HomeMy WebLinkAboutNeck_Lake_Grant Application Form
Renewable Energy Fund Round 3
Grant Application
AEA 10-015 Application Page 1 of 19 10/7/2009
Application Forms and Instructions
The following forms and instructions are provided to assist you in preparing your application for
a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA)
and the forms are available online at: http://www.akenergyauthority.org/RE_Fund-III.html
Grant Application
Form
GrantApp3.doc Application form in MS Word that includes an outline of
information required to submit a complete application.
Applicants should use the form to assure all information is
provided and attach additional information as required.
Application Cost
Worksheet
Costworksheet3
.doc
Summary of Cost information that should be addressed by
applicants in preparing their application.
Grant Budget
Form
GrantBudget3.d
oc
A detailed grant budget that includes a breakdown of costs by
milestone and a summary of funds available and requested to
complete the work for which funds are being requested.
Grant Budget
Form Instructions
GrantBudgetInst
ructions3.pdf
Instructions for completing the above grant budget form.
• If you are applying for grants for more than one project, provide separate application
forms for each project.
• Multiple phases for the same project may be submitted as one application.
• If you are applying for grant funding for more than one phase of a project, provide
milestones and grant budget for completion of each phase.
• If some work has already been completed on your project and you are requesting
funding for an advanced phase, submit information sufficient to demonstrate that the
preceding phases are satisfied and funding for an advanced phase is warranted.
• If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
• Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
• All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
• In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or
proprietary company data be kept confidential subject to review and approval by the
Authority. If you want information is to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept
confidential. If the Authority determines it is not confidential it will be treated as a
public record in accordance with AS 40.25 or returned to the applicant upon
request.
Renewable Energy Fund
Grant Application Round 3
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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
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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)
Neck 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.
This project is located 1.5 miles southwest of the community of Whale Pass on Prince of Wales
Island, Alaska. The Project would supply power to the community of Whale Pass.
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
Wind Biomass or Biofuels
X Hydro, including run of river Transmission of Renewable Energy
Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing sources Hydrokinetic
Solar Storage of Renewable
Other (Describe)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Reconnaissance Design and Permitting
Feasibility Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
AP&T proposes to construct a small run-of-river hydroelectric project at Neck Lake, a 1,000
acre lake located 1.5 miles southwest of the community of Whale Pass on Prince of Wales Island.
The Project would supply power to the community of Whale Pass, and would offset diesel
generation, which is currently the sole source of electricity. The relatively high and modulated
flows from the lake combined with the steep drop at the lower end of the outlet stream provide a
good opportunity for a small run-of-river hydroelectric development. Facilities would include
an access road, intake structure, 400 feet of penstock, a containerized power plant, a tailrace
channel, and upgrade of 4 miles of transmission line. The hydroelectric facilities will be
designed to avoid interference with the existing salmon rearing and collection facilities operated
at Neck Lake by the Southern Southeast Regional Aquaculture Association (SSRAA). AP&T
conducted a reconnaissance study of the site in 2008, and determined that there is sufficient
potential to almost always provide enough generation for Whale Pass loads (see Section 10 for a
copy of the reconnaissance report). The Project will provide clean, renewable electricity, as
well as rate stabilization and lower rates for AP&T’s Whale Pass customers.
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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.)
This project will reduce the cost of electricity to the residents of Whale Pass who presently pay
44.15 ¢/kWh (excluding PCE subsidy). AP&T estimates that diesel generation would decrease by
about 95% at current load levels, with some diesel required occasionally when flow in the stream is
low. This would decrease fuel costs for AP&T, and those savings would be passed on to AP&T’s
customers. AP&T estimates the annual savings at current rates would be approximately $23,000 in
the first year of operation (equivalent to about 8.7 ¢/kWh), and the savings would increase as the
cost of diesel fuel increases. Residential customers using less than 500 kWh/month would see only a
small decrease in their bill, assuming that AP&T’s savings result in a comparable decrease in the
PCE COPA rate. Commercial customers and residential customers using over 500 kWh/month
would see greater savings.
The State of Alaska would benefit from reduced draw on the PCE program. Currently, about 49%
of AP&T’s Whale Pass retail sales are subject to COPA. The total savings to the State is estimated
to be about $11,000/year at current rates.
Lower energy costs could help stimulate economic development in Whale Pass. Customers who
have discontinued AP&T service because of the high cost of power would likely reconnect if the
Project is built. Other benefits to the Alaskan public would be a decrease in the environmental
impacts of diesel generation by AP&T or self-generation by Whale Pass residents (e.g. air
pollution, noise pollution, fuel spills, etc.).
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 Project is estimated to be $2,440,000. AP&T proposes AEA grant funding
of 80% of the total cost ($1,952,000), with AP&T providing the 20% balance out of its normal
operating funds. The estimated funding by Phase is as follows:
Phase
AEA Grant
Funds
AP&T
Matching
Funds Total
I – Reconnaissance (1) $0 $3,500 $3,500
II – Feasibility/Assessment (2) $108,000 $0 $108,000
III - Design and Permitting $90,000 $23,000 $113,000
IV – Construction $1,754,000 $461,500 $2,215,500
Total $1,952,000 $488,000 $2,440,000
(1) AP&T conducted a site reconnaissance in 2008.
(2) Round 2 $108,000 grant awarded with no matching fund requirement
The construction costs indicated in this application are based on the 2008 site reconna issance.
The proposed Phase II work could result in an optimum project arrangement with a cost
significantly different than that shown. Ordinarily, AP&T would not include Phase IV in this
grant request. However, AP&T believes this Project can be designed and permitted quickly and
construction initiated in 2011, which is the time frame anticipated for the current round of grant
funding. Therefore, AP&T requests funding for construction costs in this current application.
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Any changes to the expected construction cost of the Project that result from more detailed
analyses in Phases II and III can be dealt with at the conclusion of those phases.
AP&T was been awarded $108,000 for conceptual design, environmental surveys, and a
feasibility report in Round 2 of the REF grant program. To date, only a small amount of work
has been conducted, since the grant documentation was not received until late October . We
have adjusted the amounts of the grant request and matching funds for this round by the amounts
of th e Round 2 grant.
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. $1,844,000
2.7.2 Grant Funds from Round 2 $108,000
2.7.3 Other Funds to be provided (Project match) $488,000
2.7.4 Total Grant Costs (sum of 2.7.1 and 2.7.2) $2,440,000
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)
$2,440,000
2.7.5 Estimated Direct Financial Benefit (Savings) [Net savings
over 50 years at 0% discount rate.]
$7,400,000
2.7.6 Other Public Benefit (If you can calculate the benefit in
terms of dollars please provide that number here and
explain how you calculated that number in your application
(Section 5.) [PCE savings over 50 years at 0% discount rate.]
$3,620,000
Renewable Energy Fund
Grant Application Round 3
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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.
Greg Mickelson, AP&T’s V.P. of Power Operations will be the Project Manager for all phases of
work. Mr. Mickelson is located in Klawock on POW, and is an engineer with extensive experience
in project management and electrical generation, transmission and distribution. Mr. Mickelson has
been a part of AP&T’s team for over 30 years and has been an essential part of their success. He
has overseen numerous projects on POW, having been there since 1983, that have also had grant
funding and is familiar with procedures put in place for their use. Please see Mr. Mickelson’s
resume in Section 10.
AP&T’s personnel will conduct all Phase II engineering work and will utilize contractors for the
environmental studies in Phase II. Phase III final design and permitting will be conducted by
AP&T’s experienced staff. Resume’s of key personnel are included in Section 10.
Phase IV construction would be either by AP&T using personnel hired from the local communities,
or by experienced contractors from the local communities with AP&T supervision.
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 design and construction sequence is provided in Section 10. The
following summarizes key activities and dates of the schedule. Note that this schedule is for the
entire development sequence; activities funded by this grant will be in Phases III and IV. Phase
II will be funded by the $108,000 grant from Round 2 and AP&T matching contributions.
Phase I: Reconnaissance: Completed Summer 2008
Phase II: Resource Assessment/Feasibility Analysis/Conceptual Design: 2009-2010
In late 2009 or early 2010, AP&T will have a surveyor develop topographic mapping of the
Project. Also early in 2010, the conceptual design from the Phase I reconnaissance work by
AP&T will be reviewed and augmented to develop a firm arrangement for presenting to
permitting agencies. As part of this work, AP&T will coordinate extensively with SSRAA
regarding the proposed development. In addition, a cost estimate will be prepared for the
selected arrangement and an economic analysis conducted. The results will be presented in a
feasibility report. At the same time, AP&T will work with the permitting agencies to develop
study plans for environmental surveys to be conducted later in 2010. These surveys may include
fish surveys, wildlife assessments, botanical surveys, wetlands surveys, archaeological survey
(initial SHPO review), and water quality testing. AP&T believes that environmental field surveys
for this Project will be very limited, since the impact area is quite small, and there should be a
wealth of information already available from permitting and operation of the SSRAA facilities.
Also in 2010, geotechnical investigations may be conducted at the intake and powerhouse areas.
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Phase III: Permitting and Final Design: Fall 2010 – Summer 2011
In this phase, permits and land easements will be acquired, and final design documents
prepared. Permits will include: COE Section 404 permit, ADFG fish habitat permit, ADNR land
lease or easement, ADNR water rights, ACMP coastal zone consistency determination, and SHPO
review. Final design will begin in Fall 2010 and will proceed into the summer of 2011 with the
intent to start construction in the Fall of 2011.
Phase IV: Construction: Fall 2011 –2012
Once all permits are received and funding for this phase is secured, AP&T will place the order
for generating equipment and begin off-site fabrication of the intake and powerhouse modules.
On-site construction will begin in 2011 and continue through the end of 2012. The construction
work should not be significantly compromised by weather at this temperate location.
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them. The
Milestones must also be included on your budget worksheet to demonstrate how you propose to
manage the project cash flow. (See Section 2 of the RFA or the Budget Form.)
Key (i.e. critical path) milestones for the Project are:
• Completion of topographic mapping by June 2010.
• End of Phase II (decision point after completion of feasibility analysis)
• Receipt of all necessary permits and land access agreements by July 2010.
• End of Phase III (decision point after completion of design and final cost estimate)
• Award contract for supply of the generating equipment by April, 2011
• Completion of access road to intake site by October 2011.
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 and their roles will be:
• Greg Mickelson, Project Manager & Construction Superintendent
• Bob Berreth, Electrical Design
• Ben Beste, Mechanical Design
• Larry Coupe, Civil Design
• Glen Martin, Resource Assessment and Permits
Resume’s can be found in Section 10.
Phase I: Reconnaissance
Already completed by AP&T.
Phase II: Resource Assessment/Feasibility Analysis/Conceptual Design
In this phase AP&T will acquire property access and complete environmental and
engineering/conceptual design studies. AP&T may use the following contractors for the various
surveys:
• Wetlands delineation - - HDR Alaska Inc.
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• Threatened and endangered plant species survey - - HDR Alaska Inc.
• Fish surveys - - Romey Associates, LLC (or possibly staff from SSRAA Hatchery)
• Water quality sampling - - Analytica Group Environmental Laboratories
• Cultural resource surveys - - Browne Research
• Topographic mapping - - Sentec, Inc.
• Geotechnical evaluation - - GeoEngineers, Inc.
AP&T permitting specialists will compile the environment information into resource assessment
documents as required by the various permitting agencies. AP&T engineers will conduct the
engineering/conceptual design studies in-house.
Phase III: Final Design & Permitting
AP&T has filed for a jurisdictional determination from the Federal Energy Regulatory
Commission (FERC), and expects to receive that determination by end of 2009. AP&T is
confident that FERC will not have jurisdiction, and therefore a FERC license will not be
required. Accordingly, in this phase the following permits will be acquired:
• 404 permit (Corps of Engineers)
• Coastal zone consistency determination (ADNR-DCOM)
• Fish habitat permit (ADF&G)
• Land lease or easement (ADNR)
• Water right (ADNR)
• SHPO review
AP&T will prepare the final design documents in-house using its staff civil, mechanical, and
electrical engineers, who all have extensive experience in hydroelectric development. These
engineers designed AP&T’s South Fork Hydroelectric Project which entered service in 2005, as
well as AP&T’s Kasidaya Creek Hydroelectric Project which began service in October 2008.
Phase IV: Construction
Construction will be by local contractors and AP&T staff, as follows:
• Access road - - local contractor(s) or force account
• Intake fabrications - - Reynold Grey Machining and Services
• Intake on-site construction - - local contractor(s) or force account
• Penstock materials procurement - - AP&T
• Penstock installation - - local contractor(s) or force account
• Generating equipment procurement - - AP&T
• Powerhouse fabrications - - Reynold Grey Machining and Services
• Powerhouse construction - local contractor(s) and force account
• Transmission line construction - - local contractor(s) and force account
• Testing and start-up - - AP&T
Reynold Grey Machining and Services is a welding and fabrication company in Port Townsend,
Washington that AP&T has used frequently for similar work, including fabrication of container
modules for diesel powerplants recently installed in Slana and Allakaket. Reynold Grey is located
near AP&T’s engineering staff, who thereby can conveniently oversee the proposed fabrication
work.
AP&T will negotiate purchase orders for materials and equipment from vendors who have
performed well on AP&T’s recent projects.
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3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
During Phases II and III, AP&T proposes to provide quarterly reports to AEA regarding the
status of the work. AP&T has provided similar reports to AEA and other grant funding agencies
in the past several years on other projects, and has established the necessary procedures for
producing the report expeditiously. Besides the quarterly reports, at the completion of Phase II,
AP&T will provide AEA with a copy of a report that includes the conceptual design drawings
and cost estimate. At the completion of Phase III, AP&T will provide AEA with a copy of the
final design drawings, specifications, and cost estimate, and the permits along with a request to
release the grant funds.
During Phase IV, communications within the team would consist of:
• Weekly reports by the Environmental Compliance Monitor (as likely to be required by
the ADF&G Fish Habitat Permit)
• Bi -weekly conference calls among the Project Manager, Construction
Superintendent, the Design Engineers, and SSRAA managers.
• Periodic site visits by the Project Manager and Design Engineers.
These interna l discussions will form the basis of quarterly reports to AEA. The reports will show
in a clear and concise manner progress made on the various tasks/milestones, the work to be
accomplished in the ensuing quarter, and potential problems and corrective actions to be
considered or implemented. Cost data will also be provided on a quarterly basis. Microsoft
Project or similar software will be used to develop and maintain schedule and budget
information; updating of the management files will be on a monthly basis.
3.6 Project Risk
Discuss potential problems and how you would address them.
Site Control – AP&T does not yet have development rights on the land, but will apply to ADNR
for those rights. AP&T is confident that its development will not conflict with the SSRAA
operation already on the site.
Seismic – 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.
Underground Construction – The Project does not include underground construction, which can
be fraught with cost overrun potential. Geotechnical investigations will be made at the diversion
and powerhouse areas to provide an adequate level of knowledge about ground conditions at
those sites.
Inclement Weather – Working conditions in the Project area during the winter could cause brief
interruptions of the construction schedule. If prolonged interruptions occur that could
jeopardize the completion schedule, AP&T will add contractors or more personnel as necessary
to get back on schedule.
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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.
Proposed Energy Resource: The Neck Lake site has the potential to generate perhaps 3.2 GWh
per year with an installed capacity of 750 kW, however, that would be much greater than the
required generation (currently about 300 MWh/yr) . AP&T will evaluate the optimum installed
capacity during Phase II; at this time an installed capacity of 124 kW is planned.
At this time the only viable alternative to the Project is considered to be continued diesel
generation. The Project would eliminate diesel generation for almost all of the year and
significantly reduce diesel generation for the remainder.
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.
AP&T has been aggressively extending it transmission system to most of the communities on
Prince of Wales Island, and is planning to connect Coffman Cove by the end of 2010 and Naukati
Bay possibly in 2011. Theoretically, the transmission system could be extended another 25 miles
to Whale Pass from Naukati Bay, however, it would cost much more than the Project, and would
likely be less reliable.
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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.
Existing Power Generation
There are 3 gensets in AP&T’s Whale Pass diesel power plant, as follows:
Unit #1 = JD4045, 70 kW, Installed 1995, 11.27 kWh/gal (averaged from 2008)
Unit #2 = Cummins BT5.9, 100 kW, Installed 1995, 11.38 kWh/gal (averaged from 2008)
Unit #3 = Cummins NT855-64, 160 kW, Installed 2008, 12.62 kWh/gal (avg. July/August 2008)
4.2.2 Existing Energy Resources Used
Briefly discuss your understanding of the existing energy resources. Include a brief discussion of
any impact the project may have on existing energy infrastructure and resources.
Diesel generation being the existing energy resource, this hydroelectric project will for nearly all
of the year eliminate the use of diesel generators. At other times only one or more diesel gensets
will be needed in addition to the hydro power. This will reduce the use of diesel and the
frequency of their maintenance, including overhauls and replacement. The diesel generators that
would be impacted are all owned and operated by AP&T in Whale Pass. The Project will reduce
this area’s reliance on fossil fuels. AP&T also owns the transmission and distribution
infrastructure, so no impacts will occur to existing energy infrastructure and resources.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The existing energy market for the Project is Whale Pass. Whale Pass is an isolated community on
the northern end of POW, approximately 25 road miles above Naukati Bay. AP&T currently owns
and operates all of the electrical infrastructure on the island. The Project will reduce fossil fuel
consumption by the diesel power plant in Whale Pass by approximately 25,000 gallons per year.
The existing diesel plant will be placed on standby status, reducing AP&T’s diesel operations and
maintenance costs.
Currently, Whale Pass customers pay 44.15 ¢/kWh (excluding PCE subsidy). Whale Pass
residential customers who use less than 500 kWh/month will see only a small decrease in their
electric bills, since the PCE COPA would decrease proportionally. Commercial customers and
residential customers who use more than 500 kWh/month will see a larger decrease in their electric
bills (up to 8.7 ¢/kWh in the first year of operation). Electric rates would be much more stable once
the Project is in operation.
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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
Renewable energy technology specific to location – The Project will be a conventional run-of-
river hydroelectric project. Facilities to be constructed include:
• 400 feet of single lane access road
• Intake with fish screen, 34 cfs diversion capacity
• 350 feet of 30- inch diameter pipeline
• Powerhouse with four 31-kW generating units, each consisting of a pump-as-turbine and
synchronous generator
• Upgrade of about 4 miles of transmission line from single-phase to three-phase.
Hydroelectric technology is well developed, and provides most of the renewable energy generated
in the world in general and in Alaska in particular. The Project will utilize the abundant rainfall
and steep topography afforded by the falls on the Neck Lake outlet stream to generate renewable
energy.
Optimum installed capacity – 124 kW (to be confirmed by Phase II studies).
Anticipated capacity factor – 28% (to be confirmed by Phase II studies).
Anticipated annual generation – Approximately 300 MWh/yr, which would off-set about 25,000
gallons of diesel used per year. If Whale Pass loads grow, the Project would be able to generate
as much as 1,000 MWh/yr with the proposed installed capacity of 124 kW.
Anticipated barriers – No technological barriers.
Basic integration concept – Integration of hydropower is not particularly difficult; AP&T already
operates two independent integrated hydro-diesel systems. For much of the year the hydro
generation will be much more than the load, and therefore the diesel generation will be on
standby; one or more hydro units will be on-line, with any excess generation shunted to dummy
resistance loads. During low flow periods, possibly during late summer and during parts of the
winter when flow is low, the hydro generation may be placed in lag position with diesel taking the
lead. During the transition periods, diesel unit(s) will be block loaded in lag position, with the
hydro in lead position. Preliminary studies indicated that the Project would be able to replace
about 99.5% of the diesel generation, excluding planned or forced outages.
Delivery methods – Project generation will be delivered to Whale Pass via a 4-mile-long
transmission line from the powerhouse to the existing distribution system.
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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 project is located on State land and AP&T will be applying for an easement or lease to use
the land.
4.3.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
outstanding permit issues.
• List of applicable permits
• Anticipated permitting timeline
• Identify and discussion of potential barriers
Applicable Permits:
• 404 permit (Corps of Engineers)
• Coastal zone consistency determination (ADNR-DCOM)
• Water right (ADNR),
• State land easement (ADNR)
• Fish habitat permit (ADF&G)
• SHPO review
Permitting Timeline: AP&T expects to complete environmental and design studies in 2011 in
order to have permits by summer 2011.
Potential Permitting Barriers: There are no known permitting barriers at this time.
4.3.4 Environmental
Address whether the following environmental and land use issues apply, and if so how they will
be addressed:
• Threatened or Endangered species
• Habitat issues
• Wetlands and other protected areas
• Archaeological and historical resources
• Land development constraints
• Telecommunications interference
• Aviation considerations
• Visual, aesthetics impacts
• Identify and discuss other potential barriers
T&E Species: No impacts are anticipated to T&E species due to the projects location and small
size. However, the agencies will be consulted prior to making any determination.
Habitat Issues: The Southern Southeast Regional Aquaculture Association has established a
rearing and trapping facility at the lake and outlet stream. Coho salmon smolts are reared in
pens in the lake, then released into the lake for migration out to tidewater during the spring.
When the adults return, they ascend a ladder into a single raceway, where they are quickly
processed for shipment south. Water for the raceway and ladder is diverted from the head of the
second (middle falls). A general arrangement of the SSRAA facilities is shown in the
Reconnaissance Report located in Section 10 (it is a preliminary drawing and is not 100%
accurate). SSRAA’s existing knowledge of fish usage of the stream is expected to be sufficient so
that additional fish surveys will not be required.
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Wetlands: There is potential for a small amount of wetlands to be impacted. A wetlands
delineation may be necessary to determine what, if any, impacts there may be.
Archaeological & Historical Resources: A review by SHPO of this site will need to occur to
determine if an archaeological survey will be necessary. Because of SSRAA’s existing use of
much of the site, an archaeological survey is unlikely to be required.
Land Development Constraints: AP&T will coordinate with SSRAA to make sure their needs and
goals are not affected by construction and operation of the Project.
Telecommunications Interference: The 12 kV transmission line will not create interference with
telecommunications.
Aviation Considerations: There is no significant aviation in the Project area.
Visual, Aesthetic Impacts: The Project will not be in a visually or aesthetically special view shed
that needs protection.
Potential Barriers: None
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: ..................................... $3,500 (AP&T records)
• Phase II: .............................. $108,000 (AP&T estimate based on AP&T experience)
• Phase III: .............................. $113,000 (AP&T estimate based on AP&T experience)
• Phase IV: ........................... $2,215,500 (AP&T estimate based on AP&T experience))
• Total: ................................ $2,440,000
Requested grant funding: ............ $1,844,000 (excludes $108,000 Round 2 grant)
Applicant matching funds: ............... $488,000 (total match for all grants)
Other sources of funding: ................ $108,000 Round 2 grant
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Projected capital cost: ................... $2,219,000 (capital cost is assumed to be the cost of Phase IV
– Construction)
Projected development cost: ............ $221,000 (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.)
The O&M cost for the hydro project is estimated to be $23,000 in the first year of operation
(2013). 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
AP&T is developing this Project to supply power to a community it already serves. The power
generated by the Project ultimately will be sold to AP&T’s customers in Whale Pass at a lesser
cost than the current cost of diesel generation. AP&T estimates that the current retail price for
electricity to Whale Pass customers could be reduced by 8.7¢/kWh if the Project is funded as
proposed herein (excluding PCE).
Rate of Return: Not calculated.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
The Cost Worksheet is attached in Section 10.
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)
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• 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: Over the last 10 years, Whale Pass used an average of about
25,000 gallons of diesel fuel annually to generate an average of 306,000 kWh/year. For 2009,
the most recent fuel price for Whale Pass average has been $2.67 per gallon. Over a 50 year
period the Project could potentially save 1,500,000 gallons of diesel fuel valued at $8,700,000,
assuming a 3.75% escalation rate in the price of diesel fuel and 0.5% annual load growth. Note
that current fuel prices may be unusually low because of the global economic downturn; with a
more robust global economy it is likely that fuel prices would increase much faster than the
assumed 3.75%. Also, in keeping with AEA’s analysis method, the price of fuel has only been
calculated to escalate for 20 years.
Anticipated annual revenue: If funded as proposed herein, the Project is estimated to result in a
decrease in generation costs of about $23,000 in the first year of operation. AP&T would expect
to have a new rate tariff for Whale Pass that passes those savings on to the Whale Pass
customers, i.e. AP&T’s revenues would decrease by $23,000 in the first year of operation.
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
oil 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. PCE
savings are estimated to be $3,620,000 over the 50-year life of the Project. 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 this community.
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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 will operate the Project to supply power to AP&T’s grid in Whale Pass for eventual sale to
its retail customers. AP&T will maintain the Project as it does with its other hydroelectric
resources, which can be expected to have a life of at least 50 years. The Project will be remotely
operated, with continuous monitoring by a SCADA system. O&M personnel will visit the plant at
least once per week for routine checks on the equipment. A routine maintenance schedule will be
established, a brief annual shutdown is likely for maintenance.
SECTION 7 – READINESS & COMPLIANCE WITH OTHER GRANTS
Discuss what you have done to prepare for this award and how quickly you intend to proceed
with work once your grant is approved.
Tell us what you may have already accomplished on the project to date and identify other grants
that may have been previously awarded for this project and the degree you have been able to
meet the requirements of previous grants.
AP&T visited the Project site, coordinated with SSRAA, and prepared a reconnaissance report in
2008. We expected to begin the Phase II Feasibility Work in early 2009 if grant funds were made
available. Although we were awarded $108,000 from the Round 2 REF grants for Phase II work,
the grant documents were not received until late October 2009. As a result, the expected
development schedule has slipped one year. We are currently planning to have topographic
surveying work conducted later in 2009 or early in 2010, and will complete the Phase II work by
the end of 2010.
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.
Since the proposed project would decrease electric rates and use a waterway that is already
developed for aquaculture by SSRAA, we would not expect any local opposition unless the
proposed project interferes with SSRAA’s operation. We fully expect to design a project that
avoids interference and is “junior” in priority to SSRAA’s operation. In our discussions to date
with SSRAA, they have been supportive of hydroelectric development as long as it does not
interfere. SSRAA has hydro generation at other facilities of theirs, and they understand the
benefits that they and the community would gain.
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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: $2,440,000
Investments to date and funding sources: AP&T has spent approximately $3,500 to date on Phase I
development activities for the Project. To date, all costs have been paid out of AP&T’s general
operations funds.
Amount requested in grant funds: $108,000 Phase II (Round 2 grant)
$90,000 Phase III (proposed this Round 3)
$1,754,000 Phase IV (proposed this Round 3)
$1,952,000 Total
Additional investment by AP&T
: AP&T will provide matching funding equaling 20% of the total cost of
Project development ($488,000). This matching amount will be paid from AP&T’s general operations
funds.
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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.
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