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HomeMy WebLinkAboutLoud Creek Feasibility Analysis and Conceptual Design App Renewable Energy Fund Grant Application AEA-09-004 City of Akutan Grant Application for Loud Creek Feasibility Analysis and Conceptual Design Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 1 of 64 9/2/2008 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) City of Akutan Type of Entity: Municipal Government – Second Class City Mailing Address 3830 C Street, Suite 205 Anchorage, Alaska 99503 Physical Address 100 Windy Way, Akutan, Alaska 99553 Telephone 907.274.7565 Fax 907.274.1813 Email jbereskin@gci.net and akutanadmin@gci.net 1.1 APPLICANT POINT OF CONTACT Name Joseph Bereskin Title Mayor Mailing Address 3830 C Street Suite 205 Anchorage Alaska 99503 Telephone 907.274.7565 Fax 907.27.1813 Email jbereskin@gci.net and akutanadmin@gci.net 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 An independent power producer, or X 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 2 of 64 9/3/2008 SECTION 2 – PROJECT SUMMARY Overview The City of Akutan is located on Akutan Island in the eastern Aleutians, some 790 miles southwest of Anchorage. It is an incorporated, second class city encompassing 13 square miles of land and 5 square miles of water. The City is currently preparing an annexation request that would expand its area to 148 square miles. Population in the 2000 census was 112 Native and 713 total. Estimated population in 2007 was 859. The economic base of Akutan is the Bering Sea fishery. The City is home to the largest seafood processing plant in North America owned by Trident Seafoods, the fifth largest employer in Alaska, with $1 billion in annual sales. There are nearly 900 workers employed at the Akutan plant. Expansion of the Bering Sea fishery and Akutan’s location 35 miles closer to the fishing grounds than Unalaska/Dutch Harbor have pointed to the need for improved infrastructure at Akutan. Current projects include state construction of a $75 million airport and transportation system, a $24 million Corps of Engineers harbor construction, and an $8 million road to connect the harbor to the City. These projects are all scheduled for completion in the next 2-3 years. Like most of Alaska’s villages, Akutan, including the Trident plant, are entirely dependent on diesel fuel imported into the area for heat and power. Projected growth, the steady rise of fuel costs, and the high level of carbon emissions make the development of renewable energy resources a must for Akutan. Consequently, the City has developed a renewable energy strategy that includes three projects: • Near-term: Upgrade the City’s existing 105 kW hydropower generation system to improve reliability and efficiency with a goal of reducing diesel fuel consumption by 60 percent by FY 2010. • Mid-term: Develop the Loud Creek hydropower generation system with a goal of reducing diesel fuel consumption 90 percent by FY 2012, provide power to the harbor, and allow for power sharing with Trident Seafoods. • Long-term: Develop the Hot Springs Bay geothermal project to virtually eliminate the City’s use of diesel fuel, support the City’s expanded infrastructure, stimulate economic development throughout the region, and allow power sales to Trident to reduce carbon emissions and provide a source of revenue for the City and Native Corporations. The City has submitted Renewable Energy Fund grant applications for each of the above-described projects. This application is for the Akutan Hydroelectric Project: Loud Creek Feasibility Analysis and Conceptual Design (“the project”). Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 3 of 64 9/3/2008 Project Background Since 1980, AEA and the City of Akutan have explored the potential for hydroelectric power generation in Akutan. Over the years, three local streams were identified for potential development: • Unnamed Creek (“School Creek”) located at the east end of the City. • North Creek, located on the north side of Akutan Harbor, 1.2 miles west of the City. • Loud Creek, located on the south side of Akutan Harbor, 0.75 miles south-southeast of the City. The City eventually developed a hydropower generation system, with a combined hydro-diesel generation powerhouse at School Creek. Standalone capacity of the hydro generator is a peak load of 105 kW. This system is currently inoperable and is the subject of a separate AEA renewable energy grant application. A 1985 AEA funded study conducted by PolarConsult identified Loud Creek as an alternative site for hydropower development, and an extensive field study of the site was completed. A 1989 AEA-funded hydroelectric feasibility assessment examined six alternatives for power generation in Akutan and identified Loud Creek as an “obvious choice” for development. The Loud Creek assessment included calculation of stream flow and impound capacity, construction requirements, transmission requirements, economic analysis and cost estimates. This data needs to be updated to reflect current conditions and to refine specific design criteria that will help determine the viability of resource development. Project Description AEA renewable energy grant guidelines require a multi-phase approach to project development. A feasibility assessment of the Loud Creek resource was previously completed at the direction of AEA. The assessment found Loud Creek to be “an obvious choice” for development. Therefore, the City of Akutan is requesting funds for: • Phase II Feasibility Analysis, Conceptual Design The tasks for this project are defined in Section 2.4 of the grant application instructions. Project Team The City has identified two design and engineering firms, PolarConsult Alaska, Inc. and Electric Power Systems, Inc. (EPS) as qualified and capable of performing the tasks outlined in the grant requirements for Phase II (Section 2.4 of the grant application instructions). Both companies have prepared task lists, cost estimates and background materials in support of this grant application. Both companies are familiar with the Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 4 of 64 9/3/2008 Akutan power system, and both have performed work on the system under contract to AEA and the City of Akutan. The City’s energy program management team, RMA Consulting Group (“RMA”) has assisted the City with its grant applications and will have overall management responsibility for all three of Akutan’s renewable energy projects, as defined in Section 2.1 of the grant application instructions. It is anticipated that this same project team will provide services for the Akutan Hydroelectric System Repair and Upgrade project (which is the subject of a separate renewable energy grant) and other elements of the City’s renewable energy strategy. The selection of RMA, PolarConsult and Electric Power Systems for this project will provide continuity and cost savings for AEA and the City of Akutan. Summary The City of Akutan is preparing for significant economic growth and infrastructure development. Implementation of a renewable energy strategy is key to the success and sustainability of Akutan’s role in the Bering Sea fishery. The development of the Loud Creek hydroelectric project will significantly reduce the cost of power, stimulate economic growth, reduce carbon emissions, and support energy independence. 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. This is a Phase II - Feasibility Analysis, Conceptual Design project as defined in Section 2.4 of the grant application instructions. 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. This Phase II project requires a review and analysis of existing studies and field data and a comprehensive site survey. Stream gauges will be installed during the site survey and data will be collected as design input. Siting evaluations will be completed for intake/impound areas, a dam site, the powerhouse and transmission lines. Other tasks will include environmental review, permitting requirements, economic analysis, and land ownership. A feasibility report will be prepared to summarize the findings of the field work, discuss the benefits of the project, and outline the business plan. A conceptual design and cost estimates for construction will be provided, along with recommendations for proceeding to Phase III – Final Design and Permitting. 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. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 5 of 64 9/3/2008 Funding required for the Phase II Feasibility Analysis and Conceptual Design is as follows: Task Cost Estimate • Literature/Map Survey $ 7,800 • Site Surveys 92,406 • Feasibility Analysis 28,792 • Conceptual Designs 53,965 • Cost Estimating and Material Lists 16,149 • Feasibility Reports 38,660 Total:$237,772 The City of Akutan is asking that this Phase II Feasibility Analysis and Conceptual Design be fully funded by the Alaska Renewable Energy Grant Fund – a total request of $237,772. The Phase II Feasibility Analysis and Conceptual Design will be examining a number of alternatives and designs for the development of the Loud Creek resource; therefore, a total cost through construction will be developed and reported in the final feasibility report. 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. As the City prepares for the build-out of more than $100 million of infrastructure projects and increased economic development, renewable energy development will provide long-term sustainability for the City, tribal organizations and the local seafood industry. This opportunity presents a broad range of economic and social benefits for the City, the region and the State of Alaska, including employment, tax revenue, improved public services, and substantial reduction of carbon emissions. Development of the Loud Creek hydroelectric project is an important part of Akutan’s renewable energy strategy. Energy demand in Akutan will continue to increase as new projects like the airport and small boat harbor come on line. This project will provide a bridge between the City’s existing hydroelectric system, which should be back on line in FY 2010, and the development of the Hot Springs Bay Valley geothermal project in FY 2012. The Loud Creek hydroelectric project will support the anticipated growth of the Bering Sea fishery and the development of Akutan as a regional harbor and processing center. Aside from economic development and sustainability, there are other public benefits such as fuel cost savings, reduced state subsides and reduction of carbon emissions. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 6 of 64 9/3/2008 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.) $ 2.5.2 Grant Funds Requested in this application. $237,772 2.5.3 Other Funds to be provided (Project match) $ 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $237,772 2.5.5 Estimated Benefit (Savings) $ 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.) $ 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. The City of Akutan has engaged a Program Management team to support the development and implementation of its renewable energy strategy. RMA Consulting Group has assisted the City with the preparation of this grant application, and applications for the Akutan Hydroelectric System Repair and Upgrade and Hot Springs Bay Valley Geothermal Reconnaissance. With the approval of one or more of these grant requests, the RMA team will be responsible for successful completion of the projects within the scope, schedule and budgets defined in the grant agreements. RMA is an Alaska Company specializing in the planning and implementation of infrastructure projects related to utilities, transportation, renewable energy and community services. To support the City of Akutan’s renewable energy program, RMA has assembled a team of project management, engineering and professional services consultants that include Kennedy/Jenks Consultants and Dorsey & Whitney LLP. Mr. Raymond Mann, Senior Consultant and former Director of Public Works for the Municipality of Anchorage, is the City’s renewable energy program manager. He will manage all renewable energy projects and act as the primary point of contact with AEA grant managers. Mr. Mann will direct the efforts of the project management team, as shown below: Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 7 of 64 9/3/2008 Renewable Energy Program Management Team Resumes for the program management team members shown above are attached to this application. Upon approval of this grant application, RMA will provide the engineering and professional services consultants necessary for the effective management and administration of the grant. This team will work closely with the City and AEA to develop the detailed scoping documents, project plans, schedules and specifications for procurement of the resources needed to complete the tasks defined in the grant agreement. The project management team will also assist the City with the procurement process, including proposal review, contractor selection and the preparation of contract documents. When contractors/suppliers are selected and approved, RMA will coordinate the combined efforts of the project team and act as the primary interface with the AEA grant manager. Mr. Mann will be responsible for progress reporting for identified project milestones, and overall compliance with the project scope, schedule and budget as defined in the grant agreement. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 8 of 64 9/3/2008 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.) This Phase II project will be completed in seven months from the execution of the grant agreement. A generalized schedule for primary tasks is as follows: • Project Start Up 2 weeks • Literature/Map Survey 1 month • Site Survey 2 months • Feasibility Analysis 3 months • Conceptual Designs 1.5 months • Feasibility Reports 3 months • Project Review/Wrap 2 weeks An overall estimate of the project schedule is attached to this grant application. 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. The Phase II Feasibility Analysis and Conceptual Design for the Loud Creek hydroelectric project will require a combination of field work and the preparation of reports, estimates and design documents in an office environment. Key tasks and deliverables are defined as milestones for project completion: • Project Startup – Includes grant execution and setup for grant management/administration. • Literature/Map Survey – Review the 1989 Feasibility Assessment, reconnaissance data, related literature and maps pertinent to the project. • Site Survey – General site evaluation, stream gauging, interconnection data collection, and siting for intake sites, pipelines, powerhouse and transmission lines. • Feasibility Analysis – Gather and evaluate input for feasibility analysis, including property ownership, existing energy system, permit and environmental requirements and business plan. • Conceptual Designs – Conceptual designs for intake, pipelines, powerhouse and transmission lines. • Cost Estimates and Material Lists – Engineer estimates related to conceptual designs for intake, pipelines, powerhouse, and transmission lines. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 9 of 64 9/3/2008 • Feasibility Reports – Preparation of draft and final feasibility reports, including analysis and recommendations, project alternatives and business plan. • Project Review/Wrap-up – Review project results with grant manager. Obtain approval for proceeding to next phase of project development. The schedule for these milestones is shown in the attached project schedule. 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. The City believes it is important to use a team approach to implementing and managing its renewable energy projects. The team will consist of selected City staff, the RMA project management team, PolarConsult Alaska, Inc., Electric Power Systems, Inc., and the AEA grant manager. Each of the tasks described in this application requires specialized knowledge and skills that must be obtained from private sector consultants and service providers engaged in or highly familiar with hydropower resource development. PolarConsult and Electric Power Systems (EPS) are highly qualified to perform the work described in this grant application. Both companies are familiar with Akutan’s power system, and both have performed work on the system under contract to AEA and the City of Akutan. PolarConsult will be the prime contractor for this project. EPS will be sub-contracted to perform the tasks related to the powerhouse, control systems, and transmission lines. The project team organization is shown below: Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 10 of 64 9/3/2008 Akutan Hydroelectric Project: Loud Creek Feasibility Analysis and Conceptual Design Project Management Team As described in Section 3.1, above, RMA Consulting Group will act as the City’s representative and program management team. Having a program management team in place prior to grant approval, will allow the City to complete several pre-project activities such as coordination with AEA, refinement of the City’s grant applications, preparation of contract documents, and review of proposed grant agreements. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. The City has identified Mr. Mann as the project manager and primary point of contact for communications with AEA and the grant manager. This will ensure an effective, continuous flow of communication throughout the project. In addition, the project team will use a suite of project management tools including web-based communications and reporting, task and milestone tracking, work breakdown structure, scheduling, document control, budget control and risk management. The project manager will coordinate with the AEA grant manager to develop a schedule Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 11 of 64 9/3/2008 of reports. At a minimum, the City will conduct weekly status teleconferences and web- based distribution of weekly reports on scope, schedule, budget and unresolved issues. Trouble shooting reports and teleconferences will be provided on an as needed basis. 3.6 Project Risk Discuss potential problems and how you would address them. Potential risk for this Phase II project centers on site survey requirements. Field work is required for facility siting, stream gauging, environmental review, and permitting requirements. Some of these activities can be impeded or delayed by weather conditions in Akutan. The project team is familiar with contingency requirements for site work in Akutan and will effectively manage the project schedule to avoid disruptions or delays. Potential risks associated with development of the Loud Creek hydro project will be identified as part of the Phase II Feasibility Analysis and Conceptual Design. 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 1989 Feasibility Assessment by Ott Engineering evaluated six development alternatives for construction of a hydroelectric facility in Akutan, (See Alaska Energy Authority, “Akutan Hydro electric Feasibility Assessment”, December 1989, prepared by Ott Engineering, Inc., hereafter “the Ott Report”). Two stream resources were evaluated, North Creek and Loud Creek. North Creek is located on the north side of Akutan Harbor, 1.2 miles west of Akutan and 0.9 miles west of the Trident Seafoods plant. Loud Creek is located on the south side of Akutan Bay, 0.75 miles south-southeast of the town site. The Ott Report reviewed site data, precipitation, stream flow data and peak discharges for both North Creek and Loud Creek, and concluded, "On a technical basis, Loud Creek is the obvious choice” for hydroelectric development. The report identified the following advantages of Loud Creek over North Creek (Ott Report, p. 39): • Loud Creek will provide 25 to 30 percent greater power than North Creek; Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 12 of 64 9/3/2008 • the 95 percent exceedence flow of Loud Creek is nearly double that of North Creek; • the dam at Loud Creek will impound 36 times more water than North Creek. This will simplify the control systems; • the penstock at Loud Creek, although slightly longer, will be constructed on easier working grades and will have only one stream crossing versus three at North Creek; • construction and maintenance will be improved at Loud Creek due to the easier working terrain. Staging and work areas will be improved and damage to the environment will be decreased; • the transmission line can be a direct route to the community; • no fish have been found at Loud Creek; • there is no conflict with the present Trident Seafoods’ water usage at North Creek; and The only disadvantage of the Loud Creek site is the necessity of a cross- harbor transmission line. The power output at Loud Creek is estimated at 350 kW. This could be increased by an additional 60 kW by including a nearby tributary in the project. This is more than twice the estimated output for North Creek. This advantage, combined with those listed above, supports the development of the Loud Creek hydroelectric project as the best alternative for meeting the mid-term energy needs identified in Akutan’s renewable energy strategy. 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 Akutan generation system was evaluated in 2007 as part of a power system upgrade study (see Alaska Energy Authority, Rural Energy Group, “Conceptual Design Report, Akutan Rural Power System Upgrade”, April 2007, prepared by LCMF, hereafter “the LCMF Report”). The generation system is described as follows (LCMF Report, pp 5- 7): A. Diesel Plant Facility Description Akutan Electric Utility Inc. operates a diesel power generating facility which presently provides electricity to the entire community. The power plant is Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 13 of 64 9/3/2008 located at the west end of the City. It houses two diesel generators: 70 kW Caterpillar engine, 150 kW Perkins engine and associated switchgear. The switchgear includes a Direct Logic 205 PLC and equipment for a third generator. The 205 PLC was set up for an I/O interface with the hydro plant via radio communications, although no communication link had been installed. In conjunction with this report, a study was conducted to determine the feasibility to integrate control systems between the diesel plant and hydro plant. It is recommended to establish such communication link so it will provide for parallel operation of the two existing power generating plants. It will also provide the ability to incorporate the diesel plant control system into the existing HMI at the City Hall. See Appendix A – Overview of Generation System by EPS. B. Hydroelectric Facility Description The hydroelectric powerhouse is located at the east end of the city. It is a stand-alone generation facility consisting of a self – contained 175 kVA (105 kW peak capacity) Canyon Industries hydro generator, backed by a 125 kW Perkins diesel generator in the same module. The facility features a 4-inch plastic penstock, which provides water to a Pelton wheel turbine from a reservoir 800 feet above the powerhouse. The hydro plant has a PLC based control system that allows for the hydro generator to be paralleled with diesel one. The controls also provide remote monitoring and control of the powerhouse. According to the representatives of the City of Akutan, the hydro plant is not currently operational. The ANTHC cut the main line during the construction of the water treatment plant. The process for repairing the line is in progress. It is anticipated that the plant should be operational in the very near future. C. Existing Power Generation Capacity Summary The following table lists the existing total power generation capacity: Existing Total Power Generation Capacity Generator Capacity (KW) #1 Power Plant 70 #2 Power Plant 150 #3 Hydro Plant 105 #4 Hydro Plant 125 Total 450 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 14 of 64 9/3/2008 D. Existing Electrical Distribution System The existing electrical distribution system for Akutan was evaluated by EEE in conjunction with this report. The electrical generation system in Akutan consists of a diesel power plant and a hydro plant. The field inspection of the power distribution system, performed by Greg Errico, indicates necessity for the modification and/or replacement. Two of the three 3- phase junction boxes have missing parts/sides of their enclosures. The enclosures should be relocated and have new 7.2/12.5 kV junctions installed. Most of the pad mounted transformer doors are not locked or not properly secured. Many electrical services have deteriorated beyond functioning to enclose the facilities it houses and would require replacement or an upgrade. The City is submitting a renewable energy grant request to fund the repair and upgrade of the existing hydropower system. This will include control upgrades to improve efficiency. A Denali Commission grant is currently funding the power system upgrade described in the LCMF study. When these two projects are completed, the increases in both capacity and efficiency should allow the City to significantly reduce its dependence on diesel fuel and lower the cost of power. The Loud Creek hydro power will further extend the City’s progress toward long-term energy independence. 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. Electrical power for Akutan is provided by diesel generators operated by Akutan Electric Utility, Inc., a non-regulated utility. The best available information regarding energy resource utilization comes from the Power Cost Equalization (PCE) Reports filed with the Regulatory Commission of Alaska. The City’s PCE annual report for July 2007 to June 2008 shows the consumption of 48,013 gallons of #2 diesel fuel at an average $2.93/gallon cost of fuel. With an annual generation of over 692,000 kWh, the cost of power related to fuel is $0.25/kWh. When non-fuel power costs are added, the City’s total cost of power is $0.54/kWh. The cost of power in Akutan will drop dramatically over the next two years if the Akutan Hydroelectric System Repair and Upgrade and the Loud Creek Hydroelectric development projects are approved for renewable energy grants. However, these projects will not provide the long-term energy needed for planned growth and economic development in Akutan. Phase II Feasibility Analysis and Conceptual Design will address the impacts of Loud Creek hydropower development on general capacity, and the availability of power for the planned small boat harbor, and/or power sales to Trident Seafoods. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 15 of 64 9/3/2008 Power for Akutan is provided by the Akutan Electric Utility, Inc., an unregulated utility. The most current Annual Power Cost Equalization (PCE) Report for Nonregulated Utilities was filed with the Alaska Regulatory Commission for the period July 2007 to June 2008. The report provides the following market data: Sales Revenue Class Customers Revenue Residential 37 $70,441 Commercial 17 $67,775 Community Facilities 12 $41,709 Total:$179,925 Total utility operating expense: $358,167 City subsidy to electric utility: $178,242 Cost of power related to fuel: $0.25 kWh Total cost of power: $0.54 kWh City subsidy to customers: $0.27 kWh Development of the Loud Creek hydropower resource will reduce state and City subsides for power generation in Akutan. It should also help offset the increased demand related to the small boat harbor project. Other potential effects on the local energy market will be evaluated as part of the Phase II Feasibility Analysis and Conceptual Design. 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 Phase II project described in this grant application will result in a conceptual design for the Loud Creek hydroelectric system. Design elements will include the impoundment dam, penstock, powerhouse and underwater transmission lines. A feasibility analysis is also required to evaluate the alternative of a transmission line from the Loud Creek power plant to the planned small boat harbor at the head of Akutan Bay. The proposed Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 16 of 64 9/3/2008 system design will be consistent with the design elements identified in Section 2.4 of the grant application instructions. 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 Loud Creek drainage area required for this project is owned by the City. It is assumed that land required for material storage, staging and construction will be within City-owned property. Ownership of land required for a potential transmission line from the Loud Creek power plant to the planned small boat harbor at the head of Akutan Bay needs to be identified during the Phase II feasibility analysis. In addition, tidelands and rights of way required for the underwater transmission lines must be identified, and ownership established as part of the feasibility analysis. 4.3.3 Permits Provide the following information is 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 This information will be gathered as part of the Phase II Feasibility Analysis, as defined in Section 2.4 of the grant application instructions. This project involves construction of an underwater cable. Special consideration will be given to tideland permits required for this phase of the project. 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 This information will be gathered as part of the Phase II Feasibility Analysis, as defined in Section 2.4 of the grant application instructions. This project involves construction of an underwater cable. Special consideration will be given to any potential environmental impacts of this phase of the project. 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 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 17 of 64 9/3/2008 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 PolarConsult and EPS have developed cost estimates for the proposed Phase II Feasibility, Conceptual Design project. The City has estimated the costs of project management and administration. Total anticipated project costs are as follows: Task Cost Estimate • Literature/Map Survey $ 7,800 • Site Surveys 92,406 • Feasibility Analysis 28,792 • Conceptual Designs 53,965 • Cost Estimating and Material Lists 16,149 • Feasibility Reports 38,660 Total:$237,772 The City is requesting full funding for this Phase II project. The Phase II Feasibility and Conceptual Design project will be examining various alternatives for siting of the intake, pipelines, powerhouse and transmission lines. Until these alternatives are evaluated and conceptual designs are developed it is impractical to estimate the total cost of the project through construction. This information will be developed and reported as part of the final feasibility report. 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 This information will be gathered as part of the Phase II Feasibility Analysis, as defined in Section 2.4 of the grant application instructions. 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 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 18 of 64 9/3/2008 This information will be gathered as part of the Phase II Feasibility Analysis, as defined in Section 2.4 of the grant application instructions. 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. The completed Cost Worksheet is attached. 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. When constructed, the Loud Creek hydroelectric system will be owned and operated by the Akutan Electric Utility. The Utility will need to adopt a business plan that sets priorities for distribution and use of power from the Loud Creek system. These priorities include service to existing utility customers, power for the planned small boat harbor, and potential power sales to Trident Seafoods. The data and information required for business plan development will be gathered as part of the Phase II Feasibility Analysis and presented as part of the final report. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. Akutan is preparing for local and regional growth by upgrading its infrastructure, expanding its physical boundaries, and working with Trident and the fish products industry to promote economic development. Energy production is a critical factor for meeting these multiple challenges. That is why the City is implementing a comprehensive renewable energy strategy that includes both hydropower and geothermal development. The Loud Creek hydroelectric project will provide a bridge between the City’s existing power capacity and long-term energy independence through the development of the Hot Springs Bay Valley geothermal resource. Loud Creek power will serve to contain energy costs for existing users, provide for the development of critical infrastructure, and create the potential for power sales to Trident to enhance utility revenues. Previous field investigation and feasibility assessment of the Loud Creek project concluded that Loud Creek is the obvious choice for further development of hydro power generation in Akutan. This grant application is consistent with previous AEA findings and recommendations. Proceeding with Phase II of the project will provide AEA and the City with the decision-making information needed for further consideration of project development. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 19 of 64 9/3/2008 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 The State of Alaska, including AEA, continues to make significant investment in Akutan’s energy and transportation infrastructure. Federal appropriations administered by the Denali Commission and the Corp of Engineers have added significant funding for development in Akutan. These funds are, in large measure, recognition of the importance of the Bering Sea fishery and Akutan’s potential for economic development. The City’s renewable energy strategy will support this significant public investment by providing long-term, cost effective power for both public and private expansion in the Eastern Aleutians. The development of the Loud Creek hydropower system is an important step in preparing for more than $100 million of public investment. The project will provide immediate benefits by reducing dependence on diesel fuel and improving air quality relative to climate change. Other benefits such as anticipated revenues, fuel displacement, and reduced subsidies will be identified as part of the Phase II Feasibility Analysis and detailed in the final report. 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 The City of Akutan is requesting total grant funding of $237,772 for the Phase II project described in this grant application. The City has not offered any matching funds or contributions for this project. However, it should be noted that the City continues to provide direct subsidies to power generation and heating. Without the development of renewable energy resources these subsidies will total more than $1 million over the next 24-36 months. The attached grant Budget Form provides a task and funding source breakdown. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 20 of 64 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. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 21 of 64 9/3/2008 Resumes of Applicant’s Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 27 of 64 9/2/2008 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 27 of 64 9/2/2008 Renewable Energy Fund ation AEA 09-004 Grant Application Page 33 of 64 9/3/2008 Grant Applic                          About RMA Consulting Group “Consulting services for growth, transition and structural change” RMA Consulting Group is an Alaska Company founded in 1998 by Ray Mann, former Public Works Director, Municipality of Anchorage. The company specializes in management and technical service for state/local government and business. Our Public Services consulting practice focuses on the needs of Alaska’s communities for interim management, project support, permitting, regulatory compliance, policy/legislation development and infrastructure development. We provide a multi-discipline team with more than 30 years experience in government and utility operations in Alaska. We also provide a variety of engineering services through our partnership with Kennedy/Jenks Consultants, a nationally recognized firm specializing in the areas of transportation, maritime ports, airports and energy services. We can address legal and regulatory issues related to energy projects in Alaska through our partnership with Dorsey & Whitney LLP, a legal services firm specializing in energy related projects, licensing/regulation, transactional structuring, and tax-exempt financing. Our strong interest is in developing relationships with cities and boroughs that are implementing infrastructure projects related to utilities, transportation, renewable energy and community services. Renewable Ener AEA 09-004 Grant Application Page 34 of 64 9/2/2008 gy Fund Grant Application Company Capabilities Overview RMA Consulting Group (RMA/CG) provides integrated business services to companies and government agencies that require a managed approach to growth, transition and mission/structural change. We offer services for organizational and program assessment; strategic, business and action planning; management/leadership development, and team building. Implementation services include program/project management, process redesign, performance improvement and change management in both on-site and outsourced environments. Through a well-defined planning process and in-depth organizational analysis, we gain a strategic view of our clients’ management and operations environment. This allows us to develop targeted solutions to improve management, administration, financial control, product and service delivery, and customer relations. Successful implementation insures that our clients obtain the most from their current capabilities and capitalize on future opportunities. Services RMA/CG consultants and project managers have extensive experience in both public and private sector management. This provides us with a unique business perspective focused on customer satisfaction, service delivery and cost-effective solutions. Our “targeted solutions” approach provides the same effective integration of advice, professional resources and implementation support for a five member leadership team as for a multi-national infrastructure project. The goal of every assignment is to create an environment for management and operational sustainment. We feel this is best achieved through the integration of services that support a planning – management – implementation lifecycle. Planning: Developing management strategies and stakeholder consensus. • Organizational and Program Needs Assessments • Strategic, Business and Action Plans • Capacity/Skills Inventory • Process/Productivity Analysis Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 35 of 64 9/2/2008 Management: Building individual and team skills, strengthening organizational capacity and improving decision-making. • Leadership Development • Executive Coaching • Team Building • Consensus Development • Communications • Skills/Capacity Training Implementation: Applied resources to support strategic or action plan implementation and program/project management. • Outsourcing and on-site staffing for executive management, program/project managers and technical leads • Process Redesign • Performance Improvement • Change Management • Risk Management                       Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 49 of 64 9/2/2008 Cost Worksheet per application form Section 4.4.4 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 50 of 64 9/2/2008 Application Cost Worksheet Akutan Hydroelectric Project: Loud Creek Feasibility Analysis and Conceptual Design Please note that some fields might not be applicable for all technologies or all project phases. Level of information detail varies according to phase requirements. 1. Renewable Energy Source The Applicant should demonstrate that the renewable energy resource is available on a sustainable basis. Annual average resource availability. Year-round flow with low flows February – April. Exceeds 1.6 cfs 95% of the time. Unit depends on project type (e.g. windspeed, hydropower output, biomass fuel) 2. Existing Energy Generation a) Basic configuration (if system is part of the Railbelt 1 grid, leave this section blank) i. Number of generators/boilers/other 1 hydropower; 3 diesel ii. Rated capacity of generators/boilers/other Hydro: 105 kW; Diesel: 70 kW, 125 kW, 150 kW iii. Generator/boilers/other type Hydro Plant: 1 Canon Industries hydro, 1 Perkins Diesel Diesel Plant: 1 Caterpillar diesel, 1 John Deere diesel iv. Age of generators/boilers/other 1 Canyon hydro, 15 years; 2 Perkins diesel, 10 years; 1 John Deere diesel, 2 years. v. Efficiency of generators/boilers/other 70% - 80% b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank) i. Annual O&M cost for labor FY 08 - $79,697 ii. Annual O&M cost for non-labor FY 08 - $281,118 (including fuel) c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the Railbelt grid, leave this section blank) i. Electricity [kWh] 692,000 kWh generated; 560,000 kWh sold ii. Fuel usage Diesel [gal] FY 08: 48,000 gallons #2 diesel Other iii. Peak Load 108 kW 1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden  Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage  Municipal Light and Power.  Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 51 of 64 9/2/2008 iv. Average Load 84 kW v. Minimum Load 50 kW vi. Efficiency 14.14 kWh/gallon vii. Future trends Increasing demand over next 24-36 months related to harbor and airport projects. d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] 42,870 gallons #1 and #2 diesel ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other 3. Proposed System Design a) Installed capacity 400 kW hydro generation b) Annual renewable electricity generation i. Diesel [gal or MMBtu] ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other 1,800,000 kWh from hydro generation 4. Project Cost a) Total capital cost of new system b) Development cost c) Annual O&M cost of new system d) Annual fuel cost 5. Project Benefits a) Amount of fuel displaced for i. Electricity ii. Heat iii. Transportation b) Price of displaced fuel c) Other economic benefits Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 52 of 64 9/2/2008 d) Amount of Alaska public benefits 6. Power Purchase/Sales Price a) Price for power purchase/sale 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio Payback Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 53 of 64 9/2/2008 Grant Budget Form per application form Section 6 Renewable Energy Fund Grant Application BUDGET INFORMATION BUDGET SUMMARY: Loud Creek Hydro Phase I Feasibility Analysis and Conceptual Design Milestone or Task Federal Funds State Funds Local Match Funds (Cash) Local Match Funds (In‐Kind) Other Funds TOTALS Literature/Map Survey $7,800.00  $7,800.00Site Survey $92,406.00  $92,406.00Feasibility Analysis $28,792.00  $28,792.00Conceptual Designs $53,965.00  $53,965.00Cost Estimating and Materials Lists $16,149.00  $16,149.00Feasibility Reports  $38,660.00  $38,660.00Milestone # or Task # BUDGET CATAGORIES: 1 234 56TOTALS Direct Labor and Benefits   $0.00Travel, Meals, or Per Diem   $0.00Equipment   $0.00Supplies   $0.00Contractual Services $7,800.00 $92,406.00$28,792.00$53,965.00 $16,149.00$38,660.00$237,772.00Construction Services   $0.00Other Direct Costs        $0.00TOTAL DIRECT CHARGES $7,800.00 $92,406.00$28,792.00$53,965.00 $16,149.00$38,660.00$237,772.00AEA 09-004 Grant Application Page 54 of 64 9/2/2008 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 55 of 64 9/2/2008 An electronic version of the entire applications per RFA Section 1.6 (Disc provided separately.) Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 56 of 64 9/2/2008 Governing Body Resolution per RFA Section 1.4 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 57 of 64 9/2/2008 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 58 of 64 9/2/2008     Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 59 of 64 9/2/2008 Task and Milestone Schedule Renewable Energy Fund Grant Application Akutan Hydroelectric Project: Loud Creek Phase II Feasibility Analysis and Conceptual Design Task and Milestone Schedule Task/Milestone Months 1 2 3 4 5 6 7 Project Start Up Literature/Map Survey Site Survey Feasibility Analysis Conceptual Designs Cost Estimates/Material Lists Feasibility Reports Project Review/Wrap-up AEA 09-004 Grant Application Page 60 of 64 9/2/2008 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 61 of 64 9/2/2008 Letter of Support (Trident Seafoods, Inc.) Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 62 of 64 9/2/2008 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 63 of 64 9/2/2008 CERTIFICATION Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 64 of 64 9/2/2008