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HomeMy WebLinkAboutReynolds Creek Hydroelectric Project AppRenewable Energy Fund Grant Application    AEA-09-004 Renewable Energy Grant Application First Round Phase IV (Construction/Commissioning/Operations/Reporting PROJECT: Reynolds Creek Hydroelectric Project LOCATION: Prince of Wales Island, Alaska OWNER: Haida Power, Inc., a joint venture between Haida Corporation and Alaska Power & Telephone       Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 1 of 25 9/2/2008 Application Forms and Instructions The following forms and instructions are provided for preparing your application for a Renewable Energy Fund Grant. An electronic version of the Request for Applications (RFA) and the forms are available online at http://www.akenergyauthority.org/RE_Fund.html The following application forms are required to be submitted for a grant recommendation: Grant Application Form GrantApp.doc Application form in MS Word that includes an outline of information required to submit a complete application. Applicants should use the form to assure all information is provided and attach additional information as required. Application Cost Worksheet Costworksheet.doc Summary of Cost information that should be addressed by applicants in preparing their application. Grant Budget Form GrantBudget.xls A detailed grant budget that includes a breakdown of costs by task and a summary of funds available and requested to complete the work for which funds are being requested. Grant Budget Form Instructions GrantBudgetInstr.pdf Instructions for completing the above grant budget form. • If you are applying for grants for more than one project, provide separate application forms for each project. • Multiple phases for the same project may be submitted as one application. • If you are applying for grant funding for more than one phase of a project, provide a plan and grant budget for completion of each phase. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. • If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. REMINDER: • Alaska Energy Authority is subject to the Public Records Act, AS 40.25 and materials submitted to the Authority may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority web site after final recommendations are made to the legislature. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 2 of 25 9/3/2008 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Haida Power, Inc. Type of Entity: Utility (Certificate of Public Convenience and Necessity will be applied for in October) Mailing Address PO Box 89 Hydaburg, AK 99222  Physical Address 8th and Cedar Street Hydaburg, AK 99222 Telephone (907) 285-3721 Fax (907) 285-3944 Email toddtew@starband.net 1.1 APPLICANT POINT OF CONTACT Name Todd Tew Title General Manager Mailing Address PO Box 89 Hydaburg, AK 99222 Telephone (907) 285-3721 Fax (907) 285-3944 Email toddtew@starband.net 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) An electric utility holding a certificate of public convenience and necessity under AS 42.05, or Note 1 An independent power producer, or A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes or No 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 or No 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 or No 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.) Note 1: Haida Corporation currently holds the FERC license for Reynolds Creek. Haida Power, Inc., has been formed and will be a joint venture between Haida Corporation and Alaska Power & Telephone, with AP&T owning no less than 25% but no more than 49% of Reynolds Creek. Haida Power is now preparing an application for a Certificate of Public Convenience and Necessity for submittal to the Regulatory Commission of Alaska later this month. Haida Power will be a regulated utilty. X Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 3 of 25 9/3/2008 SECTION 2 – PROJECT SUMMARY Provide a brief 1-2 page overview of your project. 2.1 PROJECT TYPE Describe the type of project you are proposing, (Reconnaissance; Resource Assessment/ Feasibility Analysis/Conceptual Design; Final Design and Permitting; and/or Construction) as well as the kind of renewable energy you intend to use. Refer to Section 1.5 of RFA. Project Type: Construction Technology: Hydroelectric (limited storage) 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 Reynolds Creek Hydroelectric Project (“Reynolds Creek” or the “Project”) is a 5.0 MW hydroelectric resource to be constructed on Prince of Wales Island approximately ten miles east of Hydaburg. The Project will interconnect with the existing transmission grid on the island and will be used by the residents and businesses of Craig, Klawock, Hollis, Hydaburg, Thorne Bay, and Kasaan. In addition, once the interconnected grid is expanded to Coffman Cove and Naukati, those two communities will also directly benefit from Reynolds Creek. The Project will be constructed and owned by the Haida Power, Inc., a joint venture between the Haida Corporation and Alaska Power & Telephone. 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 total cost of Reynolds Creek, including costs spent to date, is estimated to be $17 million. Haida Power, through the Haida Corporation, has spent approximately $2 million of its own funds for initial studies, FERC licensing activities, initial permitting, and preliminary design. Another $1.4 million will be contributed by Haida Power such that 20 percent of the Project costs will be equity. State grants of $3.1 million have been received thus far ($1 million subject to approval by the Budget Committee) that will pay for final design and permitting activities as well as initial procurement. The remaining amount, $10.5 million, is being sought from this grant. As discussed in Section 4.4.3, Haida Power will be a regulated utility, and benefits from grants will be passed through directly to the ratepayers. Equity 3,425,000$ 20% Grants Previous State 3,100,000 Previous Federal 120,000 Current 10,500,000 Total Grants 13,720,000 80% Project Total 17,145,000$ Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 4 of 25 9/3/2008 2.4 PROJECT BENEFIT Briefly discuss the financial benefits that will result from this project, including an estimate of economic benefits(such as reduced fuel costs) and a description of other benefits to the Alaskan public. As explained in more detail in Section 4.2.1, two hydroelectric resources, Black Bear Lake and South Fork, provide most of the generation on Prince of Wales Island. However, current load levels require supplemental diesel generation, and this use is increased during dry water years or in years with significant freezing conditions. A cold storage facility is now being constructed in Craig, further increasing the need for diesel generation. Reynolds Creek will eliminate the need for most, if not all, of the supplemental diesel requirements for a number of years. Financial benefits to the ratepayers will accrue through the near elimination of diesel costs and the related costs of diesel plant operations. Fuel costs in the interconnected grid have averaged approximately $3.22/gallon for the first eight months of 2008, reaching a high of $4.08/gallon in July. At an average fuel efficiency of 12.7 kWh (sold)/gallon, this equates to $0.254/kWh of fuel costs that will be displaced. As a regulated utility, Haida Power will pass the benefits of grants directly on to the ratepayers. Detailed projections of financial benefits to the consumers are provided in Section 5 of this application. Benefits from Reynolds Creek are not limited to quantifiable financial benefits. Power users will also benefit from the increased stability in the cost of power. All residents on the island and in the surrounding area will benefit from the increased use of clean energy production. Reynolds Creek has the potential for allowing the entire Prince of Wales Island to have 100 percent renewable energy generation. Once the transmission grid is expanded to Coffman Cove and Naukati, only Whale Pass will be electrically isolated, and a small hydro is being investigated for that site. 2.5 PROJECT COST AND BENEFIT SUMARY Include a summary of your project’s total costs and benefits below. 2.5.1 Total Project Cost (Including estimates through construction.) $ 2.5.2 Grant Funds Requested in this application. $ 2.5.3 Other Funds to be provided (Project match) $ 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $ 2.5.5 Estimated Benefit (Savings) $ 2.5.6 Public Benefit (If you can calculate the benefit in terms of dollars please provide that number here and explain how you calculated that number in your application.) $ Since Reynolds Creek is well along in development and has been funded by a number of sources, an alternative table is provided on the following page. Estimated savings and public benefits summarized in the table are detailed in the attachment provided in Section 7. See Table on next page Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 5 of 25 9/3/2008 Total Project Costs Recon/Prelim Design/Licensing/Permitting/Misc 2,120,000$         Current Phase (Final Design/Survey/Final Permits) 2,000,000          Phase 4 ‐ Construction 13,000,000        Power Sales Agreement/Regulatory 25,000                Total 17,145,000$      Equity to be Contributed by Haida Power 3,425,000          20% Grants Previous Federal 120,000              State 3,100,000          Subtotal ‐ Previous Grants 3,220,000          Current Request 10,500,000        Total Grants 13,720,000       80% Estimated Benefits (6% Real Discount Rate)52,000,000$      Public Benefits (6% Real Discount Rate)52,000,000$      Note:  The above benefits are detailed in the economic analysis provided as an attachment in Section 7. As a regulated utility, Haida Power's will pass the benefits of all grants directly through to the ratepayers. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 6 of 25 9/3/2008 SECTION 3 – PROJECT MANAGEMENT PLAN Describe who will be responsible for managing the project and provide a plan for successfully completing the project within the scope, schedule and budget proposed in the application. 3.1 Project Manager Tell us who will be managing the project for the Grantee and include a resume and references for the manager(s). If the applicant does not have a project manager indicate how you intend to solicit project management Support. If the applicant expects project management assistance from AEA or another government entity, state that in this section. Reynolds Creek will be owned by Haida Power, Inc., a joint venture between the Haida Corporation (a village corporation located in Hydaburg, Alaska) and Alaska Power & Telephone (the parent company of Alaska Power Company, the local electric utility on Prince of Wales Island). Project management of Reynolds Creek will lie with Mr. Todd Tew, General Manager of the Haida Corporation, and Mr. Robert Grimm, President and CEO of Alaska Power & Telephone. The two bring the financial and construction experience required to successfully complete the Project within the scope, schedule, and budget as described herein. Mr. Tew is a Certified Public Accountant and is well experienced in managing public funds. Mr. Grimm has been with Alaska Power & Telephone for 36 years, and through his leadership, numerous other hydroelectric projects have been brought on line in Southeast Alaska. Résumés of both are provided 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.) All preliminary and major permitting activities have been accomplished for Reynolds Creek, and final design is now at the 40 percent level. Part of the Project will be constructed on a design/build basis by AP&T since they are well experienced and total development costs can be lowered without any degradation in quality, performance, or safety. Other components will be brought to the 100 percent design level prior to release for bid and construction. To date, $3.1 million has been awarded to the Project ($1 million of this awarded in the last special session and must be approved by the Budget Committee), and these amounts are more than sufficient to complete the design. A chart showing the remaining activities required to complete the Project is provided below. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 7 of 25 9/3/2008 Task FINAL DESIGN AND CONSTRUCTION MANAGEMENT Design Construction management MOBILIZATION CONSTRUCTION Access Facilities Diversion Structure Penstock Powerhouse Transmission COMPLETION Start-up and testing Demobilization Activities within dashed box to be completed with this grant request OTHER Power Sales Agmnt RCA Certificate 201020092008 2011 Bid requests of major equipment with long-lead times will be issued as soon as total Project financing is in place. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 8 of 25 9/3/2008 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. Detailed tasks and schedules are provided below. All feasibility studies have been completed, and the remaining decision point is the Plan of Finance if sufficient grant funds are not received. Task Start Date End Date FINAL DESIGN AND CONSTRUCTION MANAGEMENT Marine access, roads, and transmission line 7/1/2008 4/1/2009 Balance of construction 7/1/2008 10/1/2009 Construction management 4/1/2009 12/31/2010 MOBILIZATION Initial mobilization 3/1/2009 4/1/2009 Second mobilization 10/1/2009 10/31/2009 ACCESS FACILITIES Deer Harbor marine access 4/1/2009 5/31/2009 Copper Harbor marine access 6/1/2009 6/30/2009 Existing road improvements 7/1/2009 7/31/2009 New access roads 8/1/2009 9/30/2009 DIVERSION STRUCTURE Diversion during construction 4/1/2010 10/31/2010 Intake civil works and left abutment 5/1/2010 7/31/2010 Spillway and right abutment 8/1/2010 10/31/2010 Intake mechanical and electrical 11/1/2010 11/31/2010 PENSTOCK Pipe procurement 10/1/2009 4/1/2010 Penstock upper section installation 9/1/2010 11/30/2010 Penstock lower section installation 11/1/2009 8/31/2010 POWERHOUSE Generating equipment procurement 1/1/2009 3/31/2010 Powerhouse foundation 10/1/2009 1/1/2010 Powerhouse superstructure and crane 2/1/2010 4/1/2010 Generating equipment installation 4/1/2010 11/30/2010 TRANSMISSION FACILITIES Transmission equipment and materials procurem 3/1/2009 7/31/2009 Transmission equipment installation 12/1/2009 2/28/2010 Transmission line installation 4/1/2009 11/30/2009 COMPLETION Start‐up and testing 12/1/2010 12/31/2010 Demobilization 1/1/2011 4/30/2011 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 9 of 25 9/3/2008 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. Alaska Power & Telephone, parent company of JV partner Alaska Power Company, will be the primary construction firm. In the last 13 years, AP&T has completed four hydroelectric projects in Southeast Alaska: • Black Bear Lake Project, 4.5 MW, Prince of Wales Island, 1995 • Goat Lake Project, 4.0 MW, Skagway, 1998 • South Fork Project, 2.0 MW, Prince of Wales Island, 2005 • Kasidaya Creek Project, 3.0 MW, Skagway, 2008 For the first two of these projects, AP&T managed the civil works construction by contractors and constructed most of the mechanical and electrical works with its own personnel. Both of these projects utilized highline systems for installing the penstock, which is a technique likely to be used for Reynolds Creek. For the latter two projects (South Fork and Kasidaya Creek), AP&T performed nearly all of the work using it own personnel, since competent contractors were not readily available. The Kasidaya Creek Project is particularly relevant because the primary access to the site is by watercraft, which is also the case for Reynolds Creek. AP&T already owns an LCM-8 landing craft and a 34-ft crewboat (both USCG certified) that will be available in late 2008 once the Kasidaya Creek Project is 100% complete. Other major construction equipment owned by AP&T that can be used at Reynolds Creek includes: • Kobelco 400 excavator • Kobelco 200 excavator • Komatsu 200 excavator • Caterpillar 416C backhoe • Mack fuel truck • Mack dump truck • FL concrete mixer truck • Morooka MST 2000 tracked dump truck • Morooka MST 2200 tracked dump truck • Fire trailers (2) • 3,000-gallon double-walled fuel tank Other equipment necessary for the construction will be purchased or leased as necessary. Alaska Power & Telephone will utilize the expertise of the following key personnel, all of whom have had the same roles in the South Fork and Kasidaya Creek construction: • Vern Neitzer, Construction Manager • Roger Bargar, Construction Superintendent (except transmission line) • Larry Coupe, Civil Engineer • Ben Beste, Mechanical Engineer • Bob Berreth, Electrical Engineer Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 10 of 25 9/3/2008 Résumés for these individuals are provided in Section 7 of this application. Other key personnel will be added to the construction team as shown below; these positions have not yet been filled, and therefore resumes are not provided: • Civil construction inspector (full-time HDR Engineering, Inc.(“HDR”) employee expected) • Electrical/transmission inspector (periodic inspection by HDR employee) • Environmental compliance monitor (ECM, local hire expected) The résumé of Michael Stimac, the lead Project engineer from HDR, is included in Section 7. Haida Power will obtain the major generating equipment for the project through a competitive bidding process managed by the design engineer (HDR). Only well-known suppliers with international scope will be allowed to bid to ensure that high quality generating equipment is installed. As shown in the construction schedule, Haida Power anticipates awarding the equipment contract by March 31, 2009. Other equipment for the project, such as the powerhouse crane, control system, valves, penstock pipe, and transformers will be obtained either by competitive bids or by negotiated purchase orders with vendors previously used by Alaska Power & Telephone in its prior construction projects. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. During Project construction, communications within the team will consist of: • Weekly conference calls among the Construction Manager, Construction Superintendents, Design Engineer, and representatives of Haida Power. • Weekly reports by the ECM regarding compliance with environmental requirements • Bi-weekly written reports from the Construction Manager and Design Engineer detailing work completed, work to be completed in the next two weeks, and potential problems. • Periodic site visits by the Construction Manager, Design Engineer, and representatives of Haida Power. These internal discussions will form the basis of monthly reports to AEA. The reports will show in a clear and concise manner progress made on the various tasks/milestones, the work to be accomplished in the ensuing month, and potential problems and corrective actions to be considered or implemented. Cost data as described above will also be provided on a monthly basis. Microsoft Project or similar software will be used to develop and maintain schedule and budget information; updating of the management files will be on a bi-weekly basis. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 11 of 25 9/3/2008 3.6 Project Risk Discuss potential problems and how you would address them. Resource construction always carry certain amounts of uncertainty be it technical or financial. Some of the potential risks and mitigating actions being taken by Haida Power for Reynolds Creek include the following. Permitting – HDR, a well-respected and international engineering firm, has led and is leading the efforts on permitting. Most of the permits have been obtained, and the remaining permits will be issued by the end of the first quarter of 2009. For a list of permits and their status, please refer to Section 4.3.3 of this application. Design – HDR is also performing design activities and is now at the 40 percent level. Since AP&T is well equipped to construct certain components of the Project, the design of those activities will not be taken further but rather constructed on a design/build basis in an effort to lower Project costs. Design of the remaining elements will be completed in the first quarter of 2009. The FERC license requires design documents to be submitted to FERC for review. Seismic – Project components are being designed appropriately for seismic activity, although it is noted that Prince of Wales Island is not in a high-risk seismic zone. Two other hydroelectric resources exist on the island. Underground Construction – The current design for the project does not include a significant amount of underground construction, which can be fraught with cost overrun potential. Geotechnical investigations, including core borings, have been made at the diversion and powerhouse area to provide an adequate level of knowledge about ground conditions at those sites. Cost Overruns – The Project budget includes an appropriate level of contingency. It is noted, however, that the Plan of Finance would allow additional capital requirements while retaining benefits to the ratepayers. Please refer to Section 5. Operations – All major elements of the Project will carry standard warranties as appropriate. Operations and maintenance of the Project will be performed by APC in conjunction with similar activities on their Black Bear Lake and South Fork hydroelectric projects on Prince of Wales Island. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 12 of 25 9/3/2008 SECTION 4 – PROJECT DESCRIPTION AND TASKS • Tell us what the project is and how you will meet the requirements outlined in Section 2 of the RFA. The level of information will vary according to phase of the project you propose to undertake with grant funds. • If you are applying for grant funding for more than one phase of a project provide a plan and grant budget for completion of each phase. • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. The Reynolds Creek Project will be a 5-megawatt hydroelectric resource with limited storage located approximately ten miles east of Hydaburg. Annual energy production during an average water year is estimated to be 19.3 million kilowatt-hours, subject to usability in the area load. The Project is being designed to accommodate increased storage in the future that would allow for better matching generation with load requirements. This feature is not felt to be warranted at this time but can be added as loads increase. Advantages: As will be discussed in the next subsection, diesel generation must be used to supplement the existing hydroelectric generation on the island. Reynolds Creek will eliminate the need for diesel generation in the interconnected grid until loads grow to the point exceeding total hydroelectric capability. While other small hydroelectric resources are available in the area, none have the energy potential of Reynolds Creek, nor are they ready for immediate construction. In addition, there are other lakes in the mountains above Reynolds Creek whose future development (if load growth warrants) would be facilitated by the Project. Tidal energy has some potential in the Prince of Wales Island area, but any such development would take many years to reach fruition. Haida Power is not aware of any significant wind and geothermal resources on the island. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 13 of 25 9/3/2008 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation. The power system on Prince of Wales Island is comprised of two “areas” – the interconnected grid and the non-interconnected area. Within the interconnected grid there are five communities: Craig, Klawock, Hollis, Hydaburg, Thorne Bay, and Kasaan. Generation is primarily from two hydroelectric resources, Black Bear Lake and South Fork, with diesel generation used for supplemental requirements. The non-interconnected area includes Naukati, Coffman Cove, and Whale Pass, each electrically isolated. Generation to these three villages is provided from diesel generation at each location. Separate from this application, AP&T is applying for a grant to extend the interconnected grid to Naukati and Coffman Cove so that the ratepayers will gain access to hydro resources on the island. AP&T is also investigating a small hydro project at Neck Lake to serve Whale Pass. A summary of the installed generation on the island is provided in the following table. Efficiency for the interconnected grid is provided as an average since the system is dispatched taking into account net loads (after hydro), diesel unit sizes, stability, and other operational issues. Fuel Name/ Location Intercon- nected Number of Units Efficiency1 Size (kW)Age Hydro Black Bear Lake Yes 4,500 1995 Hydro South Fork Yes 2,300 2005 Diesel Craig Yes 6 6,835 Diesel Thorne Bay Yes 2 1,075 Diesel Kasaan Yes 2 180 Diesel Hollis Yes 1 250 Diesel Hydaburg Yes 3 1,010 12.1 Diesel Coffman Cove No2 3 13.1 855 Pre 94 Diesel Naukati No2 312.5483 Diesel Whale Pass No 3 12.2 295 Pre 96 1 Amount shown for 2007 in kWh generated per gallon. 2 Grant application being submitted by AP&T to interconnect these two load centers to the grid. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 14 of 25 9/3/2008 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. Although the installed capacity of APC’s existing hydroelectric resources are greater than the peak demand of the interconnected grid, diesel generation is required due to water not being available for generation. Icing conditions also curtail hydro generation. The generation on Prince of Wales Island since the beginning of 2006 is summarized in the following table. South Fork hydro became operational in late 2005. Black Bear South Fork Total Hydro Diesel Total Coffman Cove Naukati Whale Pass 2006 19,382 5,156 24,538 2,008 26,546 902 502 340 2007 20,315 6,961 27,276 243 27,519 944 528 298 2008 (Jan - Aug) 8,650 4,073 12,723 4,639 17,362 677 376 216 Interconnected Grid Isolated Load Centers (All Diesel) Annual Generation (MWh) Reynolds Creek will be fully incorporated with the other hydro resources so that the renewable resources will be dispatched as an integrated system. Reynolds Creek is also lower in altitude than the other two hydros and will not have the icing problems during the winter months. Therefore, it is expected that the Project will eliminate essentially all diesel generation in the interconnected grid. When the grid is expanded to Coffman Cove and Naukati, that diesel generation will also be eliminated. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 15 of 25 9/3/2008 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The following table provides a summary of the total energy sales over the past five years. Grid Coffman Cove Naukati Whale Pass 2004 23,548            729                463                307                 2005 23,617            722                501                309                 2006 24,049            833                444                280                 2007 24,809            863                464                252                 2008 (thur 8/08) 16,029            615                337                182                 Grid currently consists of Craig, Hollis, Hydaburg, Klawock, and Thorne Bay. Other, large loads are being added to the system. The City of Craig recently started work on a cold storage facility and is expected to be operational in early 2010. This facility is being constructed to support the fishing industry, and much of the operations will be seasonal in nature. However, the facility will be open the entire year with some basic maintenance load during the off-season months. Preliminary estimates of power usage are up to 3,000 MWh per year. This load addition may be offset by the loss of a floating processor that recently established operations in Craig. The floating processor, with a load of approximately 686 MWh per year, has a three-year lease with the City of Craig for dock space, and it is unknown whether they will continue operations once the City’s cold storage facility is completed. In May 2008, Alaska Power Company was contacted by a representative of a mine being developed near Kasaan. Operations are estimated to begin in late 2009/early 2010 with power requirements averaging 1,100 kW for nine months of the year, or 7,227 MWh per year. Other mine prospects are being investigated including the Niblack Mine, a gold/silver/zinc/ copper prospect in the southeastern portion of the island near Moira Sound. Another prospect on the island containing uranium and precious metals is being investigated for re-opening. Without Reynolds Creek, any one of these mine loads or even the cold storage facility would create significant needs for diesel generation. Reynolds Creek will provide the long-term/low- cost power required for the development of these and other potential loads. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 16 of 25 9/3/2008 4.3 Proposed System Include information necessary to describe the system you are intending to develop and address potential system design, land ownership, permits, and environmental issues. 4.3.1 System Design Provide the following information for the proposed renewable energy system: • A description of renewable energy technology specific to project location • Optimum installed capacity • Anticipated capacity factor • Anticipated annual generation • Anticipated barriers • Basic integration concept • Delivery methods Renewable energy technology specific to location – The Project will be a conventional hydroelectric project. Hydroelectric technology is well developed, and provides most of the renewable energy generated in the world in general, and Southeast Alaska in particular. The Project will utilize the abundant rainfall and steep topography afforded by the Reynolds Creek basin to generate renewable energy. Other hydro sites may exist in the area but are much smaller than Reynolds Creek and would have significantly less energy potential. Tidal generating technology may be applicable to the area but is considered too experimental and expensive to compete with Reynolds Creek. Wind, biomass, wave, and other renewable technologies are not suitable to the area. Optimum capacity - When originally investigated, Hydaburg was not interconnected with the Prince of Wales Island transmission grid, and the Project was scoped as a 1.5-megawatt facility with expansion to 5.0 megawatts when Hydaburg became interconnected. Since Hydaburg is now interconnected, the Project will be developed initially at the licensed capacity of 5.0 megawatts. Anticipated capacity factor – Studies performed by HDR indicate the annual capacity factor is expected to be approximately 44 percent. Anticipated annual generation – 19,300,000 kWh Anticipated barriers – None Basic integration concept – The Prince of Wales Island system is already a hydro-based system with diesel backup. Integrating another hydro project to the system will not present any difficulties. The power sales agreement between Haida Power and Alaska Power Company will specify that APC will purchase 6 million kilowatt-hours of Reynolds Creek energy on a fixed payment basis. Thus there will be no economic incentive to not dispatch Reynolds Creek, and the Project will be fully integrated into the system. Dispatch of the three hydro resources on the island will essentially be as follows: 1. Minimum flow requirements per Black Bear Lake Hydro’s licensing requirements. 2. South Fork (run of river with no storage) 3. Minimum purchase requirements from Reynolds Creek Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 17 of 25 9/3/2008 4. Remaining capacity of Black Bear Lake 5. Remaining capacity of Reynolds Creek. Delivery method – Reynolds Creek will be interconnected to the grid with a 10.9-mile, 34.5-kV transmission line that is considered part of the Project and included in Project costs. The Project location and general design documents are provided as an attachment in Section 7. 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 Project will be on both Haida Corporation and Sealaska land. (See the attached map in Section 7.) Sealaska has proposed a set of fees, and an agreement between Haida Power and Sealaska is now being negotiated around that fee structure. 4.3.3 Permits Provide the following informationas it may relate to permitting and how you intend to address outstanding permit issues. • List of applicable permits • Anticipated permitting timeline • Identify and discussion of potential barriers The following major permits have been received to construct, operate, and maintain the Project subject to certain conditions: • Federal Energy Regulatory Commission License (FERC Project No. 11480) • Coastal Zone Consistency Determination No. AK 9902-06JJ from the State of Alaska, Office of the Governor, Office of Management and Budget, Division of Governmental Coordination • Fish Habitat Permit FG-00-I(POW)-0018 from the Alaska Department of Fish and Game • Corps of Engineers Permit No. 2-950127 from the Department of the Army, U.S. Army Engineer District, Alaska The following major permitting actions have yet to be completed: • Easement from the Alaska Department of Natural Resources for the transmission line crossing of Hetta Inlet pending determination of the final routing of the line. It is anticipated that the applications for this permit and the temporary permits for barge facilities in Deer Bay and Copper Harbor will be submitted to the ADNR no later than January 2009. • Water rights from the Alaska Department of Natural Resources for use of water from Lake Mellen pending receipt by Haida Corporation from Sealaska of a possessory interest in the property where the water is to be used. Articles of the FERC License require Haida Corporation to file for approval certain environmental plans, as well as design drawings, specifications, and reports. HDR has prepared five of the plans and has submitted them for review by various state and gederal agencies. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 18 of 25 9/3/2008 Following receipt of agency comments, they were submitted to FERC. The remaining seven plans are in various stages of development and will all be submitted to FERC by the end of 2008. The design drawings, specifications, and reports are currently being developed by HDR and will be submitted to FERC for approval when complete. The construction schedule provided in section 3.2 includes sufficient time for obtaining FERC approval of these items. A copy of the FERC license is provided in Section 7. Copies of other permits, permits, and more detailed design documents are available on request. 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 Reynolds Creek has undergone a thorough environmental review by the FERC and other federal and state agencies. All known environmental issues have been addressed. As a result, a Commissioner-Level Final Consistency Determination was issued by the State of Alaska, Office of the Governor, Office of Management and Budget, Division of Governmental Coordination on July 23, 1999, and the FERC issued the License for the Project on October 24, 2000. The licensing process included the preparation of an Environmental Assessment to achieve compliance with the National Environmental Policy Act. Recent additional detailed field investigations have been conducted in support of final design of the Project and in preparation for the start of construction. These activities have included coordination with the FERC, Alaska Department of Fish & Game, Alaska Department of Natural Resources, NOAA Fisheries, and the U.S. Fish & Wildlife Service. No new issues have been identified. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 19 of 25 9/3/2008 4.4 Proposed New System Costs (Total Estimated Costs and proposed Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following: • Total anticipated project cost, and cost for this phase • Requested grant funding • Applicant matching funds – loans, capital contributions, in-kind • Identification of other funding sources • Projected capital cost of proposed renewable energy system • Projected development cost of proposed renewable energy system Detailed cost information is provided in Section 7. 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 APC will act as operator of the Project, and an operating agreement between Haida Power and APC is now being drafted. Given the similarities between Black Bear Lake and Reynolds Creek, APC’s cost of operating Black Bear is used as a proxy for the cost of operations, maintenance, insurance, FERC reporting, and other on-going Project activities. An annual estimate of $225,000 for O&M and land use fees to Sealaska is being used. These on-going operating costs will be paid as described in the next subsection. No grant funding is requested for operating costs. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 20 of 25 9/3/2008 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 Power from Reynolds Creek will be sold to APC, the electric utility on Prince of Wales Island. A power sales agreement has not fully been negotiated at this time, but the concepts agreed to are the following. • APC to pay an annual fixed fee of $300,000 for the first 6 million kWh of Reynolds Creek Energy • Additional energy from Reynolds Creek shall be used if power from Black Bear Lake and South Fork is unavailable or the resources fully utilized. Additional energy shall be priced at the rate then in effect for Black Bear Lake (currently $0.0648/kWh). • APC shall not be responsible for any payments on debt associated with Reynolds Creek. Such payments shall be made from the fixed fee. • APC shall pay for all O&M until the annual net cash flow to Haida Power is $500,000 (after any debt service payments). At that time, APC shall pay 50 percent of the O&M costs until the net cash flow to Haida Power once again reaches $500,000 per year. At that time, Haida Power shall be responsible for all O&M costs. The above concept results in ratepayers on the island not paying additional amounts due to Reynolds Creek. As loads grow and Reynolds Creek is increasingly used, additional sales are priced such that ratepayers benefit from the long-term low cost of hydro. Haida Power will be a regulated utility and is now preparing an application for a Certificate of Public Convenience and Necessity. That application will include the Power Sales Agreement which must be approved by the RCA. As a regulated utility, Haida Power’s return on investment will be regulated by the RCA. Investment will be based on Project costs less all grant amounts. 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Cost worksheet provided in Section 7. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 21 of 25 9/3/2008 4.4.5 Business Plan Discuss your plan for operating the completed project so that it will be sustainable. Include at a minimum proposed business structure(s) and concepts that may be considered. Sustainability of Reynolds Creek does not start with Project operations but rather during the design stage. APC, as the local utility that will operate, maintain, and dispatch Reynolds Creek into the integrated system, is providing input to design activities to facilitate long-term operations. Once Reynolds Creek is operating, APC’s obligation to operate and maintain the Project at its expense will be central to the sustainability of Reynolds Creek. As described in Section 4.4.3, APC’s payment obligations remains in effect until loads grow and the Project generates additional revenues. At prescribed times, payment obligations shifts to Haida Power in phases. APC currently owns and operates two other hydro resources on Prince of Wales Island and four other hydro resources in southeast Alaska ranging in age from 2 - 13 years. Operations of Reynolds Creek can easily be absorbed by its crews and equipment. A number of regulatory agencies will also monitor operations and can dictate certain actions if required. These agencies include FERC, the RCA, ADF&G, ADNR, AEA, NOAA Fisheries, US Fish & Wildlife Service, and the Corps of Engineers. The business structure being implemented for the construction and operations of Reynolds Creek is as shown below. Haida Hydro, Inc. Regulatory Finance Todd Tew Operations Haida Corporation Alaska Power & Telephone Owner's Engineer HDR Construction Bob Grimm 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. An analysis prepared by the Financial Engineering Company summarizing the projected economic benefits of Reynolds Creek is provided in Section 7. This grant application is for Construction Phase, and recommendations for additional project development work are not applicable. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 22 of 25 9/3/2008 SECTION 5– PROJECT BENEFIT Explain the economic and public benefits of your project. Include direct cost savings, and how the people of Alaska will benefit from the project. The benefits information should include the following: • Potential annual fuel displacement (gal and $) over the lifetime of the evaluated renewable energy project • Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or avoided cost of ownership) • Potential additional annual incentives (i.e. tax credits) • Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available) • Discuss the non-economic public benefits to Alaskans over the lifetime of the project A report prepared by the Financial Engineering Company summarizing the projected economic benefits of Reynolds Creek is provided in Section 7. Based on that information, the following summary statements are provided. • Potential annual fuel displacement: o 1.6 million gallons o $6.4 million at $4.00/gallon • Anticipated annual revenue: o Rates that Haida Power sets for Reynolds Creek will be regulated by RCA. o Initially set at $300,000/year for the first 6 million kWh of annual sales plus the then-current rate for Black Bear Lake (now $0.0648 cents/kWh) for additional sales. o Rates will be adjusted in future to recover revenue requirements. o Revenue requirements must be approved by the RCA and include: ƒ O&M (at the time Haida Power is responsible for such payments) ƒ Depreciation (net of all grants) ƒ Interest on debt ƒ Taxes ƒ Return on investment (net of all grants) ƒ Other income (green tags, etc.) • Potential additional annual incentives: None • Potential additional annual revenue streams: It is not known at this time the amount, if any, of any revenues that may be gained from green tags or renewable energy credits. As a regulated utility, Haida Power will pass these benefits directly through to the ratepayer via lower rates. • Non-economic Benefits: o Eliminates the price fluctuations in power associated with diesel generation o The ability to project power costs with more certainty will attract business and industry. o The use of fossil generation will be eliminated in the grid, thereby creating a cleaner environment. o The dock near the powerhouse at tidewater can be used in emergencies by boaters. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 23 of 25 9/3/2008 SECTION 6 – GRANT BUDGET Tell us how much your total project costs. Include any investments to date and funding sources, how much is requested in grant funds, and additional investments you will make as an applicant. Include an estimate of budget costs by tasks using the form - GrantBudget.xls As described throughout this grant application, the total cost of Reynolds Creek is estimated to be $17 million, including all costs spent to date. Initial reconnaissance studies, preliminary design, and licensing and permitting activities were funded from internal equity and a small federal grant ($120,000). By the end of 2007, internal equity totaled approximately $2 million. Since the beginning of 2008, internal equity has been used to move the Project forward. State grants during 2008 totaled $3.1 million ($1 million of which must be approved by the Budget Committee). Costs during 2008 and through Project completion will be funded by equity, the existing State grants, and proceeds from this grant. Total equity will be targeted at 20 percent of total Project costs ($3.4 million). The participants in Haida Power (Haida Corporation and AP&T) are committed to the completion of Reynolds Creek so that the benefits may flow to the ratepayers of Prince of Wales Island. The form GrantBudget.xls is provided in Section 7. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 25 of 25 9/3/2008 Section 7 Attachments: 1. Corporate Resolution (Section 1.2.2) 2. AP&T Resolution (Section 1.2.2) 3. Prince of Wales Community Advisory Council Letter of Support (Section 1.2.2) 4. Southeast Conference Letter of Support (Section 1.2.2) 5. Central Council of Tlingit and Haida Tribes Letter of Support (Section 1.2.2) 6. Résumés: a. Todd Tew (Section 3.1) b. Bob Grimm (Section 3.1) c. Vern Neitzer (Section 3.4) d. Roger Bargar (Section 3.4) e. Larry Coupe (Section 3.4) f. Ben Beste (Section 3.4) g. Bob Berreth (Section 3.4) h. Mike Stimac (Section 3.4) i. HDR, Inc. (Section 3.4) 7. Project Layout and General Design Documents (Section 4.3.1) 8. Land Use Map (Section 4.3.2) 9. FERC License (Section 4.3.3) 10. Cost Data and GrantBudget.xls (Sections 4.4.1 and 4.4.4) 11. Economic Analysis and Benefits (Sections 4.4.6 and 5) ATTACHMENTS    7.1 Corporate Resolution 7.2 AP&T Resolution 7.3 Prince of Wales Community Advisory Council Letter of Support 7.4 Southeast Conference Letter of Support 7.5 Central Council of Tlingit and Haida Tribes Letter of Support 7.6 Résumés: 7.6.1 Todd Tew 7.6.2 Robert Grimm 7.6.3 Vern Neitzer 7.6.4 Roger Bargar 7.6.5 Larry Coupe 7.6.6 Ben Beste 7.6.7 Bob Berreth) 7.6.8 Mike Stimac 7.6.9 HDR, Inc. 7.7 Project Layout and General Design Documents 7.8 Land Ownership Map 7.9 FERC License 7.10 Cost Data and GrantBudget.xls 7.11 Economic Analysis and Benefits 7.1 CORPORATE RESOLUTION  7.2  AP&T RESOLUTION  7.3  PRINCE OF WALES COMMUNITY ADVISORY COUNCIL  LETTER OF SUPPORT  PRINCE OF WALES COMMUNITY ADVISORY COUNCIL Chairman: Jon Bolling, Craig PO Box 725 Vice Chairman: Art King, Naukati Craig, AK 99921 Secretary/ (907) 826-3275 Treasurer: Elaine Price, Coffman Cove FAX: (907) 826-3278 PARTICIPATING COMMUNITIES: Coffman Cove, Craig, Hollis, Hydaburg, Kasaan, Klawock, Naukati, Thorne Bay, Whale Pass September 24, 2008 Alaska Energy Authority Renewable Energy Grant Program 813 West Northern Lights Blvd. Anchorage, AK 99503 To Whom It May Concern: The Prince of Wales Community Advisory Council (POWCAC) is an association of communities on Prince of Wales Island dedicated to improving the quality of life on the Island. POWCAC achieves this goal by acting in an advisory capacity to State and Federal agencies concerning issues that affect Prince of Wales communities. POWCAC met on September 23, 2008 and voted to support applications from Alaska Power and Telephone for funding from the Renewable Energy Grant Program for two projects: the Prince of Wales Line Extension project, and the Reynolds Creek Hydroelectric Project. The two projects have many benefits for POW Island residents. Both projects reduce dependence upon diesel-generated electricity. The line extension project will tie both Coffman Cove and Naukati into the existing hydroelectric powered POW electrical grid, putting those communities on renewable hydro power as their primary electric source. In addition to displacing diesel generation of electricity, the project will also lower dramatically the kilowatt hour cost that the two communities currently pay, from more than $0.60 per kilowatt hour to around $0.20 per kilowatt hour. In extending the transmission line to Coffman Cove, the island also positions itself closer to tying in to an eventual Southeast Alaska electrical grid, consistent with the Southeast Alaska Intertie Plan produced by the Southeast Conference, and approved by Congress. Funding from the Renewable Energy Grant Program can match other funding already secured for this project and allow construction to begin in 2009. The Reynolds Creek project will add five megawatts of hydroelectric production to the POW island electrical grid. This production is needed in the near term, as industrial uses are planned for POW Island whose that will exceed the 6.5 megawatt capacity of the existing hydro generation systems in the Black Bear Lake drainage. Once complete, the Reynolds Creek project will remove nearly all of the residents on the POW road system from diesel-generated electricity. The project already has a $2 million appropriation in place from the Alaska Legislature. Additional funding will assist project partners Haida Corporation and Alaska Power and Telephone in moving toward project construction. Renewable Energy Grant Program Letter of Support Page 2 PARTICIPATING COMMUNITIES: Both projects have widespread support from POW Island residents. I encourage the AEA to recommend to the Alaska Legislature that these projects be funded as soon as possible. Sincerely, Jon Bolling POWCAC Chairman cc: Rep. Bill Thomas Rep. Kyle Johansen Sen. Albert Kookesh Sen. Bert Stedman Coffman Cove, Craig, Hollis, Hydaburg, Kasaan, Klawock, Naukati, Thorne Bay, Whale Pass 7.4 SOUTHEAST CONFERENCE LETTER OF SUPPORT  SOUTHEAST CONFERENCE P.O. Box 21989, Juneau, AK 99802-1989 ---- Phone (907) 523-2310 FAX 463-5670 ---- www.seconference.org October 2, 2008 Ms Lisa Lang Mr. Bob Grimm Haida Corp. Alaska Power & Telephone P.O. Box 89 P.O. Box 3222 Haidaburg, AK 99922 193 Otto Street Port Townsend, WA 98368 RE: Reynolds Creek Project Dear Project Partners: Southeast Conference is the regional development organization for Southeast Alaska, and has been designated as an Economic Development District by the U.S, Economic Development Administration. We are a membership organization of local governments, visitors bureaus and chambers of commerce as well as businesses, agencies and individuals interested in the economic well being of the region. Our mission is to undertake and support activities that promote strong economies, healthy communities, and a quality environment in Southeast Alaska. Southeast Conference is pleased to support the Reynolds Creek Hydropower project. We join the communities on the Prince of Wales Island who recognize the need for this joint venture project of Haida Corporation and AP&T and urge other agencies and funding organizations to give this project their fullest support. Once complete, the Reynolds Creek project will remove nearly all of the residents on the POW road system from diesel-generated electricity. The project already has a $2 million appropriation in place from the Alaska Legislature. Additional funding will reduce dependence on debt- financing and lower electric rates for the residents of Prince of Wales Island. If Southeast Conference can be of any further assistance or if I can answer any questions, please do not hesitate to contact me at our Juneau office. Sincerely, Shelly Wright Executive Director 7.5  CENTRAL COUNCIL OF TLINGIT AND HAIDA TRIBES  LETTER OF SUPPORT  7.6  RÉSUMÉS  7.6.1  Todd Tew  7.6.2  Robert Grimm  7.6.3  Vern Neitzer  7.6.4  Roger Bargar  7.6.5  Larry Coupe  7.6.6  Ben Beste  7.6.7 Bob Berreth  7.6.8  Michael Stimac  7.6.9  HDR, Inc.  HDR Engineering, Inc. (HDR) HDR is a multidisciplinary engineering and environmental consulting firm specializing in meeting the infrastructure needs of cities, towns, counties, associations, and other public and private entities. HDR’s ability to draw upon company-wide resources and expertise is a great strength in achieving and exceeding client expectations. HDR was founded in 1917 with its home office in Omaha, Nebraska. The firm now has 11 offices (including Anchorage and Bellevue) in the Pacific Northwest (160 offices globally), and over 600 employee/owners in the Northwest (6,900 worldwide). Services include: f Surface water and stormwater management, flood control facilities planning and design, water quality assessments, as well as water and wastewater treatment and conveyance system design; f Environmental habitat mitigation/enhancement, environmental analysis and documentation (SEPA/NEPA, and biological assessments); f Fish passage, hatchery, and screening design (FishPro/HDR); f Hydroelectric generation and transmission facilities design; f Water chemistry; f Facility permitting/licensing; and f Other support services, such as hydraulic and hydrologic modeling, construction management, cost estimation, plans/specifications review, landscape architecture, geographic information systems (GIS), financial planning/rate studies, asset management, and value engineering. HDR: Nationally Recognized Environmental and Engineering Expertise Currently #16 on ENR’s “Top 500 Design Firms” list, HDR has been providing consulting services for more than 91 years (including 34 from the Bellevue office). HDR has worked on many hydroelectric installations in the Pacific Northwest including the Snoqualmie Falls, Baker River, White River, and Skagit River Projects. As an example of creativity and optimization of resources, HDR developed a plan for utilization of the Lake Tapps Reservoir (pictured above) associated with the White River Hydroelectric Project as a municipal water supply for Puget Sound Energy and the Cascade Water Alliance. 7.7  PROJECT LAYOUT AND GENERAL DESIGN                            7.8  LAND OWNERSHIP MAP   Land Ownership Map Sealaska Land Haida Corp Land 7.9 FERC LICENSE  7.10  COST DATA AND GRANTBUDGET.XLS  Previous Current TotalRecon/Prelim Design/Licensing/Permitting/Misc 120,000$              ‐$                       ‐$                       ‐$                      2,000,000$          2,120,000$          1Current Phase (Final Design/Survey/Final Permits)‐                      1,300,000          1,300,000           700,000              2,000,000          2Phase 4 ‐ Construction‐                      1,800,000          10,500,000        12,300,000         700,000              13,000,000        3Power Sales Agreement/Regulatory‐                       ‐                       25,000                25,000                4Total 120,000$            3,100,000$         10,500,000$       13,600,000$       3,425,000$         17,145,000$       Source1 Estimated costs of actual expenses.  More precise numbers can be provided upon request.2 Detailed budgetary estimate by HDR through March 2009.3 Based on preliminary vendor quotes recently obtained and actual expenses of AP&T'S Kasidaya Creek Project.  See Section 3.4.4 Consultant estimate.FederalGrantEquity Total SourceState Grants  Renewable Energy Fund   RFA AEA 09-004 Application Cost Worksheet Page 1 Application Cost Worksheet 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. Availability=95-100%; Capacity Factor=44% 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 grid, leave this section blank) i. Number of generators/boilers/other Hydro - 2; Diesel – 14 (Existing interconnected grid) ii. Rated capacity of generators/boilers/other Hydro – 6,500 kW; Diesel – 9,350 kW iii. Generator/boilers/other type Hydro/Diesel iv. Age of generators/boilers/other Hydro - 1995 and 2005; Diesel - Varies v. Efficiency of generators/boilers/other Diesel – 2007 average of 12.1 kWh/gal (generated) b) Annual O&M cost i. Annual O&M cost for labor $58,465 ii. Annual O&M cost for non-labor $156,535 c) Annual electricity production and fuel usage (fill in as applicable) i. Electricity [kWh] 27,519 MWh interconnected grid; 28,991 MWh on expansion of grid ii. Fuel usage (if system is part of the Railbelt grid, leave this section blank Diesel [gal] 188,300 gal (annual avg) interconnected grid; 228,000 expanded grid Other iii. Peak Load 6,300 kW (2007 – grid only) iv. Average Load 3,141 kW interconnected grid; 3,309 expanded grid v. Minimum Load 1,850 kW (2007 – grid only) vi. Efficiency 12.1 kWh/gal (generated) vii. Future trends Diesel use increases at higher percentage than overall load growth w/o Reynolds Creek d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] ii. Electricity [kWh] iii. Propane [gal or MMBtu] iv. Coal [tons or MMBtu] v. Wood [cords, green tons, dry tons] vi. Other  Renewable Energy Fund   RFA AEA 09-004 Application Cost Worksheet Page 2   3. Proposed System Design a) Installed capacity 5,000 kW b) Annual renewable electricity generation i. Diesel [gal or MMBtu] ii. Electricity [kWh] 19.3 million kWh potential 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 $17 million b) Development cost ~ $4 million through detailed design c) Annual O&M cost of new system ~ $225,000 including land use fees d) Annual fuel cost None 5. Project Benefits a) Amount of fuel displaced for i. Electricity 19.3 million kWh potential = 1.6 million gallons fuel at 12.1 kWh/gallon ii. Heat Unknown iii. Transportation None, but potential if conversion to electric cars b) Price of displaced fuel $5.1 million at avg 2008 price; $6.5 million at max 2008 price c) Other economic benefits d) Amount of Alaska public benefits Stable energy prices; clean, non-polluting hydro; attract businesses 6. Power Purchase/Sales Price a) Price for power purchase/sale $0.088/kWh 7. Project Analysis a) Basic Economic Analysis Project benefit/cost ratio To ratepayers: 1.46 0% real discount rate; 1.33 6.0% real discount rate Payback 28 years for full $17 million of capital costs Alaska Energy Authority ‐ Renewable Energy FundBUDGET INFORMATIONBUDGET SUMMARY:Milestone or Task Federal Funds State FundsLocal Match Funds (Cash)Local Match Funds (In‐Kind)Other FundsTOTALSPhase 1 ‐ Reconnaissance$0Phase 2 ‐ Feasibility$0Phase 3 ‐ Design and Permitting$0Phase 4 ‐ Construction$01. Construction Management $0 $500,000 $500,0002. Mobilization $500,000 $200,000 $700,0003. Access Facilities $1,000,000 $1,000,0004. Diversion Structure $1,000,000 $1,000,0005. Penstock $3,000,000 $3,000,0006. Powerhouse $4,000,000 $4,000,0007. Transmission Facilities $2,500,000 $2,500,0008. Completion $300,000 $300,000Total $0 $12,300,000 $700,000 $0 $0 $13,000,000BUDGET CATAGORIES:1. Construction Management2.   Mobilization3.             Access Facilities4.             Diversion Structure5.             Penstock6.   Powerhouse7. Transmission Facilities8.       CompletionTOTALSDirect Labor and Benefits $125,000 $70,000 $350,000 $250,000 $1,050,000 $400,000 $1,000,000 $105,000 $3,350,000Travel, Meals, or Per Diem $25,000 $28,000 $0 $0 $0 $0 $0 $0 $53,000Equipment $15,000 $546,000 $0 $200,000 $0 $3,000,000 $0 $0 $3,761,000Supplies $15,000 $28,000 $0 $0 $0 $0 $0 $0 $43,000Contractual Services $300,000 $0 $0 $0 $0 $40,000 $0 $0 $340,000Construction Services $20,000 $28,000 $650,000 $550,000 $1,950,000 $560,000 $1,500,000 $195,000 $5,453,000Other Direct Costs $0$0$0$0$0$0$0$0$0TOTAL DIRECT CHARGES $500,000 $700,000 $1,000,000 $1,000,000 $3,000,000 $4,000,000 $2,500,000 $300,000 $13,000,000MILESTONE or TASKRFA 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. 7.11 ECONOMIC ANALYSIS AND BENEFITS  Discount Rate 0.0% 12.0% Net Present Value of Displaced Costs Diesel Fuel 991,479,631$ 34,998,436$ Variable O&M 25,384,569 1,075,384 Total 1,016,864,200$ 36,073,820$ Net Present Value of Costs to Ratepayer:with Reynolds Creek Reynolds Creek Fixed Payment 15,000,000$ 2,491,350$ Variable Payment 28,221,301 1,290,113 O&M 23,582,633 2,399,756 Subtotal - Reynolds Creek 66,803,934$ 6,181,219$ Diesel Fuel 282,027,867$ 2,230,406$ Variable O&M 6,780,954 55,327 Subtotal - Diesel 288,808,822$ 2,285,733$ Total 355,612,756$ 8,466,951$ Net Benefits 661,251,444$ 27,606,869$ B/C 1.54 1.31 Summary of Ratepayer Benefits General Inflation 2.75% Discount Rate 12.00% Diesel Generation Fuel Inflation 3.75% Efficiency (kWh/gal) 12.1 Var O&M ($/kWh) $0.01 AB C D E F G H I 1.5% 2.4% 0.9% 0.0% 0.0% C/K/H/TB CC N Cold Storage Mine Total 2007 27,519 944 528 28,991 2008 3.22 27,932 967 533 29,431 2009 3.34 28,351 990 538 29,878 2010 3.47 28,776 1,014 542 2,300 32,632 1 2011 3.60 29,208 1,038 547 2,300 33,093 2 2012 3.73 29,646 1,063 552 2,300 33,561 3 2013 3.87 30,090 1,088 557 2,300 34,036 4 2014 4.02 30,542 1,114 562 2,300 34,518 5 2015 4.17 31,000 1,141 567 2,300 35,008 6 2016 4.32 31,465 1,169 572 2,300 35,506 7 2017 4.48 31,937 1,197 577 2,300 36,011 8 2018 4.65 32,416 1,225 583 2,300 36,524 9 2019 4.83 32,902 1,255 588 2,300 37,045 10 2020 5.01 33,396 1,285 593 2,300 37,574 11 2021 5.20 33,897 1,316 599 2,300 38,111 12 2022 5.39 34,405 1,347 604 2,300 38,656 13 2023 5.59 34,921 1,380 609 2,300 39,210 14 2024 5.80 35,445 1,413 615 2,300 39,773 15 2025 6.02 35,977 1,447 620 2,300 40,344 16 2026 6.25 36,516 1,481 626 2,300 40,924 17 2027 6.48 37,064 1,517 632 2,300 41,513 18 2028 6.72 37,620 1,553 637 2,300 42,111 19 2029 6.98 38,184 1,591 643 2,300 42,718 20 2030 7.24 38,757 1,629 649 2,300 43,335 21 2031 7.51 39,338 1,668 655 2,300 43,961 22 2032 7.79 39,929 1,708 661 2,300 44,597 23 2033 8.08 40,527 1,749 667 2,300 45,243 24 2034 8.39 41,135 1,791 673 2,300 45,899 25 2035 8.70 41,752 1,834 679 2,300 46,565 26 2036 9.03 42,379 1,878 685 2,300 47,241 27 2037 9.37 43,014 1,923 691 2,300 47,928 28 2038 9.72 43,660 1,969 697 2,300 48,626 29 2039 10.08 44,315 2,016 703 2,300 49,334 30 2040 10.46 44,979 2,065 710 2,300 50,054 31 2041 10.85 45,654 2,114 716 2,300 50,784 32 2042 11.26 46,339 2,165 722 2,300 51,526 33 2043 11.68 47,034 2,217 729 2,300 52,280 34 2044 12.12 47,739 2,270 736 2,300 53,045 35 2045 12.57 48,455 2,325 742 2,300 53,822 36 2046 13.04 49,182 2,381 749 2,300 54,612 37 2047 13.53 49,920 2,438 756 2,300 55,413 38 2048 14.04 50,669 2,496 762 2,300 56,227 39 2049 14.57 51,429 2,556 769 2,300 57,054 40 2050 15.11 52,200 2,617 776 2,300 57,894 41 2051 15.68 52,983 2,680 783 2,300 58,747 42 2052 16.27 53,778 2,745 790 2,300 59,613 43 2053 16.88 54,585 2,810 797 2,300 60,492 44 2054 17.51 55,403 2,878 804 2,300 61,386 45 2055 18.17 56,234 2,947 812 2,300 62,293 46 2056 18.85 57,078 3,018 819 2,300 63,215 47 2057 19.56 57,934 3,090 826 2,300 64,151 48 2058 20.29 58,803 3,164 834 2,300 65,101 49 2059 21.05 59,685 3,240 841 2,300 66,067 50 2060 21.84 60,581 3,318 849 2,300 67,047 General Power Requirements Fuel Cost ($/gal) YearRC Year Load Growth AB 2007 2008 2009 2010 1 2011 2 2012 3 2013 4 2014 5 2015 6 2016 7 2017 8 2018 9 2019 10 2020 11 2021 12 2022 13 2023 14 2024 15 2025 16 2026 17 2027 18 2028 19 2029 20 2030 21 2031 22 2032 23 2033 24 2034 25 2035 26 2036 27 2037 28 2038 29 2039 30 2040 31 2041 32 2042 33 2043 34 2044 35 2045 36 2046 37 2047 38 2048 39 2049 40 2050 41 2051 42 2052 43 2053 44 2054 45 2055 46 2056 47 2057 48 2058 49 2059 50 2060 YearRC Year South Fork 6,500 MWh Black Bear Energy 23,000 MWh Percent 69.6% Pct of Load JKLM NOP South Fork Black Bear Diesel Total Fuel O&M Total 6,500 20,178 2,313 22,491 6,500 20,484 2,447 22,931 6,500 20,795 2,583 23,378 6,500 22,712 3,420 26,132 6,500 23,000 3,593 26,593 1,068$ 39$ 1,107$ 6,500 23,000 4,061 27,061 1,252 45 1,297 6,500 23,000 4,536 27,536 1,451 52 1,503 6,500 23,000 5,018 28,018 1,666 59 1,725 6,500 23,000 5,508 28,508 1,897 67 1,963 6,500 23,000 6,006 29,006 2,146 75 2,220 6,500 23,000 6,511 29,511 2,413 83 2,496 6,500 23,000 7,024 30,024 2,701 92 2,793 6,500 23,000 7,545 30,545 3,010 102 3,112 6,500 23,000 8,074 31,074 3,342 112 3,454 6,500 23,000 8,611 31,611 3,698 123 3,821 6,500 23,000 9,156 32,156 4,080 134 4,214 6,500 23,000 9,710 32,710 4,489 146 4,635 6,500 23,000 10,273 33,273 4,927 159 5,085 6,500 23,000 10,844 33,844 5,396 172 5,568 6,500 23,000 11,424 34,424 5,897 186 6,084 6,500 23,000 12,013 35,013 6,434 201 6,635 6,500 23,000 12,611 35,611 7,008 217 7,225 6,500 23,000 13,218 36,218 7,621 234 7,854 6,500 23,000 13,835 36,835 8,275 251 8,527 6,500 23,000 14,461 37,461 8,974 270 9,244 6,500 23,000 15,097 38,097 9,720 290 10,010 6,500 23,000 15,743 38,743 10,516 310 10,826 6,500 23,000 16,399 39,399 11,365 332 11,697 6,500 23,000 17,065 40,065 12,270 355 12,625 6,500 23,000 17,741 40,741 13,235 379 13,614 6,500 23,000 18,428 41,428 14,263 405 14,668 6,500 23,000 19,126 42,126 15,358 432 15,790 6,500 23,000 19,834 42,834 16,524 460 16,984 6,500 23,000 20,554 43,554 17,766 490 18,255 6,500 23,000 21,284 44,284 19,087 521 19,608 6,500 23,000 22,026 45,026 20,493 554 21,047 6,500 23,000 22,780 45,780 21,989 589 22,578 6,500 23,000 23,545 46,545 23,580 625 24,205 6,500 23,000 24,322 47,322 25,272 664 25,935 6,500 23,000 25,112 48,112 27,070 704 27,774 6,500 23,000 25,913 48,913 28,982 746 29,728 6,500 23,000 26,727 49,727 31,013 791 31,805 6,500 23,000 27,554 50,554 33,172 838 34,010 6,500 23,000 28,394 51,394 35,465 887 36,352 6,500 23,000 29,247 52,247 37,900 939 38,839 6,500 23,000 30,113 53,113 40,485 993 41,479 6,500 23,000 30,992 53,992 43,230 1,051 44,281 6,500 23,000 31,886 54,886 46,145 1,111 47,255 6,500 23,000 32,793 55,793 49,237 1,174 50,411 6,500 23,000 33,715 56,715 52,519 1,240 53,759 6,500 23,000 34,651 57,651 56,001 1,309 57,311 6,500 23,000 35,601 58,601 59,695 1,382 61,078 6,500 23,000 36,567 59,567 63,614 1,459 65,072 6,500 23,000 37,547 60,547 67,769 1,539 69,308 Existing Hydro Without Reynolds Creek Generation Diesel Costs AB 2007 2008 2009 2010 1 2011 2 2012 3 2013 4 2014 5 2015 6 2016 7 2017 8 2018 9 2019 10 2020 11 2021 12 2022 13 2023 14 2024 15 2025 16 2026 17 2027 18 2028 19 2029 20 2030 21 2031 22 2032 23 2033 24 2034 25 2035 26 2036 27 2037 28 2038 29 2039 30 2040 31 2041 32 2042 33 2043 34 2044 35 2045 36 2046 37 2047 38 2048 39 2049 40 2050 41 2051 42 2052 43 2053 44 2054 45 2055 46 2056 47 2057 48 2058 49 2059 50 2060 YearRC Year Base Energy 6,000 MWh Max Energy 19,300 MWh Ratepayer Savings O&M (000) 225$ Nominal 661,251$ BBL Rate ($/kWh) 0.0648$ NPV @ 12% 27,607$ Fixed Payment (000) 300$ Q R S T U V W X Y Z AA AB South Fork Black Bear Reynolds Creek Diesel Total Fuel O&M Fixed Payment Var Payment OM Total 6,500 20,593 6,000 - 33,093 -$ -$ 300$ -$ 225$ 525$ 582$ 6,500 21,061 6,000 - 33,561 - - 300 - 231 531 766 6,500 21,536 6,000 - 34,036 - - 300 - 238 538 965 6,500 22,018 6,000 - 34,518 - - 300 - 244 544 1,181 6,500 22,508 6,000 - 35,008 - - 300 - 251 551 1,413 6,500 23,000 6,006 - 35,506 - - 300 0 258 558 1,662 6,500 23,000 6,511 - 36,011 - - 300 33 265 598 1,899 6,500 23,000 7,024 - 36,524 - - 300 66 272 638 2,155 6,500 23,000 7,545 - 37,045 - - 300 100 280 680 2,432 6,500 23,000 8,074 - 37,574 - - 300 134 287 722 2,732 6,500 23,000 8,611 - 38,111 - - 300 169 295 764 3,056 6,500 23,000 9,156 - 38,656 - - 300 205 303 808 3,406 6,500 23,000 9,710 - 39,210 - - 300 240 312 852 3,783 6,500 23,000 10,273 - 39,773 - - 300 277 320 897 4,188 6,500 23,000 10,844 - 40,344 - - 300 314 329 943 4,625 6,500 23,000 11,424 - 40,924 - - 300 351 338 989 5,094 6,500 23,000 12,013 - 41,513 - - 300 390 347 1,037 5,598 6,500 23,000 12,611 - 42,111 - - 300 428 357 1,085 6,139 6,500 23,000 13,218 - 42,718 - - 300 468 367 1,134 6,720 6,500 23,000 13,835 - 43,335 - - 300 508 377 1,184 7,342 6,500 23,000 14,461 - 43,961 - - 300 548 387 1,235 8,009 6,500 23,000 15,097 - 44,597 - - 300 589 398 1,287 8,723 6,500 23,000 15,743 - 45,243 - - 300 631 409 1,340 9,486 6,500 23,000 16,399 - 45,899 - - 300 674 420 1,394 10,303 6,500 23,000 17,065 - 46,565 - - 300 717 431 1,448 11,177 6,500 23,000 17,741 - 47,241 - - 300 761 443 1,504 12,110 6,500 23,000 18,428 - 47,928 - - 300 805 456 1,561 13,107 6,500 23,000 19,126 - 48,626 - - 300 851 468 1,619 14,171 6,500 23,000 19,300 534 49,334 445 12 300 862 481 2,100 14,884 6,500 23,000 19,300 1,254 50,054 1,084 30 300 862 494 2,769 15,486 6,500 23,000 19,300 1,984 50,784 1,779 49 300 862 508 3,498 16,110 6,500 23,000 19,300 2,726 51,526 2,537 69 300 862 522 4,289 16,758 6,500 23,000 19,300 3,480 52,280 3,359 90 300 862 536 5,147 17,431 6,500 23,000 19,300 4,245 53,045 4,251 113 300 862 551 6,077 18,128 6,500 23,000 19,300 5,022 53,822 5,218 137 300 862 566 7,083 18,852 6,500 23,000 19,300 5,812 54,612 6,265 163 300 862 581 8,171 19,603 6,500 23,000 19,300 6,613 55,413 7,396 191 300 862 597 9,346 20,382 6,500 23,000 19,300 7,427 56,227 8,618 220 300 862 614 10,614 21,191 6,500 23,000 19,300 8,254 57,054 9,937 251 300 862 631 11,981 22,029 6,500 23,000 19,300 9,094 57,894 11,358 284 300 862 648 13,453 22,899 6,500 23,000 19,300 9,947 58,747 12,889 319 300 862 666 15,037 23,802 6,500 23,000 19,300 10,813 59,613 14,537 357 300 862 684 16,740 24,739 6,500 23,000 19,300 11,692 60,492 16,309 396 300 862 703 18,571 25,710 6,500 23,000 19,300 12,586 61,386 18,214 438 300 862 722 20,537 26,719 6,500 23,000 19,300 13,493 62,293 20,259 483 300 862 742 22,646 27,765 6,500 23,000 19,300 14,415 63,215 22,455 530 300 862 763 24,909 28,850 6,500 23,000 19,300 15,351 64,151 24,809 580 300 862 784 27,335 29,976 6,500 23,000 19,300 16,301 65,101 27,334 633 300 862 805 29,934 31,144 6,500 23,000 19,300 17,267 66,067 30,038 689 300 862 827 32,716 32,356 6,500 23,000 19,300 18,247 67,047 32,935 748 300 862 850 35,694 33,614 Reynolds Creek Reynolds Creek Savings With Reynolds Creek Generation Costs Diesel Column Notes/Explanation C Fuel costs based on 2008 average through August and escalated at 1 percent above general inflation for the 50-year study period. D - F Annual load growth per AK-BC Alaska Intertie Feasibility Study, SE Alaska, Final Report, September 2007, Hatch Acres Corporation, Appendix I, Slide 21. G Estimated loads for cold storage have been reduced by the assumed loss of the floating processor once the cold storage becomes operational. K Black Bear generation based on the annualized amount of load (percent of total load) provided by Black Bear during the Jan 2006 - August 2008 time period. 2006 "normal" year, 2007 wet year, and 2008 dry year. N - P Diesel costs only. Assumes Black Bear and South Fork costs remain same under both scenarios (with and without Reynolds Creek). X - Y Cost to ratepayer per proposed power sales agreement structure. Z Total cost of O&M included. During early years, APC pays all or part; latter years, Haida Power pays part or all. AB Savings to ratepayer due to Reynolds Creek.