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HomeMy WebLinkAboutPort Frederick Tidal_Grant Application Form Renewable Energy Fund Round 3 Grant Application AEA 10-015 Application Page 1 of 17 10/7/2009 Application Forms and Instructions The following forms and instructions are provided to assist you in preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at: http://www.akenergyauthority.org/RE_Fund-III.html Grant Application Form GrantApp3.doc Application form in MS Word that includes an outline of information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required. Application Cost Worksheet Costworksheet3 .doc Summary of Cost information that should be addressed by applicants in preparing their application. Grant Budget Form GrantBudget3.d oc A detailed grant budget that includes a breakdown of costs by milestone and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget Form Instructions GrantBudgetInst ructions3.pdf Instructions for completing the above grant budget form. • If you are applying for grants for more than one project, provide separate application forms for each project. • Multiple phases for the same project may be submitted as one application. • If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for completion of each phase. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. • If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. REMINDER: • Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority web site after final recommendations are made to the legislature. • In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by the Authority. If you want information is to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 2 of 17 10/7/2009 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) ALASKA POWER & TELEPHONE COMPANY (AP&T) 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 17 10/7/2009 SECTION 2 – PROJECT SUMMARY This is intended to be no more than a 1-2 page overview of your project. 2.1 Project Title – (Provide a 4 to 5 word title for your project) Port Frederick Tidal Power 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. The project is approximately 10 miles southwest of the community of Hoonah. Hoonah is the primary community that would benefit from the project. 2.3 PROJECT TYPE Put X in boxes as appropriate 2.3.1 Renewable Resource Type Wind Biomass or Biofuels X Hydro, including run of river Transmission of Renewable Energy Geothermal, including Heat Pumps Small Natural Gas Heat Recovery from existing sources Hydrokinetic Solar Storage of Renewable Other (Describe) 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Reconnaissance Design and Permitting Feasibility Construction and Commissioning Conceptual Design 2.4 PROJECT DESCRIPTION Provide a brief one paragraph description of your proposed project. The Project would be located on two bays and adjacent lands in Port Frederick, which is an inlet off Icy Strait near the city of Hoonah in Southeast Alaska. As currently envisioned, the Project would be a two-basin tidal energy development wherein two bays (known as North Bight and South Bight) are isolated from Port Frederick by dikes and gate structures, with a low-head power plant located between the two bays. During high tides, water would be let into South Bight from Port Frederick, and during low tides water would be released from North Bight back to Port Frederick. Water would be continuously released from South Bight into North Bight through the power plant. By controlling the flows, a head can be maintained between the two basins, thus generating power continuously in spite of the variability of the tides. This continuous generation will allow the power to be usable in the isolated electrical system of Hoonah. This concept for tidal energy development has been around for many years, but actual installations do not exist to AP&T’s knowledge. Recent developments in low head generating equipment allow the concept to be applied in areas with only moderate tide ranges, like Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 4 of 17 10/7/2009 Southeast Alaska. AP&T expects that there could be many similar locations in Southeast where the concept could be applied; the Port Frederick location is particularly appealing because of the proximity to Hoonah, which has a relatively large load and is a community in distress. The proposed study of the two-basin tidal development for Hoonah will provide proof of the concept and knowledge of the conditions that must be met for a site to be feasible. 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 community of Hoonah presently is supplied power by the Inland Passage Electric Company (IPEC). Their power is supplied by diesel generators and their current electric rate is approximately $0.4177/kWh. This community would benefit by lowering and stabilizing electric rates, reducing particulate matter in the air and CO2 emissions, which are considered to be a major contributor to global warming. Reducing the use of diesel fuel to the community will also reduce the transport of fossil fuels that if spilled, could cause major environmental damage. 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 Port Frederick Tidal Power Project is $22,000,000, as follows: • Phase I: Reconnaissance .................................................................................... $80,000 • Phase II: Feasibility Analysis, Conceptual Design .......................................... $420,000 • Phase III: Final Design and Permitting ........................................................ $1,100,000 • Phase IV: Construction ............................................................................... $20,400,000 With this application, AP&T is requesting grant funding for Phases I and II. The total estimated cost of those two phases is $500,000, and AP&T requests grant funding of 80% of that amount, or $400,000. AP&T will provide matching funds totaling $100,000 (20%). 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. $ 400,000 2.7.2 Other Funds to be provided (Project match) $ 100,000 2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 500,000 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) $ 22,000,000 2.7.5 Estimated Direct Financial Benefit (Savings) $ 62,300,000 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.) Reduced PCE (not estimated) Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 5 of 17 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. Larry Coupe, AP&T’s C ivil Engineer, will be the Project Manager. Mr. Coupe has extensive experience in managing hydroelectric development, including feasibility, permitting, design, and construction phases. A resume for Mr. Coupe is included in Section 10 – Appendices. 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 9. The following summarizes key activities and dates of the schedule. Phase I: Reconnaissance: Spring 2010 – Summer 2010 • Installation of a tide gage • Site inspection by AP&T engineers • Re-evaluation of conceptual design based on information from the site inspection and tidal gage • Reconnaissance report • FERC scoping with resource agencies and public • Study plan development with resource agencies Phase II: Feasibility Analysis/Conceptual Design: Fall 2011 – Fall 2011 • Obtain topographic and bathymetric mapping • Geotechnical investigations at structure locations • Operations studies to refine energy output estimate • Consultations with IPEC and analyses to determine interconnection and coordination requirements • Revise conceptual design • Prepare 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: Winter 2011-12 – Winter 2014-15 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 6 of 17 10/7/2009 Phase IV: Construction: Spring 2015 – Fall 2016 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.) Milestones for the Project are: Phase I: Reconnaissance: • Installation of a tide gage ......................................................................... June 2010 • Site inspection by AP&T and geotechnical consultant engineers ............ June 2010 • Re-evaluation of conceptual design ................................................. September 2010 • Reconnaissance report ........................................................................ October 2010 • FERC scoping with resource agencies and public ........................... February 2011 • Study plan development with resource agencies ...................................... May 2011 Phase II: Feasibility Analysis/Conceptual Design: • Obtain topographic and bathymetric mapping ................................ December 2010 • Geotechnical investigations at structure locations ............................... August 2011 • Operations studies to refine energy output estimate........................... October 2011 • Determine interconnection/coordination requirements ................... November 2011 • Revise conceptual design ................................................................ November 2011 • Prepare construction cost estimate .................................................. November 2011 • Detailed economic analysis ............................................................. December 2011 • Fish surveys and analysis ................................................................... October 2011 • Wildlife surveys ..................................................................................... August 2011 • Botanical surveys .................................................................................. August 2011 • Wetland surveys .................................................................................... August 2011 • Archaeological survey .......................................................................... August 2011 • Water quality testing ........................................................................... October 2011 • Feasibility report documenting Phase II activities ............................. January 2012 The schedule described in 3.2 above is consistent with these milestones. 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 personnel involved in the project development and their roles will be: • Larry Coupe, Project Manager/Civil Design • Vern Neitzer,/Senior Review • Bob Berreth, Electrical Design • Ben Beste, Mechanical Design • Glen Martin, Resource Assessment and Permits Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 7 of 17 10/7/2009 Phase I: Reconnaissance For this phase, AP&T will utilize their own personnel to acquire and analyze data, but possibly contract for installation of a tidal gage. GeoEngineers, Inc. will assist in the site inspection (geotechnical aspects). Phase II: Feasibility Analysis/Conceptual Design In this phase AP&T will complete engineering/conceptual design studies and conduct environmental field and office studies as determined necessary by the scooping process in Phase I. 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 and bathymetric mapping - - Sentec, Inc. • Geotechnical investigations - - 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. 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 I and II, 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. At the completion of Phase I, AP&T will provide AEA with a complete report on the reconnaissance conducted and conclusions or recommendations resulting from this work. In Phase II, AP&T will provide AEA with a copy of the draft feasibility report for review, as well as a copy of the final feasibility report. 3.6 Project Risk Discuss potential problems and how you would address them. Access – AP&T will apply to the US Forest Service for an investigative Special Use Permit for Phase I, II, and III activities. Another Special Use Permit will be necessary for construction and operation (to be obtained in Phase III). Power Sales Agreement – AP&T will negotiate a power sales agreement with IPEC, the local power provider to Hoonah. Geotechnical – Project components will be designed appropriately for seismic activity, since the Project will be located in a high-risk seismic zone. Geotechnical investigation will be made at all appropriate structure locations to determine foundation requirements, etc. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 8 of 17 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 Port Frederick Tidal Power site to the largest capacity that is economically feasible. Based on computer modeling of two years of tide information for Hoonah, the installed capacity is estimated to be 400 kW, with an annual generation of 2.7 GWh. During Phase I, AP&T will re-evaluate the potential energy of the Project if warranted by information gained from the site inspection. During Phase II the Project capacity will be more thoroughly evaluated using a longer-period data set and preliminary performance information provided by generating equipment suppliers. The actual tide range at the project (based on data from the tide installed in Phase I) will be compared to the tides measured at Hoonah to develop the longer-period data set. The Hoonah area has the potential for small run-of-river hydro projects, geothermal, and the long range regional plan to intertie Hoonah with Juneau. It is unclear if any of these potentialities will reach fruition, and the Project is another option that should be considered as a way to reduce the oppressively-high power rates in Hoonah.. The community of Hoonah is presently supplied electricity by the IPEC, which presently relies 100% on diesel 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 9 of 17 10/7/2009 The Hoonah power plant facility includes three diesel electric generator sets; rated at 610 kW, 855 kW, and 1000 kW. Hoonah Generation Plant - Utility Unit # Year in service Year retired Kilo-Watt Type Inside Passage Electric Coop 1 1977 In Service 0.6 IC Inside Passage Electric Coop 3 1991 In Service 0.8 IC Inside Passage Electric Coop 2A 1997 In Service 1 IC Emissions: The significant air contaminant emission sources are the diesel electric generators. The permitted annual emissions of regulated air contaminants at the facility are limited to: 4 tons of Particulate Matter (PM-10), 249 tons of Nitrogen Oxides (NOx), 42 tons of Sulfur Dioxide (SO2), 54 tons of Carbon Monoxide (CO), and 8 tons of Volatile Organic Compounds (VOC). 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 tidal power project would reduce the use of diesel generators. This will reduce the use of diesel and the frequency of maintenance, including overhauls and replacement. The diesel generators that would be affected are all owned and operated by IPEC. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. AP&T would negotiate a power sales agreement with IPEC, the current power provider to the community of Hoonah. Note that AP&T already sells power to IPEC for Klukwan and Chilkat Valley. IPEC’s current residential electric rate is $0.4177/kWh. They purchased diesel fuel at an estimated cost of $2.40/gallon in 2009, with an average cost of $3.15/gallon in 2008. IPEC in 2008 used 367,239 gallons of diesel fuel to supply the community with power and sold 4,822,937 kWh. 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 Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 10 of 17 10/7/2009 • Delivery methods Renewable energy technology specific to location – The Project will be a tidal power project utilizing the tides between to adjacent basins to creek electricity. Facilities to be constructed include: • ~3 miles of single lane access road • One (South Bight) closure dike would be an earth-and-rock fill embankment about 400 feet long by 25 feet high and one (North Bight) closure dike would be an earth-and-rock fill embankment about 4,000 feet long and up to 80 feet high (approximately 60 feet of which would be below mean sea level). • Powerhouse with a single 400-kW generating unit • The powerhouse would be located at a narrow section of the peninsula between South Bight and North Bight. Inlet and outlet channels would connect the power plant to South Bight and North Bight, respectively. The hydraulic capacity of the power plant is preliminarily estimated to be about 560 cfs at 10.5 feet of head. • A 10-mile-long 12.5 kV submarine cable transmission line in Port Frederick to connect to the existing IPEC grid in Hoonah Optimum installed capacity – 400 kW (to be confirmed by Phase II studies). Anticipated capacity factor – 77% (to be confirmed by Phase II studies). Anticipated annual generation – The Project has the potential to generate approximately 2,700 MWh/year. Current Hoonah diesel generation is about 5 GWh/year. AP&T estimates that all of the Project generation could be used in the Hoonah system. Anticipated barriers – The two-basin tidal concept has been around for many years, but AP&T is not aware of any actual installations, thus there is little information on which to draw conclusions at this time. AP&T has conducted preliminary modeling of the site, and the estimate of generation potential is considered to be reliable. AP&T believes the main technological concern for the site is the length and depth of the dike needed to close off North Bight. Basic integration concept – Integration of this type of renewable energy is not particularly difficult; AP&T already operates two independent integrated hydro-diesel systems. Although the Project generation would vary considerably, the generation would be very predictable (which is not the case with many hydroelectric resources). Delivery methods – Project generation will be delivered to Hoonah via a 12.5 kV, 10-mile-long submarine cable through the body of water named Port Frederick. 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 project is on USFS uplands and ADNR submerged lands. AP&T has applied for a FERC preliminary permit, which provides AP&T with priority over other potential developers of the site. AP&T will obtain an investigative special use permit from the USFS to allow the field work Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 11 of 17 10/7/2009 proposed in Phase II. Currently, the land is in an inventoried roadless area and the land use designation is Old Growth Habitat; both designations are problematic but not necessarily fatal. AP&T will work with the USFS during Phase II to determine how the land classifications will affect Project development 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 for Phases I, II, and III: • Preliminary permit (FERC)(expected late 2009) • Investigative Special Use Permit (USFS) Applicable Permits for Phase IV • License (FERC) • Special Use Permit (USFS) • 404 permit (Corps of Engineers)(includes 401 Certification) • Fish habitat permit (ADF&G) • Submerged Land Easement (ADNR) • Water right (ADNR) • SHPO review • Coastal Zone Management Review (ADNR) Permitting Timeline: AP&T has already applied for the FERC preliminary permit; issuance is expected in late 2009. AP&T will apply for the USFS investigative special use permit once the FERC preliminary permit is issued. If the studies continue into Phase III, it is likely that the investigative special use permit would be amended to include the various environmental and engineering studies proposed for Phase III. The permits required for construction and operation would be applied for in Phase III; a two-year period is often required for receiving all of these permits (in particular, the FERC license). Potential Permitting Barriers: The only known potential permitting barrier is the land classification, as described in 4.3.2 above. 4.3.4 Environmental Address whether the following environmental and land use issues apply, and if so how they will be addressed: • Threatened or Endangered species • Habitat issues • Wetlands and other protected areas • Archaeological and historical resources • Land development constraints • Telecommunications interference • Aviation considerations • Visual, aesthetics impacts • Identify and discuss other potential barriers Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 12 of 17 10/7/2009 T&E Species: AP&T will conduct environmental studies during Phase III to determine the presence of any threatened or endangered species. Habitat Issues: At this time it is not known if there are habitat issues, but neither Bight is listed as having an anadromous stream by ADF&G’s website. Fish studies and other studies will occur to determine if there is any important habitat at the project site. The Bights probably offer some rearing habitat for nearby spawning streams, but this may not be an issue. 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 will be required by SHPO. Land Development Constraints: No land development constraints anticipated at this time (assumption is that the USFS will allow us to use this land). Telecommunications Interference: The low voltage 12.5 kV submarine cable transmission line does not create interference with telecommunications and in this case it will also be underwater. Much higher voltages can cause interference however. Aviation Considerations: This project is not near an airport or typical flight pattern, nor will the infrastructure (transmission line) be above ground except perhaps for a short distance at either end as the transmission line will be underwater to Hoonah. 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 in a remote location away from any moderate or high use transportation corridor. The transmission line will also be under water. 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: $80,000 (AP&T estimate based on experience) Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 13 of 17 10/7/2009 • Phase II: $420,000 (AP&T estimate based on experience) • Phase III: $1,100,000 (AP&T estimate based on experience) • Phase IV: $20,400,000 (AP&T estimate based on experience) • Total: $22,000,000 Requested grant funding: $400,000 (Phases I and II only) Applicant matching funds: $100,000 cash, direct labor & benefits Other sources of funding: $50,000 grant from USDA Energy for Rural America program Projected capital cost: $20,400,000 (capital cost is assumed to be the cost of Phase IV – Construction) Projected development cost: $1,600,000 (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 maintenance. 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 The purchaser of power generated at the Port Frederick Tidal Power Project would be the local power supplier in Hoonah (Inside Passage Electric Cooperative). To be feasible, the power sales price will need to be less than the cost of diesel generation, which is currently about $0.20/kWh. That rate will of course vary with the cost of diesel fuel, which is likely to rise significantly. If funded 80% by grants as proposed herein, a purchase price of $0.14/kWh in the first year (escalating at 2.75% for 20 years) would provide a 10.75% rate of return on AP&T’s 20% investment. 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 – Appendices. Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 14 of 17 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 annual fuel displacement is estimated to be about 193,000 gallons of diesel fuel. At a fuel price of $3.00 per gallon, that is equivalent to a savings of $580,000. Over a 50 year period the Project could potentially save 9.6 million gallons of diesel fuel valued at $62,300,000 (3.75% escalation rate until 2035, then 0% escalation rate). Anticipated annual revenue: AP&T estimates that the power sales rate could be as low as $0.14/kWh in the first year of operation if the Project is funded 80% by grants as proposed herein. That rate would be significantly less than the cost of diesel generation, and would still provide a reasonable rate of return on AP&T 20% investment. 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 15 of 17 10/7/2009 AP&T will operate the Project to supply power to IPEC’s Hoonah electrical system. 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 years. The Project will be remotely operated, with continuous monitoring by a SCADA system. O&M personnel will visit the plant at least 2-4 times per month 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. To date, AP&T has done the following: • Conducted a map-based layout of the Project structures and made a preliminary estimate of the Project costs • Prepared a basic spreadsheet model of the Project operation, and used the model to determine potential generation over two years of tide data; • Applied for a FERC preliminary permit, which expected to be issued by the end of 2009. • Applied for and received a $50,000 grant from the USDA Rural Energy for America program. No other funding has been sought or acquired at this time. AP&T intends to proceed with the Phase I work in the summer of 2010. The Phase II work will occur is 2010 and 2011. 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. Until the FERC Preliminary Permit is issued, AP&T feels it is premature to try and obtain local support for the Project. 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: $22,000,000 (total for Phases I, II, II, and IV) Investments to date and funding sources: AP&T has spent an estimated $5,000 for work to date, Renewable Energy Fund Grant Application Round 3 AEA10-015 Grant Application Page 16 of 17 10/7/2009 as described in Section 7. Amount requested in grant funds: $400,000 (80% of estimated costs for Phases I and II) Additional investment by AP&T: AP&T will provide matching funding equaling 20% of the total cost of Phases I and II ($100,000). This matching amount will be paid from AP&T’s general operations funds. Funding for Phases III and IV will be obtained at a later date. SECTION 10 – ADDITIONAL DOCUMENTATION & CERTIFICATION