HomeMy WebLinkAboutMetlakatla-Ketchikan Interie Metlakatla Indian Community App
Renewable Energy Fund Round 3
Grant Application
AEA 10-015 Application Page 1 of 20 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.
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Grant Application Round 3
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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Metlakatla Indian Community (MIC)
Type of Entity:
MIC is a federally recognized Indian Tribe organized under the provisions of Section 16 of the Indian Reorganization
Act, 25 U.S.C. Section 476. Electric power is provided to the community by Metlakatla Power & Light (MP&L), a
community owned utility.
Mailing Address
P.O. Box 8
Metlakatla, AK 99926
Physical Address
8th and Upper Milton Street
Metlakatla, AK 99926
Telephone
907-886-4441
Fax
907-886-4471
Email
info@metlakatla.com
1.1 APPLICANT POINT OF CONTACT
Name
Paul Brendible
Title
Director of Contracts and Grants
Mailing Address
P.O. Box 8
Metlakatla, AK 99926
Telephone
907-886-4441
Fax
907-886-4470
Email
paul.brendible@metlakatla.com
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
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 t he attached
grant form. (Any exceptions should be clearly noted and submitted with the
application.)
Yes
1.2.5 We intend to own and operate any project that may be constructed with grant
funds for the benefit of the general public.
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SECTION 2 – PROJECT SUMMARY
This is intended to be no more than a 1-2 page overview of your project.
2.1 Project Title – (Provide a 4 to 5 word title for your project)
Metlakatla-Ketchikan Intertie
2.2 Project Location –
Include the physical location of your project and name(s) of the community or communities that will
benefit from your project.
The Metlakatla – Ketchikan Intertie will include an overhead transmission line on Annette Island
between Metlakatla and Walden Point and a submarine cable crossing of Revillagigedo Channel
between Walden Point on Annette Island and Mountain Point on Revillagigedo Island. The
Metlakatla-Ketchikan Intertie will provide benefits to both Ketchikan and Metlakatla, allowing
for significantly improved utilization of Metlakatla’s existing hydroelectric generating resources
while reducing diesel generation in Ketchikan.
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
Wind Biomass or Biofuels
Hydro, including run of river X 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 and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
The proposed Metlakatla-Ketchikan Intertie is a 34.5-kV transmission line that will interconnect
the electric systems of Metlakatla Power & Light (MP&L) and Ketchikan Public Utilities (KPU).
The Intertie will include 16 miles of overhead wood pole transmission line to be constructed on
Annette Island between Metlakatla and Walden Point and an approximate two mile submarine
cable crossing of Revillagigedo Channel between Walden Point and KPU’s Mountain Point
Substation. The project will also include control system upgrades to allow for the integrated
operation of the interconnected s ystems’ generating plants.
Design of the Metlakatla – Ketchikan Intertie is presently underway. Transmission poles have
also been procured and are currently stored in Metlakatla.
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2.5 PROJECT BENEFIT
Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel
costs, lower energy costs, etc.)
The Metlakatla-Ketchikan Intertie will allow for the transmission of surplus hydroelectric energy
available on Metlakatla to Ketchikan where the energy will be used to offset diesel generation.
At the present time, the amount of available surplus hydroelectric generation is approximately
8,500,000 kWh per year. This amount of energy would offset approximately 580,000 gallons of
diesel fuel per year in Ketchikan. At $2.50 per gallon, this would result in savings of about $1.6
million per year in power production costs. This cost savings is expected to be shared by electric
consumers in both Metlakatla and Ketchikan. The reduction in pollutants emitted from diesel oil
combustion will provide benefits to the general public and the regional environment.
In addition, the project will provide greater interconnected system reliability and will allow for
the development of future hydroelectric and renewable energy generation projects on an
integrated, regional basis. For example, potential hydroelectric resources on Annette Island,
such as the Triangle Lake project, can be developed if deemed economically viable with a larger
market for the power output. With the Metlakatla-Ketchikan Intertie and the recently completed
Swan-Tyee Intertie, the electric systems of Metlakatla, Ketchikan, Petersburg and Wrangell will
all be interconnected.
An important benefit to the Ketchikan area will be that the Metlakatla – Ketchikan Intertie will
provide power from a source that is not dependent on the existing transmission line to Swan
Lake. When the Swan Lake transmission line is unavailable for any reason, Ketchikan is
isolated from much of its hydroelectric generation. The Intertie will still be available to provide
power from an alternative direction and as such, adds another source of backup generation in the
event of failure of the Swan Lake transmission line.
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 Metlakatla – Ketchikan Intertie through construction is
$7,652,000. MIC has received grants of $500,000 from the Denali Commission and $820,000
from the Alaska Energy Authority towards the Intertie project. MIC is requesting a grant of
$6,332,000 from the Renewable Energy Fund program. No other funds are presently available
for the Intertie project.
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. $ 6,332,000
2.7.2 Other Funds to be provided (Project match) $ 1,320,000
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 7,652,000
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Project Costs & Benefits
(Summary of total project costs including work to date and future cost estimates to get to a fully
operational project)
2.7.4 Total Project Cost (Summary from Cost Worksheet
including estimates through construction)
$7,652,000
2.7.5 Estimated Direct Financial Benefit (Savings) $1,600,000 per year
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.)
$ Not available
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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.
The Project Manager for the Metlakatla-Ketchikan Intertie will be Paul Brendible, MIC Director
of Contracts and Grants. Mr. Brendible will be assisted by C. Paul Bryant, General Manager of
Metlakatla Power & Light. Consultants and contractors will be retained as needed. No project
management assistance will be needed from AEA or any other government entity.
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.)
Design of the Metlakatla – Ketchikan Intertie is presently underway. Permitting activities will
be conducted in 2010. MIC will proceed with material procurement in 2010 and construction of
the Intertie project is expected to be conducted in 2010.
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.)
Scheduled project milestones are as follows:
Complete Final Design December 31, 2009
Select Consultant for Permitting Services January 15, 2010
Complete Field Research and Studies March 15, 2010
Complete Permitting June 30, 2010
Initiate Power Sales Negotiations January 15, 2010
Complete Power Sales Negotiations April 15, 2010
Request Bids for Materials & Construction February 28, 2010
Select Construction Contractor March 31, 2010
Begin Construction May 15, 2010
Install Submarine Cable August 15, 2010
Complete Construction October 31, 2010
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3.4 Project Resources
Describe the personnel, contractors, equipment, and services you will use to accomplish the
project. Include any partnerships or commitments with other entities you have or anticipate will
be needed to complete your project. Describe any existing contracts and the selection process
you may use for major equipment purchases or contracts. Include brief resumes and references
for known, key personnel, contractors, and suppliers as an attachment to your application.
At the present time, Electric Power Systems, Inc. (EPS) has been retained to provide engineering
and design services related to the overhead transmission line between Metlakatla and the ferry
terminal on Walden Point. EPS has also been retained to design the power plant control system
upgrades, provide specifications for the submarine cable and design the submarine cable
termination facilities. Poles and hardware have already been ordered for the transmission line to
the ferry terminal.
MIC will retain other consultants and engineers as needed to provide design, permitting and
construction services. These contractors will be retained through a process of solicitation of
proposals, evaluation of proposals by MIC and MP&L and final selection by MIC.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
MIC will provide written monthly summary reports of progress on the project. The monthly
reports will include status of activities presently underway, selection of contractors, budget status
and schedule progress. Achievement of milestones will be reported as will commitments for
material and construction services procurement. In addition, MIC will provide ongoing status
reports on its website and will remain in regular telephone contact with the Authority’s project
representative.
3.6 Project Risk
Discuss potential problems and how you would address them.
The Metlakatla-Ketchikan Intertie is a low risk project. There is some uncertainty with regard to
conditions of the seafloor at the location of the submarine crossing at the present time. Various
studies including a bathymetric survey and shoreline investigations will be conducted early in the
design process to determine the best location for the cable. These studies will also help identify
key factors to be used in the specifications for the submarine cable, such as armoring.
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SECTION 4 – PROJECT DESCRIPTION AND TASKS
Tell us what the project is and how you will meet the requirements outlined in Section 2 of
the RFA.
The level of information will vary according to phase(s) of the project you propose to
undertake with grant funds.
If you are applying for grant funding for more than one phase of a project provide a
plan and grant budget form for completion of each phase.
If some work has already been completed on your project and you are requesting funding for
an advanced phase, submit information sufficient to demonstrate that the preceding phases
are satisfied and funding for an advanced phase is warranted.
4.1 Proposed Energy Resource
Describe the potential extent/amount of the energy resource that is available.
Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be
available for the market to be served by your project.
The hydroelectric energy resources available in Metlakatla at the present time are the 1.0 MW
Chester Lake project and the 3.0 MW Purple Lake project. The two plants are capable of
generating 25,045 MWh per year on average of which about 8,758 MWh is presently estimated to
be surplus to the needs of MP&L. Studies have been conducted in the past that have identified
potential expansions to the existing hydroelectric facilities as well as a new hydroelectric facility
at Triangle Lake. It is estimated that these potential new hydroelectric resources could generate
an additional 20,700 MWh on an average annual basis.
Ketchikan Public Utilities (KPU) owns and operates 11.7 MW of hydroelectric generating
capacity at three separate facilities located relatively close to Ketchikan and 23.0 MW of diesel
generation capacity located in its Bailey power plant. The 22.5 MW Swan Lake hydroelectric
project, owned by the Southeast Alaska Power Agency (SEAPA), is also available to KPU and
provides a significant amount of the total power supply requirement in Ketchikan. The total
amount of energy available from the Swan Lake project and KPU-owned hydroelectric resources
is about 137,000 MWh on an average annual basis.
The Swan-Tyee Intertie (STI) has recently been completed by SEAPA. This transmission line
interconnects the electric systems of Ketchikan, Wrangell and Petersburg and provides for the
delivery of power from the 22.5 MW Tyee Lake hydroelectric project to Ketchikan. A significant
amount of the generating capability of the Tyee Lake project has been surplus to the needs of
Petersburg and Wrangell in the past. With the STI, surplus generation from the Tyee Lake
project will be available to KPU to offset some of KPU’s diesel generation. To the extent that the
combined hydroelectric resources are not sufficient to supply the entire power supply requirement
at any time, diesel generation will continue to be used as a supplement.
With the high price of heating oil, there is a significant change to the use of electric space heat by
the residential, commercial and public building customers in Ketchikan. The switch to electric
space heat is causing a noticeable increase in electric loads and as a result, more demand is being
placed on KPU’s diesel generators to meet the growing need for electricity. The present cost of
diesel generation in Ketchikan is estimated to be approximately 17 cents/kWh, a cost that is much
higher than was experienced just a few years ago when fuel prices were lower.
The primary purpose of the Metlakatla – Ketchikan Intertie will be to make additional existing
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hydroelectric generation available to serve loads in Ketchikan. KPU has evaluated several
alternative energy resources in recent years including the Whitman Lake and Mahoney Lake
hydroelectric projects, a municipal solid waste to energy project, bio-diesel generation, and new
diesel generators. KPU has also considered the Metlakatla-Ketchikan Intertie among the power
supply options available to it for many years. Provision was made in the design of KPU’s
Mountain Point substation for eventual connection to MP&L’s system.
There are many advantages to the Metlakatla-Ketchikan Intertie when compared to the other
alternatives being considered. Principal among the benefits of the Intertie are that it provides for
the use of existing surplus hydroelectric energy generation capability. As such, no fuel of any
kind is needed and the environmental impacts of the Intertie are very low compared to building
new generating plants. In using hydroelectric energy to supplant diesel generation, the Intertie
project will reduce CO2 and NOx emissions in the region. Further, the reduction of diesel
generation will reduce the amount of diesel fuel that must be barged into Ketchikan thereby
providing an incremental reduction in the probability of fuel spills and other fuel handling
mishaps.
A noticeable benefit of the Intertie project will be that it will provide clean, hydroelectric energy
to Ketchikan that can then be used to offset the use of oil for space heating. Many residents,
schools and businesses in Ketchikan are considering converting to electric space heat but the high
cost of electricity produced with diesel generation is a deterrent to this transition. Replacing oil
heat with electric heat will reduce the amount of pollutant emissions in the area including CO2,
SO2 and NOx.
4.2 Existing Energy System
4.2.1 Basic configuration of Existing Energy System
Briefly discuss the basic configuration of the existing energy system. Include information about
the number, size, age, efficiency, and type of generation.
The electric system in Metlakatla includes 4.0 MW of hydroelectric capacity and 3.3 MW of
diesel generating capacity. The diesel generator, a 4,500 hp Caterpillar unit, is used primarily as
a backup emergency reserve. A 1.0 MW Battery Energy Storage System (BESS) was installed in
1997 to provide emergency backup power for a limited time as well as balance out frequency and
voltage fluctuations on the MP&L system.
The Chester Lake hydroelectric project was constructed in 1986. It includes a 40 foot high
concrete arch dam, a 20 inch diameter steel penstock approximately 3,521 feet long and a
powerhouse with a single 1,042-kW Pelton turbine generating unit.
The Purple Lake hydroelectric project is comprised of a dam, reservoir, tunnel, penstock and
powerhouse containing three horizontal Francis type turbine generating units, each rated at 1,000-
kW during normal operation. The project was originally built in 1956, however a new control
system was installed in 1997, the generators were all rewound in the 1990’s and the turbine
runners were refinished in the 1990’s as well.
The existing generating units in Ketchikan are shown in the following table:
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Year
Installed
Rated
Capacity(kW)(1)
Energy Generation
Capability (MWh)(2)
KPU Owned Hydroelectric
Silvis Lake 1968 2,100 10,300
Beaver Falls Unit #1 1947 1,000 37,800 (3)
Beaver Falls Unit #3 1954 2,200 -
Beaver Falls Unit #4 1954 2,200 -
Ketchikan Unit #3 1923 1,400 18,000 (3)
Ketchikan Unit #4 1938 1,400 -
Ketchikan Unit #5 1957 1,400 -
Subtotal 11,700 66,100
Swan Lake Hydroelectric 1983 22,500 71,400
KPU-Owned Diesel(4)
Bailey Unit #1 1970 3,500 -
Bailey Unit #2 1970 3,500 -
Bailey Unit #3 1976 5,500 -
Bailey Unit #4 1998 10,500 -
Subtotal 23,000 -
Total 57,200 137,500
(1) The rated capacity may exceed the normal maximum operating capacity from the generating units.
(2) Energy generation capability for hydroelectric resources is based on average water conditions and load level s
similar to those experienced in 2000. Hydroelectric energy generation varies from year to year.
(3) Energy generation for the KPU-owned hydroelectric resources is not differentiated by unit.
(4) Diesel generators are shown as capacity resources only, although they are used to provide energy supplemental to
that provided by the hydroelectric facilities. At a 70% annual plant factor, the annual energy generation capability
of the four diesel units is 141,040 MWh.
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.
At the present time, MP&L uses its hydroelectric generating resources, the Chester Lake and
Purple Lake projects, to meet its own load. Additional energy generation capability, surplus to
the needs of MP&L, exists at these plants.
In Ketchikan, KPU fully utilizes the generating capability of its City-owned hydroelectric
generating facilities. Power is then purchased from the Swan Lake project to meet the remaining
energy requirement. At certain times, the generating capability of the combined hydroelectric
facilities is insufficient to supply the total load in Ketchikan. This hydroelectric shortage can
actually last for an extended time if local precipitation is low. During the times when
hydroelectric energy is insufficient, diesel generation is used to meet the remaining load
requirement.
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With the Metlakatla-Ketchikan Intertie, additional hydroelectric energy generation will be
available to KPU to supply loads and avoid all or a portion of the amount of diesel generation that
would be needed otherwise. Another advantage of the Intertie will be that the power production
systems of MP&L and KPU will become interconnected. As such, the hydroelectric facilities of
the two utilities can be operated in a coordinated fashion so as to maximize the capability of all
the facilities. This operating improvement is typical of larger systems where individual
generating units can be operated within their most efficient ranges and the various reservoirs can
be operated most effectively.
With the Metlakatla-Ketchikan Intertie and the recently completed Swan-Tyee Intertie, a
significantly larger southern Southeast Alaska interconnected electric system will exist. The
various hydroelectric facilities within this four community system can be operated on an
integrated basis for overall maximum efficiency. Reliability in the four communities will be
improved through additional backup options and maintenance on various generating units and
transmission lines can be effectively coordinated to reduce outage impacts to electric consumers.
Further benefits can be gained with incorporation of fiber communication strands in the
submarine cable as well as in the overhead transmission line. This can provide very high speed
communications systems to residents and businesses on Annette Island. Fiber optic cables are
typically bundled into electric submarine cables.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
In 2007, the total energy sales in Metlakatla were approximately 14,500 MWh of which 6,180
MWh, or 43%, was to residential customers. As previously indicated, the total annual
hydroelectric energy generation capability of the existing hydroelectric resources in Metlakatla is
about 25,000 MWh.
Total energy sales in Ketchikan in 2007 were about 155,800 MWh. Energy sales in Ketchikan
are expected to increase noticeably in the immediate future as various residential, public authority
and commercial customers switch to electric heat in response to continuing high oil prices. The
Metlakatla-Ketchikan Intertie will contribute to lower power costs in Ketchikan. As a municipal
electric utility, KPU sets rates based on its costs. Lower power costs will mean lower electric
rates, a direct benefit to electric consumers.
It is expected that the benefits of the Intertie in offsetting diesel generation costs will be jointly
shared by Ketchikan and Metlakatla. In Ketchikan, the benefits will mean lower electric rates to
consumers. In Metlakatla, the benefits can also mean lower electric rates to electric consumers.
The benefits in Metlakatla can also be utilized in paying the costs of repairs, replacements and
improvements to MP&L’s electric system.
With the Swan-Tyee Intertie in operation, KPU will be obligated pursuant to contract to use
power from the Tyee Lake project, as available, before it makes purchases from Metlakatla. This
issue may limit the amount of power KPU can purchase from MP&L.
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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
The Metlakatla-Ketchikan Intertie will be 17 miles in length and includes overhead and
submarine components. The line would originate at KPU’s Mountain Point substation and cross
underwater to Walden Point on Annette Island, a cable crossing distance of about two miles. A
16-mile overhead line on Annette Island would extend from the cable landing point to an MP&L
substation to complete the system.
The line is expected to be sized for a delivery of 8 MW from MP&L resources to KPU. The line
is specified at 34.5-kV which is adequate for the anticipated power loads as well as capable of
accommodating higher power loads. KPU’s transmission system at the Mountain Point
substation is also at 34.5-kV. Overhead conductors for the line were specified in previous studies
to be 4/0 Penguin/AW and the submarine cable was specified to be a three conductor, bundled
cable at 35-kV, 1/0 AWG.
Provision was made at KPU’s Mountain Point substation at the time the substation was
constructed for eventual interconnection with MP&L’s system. Not all of the components needed
for the interconnection are presently installed, but the substation design is in place and the
necessary modification is not expected to be significant from a time or cost perspective. Further,
electric conduits are currently installed under the Tongass Highway that can be used for bringing
the cable from the shoreline to the substation.
Although earlier studies identified a possible route for the portion of the Metlakatla – Ketchikan
Intertie on Annette Island following a proposed road alignment to Walden point. At the present
time a transmission line is to be built between Metlakatla and the Walden Point ferry terminal
along the road to the ferry terminal. This line is being designed for 34.5-kV but unless the
Metlakatla – Ketchikan Intertie is developed, it will only be operated at 12.47-kV. The
transmission line to the ferry terminal will be a part of the Metlakatla – Ketchikan Intertie. Since
the road to the ferry terminal is already in place, installation of the overhead transmission line will
be much easier than if it were being installed in uncleared forest.
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4.3.2 Land Ownership
Identify potential land ownership issues, including whether site owners have agreed to the
project or how you intend to approach land ownership and access issues.
The overhead portion of the Metlakatla – Ketchikan Intertie will be located entirely on Annette
Island and as such, MIC will have authority over all aspects related to land ownership and site
approval. MIC has approved the Intertie project and will work with its consultants, engineers and
advisors to approve the appropriate location for the Intertie.
No significant land issues are expected to be found on the Ketchikan side of the submarine cable
crossing. KPU has indicated that it will assist MIC with regard to bringing the cable to the
Mountain Point substation.
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
Several permits are expected to be needed, all with regard to the placement of the submarine
cable. These permits are summarized as follows:
o Army Corps of Engineers Permit
o Alaska Coastal Questionnaire
o State Fire Marshal
o U.S. Coast Guard Notification
o NOAA Notification
o Alaska DOT
o Ketchikan Gateway Borough Planning
It is anticipated that the permitting process will require approximately six months to complete,
however, some additional time may be needed if certain field investigations cannot be completed
on a timely basis due to weather conditions, fish and wildlife migrations or other factors.
It is noted in nautical charts that cable areas are presently identified in the vicinity of the proposed
Intertie submarine cable. To the extent that communication cables are already submerged in these
areas, it may be necessary to place the Intertie cable in a slightly different location to avoid
contact with the other cables. This will be investigated in the permitting and design effort for the
Intertie.
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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
None of these environmental issues are expected to be applicable to the Intertie project. MIC will
assure that the overhead portion of the Intertie meets with all standards on Annette Island. As
previously indicated, some conflict with existing submerged telecommunications cables may exist
but these conflicts will be addressed in the final design of the Intertie project and are not expected
to cause a significant change to the overall project.
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
A current cost estimate has been prepared for the Metlakatla – Ketchikan Intertie project based on
estimates from previous engineering studies adjusted for current labor and material prices and
other factors. Earlier in 2009, MP&L retained EPS for the design and staking of the section of
the line from Metlakatla to the ferry terminal at Walden Point. The cost of this work, estimated to
be $150,000, is included in the total cost of engineering and design for the Intertie project. In
addition, an engineer’s estimate for the control system upgrades was developed by EPS. This
estimate is attached to the grant application also for reference.
By far the most significant component of cost of the Metlakatla – Ketchikan Intertie is the
submarine cable between Annette Island and KPU’s Mountain Point substation. This crossing is
approximately two miles in length and the maximum depth of the channel is estimated to be about
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550 feet. Submarine cables are specially manufactured for each application and installation
requires specialized equipment and labor skills. KPU recently installed a submarine cable
between Ketchikan and Gravina Island, a crossing of about one mile. The characteristics of the
cable that KPU used are very similar to what is expected to be used for the Metlakatla –
Ketchikan Intertie. The cost of KPU’s cable has been used to estimate the cost for the Intertie
submarine cable included in the cost estimate.
It is important to note that the cost of transmission materials has increased significantly in recent
years.
The estimated development cost of the Metlakatla – Ketchikan Intertie is summarized in the
following table. The amount of the requested grant is $7,152,000.
Metlakatla – Ketchikan Intertie
Estimated Project Total Cost and Grant Funding Requested
Overhead Transmission Line
Right of Way Clearing 145,000$
Overhead Line Materials and Labor 640,000
Helicopter Assistance 615,000
Subtotal 1,400,000$
Contingency %20%
Contingencies 280,000
Subtotal - Overhead 1,680,000$
Submarine Cable
Materials and Installation 3,200,000$
Termination Facilities 200,000
Subtotal 3,400,000$
Contingency %20%
Contingencies 680,000
Subtotal - Overhead 4,080,000$
Metlakatla Control System Upgrades
Hydroelectric Plant Controls 556,000$
SCADA Controls 146,000
Substation Modifications for Interconnection 200,000
Subtotal 902,000$
Contingency %10%
Contingencies 90,000
Subtotal - Overhead 992,000$
Total Project Cost
Materials and Installation 5,702,000$
Indirect Costs
Engineering, Field Surveys, Staking 500,000$
Permitting 200,000
Owner's Administration 200,000
Subtotal - Indirect Costs 900,000$
Contingency 1,050,000
Total Project Cost 7,652,000$
Less: AEA Grant (820,000)
Less: Denali Commission Grant (500,000)
Net Grant Funding Requested 6,332,000$
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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.)
The annual O&M costs for the Metlakatla – Ketchikan Intertie are expected to be relatively
minor. Transmission lines of this type typically require very little maintenance in the early years
of operation providing the lines are designed properly and danger trees and other hazards are
cleared out during construction.
It is estimated that annual O&M costs will be $60,000 per year and that an additional $50,000 per
year will be needed for capital repairs, improvements and replacements. These costs will be paid
through revenues received from power sales over the Intertie. No grant funds will be needed for
O&M costs.
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 will be sold over the Metlakatla-Ketchikan Intertie to Ketchikan Public Utilities (KPU).
The power sales price will be negotiated between MIC and KPU and is expected to be reflective
of the cost of power available to KPU from other alternatives. At the present time, KPU pays 6.8
cents per kWh for Swan Lake power that it purchases from SEAPA. Other new hydroelectric
alternatives for KPU are estimated to have a cost of power in the range of 7.0 cents per kWh and
the cost of diesel generation for KPU is about 17 cents per kWh when diesel fuel is at $2.50 per
gallon. It is estimated that the sales price of power over the Intertie will be in the range of 6.0 to
12.0 cents per kWh.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
See attached application worksheet.
It is important to note the in the estimation of benefits for the Metlakatla – Ketchikan Intertie,
only the net fuel and incremental diesel O&M savings have been included. Additional “capacity”
benefits will be realized by Ketchikan in that the Intertie will provide additional reserve benefits
to KPU. The value of this capacity benefit has not been estimated at this time.
Fuel savings have been estimated assuming that the full amount of surplus hydroelectric
generation available in Metlakatla will be sold to KPU. Energy loads in Ketchikan are expected
to increase significantly as more emphasis is placed on electric space heat in the community. The
calculation of the Benefit Cost ratio shown in the Cost worksheet is based on the net present value
of estimated net benefits over a 30 year project life assuming a 5.5% discount rate.
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SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
Potential annual fuel displacement (gal and $) over the lifetime of the evaluated
renewable energy project
Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or cost based rate)
Potential additional annual incentives (i.e. tax credits)
Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
Discuss the non-economic public benefits to Alaskans over the lifetime of the project
The net present value savings of the net benefit of the Metlakatla-Ketchikan Intertie project is
$15,718,000 over the life of the project (30 years for this analysis). This benefit will be derived
almost entirely from the savings in fuel costs for diesel generation. It is also estimated that about
$700,000 per year could be paid to MIC for power purchased from MP&L by Ketchikan.
Other economic benefits that have not been evaluated yet include the capacity benefit that KPU
will realize with the Intertie since MP&L’s generating resources will be available to serve loads
in Ketchikan even when the Swan Lake project or the Swan Lake transmission line are
unavailable.
It is also important to note that with the Intertie, KPU will be able to provide lower power costs in
Ketchikan than could be realized with diesel generation. These lower power costs will then help
local residents, public facilities and businesses realize greater savings if they choose to transition
from oil to electric space heat. The lower electric rates will consequently serve as an additional
incentive to convert to electric heat. The amount that local consumers would save in heating bills
by converting to electric heat has not been evaluated as part of this application.
Other benefits of the Metlakatla – Intertie include:
More efficient use of the area’s hydroelectric generating resources
Relatively minor negative environmental impacts related to installation and operation of
the Intertie
Reduced oil consumption in the area
Reduced air pollution from burning of oil
Incrementally lower risks of fuel handling mishaps
Incrementally lower need for fuel deliveries in and transport through Southeast Alaska
Lower greenhouse gas emissions
Greater electric system reliability
Interconnection of previously isolated electric systems
Future development of new resources can be accomplished over a wider geographic area
More encouragement to convert to electric space heat in the area
Potential for improved high speed fiber optic communications systems to Metlakatla.
SECTION 6– SUSTAINABILITY
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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 Metlakatla – Ketchikan Intertie will be operated by MP&L in coordination with KPU.
Agreements will be established to assure effective maintenance and operating standards are in
place and administered. Further, standard utility operating procedures to assure safe and reliable
operation will be identified in contracts between MP&L and KPU and will be adhered to. Both
MP&L and KPU currently own, operate and maintain utility properties similar to the Intertie and
are very familiar with what will be needed to assure a long, useful life for the Intertie.
MIC will monitor power sales and report periodically on the net savings to MP&L, KPU and
SEAPA when the Intertie begins operation.
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.
MIC, through MP&L, has begun design and procurement activities related to the Metlakatla-
Ketchikan Intertie. As of mid-October 2009, EPS, the design engineer on the project is reporting
the following:
Draft material and installation specifications for submarine cable are complete. Okonite
and Kerite are finalizing details on their respective approaches to the material
specification, and cost estimates.
Caldwell Marine has provided an estimate of the submarine cable installation cost.
The overhead line design is being reviewed internally by EPS, and material and
construction costs are being developed. Design and cost estimates for work at Centennial,
Walden Point and Mountain Point are nearly complete.
Remaining details on the project design should be completed soon.
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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.
MIC fully supports the Metlakatla – Ketchikan Intertie project. In 2008, KPU provided a letter of
support and commitment to MIC with regard to development and construction of the Intertie
project. No local opposition to the project is expected.
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
The Metlakatla – Ketchikan Intertie is expected to be fully grant funded. Detailed costs are
provided in the attached budget form.
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SECTION 9 – ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION:
A. Resumes of Applicant’s Project Manager, key staff, partners, consultants, and
suppliers per application form Section 3.1 and 3.4.
B. Cost Worksheet per application form Section 4.4.4.
C. Grant Budget Form per application form Section 9.
D. Letters demonstrating local support per application form Section 8.
E. An electronic version of the entire application on CD per RFA Section 1.6.
F. Governing Body Resolution or other formal action taken by the applicant’s
governing body or management per RFA Section 1.4 that:
- Commits the organization to provide the matching resources for project at the
match amounts indicated in the application.
- Authorizes the individual who signs the application has the authority to
commit the organization to the obligations under the grant.
- Provides as point of contact to represent the applicant for purposes of this
application.
- Certifies the applicant is in compliance with applicable federal, state, and local,
laws including existing credit and federal tax obligations.
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.
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