximately 55 percent (13.9 acres) of the mapped 25.4 acres are wetland; and therefore subject to jurisdiction under Section 404. Land development constraints Based on preliminary project design concepts, the intake for the potential hydroelectric project would be located at the existing ANTHC intake site. Water would be conveyed to the powerhouse via a pipeline; the powerhouse would be located adjacent to the existing diesel powerhouse. Water would be returned to the stream via a rock-lined channel (i.e., tailrace). A viable route to connect the powerhouse back to the stream (i.e., tailrace) was identified from this point to the adjacent stream channel. The primary technical challenge for the site will be the construction of the upper portion of the pipeline within the narrow confines of the creek ravine. There appear to be no archaeological and historical resources at issue in the development of this hydroelectric project as all construction would occur in areas with existing development, including the ANTHC waterlines and existing roadbed. There is no telecommunications interference or aviation considerations as the first is located within the confines of the village and the airport runway/approach is over a mile away to the east. There are no visual or aesthetic impacts as this area cannot be seen from the village due to terrain. No further potential barriers are apparent at this time. 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 See Detailed Estimates of Development/Construction costs in Site Reconnaissance Report, Appendix E, Cost Calculation, Attached. Total costs for this portion of the project is $252,000 for survey and geotechnical, preliminary and final design and permitting, with an additional $38,500 in pledged matching in-kind funds. The projected capital costs for a hydroelectric generation plant is estimated to be $660,000, with development costs of the proposed system to be $950,500. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 13 of 17 10/7/2009 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.) See Page 14-15 of Reconnaissance Report. Funding of O & M would come from a portion of revenue derived from electric sales to consumers. A business plan, developed as a part of the construction application, would detail this information. 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 Power Purchase/Sales agreement will be a part of this grant funding request. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. The source for the project cost worksheet figures is the Reconnaissance Report, HDR Alaska, Inc, October 2009, included as an attachment to this application. SECTION 5– PROJECT BENEFIT Explain the economic and public benefits of your project. Include direct cost savings, and how the people of Alaska will benefit from the project. The benefits information should include the following: • Potential annual fuel displacement (gal and $) over the lifetime of the evaluated renewable energy project • Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or cost based rate) • Potential additional annual incentives (i.e. tax credits) • Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) • Discuss the non-economic public benefits to Alaskans over the lifetime of the project The potential annual fuel displacement over the lifetime of the project is calculated as follows: • Annual displaced fuel @ 26,700/gal X $5.00 per gallon = $133,500 • 26,700/gal X lifetime of project estimated @ 30 years= 801,000/gal diesel savings • $133,500/yr value of displaced fuel X lifetime of project estimated @ 30 years=$4,005,000 savings Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 14 of 17 10/7/2009 A small hydroelectric project on Anderson Creek is possible because the existing water facility has already constructed access roads and an intake, no transmission line is required due to collocation of the hydro powerhouse with the diesel powerhouse, and operations costs are minimized because there is already a powerhouse operator who can handle this function. The project will be able to produce power at a rate of approximately $0.21 per kWh. This rate could be reduced if ANTHC will cost share for the pipeline or if grant funding is obtained for the project. Non economic benefits of the project are that a reduced amount of diesel fuel would be shipped in Prince William Sound and less atmospheric carbon would be produced. A further benefit of the project is that because it is renewable it will help stabilize the future cost of power for Chenega. SECTION 6– SUSTAINABILITY Discuss your plan for operating the completed project so that it will be sustainable. Include at a minimum: • Proposed business structure(s) and concepts that may be considered. • How you propose to finance the maintenance and operations for the life of the project • Identification of operational issues that could arise. • A description of operational costs including on-going support for any back-up or existing systems that may be require to continue operation • Commitment to reporting the savings and benefits The Chenega Corporation and the Chenega IRA commit to reporting the savings and benefits achieved through operation of a newly constructed hydroelectric plant; however, costs have not been documented to date. At this time, Chenega IRA Electric Utility is generating enough revenue to cover the operations and maintenance costs of the three on-line power generators; additional O&M costs will be required by a new hydroelectric generation plant. However, this will not be thoroughly researched until the business plan for post-construction operation is completed in this phase of the development. 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. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 15 of 17 10/7/2009 There have been two previous funding awards from the Alaska Energy Authority to assist in development of a hydroelectric project in Chenega Bay. The first was awarded in 1991-92 for project feasibility and included a commitment from Chenega Corporation and the Chenega IRA in the amount of $31,000. The second and most recent grant funding was in the amount of $100,000 in grant funds, with an additional $25,000 in matching funds from Chenega Corporation to do a reconnaissance study for a hydroelectric project in the village. This 2008-09 grant funding is almost complete; the reconnaissance study is attached for in-depth analysis by AEA reviewers. Chenega Corporation is ready, upon funding award, to develop a scope of work to select and contract with a qualified engineering firm to survey the site, provide preliminary and final design and permitting and provide a more accurate project cost in preparation for construction of the hydroelectric plant. In both grant awards, all project work has been accomplished and all reporting and documentation has been provided in a timely manner. While the current project is not closed out, it is estimated that final reports will be available prior to July 1, 2010. SECTION 8– LOCAL SUPPORT 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 residents of Chenega Bay identified a hydroelectric project as a high priority in the community-approved Strategic Plan for Chenega Bay, 2001, updated 2008. It was also a priority of the Chenega Bay Economic Development Plan for the village, so residents are aware and concerned about finding economical ways to provide electric power for this rural community. The Chenega IRA Council passed resolutions, once in 1992 and again in 2008, approving moving forward with feasibility and site reconnaissance studies for this hydroelectric plant when two separate grant applications were submitted and approved. A copy of a current resolution, passed in November of 2009 also endorses a new grant application for design and engineering of the project. There are no dissenters for this project. ANTHC, partners with Chenega IRA Council, in the water/sewer facilities and upgrades currently in progress in the village, have been contacted about this project and are not averse to working with the tribe to consolidate pipelines and water conduits to provide safe drinking water to the village as well as hydroelectric energy. 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 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 16 of 17 10/7/2009 Grant funding requested in this application would be $252,000 for the planning and engineering phase of this proposed hydroelectric infrastructure development. AEA has already committed $100,000 in funding for the feasibility phase from 2008-09. There have been additional funding commitments from AEA in 1992 for another feasibility study, but documentation of that funding amount is not readily available to the applicant since it was completed over 18 years ago. Chenega Corporation also committed funds to that 1992 study and additionally, has and will spend $25,000 of matching funds (both cash and in-kind) for the feasibility study which is very near completion. The Corporation is once again pledging matching in-kind funds for labor of two project management personnel, travel & per diem for six single trips to Chenega Bay as well as materials and supplies totaling $38,500. GrantBudget3, doc is attached to estimate costs by milestones. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 17 of 17 10/7/2009 SECTION 9 – ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Resumes of Applicant’s Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4. B. Cost Worksheet per application form Section 4.4.4. C. Grant Budget Form per application form Section 9. D. Letters demonstrating local support per application form Section 8. E. An electronic version of the entire application on CD per RFA Section 1.6. F. Governing Body Resolution or other formal action taken by the applicant’s governing body or management per RFA Section 1.4 that: - Commits the organization to provide the matching resources for project at the match amounts indicated in the application. - Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. - Provides as point of contact to represent the applicant for purposes of this application. - Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. F. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations. Print Name Charles W. Totemoff Signature Title President & CEO Chenega Corporation Date November 9, 2009