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HomeMy WebLinkAboutCarlson Creek Hydro Grant Application Form Renewable Energy Fund Round 3 Grant Application AEA 10-015 Application Page 1 of 19 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 19 10/7/2009 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) ALASKA POWER COMPANY (a subsidiary of ALASKA POWER & TELEPHONE COMPANY) Type of Entity: Utility Mailing Address P.O. Box 3222, Port Townsend, WA 98368 Physical Address 193 Otto Street, Port Townsend, WA 98368 Telephone 360-385-1733 Fax 360-385-7538 Email glen.m@aptalaska.com 1.1 APPLICANT POINT OF CONTACT Name Glen Martin Title Permitting & Licensing Manager Mailing Address Alaska Power & Telephone Company P.O. Box 3222 Port Townsend, WA 98368 Telephone 360-385-1733 x122 Fax 360-385-7538 Email glen.m@aptalaska.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 19 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) Carlson Creek Hydroelectric Project. 2.2 Project Location – Include the physical location of your project and name(s) of the community or communities that will benefit from your project. This project is approximately 8 miles north of Slana, Alaska on the Glenn Highway (Tok Cutoff). This project would provide hydroelectric power to Slana, Chistochina, and Mentasta Lake. 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 Design and Permitting Feasibility Construction and Commissioning Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. AP&T proposes to construct the 300 kW Carlson Creek Hydroelectric Project (Project), which will be located approximately 8 miles north of Slana on the Glenn Highway (Tok Cutoff). The Project would off-set diesel generation which presently supplies power to the communities of Slana and Chistochina. The Project will consist of two small diversion structures, approximately 13,200 feet of penstock, a powerhouse with a single generating unit, tailrace, small substation, and a very short length of transmission line. For about half the year, the Project operation will be run-of-river, but during the colder months the Project will draw water from Carlson Lake. The potential annual generation is estimated to be approximately 1,200 MWh/yr, which is greater than the current annual requirements of the two communities. Therefore, the Project has the potential to offset 100% of the current diesel generation. The Project will provide clean, renewable electricity, as well as rate stabilization. The cost to maintain a hydro project is also significantly lower than diesel generation. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 4 of 19 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 Project will reduce the cost of generation by AP&T, and the savings would be passed on to AP&T’s customers in Slana and Chistochina who presently pay $0.5669/kWh and $0.4793/kWh respectively (excluding PCE subsidy). The Project has the potential to generate 100% of the current loads, which are about 450 MWh/yr and 300 MWh/yr for Slana and Chistochina, respectively. The existing diesel plants in Slana and Chistochina would be placed on standby status, reducing maintenance costs and the frequency of generator overhaul and replacement. This would decrease both fuel costs and O&M costs for AP&T, and those savings would be passed on to AP&T’s customers. AP&T estimates the annual savings at current rates would be approximately $49,000 in the first year of operation (equivalent to about 6.8¢/kWh of sales), and the savings would increase as the cost of diesel fuel increases. Residential customers using less than 500 kWh/month would see only a small decrease in their bill, assuming that AP&T’s savings result in a comparable decrease in the PCE COPA rate. Commercial customers and residential customers using over 500 kWh/month would see greater savings. Over the expected 50 year life of the Project, the expected economic benefits could amount to as much as $18,300,000, and the fuel savings could be as much as 3.5 million gallons. The State of Alaska would benefit from reduced draw on the PCE program. Currently, about 53% of AP&T’s retail sales in Slana and Chistochina are subject to COPA. Over the expected 50 year life of the Project, the total savings to the State could be as much as $8,600,000. Lower energy costs would help stimulate both residential and commercial development in both communities and along the highway. The environmental impacts of AP&T’s diesel generation, (e.g. air pollution, noise pollution, and potential for spills, etc.) will be significantly reduced by this Project. Within a few years, AP&T expects to extend its transmission system from Slana to Mentasta Lake, which would add an additional load of about 350 MWh that could also be met by the Project, with similar economic and environmental benefits. 2.6 PROJECT BUDGET OVERVIEW Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source of other contributions to the project. The total estimated cost of the Carlson Creek Hydroelectric Project is $6,300,000. The total estimated cost of the Project is allocated as follows: • Phase I: Reconnaissance .................................................................................... $50,000 • Phase II: Resource Assessment, Feasibility Analysis, Conceptual Design ...... $300,000 • Phase III: Final Design and Permitting ........................................................... $300,000 • Phase IV: Construction ................................................................................. $5,650,000 • Total ............................................................................................................... $6,300,000 AP&T has been awarded a grant of $40,000 for the Phase I work in Round 2 ($10,000 match by AP&T); to date the grant documents have been received, and therefore AP&T has not spent much on the Project. AP&T made a site reconnaissance in September 2009, and plans to install stream gages in the spring of 2010. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 5 of 19 10/7/2009 With this application, AP&T is requesting grant funding for Phases II and III. The total estimated cost of those two phases is $600,000, and AP&T requests grant funding of 80% of that cost, or $480,000. AP&T will provide matching funds totaling $120,000 (20% of the total cost). 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. $480,000 2.7.2 Other Funds to be provided (Project match) $120,000 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $600,000 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) $6,300,000 2.7.5 Estimated Direct Financial Benefit (Savings) [Net savings over 50 years at 0% discount rate.] $18,300,000 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.) [PCE savings over 50 years at 0% discount rate.] $8,600,000 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 6 of 19 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. Eric Hannan, AP&T’s Interior Regional Manager, will be the Project Manager for all phases of the work. Mr. Hannan is located in Tok, and is an electrical engineer with extensive experience in project management and electrical generation, transmission and distribution. A resume for Mr. Hannan is included in Section 10. 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.) A bar schedule of the expected timeline for all four development phases is provided in Section 10. The following summarizes key activities and dates of the schedule. Phase I: Reconnaissance: Fall 2009 – Spring 2010 • Installation of two stream gages • Site inspection by AP&T engineers (completed September, 2009) • Re -evaluation of project capacity and construction cost based on information from the site inspection and stream gages • Reconnaissance report to document Phase I activities • Request jurisdictional determination from the Federal Energy Regulatory Commission (FERC) Phase II: Resource Assessment/Feasibility Analysis/Conceptu al Design: Spring 2010 – Fall 2010 • Obtain topographic mapping • Geotechnical investigations a t structure locations • Hydrologic investigations to determine long-term flow availability and design flood • Revise conceptual design and construction cost estimate • Detailed economic analysis • Fish surveys and analysis • Wildlife surveys • Botanical surveys • Wetland surveys • Archaeological survey • Water quality testing • Feasibility report documenting Phase II activities Phase III: Permitting and Final Design: Fall 2010 – Fall 2011 • Prepare permit application based on Phase II analyses • Provide additional information to permitting agencies as required Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 7 of 19 10/7/2009 • Prepare final design plans, specifications, design reports, and environmental monitoring plans Phase IV: Construction: Fall 2011 – F all 2013 Once final design is complete, AP&T will place the order for generating equipment. AP&T could begin mobilization of equipment to Slana in the early spring of 2012 in anticipation of a late spring 2012 start of construction. Pioneering a road to the diversion areas and starting the powerhouse foundation will be the first goals of construction. Construction of the diversion structures and installation of the penstock would begin as soon as the road is complete; that work is expected to require two construction seasons. AP&T intends to fabricate much of the intake and powerhouse off-site in modified shipping containers so that on-site outdoor work is limited to the short April-November construction season; the off-site fabrication work will begin in early 2012 and continue through much of 2012. 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. The Milestones must also be included on your budget worksheet to demonstrate how you propose to manage the project cash flow. (See Section 2 of the RFA or the Budget Form.) Key (i.e. critical path) milestones for the Project are: • End of Phase I (decision point after completion of reconnaissance study) • End of Phase II (decision point after completion of feasibility analysis) • Receipt of all necessary permits and additional funding for the construction phase by fall 2011 • End of Phase III (decision point after completion of design and final cost estimate) • Award contract for supply of the generating equipment by fall 2011 • Completion of access road to powerhouse site by June 2012 and to diversion site by August 2012 • Completion of penstock installation by October 2013 The schedule described in 3.2 above is consistent with these milestones. It should be noted that the schedule assumes only limited on-site outside work during the December -March time period due to the extreme cold temperatures that are common for that time of year. If unusually harsh weather conditions extend that period, the entire schedule could slip, however, if mild conditions persist then more work will be accomplished. 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. Key AP&T involved in the project development and their roles will be: • Eric Hannan, Project Manager and Transmission Design • Bob Berreth, Electrical Design • Ben Beste, Mechanical Design • Larry Coupe, Civil Design • Glen Martin, Resource Assessment and Permits Phase I: Reconnaissance For this phase, AP&T will utilize their own personnel to acquire and analyze data and to install two Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 8 of 19 10/7/2009 stream gages. Phase II: Resource Assessment/Feasibility Analysis/Conceptual Design In this phase AP&T will continue with acquiring property access and complete environmental and engineering/conceptual design studies. AP&T may use the following contractors for the various studies: • Wetlands delineation - - HDR Alaska Inc. • Threatened and endangered plant species survey - - HDR Alaska Inc. • Fish surveys - - Graystar Pacific Seafood, Ltd. • Water quality sampling - - Travis/Peterson Environmental Consulting, Inc. • Cultural resource surveys - - Browne Research; Northern Land Use Research, Inc. • Topographic mapping - - Aero-Metric, Incorporated • Seismic refraction surveys - - GeoEngineers, Inc. AP&T permitting specialists will compile the environment information into resource assessment documents as required by the various permitting agencies. AP&T engineers will conduct the engineering/conceptual design studies in-house. Phase III: Final Design & Permitting Assuming that a FERC license would not be required, in this phase the following permits will be acquired: • 404 permit (Corps of Engineers) • Fish habitat permit (ADF&G)(this may not be required as the creek is not listed by ADF&G) • Land leases or easements (ADNR & Ahtna) • Water right (ADNR) • SHPO review • BIA Permit AP&T will prepare the final design documents in-house using its own civil, mechanical, and electrical engineers, who all have extensive experience in hydroelectric development. These engineers designed AP&T’s South Fork Hydroelectric Project which entered service in 2005, as well as AP&T’s Kasidaya Creek Hydroelctric Project which entered service in 2008. Phase IV: Construction Construction will be by local contractors and AP&T staff. Additional information will be provided in subsequent applications for construction funding. Resumes for the above-mentioned firms and individuals are included in Section 10. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. During Phases II and III, AP&T proposes to provide quarterly reports to AEA regarding the status of the work. AP&T has provided similar reports to AEA and other grant funding agencies in the past several years on other projects, and has established the necessary procedures for producing the report expeditiously. Besides the quarterly reports, at the completion of Phase II, AP&T will provide AEA with a copy of the feasibility report, including conceptual design drawings and cost estimate. At the completion of Phase III, AP&T will provide AEA with a copy of the final design drawings, specifications, and cost estimate, and the permits. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 9 of 19 10/7/2009 3.6 Project Risk Discuss potential problems and how you would address them. Site Control – AP&T does not yet have development rights on land to be occupied by the powerhouse and part of the penstock and access road. We are working with the land owners to negotiate a lease, easement, or sale. Seismic – Project components will be designed appropriately for seismic activity, since the Project will be located in a high-risk seismic zone. Structures will be buried as much as possible to minimize seismic impacts. Underground Construction – The Project does not include a significant amount of underground construction, which can be fraught with cost overrun potential. Geotechnical investigations will have to be made at the diversion and powerhouse area to provide an adequate level of knowledge about ground conditions at those sites. Inclement Weather – Working conditions in the Project area are very harsh during the winter. The proposed schedule assumes only some on-site outside work during the December -March period (frozen ground could aid in getting over wetlands with minimal impact). If unusually harsh winter weather extends that period, the entire schedule could slip. Should that appear likely, AP&T and its contractor(s) will review various options, including double-shift work during the long summer days or limited outside work during the winter, such as processing aggregate in the powerhouse area. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 10 of 19 10/7/2009 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. Proposed Energy Resource: AP&T will develop the Carlson Creek site to the largest capacity that is economically feasible, which at this time is estimated to be 300 kW, with an estimated annual generation of 1.2 GWh. During Phase I: Reconnaissance, AP&T will calculate the potential energy of the Project for various installed capacities, based on a hydrologic record estimated by transposition of data from similar drainages in the Tok – Slana area. During Phase II the Project capacity will be thoroughly evaluated based on stream gage data that will begin being collected in Phase I. The evaluation will consider estimates of instream flow releases that may be required, current electrical loads, and the potential for load growth. At this time the only viable alternative to the Project is considered to be continued diesel generation that occurs at both Chistochina and Slana. AP&T intertied both communities in 2008 to more efficiently use the existing diesel resources, get more households and businesses on the grid, and reduce their electric rates. Both Slana and Chistochina communities rely 100% on diesel generation provided by AP&T. The Project has the potential to displace 100% of the current generation. Pros: Compared to diesel generation, the Project will have the following advantages: • less expensive to operate than diesel (lower O&M); • no need to purchase fuel; • no air emissions; • fewer hazardous substances; • no particulate matter emissions; • can come on-line after a power outage almost immediately, but diesel can’t; • lower and more stable electric rates for customers Cons: As with all hydroelectric projects, the initial cost of development is much higher than for diesel generation. 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. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 11 of 19 10/7/2009 Existing Power Generation There are 3 gensets in the Slana diesel power plant and 2 gensets in the Chistochina diesel power plant as follows: Slana Power Plant: Unit #1 = John Deere Model 6068TF250, 115 kW, Purchased 2004 or 05?, Installed 2005 Unit #2 = John Deere Model 6068TF250, 115 kW, Purchased 2004 or 05?, Installed 2005 Unit #3 = John Deere Model 6068TF250, 115 kW, Purchased 2004 or 05?, Installed 2005 Chistochina Power Plant: Unit #1 = John Deere Model 6068TF250, 110 kW Unit #2 = John Deere Model 6068RD250, 110 kW 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. Diesel generation being the existing energy resource, this hydroelectric project has the potential to nearly eliminate the use of diesel generators, except during forced outages. This will reduce the use of diesel and the frequency of their maintenance, including overhauls and replacement. The diesel generators that would be affected are all owned and operated by AP&T in both the Slana and Chistochina power plants. The Project will reduce this area’s reliance on fossil fuels. At this time it is expected that the diesel generators would be placed on standby. In addition, the transmission and distribution grids between and in both communities are also owned and operated by AP&T. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The existing energy market is the communities of Slana and Chistochina. In the future, AP&T plans to intertie the Slana – Chistochina grid with the village of Mentasta Lake, which is also reliant upon diesel generation. Slana and Chistochina were just placed on the same grid by AP&T to reduce their rates by consolidating the power generation. Combined peak demand is about 130 kW. Annual generation is about 450 MWh and 300 MWh by the Slana and Chistochina powerplants, respectively. Load growth in Chistochina has been about 2% per year for the last 10 years. Slana and Chistochina residential customers who use less than 500 kWh/month will see only a small decrease in their electric bills, since the PCE COPA would decrease proportionally. Commercial customers and residential customers who use more than 500 kWh/month will see a larger decrease in their electric bills (up to 14.0 ¢/kWh in the first year of operation). Electric rates would be much more stable once the Project is in operation. Currently, Slana and Chistochina customers pay $0.5669/kWh and $0.4793/kWh respectively (excluding PCE). Many customers supplement their electrical use with wood, kerosene, and oil or gas generators, as well as for heating. Several customers also use propane for cooking, clothes dryers, hot water heaters, etc. If electric rates come down these other sources use may decline, which would help clean the air and reduce toxic spills. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 12 of 19 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 Renewable energy technology specific to location – The Project will be a conventional hydroelectric project. Facilities to be constructed include: • 2.5 miles of single lane access road • One diversion structure on the north fork of Carlson Creek and another at the outlet of Carlson Lake. The total diversion capacity will be approximately 12 cfs. • 13,200 feet of 20-inch pipeline • Powerhouse with a single 300-kW generating unit • A short section of buried or overhead transmission line to connect to the existing AP&T transmission line along the Glenn Highway (Tok Cutoff) Hydroelectric technology is well developed, and provides most of the renewable energy generated in the world in general, and in Alaska in particular. The Project will utilize the rainfall and steep topography afforded by the Carlson Creek basin to generate renewable energy. Optimum installed capacity – 300 kW (to be confirmed by Phase II studies). Anticipated capacity factor – 46% (to be confirmed by Phase II studies). Anticipated annual generation – The Project has the potential to generate 100% of the interconnected load, up to a maximum of approximately 1200 MWh/year (equivalent to about 94,000 gallons of diesel fuel). Current Slana and Chistochina diesel generation is about 750 MWh/year, equivalent to about 59,000 gallons of diesel fuel. Anticipated barriers – Winter operation may be hampered by freezing of the powerhouse discharge. AP&T will evaluate methods of discharging subsurface to allow winter operation. Basic integration concept – Integration of hydropower is not particularly difficult; AP&T already operates two independent integrated hydro-diesel systems. Because the Project can potentially supply 100% of the generation requirements, the diesel units will usually be in standby service. Delivery methods – Project generation will be delivered to the interconnected Slana-Chistochina system by a short section of buried cable or overhead transmission line from the powerhouse to the existing transmission line along the Glenn Highway (Tok Cutoff). 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 13 of 19 10/7/2009 project or how you intend to approach land ownership and access issues. Part of the project is on state land, Ahtna land, and private property. We are working on an agreement with Ahtna and the private property owners, and will obtain an easement from the state. 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 Applicable Permits: • 404 permit (Corps of Engineers) • Fish habitat permit (ADF&G)(this may not be required as the creek is not listed by ADF&G) • Land leases or easements (ADNR & Ahtna) • Water right (ADNR) • SHPO review • BIA Permit Permitting Timeline: we anticipate being able to complete environmental and design studies in order to have permits by spring 2011. Potential Permitting Barriers: No permitting barriers are known at this time. 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 T&E Species: Are not expected to be found there. AP&T will do a resource evaluation during Phase II. Habitat Issues: Carlson Creek is not listed as an anadromous stream by ADF&G’s website. The Slana River is listed above and below Carlson Creek as: Rec Pt Type FDD Code FDD Stream Name Species String Longitude Latitude 1 MIDSP 212-20-10080-2605 Slana River Kp,Sp -143.77123 62.76446 The creek will likely require a fish survey, but it is possible that fish do not use this waterbody. A wetland delineation will be conducted under Phase II to determine if habitat will be impacted. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 14 of 19 10/7/2009 Wetlands: Wetlands will be avoided when possible. A wetlands delineation survey will be conducted in Phase II. This survey will include looking for threatened and endangered plant species. Archaeological Issues: An archaeological survey may be required by SHPO. AP&T will request a review of the available information by SHPO to make this determination. Land Development Constraints: No land development constraints at this time (assumption is that an agreement will be reached with Ahtna and private property owners and that site analysis will not come up with any problems). Telecommunications Interference: The 34.5 kV transmission line does not create interference with telecommunications. This size of conductor is frequently found on the same pole with telephone lines, as they are also found to coexist on AP&T’s poles. Higher voltages can cause interference however. Aviation Considerations: This project is not near an airport or typical flight pattern, nor will the infrastructure be more than 45 feet above ground for a short distance to the existing transmission infrastructure along the highway, which is well below safe flying elevation. Visual & Aesthetic Impacts: Visual and aesthetics are not an issue here, but there would be minor impacts related to visible human activity. The powerhouse and appurtenances will be away from the highway and presumably out of view at this time, except for the access road and transmission line (which may be buried) to the highway. The existing infrastructure along the highway will not have to be upgraded because it is new 3-phase infrastructure. 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 Anticipated project costs: • Phase I: $50,000 (AP&T estimate based on experience with other projects) • Phase II: $300,000 (AP&T estimate based on experience with other projects) • Phase III: $300,000 (AP&T estimate based on experience with other projects) • Phase IV: $5,650,000 (AP&T estimate based on experience with other projects) • Total: $6,300,000 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 15 of 19 10/7/2009 Requested grant funding: $480,000 (Phases II and III only) Applicant matching funds: $120,000 (Phases II and III only) Other sources of funding: $40,000 Round 2 grant with $10,000 matching funds (Phase I) Projected capital cost: $5,650,000 (capital cost is assumed to be the cost of Phase IV – Construction) Projected development cost: $650,000 (development cost is assumed to be the total cost of Phases I, II, and III) 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.) AP&T will operate and maintain the Project with proceeds from sale of power to its customers. No grant funding is requested for operation and maintena nce. 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 AP&T is developing this Project to supply power to its own interconnected Slana - Chistochina system. This power ultimately will be sold to AP&T’s customers in both communities and in between at a lesser cost than the current cost of diesel generation. Rate of Return: Not calculated. 4.4.4 Project Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. The Cost Worksheet is attached in Section 10. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 16 of 19 10/7/2009 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 people of Alaska will benefit from the Project development as follows: Potential annual fuel displacement: The potential Project generation (1.2 GWh/year) is equivalent to about 95,000 gallons of diesel fuel annually, or about 4.8 million gallons over a 50 year Project life. At a fuel cost of $3.00/gallon, the annual savings would be $285,000 annually. Fuel prices are expected to escalate; at an average fuel cost of $6.00/gallon, the savings over 50 years could be as much as $29,000,000. Anticipated annual revenue: AP&T would expect to have a new rate tariff for the Slana - Chistochina system based on the various funding contributions. If funded as proposed herein, the Project is estimated to result in a decrease in revenue of about $49,000 in the first year of operation (equivalent to about $0.068/kWh of sales). Potential additional annual incentives: Not estimated. Potential additional revenue streams : Not estimated. Non-economic public benefits to Alaskans: Reduced air emissions and noise, reduced chance for diesel fuel spills. Other benefits: The State of Alaska would spend less on the PCE program, since the Project generation would decrease the amount of diesel generation subject to PCE reimbursement. In the short term the local economy would benefit due to local hire for construction. In the long term, lower and more stable electric rates could lead to more residential and commercial development, which in turn would add more income to these communities. 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 17 of 19 10/7/2009 AP&T will operate the Project to supply power to AP&T’s interconnected Slana - Chistochina system, for eventual sale to its retail customers. AP&T will maintain the Project as it does with its other hydroelectric resources, which can be expected to have a life of at least 50 year s. The Project will be remotely operated, with continuous monitoring by a SCADA system. O&M personnel will visit the plant at least once per week for routine checks on the equipment. A routine maintenance schedule will be established, a brief annual shutdown is likely for maintenance. 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. In Round 2, AEA awarded AP&T a $40,000 grant to conduct the Phase I studies for this project; however, the grant documentation has not yet been received. The Phase I work was started with a site visit by two AP&T employees in September 2009; a copy of the site visit memorandum is included in Section 7. Additional Phase I work will be conducted during the winter and spring of 2010; stream gages will be installed in the spring of 2010. Based on the site visit, we believe seismic refraction surveys in the area of the lake outlet will be necessary to determine the extent and cost of a grout curtain to enable effective use of the lake storage. That work will be planned for late summer of 2010, pending allocation of additional grant funds. 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. This project has not been advertised nor have public meetings been held at this time because we have been looking at the feasibility of the site first. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 18 of 19 10/7/2009 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 Project Costs: $6,300,000 (total for Phases I, II, II, and IV) Investments to date and funding sources: AP&T has spent on a minor amount to date for a brief helicopter reconnaissance of the site in 2008. Amount requested in grant funds: $480,000 (80% of estimated costs for Phases I, and III) Additional investment by AP&T: AP&T will provide matching funding equaling 20% of the total cost of Phases I, and III ($120,000). This matching amount will be paid from AP&T’s general operations funds. Funding for construction will be obtained at a later date. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 19 of 19 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 Signature Title Date SECTION 10 – ADDITIONAL DOCUMENTATION & CERTIFICATION