HomeMy WebLinkAboutAkutan Hydrosystem Repair and Upgrade App
Renewable Energy Fund
Grant Application
AEA-09-004
City of Akutan
Grant Application
for
Akutan Hydroelectric System
Repair and Upgrade
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 1 of 59 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
907.274.1813
Email
jbereskin@gci.net and adktanadmin@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 59 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 System
Repair and Upgrade Project (“the project”).
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 3 of 59 9/3/2008
Project Background
The City of Akutan constructed a hydroelectric power generation system (“the system”)
in 1993 as the result of a joint venture with Alaska Power Systems, and took full
ownership of the system in February 1994. The system consists of a powerhouse
containing a 174 kVA hydro generator and a 125 kW diesel generator. A reservoir 800
feet above the powerhouse provides water to a Pelton wheel turbine through a 4 inch
plastic penstock. The powerhouse control system allows the hydro and diesel
generators to operate in parallel and to be remotely controlled. The hydro generator
has a peak capacity of 105 kW. The diesel generator has a peak capacity of 125 kW.
The City’s average peak load is in the range of 85-95 kW.
Since its construction, the system has undergone a variety of upgrades, to include
enlarging of the impound dam and several control system improvements. However, the
system has continued to experience a number of problems, including reduced water
flows from leakage and clogged intakes, inoperable shutoff valves, and various
switching and control problems. The system has been inoperable since 2007 when the
main line was cut during construction of the water treatment plant.
Project Description
This grant request identifies the repairs and upgrades required to bring the system back
on line and to improve its long term efficiency and output. Since the Akutan
hydroelectric generation system has been in place for nearly 15 years, many
requirements such as site assessment, reconnaissance, conceptual design and site
control do not apply. Therefore, this grant application is requesting funds for:
• Phase III Final Design and Permitting
• Phase IV Construction, Commissioning, Operation
and Reporting
The tasks for this project are defined in Sections 2.5 and 2.6 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 Phases III and IV (Sections 2.5 and 2.6 of the
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 existing 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 program management
responsibility for all three of Akutan’s renewable energy projects, as defined in Section
2.1 of the grant instructions.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 4 of 59 9/3/2008
Since the system is currently off-line and in need of immediate repair and upgrade, the
selection of RMA, PolarConsult and EPS as the consultants 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 funds requested in this
grant application are an important step toward energy independence. The repair and
upgrade of the Akutan Hydroelectric System will have immediate impact on the cost of
energy for residential, commercial and industrial users in Akutan. Since the system is
currently inoperable, the City is requesting the earliest consideration and approval of
this funding request to allow construction during FY 2010.
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 multi-phase project that includes Phase III – Final Design and Permitting and
Phase IV – Construction, Commissioning, Operation and Reporting to provide for the
repair and upgrade of an existing hydroelectric power generation 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 Akutan hydroelectric power generation system has been in place for nearly 15
years. Therefore, this repair and upgrade project will require a site survey to update
flow and capacity data, document repair/upgrade requirements, assess dam stability,
and evaluate the power plant and control systems. This information will be used to
prepare the specifications needed for final design. An analysis and recommendations
for proceeding with construction will be presented to AEA for authorization. The City’s
project management team will prepare the required bid documents and manage the
construction, commissioning, operation and reporting necessary for project
implementation.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 5 of 59 9/3/2008
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.
Funding required for Phase III Final Design and Permitting is as follows:
Task Cost Estimate
• System Review $8,520
• Site Survey 45,021
• Power System Evaluation 12,115
• Permitting and Environmental Review 12,554
• Repair and Upgrade Designs 72,475
• Analysis and Recommendations 11,285
Total:$161,970
The City of Akutan is asking that this Phase III Final Design and Permitting be fully
funded by the Alaska Renewable Energy Grant Fund – a total Phase III request of
$161,970.
The cost of Phase IV Construction, Commissioning, Operation and Reporting is
estimated at $1,633,480. The City of Akutan is asking that Phase IV of the project be
fully funded by the Alaska Renewable Energy Grant Fund – a total Phase IV request of
$1,633,480.
The total requested funding for this project is:
Phase III: $ 161,970
Phase IV: $1,633,480
Total: $1,795,450
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.
Placing the existing hydroelectric power generation system back in operation will have
an immediate impact on energy costs to the city and power users. Even at current fuel
prices, it is estimated the City will save more than $100,000 annually. If the system is
operated at peak capacity, and with a modest increase in fuel cost ($5.00/gallon vs. a
current $2.93/gallon average cost), the savings would increase to approximately
$190,000 per year. This will provide a minimum ten year savings from the repair and
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 6 of 59 9/3/2008
upgrade project of nearly $2 million. However, rising fuel costs indicate this savings
could be substantially greater.
Aside from economic development and sustainability, there are other public benefits
such as reduced state subsidies and improved air quality. These are discussed in more
detail in Section 5 of this grant application.
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.)
$1,795,450
2.5.2 Grant Funds Requested in this application. $1,795,450
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) $1,795,450
2.5.5 Estimated Benefit (Savings) $2,000,000
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.)
$ 2,500,000
(Estimated reduction of
State PCE and City
subsidies over 10-year life
of the project)
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 Project: Loud Creek Feasibility Analysis and
Conceptual Design and Hot Springs Bay Valley Geothermal Reconnaissance projects.
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 includes 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 program management team, as
shown below:
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 7 of 59 9/3/2008
Renewable Energy
Program Management Team
Resumes for the project 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/providers 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 59 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.)
Phase III of this project will be completed within six months of project startup. A
generalized schedule for primary tasks is as follows:
Project Startup 3 weeks
System Review 1 month
Site Survey 2 months
Power System Evaluation 1 month
Permitting and Environmental Review 2 months
Repair and Upgrade Designs 3 months
Analysis and Recommendations 6 weeks
Project Review/Wrap-up 1 month
An overall estimate of the Phase III project schedule is attached to this grant. The
project schedule for Phase IV Construction, Commissioning, Operation and Reporting
will be developed as part of the analysis and recommendations task of Phase III Final
Design and Permitting.
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
The project milestones for Phase III Final Design and Permitting are as follows:
• Project Startup – Includes grant execution and setup for grant
management/administration.
• System Review – Review existing plans, maps, data, and as-built
drawings related to the existing hydroelectric generation system.
• Site Survey – Travel to project site and conduct evaluation and testing for
soils, impoundment dam, pipelines, drainage and stream flow. Prepare
written evaluation and design recommendations.
• Power System Evaluation – Travel to project site to inspect and evaluate
the existing power plant, turbines and controls. Prepare written evaluation
and design recommendations.
• Permitting and Environmental Review – Determine permitting and
environmental requirements of the project. Obtain all necessary permits
and environmental reviews. Prepare dam safety report and other
compliance documents.
• Repair and Upgrade Designs – Prepare design documents, specifications
and materials lists for repair and upgrade of impoundments, intakes,
penstock, powerhouse, turbines and controls. Determine interconnection
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 9 of 59 9/3/2008
requirements and integrate in system design. Prepare final design report
and recommendations for construction.
• Analysis and Recommendations – Based on approved designs, prepare
cost estimates, schedules and recommendations for project construction.
• Project Review/Wrap-up – Review project results with grant manager.
Obtain approval for proceeding to construction phase of the project.
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 have prepared
the task lists and cost estimates for this grant application. Both companies are familiar
with the existing hydroelectric power generation 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 powerhouse and control system repairs and upgrades. The
project management team organization is shown below:
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 10 of 59 9/3/2008
Phase III/Phase IV
Project Management Team
As described in Section 3.1, above, RMA Consulting Group will act as the City’s
representative and project management team. Having a project management team in
place prior to grant approval and the appropriation of funds 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
of reports. As a minimum, the City will conduct weekly status teleconferences and web-
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 11 of 59 9/3/2008
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.
This project is considered to be low risk. There are some risks associated with field
work and site surveys. The greatest risk in Akutan is unfavorable weather during field
operations. Delays of site work are possible, which would effect the overall project
schedule. Both PolarConsult and EPS are familiar with the hydropower system and
they are aware of weather impacts. These risks have been considered in the
development of milestones and the project schedule.
Risks associated with the construction phase of the project will be determined as part of
the analysis and recommendations task of Phase III Final Design and Permitting.
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 resource is a stream at the east end of the City of Akutan town site. It was originally
identified as “no name creek”, but is presently referred to as School Creek. Stream flows
for the resource were measured several times in the early and mid- 1980s. As a result,
the stream was identified by the City as a potential resource for hydroelectric power
generation.
In 1993, Akutan formed a joint venture with Alaska Power Systems (APS) for the design,
construction, operation and maintenance of a hydroelectric power generation system
utilizing the School Creek resource. The system was constructed and became
operational in October, 1993. The City purchased 100 percent ownership of the system
in February, 1994. The system is owned and operated by the City’s Akutan Electric
Utility, Inc., an unregulated public utility.
The proposed grant project will allow continued use of the School Creek resource to
provide a peak power output of 105 kW and integrate the hydro project with the existing
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 12 of 59 9/3/2008
diesel engines located in the remote diesel plant. This integration will allow the water
supply to be optimized for the City and utilize lower cost diesel fuel at the remote plant.
Since this is a repair and upgrade of an existing renewable energy system, there are no
reasonable alternatives available at this time.
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 as-built configuration of the existing hydropower generation system is as follows:
• Two feeder stream impoundments with 8 foot tall dams and 4000 feet of 6
inch polyethylene pipe.
• School Creek central impoundment with a 10 foot tall dam and 3000 feet of
10 inch polyethylene pipe.
• 400 feet of transmission line.
• A combined hydro-diesel generation powerhouse.
• A standalone diesel power plant located remote from the hydro/diesel
plant.
The most recent survey of the system was conducted in 2007 as part of an AEA study
(see State of Alaska, Alaska Energy Authority, Rural Energy group, “Conceptual Design
Report, Akutan Rural Power System Upgrades”, April 2007, prepared by LCMF,
hereafter “the LCMF Report”). The report provides the following 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 the local diesel generator. 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.
Phase III of this repair and upgrade project will be evaluating the condition and efficiency
of the hydropower generation system, including dams, impoundments, penstock, and the
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 13 of 59 9/3/2008
power plant. In addition to the known deficiencies of the system, Phase III will define the
repairs and upgrades needed to create optimum efficiency and output. This information
will be reflected in the design and construction tasks of Phase IV.
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 located at the power plant
remote from the hydro plant, which are 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.
In the past, the Akutan hydropower generation system has provided up to 50 percent of
the peak load requirements of the City on an annualized basis. The repair and upgrade
will return the system to operation with the capability of providing 60 percent of current
peak load. The most recent evaluation of Akutan’s energy data and the continued rise in
fuel prices, show that the hydropower system repair and upgrade project can produce
immediate fuel cost savings of more than $100,000 per year at a $3.50/gallon cost of
diesel. Increasing hydropower production to the peak capacity of 105 kW, and at a fuel
cost of $5.00/gallon, cost savings would increase to approximately $190,000 per year.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
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
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 14 of 59 9/3/2008
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
Completion of the hydropower system upgrade and repair will reduce Akutan Electric
operating expense by nearly 30 percent. The most immediate impact of this reduction
will be a corresponding reduction in the City’s general fund contributions to utility
operations. In the alternative, this savings could be used to further reduce the cost of
power to utility customers as an offset to the increasing cost of diesel fuel for heating.
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 III project described in this grant application will provide the information and
field data required for system design. Specifications and cost estimates will be provided
to AEA for review and approval. The approved design will be used in Phase IV to
develop the construction plan and schedule. Both phases will be completed in
accordance with the requirements set forth in Sections 2.5 and 2.6 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 School Creek drainage area required for this project is owned by the City of Akutan.
This includes all land necessary for access to the entire hydropower generation system
and rights of way or sites required for construction, material storage, and staging.
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
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 15 of 59 9/3/2008
Phase III of the project requires a field inspection of the impoundment dam for stability
and capacity. Any significant modification to the dam will require compliance with the
State of Alaska dam safety program. PolarConsult has contacted the state dam safety
engineer and reviewed the requirements. There are no anticipated problems associated
with the dam permitting process.
RMA has contacted the State Department of Natural Resources and confirmed that the
City of Akutan has been granted water rights to School Creek.
There are no other identified permitting issues related to this project that could be
barriers to project completion. The field inspection and data collection tasks of Phase III
will determine if there are any permitting issues to be addressed prior to construction.
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 project involves the repair and upgrade of an existing hydropower generation
system. There are no identified environmental or land use issues that are considered
barriers to project completion. The field inspection and data collection tasks of Phase III
will determine if there are any environmental issues to be considered prior to
construction.
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
• 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 III Final
Design and Permitting and Phase IV Construction, Commissioning, Operation and
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 16 of 59 9/3/2008
Reporting. The City has estimated the costs of project management and administration.
Total anticipated project costs are as follows:
Phase III: Final Design and Permitting
Task Cost Estimate
• System Review $8,520
• Site Survey 45,021
• Power System Evaluation 12,115
• Permitting and Environmental Review 12, 554
• Repair and Upgrade Designs 72,475
• Analysis and Recommendations 11,285
Total:$161,970
Phase IV: Construction, Commissioning, Operation and
Reporting
Task Cost Estimate
• Construction of impoundment dam,
feeder lines, and 3,000 feet of
penstock
$1,480,000
• Programming, installation and
commissioning of power plant and
control upgrades
153,480
Total:$1,633,480
The City is requesting full funding for both phases of this project for a total funding
request of $1,795,450.
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 identified during Phase IV of the project, based on the final
design and operating specifications. The full cost of operation and maintenance of the
upgraded system will be borne by the Akutan Electric Utility, Inc.
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
Completion of this hydropower system upgrade and repair will not present an opportunity
for power sales to any customers beyond the existing customer base. There may be a
slight increase in demand until the harbor and airport projects come online. Any
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 17 of 59 9/3/2008
increase in demand thereafter should be met by the development of the Loud Creek
hydropower project. The proposed feasibility study for the Loud Creek resource will
determine if there is a future opportunity for power sales to Trident Seafoods
Corporation.
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.
This grant request is for the existing Akutan hydroelectric generation system. The
system is owned and operated by the Akutan Electric Utility. When the repair and
upgrade of the existing system are complete, the Akutan Electric Utility will continue to
operate and maintain the system.
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your
recommendation for additional project development work.
As indicated throughout this grant application, the economic impacts of placing the
existing hydroelectric power generation system back online are well established. If the
hydro generator can operate at or near its peak capacity of 105 kW, the direct cost
savings to the City and power users will be immediate and substantial. The ten-year
costs savings of this project will be nearly $2 million at the current price of fuel. Recent
trends in fuel prices indicate that total savings for the project will substantially increase
over the next ten years.
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 repair and upgrade of the existing hydro electric power generation system and its
integration with local diesel sources is a key first step in the City’s long-term strategy.
This project will allow the City to meet its current and near-term energy demand until
subsequent projects come online. As additional power becomes available through the
Loud Creek hydro and Hot Springs Bay geothermal projects, the existing hydro electric
generation system will be incorporated into the larger power grid.
Renewable Energy Fund
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AEA 09-004 Grant Application Page 18 of 59 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 a 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 repair and upgrade of the existing hydroelectric power generation system is an
important first step in preparing for more than $100 million of public investment. In
addition, the project will provide immediate benefits by reducing dependence on diesel
fuel and improving air quality relative to climate change. Other benefits include:
• Protects previous state investment in the existing hydroelectric power
generation system.
• Decreases State subsidy for Power Cost Equalization related to diesel fuel
consumption.
• Potential annual fuel displacement is estimated at 40,000 gallons, an
annual cost savings of $190,000, nearly $2 million over the life of the
project.
• Takes advantage of a $1.2 million Denali Commission funded project to
upgrade the City of Akutan electric distribution system.
• Promotes the sustainability of the City, tribal organizations and the local
seafood industry.
• Allows for the near-term use of a renewable energy resource while the City
implements longer term renewable energy solutions.
Renewable Energy Fund
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AEA 09-004 Grant Application Page 19 of 59 9/3/2008
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 $161,970 of grant funding for Phase III Final Design
and Permitting for this project. Subject to the final design, specifications and cost
estimates developed in Phase III, the City is requesting grant funding for Phase IV
Construction, Commissioning, Operation and Reporting, of $1,633,480.
This is a total grant funding request of $1,795,450. 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.
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 20 of 59 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
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AEA 09-004 Grant Application Page 26 of 59 9/2/2008
Renewable Energy Fund
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AEA 09-004 Grant Application Page 26 of 59 9/2/2008
Renewable Energy Fund
ation
AEA 09-004 Grant Application Page 30 of 59 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 Energy Fund
Grant Application
AEA 09-004 Grant Application Page 31 of 59 9/3/2008
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
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AEA 09-004 Grant Application Page 32 of 59 9/3/2008
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 46 of 59 9/2/2008
Cost Worksheet per application form Section 4.4.4
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 47 of 59 9/3/2008
Application Cost Worksheet:
Akutan Hydroelectric System Repair and Upgrade Project
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
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
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.
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
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AEA 09-004 Grant Application Page 48 of 59 9/3/2008
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 125 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 420,000 kWh from hydro generation
4. Project Cost
a) Total capital cost of new system
b) Development cost $1,795,450
c) Annual O&M cost of new system
d) Annual fuel cost
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 30,000 gallons #2 diesel
ii. Heat
iii. Transportation
b) Price of displaced fuel FY 08: $3.26/gallon FY 09: $5.00/gallon (estimated)
c) Other economic benefits
d) Amount of Alaska public benefits $2.5 million estimated reduction of State PCE and City
subsidies over 10-year life of project.
6. Power Purchase/Sales Price
a) Price for power purchase/sale FY 08: $0.54/kWh, after construction $0.25 kWh (estimate)
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 49 of 59 9/3/2008
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio
Payback Estimated $2 million over 10 years.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 50 of 59 9/3/2008
Grant Budget Form per application form Section 6
Renewable Energy Fund Grant Application BUDGET INFORMATION BUDGET SUMMARY: Akutan Hydroelectric System Repair and Upgrade: Phase III Final Design and Permitting Milestone or Task Federal Funds State Funds Local Match Funds (Cash) Local Match Funds (In‐Kind) Other Funds TOTALS 1 System Review $8,520.00 $8,520.00 2 Site Survey $45,021.00 $45,021.00 3 Power System Evaluation $12,115.00 $12,115.00 4 Permitting and Environmental Review $12,554.00 $12,554.00 5 Repair and Upgrade Designs $72,475.00 $72,475.00 6 Analysis and Recommendations $11,285.00 $11,285.00 7 Construction, Commission, Operation and Reporting $1,633,480$1,633,480 Milestone # or Task # BUDGET CATAGORIES: 1 234567 TOTALS Direct Labor and Benefits $0.00 Travel, Meals, or Per Diem $0.00 Equipment $0.00 Supplies $0.00 Contractual Services $8,520.00 $45,021.00$12,115.00$12,554.00$72,475.00$11,285.00$161,970.00 Construction Services $1,633,480$1,633,480.00 Other Direct Costs $0.00 TOTAL DIRECT CHARGES $8,520.00 $45,021.00$12,115.00$12,554.00$72,475.00$11,285.00 $1,795,450.00 AEA 09-004 Grant Application Page 51 of 59 9/2/2008
Renewable Energy Fund
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AEA 09-004 Grant Application Page 52 of 59 9/2/2008
An electronic version of the entire applications per RFA Section 1.6
(Disc provided separately.)
Renewable Energy Fund
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AEA 09-004 Grant Application Page 53 of 59 9/3/2008
Governing Body Resolution per RFA Section 1.4
Grant Application
Renewable Energy Fund
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Renewable Energy Fund
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Renewable Energy Fund
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Task and Milestone Schedule
Renewable Energy Fund Grant Application Akutan Hydroelectric Project: Repair and Upgrade Phase III Final Design and Permitting Task and Milestone Schedule Task/Milestone Months 1 2 3 4 5 6 Project Start Up System Review Site Survey Power System Evaluation Permitting and Environmental Review Repair and Upgrade Designs Analysis and Recommendations Project Review/Wrap-up AEA 09-004 Grant Application Page 57 of 59 9/2/2008
Renewable Energy Fund
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AEA 09-004 Grant Application Page 58 of 59 9/2/2008
Certification
Grant Application
Renewable Energy Fund
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