HomeMy WebLinkAboutWest Creek Hydro Muni Skagway App
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 1 of 20 9/2/2008
Application Forms and Instructions
The following forms and instructions are provided for preparing your application for a
Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA)
and the forms are available online at http://www.akenergyauthority.org/RE_Fund.html
The following application forms are required to be submitted for a grant recommendation:
Grant Application
Form
GrantApp.doc Application form in MS Word that includes an outline of
information required to submit a complete application.
Applicants should use the form to assure all information is
provided and attach additional information as required.
Application Cost
Worksheet
Costworksheet.doc Summary of Cost information that should be addressed
by applicants in preparing their application.
Grant Budget
Form
GrantBudget.xls A detailed grant budget that includes a breakdown of
costs by task and a summary of funds available and
requested to complete the work for which funds are being
requested.
Grant Budget
Form Instructions
GrantBudgetInstr.pdf Instructions for completing the above grant budget form.
• If you are applying for grants for more than one project, provide separate application
forms for each project.
• Multiple phases for the same project may be submitted as one application.
• If you are applying for grant funding for more than one phase of a project, provide a plan
and grant budget for completion of each phase.
• If some work has already been completed on your project and you are requesting
funding for an advanced phase, submit information sufficient to demonstrate that the
preceding phases are satisfied and funding for an advanced phase is warranted.
• If you have additional information or reports you would like the Authority to consider in
reviewing your application, either provide an electronic version of the document with
your submission or reference a web link where it can be downloaded or reviewed.
REMINDER:
• Alaska Energy Authority is subject to the Public Records Act, AS 40.25 and materials
submitted to the Authority may be subject to disclosure requirements under the act if no
statutory exemptions apply.
• All applications received will be posted on the Authority web site after final
recommendations are made to the legislature.
WEST CREEK HYDRO PROJECT Renewable
Energy Fund
Grant Application
AEA 09-004 Grant Application Page 2 of 20 9/3/2008
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Borough and Municipality of Skagway
Type of Entity:
Government
Mailing Address
P.O. Box 415, Skagway, AK 99840
Physical Address
700 B Spring Street, Skagway, AK 99840
Telephone
(907) 983-2297
Fax
(907) 983-2151
Email
www.skagway.org
1.1 APPLICANT POINT OF CONTACT
Name
Alan Sorum
Title
Borough Manager
Mailing Address
P.O. Box 415, Skagway, AK 99840
Telephone
(907) 983-2297
Fax
(907) 983-2151
Email
www.skagway.org
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.)
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Grant Application
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SECTION 2 – PROJECT SUMMARY
Provide a brief 1-2 page overview of your project.
2.1 PROJECT TYPE
Describe the type of project you are proposing, (Reconnaissance; Resource Assessment/
Feasibility Analysis/Conceptual Design; Final Design and Permitting; and/or Construction) as
well as the kind of renewable energy you intend to use. Refer to Section 1.5 of RFA.
The Municipality of Skagway proposes to develop a hydroelectric project on West Creek near
Dyea and Skagway, Alaska. Funds are requested for Phases II and III of project development.
Phase IV: Construction funding will be requested later.
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 Municipality of Skagway (Municipality) proposes to construct the West Creek Hydroelectric
Project (Project) located on West Creek, approximately 7 miles west of Skagway and adjacent to
the small community of Dyea. The primary purpose of the Project would be offsetting diesel
generation by cruise ships that dock in Skagway from May through September each year. Up to
five cruise ships per day dock in Skagway for 12-15 hours and continuously operate their diesel
plants to provide for on-board electricity consumption. The continuous stack emissions spread a
blue haze at about the 1,500 foot elevation where vegetation has been noticeably affected. The
Project will improve air quality and save vegetation in the area (there may be other unknown
environmental benefits). To emphasize how serious the air quality of the area is being taken, the
National Park Service, Municipality of Skagway, and Alaska Power & Telephone Company
(AP&T) have a cooperative agreement to place and maintain equipment at AP&T’s Dewey
Lakes Hydro project site to monitor this pollution.
The Alaska Power Authority had a feasibility study conducted for the Project by R.W. Beck and
Associates in 1981-82. That study focused on a development that would meet the electricity
needs of Skagway and Haines rather than the nascent cruise ship industry. It recommended an
installed capacity of 6.0 MW and a 20,000 acre-foot reservoir formed by a 120-feet high
concrete-faced rockfill dam. The proposed Project will be significantly different than proposed
by Beck in that the installed capacity will be greater and the reservoir storage will be much less
(possibly run-of-river with no storage). Nevertheless, the Beck study provides an excellent
starting point for the proposed re-evaluation of the site, and therefore the Municipality believes
that a Phase I reconnaissance study is not necessary.
West Creek drains from an ice field into the Taiya River. The Municipality has already
requested the land the Project would be on from the State as Municipal Entitlement Land. Since
the stream is glacial, flows are very high in the summer, which is also when the cruise ships are
active. This fortuitous coincidence between flow and load allows for a relatively large installed
capacity with little or no storage. Preliminary analysis indicates that a Project with a capacity
to serve one large cruise ship could be operated on a run-of-river basis. Increasing the capacity
so the Project could serve two or three cruise ships is possible, but a storage reservoir would be
required to make the generation dependable. The costs and benefits of these capacity/storage
alternatives will be a primary focus of the proposed Phase II studies.
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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.
The Municipality estimates the proposed Phase II work will cost $295,000. Because of the
urgency of the air pollution issue and the current availability of funds, the Municipality wants to
begin Phase III permitting and design activities as soon as possible, and is therefore requesting
grant funding of Phase III with this application. The Phase III costs will be dependant on the
outcome of the Phase II studies, but are estimated at this time to be $8,285,000 if a storage
project with a 25 MW capacity is selected. The Municipality proposes to provide a match of
20% of the Phase II and Phase III costs, which will be paid from the Municipality’s share of
tourism tax revenue.
The estimated construction cost will also depend on whether a run-of-river or storage project is
selected from the Phase II studies. Preliminary estimated costs are shown in the budget
summary table below; the construction costs are based on updating the costs estimated by Beck
in the 1982 feasibility study:
Phase Phase II Phase III Phase IV Total
Run-of-River Project
AEA Grant Funds
Municipality Match
$236,000
$59,000
$5,588,000
$1,397,000
Total
$295,000 $6,985,000 $114,820,000 $127,000,000
Storage Project
AEA Grant Funds
Municipality Match
$236,000
$59,000
$6,628,000
$1,657,000
Total $295,000 $8,285,000 $126,520,000 $140,000,000
For the purposes of this grant application, the Municipality believes it prudent to assume that a
storage project with a capacity of 25 MW will be most beneficial, and therefore requests that
AEA provide $6,864,000 in grant funding, which will all be used for Phases II & III. The
Municipality will provide matching funding in the amount of $1,716,000. Please see the
attached Grant Budget for a cost breakdown for each phase of development.
2.4 PROJECT BENEFIT
Briefly discuss the financial benefits that will result from this project, including an estimate of economic
benefits(such as reduced fuel costs) and a description of other benefits to the Alaskan public.
The primary purpose of the Project is to reduce the environmental impacts of on-board diesel
generation by cruise ships. The environmental benefits include: cleaner air from 1-3 cruise
ships shutting down their diesel generators while in port; fewer trees and other vegetation being
stressed at and above the 1500-foot elevation; and other unknown environmental and public
benefits related to the reduction of greenhouse gas and particulate matter emissions.
The Municipality anticipates negotiating power sales agreements with cruise lines that visit
Skagway at rates that would be less than the cost of self-generating but would still cover the cost
of owning and operating the Project. The Municipality may also receive some benefit from
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surplus power sales to the local utility (AP&T). The financial benefits to the cruise ship industry
would be from lower costs of operation. The Municipality would share the net revenues with the
State so that its investment would be returned. The State and the Municipality would also benefit
from maintaining the tourism tax revenues that a healthy cruise ship industry provides.
The benefits of the Project will depend a great deal on how the construction costs are financed.
The economic analysis described in Section 4.4.6 is based on 80% being funded by grants from
the State, 20% being funded by the Municipality with 6%/30-year municipal bonds. The cost of
power to the cruise lines starts at 90% of the equivalent cost of self-generation and escalates at
2.75% per year. Net revenues are split 50/50 between the Municipality and the State. That
financing arrangement provides a positive long-term benefits for all three parties (cruise lines,
the Municipality, and the State). Other financing arrangements would provide differing results,
and can be evaluated during the Phase II studies.
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.)
$140,000,000
2.5.2 Grant Funds Requested in this application. $6,864,000
2.5.3 Other Funds to be provided (Project match) $1,716,000
2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $8,580,000
2.5.5 Estimated Benefit (Savings) (Direct net benefits accruing to
the Municipality over 50 year life, not discounted)
$231,009,000
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.)
(Direct net benefits accruing to the State over 50 year life, not
discounted)
$119,009,000
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SECTION 3 – PROJECT MANAGEMENT PLAN
Describe who will be responsible for managing the project and provide a plan for successfully
completing the project within the scope, schedule and budget proposed in the application.
3.1 Project Manager
Tell us who will be managing the project for the Grantee and include a resume and references
for the manager(s). If the applicant does not have a project manager indicate how you intend to
solicit project management Support. If the applicant expects project management assistance
from AEA or another government entity, state that in this section.
For the proposed Phase II and Phase III work, the project manager will be Paul Taylor, P.E. for
the Municipality and Stan Selmer, Corporate Secretary and Power Operations Manager for
Upper Lynn Canal (ULC) for AP&T. Both are residents of Skagway.
The Phase II work will be conducted by AP&T for the Municipality. Both project managers will
coordinate activities as necessary. Paul Taylor is a civil engineer with extensive experience in
Alaska and the Yukon for the past 30 years. He has planned projects as diverse as harbors and
railroads; designed highways, airports, and marine docks and railroad operation. Mr. Taylor is
the business owner of Pacific Contract Company (PCC) specializing in project planning,
permitting, design, budgeting, and project construction management. Mr. Selmer has extensive
experience in project management and electrical generation, transmission and distribution, and
hydro development, including the integration and operation of hydro/diesel systems. Mr. Selmer
will also manage Phase III (for AP&T) if the Municipality selects AP&T to conduct that work.
Resumes for Mr. Taylor and Mr. Selmer are included in Section 7.
3.2 Project Schedule
Include a schedule for the proposed work that will be funded by this grant. (You may include a
chart or table attachment with a summary of dates below.)
A bar schedule of the expected design and construction sequence is provided in Section 7. The
following summarizes key activities and dates of the expected Project schedule. Note that this
schedule is for the entire development and construction sequence; activities funded by this grant
will be in Phase II and III only. The schedule assumes grant funds will be authorized for
expenditures in 2009.
Phase I: Reconnaissance – Not Required
Phase II: Resource Assessment/Feasibility Analysis/Conceptual Design – January 2009 to
April 2010
Phase III: Final Design & Permitting – April 2010 to April 2012
Phase IV: Construction – April 2012 to October 2015
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
Key (i.e. critical path) tasks and decision points for the Project are listed below. Note that these
milestones assume the Phase II work is performed in 2009.
• November 2009 - Draft feasibility report providing AP&T’s recommendations regarding
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the preferred Project arrangement.
• December 2009 - Selection of preferred Project arrangement for final analysis.
• April 2010 – Final feasibility report completed (includes results of environmental
scoping process).
• May 2010 – Study plans for 2010 field work completed and approved.
• January 2011 – Permit applications submitted for approval.
• April 2012 – Permits received, final design completed, and construction bids solicited.
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.
Phase I: Reconnaissance
Not required.
Phase II: Resource Assessment/Feasibility Analysis/Conceptual Design
In this phase AP&T will assist the Municipality in conducting a feasibility analysis and scoping
of environmental studies necessary to permit the selected Project arrangement. Key AP&T
personnel and their respective roles will be:
• Paul Taylor, Municipality Project Manager
• Stan Selmer, AP&T Project Manager
• Bob Berreth, Electrical Design
• Ben Beste, Mechanical Design
• Larry Coupe, Civil Design
• Vern Neitzer, AP&T Chief Engineer
• Glen Martin, Resource Assessment and Permits
The Municipality and AP&T believe that the Project does not require licensing by the Federal
Energy Regulatory Commission (FERC), since the Project will not be on Federal lands, affect
interstate commerce, or be on a navigable stream. The Municipality will apply for a non-
jurisdictional determination from FERC early in Phase II to confirm that a FERC license will
not be required. Obtaining a FERC license would increase the Project cost and extend the
development schedule significantly.
The Beck/APA 1982 feasibility analysis will provide some basic information for reevaluation of
the site, including topographic mapping, geotechnical data, and environmental information.
Some of the environmental information may need to be updated, and additional field work may
be required. AP&T may use or has used the following contractors for the various studies:
• Wetlands delineation - - HDR Alaska Inc.
• Threatened and endangered plant species survey - - HDR Alaska Inc.
• Fish surveys - - Romey Associates, Inc.
• Water quality sampling - - Analytica Group, Inc.
• Cultural resource surveys - - Browne Research;
Tasks in the feasibility analysis will include:
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• Collection of data, maps, and reports from previous studies, generation/load data from
cruise lines, cruise ship visitation records, and hourly flow data from the USGS
• Site visit by AP&T engineers
• Hydrology studies to develop a long-term daily flow record and hourly flows for
representative years
• Development of spreadsheet models for power studies, cost estimates, and economic
analyses
• Optimization studies of project alternatives, including number of boats to be served,
amount of storage to be provided, type and diameter of power conduit, and type of
transmission line
• Preparation of draft report for review and preferred alternative selection by the
Municipality
• Scoping of environmental issues and development of study plans to support permitting of
the selected Project arrangement
• Preparation of final feasibility report, including results of the environmental scoping.
Phase III: Final Design & Permitting
Assuming that a FERC license is not required, then in this phase the following permits will be
acquired:
• 404 permit (Corps of Engineers)
• Fish habitat permit (ADF&G)
• Coastal zone consistency determination (DCOM)
• Water right (ADNR)
• SHPO review
The Municipality will contract with engineering firm(s) for preparation of final design plans and
specifications. The Municipality will select the design firm(s) based on experience and
qualifications, but no firm has yet been chosen. AP&T will provide input into the final design,
and may be selected for some of the design work as appropriate.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
During Phases II and III, the Municipality proposes to provide quarterly reports to AEA
regarding the status of the work. The Municipality has provided similar reports to grant funding
agencies in the past on other projects, and has established the necessary procedures for
producing the report expeditiously. In addition, at the completion of Phase II, the Municipality
will provide AEA with a copy of the conceptual design drawings and cost estimate. At the
completion of Phase III, the Municipality will provide AEA with a copy of the final design
drawings, specifications, and cost estimate. Additional funding will be pursued during Phase III
for the construction phase of this project.
3.6 Project Risk
Discuss potential problems and how you would address them.
FERC Jurisdiction – As noted above, the Municipality and AP&T believe that FERC licensing
will not be required. However, there is the risk that FERC could assert jurisdiction based on
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West Creek being navigable or because of proximity to the Klondike Gold Rush National
Historical Park. A non-jurisdictional determination will be applied for early in Phase II. If
FERC does assert jurisdiction, the Municipality will either appeal the ruling, or continue Project
development under FERC jurisdiction at greater cost.
Seismic – Project components will be designed appropriately for seismic activity, since the
Project will be located in a moderate-risk seismic zone. Structures will be buried as much as
possible to minimize seismic impacts.
Landslides – In July 2002, a moraine collapse in the upper West Creek valley caused flooding
near the West Creek/Taiya River confluence. Although that type of event is unlikely to occur
again, it indicates the active geologic nature of the area. During Phase II, the Municipality will
have a consultant conduct a thorough review of the geologic hazards, which will be addressed in
the Phase II preliminary design.
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SECTION 4 – PROJECT DESCRIPTION AND TASKS
• Tell us what the project is and how you will meet the requirements outlined in Section 2 of
the RFA. The level of information will vary according to phase 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.
Proposed Energy Resource: The optimum arrangement for the Project will be determined during
the Phase II studies. The various alternatives will have varying installed capacities and annual
generation capabilities. The Beck/APA 1982 study looked at alternatives varying from 6 MW &
24 GWh per year to 17 MW and 75 GWh per year. For the proposed feasibility study, the
Municipality expects to evaluate capacities from 10 MW to 25 MW.
The Project is well-suited to the proposed task of supplying shore power to cruise ships docked in
Skagway, since the high streamflows coincide with the tourist season. There are no other
renewable resources that could provide the same amount of reliable power. AP&T is considering
development of a hydroelectric project at Connelly Lake which could also be configured to
provide power to cruise ships in Haines and/or Skagway, but it would have only about half the
potential of the Project. Even so, AP&T and the Municipality believe there is enough cruise ship
load that both the Project and Connelly Lake could be developed economically. The only real
alternative to Project is then considered to be continued diesel generation by the cruise ships.
Pros: Compared to the diesel generation on the cruise ships, the Project will have the following
advantages:
• reduce use of diesel fuel by cruise ships;
• reduce air emissions of either CO2 or particulate matter while docked in Skagway;
• reduce haze visible in and around Skagway;
• reduce or eliminate impacts to vegetation in the area;
• may provide other public health benefits unknown at this time;
• would provide a backup energy source for the local grid;
Cons: As with all hydroelectric projects, the initial cost of development is much higher than for
diesel generation.
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.
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AP&T serves Skagway as part of its Upper Lynn Canal (ULC) system, which includes the
following generating units:
Unit Type Capacity, kW Efficiency, kWh/gal Age, years
Goat Lake Hydro (storage) 4,000 N.A. 11
Dewey Lakes Hydro (storage) 943 N.A. 106
Lutak Hydro (run of river)285 N.A. 9
10-Mile(1) Hydro (run of river)600 N.A. 8
Kasidaya Hydro (run of river)3,000 N.A. 0
Skagway #6 Diesel 855 14.69 22
Skagway #7 Diesel 1,100 14.80 12
Skagway #8 Diesel 500 14.89 17
Skagway #9 Diesel (refurbished)930 ? 0
Haines #1 Diesel 800 12.64 39
Haines #2 Diesel 1265 12.93 25
Haines #3 Diesel 1600 14.92 19
Haines #4 Diesel 2865 12.83 13
(1) AP&T purchased power from Southern Energy’s 10-Mile hydro project until 2002. Purchases resumed in 2008.
Haines and Skagway are interconnected by a 15-mile-long 34.5-kV submarine cable with a
capacity of approximately 20,000 kW. Skagway and Dyea are connected by a 7.3-mile long 7.2-
kV distribution line, and Haines and the IPEC system are connected by a 10-mile long 12.47-kV
distribution line.
4.2.2 Existing Energy Resources Used
Briefly discuss your understanding of the existing energy resources. Include a brief discussion of
any impact the project may have on existing energy infrastructure and resources.
AP&T’s ULC system is primarily hydroelectric generation with diesel backup. In recent years
diesel has been needed for peaking operations and at the end of some long winters. AP&T is
evaluating another hydroelectric project near Haines (Connelly Lake Hydro) to supplement the
ULC resources to eliminate the current diesel generation. That project should also allow for
significant load growth in the ULC system.
The Project is intended to provide power to the cruise ships that visit Skagway each year from
May through September. This project would not have an impact on the existing energy (AP&T)
resources which are solely dedicated to providing power for the residential and commercial
customers of ULC. The existing energy resources can in no way handle even one cruise ship at
this time. The Project would not replace or share the load with any existing generating
resources. The Project could provide backup renewable energy for the ULC system in the event
of an emergency, e.g. an extended outage of the Goat Lake hydro project.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The existing energy market would be the cruise ships that come to Skagway from May through
September each year. Each large cruise ship has about a 7 MW average load that requires
continuous diesel operation while spending approximately 12-15 hours in port. During the 2008
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season, five cruise ships were scheduled to be in port every day, Mondays – Thursdays, and the
remaining days had from one to four ships consistently scheduled. The Project could be sized to
handle up to three cruise ships, which could cut emissions by about two-thirds. The current ULC
electric grid (owned and operated by AP&T) has no available or surplus renewable energy
resources to supply power to these cruise ships. The Project will not affect the existing energy
resources or market as this would be a new market requiring new resources. However, as
explained elsewhere in this document there is a significant need to get cruise ships off of their
own generation while in port due to the apparent impacts they are having on the environment.
4.3 Proposed System
Include information necessary to describe the system you are intending to develop and address
potential system design, land ownership, permits, and environmental issues.
4.3.1 System Design
Provide the following information for the proposed renewable energy system:
• A description of renewable energy technology specific to project location
• Optimum installed capacity
• Anticipated capacity factor
• Anticipated annual generation
• Anticipated barriers
• Basic integration concept
• Delivery methods
Renewable energy technology specific to location – The Project will be a conventional run-of-
river or storage hydroelectric project with an installed capacity of as much as 25 MW. The exact
configuration of the Project will be determined during Phase II. Hydroelectric technology is well
developed, and provides most of the renewable energy generated in the world in general, and in
Alaska in particular. The Project will utilize the rain, snow, glacial melt and steep topography
afforded by the West Creek basin to generate renewable energy.
Optimum Installed Capacity – 25 MW (to be confirmed by Phase II studies)
Anticipated capacity factor – 12% (to be confirmed by Phase II studies)
Anticipated annual generation – 27 GWh (to be confirmed by Phase II studies)
Anticipated barriers – No technological barriers.
Basic integration concept – AP&T’s ULC system is primarily hydroelectric with diesel backup.
Integration of the comparatively large Project into the existing system will require that the
Project be well-governed, however, that is not an unusual or difficult requirement. The cruise
ship loads are expected to be relatively easy to control. Note that AP&T also has experience with
connecting cruise ships to local grids as they designed much of the hookup at Juneau for AEL&P.
The Project could be developed as a completely independent system from AP&T’s ULC system,
but that would eliminate some of the auxiliary benefits of the Project.
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Delivery methods – Delivering the power to the Skagway dock will require approximately 12
miles of new or upgraded transmission line, as well as new switchyards, substations, and
shorepower switches and connections. The optimum arrangement for these facilities will be
determined during Phase II.
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 Municipality has already requested the land the Project would be situated on from the State
as Municipal Entitlement Land.
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
Applicable Permits:
• 404 permit (Corps of Engineers)
• Water right (ADNR),
• Fish habitat permit (ADF&G)
• Coastal zone consistency determination (DCOM)
• SHPO review
• Municipality of Skagway approval.
Permitting Timeline: Permitting is proposed to take place during the second and third years after
commencement of Phase II. This schedule assumes FERC will not have jurisdiction.
Potential Permitting Barriers: ADF&G may determine that water is needed in the bypassed
reach of the creek (between the diversion and powerhouse tailrace) for fish habitat, if any exists,
although the 1982 AEA report mentioned earlier indicates there would not be any fish use in the
bypass reach. Fish studies will determine what habitat is there. If water is needed in the
bypassed reach this could impact project capacity because that water could not be used for
generating electricity.
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
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As mentioned earlier, in 1982 R.W. Beck conducted a feasibility study of this site for the AEA. In
Section 7 is a copy of the Environmental Analysis of the large storage project proposed at that
time. Below are comments pulled from that analysis.
T&E Species: The 1982 AEA report states this site has no Federally-listed endangered or
threatened species residing in it. Field studies may still be conducted for this site, but impacts to
such species are not anticipated.
Habitat Issues: The 1982 AEA report, with the large project proposed at that time, states that
impacts of West Creek flow variations, possible turbidity increases, and possible temperature
alterations on fish resources are expected to be minimal because West Creek contributes only
30% of the total flows of the Taiya River. Fish habitat surveys will still likely need to be
conducted, but the creek has been identified by ADF&G as having Coho rearing habitat (Stream
No. 115-34-10230-2009) in the lower part. There is black bear habitat that with a large
reservoir would impact some of their home range. According to the 1982 AEA report, impacts to
wildlife habitat in general are expected to be minimal.
Wetlands: The only wetland is the creek itself. If a storage reservoir is developed, then additional
wetlands will be created in the valley (the reservoir) that may benefit both avian and furbearer
species.
Archaeological Resources: This project will have a SHPO review. Available information will be
researched prior to hiring an archaeologist to review the site, if necessary. The Project is near
the Klondike Gold Rush National Historical Park, therefore it is likely an archaeologist will have
to review this site.
Land Development Constraints: None known at this time.
Telecommunications Interference: The 34.5 kV transmission line does not create interference
with telecommunications. This size of conductor is frequently found on the same pole with
telephone lines, as they are also found to coexist on AP&T’s poles. For the Project, part of the
transmission line is likely to be buried. Higher voltages can cause interference however.
Aviation Considerations: The project does not pass by an airport and the wood poles will only be
about 45 feet in height, well below any flight pattern. The ROW for the transmission line is
bordered by forest on both sides and trees in the area are generally as tall as the poles or taller
so that flying would be problematic regardless of transmission line.
Visual, Aesthetic Impacts: Wood poles will be placed approximately 300 feet apart for the
transmission line, where above ground. Part of the transmission line may be buried in conduit.
Although the area is forested, which is expected to minimize visual and aesthetic impacts, the
penstock corridor could be partially visible from the Klondike Gold Rush National Historical
Park. The construction corridor will be kept to a minimum of clearing.
Potential Barriers: None at this time.
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
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• Requested grant funding
• Applicant matching funds – loans, capital contributions, in-kind
• Identification of other funding sources
• Projected capital cost of proposed renewable energy system
• Projected development cost of proposed renewable energy system
Anticipated project costs:
• Phase I: $0 (reconnaissance study not required)
• Phase II: $295,000 (AP&T estimate based on AP&T experience)
• Phase III: $8,285,000 (AP&T estimate based on AP&T experience)
• Phase IV: $131,420,000 (AP&T estimate based on AP&T experience)
• Total: $140,000,000
Requested grant funding: $6,864,000 (for Phases II & III)
Applicant matching funds: $1,716,000
Other sources of funding: N/A
Projected capital cost: $126,520,000 (capital cost is assumed to be the cost of Phase IV –
Construction)
Projected development cost: $8,580,000 (development cost is assumed to be the total cost of Phases
II and III)
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
Total Anticipated O&M Costs for Project and how it would be funded: $1,500,000/year approx.
Requested Grant Funding: No funding will be requested for O&M by the Municipality because
they will pay for O&M from revenue acquired through selling power to the cruise ships.
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
The potential power buyer would be the cruise lines that have ships dock in Skagway. Concepts
for power purchase agreements will be discussed with the cruise lines in Phase II. The economic
analysis for the Project included with this application assumes a sales price of $0.252/kWh,
which is 90% of the expected cost of self-generation by the cruise ships.
4.4.4 Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Cost Worksheet is included in Section 7 – Appendices
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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.
The Municipality may operate the Project or may contract with AP&T to operate the Project to
supply power to cruise ships that dock at Skagway’s port. A contractor or AP&T may maintain
the Project, which can be expected to have a life of at least 50 years. The Project will be
remotely operated, with continuous monitoring by a SCADA system. O&M personnel will visit
the plant at least once per week for routine checks on the equipment. A routine maintenance
schedule will be established, a brief annual shutdown is likely for maintenance.
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your
recommendation for additional project development work.
AP&T prepared an economic analysis for the Project based on the following assumptions:
General Assumptions:
• Term of analysis 50 years (of Project life)
• General inflation rate 2.75%
• Discount rate 0% and 12%
West Creek Assumptions:
• AEA grant funds (Phases II and III) $6,864,000
• Other grant funds (80% of Phase IV costs) $105,136,000
• Municipality funds (Phases II and III) $1,716,000
• Municipality funds (20% of Phase IV costs) $26,284,000
• Total construction cost $140,000,000
• Bond term 30 years
• Bond interest rate 6%
• First year of operation 2015
• Annual O&M cost (2008) $1,500,000
• O&M escalation rate General inflation rate
• Generation at plant 27,000 MWh/yr
Diesel Assumptions
• Cost of diesel fuel (2008) $3.00
• Average efficiency 14.5 kWh/Gal
• Fuel escalation rate 3.75%
• Variable O&M cost (2008) $0.01/kWh
• O&M escalation rate General inflation rate
Power Sales Agreement Assumptions
• Initial sales rate 90% of equivalent diesel cost
• Sales escalation rate 2.75%
• Municipality’s share of net revenue 50%
• State’s share of net revenue 50%
A copy of the economic analysis is provided in Section 7. The analysis shows the following:
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Discount Rate (1) 0% 12%
Net Present Value of Cruise Line
Savings $343,795,000 $16,714,000
Net Present Value of West Creek
Costs to the Municipality (2) $251,121,000 $35,730,000
Net Present Value of Power Sales Net
Revenue to the Municipality (3) $231,009,000 $18,419,000
Benefit-Cost Ratio for the
Municipality (4)
1.92 1.52
Net Present Value of West Creek
Costs to the State (5) $112,000,000 $112,000,000
Net Present Value of Power Sales Net
Revenue to the State (6) $231,009,000 $18,419,000
Benefit-Cost Ratio for the State (7) 2.06 0.16
(1) Low and high discount rate values for comparison.
(2) Annualized capital cost plus O&M cost, discounted to 2015. Funds
annualized over 50 years at the indicated discount rate.
(3) 50% of annualized net revenue from power sales, discounted to 2015.
Funds annualized over 50 years at the indicated discount rate.
(4) B/C ratio =[(2)+(3)]/(2)
(5) Proposed grant funding amount for Phases II, III, and IV.
(6) 50% of annualized net revenue from power sales, discounted to 2015.
Funds annualized over 50 years at the indicated discount rate.
(7) B/C ratio =(6)/(5)
The analysis indicates sufficient potential for feasible development of the Project that will
decrease environmental impacts from cruise ship diesel emissions, reduce the cost of diesel
generation by the cruise lines, provide a source of revenue for the Municipality, and repay the
investment by the State. Other direct and indirect benefits may accrue as well. Therefore, we
recommend AEA provide the necessary funding for Phases II and III of Project development as
described in this application to evaluate the development in more detail and complete the design
and obtain the necessary permits.
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SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
• Potential annual fuel displacement (gal and $) over the lifetime of the evaluated
renewable energy project
• Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or 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
Potential annual fuel displacement: The Project will displace about 1.9 million gallons of
diesel fuel annually, which equates to a reduction of approximately 22,000 tons in emissions
from the combustion of fossil fuels. Over a 50 year period the Project could potentially save 93
million gallons of diesel fuel.1
Anticipated annual revenue: The Municipality would negotiate power purchase agreements
with cruise lines that would provide power to the cruise lines at a cost less than self-
generation. This would provide direct financial benefits to the cruise lines at no cost to them.
The Municipality would also negotiate the PPA rates to provide a positive revenue stream that
would be shared between the Municipality and the State. Over the 50-year life of the Project,
the savings could amount to as much as $343,000,000 to the cruise lines and $231,000,000 to
the Municipality, and $119,000,000 to the State (undiscounted).
Potential additional annual incentives: Not estimated.
Potential additional revenue streams : Not estimated. The Municipality may also be able to
sell surplus power to the local utility.
Non-economic public benefits to Alaskans: The primary non-economic benefits of the Project
are the environmental benefits from reducing diesel generation by cruise ships while docked in
Skagway. These environmental benefits will maintain Skagway’s desirability as a cruise ship
destination, which will provide indirect economic benefits to Skagway and the State.
Other benefits: In the short term the local economy would benefit due to local hire for
construction labor, materials for construction, and lease or rental of equipment. In the long
term, there would be employment for O&M of the Project.
1 1.9 million gallons @ 138,000 btu/gal equals 262,200 MM/btu emissions are 168.40 lbs/mmbtu thus air
emissions are about 22,077 tons per year.
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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
Total Project Costs: $140,000,000 (excluding reserve account for funding negative cash flows)
Investments to date and funding sources: $0
Amount requested in grant funds: $6,864,000 (for Phase II & III work)
Additional investment by Municipality: The Municipality will provide matching funds in the
amount of $1,716,000 for Phase II and III work (20% match).
APPENDICES
TABLE OF CONTENTS
1. Municipality Resolution (MOU)
2. Project Maps
3. Project Schedule
4. Environmental Excerpt from 1982 AEA Feasibility Study
5. Land Ownership
6. Resume’s
7. Cost Worksheet
8. Grant Budget Form
MEMORANDUM OF
UNDERSTANDING
PROJECT MAPS
PROJECT SCHEDULE
PHASE II: Feasibility AnalysisData Collection and ReviewSite InspectionHydrology StudiesOperation Model DevelopmentCost Estimate SpreadsheetEconomic Analysis ModelAlternatives AnalysisDraft ReportEnvironmental ScopingFinal ReportPHASE III: Final Design and PermittingField StudiesPermit Application PreparationPermit Application ProcessingFinal DesignPHASE IV: ConstructionMobilizationAccess RoadsDam and ReservoirIntake, Tunnel, and PenstockGenerating Equipment ProcurementPowerhouseTransmission LineTesting and Start-UpWEST CREEK HYDROELECTRIC PROJECTDESIGN AND CONSTRUCTION SCHEDULEQ42013 2014Q1 Q2 Q32009 2010Q4Q1Q3 Q4Q4 Q1 Q2 Q3Q2 Q3 Q4 Q1 Q2 Q32011Q1 Q2 Q3 Q42012Q1 Q2
ENVIRONMENTAL EXCERPT FROM
1982 AEA FEASIBILITY STUDY
HAINES-SKAGWAY REGION
FEASIBILITY STUDY
VOLUME 1 – REPORT
R.W. BECK AND ASSOCIATES, INC.
JUNE 1982
FOR THE ALASKA ENERGY AUTHORITY
SECTION XIV
EFFECT ON ENVIRONMENT
OF THE SELECTED PROJECT ARRANGEMENT
1. GENERAL
The following discussion addresses potential impacts and mitigation with respect
to fisheries resources, wildlife resources, water quality, historical and archaeological
resources, socioeconomics, recreational resources, aesthetic resources, air quality, and
land use. Environmental studies found that the environmental impacts of the West Creek
Project are limited in scope and not expected to significantly affect Project development.
A report by the consultant Environaid, describing on-site environmental investigations
provides the basis for discussion of the fisheries, wildlife, and historical and
archaeological resources and is included in Appendix C.
2. FISHERIES RESOURCES
Few fisheries resources are known to occur in West Creek based on field
observations, fish sampling, and interviews with local residents. Consequently, impacts
on the fisheries resources are expected to be minimal. The following presentation
describes the habitat and fisheries resources of West Creek, and discusses potential
Project impacts.
Above the dam site, the creek is a stream of moderate gradient, turbid waters, and
predominantly boulder, cobble, and gravel substrate. There are a number of small
tributaries of relatively clear water with suitable salmonid spawning substrate. These
tributaries were in the general area of the proposed reservoir and would be the most
probable location of residential fish. Attempts were made to sample fish with minnow
traps in three of the tributaries. However, no fish were encountered. Reports by residents
at Skagway and Dyea indicate that few if any fish reside or spawn in waters near the
proposed dam site.
Below the dam site, the upper gorge has a steep gradient and contains a series of
cataracts and chutes. Upstream fish passage is extremely difficult if not impossible, at
least during the periods of high flow from May to November.
Further downstream within the middle basin, high velocity flows persist and
substrate is predominantly boulder and cobble. Little rearing or spawning habitat occurs
in the stream channel in this area. However, two small tributaries enter this section that
contain good quality spawning gravel in their lower reaches. Sampling of these
tributaries with minnow traps revealed a low density, slow growing population of Dolly
Varden char that is believed to be resident rather than anadromous.
The lower gorge just below the middle basin is an extended section of rapids and
falls. The sustained high velocity of this reach appears to prevent upstream passage by
fish and , therefore, would block use of the creek above this point by anadromous fish.
Between the lower gorge and its mouth, West Creek widens and the velocity is
reduced. As the creek approaches its confluence with the Taiya River, the gradient
declines and the substrate changes from boulder to cobble, gravel, and finally sand at the
confluence. These is a single tributary on the north side of West Creek below the bridge
that connects to a cutoff meander channel. Large Dolly Varden have been observed in
the tributary but no other fish have been seen in this small stream or in West Creek. The
possibility exists that a few fall chum or coho may utilize the tributary or lower West
Creek. Eulachon (candlefish) are known to spawn in the lower Taiya River and are
reported to spawn in the lower sandy reaches of West Creek.
Sources of potential impacts on fisheries resources include inundation of stream
habitat by the reservoir, alterations of the West Creek flow regime due to Project
operation, increased turbidity and sediments from construction activity, changes in stream
temperature due to the reservoir, and nitrogen supersaturation from water plunging over
the spillway.
The reservoir would inundate approximately 2.5 miles of stream habitat in West
Creek and small amounts of stream habitat in the lower reaches of three minor tributaries
(Fig. 16). Because there is no evidence of fish populations in this general area, it appears
that no fishery impacts would result from inundating the upper valley. The indicated lack
of fish resources also eliminates any concern for turbine-related injuries or mortalities of
fishes entering the power intake from the reservoir.
The proposed Project would cause changes in the flow between the dam and the
powerhouse. During the low flow months, December through April, there would be no
flow below the dam. The lack of flows could extend into early summer as the reservoir
fills. In summer and early fall, the flows would be much greater as melt-water flows fill
the reservoir exceeding generation requirements and result in excess water being spilled.
In general, however, flows would still be less than under natural conditions. (See Section
XI, Power Operation Studies.) However, little impact on fisheries is expected in West
Creek between the dam and the powerhouse because no fish are known to reside in or
Feasibility Study for AEA by R.W. Beck p. 2 West Creek Hydro
June 1982 Section XIV
migrate through the creek above the lower gorge. The small population of resident Dolly
Varden char, known to exist in the lower sections of the two tributaries of this part of
West Creek, should not be significantly affected by the reduced flows.
Below the powerhouse site, the major changes in the flow regime would occur
during the winter and spring months. The principal demand for power is from December
to April which are generally low flow months in the watershed. During this period,
generation would come from reservoir storage. Thus, average daily flows below the
powerhouse would increase during the winter and spring. Substantial daily variation in
flow would occur because power generation would be keyed to the daily cycle of
electrical load demand. This may cause flows to be less than what would occur under
natural conditions for a part of the day and greater for the remainder. These effects
could continue into early summer while the reservoir is filled. During the naturally high
flow months of summer and early fall, the average daily flows would not change and the
daily variations associated with electrical load demand would be small relative to the
magnitude of the total flows resulting from spill.
The changes in the flow regime of lower West Creek are not expected to impact
fish access to or use of the single tributary where Dolly Varden are known to occur.
Flow variations in the winter and spring could affect fish spawning or rearing activities in
lower West Creek; however, indications are that little if any of these activities exist with
the exception of spring spawning of eulachon.
Turbidity and sediments may increase in West Creek because of blasting and
other construction activities. This would result in transient impacts on the stream habitat,
fishes, and other aquatic organisms. Currently accepted, prudent construction practices
would be implemented to minimize these effects, including proper application of bank
stabilization, control of surface runoff, reclamation, and revegetation measures.
No significant alterations in the water temperature regime are anticipated to result
from the effects of the proposed reservoir or operation of the project; therefore, no
fisheries-related impacts would be expected. Stream temperatures are currently being
monitored, and potential water temperature changes will be evaluated after on year’s
temperature record is completed in the summer of 1982.
Supersaturation of nitrogen in the stream waters below a dam could impact
fisheries resources. This phenomenon can develop from waters plunging over a spillway
into a stilling basin below a dam. Nitrogen supersaturation causes gas bubble disease in
fishes and is destructive to both juvenile and adult fishes. The chute spillway planned for
the Project would not cause supersaturation of nitrogen.
Sport or subsistence fishing opportunities in West Creek are limited by the
available fish resources. No fishermen were encountered during Project studies on West
Creek. Fishing for Dolly Varden in the tributary near the creek mouth and dip netting for
eulachon in lower West Creek appear to present the best opportunities. No impact on
sport of subsistence fishing is expected.
Feasibility Study for AEA by R.W. Beck p. 3 West Creek Hydro
June 1982 Section XIV
The Taiya River supports runs of coho, chum, pink, Dolly Varden, and eulachon.
Impacts of West Creek flow variations, possible turbidity increases, and possible
temperature alterations on these fish resources are expected to be minimal because West
Creek contributes only 30% of the total flows of the Taiya River.
The submarine routing of the transmission cable from Skagway to Haines would
have little impact on marine organisms. Minor physical disruption of marine benthic and
intertidal communities would occur when the cable is laid. Electrical and magnetic-field
effects of the 34.5-kV insulated cable would be minimal and localized with little-to-no
physical or behavioral effects on fishes and other organisms. There may be some risk of
fishing gear or anchors fouling on the transmission cable.
The major mitigation concerns for fisheries are to assure no impact from nitrogen
supersaturation through proper design of the spillway and to maintain the alluvial channel
in West Creek below the powerhouse and gorge. The latter provision would allow fish
access to the tributary on the north side of the creek below the bridge. It is unlikely,
however, that the Project would adversely affect access to the tributary. A more
complete assessment will be made after topographic mapping of the lower creek section
is completed and Project layout has been determined. No mitigation activity would be
required for the Dolly Varden in the tributaries of the middle basin because the
populations are not expected to be significantly affected by any changes in habitat due to
alterations of West Creek flows.
Two fisheries enhancement possibilities have been suggested: (1) providing a
water supply source for a hatchery at the tailrace; and (2) modifying the tailrace to serve
as a spawning channel. It is expected that implementation of either enhancement
measure would entail development of required fish facilities by the Alaska Department of
Fish and Game (ADF&G) or the Northern Southeast Regional Aquaculture Association
(NSRAA). Factors to consider in evaluating the potential of the hatchery or spawning
channel include quality of water from the reservoir, the capacity of the Taiya River and
Taiya Inlet to support an increase of out migrants, the availability of fish stocks to be
used in the facilities, and specific effects of a propagated run on existing fisheries and
management of the fisheries. Discussions have been initiated with ADF&G and NSRAA
regarding the possibility of developing a spawning channel in the tailrace. Further
consultation with these agencies is expected to better assess these fisheries enhancement
opportunities.
3. WATER QUALITY
West Creek is a glacially-fed stream with highly turbid waters, particularly during
the high flow months of summer. Water temperatures range from less than 10˚C in the
summer down to 0˚C in the winter. Dissolved oxygen is high because of the low
temperatures and cascading passages. The clearcut area on the north side of the middle
basin (Fig. 16) has been revegetated and does not affect stream water quality. Currently,
Feasibility Study for AEA by R.W. Beck p. 4 West Creek Hydro
June 1982 Section XIV
there is no known human activity or development in the watershed that has any
significant impact.
No significant effects on water quality would be expected from the Project.
Temporary increases in suspended sediments and turbidity would occur in the West
Creek during construction due to erosion associated with clearing and grading of lands,
spoil disposal, road use, and blasting at the dam site. Standard prudent construction
industry practices including proper bank stabilization, runoff control, and revegetation of
exposed soils would minimize impacts on water quality.
Subsequent to construction, the reservoir would act as a sediment trap removing
larger sediments from the downstream flow. Generally, only colloidal-sized particles
would remain in suspension by the time waters passed out of the reservoir. There is,
however, the potential for erosion of the exposed banks of the reservoir during periods of
drawdown. This could have the effect of increasing turbidity in the reservoir and
downstream.
No major alterations of the water temperature regime would be expected. The
proposed reservoir could cause a slight delay in warming of the stream in the spring and
cooling in the fall. An evaluation of potential Project effects on water temperature will
be made at the completion of ongoing stream temperature monitoring studies during the
summer of 1982.
4. WILDLIFE
The major wildlife species in West Creek Valley are mammals and birds.
Common mammalian species include black bear, mountain goat, various furbearers, and
several species of voles and mice. The Sitka black-tailed deer, moose, and wolf are not
found in the valley. A few brown bears may include portions of West Creek within their
home range, and there have been seasonal sitings (sic) of wolverine and coyote. Bird
species include various waterfowl, grouse, and the bald eagle. Many other birds, such as
other raptors, shore birds, and passerines, also occur in the valley. No Federally-listed
endangered or threatened species resides in the Project area.
The principal impacts on wildlife would result from inundation of habitat by the
storage reservoir, loss of habitat on lands required for Project structures, disturbance of
wildlife by construction activities, and wildlife disturbance associated with improved
public access.
The storage reservoir would inundate approximately 600 acres of conifer forest,
riparian shrub, and sedge marsh. Most of the resident wildlife would be immediately
lost. Birds and larger mammals would be dislocated to other areas. These animals could
only become established on adjacent habitat if those areas were capable of supporting
them.
Feasibility Study for AEA by R.W. Beck p. 5 West Creek Hydro
June 1982 Section XIV
Indications are that black bear occupy virtually all of the valley floor and forested
slopes and, therefore, have fully partitioned the habitat of the watershed among the
population. Loss of habitat to the reservoir would require a readjustment of individual
bear home ranges and if the remaining habitat is fully occupied, the loss of one or more
bears from the watershed could occur.
The side slopes of the valley support a stable mountain-goat population. The
reservoir and other Project features would not be expected to affect any of their habitat
and would have no direct impact on the population.
The elimination of habitat would impact small animals that are abundantly
distributed in the area of the proposed reservoir, including deer, mice, least shrews,
porcupines, and red squirrels. Furbearers such as river otter, marten, least weasels, and
mink may also be impacted. Some benefits to furbearers would be derived from the
reservoir’s new riparian habitat although these benefits would be tempered by the annual
fluctuations of the reservoir surface.
Birds would be only slightly impacted by reservoir inundation. The proposed
reservoir area contains less than 3 acres of waterfowl habitat or approximately half of the
open Stillwater habitat in the valley. In addition, the reservoir would inundate only one
square mile of poor quality grouse habitat or about one-eighth of the total grouse habitat
in the watershed. Virtually all of the bottomland to be inundated has some habitat value
for the general avifauna. The impacts due to the inundation of bird habitats are expected
to be small.
At maximum pool elevation, the reservoir would create 600 acres of standing
water with approximately 5 miles of shoreline and associated shallows. It is probable
that more waterfowl habitat would be created than destroyed, although the habitat quality
would be influenced by the extent and timing of reservoir drawdowns. The reservoir
would displace a small number of grouse, but the effect on the overall grouse population
would be minor. Numbers of some species of the general avifauna would be reduced and
others increased, but no species would be eliminated. In fact, habitat may be created for
new species resulting in a more diverse avifauna overall.
Additional habitat losses, with fewer through similar impacts on wildlife, would
develop from emplacement of Project structures. The impacts would be smaller in scale
and would result from building the dam, surface penstock, powerhouse, access roads, and
transmission line. Minimal effects would result from construction of the power tunnel
because the overlying land surface would remain undisturbed.
Localized disturbance to wildlife would be caused by construction activities such
as blasting, road use, heavy equipment operation, and tunnel boring. Changes in wildlife
distribution and behavior, such as relocation of black bear home ranges, would be
expected. These changes would be temporary and subject to readjustments on
completion of construction.
Feasibility Study for AEA by R.W. Beck p. 6 West Creek Hydro
June 1982 Section XIV
Presently, the West Creek valley supports little recreational hunting or wildlife
observation activities, probably because access is limited by the steep valley walls and
dense bottomland vegetation. The possibility exists that road improvements associated
with Project development would, by improving access, encourage an increase in wildlife
use. The Alaska Department of Fish and Game is interested in any associated increase in
hunting pressure on mountain goats in the valley. The West Creek goat population
appears capable of sustaining a larger harvest than it has experienced in recent years.
No major wildlife mitigation measures are planned because no significant
detrimental effects on the populations of any wildlife species are anticipated. Planned
mitigation measures include minimizing the clearing of vegetation to curtail destruction
of habitat during construction; locating the access road and other Project features to
minimize disruption of the travel routes of wide-ranging mammals within the narrow
valley-bottom corridor near the dam site; revegetating areas denuded during the
construction process; and designing the above-ground sections of the transmission line to
minimize potential impact on raptors such as the bald eagle.
5. HISTORIC AND ARCHAEOLOGICAL RESOURCES
Potential impacts on historic and archaeological resources were evaluated based
on field reconnaissance, review of ethnographic literature, and interviews with local
residents. The evaluation focused on locations of potential ground disturbance associated
with construction of the dam and reservoir, power tunnel, powerhouse, and transmission
line. Archaeological and historical field investigations were limited to surface inspection
of study areas. No excavations or test pits were dug in compliance with agreements with
the National Park Service and the Alaska State Historic Preservation Officer.
No cultural resources were found at the proposed dam site, within the proposed
reservoir, or in the areas of expected construction activity associated with the power
tunnel or powerhouse. Consequently, no impacts on historic and archaeological
resources are expected relative to the development of these Project features.
The transmission line could be buried throughout its route within the National
Park to avoid negative aesthetic impacts. Within the National Park and along the west
side of the Taiya River, the transmission line corridor would cross the historic Chilkoot
Trail, northern portions of the Dyea community, and other areas of gold rush activity
(Fig. 17). In this same general area, parts of the native Village of Dyea may have existed,
though its presence was not identified during current field investigations. Evidence of the
pre-gold rush native village may have been overlain by or incorporated into subsequent
site developments.
Although the potential exists for cultural impacts west of the Taiya River, the area
has been disturbed by relatively recent activities. The short section of the corridor
between the powerhouse and Dyea Road is criss-crossed with roads and tracks. It
contains houses, sheds, and barbed wire fencing along with abandoned wood stoves,
large kitchen appliances, motor vehicle parts, and other contemporary discarded
Feasibility Study for AEA by R.W. Beck p. 7 West Creek Hydro
June 1982 Section XIV
materials. Parts of the area have been selectively logged. The State Department of
Transportation and Public Facilities has cleared the roadside within the right-of-way.
The transmission line would likely be located within this roadside clearing. The road,
built in the 1940’s, was cleared by pushing the vegetation where excess construction
material was deposited. Most cultural resources of the gold rush period are located away
from Dyea Road, although the Chilkoot Trail crosses the road approximately 0.1 mile
northwest of the Taiya River bridge.
After determining the exact transmission line route within the corridor on the west
side of the Taiya River, additional archaeological/historical investigation would be
required. Final location of this section of the transmission line woul necessitate
consulting with and obtaining approval of the Alaska State Historical Preservation
Officer and the National Park Service.
Four potential areas of concern were found within the transmission corridor on the
east side of the Tiaya River Valley: the modern Chilkoot Trail and trailhead; the wooden
structures and out-buildings east of Dyea Road at Mile 8.4; the National Park Service
ranger station at Mile 8.3; and the marine shell deposit at Mile 8.0 (Fig. 17). By avoiding
these areas in final routing, the need for investigating these sites further may be
eliminated.
Similarly, in the corridor section between the Taiya River and Skagway, potential
impacts would be eliminated by avoiding specific areas containing cultural materials.
These materials include a single steel wire telegraph/telephone line that runs over the east
ridge at about Mile 6.6 and, of less significance, the shed and possible other materials at
the trailhead of the Skyline Trail, the pet cemetery, and the suspension bridge remains
near the Skagway River (Fig. 17).
Mitigation for historical and archaeological resources usually takes two forms:
avoidance of impacts by relocating Project facilities and scientific data recovery.
Pending results of additional surveys in the sensitive areas noted above, no specific
mitigation requirements are indicated at this time. The potential does exist for cultural
remains to be encountered unexpectedly during construction. In that event, investigation
of the find would be necessary to determine it value and whether mitigation would be
necessary.
6. SOCIOECONOMIC
The principal socioeconomic impacts would be the housing needs and payroll
spending of temporary construction workers on the City of Skagway. The Project site is
located within Skagway’s corporate limits approximately 10 miles by road from the
center of town.
It is common practice in Alaska for dam construction workers to live in “bachelor
quarters” near a project site. The remote location of many construction sites, the need to
import workers with special skills, transportation difficulties, and union requirements to
Feasibility Study for AEA by R.W. Beck p. 8 West Creek Hydro
June 1982 Section XIV
provide worker transportation between the job site and the place of worker residence all
contribute to this practice. Except for workers already living in the local area, Alaska
dam construction projects usually have few workers accompanied by dependents.
Because housing would be provided by the construction contractor at the Project site, the
average work force of 100 men would have little impact on the City of Skagway’s
summer housing shortage, schools, and other facilities. However, if the City of Skagway
adopts land use policies that would restrict the location of temporary housing at the
Project site, the impacts of temporary construction workers on the City’s housing stock
and public facilities would require further investigation.
The construction contactor would provide meals for workers living at the
construction site. Some supplies would likely be purchased locally. Most construction
equipment and materials are not available locally and would be purchased from available
sources located outside Alaska and transported to the site either by sea, road, or rail. A
portion of the construction workers’ payroll would be spent for entertainment and
personal supplies in Skagway.
Another possible socioeconomic impact would be a tax loss to the City of
Skagway due to the purchase of private lands for the Project. Project lands and properties
would not be taxable as public assets. However, the amount of private land to be used for
the Project is very small. The Project reservoir and dam site are located almost entirely
on State land. A portion of the reservoir would include State lands which have been
allocated to the City of Skagway for future private sale. (See Fig. 18) Ten acres of
National Park land would probably be used for the powerhouse site. Approximately 2
acres of private land would be used for the tailrace as well as approximately 2 acres of
State lands and 4 acres of National Park lands. The assessed value of the private land and
Skagway allotment lands currently is estimated to equal about $75,000 (Charles Horan,
December 1, 1981).(14) The value of the remainder of State lands is estimated to equal
about $250,000. In the area of the Project, the City of Skagway levies a property tax on
the assessed value of private land of 19% of $4.00 per $1,000 assessed value or $0.76 per
$1,000. Possible tax revenue losses from private lands and State allotment lands (if sold
for private use) currently would equal about $60 a year. In 1981 the City did not assess
personal property, indicating no off-setting tax revenue would accrue from a tax on the
value of construction equipment to be located at the Project site. If the tax were
collected, it would be assessed at the same rate as for property tax.
The State-maintained Dyea Road will provide public access to the Project site.
The road may have short periods of restricted travel when construction equipment is
being mobilized. Equipment could be moved during periods of light traffic and would
avoid periods of peak summer use of the Klondike Gold Rush National Historical Park.
No permanent road closures or modifications of the State road would be required during
or after Project construction.
The Project area is not served by electric or telephone service. The site is not
within the franchised service are of the local private electric and telephone company.
Construction would require providing electric and telephone service at the Project site.
Feasibility Study for AEA by R.W. Beck p. 9 West Creek Hydro
June 1982 Section XIV
Electrical service could be provided by the construction contractor or purchased from the
electric utility.
Providing electric and telephone services to the Project offers the possibility of
providing one or both of these services to local residents living in the Taiya River Valley
near the Dyea Road. Since this opportunity for service occurs outside the franchise area
of the electric and phone company, a mechanism for financing these improvements
would need to be developed. The small population of the area may make the cost of
improvements difficult to finance. The impact on future residential development in the
area would also need to be considered. The National Park Service would be a major
participant in any discussions on extending electrical or telephone service within the park
boundary.
7. RECREATIONAL RESOURCES
The Chilkoot Trail Unit of the Klondike Gold Rush National Historical Park is the
only established recreation facility in the vicinity of the Project. This Unit totals
approximately 9,100 acres and consists of a corridor of parkland approximately one mile
wide and 17 miles long, paralleling the entire length of the Chilkoot Trail within the
United States. The Unit lies principally in a north-south direction, with the south
boundary extending to saltwater at Taiya Inlet and the north boundary located at Chilkoot
Pass on the United States-Canadian border. Included in the Unit are the historic townsite
of Dyea, the 36-campsite Dyea Campground, the Chilkoot Trail, and all related historic
sites and artifacts along the trail and in the vicinity of Dyea. The modern Chilkoot Trail
begins where the Dyea Road crosses the Taiya River. The trail is located on the east side
of the river and traverses Chilkoot Pass to Lake Bennett, Canada. (15,16) More than
2,500 hikers traveled the trail in 1981 with almost 80% of the sue occurring in the months
of July and August. (17)
There are several trails in the vicinity of the Project in addition to the famous
Chilkoot Trail. The little-used Lost Lake Trail begins on the west side of the Taiya River
Valley about .75 mile south of West Creek near Dyea. (See Fig. 16) The trail climbs
steeply for about 2 miles to Lost Lake which is nestled on the slope above the Taiya
Valley. The only other trail is the Skyline and AB Mountain Trail which begins from the
Dyea Road near Yakutania Point and extends 6 miles north to AB Mountain. Most hikers
only travel the first 3 miles to a viewpoint of Skagway and Taiya Inlet.
There are no recreational facilities located in the West Creek Valley. A logging
road extends for approximately 2 miles from the Taiya Valley into the lower West Creek
Valley, but not as far as the proposed dam site. An informal trail beginning at the road’s
end provides access to the upper valley. Some residents of Skagway hunt, hike, and pick
berries within the middle section of West Creek Valley. Some firewood is gathered in
the lower valley.
The Haines-Skagway Area Land-Use Plan classifies the West Creek Valley as
public recreation land. Alaska Department of Natural Resources management policy
Feasibility Study for AEA by R.W. Beck p. 10 West Creek Hydro
June 1982 Section XIV
recommends that this area be managed in a manner that permits existing recreational uses
to continue and is compatible with Klondike Gold Rush National Historical Park
objectives. (18)
During construction, access to the West Creek Valley for recreation would be
limited. However, there is the possibility of providing a dam overlook to accommodate
public interest in construction activities. Construction activity, traffic, and noise may
affect the recreationists at Klondike Gold Rush National Historical Park, particularly at
the Dyea Campground, and hikers along the first 2 miles of the modern Chilkoot Trail.
This impact would primarily occur in July and August when the majority of people visit
the Park. There should be no impact to tourists visiting Skagway and the Skagway River
Valley nor to the cruise ship, ferry, and airplane travelers in the region.
Maintenance of the road to the dam would improve access to the valley. The
reservoir and improved access could stimulate recreation use in the Project area. In
addition to the possibility of a dam overlook, other possible recreational facilities include
a hiking trail to Upper West Creek Valley and a boat launch ramp. Recreationists would
probably be primarily Skagway residents. Visitors to the Project area would have to
travel through the National Park but there should be minimal impact to existing Park uses
and management objectives. (18)
8. AESTHETIC RESOURCES
Most of the Taiya River Valley floodplain is included in the Klondike Gold Rush
National Historical Park. The Dyea Road, running from Skagway through the valley, is
frequently traveled by tourists and residents. The vegetation of the valley is mixed
coniferous-deciduous forests (western hemlock, mountain hemlock, Sitka spruce, alpine
fir, lodgepole pine, black cottonwood, alder, willow, and poplar) and provides dense
cover during the summer except along areas that have been cleared, such as roadways.
Visitors and residents alike have a high appreciation for scenic values.
Project impacts that would affect residents and visitors to the Klondike Gold Rush
National Historical Park would occur in the Taiya River Valley. During construction,
traffic would increase, the noise of clearing, grading, blasting, and other activities would
e evident, and scenic values would be diminished by construction of Project features such
as the penstock, powerhouse, tailrace, and transmission line. Construction activity,
though temporary, would be greatest during the months of July and August when most
National Park visitation occurs.
Subsequent to construction, impacts would be minimal because of mitigative
measures incorporated into Project design, particularly as they apply to the penstock,
powerhouse, tailrace, and transmission line. The 3-foot-diameter, 1,520-foot-long
penstock is located on the west sideslope of the Taiya River Valley on State of Alaska
land and in part within the National Park boundary. The 25-foot-high concrete
powerhouse and 1,150-foot-long tailrace are located within the National Park. The
penstock, powerhouse, and tailrace might be visible from the Lost Lake Trail, several
Feasibility Study for AEA by R.W. Beck p. 11 West Creek Hydro
June 1982 Section XIV
points along the Chilkoot Trail, the Dyea Road, and several residences in the Taiya River
Valley. The National Park Service and State of Alaska have a cooperative management
agreement to protect the scenic qualities of the Taiya River Valley.(19) Mitigation
measures to protect the scenic resources will include painting the penstock and
revegetating the right-of-way to blend in with the existing landscape.
The transmission line could be located underground where it passes through the
National Park. Most of its route between the powerhouse and Skagway would probably
parallel the Dyea Road, resulting in reduced clearing requirements for the right-of-way.
Between the National Park and Skagway, the line would be a single-pole construction
supporting stand-off insulators and would be designed to minimize any adverse impacts
to scenic value. Submarine routing of the transmission line between Skagway and Haines
would eliminate potential aesthetic impacts along Taiya Inlet.
The dam and spillway would impact the scenery in upper West Creek. However,
there is currently little public use of this area and these facilities would not be visible
from the National Park or the Taiya Valley.
9. AIR QUALITY
The air quality within the Skagway City limits is excellent. Winds, often in
excess of 20 mph in Skagway and the nearby river valleys, and the lack of air pollution
sources prevent concentration of air contaminants. No polluting industries are located
within the City of Skagway, and no sources of air pollutants exist which require a Federal
or State operating permit. The nearest permitted sources of air contaminants are located
in Haines. These sources are some 20 miles distant from the Project and do not affect air
quality in the Skagway area.
The Project is located within the Southeastern Alaska Intrastate Air Quality
Control Region (SAIAQCR). The entire air quality control region is under the
jurisdiction of the Alaska Department of Environmental Conservation. For this air
quality control region, the State of Alaska has determined that for all regulated air
pollutants (total suspended particulates, nitrogen oxides, sulfur oxides, photochemical
oxidants, carbon monoxide, and lead) the ambient concentrations fall within all Federal
and State air quality standards (Alaska Department of Environmental Conservation,
1980). The Project study area (and the entire SAIAQCR) is designated an attainment
area for all regulated air pollutants. (20)
During the construction phase of the West Creek Hydroelectric Project, pollutants
emitted to the atmosphere would be of two types: fugitive dust generated by
transportation and construction activities, and gaseous emissions from internal
combustion engines. The fugitive dusts would results from land clearing, road
construction and maintenance, blasting, site preparation, rock crushing, concrete
batching, and vehicular traffic. Gaseous emissions would be produced from internal
combustion engines and would consist of oxides of nitrogen, carbon monoxide, sulfur
Feasibility Study for AEA by R.W. Beck p. 12 West Creek Hydro
June 1982 Section XIV
dioxide, and hydrocarbons. In general, these emissions would be temporary, lasting only
during the construction phase and would not significantly impact air quality.
Additional pollutants would be emitted from the reservoir clearing operations and
during periods of forest residue burning. These emissions would consist of particulates,
carbon monoxide, hydrocarbons, and oxides of nitrogen. These emissions would be
localized and temporary, and would have no long-term air quality impacts in the study
area.
There may be a minor increase in local fog in the vicinity of the reservoir.
However, operation of the West Creek Project would not cause or contribute to any air
quality impacts in the study area.
10. LAND USE
As shown in Fig. 18 and Table XIV-1, most land in the Project vicinity is State
selection land which is being transferred from the Federal Government. Some of this
land has been allotted to Skagway for eventual private sale. The Federal Government
also owns about 600 acres included in Klondike Gold Rush National Historical Park.
Only about 55 acres, or 0.3%, of lands in the vicinity of the Project, are privately owned.
The Department of Natural Resources, in its Haines-Skagway Area Land Use
Plan, has classified State selection lands in the West Creek Valley for recreation use. (18)
The intent of the classification is to keep the valley in an undeveloped state. However,
the plan classification can be changed to meet new land use requirements. Modification
of the plan will require a public hearing with legal notices. The process would probably
take 6 months to 1 year.
Construction of the Project would require about 10 acres of National Park land for
the powerhouse site. The tailrace right-of-way from the powerhouse to West Creek
would use about 8 acres of private, National Park and State land. A penstock would cross
State and National Park land for a distance of about 1, 400 feet on the hillside located
above the powerhouse. The dam and reservoir would use about 600 acres of State land of
which about 100 acres is Skagway allotment land. (See Fig. 18). Additionally, an
easement or right-of-way across private land and an easement along the State highway
right-of-way would be required for the transmission line.
The proposed powerhouse site, tailrace, and portions of the penstock and
transmission line would be within the boundary of the National Park. An Act of
Congress would be required to allow construction of a power plant on any land which is
within a National Park boundary or to relocate the park boundary. However, it is
possible that permission to build the transmission line within the National Park boundary
can be secured administratively.
The principal land use change associated with the Project would be the flooding
of the partially-wooded upper West Creek Valley. The lower elevation, eastern part of
Feasibility Study for AEA by R.W. Beck p. 13 West Creek Hydro
June 1982 Section XIV
the valley, has some commercial forests of spruce and hemlock. The area to be inundated
by the reservoir is in the upper part of the valley where soil conditions and drainage are
generally not conducive to commercial forest production.
The land to be used for the powerhouse and tailrace is covered primarily with
brush and cottonwood trees. Adjacent privately-owned bottomlands of brush and pasture
would be crossed by the transmission line from the powerhouse to the State highway.
The transmission line would then follow the State road except at a point where a hillside
is crossed at the head of Nahku Bay. The State highway right-of-way crosses through
lands owned by the National Park Service and Skagway State allotment funds.
Except for two unoccupied cabins, no structures would be lost due to Project
construction or operation. No valuable agricultural lands in the area would be impacted
by the Project. No permanent garden plots or improved pasturelands in private
ownership would be used for the powerhouse site or transmission line route. A local
access dirt road adjacent to the proposed route for the powerhouse tailrace may lie within
the Project boundaries. Road access would still be maintained.
Feasibility Study for AEA by R.W. Beck p. 14 West Creek Hydro
June 1982 Section XIV
LAND OWNERSHIP
MUNICIPALITY OF SKAGWAY, ALASKA
SPECIAL ASSEMBLY MEETING
September 12, 2008
Page 1 of 5
1. Call To Order:
Mayor Cochran called the meeting to order at 5:00 p.m.
2. Roll Call:
Present: Mayor: Tom Cochran, Assembly Members: Dan Henry, Colette Hisman, Dave
Hunz, Mike Korsmo, Mark Schaefer
Absent: Assembly Member: Lisa Cassidy
3. Proof of Notice:
Clerk Harris indicted that notice had been posted at the Municipal Offices and Post Office, on
the Municipal website, faxed out to the meeting list and emailed to each assembly member and
mayor on September 5, 2008.
4. West Creek Hydro Project:
Manager Sorum indicated that his initial concern is what we are talking about is on entitlement
land, owning the land makes things easier. He indicated that 6 parcels have been selected for
survey and the State is in the process of getting the survey instructions prepared for those 6
parcels. The survey instruction process from the State is a long process and he is hoping to set
up the survey contract to that as one survey is completed they will roll into the next set of
instructions. He indicated that in this project owning the land is easier project wise. Manager
Sorum indicated there was some concern in the first proposed MOU regarding guarantee of
ownership, the current draft before the Assembly has been changed so that the Municipality
agrees to pursue getting title to the property.
Mayor Cochran indicated that if the Assembly approves this MOU it will obligate $5,000 for the
grant application. Mayor Cochran asked how long following receipt of the survey instructions
until we received title to the land. Clerk Harris indicated that the survey instructions for the 980
acres were received shortly before she started in 1997 and the length of the survey took several
years to iron out issues with the survey. From the point when the Planning & Zoning
Commission received the preliminary plat to the point when we received patent was 7 years.
Mayor Cochran indicated this agreement obligates the Municipality to the $5,000 for paying for
the grant application process, it does not guarantee that the Municipality will pursue the grant,
its just getting the application in by the November 10th deadline. Once the application is in
there is still a long way to go, there is still the feasibility study and if it turns out that it’s not
feasible the project isn't going to happen anyway. He indicated that normally permitting for a
hydro project is 5 years and could be longer.
Assemblyman Hunz indicated that he is a stockholder in AP&T for clarification.
Motion/Second: Schaefer/Henry
To accept the MOU with AP&T for the West Creek Hydro Project.
Assemblyman Schaefer indicated that he thinks this is a good idea but it’s a long process and
will be several years down the road.
Assemblyman Korsmo indicated that when it gets to that point and it does become feasible and
the Assembly starts looking at different kinds of funding, he will make sure that the Assembly
MUNICIPALITY OF SKAGWAY, ALASKA
SPECIAL ASSEMBLY MEETING
September 12, 2008
Page 2 of 5
concentrates some of the revenues coming in from the Cruise Ship Fund to developing the
current projects we have like the boat harbor. He indicated he will make sure that the Assembly
continues to develop those projects that are already elevated that the Assembly supports them
before supporting something that could be a pretty huge drain on those special revenue tax
monies coming in.
Assemblyman Hunz indicated that the comments relayed to him are; why are we spending
$5,000 of municipal funds to help a private corporation. Mayor Cochran indicated that it’s a
benefit to the community. Assemblyman Hunz asked how is the community going to benefit, we
have hydro now and we are still getting diesel generation because the excess power is sold out
of our region so now we are trying to generate more hydro power so we can protect our region.
How do we know its going to stay here and not get sold elsewhere? He indicated that people
are coming to him asking what's it going to cost the tax payers to build all this infrastructure and
how are they going to benefit, they hydro AP&T has done now has stabilized the power but they
are still paying the excess for somebody else to benefit.
Assemblyman Korsmo indicated that a benefit for possibly public health if the ships plug in.
Assemblyman Hunz questioned if they are going to buy it and indicated he doubted it if its $0.22
per kilowatt hour.
Mayor Cochran indicated one thing to keep in mind if we do pursue this project and it is feasible
and can permit it and looks like something we can do and want to do. The Municipality is the
landowner and goes after the grant monies to build the project then we would basically be the
owner or at least a partner so its not that we are looking at we are spending municipal money
for a private company to build a project, the Municipality would be a stakeholder of at least
50/50 if not more so any revenue is going to be shared.
Manager Sorum indicated that if the Municipality takes the time and effort to secure the grants
that the Municipality would be a part owner in it because you wouldn't want to deal with it
because ownership gives you control over that part of the power you have control over and the
Municipality could say that Skagway uses this much power, we don't want our power shipped
over to somewhere for diesel generation or we want our power to plug in a cruise ship. He
indicated he thinks it backs up to whether the project is feasible and it will pay for itself and
AP&T has run into issues where they have financed hydro projects and not gotten the State
support for them that other projects have gotten and with the AEA renewable energy fund we
have an opportunity to get grant funds to put major capital bucks into projects where that
opportunity hasn't existed before. If the project is feasible and can be permitted that's the first
step and we aren't going to do any of that unless we get grant funding from the State to do that.
He indicated he doesn't see the Borough pursuing construction of the project unless it’s proven
feasible and we also get enough grant funding to build it, he doesn't see the Municipality
financing the whole $50 million project. Manager Sorum indicated that the whole idea of the
AEA grants is they want to support these sorts of projects and they are going to be putting $50
million per year out to build them and this idea is does the Municipality want to take advantage
of this or not.
Assemblyman Korsmo indicated that there is not an opportunity for public participation in this
and asked Mayor Cochran if it could be opened for comment from the public.
Mayor Cochran asked if anyone wished to address the Assembly. No comments were made.
MUNICIPALITY OF SKAGWAY, ALASKA
SPECIAL ASSEMBLY MEETING
September 12, 2008
Page 3 of 5
Mayor Cochran indicated he would like #2 changed to insert "Municipal ownership on both sides
of the West Creek River". There was no objection from the Assembly.
Motion passed by roll call vote of those present.
5. Communications to the Assembly:
6. Mayor and Assembly Discussion Items:
Assemblyman Korsmo displayed the artwork from Peter Luccetti that he would be taking to the
Southeast Conference as the silent auction item from Skagway and indicated that Mr. Luccetti
was willing to let it go for $500.00 but it was worth considerably more then that and the Manager
will be taking it to the conference with him since he is driving. Assemblyman Korsmo also
indicated he just got notified that he was reappointed to the Governor’s transportation
committee.
Assemblywoman Hisman indicated she brought up an issue that was weighing on her that has
to do with a benefit that was enacted with the new fiscal year July 1 and use of the Rec. Center.
Municipal employees and assembly members could use the Rec. Center and their families
could get 50% off. She indicated she didn't believe that it really met a standard of being out for
the public comment and believes that the public deserves an opportunity to comment on that.
She indicated she was trying to come up with a way that could happen and felt the only way
was to make sure that benefit absolutely lapsed with the new budget cycle and if people felt
strongly about it they could bring it forward again and let the public comment on whether they
felt that was something that they wanted us to do.
Mayor Cochran asked if that ever came before the Assembly. Assemblyman Henry indicated
no.
Manager Sorum indicated that he and Assemblywoman Hisman talked about it and there was
tons of conversations about it but looking back he doesn't know that it ever got past Finance.
He indicated that he suggested to Assemblywoman Hisman that we make sure we bring it back
up in the next budget cycle one way or the other because it’s kind of hard to shift right now. He
indicated that the other conversation that has to happen is he believes that going into January
we need to talk about the health care costs because that's the same thing. By the time we are
into the budget cycle it’s going to be too late to talk about the insurance policies we are carrying
and any of the discussions about co-pay or coverage so this is in the same boat. Does it benefit
the employees, in the long run would it make it a more productive work force, does it lower the
costs for care but the other thing is we have to jump on the health benefit stuff early rather then
wait for the fiscal year to end.
Assemblywoman Hisman indicated that in all the emails she could get together it seemed that
the only discussions that happened were between people that would benefit from this policy
change and if nobody from the outside comments then it really could look like we are just doing
ourselves a favor and that's not right.
Assemblyman Korsmo indicated he went to a Rec. Board meeting and they will be preparing
some other exemption proposals for the Assembly to consider, they spoke about this and are
looking at seniors also. He indicated that revisiting this shouldn't be a shock to anybody; he
doesn't believe that anyone is at fault it’s just something that happened. He also indicated that
MUNICIPALITY OF SKAGWAY, ALASKA
SPECIAL ASSEMBLY MEETING
September 12, 2008
Page 4 of 5
there was information that came by the Assembly but if you weren't paying close attention you
could have missed it.
Manager Sorum indicated that he remembers they punched it into the budget but it didn't get
talked about during the budget, there were talks about what it should it look like, what would it
cost and what should we do and it got stuck in there and that was the end of it.
Mayor Cochran indicated he agreed with Assemblywoman Hisman and the Assembly should fix
it.
Assemblyman Hunz indicated it was brought up to him that as a tax payer why are they having
to pay their taxes and also have to pay for the Rec. Center when other people get to use it for
free. When the Rec. Center was set up the idea was that the Municipality was going to
supplement it a little bit with tax dollars and try to raise the money itself but looking at the budget
and the amount of money put into the Rec. Center and certain people are getting to use it for
free and others are getting put out because they are having to pay for it. He indicated it came to
his attention when he received a card saying that he could join for free.
Assemblyman Korsmo indicated that the Rec. Board's intention is with different issues that
groups have brought up for possible exemptions, the Rec. Board itself has always maintained
Rec. Center fees across the board because of that. He indicated that the Rec. Board did not
weigh in on this issue at all.
Manager Sorum pointed out that he had this discussion with the Rec. Center Board and it’s
beyond their powers. Assemblyman Korsmo indicated he knows it’s beyond their purview but at
the same time they at least need to know about it because they get questions just like the
Assembly does and they need to be aware even if it’s not a policy decision that they make.
Assemblywoman Hisman asked if the Assembly is going to do anything about it or put it on the
next fiscal cycle. Manager Sorum indicated if the Assembly tells staff to bring it forward as a
discrete component of the budget so the Assembly can yea or nay it. He indicated that he was
hoping when he was talking with Assemblywoman Hisman that we would get it on the record
and bring it back up and treat it separately.
Assemblywoman Hisman indicated she would like to see it sunset and then the Assembly can
say we will not do it and then bring it forward for consideration. Assemblyman Korsmo indicated
that right now he thinks the Rec. Center is set up to deal with it.
Manager Sorum clarified that Assemblywoman Hisman wants to let it drop and then for the next
fiscal year bring it back up? Assemblywoman Hisman indicated that if people want to bring it
back up for the next fiscal year we can discuss it,
Manager Sorum indicated you would drop it for a year,
Assemblyman Korsmo indicated no we leave it in place.
Manager Sorum indicated that's not what Assemblywoman Hisman is saying.
Assemblywoman Hisman indicated she is saying that it ends unless it is adopted for our next
budget cycle.
MUNICIPALITY OF SKAGWAY, ALASKA
SPECIAL ASSEMBLY MEETING
September 12, 2008
Page 5 of 5
Manager Sorum indicated he can bring it forward as a separate subject in the budget and you
can vote it up or down. But the way I'm listening to you it almost sounds like you want it to end
on July 1. Assemblywoman Hisman indicated yes unless it is okayed for the next budget cycle.
Manager Sorum indicated he would bring it forward as a specific single item so when the
Assembly goes through the budget. Assemblywoman Hisman indicated she thinks that is where
it happened when the Assembly was going through the Rec. Center budget meetings it never
was talked about as a separate issue.
7. Adjournment:
Motion/Second: Henry/Korsmo
To adjourn the meeting of September 12, 2008 at 5:43 p.m. Motion passed unanimously by
voice vote.
__________________________________
Thomas D. Cochran, Mayor
ATTEST:
__________________________________
Marjorie D. Harris, Borough Clerk
(SEAL)
Approved: October 2, 2008
RESUME’S
11/05/08 2
Page 3 of 3
COST WORKSHEET
Renewable Energy Fund
Application Cost Worksheet For The West Creek Hydro 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. 27,000,000 kWh annual hydropower output
Unit depends on project type (e.g. windspeed, hydropower output, biomasss 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 0 (The Project will supply shore power to cruise
ships docked in Skagway. The existing AP&T
system in Skagway serves residential and
commercial loads in Skagway, and does not have
the capacity or firm energy to supply power to
cruise ships)
ii. Rated capacity of generators/boilers/other NA
iii. Generator/boilers/other type NA
iv. Age of generators/boilers/other NA
v. Efficiency of generators/boilers/other NA
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor NA
ii. Annual O&M cost for non-labor NA
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] 0
ii. Fuel usage
Diesel [gal] NA
Other NA
iii. Peak Load NA
iv. Average Load NA
v. Minimum Load NA
vi. Efficiency NA
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.
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 1
Renewable Energy Fund
vii. Future trends NA
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] NA
ii. Electricity [kWh] NA
iii. Propane [gal or MMBtu] NA
iv. Coal [tons or MMBtu] NA
v. Wood [cords, green tons, dry tons] NA
vi. Other NA
3. Proposed System Design
a) Installed capacity 25 MW
b) Annual renewable electricity generation
i. Diesel [gal or MMBtu]
ii. Electricity [kWh] 27,000,000 kWh
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
vi. Other
4. Project Cost
a) Total capital cost of new system $131,420,000 (Phases IV)
b) Development cost $8,580,000 (Phases I, II, and III)
c) Annual O&M cost of new system $1,500,000
d) Annual fuel cost $0
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 1.9 million gallons/year, 93 million gallons over minimum 50 year Project life
ii. Heat
iii. Transportation
b) Price of displaced fuel $3.00/gallon est. current price for diesel fuel
c) Other economic benefits Estimated 50-year undiscounted economic benefits are:
• For cruise lines - - $343,795,000
• For Skagway - - $231,009,000
• For State - - $119,009,000
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 2
Renewable Energy Fund
d) Amount of Alaska public benefits Economic benefits for Skagway and the State as
indicated above: Indirect benefits from reducing
environmental impacts and maintaining healthy
tourist/cruise industry
6. Power Purchase/Sales Price
a) Price for power purchase/sale To be determined (approx. $0.28/kWh minimum)
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio For Skagway, 1.92 with 80% grant funding of construction cost
For State, 2.06 with 80% grant funding of construction cost
Non-discounted values based on 50/50 sharing of net revenues
Payback Not calculated
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 3
Discount Rate 0.0% 12.0%
Net Present Value of Cruise
Line Savings with West Creek 343,795,000$ 16,714,000$
Net Present Value of Skagway Costs with West Creek
Debt Service 61,025,000$ 16,386,000$
O&M 190,096,000 19,344,000
Total 251,121,000$ 35,730,000$
Net Present Value of Skagway Net Revenue with West Creek
Net Revenue 231,009,000$ 18,419,000$
B/C for Skagway 1.92 1.52
Net Present Value of AEA Costs with West Creek
Grant Funding Total 112,000,000$ 112,000,000$
Net Present Value of AEA Net Revenue with West Creek
Net Revenue 231,009,000$ 18,419,000$
B/C for AEA 2.06 0.16
WEST CREEK HYDROELECTRIC PROJECT
ECONOMIC ANALYSIS
SUMMARY OF COSTS AND BENEFITS
WEST CREEK HYDROELECTRIC PROJECTECONOMIC ANALYSISGeneral Inflation 2.75% O&M ($000) 1,500$ Project Life, years 50Total Project Cost 140,000 Financing Term, years 30Diesel Generation Reserve Fund - Financing Rate 6.00%Fuel Inflation 3.75% Municipality Phase II & III grants 6,864 Reserve Fund Earnings Rate 4.00%Efficiency (kWh/gal) 14.5 Municipality Phase II & III match 1,716 Initial Power Sales Rate, $/kWh 0.25$ Var O&M ($/kWh) 0.01$ Construction % grant funding 80% Power Sales Escalation Rate 2.75%Min. O&M ($000) -$ Municipality Cost ($000) 28,000$ Skagway Share of Net Revenue 50%AEA Cost ($000) 112,000$ -$ Load GrowthTotal Skagway Alaska0.0% Diesel Fuel O&M Total $/kWhWest Creek Debt Service O&MRate, $/kWhGross RevenueNet RevenueNet RevenueNet Revenue200727,000 27,000 20083.00 27,000 27,000 2009 3.11 27,000 27,000 2010 3.23 27,000 27,000 2011 3.35 27,000 27,000 2012 3.48 27,000 27,000 2013 3.61 27,000 27,000 2014 3.74 27,000 27,000 -$ 1 2015 3.88 27,000 27,000 7,228 335 7,564 0.280 27,000 2,034$ 1,814$ 3,848$ 0.252 6,804$ 2,956$ 1,478$ 1,478$ -$ -$ 760$ 2 2016 4.03 27,000 27,000 7,499 345 7,844 0.291 27,000 2,034$ 1,864$ 3,898$ 0.259 6,991$ 3,093$ 1,547$ 1,547$ -$ -$ 853$ 3 2017 4.18 27,000 27,000 7,781 354 8,135 0.301 27,000 2,034$ 1,915$ 3,949$ 0.266 7,183$ 3,234$ 1,617$ 1,617$ -$ -$ 951$ 4 2018 4.34 27,000 27,000 8,072 364 8,436 0.312 27,000 2,034$ 1,967$ 4,002$ 0.273 7,381$ 3,379$ 1,690$ 1,690$ -$ -$ 1,055$ 5 2019 4.50 27,000 27,000 8,375 374 8,749 0.324 27,000 2,034$ 2,022$ 4,056$ 0.281 7,584$ 3,528$ 1,764$ 1,764$ -$ -$ 1,165$ 6 2020 4.67 27,000 27,000 8,689 384 9,073 0.336 27,000 2,034$ 2,077$ 4,111$ 0.289 7,792$ 3,681$ 1,841$ 1,841$ -$ -$ 1,281$ 7 2021 4.84 27,000 27,000 9,015 395 9,410 0.349 27,000 2,034$ 2,134$ 4,168$ 0.297 8,007$ 3,838$ 1,919$ 1,919$ -$ -$ 1,403$ 8 2022 5.02 27,000 27,000 9,353 406 9,759 0.361 27,000 2,034$ 2,193$ 4,227$ 0.305 8,227$ 4,000$ 2,000$ 2,000$ -$ -$ 1,532$ 9 2023 5.21 27,000 27,000 9,704 417 10,120 0.375 27,000 2,034$ 2,253$ 4,287$ 0.313 8,453$ 4,166$ 2,083$ 2,083$ -$ -$ 1,667$ 10 2024 5.41 27,000 27,000 10,068 428 10,496 0.389 27,000 2,034$ 2,315$ 4,349$ 0.322 8,686$ 4,336$ 2,168$ 2,168$ -$ -$ 1,810$ 11 2025 5.61 27,000 27,000 10,445 440 10,885 0.403 27,000 2,034$ 2,379$ 4,413$ 0.331 8,924$ 4,511$ 2,256$ 2,256$ -$ -$ 1,961$ 12 2026 5.82 27,000 27,000 10,837 452 11,289 0.418 27,000 2,034$ 2,444$ 4,479$ 0.340 9,170$ 4,691$ 2,346$ 2,346$ -$ -$ 2,119$ 13 2027 6.04 27,000 27,000 11,243 465 11,708 0.434 27,000 2,034$ 2,512$ 4,546$ 0.349 9,422$ 4,876$ 2,438$ 2,438$ -$ -$ 2,286$ 14 2028 6.26 27,000 27,000 11,665 477 12,142 0.450 27,000 2,034$ 2,581$ 4,615$ 0.359 9,681$ 5,066$ 2,533$ 2,533$ -$ -$ 2,461$ 15 2029 6.50 27,000 27,000 12,102 490 12,593 0.466 27,000 2,034$ 2,652$ 4,686$ 0.368 9,947$ 5,262$ 2,631$ 2,631$ -$ -$ 2,645$ 16 2030 6.74 27,000 27,000 12,556 504 13,060 0.484 27,000 2,034$ 2,725$ 4,759$ 0.379 10,221$ 5,462$ 2,731$ 2,731$ -$ -$ 2,839$ 17 2031 7.00 27,000 27,000 13,027 518 13,545 0.502 27,000 2,034$ 2,799$ 4,834$ 0.389 10,502$ 5,668$ 2,834$ 2,834$ -$ -$ 3,043$ 18 2032 7.26 27,000 27,000 13,515 532 14,047 0.520 27,000 2,034$ 2,876$ 4,911$ 0.400 10,791$ 5,880$ 2,940$ 2,940$ -$ -$ 3,257$ 19 2033 7.53 27,000 27,000 14,022 547 14,569 0.540 27,000 2,034$ 2,956$ 4,990$ 0.411 11,088$ 6,098$ 3,049$ 3,049$ -$ -$ 3,481$ 20 2034 7.81 27,000 27,000 14,548 562 15,110 0.560 27,000 2,034$ 3,037$ 5,071$ 0.422 11,393$ 6,322$ 3,161$ 3,161$ -$ -$ 3,717$ 21 2035 8.11 27,000 27,000 15,094 577 15,671 0.580 27,000 2,034$ 3,120$ 5,155$ 0.434 11,706$ 6,551$ 3,276$ 3,276$ -$ -$ 3,965$ 22 2036 8.41 27,000 27,000 15,660 593 16,253 0.602 27,000 2,034$ 3,206$ 5,240$ 0.445 12,028$ 6,787$ 3,394$ 3,394$ -$ -$ 4,225$ 23 2037 8.73 27,000 27,000 16,247 609 16,856 0.624 27,000 2,034$ 3,294$ 5,328$ 0.458 12,358$ 7,030$ 3,515$ 3,515$ -$ -$ 4,498$ 24 2038 9.05 27,000 27,000 16,856 626 17,482 0.647 27,000 2,034$ 3,385$ 5,419$ 0.470 12,698$ 7,279$ 3,640$ 3,640$ -$ -$ 4,784$ 25 2039 9.39 27,000 27,000 17,488 643 18,132 0.672 27,000 2,034$ 3,478$ 5,512$ 0.483 13,048$ 7,535$ 3,768$ 3,768$ -$ -$ 5,084$ 26 2040 9.74 27,000 27,000 18,144 661 18,805 0.696 27,000 2,034$ 3,574$ 5,608$ 0.497 13,406$ 7,799$ 3,899$ 3,899$ -$ -$ 5,399$ 27 2041 10.11 27,000 27,000 18,825 679 19,504 0.722 27,000 2,034$ 3,672$ 5,706$ 0.510 13,775$ 8,069$ 4,034$ 4,034$ -$ -$ 5,729$ 28 2042 10.49 27,000 27,000 19,530 698 20,228 0.749 27,000 2,034$ 3,773$ 5,807$ 0.524 14,154$ 8,347$ 4,173$ 4,173$ -$ -$ 6,074$ 29 2043 10.88 27,000 27,000 20,263 717 20,980 0.777 27,000 2,034$ 3,877$ 5,911$ 0.539 14,543$ 8,632$ 4,316$ 4,316$ -$ -$ 6,437$ 30 2044 11.29 27,000 27,000 21,023 737 21,759 0.806 27,000 2,034$ 3,983$ 6,017$ 0.553 14,943$ 8,926$ 4,463$ 4,463$ -$ -$ 6,816$ 31 2045 11.71 27,000 27,000 21,811 757 22,568 0.836 27,000 -$ 4,093$ 4,093$ 0.569 15,354$ 11,261$ 5,631$ 5,631$ -$ -$ 7,214$ 32 2046 12.15 27,000 27,000 22,629 778 23,407 0.867 27,000 -$ 4,205$ 4,205$ 0.584 15,776$ 11,571$ 5,785$ 5,785$ -$ -$ 7,631$ 33 2047 12.61 27,000 27,000 23,478 799 24,277 0.899 27,000 -$ 4,321$ 4,321$ 0.600 16,210$ 11,889$ 5,945$ 5,945$ -$ -$ 8,067$ 34 2048 13.08 27,000 27,000 24,358 821 25,179 0.933 27,000 -$ 4,440$ 4,440$ 0.617 16,656$ 12,216$ 6,108$ 6,108$ -$ -$ 8,523$ 35 2049 13.57 27,000 27,000 25,271 844 26,115 0.967 27,000 -$ 4,562$ 4,562$ 0.634 17,114$ 12,552$ 6,276$ 6,276$ -$ -$ 9,001$ 36 2050 14.08 27,000 27,000 26,219 867 27,086 1.003 27,000 -$ 4,687$ 4,687$ 0.651 17,584$ 12,897$ 6,449$ 6,449$ -$ -$ 9,502$ 37 2051 14.61 27,000 27,000 27,202 891 28,093 1.040 27,000 -$ 4,816$ 4,816$ 0.669 18,068$ 13,252$ 6,626$ 6,626$ -$ -$ 10,025$ 38 2052 15.16 27,000 27,000 28,222 915 29,138 1.079 27,000 -$ 4,949$ 4,949$ 0.688 18,565$ 13,616$ 6,808$ 6,808$ -$ -$ 10,573$ 39 2053 15.72 27,000 27,000 29,281 940 30,221 1.119 27,000 -$ 5,085$ 5,085$ 0.706 19,075$ 13,991$ 6,995$ 6,995$ -$ -$ 11,146$ 40 2054 16.31 27,000 27,000 30,379 966 31,345 1.161 27,000 -$ 5,225$ 5,225$ 0.726 19,600$ 14,375$ 7,188$ 7,188$ -$ -$ 11,745$ 41 2055 16.93 27,000 27,000 31,518 993 32,511 1.204 27,000 -$ 5,368$ 5,368$ 0.746 20,139$ 14,771$ 7,385$ 7,385$ -$ -$ 12,372$ 42 2056 17.56 27,000 27,000 32,700 1,020 33,720 1.249 27,000 -$ 5,516$ 5,516$ 0.766 20,693$ 15,177$ 7,588$ 7,588$ -$ -$ 13,027$ 43 2057 18.22 27,000 27,000 33,926 1,048 34,974 1.295 27,000 -$ 5,668$ 5,668$ 0.787 21,262$ 15,594$ 7,797$ 7,797$ -$ -$ 13,712$ 44 2058 18.90 27,000 27,000 35,198 1,077 36,275 1.344 27,000 -$ 5,823$ 5,823$ 0.809 21,847$ 16,023$ 8,012$ 8,012$ -$ -$ 14,429$ 45 2059 19.61 27,000 27,000 36,518 1,107 37,625 1.394 27,000 -$ 5,984$ 5,984$ 0.831 22,447$ 16,464$ 8,232$ 8,232$ -$ -$ 15,178$ 46 2060 20.35 27,000 27,000 37,888 1,137 39,025 1.445 27,000 -$ 6,148$ 6,148$ 0.854 23,065$ 16,916$ 8,458$ 8,458$ -$ -$ 15,960$ 47 2061 21.11 27,000 27,000 39,309 1,168 40,477 1.499 27,000 -$ 6,317$ 6,317$ 0.878 23,699$ 17,382$ 8,691$ 8,691$ -$ -$ 16,778$ 48 2062 21.90 27,000 27,000 40,783 1,201 41,983 1.555 27,000 -$ 6,491$ 6,491$ 0.902 24,351$ 17,860$ 8,930$ 8,930$ -$ -$ 17,632$ 49 2063 22.72 27,000 27,000 42,312 1,234 43,545 1.613 27,000 -$ 6,669$ 6,669$ 0.927 25,020$ 18,351$ 9,175$ 9,175$ -$ -$ 18,525$ 50 2064 23.58 27,000 27,000 43,899 1,267 45,166 1.673 27,000 -$ 6,853$ 6,853$ 0.952 25,708$ 18,855$ 9,428$ 9,428$ -$ -$ 19,458$ 462,017$ 231,009$ 231,009$ 0 343,795$ Reserve Fund BalanceCruise Line SavingsWith West CreekRevenueWest CreekGeneral Power RequirementReserve Fund DrawWest CreekSkagway TotalGenerationCostYCYearGenerationFuelCost($/gal)YearWithout West CreekCostsDieselPage 1 of 1
GRANT BUDGET FORM
Alaska Energy Authority - Renewable Energy Fund
BUDGET SUMMARY: WEST CREEK HYDROELECTRIC PROJECT
Milestone or Task
Federal
Funds
State Funds
(Proposed
AEA Grant)
Municipality
Funds Other Funds TOTALS
Phase 2 : Feasibility Analysis
Data collection and review $14,400 $3,600 $18,000
Site inspection $12,000 $3,000 $15,000
Hydrology $8,000 $2,000 $10,000
Operation model $8,000 $2,000 $10,000
Cost estimate spreadsheet $24,000 $6,000 $30,000
Economic analysis model $6,400 $1,600 $8,000
Alternatives analysis $76,000 $19,000 $95,000
Draft report $28,000 $7,000 $35,000
Environmental scoping $28,800 $7,200 $36,000
Final report $13,600 $3,400 $17,000
Project management $16,800 $4,200 $21,000
Phase 3 - Design and Permitting
Field Studies $564,800 $141,200 $706,000
Permit applications and processing $343,200 $85,800 $429,000
Final design $5,720,000 $1,430,000 $7,150,000
Phase 4 - Construction
Construction management $5,720,000 $5,720,000
Mobilization $3,000,000 $3,000,000
Access road $5,300,000 $5,300,000
Dam and reservoir $17,400,000 $17,400,000
Intake, tunnel, and penstock $43,100,000 $43,100,000
Powerhouse $30,300,000 $30,300,000
Transmission facilities $21,700,000 $21,700,000
Interest during construction $4,900,000 $4,900,000
Total $0 $6,864,000 $1,716,000 $131,420,000 $140,000,000
BUDGET CATAGORIES:
Phase 1 -
Recon-
naissance
Phase 2 -
Assessment/
Feasibility
Phase 3 -
Design and
Permitting
Phase 4 -
Construction
TOTALS
Direct Labor and Benefits $0 $10,000 $100,000 $300,000 $410,000
Travel, Meals, or Per Diem $0 $0 $15,000 $20,000 $35,000
Equipment $0 $0 $0 $50,000,000 $50,000,000
Supplies $0 $0 $0 $600,000 $600,000
Contractual Services $0 $285,000 $8,170,000 $5,500,000 $13,955,000
Construction Services $0 $0 $0 $75,000,000 $75,000,000
Other Direct Costs $0 $0 $0 $0 $0
TOTAL DIRECT CHARGES $0 $295,000 $8,285,000 $131,420,000 $140,000,000
MILESTONE or TASK
BUDGET INFORMATION
RFA AEA09-004 Budget Form
Renewable Energy Fund
RFA AEA09-004 Grant Budget Instructions Page 1 of 4
Grant Budget Instructions
Information concerning the proposed budget needs to be provided on the attached form.
The Budget Summary (upper portion of the form) is to provide information on the funding for the
entire project by tasks. The applicant is to provide amounts and identify the source of all funds
that will be used to complete this project. The tasks should represent major units of work that
will need to be completed on the project. At a minimum they should represent the phases
discussed in the application (Reconnaissance, Feasibility, Design and Permitting, or
Construction). Tasks may also represent subtasks under a specific phase. For example, under
Conceptual Design phase, a separate permitting task could be noted.
The Budget Categories (lower portion of the form) is to provide specific budget information for
the grant funds being applied for. Budget information for the other funds to be used to complete
the project need only be provided if that additional information is currently available.
Allowable costs for a grant include all reasonable and ordinary costs for direct labor and
benefits, travel, equipment, supplies, contractual services, construction services, and other
direct costs identified that are necessary for and incurred as a direct result of the project.
A cost is reasonable and ordinary if, in its nature or amount, it does not exceed that which would
be incurred by a prudent person under the circumstances prevailing at the time the decision was
made to incur the costs.
1. Allowable Cost
Allowable costs are only those costs that are directly related to those activities necessary for the
completion of the proposed project. The categories of costs and additional limits or restrictions
are listed below:
a. Direct Labor and Benefits
Include salaries, wages, and employee benefits of the Applicant’s employees for that portion
of those costs that will be attributable to the time actually devoted by each employee to, and
necessary for the project. Direct labor costs do not include bonuses, stock options, other
payments above base compensation and employee benefits, severance payments or other
termination allowances paid to the Applicant’s employees.
b. Travel, Meals, or Per Diem
Include reasonable travel expenses necessary for the Project. These include necessary
transportation and meal expenses or per diem of Applicant employees for which expenses
the employees are reimbursed under the Applicant’s standard written operating practice for
travel and per diem; or, the current State of Alaska Administrative Manual for employee
travel.
c. Equipment
Include costs of acquiring, transporting, leasing, installing, operating, and maintaining
equipment necessary for the Project, including sales and use taxes.
Subject to prior approval of the Authority’s Project Manager, costs or expenses necessary to
repair or replace equipment damage or losses incurred in performance of work under a
grant may be allowed. However, damage or losses that result from the Applicant’s
Renewable Energy Fund
RFA AEA09-004 Grant Budget Instructions Page 2 of 4
employees, officer’s, or contractor’s gross negligence, willful misconduct, or criminal conduct
will not be allowed.
d. Supplies
Include costs of material, office expenses, communications, computers, and supplies
purchased or leased by the Applicant necessary for the project.
e. Contractual Services
Include the Applicant’s cost of contract services necessary for the Project. Services may
include costs of contract feasibility studies, project management services, engineering and
design, environmental studies, field studies, and surveys for the project as well as costs
incurred to comply with ecological, environmental, and health and safety laws.
f. Construction Services
For construction projects this includes the Applicant’s cost for construction contracts, labor,
equipment, materials, insurance, bonding, and transportation necessary for the project.
Work performed by the Applicant’s employees during construction may be budgeted under
direct labor and benefits, project management or engineering. Major equipment purchases
made by the Applicant may be budgeted under equipment.
g. Other Direct Costs
In addition to the above the following expenses necessary for the project may be allowed.
Net insurance premiums paid for insurance required for the grant project;
Costs of permits and licenses for the grant project;
Non-litigation legal costs for the project directly relating to the activities (in this
paragraph, “non-litigation legal costs” includes expenses for the Applicant’s legal staff
and outside legal counsel performing non-litigation legal services);
Office lease/rental payments;
Other direct costs for the project directly relating to the activities and identified in the
grant documents; and/or
Land or other real property or reasonable and ordinary costs related to interests in land
including easements, right-of-ways, or other defined interests.
The Applicant is reminded to include sufficient funds for the management of the project, as the
Authority may terminate the grant or assume the project management responsibilities if it is
determined by the Authority that the Applicant is not providing adequate project management on
its own.
2. Specific Expenditures Not Allowed
Ineligible expenditures include costs for overhead, lobbying, entertainment, alcohol, litigation,
payments for civil or criminal restitution, judgments, interest on judgments, penalties, fines,
costs not necessary for and directly related to the grant project, or any costs incurred before the
beginning date of the grant. This is not intended to be a complete list of all ineligible
expenditures.
Overhead costs described in this section include:
salaries, wages, applicable employee benefits, and business-related expenses of the
Applicant’s employees performing functions not directly related to the grant project;
Renewable Energy Fund
RFA AEA09-004 Grant Budget Instructions Page 3 of 4
office and other expenses not directly related to the grant project; and
costs and expenses of administration, accounting, human resources, training, property
and income taxes, entertainment, self-insurance, and warehousing.
3. Match and Cost Sharing
If the Applicant is providing a match, it is should be detailed either as a specific dollar amount or
as a percentage of the total project budget. The type and amount of matching contributions
should be discussed in the application under section two.
Cost sharing or matching is that portion of the Project costs not borne by the Authority. The
Authority will accept all contributions, including cash and in-kind, as part of the Applicants’ cost
sharing or matching when such contributions meet the following criteria:
Are provided for in the Project budget;
Are verifiable from the Applicant’s records;
Third party costing sharing contributions are verifiable (with a letter of intent or similar
document);
Are not included as contributions for another state or federally assisted project or
program (i.e., the same funds cannot be counted as match for more than one program);
Are necessary and reasonable for proper and efficient accomplishment of the Project or
program objectives;
Are allowable costs;
Are not paid by the State or federal government under another award, except for
authorized by the State or federal statute to be used for cost sharing or matching;
Must be incurred within the grant eligible time period.
Any match proposed with the application will be required in the Grant award and the Grantee
will be required to document the use of the proposed matching funds or in-kind contributions
with their request for reimbursement.
4. Valuing In-Kind Support as Match
If the Applicant chooses to use in-kind support as some; or, its entire match, the values of those
contributions will be reviewed by the Authority at the time the budget is approved. The values
will be determined as follows:
The value of real property will be the current fair market value as determined by an
independent third party or a valuation that is mutually agreed to by the Authority and
the Applicant and approved in the grant budget.
The value assessed to Applicant equipment or supplies will not exceed the fair
market value of the equipment or supplies at the time the grant is approved or
amended.
Equipment usage will be valued based on approved usage rates that are determined
in accordance with the usual accounting policies of the recipient or the rates for
equipment that would be charged if procured through a competitive process. Rates
paid will not exceed the fair market value of the equipment if purchased.
Renewable Energy Fund
RFA AEA09-004 Grant Budget Instructions Page 4 of 4
Rates for donated personal services will be based on rates paid for similar work and
skill level in the recipient’s organization. If the required skills are not found in the
recipient organization, rates will be based on rates paid for similar work in the labor
market. Fringe benefits that are reasonable, allowable, and allocable may be
included in the valuation.
Transportation and lodging provided by the Applicant for non-local labor will not
exceed the commercial rates that may be available within the community or region.
5. Grant Disbursements
Applicants are reminded that they must request disbursement of grant funds in the form and
format required by the Authority with appropriate back-up documentation and certifications.
This format will be provided by the Authority.
The back-up documentation must demonstrate the total costs incurred are allowable, and reflect
the amount being billed. Documentation must include:
A summary of direct labor costs
Travel and per diem reimbursement documentation
Contractor or vendor pay requests
Invoices
Timesheets or check copies to document proof of payment must be available for audit purposes
at the Applicants place of business.
Payment of grant funds will be subject to the Applicant complying with its matching contribution
requirements of the proposed grant.