HomeMy WebLinkAboutNusgagak Area Hydro Grant Lake GrantApp round III
Renewable Energy Fund Round 3
Grant Application
AEA 10-015 Application Page 1 of 12 10/7/2009
Application Forms and Instructions
The following forms and instructions are provided to assist you in preparing your application for
a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA)
and the forms are available online at: http://www.akenergyauthority.org/RE_Fund-III.html
Grant Application
Form
GrantApp3.doc Application form in MS Word that includes an outline of
information required to submit a complete application.
Applicants should use the form to assure all information is
provided and attach additional information as required.
Application Cost
Worksheet
Costworksheet3
.doc
Summary of Cost information that should be addressed by
applicants in preparing their application.
Grant Budget
Form
GrantBudget3.d
oc
A detailed grant budget that includes a breakdown of costs by
milestone and a summary of funds available and requested to
complete the work for which funds are being requested.
Grant Budget
Form Instructions
GrantBudgetInst
ructions3.pdf
Instructions for completing the above grant budget form.
If you are applying for grants for more than one project, provide separate application
forms for each project.
Multiple phases for the same project may be submitted as one application.
If you are applying for grant funding for more than one phase of a project, provide
milestones and grant budget for completion of each phase.
If some work has already been completed on your project and you are requesting
funding for an advanced phase, submit information sufficient to demonstrate that the
preceding phases are satisfied and funding for an advanced phase is warranted.
If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
Alaska Energy Authority is subject to the Public Records Act AS 40.25, and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or
proprietary company data be kept confidential subject to review and approval by the
Authority. If you want information is to be kept confidential the applicant must:
o Request the information be kept confidential.
o Clearly identify the information that is the trade secret or proprietary in their
application.
o Receive concurrence from the Authority that the information will be kept
confidential. If the Authority determines it is not confidential it will be treated as a
public record in accordance with AS 40.25 or returned to the applicant upon
request.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 2 of 12 10/7/2009
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Nushagak Electric and Telephone Cooperative, Inc.
Type of Entity:
Not-for-profit Utility
Mailing Address
PO Box 350
Dillingham, AK 99576
Physical Address
557 Kenny Wren Rd. Dillingham, AK
Telephone
907-842-5251
Fax
907-842-2780
Email
nushtel@nushtel.com
1.1 APPLICANT POINT OF CONTACT
Name
Frank Corbin
Title
Chief Executive Officer / General Manager
Mailing Address
PO Box 350
Dillingham, AK 99576
Telephone
907-842-6315
Fax
907-842-2780
Email
fcorbin@nushagak.coop
1.2 APPLICANT MINIMUM REQUIREMENTS
Please check as appropriate. If you do not to meet the minimum applicant requirements, your
application will be rejected.
1.2.1 As an Applicant, we are: (put an X in the appropriate box)
X An electric utility holding a certificate of public convenience and necessity under AS
42.05, or
An independent power producer in accordance with 3 AAC 107.695 (a) (1), or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes
1.2.2. Attached to this application is formal approval and endorsement for its project by
its board of directors, executive management, or other governing authority. If the
applicant is a collaborative grouping, a formal approval from each participant’s
governing authority is necessary. (Indicate Yes or No in the box )
Yes
1.2.3. As an applicant, we have administrative and financial management systems and
follow procurement standards that comply with the standards set forth in the grant
agreement.
Yes
1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached
grant form. (Any exceptions should be clearly noted and submitted with the
application.)
Yes
1.2.5 We intend to own and operate any project that may be constructed with grant
funds for the benefit of the general public.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 3 of 12 10/7/2009
SECTION 2 – PROJECT SUMMARY
This is intended to be no more than a 1-2 page overview of your project.
2.1 Project Title – (Provide a 4 to 5 word title for your project)
Nushagak Area Hydropower Project (NAHP)
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.
North of Dillingham, Alaska at Lake Elva and Grant Lake.
Serving Dillingham, the village of Aleknagik, and the Kanakanak community.
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)
X Reconnaissance X Design and Permitting
X Feasibility X Construction and Commissioning
X Conceptual Design
2.4 PROJECT DESCRIPTION
Provide a brief one paragraph description of your proposed project.
The Grant Lake site facility would be constructed with a dam at the upper falls and diversion tunnel to
maximize the power potential at approximately 3.12 MW (397 feet-net head). However, to minimize
the impact on salmon resources in Grant River below the dam site the construction as proposed would
consist of a canal from behind the dam to an intake structure located in an adjacent dry channel. The
dam constructed at the upper falls will be a concrete dam with an uncontrolled spillway. With a
maximum height at El 504 and a 225 foot wide spillway at El 500 the spillway flows will be diverted away
from the toe of the dam via a concrete apron onto bedrock nearby. The @1 mile diversion canal, 20
foot deep (1/1 side slopes), with an invert 468 El will have a minimum drawdown of 23 feet to El 477. A
dike in the canal will direct the water flow into the low pressure 60 inch 6,600 foot long pipeline leading
to the surge tank and penstock. The 3,100 foot 48 inch penstock will link the surge tank to the power
house. The powerhouse will contain two 1,350 kW generators driven by two 2,000 hp turbines under a
rated net head of 233 feet (average 215 ) with 92cfs. This project will necessitate the construction of
approximately 45-65 miles (depending on routing) of new underground three phase transmission tie line
from the project site to a new power substation constructed near the village of Aleknagik.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 4 of 12 10/7/2009
2.5 PROJECT BENEFIT
Briefly discuss the financial and public benefits that will result from this project, (such as reduced fuel
costs, lower energy costs, etc.)
The Nushagak Area Hydropower Project is intended to provide 100% of NETC’s energy requirements
relegating the existing diesel plant to standby status. Existing fuel costs, almost $0.30/kWh today, and
their associated volatility will be eliminated and a stable debt service burden will replace that factor as a
major rate component. It is expected that the debt service burden will be less than future fuel costs
(the yearly cost of borrowing funds to finance fuel purchases adds $0.0075/kWh to the electric rate all
by itself). And, instead of rates increasing with future increases in diesel fuel costs, this project will allow
future rates to be lowered upon debt satisfaction.
2.6 PROJECT BUDGET OVERVIEW
Briefly discuss the amount of funds needed, the anticipated sources of funds, and the natu re and source
of other contributions to the project.
Nushagak Area Hydropower Project estimated costs: Grant Lake site: $49,500,000
Grant Lake diversion facility: $30,000,000
Grant Lake inter-tie: $19,500,000
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. $ 20,000,000
2.7.2 Other Funds to be provided (Project match) $ 29,500,000
2.7.3 Total Grant Costs (sum of 2.7.1 and 2.7.2) $ 49,500,000
Project Costs & Benefits
(Summary of total project costs including work to date and future cost estimates to get to a fully
operational project)
2.7.4 Total Project Cost (Summary from Cost Worksheet
including estimates through construction)
$ 49,500,000
2.7.5 Estimated Direct Financial Benefit (Savings) $ 150,000,000
2.7.6 Other Public Benefit (If you can calculate the benefit in
terms of dollars please provide that number here and
explain how you calculated that number in your application
(Section 5.)
$
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 5 of 12 10/7/2009
SECTION 3 – PROJECT MANAGEMENT PLAN
Describe who will be responsible for managing the project and provide a plan for successfully
completing the project within the scope, schedule and budget proposed in the application.
3.1 Project Manager
Tell us who will be managing the project for the Grantee and include a resume and references
for the manager(s). If the applicant does not have a project manager indicate how you intend to
solicit project management support. If the applicant expects project management assistance
from AEA or another government entity, state that in this section.
Nushagak Cooperative will employ their Project Manager, Michael Favors, as the single point of contact
for the successful contracting entity (NETC will contract out all construction activities including direct
project management of this project). Other directly involved NETC employees are Frank Corbin, CEO /
GM and James Thames, Electric Division Manager.
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.)
1Q 2010 - $20,000,000 grant award
2Q-3Q 2010 -2011 environmental impact and historic preservation assessments onsite
4Q 2010/1Q 2011 equipment and material moved on site
2011-2013 construction
1Q 2014 construction equipment removal
2Q-3Q 2014 site remediation
4Q 2014 power generation
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.)
Updated comprehensive feasibility study completed Feb. 2009
2010-2012 construction of Lake Elva facility with intertie
2011-2014 construction of Grant Lake facility with intertie
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.
All future contracts/contractors will be acquired through standard RFP processes. NETC has
also engaged C. Mike Prewitt as a consultant – he is expected to remain for the life of the
project.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
NETC’s Project Manager, Michael Favors, will file quarterly progress reports and all additional
required information with the Alaska Energy Authority during the life of this project.
3.6 Project Risk
Discuss potential problems and how you would address them.
Stakeholders concerns will be addressed and mitigated with respect to cost/benefit analysis.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 6 of 12 10/7/2009
SECTION 4 – PROJECT DESCRIPTION AND TASKS
Tell us what the project is and how you will meet the requirements outlined in Section 2 of
the RFA.
The level of information will vary according to phase(s) of the project you propose to
undertake with grant funds.
If you are applying for grant funding for more than one phase of a project provide a
plan and grant budget form for completion of each phase.
If some work has already been completed on your project and you are requesting funding for
an advanced phase, submit information sufficient to demonstrate that the preceding phases
are satisfied and funding for an advanced phase is warranted.
4.1 Proposed Energy Resource
Describe the potential extent/amount of the energy resource that is available.
Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be
available for the market to be served by your project.
The powerhouse will contain two 1,350 kW generators driven by two 2,000 hp turbines under a
rated net head of 233 feet (average 215 ) with 92cfs.
This area of Alaska is lacking in other significant renewable alternatives.
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.
NETC currently supports a diesel fueled power house comprised of :
1 – 455 ekW diesel Caterpillar 3456
5 – 1050ekW 3512 diesel Caterpillars, vintages, 2001 2006, & 2008
1 – 1135ekW 3516 diesel Caterpillar circa 1988
Our current power house efficiency overall is 14.16 kWh/gal at the recloser servicing an
average yearly load of 2MWh.
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.
A recent wind study in our area indicated a class 2 to “fair class 3” wind resource (with high wind
shear factors). Other studies in different areas are currently under way. There are no studies to
indicate that Solar power is a viable resource. However, our utility is using costly ($25.00/watt)
solar power to mitigate commercial power instabilities at our Clarks Point telecommunications
site. Tidal and “in-river” options raise significant concerns about impacts on the local fishery.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
NETC serves electric power from one substation to an isolated network of three communities
over about 100 miles of distribution. The total demand averages about 2 MW over the course of a
year – peaking in summer during the fish processing season with lower demand in the spring and
fall. This project will stabilize electric rates which have risen steeply due to an average annual
fuel price increase of 30% from 2003-2008. Steady rates with the future possibility of a rate
decrease will encourage businesses and residents to remain in the area and enhance local
productivity.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 7 of 12 10/7/2009
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
The Grant Lake site facility would be constructed with a dam at the upper falls and diversion
tunnel to maximize the power potential at approximately 3.12 MW (397 feet-net head). However,
to minimize the impact on salmon resources in Grant River below the dam site the construction
as proposed would consist of a canal from behind the dam to an intake structure located in an
adjacent dry channel.
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.
All of the identified land involved is held in trust by the State of Alaska. NETC is working with
the SOA / DNR to mitigate any and all 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 FERC has made a “non-jurisdictional” ruling (2Q-2008) in regards to this project. All future
permitting and license applications will be conducted through applicable State of Alaska
processes. (The letters from FERC stating such determination are attached)
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
All of these issues have been investigated during previous studies of this project and none of
them have been identified as probable roadblocks. NETC will update and/or re-do the necessary
studies and mitigate the concerns as required going forward.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 8 of 12 10/7/2009
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
Nushagak Cooperative (NETC) is requesting $20 million in State of Alaska grant funding and
NETC will request $10 million in Federal grant funding for this $49.9 million dollar project.
NETC also expects to contribute $19.5 million in borrowed funds to this project.
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.)
NETC will support this facility through rate supported O&M expenses that are expected to
increase existing overheads measurably but substantially less than 100%.
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
NETC will use all power produced from this proposed facility to replace diesel generated
electricity (and some current supplemental heat demand if necessary) currently provided to its
membership.
4.4.4 Project Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Form attached:
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 9 of 12 10/7/2009
SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
Potential annual fuel displacement (gal and $) over the lifetime of the evaluated
renewable energy project
Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or cost based rate)
Potential additional annual incentives (i.e. tax credits)
Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
Discuss the non-economic public benefits to Alaskans over the lifetime of the project
The potential annual fuel displacement of this project phase is 850,000 gallons/year. At an
average price of $5.96/gal (double recent three year average of $2.97/gal) today’s prices that will
be >$150,000,000 over thirty years (@>$2,500,000 the first year).
NETC serves electric power from one substation to an isolated network of three communities
over about 100 miles of distribution. The total demand averages about 2 MW over the course of a
year – peaking in summer during the fish processing season with lower demand in the spring and
fall.
This project will stabilize electric rates which have risen over the past five years due to an
average annual fuel price increase of 30%. Steady rates with the future possibility of a rate
decrease will encourage businesses and residents to remain in the area and enhance local
productivity.
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
This hydro facility is expected to replace all but maintenance cycle back up diesel
generation run-time and produce the majority of NETC’s power generation requirements.
With peak and maintenance period generation support from the additional site, Lake
Elva, this complete project will provide peak power capability in the summer during high
water time frames that coincide with the peak usage demands of NETC’s customer base.
NETC’s rate base will provide revenues to meet ongoing expenses and any incurred long
term debt service. That long term debt service is excepted to be roughly equivalent to
the annual diesel expense presently incurred.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 10 of 12 10/7/2009
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 t o
meet the requirements of previous grants.
NETC ‘s staff has recent experience with both State and Federal grant management.
NETC has retained a consultant so that we may proceed continuously and immediately increase
our efforts on this project upon grant award.
NETC has completed an initial feasibility study and compiled an information document to share
with project stakeholders.
NETC has applied for and received a FERC jurisdictional analysis for this project that found no
justification for Federal jurisdiction.
NETC has held topic specific (in addition to regular and Annual Meetings where this project is
the subject of much public discussion) public meetings in Dillingham (October 08) and
Anchorage (June 09) where all interested parties were invited to attend.
NETC has been awarded a $4,006,500.00 grant from the State of Alaska for the Lake Elva
portion of this project.
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.
Local residents (co-op members and rate payers) have continually expressed their support for this
project through participation at public meetings and through the electoral cycle where they have
selected hydro project supporters to represent them on the Board of the Cooperative.
Interest and support from outside the immediate area (specifically Manokotak) has been evident
as well.
Representative Don Young spoke on the record in favor of this project when he visited
Dillingham and many statewide Representatives have expressed their support as well.
To date, NETC has received some verbal opposition to this project consisting for the most part
the imaginings of what non-residents would or would not think about various potential visible
parts of this project.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 11 of 12 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
Nushagak Cooperative hopes initially to receive 40% State grant funding ($20 million) and 20%
Federal Grant funding ($10 million) for the Grant Lake portion of the Nushagak Area
Hydropower Project. NETC would borrow the other 40% ($20 million) of the initial projected
cost and borrow funds to meet some unexpected cost overruns which would be repaid through a
portion of the electric rate base – similar to the fuel surcharge in use today. There are a few
different formulas available to compute the electric rates necessary to discharge the debt service
in a reasonable fashion and NETC’s Board would select the most appropriate system based on
the total size and other relevant factors of the final debt service load.
NETC’s expenses to date (@$150,000.00) are expected to be met through application of grant
funds awarded to the Lake Elva portion of this project. Further development on that phase
would require similar funding ratios to those described above.
Renewable Energy Fund
Grant Application Round 3
AEA10-015 Grant Application Page 12 of 12 10/7/2009
SECTION 9 – ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION:
A. Resumes of Applicant’s Project Manager, key staff, partners, consultants, and
suppliers per application form Section 3.1 and 3.4.
B. Cost Worksheet per application form Section 4.4.4.
C. Grant Budget Form per application form Section 9.
D. Letters demonstrating local support per application form Section 8.
E. An electronic version of the entire application on CD per RFA Section 1.6.
F. Governing Body Resolution or other formal action taken by the applicant’s
governing body or management per RFA Section 1.4 that:
- Commits the organization to provide the matching resources for project at the
match amounts indicated in the application.
- Authorizes the individual who signs the application has the authority to
commit the organization to the obligations under the grant.
- Provides as point of contact to represent the applicant for purposes of this
application.
- Certifies the applicant is in compliance with applicable federal, state, and local,
laws including existing credit and federal tax obligations.
F. CERTIFICATION
The undersigned certifies that this application for a renewable energy grant is truthful
and correct, and that the applicant is in compliance with, and will continue to comply
with, all federal and state laws including existing credit and federal tax obligations.
Print Name
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