HomeMy WebLinkAboutReynolds Creek 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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SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
ALASKA POWER COMPANY (APC)
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)
Reynolds Creek Hydro Transmission Line
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 on Prince of Wales Island, Alaska (POW). The purpose of this project is to connect a new
hydroelectric project (5.0-megawatt Reynolds Creek Hydroelectric Project) with the existing grid on the
island, which although presently has two hydroelectric projects is still needing diesel generation to meet
peak loads and new loads as the economic landscape continues to fluctuate and change on the island.The
transmission line will benefit the communities of Hydaburg, Hollis, Klawock, Craig, Thorne Bay, South
Thorne Bay, Kasaan, and soon both Coffman Cove and Naukati.
The overall 34kV power line route is approximately 12 miles long. Approximately 0.9-mile of the
westernmost section is an existing APC 2kV distribution line that will be overbuilt. The line will cross
Hetta Inlet via Jumbo Island. On Jumbo Island the transmission line will go southeast to Copper Harbor
where the powerhouse and switchyard will be located. The route will be able to primarily follow existing
logging roads.
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
Wind Biomass or Biofuels
Hydro, including run of river X Transmission of Renewable Energy
Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing sources Hydrokinetic
Solar Storage of Renewable
Other (Describe)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Reconnaissance Design and Permitting
Feasibility Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
The overall 34kV power line route is approximately 12 miles long. Approximately 0.9-mile of the
westernmost section is an existing APC 2kV distribution line that will be overbuilt. The line will cross
Hetta Inlet via Jumbo Island. The route primarily follows existing logging roads.
The power line will begin at a point along Hydaburg Road about 0.45 miles northeast of the town. It will
continue northeast along the existing logging road passing north of Deer Bay and intersecting Hetta Inlet
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opposite Jumbo Island. This section is adjacent to private forested land with a small section of Muskeg
and is 7.0 miles long. The logging roads are mostly mild to moderate cut sections with a few rock cuts.
The first 0.9 miles of this section is an existing APC corridor adjacent to the road established for a 2kV
line.
The water crossing over Hetta Inlet will be accomplished with 3 multi-pole structures with one on each
side of the inlet and one at the pinnacle of Jumbo Island. Jumbo Island slopes steeply toward the water
on both sides and is heavily forested. A new corridor will need to be established. The structure on the
island will likely be set by helicopter. This crossing is 0.9 miles across.
The power line will continue in a new corridor for 0.3 mile to the east until it intersects an existing
logging road. Approximately 1500 feet of temporary or permanent access road spurs will need to be
constructed to access 2 line structures along this section.
The line route then turns south and follows existing loggings roads 3.8 miles southeast to the
powerhouse/switchyard location near Copper Harbor. This section is adjacent to private, recently
harvested forest land with very steep and rocky terrain prone to slides. The logging road is primarily full
bench construction with several rock cut sections. There are danger trees (and boulders) above the
power line route on the eastern side slopes that may need to be removed/secured to protect the power
line.
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.)
Reynolds Creek will allow the loads within the interconnected system on POW to be met exclusively with
renewable hydroelectric power. The Project provides other operational benefits as well:
• The facilities are lower in elevation than the Black Bear Lake and South Fork hydro projects and
will, therefore, not be as susceptible to freezing as the other two resources are.
• Reynolds Creek will also allow better use of the storage reservoir at Black Bear Lake Hydro so
that water can be stored and used during drier months or provide for new peaking loads.
The 5.0-megawatt Reynolds Creek hydroelectric project is located approximately 10 miles east of
Hydaburg. The Project, through this transmission line grant application, will be interconnected into the
island grid and sold on a wholesale basis to APC, the certificated retail electric utility on the island.
Although APC owns and operates two other hydroelectric resources on the island (Black Bear Lake and
South Fork), power requirements cannot be fully met with these two resources. APC was also recently
awarded a grant to expand the interconnection system to Coffman Cove and Naukati, further increasing
the need for hydroelectric power.
A summary of the 2008 power supply for the interconnected grid and Coffman Cove and Naukati is
provided in the following table.
Prince of Wales Island Sources of Power –2008
Energy Requirements (MWh) Generation
Existing Grid 26,313 Hydroelectric
Coffman Cove 885 Black Bear 15,101
Naukati 497 South Fork 6,558
Diesel 6,036
Total Requirements 27,695 Total Generation 27,695
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From the Table above it is apparent that the load matches the current generation system, but relies upon
over 6 MWh of diesel generation annually. Current diesel fuel costs are $2.75/gallon for the grid. Fuel
offset by this project is approximately 429 gallons annually. The continued use of diesel means the
electric rates on the island are continuing to fluctuate with the price of diesel, placing economic pressure
on households and businesses. Until this grid can be 100% hydroelectric power the communities on the
island will continue to be impacted by rate fluctuations.
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 for the transmission line facilities will be $3,000,000.
In a recent loan application for Reynolds Creek Hydroelectric Project, total costs for the project are as
follows:
Sources of Funds
Grants
Federal $1,340,000
State $4,000,000
Subtotal - Grants $5,340,000
Equity
To Date (Approximate) $4,000,000
Partial Equity Repayment* ($1,095,000)
Subtotal - Equity $2,905,000 24%
PPF Loan $9,500,000 76%
Total $17,745,000
* From loan proceeds.
Of the $9,000,000 requested in the loan above, $3,000,000 is for the transmission line. From a financial
feasibility standpoint, grant funding is preferable to a loan. The transmission line is one significant part
of the Project still requiring funding and would be one of the first and significant parts of the project to
be constructed. For this grant application, because other hydro projects are on the island grid, we are
requesting $2,000,000.
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. $2,000,000
2.7.2 Other Funds to be provided (Project match) $400,000 (20% matching)
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $2,400,000
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)
$3,000,000
2.7.5 Estimated Direct Financial Benefit (Savings) $
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.)
$
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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, APC’s Chief Engineer, will be the Project Manager. Mr. Neitzer is located in Skagway,
Alaska, and has extensive experience in managing hydroelectric development, including feasibility,
construction and operation phases. A resume for Mr. Neitzer is included in Section 7 – 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.)
Phase IV: Construction: July 2010 – October 2011
AP C will place the order for transmission line materials in early 2010. AP C expects to begin
mobilization of equipment to Hydaburg the spring/summer of 20 10 in anticipation of starting construction
by July 2010. Since a logging road already exists into the site construction can start immediately with the
any additional brushing that is needed and then the placement of poles.
Transmission Facilities Schedule
Hydaburg to Deer Bay 7/1/2010 – 10/31/2010
Jumbo Island Crossing 11/1/2010 – 2/28/2011
Jumbo Island to Copper Harbor 3/1/2011 – 10/1/2011
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:
• Order materials for the transmission line by January 2010
• Beginning of construction of the transmission line by July 2010
• Completion of Hydaburg to Deer Bay by Fall 2010
• Completion of Jumbo Island crossing by February 2011
• Completion of transmission line installation by October 2011
The schedule described in 3.2 above is consistent with these milestones. It should be noted that the
schedule assumes weather will be cooperative throughout the winter, however if unusually harsh weather
conditions occur, the entire schedule could slip, however, if mild conditions persist then more work will
be accomplished
3.4 Project Resources
Describe the personnel, contractors, equipment, and services you will use to accomplish the
project. Include any partnerships or commitments with other entities you have or anticipate will
be needed to complete your project. Describe any existing contracts and the selection process
you may use for major equipment purchases or contracts. Include brief resumes and references
for known, key personnel, contractors, and suppliers as an attachment to your application.
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Key APC personnel involved in the project development and their roles will be:
• Vern Neitzer, Project Manager/Senior Engineer
• Bob Berreth, Electrical Design
• Ben Beste, Mechanical Design
• Larry Coupe, Civil Design
• Glen Martin, Resource Assessment and Permits
Phase IV: Construction
Construction will be by local contractors and APC staff.
Resumes for the above-mentioned individuals are included in Section 7.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
During Phases IV, AP C proposes to provide quarterly reports to AEA regarding the status of the work.
AP C has provided similar reports to AEA and other grant funding agencies in the past years on other
projects, and has established the necessary procedures for producing the report expeditiously. At the
completion of Phase IV, AP C will provide AEA with a copy of the final design drawings, specifications,
and a report on how construction went, lessons learned, and how things would be done differently, if
needed.
3.6 Project Risk
Discuss potential problems and how you would address them.
Site Control – APC has a joint venture with Haida Corporation as Haida Energy. Haida Corporation
owns some of the land. Other land is owned by Sealaska Corporation and a land lease is currently being
negotiated with them. A map showing land ownership is provided in Attachment 2.
Power Sales Agreement – Haida Energy (joint venture) will be a regulated utility selling wholesale power
to APC.
Inclement Weather – Working conditions in the Project area can be very harsh during the winter. The
proposed schedule however has assumed that winter weather will not be overly harsh for the December-
March period. If unusually harsh winter weather extends that period, the entire schedule could slip.
Should that appear likely, AP&T and its contractor(s) will review various options, including double-shift
work during the long summer days or limited outside work during the winter such as boring holes for the
poles.
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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: APC will develop the 5 MW Reynolds Creek Hydro Transmission Line to get
renewable energy out to the power grid on POW to offset the use of diesel generation. At present this
would offset up to 6 MWh of diesel annually. Loads are expected to grow due to some industries being
proposed for POW, such as mining.
During Phase IV: Construction, APC will construct the transmission line either using its own linemen or
using a contractor. This project has been licensed by the Federal Energy Regulatory Commission
(FERC). The full potential of this renewable resource is being developed at 5 MW.
Alternatives: There are no real alternatives for another storage project on POW. This project, already
licensed, is the logical next step to providing energy independence and security to the communities on the
island. Although other forms of renewable energy may one day become a part of the energy mix on the
island, those technologies, i.e. wind, geothermal, are not yet advanced enough to warrant an investment of
this nature. To our knowledge none of these other technologies are currently being actively pursued,
making this project the only viable alternative as opposed to the continued use of diesel generation.
Pros: Compared to diesel generation, the hydro project the transmission line will support will have the
following advantages:
• less expensive to operate than diesel (lower O&M);
• will reduce or eliminate APC’s need to purchase fuel for the island;
• reduced or eliminated 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 (current diesel rate based on $2.75/gal)
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.
There are two hydroelectric projects currently on the POW grid:
• Black Bear Lake Hydro (4.5 MW) storage mode of operation;
• South Fork Hydro (2.0 MW) run-of-river mode of operation.
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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.
Hydropower is the main source of energy on the POW grid, with diesel generation needed to meet peak
loads up to 6 MWh annually. There are backup diesel generators in almost every community APC serves
on the island left over from before they were intertied with today’s grid. This project would also affect the
frequency of maintenance of the diesel generators, reducing the annual cost of O&M.
The Project would impact the existing energy system by reducing or eliminating the use of diesel, except
for maintenance or power outages. Because this project connects the Reynolds Creek Hydro Project,
which is lower in elevation than the other two hydro projects on the island, this project would not be
susceptible to freezing giving it more flexibility in its operations. The hydro project this project will
intertie will also allow better use of the storage reservoir at Black Bear Lake Hydro so that water can be
stored and used during drier months or provide for new peaking loads.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
APC sells power to all the communities presently on the POW grid. These communities include:
Hydaburg; Hollis, Klawock, Craig, Kasaan, South Thorne Bay, and Thorne Bay. Two other communities
are expected to be added to the grid in the next few years, Coffman Cove and Naukati. APC’s two
hydroelectric projects generated 21,659,055 kWh in 2008 while generating 6,305,868 kWh with diesel
generation. Transmission lines throughout the island grid are primarily 34.5 kV, 3-Phase.
This transmission line from the Reynolds Creek Hydropower Project will give the energy customers more
stable rates by eliminating the use of diesel and because they presently rely primarily upon hydropower.
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 transmission line connecting a
new 5 MW, storage hydroelectric project. Facilities to be constructed include:
• ~11 miles of three-phase 34.5 kV transmission line (wood poles, conductor, transformers)
• <3 miles of new access road
Optimum installed capacity – 34.5 kV).
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Anticipated capacity factor – N/A.
Anticipated annual generation – The Project will interconnect a 5 MW storage resource on Prince of
Wales Island, approximately ten miles east of Hydaburg. Average annual energy production is projected
to be 19.3 million kilowatt-hours. Power will be sold to Alaska Power Company (“APC”) on a wholesale
basis and will displace over 6 million kilowatt-hours of diesel generation at current loads. Once the
transmission line is completed, and the hydro project is completed, the full load of the entire
interconnected grid on Prince of Wales Island will be met with renewable energy.
Anticipated barriers – There is always the potential for environmental issues, i.e. something an eagle nest
found in the transmission line right-of-way during construction, but since the road is already in place
except for about 3 miles of new road, there is a low probability this would occur. No barriers are
anticipated.
Basic integration concept – Integration of this type of transmission line with the existing grid will have no
difficulty as this same type of transmission line has been integrated many times on the island to create the
grid that exists today.
Delivery methods – The Project will deliver power from the hydro project via a 34.5 kV, 11-mile-long
above ground transmission line to the existing 34.5 kV grid on the island.
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 will set on both Sealaska Corporation and Haida Corporation land. A land lease
agreement with Sealaska Corporation is now being negotiated. Haida Corp is in a joint venture with APC,
so this presents no issues.
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
The following major permits have been received to construct, operate, and maintain the Project
subject to certain conditions:
• Federal Energy Regulatory Commission License (FERC Project No. 11480)
• Coastal Zone Consistency Determination No. AK 9902-06JJ from the State of Alaska, Office of the
Governor, Office of Management and Budget, Division of Governmental Coordination
• Fish Habitat Permit FG-00-I(POW)-0018 from the Alaska Department of Fish and Game
• Corps of Engineers Permit No. 2-950127 from the Department of the Army, U.S. Army Engineer District,
Alaska
The following major permitting actions have yet to be completed and are currently being sought:
• Easement from the Alaska Department of Natural Resources for the transmission line crossing of Hetta
Inlet pending determination of the final routing of the line. It is anticipated that the applications for this
permit and the temporary permits for barge facilities in Deer Bay and Copper Harbor will be submitted to
the ADNR no later than January 2010.
Articles of the FERC License require Haida Corporation to file for approval certain environmental plans,
as well as design drawings, specifications, and reports. HDR* has prepared five of the plans and has
submitted them for review by various state and federal agencies. Following receipt of agency comments,
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they were submitted to FERC. The remaining seven plans are in various stages of development and will all
be submitted to FERC by the end of 2009. The design drawings, specifications, and reports are currently
being developed by HDR and will be submitted to FERC for approval when complete.
*HDR is an engineering firm hired by Haida Corp to develop the environmental plans and final design for
construction to begin.
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
Permitting to address environmental issues has almost been completed, except for the Alaska DNR permit
still to be issued, which covers the transmission line water crossing over Hetta Inlet.
T&E Species: Are not expected to be encountered. APC will construct the transmission line with raptor
safety configuration and possibly some anti-perch devices placed on some poles.
Habitat Issues: No real habitat issues for the transmission line, other than using a raptor safety
configuration for the spacing of conductors. Appropriate erosion and sedimentation control measures are
spelled out in the permits to protect wetlands and any aquatic habitat encountered.
Wetlands: Wetlands will be avoided when possible. The ~11-mile transmission line will be in an existing
road corridor requiring little if any clearing and with 300-foot pole spacing will avoid most or all
wetlands. The approximately 3-miles of new road will be on slopes and most likely avoiding wetlands.
This has been analyzed and permitted by the state and federal agencies.
Archaeological Issues: There are no archaeological issues with this transmission line, primarily because
it will be in an existing cleared right-of-way.
Land Development Constraints: There are no land development constraints.
Telecommunications Interference: The 34.5 kV transmission line will not create interference with
telecommunications, although transformers sometimes can, however, this size of line is common for the
island and is located in a remote area. Much higher voltages can cause interference.
Aviation Considerations: This project is not near an airport or typical flight pattern, however, the aerial
crossing of Hetta Inlet will be marked with three different colors of ball like devices. The transmission line
will be configured to prevent avian electrocution as well.
Visual & Aesthetic Impacts: Visual and aesthetics are not an issue here because of the remote location.
There will be evidence of some human activity, but only in a narrow corridor at this remote site.
4.4 Proposed New System Costs and Projected Revenues
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(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 IV – Construction: $3,000,000
Requested grant funding: $2,000,000 (because other hydro already exists)
Applicant matching funds: $400,000 (20%)
Other sources of funding: none for the transmission line at this time, but additional may be sought
Projected capital cost: $3,000,000
Projected development cost: $
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 C 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
In order to facilitate construction and operations, Haida Energy was formed as a joint venture between
Haida Corporation and Alaska Power & Telephone (AP&T), with Haida Corporation’s interest in the
joint venture set at 75 percent and AP&T ’s at 25 percent. Power will be sold by the joint venture to APC
on a wholesale basis.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 13 of 17 10/7/2009
Download the form, complete it, and submit it as an attachment. Document any conditions or sources
your numbers are based on here.
The Cost Worksheet is attached in Section 10 – Appendices.
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 Project will displace about 429 gallons of diesel fuel in the first
year of operation, which equates to a savings of $1,179.75 (average 2009 fuel price of $2.75 per gallon,
which is expected to be $3.15/gallon in 2010). Over a 50 year period the Project could potentially save
21,450 gallons of diesel fuel valued at $59,000 (without assuming an escalation rate in the price of diesel
fuel).
Anticipated annual revenue: Not estimated.
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 may 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.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 14 of 17 10/7/2009
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
The joint venture Haida Energy will operate the Project a nd sell wholesale power to APC to feed the POW
electrical grid. APC will maintain the Project utilizing their background in hydroelectric resources
operation and maintenance. The Project will be remotely operated, with continuous monitoring by a
SCADA sy stem. 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.
APC is prepared to order poles, transformers and conductor in early 2010. The last permit for this
project, from ADNR, is expected soon. Construction should be able to start by July 2010. FERC still needs
to approve some environmental plans which should be accomplished over the winter of 2009-2010.
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.
Although there are no current letters of support, they were likely received years ago when the project was
licensed. There can be little doubt that by funding a project like this through sources such as grants to
keep costs down and by getting the communities off of diesel, their rates will be lower on average and they
will have more stable rates. The communities on the island will support this type of infrastructure
addition.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 15 of 17 10/7/2009
SECTION 9 – GRANT BUDGET
Tell us how much you want in grant funds Include any investments to date and funding sources,
how much is being requested in grant funds, and additional investments you will make as an
applicant.
Include an estimate of budget costs by milestones using the form – GrantBudget3.doc
APC is applying for grant funds in the amount of $2,000,000, from Round III, the maximum amount
allowed for communities with installed hydropower, which POW has. Matching funds of 20% would
amount to $400,000. Total costs for the transmission line to get hydropower out to the communities is
$3,000,000. Below is a budget for the whole Reynolds Creek Hydroelectric Project showing where other
sources of funding for that project has come from and the total costs of that project. The joint venture,
Haida Energy is seek funds for the remainder of that project, which amounts to approximately $6,000,000
A construction budget prepared by HDR Engineering is provided in the following table showing the
budget for the Reynolds Creek Hydroelectric Project the transmission line will carry electricity from.
Recon/Permitting & Design/Prelim Design $2,120,000
Final Design/Surveying/Final Permits 2,000,000
Construction
Construction Management $ 500,000
Mobilization 700,000
Access Facilities 1,000,000
Diversion Structure 1,000,000
Penstock 3,000,000
Powerhouse 4,000,000
Transmission Facilities 3,000,000
Completion 300,000
13,500,000
Power Sales Agreement/Regulatory 125,000
$17,745,000
Funding sources for Project construction will include a combination of equity, grants, and debt. A loan
was also applied for to be used to repay Haida Corporation for part of its equity investment thus far and
for construction costs in excess of equity and grants.
Sources of Funds
Grants
Federal $ 1,340,000
State 4,000,000
Subtotal - Grants $ 5,340,000
Equity
To Date (Approximate) 4,000,000
Partial Equity Repayment* (1,095,000)
Subtotal - Equity 2,905,000 24%
PPF Loan 9,500,000 76%
Total $17,745,000
* From loan proceeds.
Haida Energy will be a regulated utility selling wholesale power to APC. As such, its return on equity
will be regulated by the Regulatory Commission of Alaska. Since equity has a much higher cost of capital
than debt, maximizing the supportable debt will lower the cost of power to the ratepayers.
The above summary of funding sources is based on a viable financing structure with the grants now in
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 16 of 17 10/7/2009
hand. It is APC’s intention to seek additional grants, and if obtained, the debt and equity will be modified
as appropriate.
SECTION 10
– ADDITIONAL DOCUMENTATION & CERTIFICATION