HomeMy WebLinkAboutSchubee_Lake_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.
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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)
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.
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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)
Schubee Lake 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.
The Schubee Lake Hydroelectric Project would be located across Chilkoot Inlet from Haines,
Alaska, approximately 90 miles north of Juneau. The communities of Skagway, Haines, Lutak,
and Klukwan would benefit from this potential 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.
AP&T is actively looking to add another hydroelectric storage facility to its Upper Lynn Canal
(ULC) system serving Haines, Skagway, and nearby communities. To date, AP&T has
considered Connelly Lake near Haines and Walker Lake near Klukwan, with Connelly Lake
being preferred because of its much greater energy potential. However, some Haines citizens
are opposed to development of Connelly Lake, and have expressed their interest in AP&T
evaluating the Schubee Lake site as an alternative. AP&T has made a very preliminary
evaluation of the Schubee Lake site and believe there is some potential; therefore the proposed
grant is to study the Schubee Lake site to approximately the same depth as Connelly Lake so that
a fair comparison can be made between the two. In our view, this means bypassing the
reconnaissance phase (Phase I) and proceeding directly with conceptual design and feasibility
work (Phase II).
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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.)
AP&T’s ULC system is short of hydro energy for peaking between December 1 and April 15 of
each year, requiring another storage hydropower project to reduce reliance on diesel generation
during these periods and to allow for growth into the future for this region.
The Schubee Lake Project has the potential to keep customers rates low compared to diesel
generation. This project will reduce or eliminate price fluctuations due seasonally from the use
of fossil fuels. At the times diesel has to be run there are pollutants added to the air including
greenhouse gases and particulate matter and noise to those nearby the generation plant. This
Project would also reduce the import of diesel fuel to the area, which would reduce the
opportunity for spills. This Project would also reduce O&M costs for the diesel generators.
Diesel generation during the last 8 years has averaged about 0.7 GWh in ULC, but was double
that average amount during two of the years. Continuing load growth will make diesel
generation more frequent. The potential generation of Schubee Lake is estimated to be about 30
GWh per year (although this value is based on very limited information). It is expected that
generation during the early years of the Project’s life would likely be fairly limited.
Another benefit of the Project would be an increase in reliability. Currently, the primary
hydroelectric generators in the ULC system are near Skagway, with only diesel generation and
two small run-of-river hydros located near Haines. If the submarine cable between Haines and
Skagway were to be damaged, nearly all generation for Haines would need to be from diesel
units. If constructed, this Project would need to transmit power directly to Haines through a
second submarine cable to provide an increase in reliability.
The Project could supply power to new industrial loads if they occurred. Currently, there is
discussion about using the Port of Haines for offloading and possible assembly of the gas
pipeline components before trucking them north, which could add a significant load to the area.
Mineral exploration is occurring further up the Chilkat River toward Klukwan as well, which
may require 2 MW or more of generation.
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 cost of the proposed Phase II work is estimated to be $200,000. If the Phase II studies
indicate a feasible project that can be developed more readily than Connelly Lake, AP&T will
apply for additional funding in later AEA Renewable Energy Fund rounds for conducting Phase
III and IV work.
AP&T requests with this application grant funding of $160,000 which is 80% of the estimated
costs of Phase II. AP&T will provide $40,000 in matching funds (20% match) from its normal
operating funds. The total estimated costs for each phase, are shown below:
• Phase I: Reconnaissance ........................................................................................... $0
• Phase II: Feasibility Analysis/Conceptual Design ........................................ $200,000
• Phase III: Permitting and Final Design (gross estimate) ............................ $4,000,000
• Phase IV: Construction (gross estimate) ................................................... $36,000,000
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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. $ 160,000
2.7.2 Other Funds to be provided (Project match) $ 40,000
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 200,000
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)
$ 40,200,000
2.7.5 Estimated Direct Financial Benefit (Savings) $ 642,000,000
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.)
Not calculated
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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.
Vern Neitzer, AP&T’s Chief Engineer, will be the Project Manager. Mr. Neitzer is located in
Skagway near the Project location, and has extensive experience in managing hydroelectric
development. A resume for Mr. Neitzer 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 reconnaissance, feasibility analysis and conceptual design
sequence is provided in Section 10. The following summarizes key activities and dates of the
schedule. A FERC license will be required for this project since it will be located on Federal
land.
Phase II: Feasibility Analysis/Conceptual Design:
FERC Preliminary Permit Application ....................... summer 2010
USFS Special-Use Permit Application ....................... summer 2010
Stream gage installation ............................................. summer 2010
Hydrology studies ......................................................... spring 2011
Conceptual design/optimization .................................. summer 2011
Geotechnical reconnaissance ..................................... summer 2011
Draft feasibility report ....................................................... fall 2011
Scoping – Agency/Public Meeting ..................................... fall 2011
Final feasibility report ............................................ winter 2011-12
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.)
The key tasks and decision points for Phase II are as follows:
• Apply for FERC preliminary permit - summer 2010 (AP&T may elect to take this step
earlier if the cost can count as part of AP&T’s matching contributions)
• Apply for FS Special Use Permit for investigations - summer 2010
• Install stream gage - summer 2010
• Hydrology studies – spring 2011 after sufficient gage data has been collected to allow
reasonable correlation of flows (to be updated as more data is collected)
• Optimization of the conceptual design, including alternatives to discharge to either Lynn
Canal or Kasidaya Creek – summer 2011
• Geotechnical reconnaissance of likely alternative arrangements – summer 2011
• Preparation of a draft feasibility report documenting the studies to date and the selection
of a preferred alternative – fall 2011
• Scoping of environmental issues and proposed studies based on optimized conceptual
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design – fall 2011
• Preparation of the final feasibility report that incorporates the results of the
environmental scoping – winter 2011-12
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:
• Vern Neitzer, Project Manager
• Bob Berreth, Electrical Design
• Ben Beste, Mechanical Design
• Larry Coupe, Civil Design
• Glen Martin, Resource Assessment and Permits
Phase II: Feasibility Analysis/Conceptual Design
In this phase AP&T will conduct the permitting and feasibility evaluation work indicated in 3.2
and 3.3 above. All of that work will be by the AP&T personnel noted above, except for the
geotechnical reconnaissance, which will be by a contractor (probably GeoEngineers, Inc.).
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
During Phase II, AP&T proposes to provide quarterly reports to AEA regarding the status of the
work and use of the grant funds. 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 reports expeditiously.
3.6 Project Risk
Discuss potential problems and how you would address them.
Site Control – AP&T will apply to the Forest Service for an investigative Special Use Permit to
conduct the necessary studies.
Seismic – Geotechnical investigations will be conducted to provide an adequate level of
knowledge about seismic and other geotechnical risks. Project components will be designed
appropriately for seismic activity, since the Project will be located in a moderate-risk seismic
zone. Structures will be buried as much as possible to minimize seismic impacts.
Inclement Weather – Working conditions in the lake area are very harsh during the winter. The
proposed schedule assumes no work during the winter at the lake.
Environmental Opposition – AP&T is aware that some Haines area residents support
development of the Schubee Lake Project as an alternative to the Connelly Lake Hydro Project,
which they oppose. Nevertheless, other parties may oppose Schubee Lake for other reasons (it is
located in an inventoried roadless area and the Forest Service Land Use Designation for the
area is Semi-Remote Recreation, which may be restrictive).
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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.
Potential Energy Resource: At this time only a rough estimate can be made of the energy
potential of this site based on drainage area and average precipitation. The energy potential is
estimated to be about 30 GWh per year. The installed capacity would be approximately 6.0 MW.
The Upper Lynn Canal (ULC) region is short of hydro energy for peaking between December 1
and April 15 of each year, requiring another storage hydropower project to reduce reliance on
diesel generation during these periods and to allow for growth into the future for this region. The
Schubee Lake site is one possibility. Other potential storage sites include Connelly Lake near
Haines and Walker Lake near Klukwan. The primary advantages and disadvantages of these
three sites, as estimated by AP&T at this time, are as follows:
Schubee Lake Connelly Lake Walker Lake
Energy potential 30 GWh/yr 45 GWh/yr 5 GWh/yr
Land ownership Federal State State
Restrictive land use classification High Moderate Moderate
Anadromous fish issues None Minor Minor
Local support or opposition Unknown Known opposition Unknown
Relative cost High Moderate Moderate
Based on this simple assessment, AP&T does not consider Walker Lake to be a preferred
alternative because of its relatively small energy potential. However, the assessment does not
make a clear case for either Schubee Lake or Connelly Lake.
AP&T is not aware of any feasible wind, tidal, wave, geothermal or other renewable energy sites
in the area.
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
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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.
The existing ULC energy system configuration is as follows:
Unit Type Capacity, kW Efficiency, kWh/gal Age, years
Goat Lake Hydro (storage) 4,000 N.A. 11
Dewey Lakes Hydro (storage) 943 N.A. 106
Lutak Hydro (run of river) 285 N.A. 9
10-Mile(1) Hydro (run of river) 600 N.A. 8
Kasidaya Hydro (run of river) 3,000 N.A. 0
Skagway #6 Diesel 855 14.69 22
Skagway #7 Diesel 1,100 14.80 12
Skagway #8 Diesel 500 14.89 17
Skagway #9 Diesel (refurbished) 930 ? 0
Haines #1 Diesel 800 12.64 39
Haines #2 Diesel 1265 12.93 25
Haines #3 Diesel 1600 14.92 19
Haines #4 Diesel 2865 12.83 13
(1) AP&T purchased power from Southern Energy’s 10-Mile hydro project until 2002. Purchases resumed in 2008.
Haines and Skagway are interconnected by a 15-mile-long, 34.5-kV submarine cable with a
capacity of approximately 20 MW. Skagway and Dyea are connected by a 7.3-mile long 7.2-kV
distribution line, and Haines and the IPEC system are connected by a 10-mile long 12.47-kV
distribution line.
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.
Although the installed capacity of AP&T’s existing hydroelectric resources in the ULC system are
greater than the peak demand of the interconnected grid, diesel generation is sometimes required
due to water not being available for generation. Icing conditions also curtail hydro generation.
The generation in the ULC system since the beginning of 1998 is summarized in the following
table. Kasidaya Creek hydro will became operational in late 2008, and has an annual energy
potential of 12 GWh. AP&T began supplying power to the IPEC system in 2007.
Annual Generation, MWh
Year Goat Lake Dewey Lakes Lutak 10-Mile Diesel Total
1998 10,046 3,021 0 692 9,486 23,246
1999 17,159 3,511 0 861 2,237 23,768
2000 17,999 3,737 0 1,088 888 23,712
2001 18,457 3,267 0 837 669 23,230
2002 18,016 3,449 609 174 1,366 23,613
2003 18,711 3,439 583 0 284 23,017
2004 18,563 3,391 827 0 761 23,541
2005 19,533 3,646 810 0 255 24,244
2006 22,151 3,438 479 0 89 26,159
2007 22,090 3,242 695 0 1,414 27,441
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The Project will be fully incorporated with the other hydro resources so that the renewable
resources will be dispatched as an integrated system. It is expected that the Project will eliminate
essentially all diesel generation in the interconnected grid.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
It is expected that the Project will be able to supply loads in any of the interconnected
communities in the ULC system, as well as IPEC loads in the Chilkat valley. Currently, it is
sometimes necessary for AP&T to use diesel generation to supplement the hydro generation,
either due to low streamflows, low lake levels, long-lasting cold springs, or outages. Load
increases and expansion of the system have exacerbated this situation. When diesel generation is
required, electric rates increase and cause fluctuations in customer energy bills that can be
difficult to anticipate or adjust for. Adding more hydro capacity to the ULC grid will alleviate
fluctuating electric rates for customers.
The Project could provide in the near-term an incentive for additional economic development in
the Haines and Skagway areas because there would be a surplus of economical power available.
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. Hydroelectric technology is well developed, and provides most of the
renewable energy generated in the world in general, and Southeast Alaska in particular. The
Project will utilize the abundant rainfall, glacial melt, and steep topography afforded by the
Schubee Lake basin to generate renewable energy.
Optimum installed capacity – The optimum installed capacity will be determined during Phase II.
AP&T current estimates the installed capacity at 6.0 MW.
Anticipated capacity factor – The anticipated capacity factor is estimated to be 57% (at 6.0
MW).
Anticipated annual generation – The potential annual generation is estimated to be 30 GWh (at
6.0 MW).
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Anticipated barriers – There are no known technological barriers to development of the Project
at this time.
Basic integration concept – The ULC system is already a hydro-based system with diesel backup.
Integrating another hydro project to the system will not present any difficulties. The run-of-river
hydros in the system (Lutak, Kasidaya) will be dispatched first, followed by storage hydros (Goat
Lake and Schubee Lake). Generally, the storage hydros will be dispatched based on their then-
current storage levels and operating characteristics. In addition, one or both of the storage
hydros would always be on-line to provide system stability.
Delivery methods – The Project would be interconnected to the ULC grid either near Haines via
a new submarine cable or at Kasidaya Creek via the existing 14-mile long, 34.5 kV submarine
cable that connects Skagway and Haines.
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 Tongass National Forest land that is in an inventoried roadless area and has a
Semi-Remote Recreation land use designation. Under current rules, the roadless area status is
potentially very problematic but not necessarily fatal. Because of the Federal lands, a FERC
license would be required, as well as a USFS Special Use Permit. Some State of Alaska lands
would also be utilized, which would require a land lease from ADNR. The full extent of the land
ownership issues and the steps necessary to address those issues will be explored and
documented in the proposed Phase II studies.
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:
• FERC License
• USFS Special Use Permit
• 404 permit (Corps of Engineers)
• Water right (ADNR),
• State land lease (ADNR)
• Coastal zone consistency review (ADNR-DCOM)
• Fish habitat permit (ADF&G)(possibly)
• SHPO review
Permitting Timeline: Permit applications will be filed with the various agencies in Phase III after
completion of the necessary feasibility assessments in Phase II. An application for a preliminary
permit from FERC will occur before or during Phase II.
Potential Permitting Barriers: AP&T is not currently aware of any permitting issues that would
preclude development of the Project. Permitting barriers may become known as the Phase II
work progresses. The USFS Land Use Designation (LUD) for this area is Semi-Remote
Recreation, and transportation and utility development is allowed. However, the site is in an
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inventoried roadless area, which means that authorization of Project development by the Forest
Service would need to be made by the Secretary of Agriculture rather than by the Tongass
National Forest.
4.3.4 Environmental
Address whether the following environmental and land use issues apply, and if so how they will
be addressed:
• Threatened or Endangered species
• Habitat issues
• Wetlands and other protected areas
• Archaeological and historical resources
• Land development constraints
• Telecommunications interference
• Aviation considerations
• Visual, aesthetics impacts
• Identify and discuss other potential barriers
Threatened and endangered species: AP&T is not aware of any threatened and endangered
species in the Project area. AP&T expects to conduct field studies during Phase III regarding
threatened and endangered species, but impacts are not anticipated.
Habitat Issues: Habitat surveys will be conducted by to determine if fish utilize any part of this
drainage. A mountain goat survey will be necessary for this project. No other issues are expected
at this time.
Wetlands: The Project will affect some wetlands, including Schubee Lake and possibly small
muskeg areas along the penstock route. However, no significant impacts are expected and final
configuration of the project has not been made.
Archaeological Resources: Archeological surveys will need to be conducted during Phase III.
No significant impacts to archeological or cultural resources are expected.
Land Development Constraints: No land development constraints are known at this time other
than the potential for the USFS LUD to place some restrictions on this site. Permits acquired
from the resource agencies will specify any necessary constraints for the Project features.
Telecommunications Interference: A 34.5 kV submarine cable will not create interference with
telecommunications.
Aviation Considerations: The project does not pass by an airport and transmission of electricity
would be over a submarine cable, which would be out of the way of any aviation.
Visual, Aesthetic Impacts: Impacts to visual aesthetics are unknown at this time until a
conceptual design is developed during Phase II. The LUD for this site could make this something
to address, however.
Other Potential Barriers: No other potential barriers are known at this time.
4.4 Proposed New System Costs and Projected Revenues
(Total Estimated Costs and Projected Revenues)
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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 (based on AP&T’s knowledge and experience at building hydroelectric
projects):
Phase I (no reconnaissance phase proposed) ............................... $0
Phase II (see breakdown below) ........................................ $200,000
Phase III (gross estimate) ............................................... $4,000,000
Phase IV (gross estimate).............................................. $36,000,000
Total .............................................................................. $40,200,000
Estimated Costs for Phase II: Feasibility Analysis/Conceptual Design
FERC Preliminary Permit Application .................................. $5,000
USFS Special-Use Permit Application................................... $5,000
Stream gage installation ...................................................... $25,000
Hydrology studies .................................................................. $5,000
Conceptual design/optimization ........................................... $80,000
Geotechnical reconnaissance............................................... $25,000
Draft feasibility report ......................................................... $15,000
Environmental scoping......................................................... $30,000
Final feasibility report ........................................................ $10,000
Total For Phase II: .......................................................... $200,000
Requested Grant Funding: $160,000 (80% of total cost for Phase II)
Applicant Matching Funds: $40,000 (20% of total cost for Phase II)
Other Funding Sources: Other funding sources have not been identified at this time. AP&T will
provide the $40,000 in matching funds for Phase II from its normal operating funds.
Projected Capital Cost of Renewable Energy System: $36,000,000 (assumed to be the cost of
Phase IV Construction)
Projected Development Cost of Proposed Renewable Energy System: $4,200,000 (assumed to be
the sum of Phase I, II, and III costs).
4.4.2 Project Operating and Maintenance Costs
Include anticipated O&M costs for new facilities constructed and how these would be funded by
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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 O&M cost for the Project is estimated to be approximately $250,000 per year. AP&T is not
requesting grant funding 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
AP&T is developing this project to supply power to AP&T’s ULC system customers. AP&T
expects that the regulated rates to its commercial and residential customers would be adjusted to
reflect the capital costs added to the rate base; it is too early to identify how much adjustment
would be necessary. Currently, AP&T’s customers in Haines and Skagway pay $0.2107/kWh
(excluding PCE subsidy).
During the Phase II work, AP&T will evaluate whether the Project has the potential to supply
power to cruise ships visiting either Haines or Skagway during the summer tourist season. Such
sales could provide substantial revenue during the early years of the Project’s life. AP&T
projects that a sales price of $0.20/kWh would be attractive to the cruise lines and the revenue
from those sales would provide a positive net income to AP&T and the State.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Please see the attached Cost Worksheet.
SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
• Potential annual fuel displacement (gal and $) over the lifetime of the evaluated
renewable energy project
• Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or cost based rate)
• Potential additional annual incentives (i.e. tax credits)
• Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
• Discuss the non-economic public benefits to Alaskans over the lifetime of the project
The people of Alaska will benefit from the Project development as follows:
Potential annual fuel displacement: The potential Project generation (30 GWh/year) is
equivalent to about 2.14 million gallons of diesel fuel annually, or about 107 million gallons over
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a 50 year Project life. At a fuel cost of $3.00/gallon, the savings would be $6,400,000 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 $642,000,000.
Anticipated annual revenue: If sold at $0.20/kWh, the anticipated annual revenue for the
potential Project generation would be $6,000,000.
Potential additional annual incentives: Not estimated.
Potential additional revenue streams : Not estimated.
Non-economic public benefits to Alaskans: The primary non-economic benefits of the Project are
the environmental benefits from reducing diesel generation. The potential Project generation (30
GWh/year) is equivalent to about 25,000 tons of diesel emissions per year.
Other benefits: In the short term the local economy would benefit due to local hire for
construction labor, materials for construction, and lease or rental of equipment. In the long
term, there would be employment for O&M of the Project.
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
AP&T operates and maintains all of the existing ULC generation, transmission, and distribution
system to provide a high degree of reliability. The Project will be integrated into the ULC system,
and will be operated and maintained in a similar manner.
With regular maintenance, a conventional hydroelectric project should have a minimum life of 50
years; there are many operating projects over 100 years old. Some components may need
replacement or refurbishment during that time, but replacement of major items resulting in
significant costs are not expected, since conventional hydroelectric equipment and materials are
robust and commercialized. O&M costs are expected to be about $250,000 per year (2009 cost
level). Operation and maintenance costs will be funded by revenues from the sale of power from
the project.
AP&T will provide whatever reporting of savings and benefits that AEA considers appropriate.
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
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that may have been previously awarded for this project and the degree you have been able to
meet the requirements of previous grants.
AP&T conducted a site visit in August 2009 to measure flow in the outlet stream and to take lake
depth readings to help determine the energy potential of this site. AP&T expects to begin the
Phase II work in July 2010. AP&T may elect to apply for a FERC Preliminary Permit prior to
July 2010 in order to expedite the schedule.
No other grants have been applied for to pay for this project at this time.
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.
Enclosed are letters of support for this project, including a resolution from the Haines Borough
(Resolution No. 09-01-149).
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: $40,200,000
Investments to date and funding sources: AP&T has invested approximately $5,000 in labor and
helicopter services in making preliminary investigations of the Schubee Lake site.
Amount requested in grant funds: $160,000 (for Phase II work)
Additional investment by AP&T
: AP&T will provide matching funds in the amount of $40,000
for Phase II work (20% match).
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SECTION 10 – 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