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HomeMy WebLinkAboutKiseralik Chikuminuk Hydro App part 1Association of Village Council Presidents Regional Housing Authority P.O. Box 767 — Bethel, AK 99559 907-543-3121 1-800-478-4687 907-543-2270 (FAX) www.avcphousing.org November 7, 2008 Alaska Energy Authority AEA-09-004 — Renewable Energy Grant Application ATTN: Butch White Grant Manager 813 West Northern Lights Blvd Anchorage, AK 99503 Dear Mr. White, Attached please find a copy of our grant application which is submitted under AEA's Renewal Energy Fund grant program. We are submitting the grant application as a governmental entity, which includes tribal councils and housing authorities. Our grant project attempts to begin implementation of the AVCP Calista Regional Biennial Energy Plan 2008-2010, which includes a feasibility level analysis to be conducted by the AVCP Regional Housing Authority (Housing) for Renewal Energy Deployment for the Kuskokwim region involving Hydroelectric Power, Wind & Solar Energy, Biomass Heating, and Regional Utility Consolidation Plan and Development for Bethel and villages along the Kuskokwim River. More specifically, this grant project will be for a feasibility study to facilitate development of a Hydroelectric Power Project in the Kuskokwim River region. We are aware of several potential hydroelectric project locations that may provide up to 12 megawatts of power, which is enough electricity to displace diesel -generated power in as many as 13 villages along the Kuskokwim River, including Bethel. Our project will cost $400,000. We are requesting $250,000 which we will match with in - kind funding of $150,000 from AVCP Housing and its regional partners, namely AVCP, Inc., Calista Corporation, and Yukon Kuskokwim Health Corporation. On behalf of AVCP Housing and its partners, thank you very much for kindly considering our grant application. We look forward to working with AEA on this and many other renewable energy projects in the future. Sincerely, Ron HMm- ari, Preside C'EO' AVCP Regional Housing Authority /avV ALASM Renewable Energy Fund WED ENERGY AUTHORITY Grant Application 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 GrantApp.doc Application form in MS Word that includes an outline of Form 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 Costworksheet.doc Summary of Cost information that should be addressed Worksheet in preparing their application. Grant Budget GrantBudget.xls _pLapplicants A detailed grant budget that includes a breakdown of Form costs by task and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget GrantBudgetlnstr.pdf Instructions for completing the above grant budget form. Form Instructions • 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. AEA 09-004 Grant Application Page 1 of 20 9/2/2008 /&� ALASM Renewable Energy Fund Grant Application SECTION 1 — APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Association of Village Council Presidents Regional Housing Authority Type of Entity: Indian Housing Authority Mailing Address Physical Address P.O. Box 767 Bethel, Alaska 99559 405 Ptarmigan Telephone Fax Email 907-543-3121 907-543-3933 --mark@avcphousing.org 1.1 APPLICANT POINT OF CONTACT Name Title Mark Charlie Vice President of Operations Mailing Address AVCP RHA P.O. Box 767 Bethel, Alaska 99559 Telephone Fax Email 907-543-3121 907-543-3933 mark@avcphousing.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 A local government, or X 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.) AEA 09-004 Grant Application Page 2 of 20 9/3/2008 /461LED) ALASKA Renewable Energy Fund ENERGY AUTHORITY Grant Application 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; andlor Construction) as well as the kind of renewable energy you intend to use. Refer to Section 1.5 of RFA. Feasibility Analysis of hydropower projects that would provide renewable electric energy to the Bethel area and surrounding Yukon-Kuskokwim delta villages. While the project will focus on the Kiseralik hydropower project previously studied by the AEA in 1980, the analysis will also review the previously studied Chikuminuk hydropower project and any others that may be viable for the region. 2.2 PROJECT DESCRIPTION Provide a one paragraph description of your project. At a minimum include the project location, communities to be served, and who will be involved in the grant project. This application addresses a first phase in implementing the AVCP Calista Regional Biennial Energy Plan 2008 — 2010 involving a feasibility level analysis to be conducted by the AVCP Regional Housing Authority for Renewable Energy Deployment for the Kuskokwim Region involving Hydroelectric Power, Wind and Solar Energy, Biomass Heating, including Regional Utility Consolidation Plan and Development for Bethel and villages along the Kuskokwim River. As a first effort, engineering, including geophysical and geotechnical analysis is proposed to be undertaken to determine the feasibility and deployment requirements, including environmental permitting required to facilitate development of a Kiseralik River hydroelectric project for the communities in the Kuskokwim River Region. The study will also review the technical merits of the Chikuminuk hydropower project in view of technological advances that may have transpired in the transmission of electricity. This effort also includes the determination of power generation and distribution systems required to interconnect communities of the Kuskokwim region with transmission interties from a regional hydroelectric utility. This project also proposes to outline the planning, organizational and development requirements for consolidating the local utilities into a regional wholesale non-profit utility for the operation and management of a regional hydroelectric generation and transmission system. This project proposes to bring together in a planning and development process the regional non-profit organizations, tribal governments and local utilities proposed to be affected by a regional hydroelectric development project. 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. ,$250, 000 is requested from the Renewable Energy Development Grant program to pay for engineering and technical services. Approximately S150, 000 is being proposed from AVCP, Calista, YKHC and AVCP Regional Housing Authority in the form of in -kind contributions to this planning and development effort. In the event the hydropower project is found to be AEA 09-004 Grant Application Page 3 of 20 9/3/2008 ALASKA Renewable Energy Fund / ENERGY AUTHORITY Grant Application economically feasible and environmentally acceptable, funding for field investigations and Federal Energy Regulatory Commission (FERC) licensing activities will be pursued. These investigations and activities include detailed engineering, environmental studies, resource agency consultation, and an Environmental Assessment or Impact Statement, and are estimated to require approximately four years and $20 million to accomplish. If approved by FERC and acceptable to the general public of the region, financing will be sought to construct what is presently estimated to be a $250 million project to bring power to the Bethel area. Additional funds will be needed to construct an area wide electric grid system capable of bringing power to all of the villages in the region. 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. It has been estimated from previous studies conducted involving a potential Kiseralik Hydroelectric project that approximately 30 megawatts of power and roughly 130 million kwh of energy may be available for Bethel and the 12 villages from Tuluksak to Quinhagak located along the Kuskokwim River. A previous Chikuminuk hydroelectric project estimated up to 24 megawatts of power. This project has the potential of replacing diesel as the primary source of energy in this region. A 1980 reconnaissance study conducted for the Alaska Power Authority of this project demonstrated energy costs of 180 per kwh as opposed to 300 per kwh for continued diesel generation with a medium interest rate of 7%. In today's dollars that could equate to approximately 230 per kwh as opposed to 380 per kwh based upon conservative estimates of inflation costs. 2007 PCE reports indicate costs of 400 per kwh to 600 per kwh without PCE adjustments for continued diesel power generation demonstrating greater potential savings per household. Additional savings to the state in the form of reduced PCE requirements provide added cost saving benefit to the state over the long term. Hydroelectric power in the Kuskokwim Region is a viable first alternative compared to wind and other renewable energy options. Wind energy systems installed in the region have proven to be expensive and can only provide a portion savings in diesel fuel costs. Diesel fuel costs are expected to remain high for the foreseeable future and the consistency of lower energy costs provided by a full capacity regional hydroelectric system offers a significant advantage over the long term for the region. This fact has been demonstrated by other successful regional hydroelectric projects constructed in Alaska during the past 30 years for other communities. Even more importantly, the project may allow communities to switch to partial electric heating and eliminate the use of very expensive heating fuel oil. The economic savings from this project will allow area residents to save more of their disposable income for other economic endeavors. 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. $ 400,000 2.5.2 Grant Funds Requested in this application. $250,000 2.5.3 Other Funds to be provided (Project match) $150,000 2.6.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $400,000 2.5.5 Estimated Benefit (Savings) $ to be determined 2.5.6 Public Benefit (If you can calculate the benefit in terms of $ to be determined AEA 09-004 Grant Application Page 4 of 20 9/3/2008 &ALASKA Renewable Energy Fund Grant Application dollars please provide that number here and explain how you calculated that number in your application.) AEA 09-004 Grant Application Page 5 of 20 9/3/2008 /mV ALASKA Renewable Energy Fund ENERGY AUTHORITY Grant Application SECTION 3 — PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully completing the project within the scope, schedule and budget proposed in the application. 3.1 Project Manager Tell us who will be managing the project for the Grantee and include a resume and references for the manager(s). If the applicant does not have a project manager indicate how you intend to solicit project management Support. If the applicant expects project management assistance from AEA or another government entity, state that in this section. Bob Charles, AVCP Community Development Coordinator and President of Nuvista Light and Electric Cooperative (formerly Nuvista Light and Power Company) is proposed as Project Manager overseeing the grant project management for engineering and feasibility analysis which will be conducted by a qualified engineering company with hydropower expertise. Within that firm, a lead engineer will be identified via a procurement process early on in the project. This lead engineer will serve as project manager overseeing the engineering and feasibility analysis. Bob Charles has previous project management experience with the Alaska Energy Authority as President of Nuvista when he managed the 2002 Nuvista Regional Energy Study and 2004 Regional Energy Feasibility Analysis for the AEA. Bob will be assisted by Allen Joseph, Grant Administrator for the AVCP Regional Housing Authority. The Nuvista Light and Electric Cooperative Board of Directors will provide overall project oversight and policy development and planning. The Nuvista Light and Electric Cooperative Board of Directors include members from AVCP, Calista Corporation, YKHC, AVCP Regional Housing Authority, Middle Kuskokwim Electric Cooperative, AVEC, Kwethluk Power Company, Chaninik Wind Group. In addition the AVCP Regional Energy Biennial Plan effort involves North Star Gas LLC, City of Bethel, Lower Kuskokwim School District, Lower Yukon School District, Yukon Delta Fisheries Development Association, City of Emmonak, Donlin Creek LLC, and various tribal representatives from the region. 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.) Project Management and Engineering Solicitation - January 2009 Scope of Work Development — February 2009 Feasibility Design —February 2009 to July 2010 • Regional Energy Demand Projections • Project Hydrology and Power Output Studies • Dam, Intake and Power Conduit Concept Design • Hydraulic Production Plant Concept Design • Transmission Plant Concept Design • General Plant Design • Project Cost Estimate • Project Development Schedule Geotechnical Analysis — May 2009 to September 2009 Land Status and Transmission Line Routing — September 2009 to March 2010 Environmental Permittinz Analvsis — September 2009 to March 2010 AEA 09-004 Grant Application Page 6 of 20 9/3/2008 GNED ALASM Renewable Energy Fund Grant Application Public Meetings - April 2010 — May 2010 Economic Feasibility Analysis — February 2010 to May 2010 Regional Wholesale Utility Planning and Development — February 2010 to May 2010 Prepare Draft and Final Report — April 2010 to July 2010 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. 1. Project Management and Engineering Solicitation - January 2009 2. Scope of Work Development — February 2009 3. Feasibility Design Development— February 2009 to July 2010 a. Energy Demand Projections b. Hydraulic Production Plant c. Transmission Plant d. General Plant 4. Geotechnical Analysis — May 2009 to September 2009 S. Land Status and Transmission Line Routing — September 2009 to March 2010 6. Environmental Permitting Analysis — September 2009 to March 2010 7. Economic Feasibility Analysis — February 2010 to May 2010 8. Public Meetings April 2010 — May 2010 9. Regional Wholesale Utility Planning and Development — February 2010 to May 2010 10. Prepare Draft and Final Report —April 2010 to July 2010 11. Submit Preliminary Permit application to Federal Energy Regulatory Commission 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. As indicated above, Bob Charles along with Allen Joseph will provide overall grant project management and overall project oversight and policy development will involve the Nuvista Light and Electric Cooperative Board of Directors as stated above. Contractors and related services involving hydroelectric engineers and geotechnical consulting, environmental consulting will be sought via procurement solicitation as required by state regulation. Resumes for Bob Charles and Allen Joseph are included with this application. Potential Contractors for engineering and other professional consulting may include such companies as, follows: MWH Global HDR Alaska Polar Consulting Engineers DTA Devine Tarbell & Associates Hatch Acres R&M Consultants, Inc. Knight Piesold and Co. All of these companies have experience and current engineering expertise in Alaska Hydroelectric projects. Depending on the available services of the engineering firm selected, additional consulting firms specializing in transmission line design andpermitting, and economic analysis and other specialty AEA 09-004 Grant Application Page 7 of 20 9/3/2008 /4" ALASM Renewable Energy Fund ENERGY AUTHORITY Grant Application disciplines may also be retained 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Bob Charles and Allen Jospeh will outline the scope of work with the Project Manager Engineer for this project which will include a schedule of meetings and reporting to Nuvista Light and Electric Cooperative Board of Directors and the Alaska Energy Authority. Regularly scheduled quarterly meetings will be held with the Project Manager Engineer to review project progress and preparation of necessary reports to the Authority. Weekly status reports via telephone will be conducted between AVCP management and its Engineering Consultant. AEA management may attend these weekly status reports at its discretion. A communication protocol will be established that will address communication requirements at all levels and by which medium. The plan will address communication medium such as hard copy transmittals, telecommunications and electronic internet as well as frequency of communication and who should be included at the various levels. 3.6 Project Risk Discuss potential problems and how you would address them. This is a feasibility level analysis of a potential Hydroelectric Power project for the Kuskokwim Region. There does not appear to be significant potential problems with conducting a feasibility analysis at this stage. The selected engineering consultant will have the primary responsibility for conducting the investigations. It will be incumbent upon the consultant to coordinate all logistics with appropriate agencies and interested parties and to procure necessary transportation needed to conduct field investigations. It is expected that there will be challenges with addressing public concerns and regulatory agencies related to the environmental aspects of this potential regional hydroelectric project. The previous hydroelectric studies for the region identified environmental issues and challenges that need careful consideration in the planning and development. The communities affected by such a project would need to be included closely in the oversight, information exchange and consultation throughout the analysis so that their concerns are adequately considered. However mitigation planning can only be addressed in a general sense at this pre feasibility stage, based on experience with similar project, and indicators from on -site investigations, literature searches and resource agency discussions. Detailed investigations to be conducted during the FERC licensing phase of the project will better identify potential project impacts and how they will be addressed This will be a collaborative process involving State and Federal agencies, the concerned public and non- governmental organizations, under an Integrated Licensing Process (ILP). 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. AEA 09-004 Grant Application Page 8 of 20 9/3/2008 ALAS40C) ENERGY HKA Renewable Energy Fund Grant 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. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. The following excerpts from the aforementioned studies provides information about the potential resource and alternatives available for the Kuskokwim region. AEA 09-004 Grant Application Page 9 of 20 9/3/2008 rmnw) ALASKA Renewable Energy Fund Grant Application Bethel - Section III APA15!£ The present state of the art in wind and solar energy conversions are considered to be uneconomical on a "utility" scale due to either high cost or questionable reliability. It is expected that both these energy conversion technologies will be pursued on a demnstration - or private individual level -in the near future. Overall energy needs, however, must be filled by means of proveir technology and economically feasible developments. Emphasis has been placed on renewable resources. This does not imply that other resources have been overlooked but rather attempts to put them in perspective in regard to possible development and costs. Hydroelectric Potential a. Introduction: The Golden Gate Hydro Site on the Kisaralik River has the potential to supply the entire future needs of the Bethel area through the year 2000, The energy from the Golden Gate hydro project can be absorbed by interconnecting numerous s•mali villages surrounding Bethel to a centralized pourer distribution point located in Bethel, which is in turn supplied via a 69 mile long transission line from the Golden Gate Hydro project. This concept is shown in Figure III-1. It is estimated that 1986 would prove to be the earliest possible completion date for the project assuming all necessary permits can be readily acquired. This completion date is, however, questionable as the present and future land status of the area is uncertain. The project lies within the proposed "Yukon Delta" National Wildlife Refuge created by the Federal Land Policy Management Act of November 16, 1978, Emergency Order 2O4E. The following pages address the preliminary geologic investigation, construction, construction cost, environ•- mental impact and energy potential of the Golden Gate Project. General Descri2tion: The Kisaralik River originates in the Kilbuck Mountains and flows west-northwest approximately 110 miles where it empties into the Kuskokwim River near the village of Akiak. The proposed dam site is located in a narrow meandering gorge at approximate river mile 67 and 63.5 airline miles east-southeast of the City of Bethel. This site is in section 17, T4N, R62W; Seward Meridian and identified as "Lower Falls" on the U.S.G.S. Bethel (B-3) quadrangle although there are no falls at the location. There are no significant falls anywhere along this section of river where a substantial head could be utilized, A AEA 09-004 Grant Application Page 10 of 20 9/3/2008 ALASM 4ME) ENERGY AUTHORITY Renewable Energy Fund Grant Application Bethel - Section I APA013/1 Electric Energy Resources The Kisaralik River, attributary to the Kuskokwim, has potential for hydroelectric development. The site is located approximately 69 miles soutHe-i-st of Bethel. By constructing a 300' high dam near the Lower Falls a firm capacity of 15 14W or 131,400 MWh per year can be obtained. The construction cost (1979-$) is estimated at $99,657,000 for 2-15 M generating units installed. This includes the transmission line to Bethel. The construction time is estimated to be approximately 4-5 years. The hydro site is presently included in the 1978 federal emergency withdrawals. Attempts to obtain a powersite exemption should begin immediately. A possible supplementary alternate energy resource to fuel oil or hydroelectric resources appears to be wind eneroy conversion. The available systems are still very costly, however, and reliability of the equipment in Alaska has not proven to be very high. With continued improvements it is anticipated that utilization of WECS will be economically feasible by individuals in remote locations as well as by electric utilities for supplementary energy to offset fuel cost. Applications for pumping or heating appear to be even more promising. The cost for electric energy generation by WECS at this time in the Bethel area has to be anticipated between 304/kWh and 80C/kWh. (These costs are strictly for s6condary. nonfirm energy and do not include standby generatorsT. — " To utilize diesel generation more efficiently -- if no other source of electric energy is available -- central generation with transmission interties promises cheaper energy, if the transmission ties are economically feasible. The single wire ground retu—r-n-TSWR) line concept, is anticipated to offer savings of approximately 60% compared to conventional three phase transmission or distribution lines. A demonstration project to be built in 1980 in the Bethel area is presently in the design stage. Successful construction and operation is expected to increase the use of this type,of line construction and make interties between small communities and load centers possible. For this report the feasibility of interties has been investigated for 11 communities in the Bethel area. It is conceivable that busbar costs of electric energy in the small communities could be lowered if the interties to Bethel are built. This,is mostly the result of enhanced generating efficiency and lower fuel costs in Bethel compared to the more remote communities. Investigation of.the Nulato coal field, to assess its potential as an alternate energy sourceforthe Bethel area yielded discouraging results. Commercial utilization of this resource T - A AEA 09-004 Grant Application Page 11 of 20 9/3/2008 /v4V MIED ALASHM Renewable Energy Fund Grant Application Bethel - �tsr[ iofr 1 APA013/I does not appear to be feasible at this time. The presently available information on wood does not allow proper assessment of the utilization possib Tiities. The geothermal resources identified are the Mitchell site in the ui�i it nuF-Rountains, Tul uksak Hot Springs near Nyal , and 0phir Creek Not Springs. Water temperatures below 150*F and moderate flow rates make all but local use uneconomical. 3. Economic Feasibility Analysis The development of the Kisaralik River hydroelectric potential and conservation of fuel by interconnecting small communities to a central generating system appear to be the most promising electric energy resources for the foreseeable future. Alternate development plans have been evaluated for a regional intertied system (See Figure I-2) including up to 12 communities. Utilizing annual cost and present worth comparisons, the following scenarios have been found to be the most advantageous developments: • Kisaralik River Hydro for a regional intertied systems. Regional Intertied System using Diesel Generation. Transmission interties of 11 communities in the Bethel area to the central generating plants in Bethel have been found feasibly independent of hydropotential development. This is mostly due to the high fuel cost in remote locations and low generating efficiencies. The following table will illustrate the economic. differences for the main alternate development plans investigated. Unit costs for marketable energy (historical load growth) are listed for a medium interest rate of 7%. TABLE 1-2 Busbar Cost of Electric Energy in 4/kWh Alternate Plan 1980 1990 2000 Continued use of diesel (Bethel) 12.6 21.0 $518 Small communities, local diesel 32.7 62.0 102.1 16tertied system, diesel only 14.7 20.8 35.1 intertied system with Kisaralik Hydro - 30.6 17.8 It should be noted that the above are bulbar costs -- not costs to the consumer. AEA 09-004 Grant Application Page 12 of 20 9/3/2008 ALASKA Renewable Energy Fund Grant Application 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation. The State of Alaska 2007 PCE report provides the following information about the existing energy systems: Total Total Fuel Avg Price Diesel Pop Used Total Cost of of Generated Utility Community 06/30/07 (gallons) Fuel/Gallon Fuel/Gallon kWhs Akiachak Native Community $ Electric Co. Akiachak 644 181,453 596,325.38 3.29 1,800,172 Akiak, City $ of Akiak 378 90,305 272,651.20 3.02 AVEC Eek 291 56,570 108,336.85 $ 1.92 775,087 AVEC Kasi luk 534 162,151 310,947.73 1.92 2,235,444 AVEC Nuna itchuk 516 - AVEC Quinha ak 642 134,072 259,790.18 1.94 1,802,038 Atmautluak Joint $ Utilities Atmautluak 304 53,931 173,703.84 3.22 33,269 Bethel Utilities $ Corp. Bethel/Oscarville 6,019 3,084,531 11,632,705.15 $ 3.77 42,140,800 Kwethluk, $ Inc. Kwethluk 695 100,363 285,573.91 $ 2.85 1,438,119 Napakiak Ircinraq Power $ Company Na akiak 373 - Napaskiak Electric $ Utility Na askiak 428 74,098 235,252.27 $ 3.17 934,527 Tuluksak Traditional Power $ Utility Tuluksa 1 466 1 75,738 1 228,234.80 1 $ 3.01 869,717 AEA 09-004 Grant Application Page 13 of 20 9/3/2008 rALASM Renewable Energy Fund ENERGY AUTHORITY Grant Application Tuntutuliak Community Service $ Assoc. Tuntutuliak 7 399 43,963 100,930.75 $ 2.30 542,072 4.2.2 Existing Energy Resources Used Briefly discuss your understanding of the existing energy resources. Include a brief discussion of any impact the project may have on existing energy infrastructure and resources. The Bethel and Kuskokwim villages that make up the market area for the Kuskokwim Region Hydroelectric project presently consume approximately 52,571,245 kwh of electricity annually. Each of the 13 villages in the region presently provides for their own electrical needs from their stand alone village utility systems. None of these villages are presently interconnected and collectively they consume about 4 million gallons of diesel fuel annually to generate this electricity. In addition, the communities probably consume another 6 million gallons of heating fuel annually for home and business heating. The proposed hydroelectric power project would provide a total energy resource replacement for Bethel and the affected villages. Existing diesel generation resources and infrastructure would likely be utilized as secondary back-up power to the primary hydroelectric power to be provided by the hydroelectric facility for Bethel and the 12 Kuskokwim villages. While the existing generation that resides in each village can be relegated to standby status, it may also be possible to eliminate some plants through reserve sharing from the integrated transmission system. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. If constructed to the size indicated in the original Kiseralik feasibility study, it is possible that both the total electrical and heating needs of the region can be met from the project. As indicated above the current energy use is driven by the cost of the energy resource; primarily the cost of diesel oil. It is expected that with high diesel costs continuing well into the foreseeable future that energy use will continue to be low as compared to other available energy resources such as hydroelectric. With the development of a regional hydroelectric facility and the resulting low long-term cost per kwh compared to diesel cost per kwh, local residents will see lower electric utility costs and will likely increase their energy utilization. The aforementioned reconnaissance study stated the energy use in the Kuskokwim region would be comparable to energy use in Southcentral Alaska with available lower per kwh energy cost provided by hydroelectric generation. AEA 09-004 Grant Application Page 14 of 20 9/3/2008 /M�ALASKA Renewable Energy Fund MED ENERGY AUTHORITY Grant Application 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 Based upon previous studies the project could include a 300 foot high dam on the Kiseralik River for the purposes of providing pressure head and storage capacity sufficient to provide continuous firm electricity throughout the year. Similarly situated facilities may be feasible at Lake Chikuminuk. The power plant would contain two 15 MW Francis turbine -generating units operating at a 50% annual plant factor. Firm annual generation capability of the 30-MW project is estimated to be approximately 130 million kwh. Electricity would be transported to the Bethel area by way of a 65 mile long 139 kv transmission system. The feasibility study to be conducted under this grant application will further refine the optimum size of all of' these system components. The 1980 Kiseralik Hydroelectric Reconnaissance Study provides the following information that describes in more detail the system design, land ownership, permits and some environmental issues. The Chikuminuk study report also provides additional information. 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. Land ownership will be determined as an element of the feasibility study. None of the existing land owners have been approached regarding use of their land in support of the project. It is anticipated that federal, state, and private land would be impacted by elements of the hydropower project, transmission facilities, and access roads. A more detailed discussion of land issues is contained in the 1980 Kiseralik Reconnaissance Study. 4.3.3 Permits Provide the following informationas it may relate to permitting and how you intend to address outstanding permit issues. • List of applicable permits • Anticipated permitting timeline • Identify and discussion of potential barriers Some agency permits may be required for certain site investigations. In general field activities associated with this feasibility study will not be of an intrusive nature. If the project proves AEA 09-004 Grant Application Page 15 of 20 9/3/2008 /4EDALASKA Renewable Energy Fund 4NED ENERGY AUTHORITY Grant Application feasible, AVCP will apply for a FERC preliminary permit for the project. If granted, AVCP and its consulting agents will initiate field investigations in consonance with FERC procedures. This will be a collaborative process with State and Federal agencies, the general public and non- governmental organizations in which all parties will help to craft the field investigations necessary for a FERC license to construct the project. This will require :numerous state and federal permits. It is anticipated that the licensing phase of the project will require at least four years to accomplish. The NEPA process will insure AVCP compliance with all relevant Federal environmental protection laws. 4.3.4 Environmental Address whether the following environmental and land use issues apply, and if so how they will be addressed: • Threatened or Endangered species • Habitat issues • Wetlands and other protected areas • Archaeological and historical resources • Land development constraints • Telecommunications interference • Aviation considerations • Visual, aesthetics impacts • Identify and discuss other potential barriers The feasibility study that would be funded by this grant application should have no environmental impacts as outlined above. All field activities will be of a non intrusive nature during this phase of the investigation. Nevertheless, state and federal resource agencies will be consulted regarding any field activities that would be required and appropriate site access permits obtained. However all environmental impacts would be evaluated in subsequent FERC licensing activities to insure that the project could be developed and operated in such a manor to minimize environmental impacts to an acceptable level. A more detailed discussion of the potential impacts from the project is contained in the 1980 Kiseralik reconnaissance study. 4.4 Proposed New System Costs (Total Estimated Costs and proposed Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer's estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following: • Total anticipated project cost, and cost for this phase • Requested grant funding • Applicant matching funds — loans, capital contributions, in -kind • Identification of other funding sources • Projected capital cost of proposed renewable energy system • Projected development cost of proposed renewable energy stem Total anticipated project costs for this phase of the project is estimated to be $400,000 to include $250,000 of grant funding requested and in -kind contribution match of $150,000. Potential costs for the Kuskokwim Region Hydroelectric Project would be near $250,000,000 to construct using AEA 09-004 Grant Application Page 16 of 20 9/3/2008 / ALASM Renewable Energy Fund ENERGY AUTHORITY Grant Application today's dollars. The previous reconnaissance study estimated the cost of the project to be nearly $95,000,000 in 1980 dollars. Additional funds would be needed to interconnect the thirteen villages that would be served by the project. 4.4.2 Project Operating and Maintenance Costs Include anticipated O&M costs for new facilities constructed and how these would be funded by the applicant. • Total anticipated project cost for this phase • Requested grant funding This is a feasibility level analysis for a potential Kuskokwim Region Hydroelectric Project and anticipated O&M costs are yet to be determined. As indicated above total grant project costs are at $400,000 with $250,000 requested grant funding and the rest in in -kind contributions. 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 Potential buyers are the communities of Bethel and the 12 villages in the Kuskokwim region that would be served by a Kuskokwim Region Hydroelectric facility. The 1980 K:iseralik reconnaissance study of this project demonstrated energy costs of 18¢ per kwh as opposed to 30p per kwh for continued diesel generation with a medium interest rate of 7%. In today's dollars that could equate to approximately 23¢ per kwh opposed to 38¢ per kwh based upon conservative estimates of inflation costs. 2007 PCE reports indicate costs of 40¢ per kwb. to 60¢ per kwh without PCE adjustments for continued diesel power generation demonstrating greater potential savings per household. There would be not rate of return on any grant funding for the project. The benefits from grant funding would be passed straight through to the consumer. Return on equity would be in accordance with rates allowed by the Regulatory Commission for Alaska, and as a non-profit entity, rates will be designed to cover debt and operating expenses and appropriate reserve funds to maintain financial integrity of the company. 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Download the form, complete it, and submit it as an attachment. Document any conditions or sources your numbers are based on here. AEA 09-004 Grant Application Page 17 of 20 9/3/2008 /NO ALASKA Renewable Energy Fund 4MULD ENERGY AUTHORITY Grant Application 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 feasibility analysis will help determine the operations and management proposed for a Kuskokwim Region Hydroelectric project. At present it is proposed that the local utilities would consider consolidation under a regional wholesale non-profit utility that would organize all the local utilities together. The Board of Directors would include one member from each of the participating village utilities. Other organizational concepts may be explored including the development of the project by an existing utility or investment by an outside utility such as an Independent Power Producer for the development, operations and management. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. See attached information from the attached excerpt of 1980 Kiseralik Reconnaissance Study and Chikuminuk Report. Further economic analysis is proposed to be undertaken as part of this proposed feasibility analysis. It is anticipated that two primary analyses will be performed. First there will be an economic analysis that includes a net present worth, life -cycle analysis that makes a comparative assessment of all viable energy options. The second analysis will be of a financial nature. It will assess financial options for developing the most viable project. This may include a mix of debt and grant funding similar to what has been done for the successfully developed Four Dam Pool and the Bradley Lake hydropower projects. These analyses will be conducted under the regional umbrella of a Bethel area Integrated Resource Plan. 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 These issues are yet to be determined through the feasibility analysis of this proposed project. Some information is available in the aforementioned Kiskeralik Reconnaissance Study. See attached. As a minimum, however, the project has the capability of displacing as much as 10 million gallons of diesel fuel annually. And of course the intangible benefits of the project are that the project will save a depleting oil resource, it will eliminate millions of tons of greenhouse AEA 09-004 Grant Application Page 18 of 20 9/3/2008 /Z� GNIED ALASM Renewable Energy Fund Grant Application gas from the atmosphere, and it will reduce the amount of Power Cost Equalization that the State of Alaska will need to expend in the region. Finally, the project will strengthen the economic viability of the region. 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 ar applicant. Include an estimate of budget costs by tasks using the form - GrantBudget.xls All the organizations mentioned above as being participants in the AVCP Calista Regional Biennial Energy Plan 2008-2010 and/or board member organizations of Nuvista Light and Electric Cooperative that is undertaking this feasibility analysis under the auspices of AVCP Regional Housing Authority is expected to provide additional inkind contributions to this project. It is estimated that this inkind contributed effort will be approximately $150, 000 total. Budget costs for the feasibility analysis conducted by engineering firms and related technicians would be as follows: Project Management Engineer $100,000 Feasibility Design Development Project Hydrology and Power Output $20,000 Dam, Intake and Power Conduit $10,000 Hydraulic Production Plant $10,000 Transmission Plant $20,000 General Plant $20,000 Project Cost Estimate Project Development Schedule $5,000 Geotechnical Analysis $10,000 Land Status and Transmission Line Routing $10,000 Environmental Permitting Analysis $15,000 Public Meetings $5,000 Economic Feasibility Analysis $10,000 Regional Wholesale Utility Planning and Development $5,000 Prepare Draft and Final Report $10,000 $250,000 These are estimates to be further finalized with the development of the scope of work at the beginning of the project. AEA 09-004 Grant Application Page 19 of 20 9/3/2008 ,� ALASKA Renewable Energy Fund ENERGY AUTHORITY Grant Application SECTION 7 — ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Resumes of Applicant's Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4 B. Cost Worksheet per application form Section 4.4.4 C. Grant Budget Form per application form Section 6. D. An electronic version of the entire application per RFA Section 1.6 E. Governing Body Resolution per RFA Section 1.4 Enclose a copy of the resolution or other formal action taken by the applicant's governing body or management that: - authorizes this application for project funding at the match amounts indicated in the application - authorizes the individual named as point of contact to represent the applicant for purposes of this application - states the applicant is in compliance with all federal state, and local, laws including existing credit and federal tax obligations. F. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations. Print Name Ron Hoffman Signature Title PRESIDENT/CEO Date November 7, 2008 AEA 09-004 Grant Application Page 20 of 20 9/3/2008