HomeMy WebLinkAboutConnelly_Lake_Grant Application
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 COMPANY (a subsidiary of 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)
Connelly 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 in Southeast Alaska, approximately 14 miles northeast of the City of
Haines and 10 miles southwest of the City of Skagway. Both communities were intertied by APC
in 1998 with a 15 mile, 34.5 kV submarine cable. This project would provide power to both
communities.
2.3 PROJECT TYPE
Put X in boxes as appropriate
2.3.1 Renewable Resource Type
Wind Biomass or Biofuels
X Hydro, including run of river Transmission of Renewable Energy
Geothermal, including Heat Pumps Small Natural Gas
Heat Recovery from existing sources Hydrokinetic
Solar Storage of Renewable
Other (Describe)
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Reconnaissance Design and Permitting
Feasibility Construction and Commissioning
Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
The Connelly Lake Hydroelectric Project (Project) will be located in Southeast Alaska,
approximately 14 miles northeast of the City of Haines and 10 miles southwest of the City of
Skagway. Connelly Lake (formerly known as Upper Chilkoot Lake) is an 85 acre alpine lake,
and drains into the Chilkoot River. The project will be on state and private land, including the
Haines State Forest and Chilkat Bald Eagle Preserve. The project facilities will include a dam
at the lake outlet, a penstock about 6,200 feet long, a 12.0 MW powerhouse with two generating
units, a 14-mile-long 34.5 kV transmission line and a 14-mile long access road. Final
dimensions and capacities of these facilities will be determined by optimization studies to be
conducted during Phase II. The Project will be developed by AP&T to provide additional
generation to its interconnected Haines and Skagway electrical systems.
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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 provide additional hydroelectric generation to AP&T’s Upper Lynn Canal
(ULC) system, which includes Haines, Skagway, and other nearby communities. AP&T also
supplies power to Inland Passage Electric Cooperative from the ULC system. The Project will
be a long-term resource to offset diesel generation. Currently, diesel generation is necessary
during low water periods. Diesel generation during the last 8 years has averaged about 0.7
GWh, but was double that average amount during two of the years. Continuing load growth will
make diesel generation more frequent. The potential generation of a 12.0 MW project is
estimated to be 45 GWh, which should be sufficient to meet increasing loads for many years to
come, although generation during the early years of the Project’s life would likely be fairly
limited. To provide revenue in the early years of Project operation, AP&T will sell power during
the summer months to cruise ships docked at either Haines or Skagway. The estimated annual
load from supplying one ship is estimated to be 9,000 MWh, with a peak of 11 MW. AP&T
estimates that a power sales rate of $0.20/kWh would be attractive to the cruise lines, and that
revenue would be sufficient to offset AP&T’s debt service and O&M costs, assuming the
construction is 80% grant funded by the State. Any excess revenue could be assigned to the State
to offset the cost of the grant funding and provide an additional revenue source to the State.
Installation of a larger capacity to supply two cruise ships is possible, which would increase the
revenue to the State at little additional cost.
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. The Project will connect into the system near Haines, and so in the event of a submarine
cable outage Haines would still be fully supplied with hydro generation.
It should also be noted that the Project could supply power to new industrial loads if they
occurred. Currently, mineral explorations are being conducted in the Klukwan area, and there
is discussion that a mine on the order of the Greens Creek Mine near Juneau could be
developed.
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 $33,235,000, not including costs incurred by
Haines Light & Power Co. (HL&P) in the 1990s for a preliminary design of the project. No
reconnaissance level studies (i.e. Phase I) are necessary because of the previous HL&P work,
however, AP&T proposes to conduct additional resource assessment/feasibility
analysis/conceptual design studies (Phase II) to update and possibly revise the HL&P work.
Also during Phase II, AP&T will contract with various entities to conduct environmental studies
and data collection as necessary for obtaining state and federal permits. Note that AP&T
purchased HL&P in 1998, including assets associated with the Project.
If the Phase II studies indicate a feasible project can be developed as expected, AP&T will
immediately begin the Phase III work to obtain the necessary permits and final design.
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AP&T request with this application grant funding of $988,000 which is 80% of the estimated
costs of Phases II and III. AP&T will provide $247,000 in matching funds (20% match) from its
normal operating funds. The total estimated costs for each phase, including construction, are
shown below:
Phase II: Feasibility Analysis/Conceptual Design ....................................$535,000
Phase III: Final Design and Permitting ....................................................$700,000
Phase IV: Construction ..........................................................................$32,000,000
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. $988,000
2.7.2 Other Funds to be provided (Project match) $247,000
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $1,235,000
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)
$33,235,000
2.7.5 Estimated Direct Financial Benefit (Savings) $1,050,000,000 (1)
$187,000,000 (2)
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.)
Other benefits due to
reduction in cruise
ship emissions.
(1) Potential savings in diesel fuel costs over 50 years with full utilization of Project output.
(2) Estimated revenue from sale of 9,000 MWh/year to cruise ships over 50 years.
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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 design and construction sequence is provided in Section 10. The
following summarizes key activities and dates of the schedule assuming no FERC license is
required (a jurisdictional determination should be forthcoming shortly).
Phase II: Feasibility Analysis/Conceptual Design:
Conceptual design/optimization........................ December, 2010
Stream gage installation ...................................... October, 2010
Geotechnical investigations ................................. October, 2011
Environmental studies ....................................... December, 2011
Phase III: Permitting and Final Design:
Permit application preparation and processing ......... July, 2012
Stream gaging (data collection for 2 years) ........ October, 2012
Penstock alignment survey ................................... October, 2011
Final design ...................................................... December, 2012
Phase IV: Construction: 2013 –2015
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 Phases II and III are as follows:
Selection of an installed capacity and optimum project arrangement by the end of 2010,
so that environmental and geotechnical studies to be conducted in 2011 can be focused
appropriately.
Installation of stream gages in summer 2010 to provide at least one full water year of
data for analysis prior to applying for permits.
Submittal of permit applications by the end of 2011 so that construction can be
authorized for 2013.
Completion of final design by the end of 2012 so that construction can proceed in 2013.
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3.4 Project Resources
Describe the personnel, contractors, equipment, and services you will use to accomplish the
project. Include any partnerships or commitments with other entities you have or anticipate will
be needed to complete your project. Describe any existing contracts and the selection process
you may use for major equipment purchases or contracts. Include brief resumes and references
for known, key personnel, contractors, and suppliers as an attachment to your application.
Key AP&T 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: Resource Assessment/Feasibility Analysis/Conceptual Design
In this phase AP&T will conduct the environmental and engineering/conceptual design studies
listed below. Most of the environmental studies will be by contractors; the contractors listed
below are those AP&T has used on similar tasks. The actual contractors used may vary from
those shown, depending on workloads and proposed budgets.
Wetlands delineation - - HDR Alaska Inc.
Threatened and endangered plant species survey - - HDR Alaska Inc.
Fish surveys - - Romey Associates, Inc.
Water quality sampling - - Analytica Group, Inc.
Cultural resource surveys - - Browne Research;
Geotechnical investigations - - GeoEngineers, Inc.
Conceptual design - - AP&T staff engineers
Feasibility analysis - - AP&T staff engineers
Phase III: Final Design & Permitting
AP&T expects to receive in 2009 a determination that the Federal Energy Regulatory
Commission (FERC) will not have jurisdiction over the Project, since no federal lands or
interstate commerce will be affected by Project development. Therefore a FERC license will not
be required, and only the following permits will be acquired during Phase III:
404 permit (Corps of Engineers)
Fish habitat permit (ADF&G)
Land leases or easements (ADNR, private landowners)
Coastal zone consistency review (ADNR)
Water right (ADNR)
SHPO review
AP&T permitting specialists will compile the environment information obtained in Phase II into
resource assessment documents as required by the various permitting agencies.
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 entered service in October 2008.
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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 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 does not yet have development rights on land to be occupied by part of the
transmission line and access road. We are working with the private land owners to negotiate
leases, easements, or sales.
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 a significant amount of underground
construction, which can be fraught with cost overrun potential. Geotechnical investigations will
be conducted at the dam and powerhouse areas to provide an adequate level of knowledge about
ground conditions at those sites.
Inclement Weather – Working conditions in the dam area are very harsh during the winter. The
proposed schedule assumes no work on the dam and upper portions of the penstock during the
December-March period.
Environmental Opposition – AP&T is aware that some Haines area resident may oppose Project
development, primarily because the proposed road could increase access into the Chilkoot
valley, and because of perceived impacts from the minor flow modifications that would occur in
the Chilkoot River. AP&T believes the environmental impacts will be insignificant or can be
prevented or adequately mitigated. AP&T will meet regularly with concerned citizens to address
any issues with the Project, with the intent of reaching a favorable concensus. In our meetings
to date, some Haines citizens have asked us to consider development of Schubee Lake as an
alternative; AP&T conducted a site visit to Schubee Lake in 2009, and will conduct a
reconnaissance study of that sites potential as indicated in a separate grant application.
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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: HL&P’s investigations of the Project in the 1990s were for a
development to supply power only to Haines. They ultimately selected a preliminary design with
an installed capacity of 6 MW and a potential annual generation of 35 GWh.
AP&T believes the arrangement proposed by HL&P could be undersized with regard to the
available water resource and the current load conditions. With the HL&P arrangement, there
would be a large amount of water spilled during the summer months. AP&T believes that it may
be economical to utilize the spilled water, either by a larger installed capacity, a larger reservoir,
or both. AP&T estimates the largest practical reservoir would have a storage capacity of 9,000
acre-feet and a maximum water level at El 2325, which could support an installed capacity of 15
MW and an annual generation of about 50 GWh. AP&T proposes to conduct an economic sizing
of the project as part of its Phase II work. The Project construction cost indicated in this
application is based on an installed capacity of 12.0 MW.
Pros: This project has enough storage and head for a resource that will provide for future load
growth in ULC for many years to come. This would eliminate diesel use except for outages and
possibly shutdown for maintenance of the hydro project. Other potential hydro sites in the area
have much less generation potential. 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
Cons: As with all hydroelectric projects, the initial cost of development is much higher than for
diesel generation. In addition, there may be environmental impacts associated with the Project,
such as the access and transmission route through a portion of the Chilkat Bald Eagle Preserve
and minor modifications of the flow in the Chilkoot River.
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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.
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.
AP&T’s ULC system is primarily hydroelectric generation with diesel backup. In recent years
diesel has been needed for peaking operations and at the end of some long winters. AP&T is
evaluating another hydroelectric project near Haines (Connelly Lake Hydro) to supplement the
ULC resources to eliminate the current diesel generation. That project should also allow for
significant load growth in the ULC system.
The Project is intended to provide power to the cruise ships that visit Skagway each year from
May through September. This project would not have an impact on the existing energy (AP&T)
resources which are solely dedicated to providing power for the residential and commercial
customers of ULC. The existing energy resources can in no way handle even one cruise ship at
this time. The Project would not replace or share the load with any existing generating
resources. The Project could provide backup renewable energy for the ULC system in the
event of an emergency, e.g. an extended outage of the Goat Lake hydro project.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The Project will be able to supply loads in any of the interconnected communities in the ULC
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system, as well as IPEC loads in the Chilkat valley. Currently, it is sometimes ne cessary for
AP&T to use diesel generation to supplement the hydro generation, either due to low streamflows
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.
If the Project is configured to provide shore power to cruise ships docked at Haines or Skagway,
the cruise lines would see their operating costs decrease, which would be beneficial for that
industry, which in turn would help the communities because the local economy is currently so
dependent on tourism.
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 and steep topography afforded by the Connelly Lake
basin to generate renewable energy. Other hydro sites may exist in the area but are much
smaller than the Project and would have significantly less energy potential. Tidal generating
technology may be applicable to the area but is considered too experimental and expensive to
compete with the Project. Wind, biomass, wave, and other renewable technologies are not
suitable to the area.
Optimum installed capacity – The optimum installed capacity is estimated to be 6.0-15 MW. An
economic sizing of the installed capacity will be accomplished during the proposed Phase II
studies.
Anticipated capacity factor – The potential capacity factor is estimated to be from 38% (at 15
MW) to 67% (at 6.0 MW).
Anticipated annual generation – The potential annual generation is estimated to be from 35 GWh
(at 6.0 MW) to 50 GWh (at 15 MW).
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Anticipated barriers – There are no known technological barriers to development of the Project.
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 Connelly 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 will always be on-line to provide system stability.
Delivery methods – The Project will be interconnected to the ULC grid at Lutak Inlet by a 14-
mile long, 34.5 kV transmission line that is considered part of the Project and included in Project
costs.
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 primarily on State of Alaska Lands (Haines State Forest, Chilkat Bald Eagle
Preserve), with some small private landholdings along the access road/transmission line route. A
land lease has been applied for from DNR and from the Haines State Forest. Private land
owners are currently being negotiated with.
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)
Water right (ADNR),
State land easement (ADNR)
Coastal zone consistency review (ADNR-DCOM)
Fish habitat permit (ADF&G)
State Parks Permit
SHPO review.
Permitting Timeline: Permit applications will be filed with the various agencies in Phase III after
completion of the necessary resource assessments in Phase II. We currently estimate that permits
applications will be filed in late 2010 and the permits will be received by fall 2011.
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 and
Phase III work progresses.
4.3.4 Environmental
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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 II regarding
threatened and endangered species, but impacts are not anticipated.
Habitat Issues: Habitat surveys were conducted by ADF&G in the 1990’s for fish in Connelly
Lake and in the Chilkoot River near the lake outlet stream’s confluence with the river. No fish
were found in the lake or using the outlet stream. The Chilkoot River provides anadromous
rearing and spawning habitat, and fish surveys and analyses are planned during Phase II to
assess any impacts from varying flows due to the project; AP&T believes the impacts will be
minor because the flow fluctuations in the summer will be small compared to the natural flow in
the Chilkoot River. In the winter, the project will likely increase the natural flow of the Chilkoot
River, which could be beneficial. Wildlife surveys during Phase II will be condu cted to assess the
current use of the area, particularly by mountain goats; significant impacts are not expected.
Wetlands: The Project will affect some wetlands, including Connelly Lake and possibly small
muskeg areas along the penstock route. However, no significant impacts are expected.
Archaeological Resources: Archeological surveys will be conducted during Phase II. No
significant impacts to archeological or cultural resources are expected.
Land Development Constraints: No land development constraints are known at this time. Lease
agreements with the state will specify any necessary mitigation requirements for the Project
features. AP&T would expect to provide gates on the access road to limit unauthorized access.
Telecommunications Interference: The 34.5 kV transmission line will not create interference with
telecommunications.
Aviation Considerations: The project does not pass by an airport and the wood poles will only be
about 45 feet in height, well below any flight pattern. The ROW for the transmission line is
bordered by forest on both sides, and trees in the area are generally at least as tall as the poles.
Visual, Aesthetic Impacts: Wood poles will be placed approximately 300 feet apart. Much of the
route was cleared for a logging road (RS 2477) into the valley and can still be used after some
repairs and tree trimming. The area is not easily accessed so that the project would not be
visible from Chilkoot Lake or other publicly accessible areas. This project will not be in a
visually or aesthetically special viewshed.
Other Potential Barriers: No other potential barriers are known at this time.
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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 ........................................... $0
Phase II .............................. $535,000
Phase III ............................. $700,000
Phase IV ........................ $32,000,000
Total .............................. $33,235,000
Requested Grant Funding: $988,000 (80% of total cost for Phase II and Phase III)
Applicant Matching Funds: $247,000 (20% of total cost for Phase II and Phase III)
Other Funding Sources: Other funding sources have not been identified at this time. AP&T will
provide the $247,000 in matching funds for Phase II and Phase III from its normal operating
funds.
Projected Capital Cost of Renewable Energy System: $32,000,000 (assumed to be the cost of
Phase IV Construction)
Projected Development Cost of Proposed Renewable Energy System: $1,235,000 (assumed to be
the sum of Phase I, II, and III costs).
These estimated costs, reflect the applicant’s knowledge and experience at building hydroelectric
projects.
Phase II: Project Costs for Resource Assessment/Feasibility Analysis/Conceptual Design
Conceptual Design and Optimization ....................................................... $125,000
Stream Gaging (Chilkoot River by USGS, Connelly Creek by AP&T) ....... $75,000
Geotechnical Investigations ...................................................................... $100,000
Fish Surveys & Analysis .............................................................................$125,000
Wildlife Surveys ............................................................................................$25,000
Botanical Survey ......................................................................................... $25,000
Wetland Survey .............................................................................................$20,000
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Archaeological Survey .................................................................................$30,000
Water Quality Testing ................................................................................. $10,000
Total For Phase II: ................................................................................... $535,000
Phase III: Project Costs for Final Design & Permitting
Permit Applications and Processing ........................................................... $50,000
Stream Gaging (O&M for 2 years) ............................................................. $50,000
Penstock Alignment Survey ......................................................................... $50,000
Final Design Engineering ......................................................................... $550,000
Total For Phase III: .................................................................................$700,000
Phase IV: Project Costs for Construction
Construction Management ........................................................................ $500,000
Mobilization ........................................................................................... $1,000,000
Access Roads and Bridges ..................................................................... $1,500,000
Dam and Reservoir ................................................................................ $8,000,000
Penstock ................................................................................................. $9,000,000
Powerhouse ............................................................................................ $7,000,000
Transmission .......................................................................................... $5,000,000
Total For Phase IV: ........................................................................................ $32,000,000
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 Project is estimated to be approximately $500,000 per year (2009 cost
level). 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 and to cruise
lines that visit Haines and Skagway during the summer tourist season. AP&T expects that the
rates to its commercial and residential customers would not increase due to Project development.
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.
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SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
Potential annual fuel displacement (gal and $) over the lifetime of the evaluated
renewable energy project
Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or cost based rate)
Potential additional annual incentives (i.e. tax credits)
Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
Discuss the non-economic public benefits to Alaskans over the lifetime of the project
Potential annual fuel displacement: The potential Project generation is about 45 GWh per year,
equivalent to 3,300,000 gallons of diesel fuel annually. Over a 50 year period the Project could
potentially save 165 million gallons of diesel fuel. Actual fuel displacement will depend on future
load growth. AP&T’s most recent purchase of diesel fuel for Haines was at a price of $2.61/gal,
with an additional $0.14/gal in taxes. Current fuel prices may be unusually low because of the
current global economic slowdown. AP&T’s economic analysis assumes that fuel prices will
escalate at 3.75% per year for the next 20 years, then hold constant, which results in an average
fuel price of $6.36/gal for the assumed 50 year life. Thus the potential lifetime fuel displacement
is valued at $1,050,000,000 (not discounted for inflation).
Anticipated annual revenue: Revenues would be from 1) sales to residential and commercial
customers at AP&T’s regulated rates, and 2) sales to cruise ships docking in either Haines or
Skagway. Power purchase agreements with cruise lines would be negotiated that would provide
power to the cruise lines at a cost less than self-generation; sale of 9,000 MWh/year at a rate of
$0.20/kWh in the first year is assumed for AP&T’s economic analysis. Note that this sale volume
is much less than the potential generation. Even at that low volume, the cruise ship sales would
provide a positive revenue stream. Over the 50-year life of the Project, the total revenue from
sales to the cruise lines is estimated to be $187,000,000. Thus the Project has the potential to
provide a positive return to the State on its grant investment, and could even be viewed as a
revenue source for the State.
Potential additional annual incentives: Not estimated.
Potential additional revenue streams : Not estimated.
Non-economic public benefits to Alaskans: A main non-economic benefit of the Project is the
reduction of emissions from diesel generation by cruise ships while docked in Skagway. The
potential Project generation is equivalent to a reduction in emissions of about 37,000 tons per
year. These environmental benefits will maintain Haines and Skagway’s desirability as a cruise
ship destination, which will provide indirect economic benefits to the people of Alaska.
Another non-economic benefit is improving the reliability of the ULC system. Currently, Haines
is supplied primarily by generation near Skagway that is transmitted over a 12-year old
submarine cable. The cable is partially located in an area of loose marine sediment that is
known to be unstable during seismic events. The Project would provide hydro generation to
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Haines in the event the submarine cable becomes unusable.
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 $500,000 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
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 has considered development of the Connelly Lake site for many years. In fact, it was the
main alternative to development of the Goat Lake site. Over the years, AP&T has conducted
several site visits to Connelly Lake and other nearby potential hydro sites in order to confirm the
technical and economic superiority of the Project. In the last couple of years, AP&T has been
holding public meetings and one-on-one communications with Haines residents to provide
information about the Project and develop local support.
In 2009, AP&T filed a notice of intent with the Federal Energy Regulatory Commission (FERC),
with the expectation that FERC would determine they do not have jurisdiction over the Project.
In 2008, FERC in fact ruled they do have jurisdiction because some land had not yet been
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transferred to the State. That land has now been transferred, and AP&T refiled with FERC in
May 2009. We expect a favorable jurisdictional determination in late 2009 or early 2010.
AP&T intends to proceed with the proposed Phase II work in 2009 as scheduled. There have
been no other State or Federal grants awarded to the Project. In REF Round 2, the Project was
recommended for $428,000 in grant funding, but no grant funds were provided.
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.
AP&T has conducted a several public meetings in Haines to explain our intent with this project.
AP&T is aware that some Haines area resident may oppose Project development, primarily
because the proposed road could increase access into the Chilkoot valley, and because of
perceived impacts from the flow modifications that would occur in the Chilkoot River because of
Project operation. AP&T believes the environmental impacts will be minor or can be prevented
or adequately mitigated. AP&T will meet regularly with concerned citizens to address any issues
with the Project, with the intent of reaching a favorable consensus. In our meetings to date, some
Haines citizens have asked us to consider development of Schubee Lake as an alternative; AP&T
conducted a site visit to Schubee Lake in 2009, and will conduct a reconnaissance study of that
site’s potential as indicated in a separate grant application.
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
Investments to date: AP&T has conducted several sites visits over the years and has
reconsidered the conceptual design for the project. The total cost for that work is estimated to
be on the order of $10,000, paid out of AP&T’s general operating budget.
Amount requested in grant funds: $988,000 (for Phase II & III work)
Additional investment by AP&T: AP&T will provide matching funds in the amount of $247,000
for Phase II and III work (20% match).
See the attached GrantBudget3.doc for a breakdown of the costs by milestones.
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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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