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HomeMy WebLinkAboutDelia Creek Hydro App Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 1 of 14 9/2/2008 Application Forms and Instructions The following forms and instructions are provided for 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.html The following application forms are required to be submitted for a grant recommendation: Grant Application Form GrantApp.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 Costworksheet.doc Summary of Cost information that should be addressed by applicants in preparing their application. Grant Budget Form GrantBudget.xls A detailed grant budget that includes a breakdown of costs by task and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget Form Instructions GrantBudgetInstr.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 a plan 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. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 2 of 14 9/3/2008 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) HPML LLC Type of Entity: LLC Mailing Address P.O. Box 91187 Anchorage, AK 99509 Physical Address 1740 E. 27th Ave., Anchorage, AK 99508 Telephone 907-232.9648 Fax Email jilreese@gmail.com 1.1 APPLICANT POINT OF CONTACT Name Jill Reese Title member Mailing Address same Telephone 907-232-9648 Fax Email same 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) An electric utility holding a certificate of public convenience and necessity under AS 42.05, or x An independent power producer, 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 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.) Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 3 of 14 9/3/2008 SECTION 2 – PROJECT SUMMARY Provide a brief 1-2 page overview of your project. 2.1 PROJECT TYPE Describe the type of project you are proposing, (Reconnaissance; Resource Assessment/ Feasibility Analysis/Conceptual Design; Final Design and Permitting; and/or Construction) as well as the kind of renewable energy you intend to use. Refer to Section 1.5 of RFA. The Applicant is requesting grant funding for Phase III, Final Design Specifications and Phase IV, Final Construction. The proposed project is a hydroelectric energy system. 2.2 PROJECT DESCRIPTION Provide a one paragraph description of your project. At a minimum include the project location, communities to be served, and who will be involved in the grant project. The Applicant owns and operates Motherlode Lodge located near Delia Creek. The 4.9 acre plot of land is privately owned but segments of the proposed project will be located on land owned by the State of Alaska Park Service. The Motherlode Lodge currently utilizes 2 diesel fuel generators, 1 boiler and 2 wood stoves to power the facility and accounts for a significant percentage of annual operating expenses. The company plans to construct a 50 kWh run of river project with a flow of 3.5 cfs through a 10” pipeline from Delia Creek to the Powerhouse. Peak production is estimated to be 140 kWh with a minimum of 16 kWh. The proposed project, The Delia Creek Alternative Energy Project (DCAEP), will utilize water flow from the Delia Creek to power electricity to the Motherlode Lodge. The project will include an intake site, underground penstock and powerhouse. The hydroelectric system will be integrated with the new MEA power line extension. The existing energy system will be removed immediately and a 2.75 mile MEA power line extension developed to displace all fuel costs. The first phase of development was estimated by MEA to cost $150,000. All three phases of development are estimated at $750,000 by MEA. DCAEP will be headed by Project Manager, Jill Reese, Owner and sole member of HPML LLC and Polarconsult Engineering Firm. HPML LLC will match funds of $50,000 to the total cost of development. This does not include HPML’s initial investment in the lodge (paid, free and clear) plus an additional $850,000 in upgrades, permits and licensing. 2.3 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. Include a project cost summary that includes an estimated total cost through construction. Phase III and Phase IV entail final analysis, cost estimates, project details and construction. Phase III is currently budgeted at $50,000 for engineering fees. Phase IV is currently budgeted at $1,500,000 for final construction. This would include $650,000 for the development of DCAEP, engineering fees and $750,000 to construct the MEA power line extension. Final specifications and modifications will be addressed during Phase III. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 4 of 14 9/3/2008 2.4 PROJECT BENEFIT Briefly discuss the financial benefits that will result from this project, including an estimate of economic benefits(such as reduced fuel costs) and a description of other benefits to the Alaskan public. The expected outcome is significant annual fuel displacement and energy cost savings in addition to mitigation of adverse environmental impact and improvement in air and noise quality. DCEAP directly benefits valuable public services provided by the Motherlode Lodge including public education, energy distribution, search and rescue and public trail access. 2.5 PROJECT COST AND BENEFIT SUMARY Include a summary of your project’s total costs and benefits below. 2.5.1 Total Project Cost (Including estimates through construction.) $1,550,000.00 2.5.2 Grant Funds Requested in this application. $1,500,000.00 2.5.3 Other Funds to be provided (Project match) $50,000.00 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $1,500,000.00 2.5.5 Estimated Benefit (Savings) $71,076.00 annually plus and additional $76,490.00 2.5.6 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.) $375,000.00 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 5 of 14 9/3/2008 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. Project Manager Jill Reese, Owner of Motherlode Lodge for 17 years, lends over 25 years of business experience with emphasis on development and investment in complicated real estate projects. Please see her attached bio. Her role in the DCAEP entails overseeing all operations and expenses incurred during the life of the project. Her responsibilities include identifying goals and objectives, setting tasks, allocating duties, commissioning staff and contractors, monitoring purchases, obtaining licensing, permits, purchase agreements, letters of support and other necessary documentation. She will also oversee communications, coordinate meetings, identify potential barriers and address them accordingly. 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.) The Project Schedule begins between December 2008 and June 2009 or when funding is awarded, whichever event occurs sooner. Phase III is expected to be completed by May 2009 and Phase IV by August 2009. Please refer to the attached timeline table. 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. Project Milestones Project Milestones are organized concurrent with Phases of Development. The timeline table breaks down the timeline of Project Milestones by phase and associated tasks to meet Project Milestones. They are as follows: (a) Phase I  Completion of Phase I Reconnaissance (Completed without outside funding) o N/A Tasks Completed (b) Phase II  Completion of Phase II Feasibility (Completed without outside funding) o N/A Tasks Completed (c) Phase III  Final Design Concept o Task 3.1. Compile final engineering and approved energy system configuration upgrades of existing system o Task 3.2. Final engineered and approved system design, integration and interconnection study Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 6 of 14 9/3/2008 o Task 3.3. Final estimated of project cost (d) Phase IV  Final construction and testing o Task 4.1. Coordination of conversion, integration or surplus of existing system o Task 4.2. Construction and commissioning plan and schedule o Task 4.3. Final Construction 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. (a) Project Team  Carol Hart – Operator of Motherlode Lodge. Please see attached bio. Her role in the DCAEP project entails supplying Phase I and Phase II O&M data, including both the existing energy system and the proposed DCAEP system. She is responsible for the day to day O&M and providing periodic O&M reports in order to accurately record performance and demonstrate fuel displacement and cost savings.  Polar Consult Engineers – With years of experience in Engineering and special emphasis on renewable energy. Their primary role is to provide engineering design, feasibility studies, project planning, environmental services, and construction management. Polarconsult is licensed in Alaska to perform structural, civil, and electrical engineering, land surveying, and regulated environmental site assessments.  Karola Moore – Accountant/CPA, is a partner in the Anchorage accounting firm of Sramek Hightower and brings over 25 years experience. Her role in the DCHP project entails supplying data for financial analysis, calculating fuel displacement and energy costs, determine feasibility of DCHP and to facilitate budgeting.  Alaska Technical Writers – Contribute project management and innovative technology research and development experience with special emphasis on market research and commercialization. Their primary role is to provide technical writing and consulting services to the Applicant. (b) Vendors, Contractors and Services Phase II Conceptual Design will help the Applicant determine which vendors, contractors and services will best serve the project. Factors considered when determining suitable vendors and contractors include:  Feasibility – are they qualified to undertake the specified scope of work?  Price – do they quote reasonable prices that are within the specified budget?  Quality – does their previous experiences or references indicate quality of work that is Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 7 of 14 9/3/2008 upheld to a high standard? Phase III will also help the Applicant determine the nature of vendors, contractor and services needed to accomplish the project. It is currently known that Phase IV construction and development will require a reputable contractor to remove and refurbish the current diesel fuel generator system and build and install the equipment needed for the new DCAEP system. It is not currently known if that expense includes the price of equipment or if that will be needed to be purchased from a separate vendor. Reconnaissance study has shown that a certified electrician/plumber is all that is needed for future O&M services on the DCAEP system as routine ‘check-ups’ to ensure good working order. MEA (Matanuska Electric Association) has quoted for the total construction costs to implement a power line extension. They have offered to provide contractual work for the construction of the power line for Phase IV development. (c) Equipment The DCAEP system will be built on-site at the Motherlode Lodge in Hatcher Pass. The Applicant is able to provide housing and some equipment. Contractors and vendors will provide most of the necessary equipment to replace, refurbish, design and build the DCAEP system. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. The project team will communicate via e-mail, live meetings, telephonically and by two- way radio, if necessary. Jill Reese will manage communications, scheduling meetings to discuss project details with engineers, receiving and forwarded updates to and from other contacts as necessary to finish the project. 3.6 Project Risk Discuss potential problems and how you would address them. The Applicant will address and manage project risks accordingly: (a) Permitting Issues The State of Alaska Department of Natural Resource permitting is in process including applications for an easement, with Fish and Game, with State Parks, Historical Preservation and Water and Mining. There is no permit necessary from the Mat-Su Borough. We have received the letter of non-objection from FERC and the general permit from the Corp of Engineers. The State of Alaska has reflected no wish to deny authorization but the permit remains in pending status. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 8 of 14 9/3/2008 (b) Budgeting Issues All projects inherently carry some inherent risk of poor execution due to miscalculations or misappropriation of funds. The Applicant is taking the necessary initiatives to prevent such an event by the following:  Careful planning, review and execution  Detailed financial analysis based on quotes, accounting  Alternative sources of funding (Motherlode Lodge revenue, Real Estate Broker Sales or Bank Loan) 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 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 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 Delia Creek natural resource carries the potential to generate between 14kWh to 50kWh, depending on the season. Please refer to the attached chart for details. The Motherlode Lodge is located off the grid from municipal energy sources, so its only current source of energy is from diesel fuel generators. Due to location, weather conditions, availability of sunlight, cost efficiency and available natural or man-made resources, the location would not be suitable for wind turbine, solar, geothermal, coal, electricity or tidal energy sources. The existing diesel fuel alternative accounts for a significant portion of operational overhead, pollutes the environment and cannot be distributed to other facilities. The nearby Delia Creek could produce enough energy to displace a significant portion of diesel fuel costs on an annual basis and is safe for the environment. Because energy to facilitate buildings and shelters in the Hatcher Pass area is sparse, the hydroelectric system could open doors for state park facilities nearby to access affordable energy. Virtually zero O&M costs make hydroelectric power the most economically efficient way to distribute energy. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 9 of 14 9/3/2008 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 energy system is comprised of 2 generator sets and 1 boiler, all of which utilize diesel fuel which is trucked up to the Hatcher Pass area. The first generator is 17+ years old, with a peak size of 75 kWh. The second generator is 12 years with a peak size of 50 kWh. The boiler is 10 years old with a peak size of 45 kWh. The system includes 2 wood stoves which use 4 cords of wood annually. Average production is 5.3 kWh/gal ($.75 kWh at $4 gal). Please refer to the attached ‘Delia Creek Economics’ sheet to see monthly and annual production versus demand. 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. The average performance of the existing energy system averages 6.9 kWh (in October) with a daily fuel usage of 31 gallons. Annual average is at 5.3 kWh/gal ($.075 kWh at $4/gal). Monthly demands for fuel usage vary throughout the seasons and other factors, such as weather conditions and usage of the facility. The total required energy for the year is estimated at 93,000 kWh, costing HPML just over $70,000 annually. The proposed system, which includes the hydroelectric DCAEP project and the installation of an MEA grid power line extension, would completely replace the existing energy system, displace all fuel costs, displace most of the O&M costs and even generate a profit. The MEA grid power line is necessary not only in effectively displacing overhead costs but in addition to assisting the hydroelectric project in producing the necessary kWh during winter months when the cfs flow is down. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. No energy market currently exists in the immediate area, as it is off the grid. The Motherlode, as well as nearby facilities must use diesel fuel generators to power their facilities. Power usage is independent and not currently shared between buildings and facilities. The DCAEP project would change that by connecting its 2.75 mile MEA power line extension at $.15 per kWh to be distributed and shared throughout the market. Portions of hydroelectric power could also be distributed during summer months when it is up to 140 kWh to meet MEA interest in buying up to 100 kWh of energy. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 10 of 14 9/3/2008 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 DCAEP (Delia Creek Alternative Energy Project) integrates hydroelectric power from the Delia Creek. The intake site from the river (see attached map) will utilize gravity to flow from 1.0 to 3.5 cfs through a 10” underground penstock to reduce turbulence and increase water pressure. The penstock (pipeline) feeds water directly to the powerhouse, located just outside the lodge which will anchor and house the turbomachinery. Water pressure applied to the turbines, set by controls and maintained will generate power to the system’s internal power distributor. The 10” pipeline upgrade (from the initially proposed 6” pipeline) will generate power that can be integrated with the MEA Grid power line extension (2.75 miles) and translated into distributable power.  Optimum capacity for the hydroelectric system plus grid connection is 140 kWh with a flow of 3.5 cfs.  Anticipated annual generation is 600,000 kW.  With licensing, permitting and environmental barriers resolved, the application forsees no major barriers  The 2.75 mile MEA Grid power line extension will complement power generated through hydroelectricity, meeting the 100 kWh minimum interest expressed by MEA for power sales.  The delivery method will be through the penstock (pipeline) feeding water from the intake site to the turbomachinery in the powerhouse and conveyed through a power line. The Grid connection will be delivered through the 2.75 mile to the power line. 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. HPML LLC owns the Motherlode Lodge 100% as well as the 4.9 acres on which it is located. However, some parts of the project, including the MEA extension and the Delia Creek do belong to the Alaska State Park Service. They have expressed their support and do not currently present any formidable barriers for usage of this land. State licensing is in pending status. Please refer to the attached letters of support from the State. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 11 of 14 9/3/2008 4.3.3 Permits Provide the following informationas 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 State of Alaska Department of Natural Resource permitting is in process including applications for an easement, with Fish and Game, with State Parks, Historical Preservation and Water and Mining. There is no permit necessary from the Mat-Su Borough. We have received the letter of non-objection from FERC and the general permit from the Corp of Engineers. The State of Alaska has reflected no wish to deny authorization but the permit remains in pending status. 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 The DCAEP project presents no formidable environmental hazards or adverse impacts on the environment. In contrast, hydroelectric and Grid connection helps to improve air and noise quality, is hidden from sight as to not adversely impact natural aesthetics and positive financial impact of the project helps the restoration and preservation of the Motherlode Lodge as a site of historical importance and education. The river is not a habitat for fish or other wildlife that could be adversely affected by the project. HPML LLC is currently seeking research and State support to confirm this fact. 4.4 Proposed New System Costs (Total Estimated Costs and proposed 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 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 12 of 14 9/3/2008  Identification of other funding sources  Projected capital cost of proposed renewable energy system  Projected development cost of proposed renewable energy system The total project cost will be $1,550,000 dollars, of which $50,000 will be matched by the applicant. The applicant is asking $1,500,000 for phases III and IV, including removal of existing energy system, engineering fees, contractual development work and MEA power line extension development. 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.  Total anticipated project cost for this phase  Requested grant funding O&M costs will be greatly displaced by the implementation of the new energy system. 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 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Download the form, complete it, and submit it as an attachment. Document any conditions or sources your numbers are based on here. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 13 of 14 9/3/2008 4.4.5 Business Plan 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. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. 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 avoided cost of ownership)  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 SECTION 6 – GRANT BUDGET Tell us how much your total project costs. Include any investments to date and funding sources, how much is requested in grant funds, and additional investments you will make as an applicant. Include an estimate of budget costs by tasks using the form - GrantBudget.xls Provide a narrative summary regarding funding sources and your financial commitment to the project. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 14 of 14 9/3/2008 SECTION 7 – 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 6. D. An electronic version of the entire application per RFA Section 1.6 E. Governing Body Resolution per RFA Section 1.4 Enclose a copy of the resolution or other formal action taken by the applicant’s governing body or management that: - authorizes this application for project funding at the match amounts indicated in the application - authorizes the individual named as point of contact to represent the applicant for purposes of this application - states the applicant is in compliance with all 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 Jill Reese Signature Title Project manager Date 11/10/2008