HomeMy WebLinkAboutGrant Lake Falls Creek Hydro Project Kenai Hydro App
6921 Howard Ave, Anchorage, Alaska 99504
Alaska Energy Authority
AEA-09-004-Renewable Energy Grant Application
813 West Northern Lights Boulevard
Anchorage, AK 99503
October 8, 2008
Subject: Round I Grant RFA, Kenai Hydro, LLC
Dear Alaska Energy Authority,
Alaska Wind Energy, LLC, dba Wind Energy Alaska, is a partnership of Cook Inlet
Region Inc and a major renewable energy developer, enXco Development Corp. Wind
Energy Alaska has partnered with Homer Electric to form Kenai Hydro, LLC. Wind
Energy Alaska is the manager of Kenai Hydro under the terms of that entity’s governing
documents, and therefore is submitting this application on its behalf.
Kenai Hydro appreciates the opportunity to present the enclosed AEA-09-004-Renewable
Energy grant application for partial funding for the study of the Grant Lake low impact
hydro electric generation project on the Kenai Peninsula. Hydro projects require a
rigorous set of studies and grant funds help with the upfront costs associated with this
work. The project represents an important opportunity for the community to reduce
electric costs over the long term while diversifying the energy mix for Alaskans on the
Kenai Peninsula.
Thank you for this opportunity. Please feel free to contact me with questions.
Best Regards
Steve Gilbert
Manager, Alaskan Projects
enXco Development Corp
(907) 333-0810
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 1 of 18 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 18 9/3/2008
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Kenai Hydro, LLC
Type of Entity:
Independent Power Producer
(A Joint Venture among Homer Electric Association, Inc. (HEA), enXco, and Cook Inlet Region, Inc
(CIRI))
Mailing Address
2525 C Street, Suite 500, Anchorage, AK 99503
Physical Address
Same
Telephone
907-333-0810
Fax
None
Email
SteveG@enxco.com
1.1 APPLICANT POINT OF CONTACT
Name
Steve Gilbert
Title
Manager
Mailing Address
6921 Howard Avenue, Anchorage, AK 99504
Telephone
907-333-0810
Fax
None
Email
SteveG@enxco.com
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
X An independent power producer, or
A local government, or
A governmental entity (which includes tribal councils and housing authorities);
Yes
1.2.2. Attached to this application is formal approval and endorsement for its project by
its board of directors, executive management, or other governing authority. If a
collaborative grouping, a formal approval from each participant’s governing
authority is necessary. (Indicate Yes or No in the box )
Yes
1.2.3. As an applicant, we have administrative and financial management systems and
follow procurement standards that comply with the standards set forth in the grant
agreement.
Yes
1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached
grant form. (Any exceptions should be clearly noted and submitted with the
application.)
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 3 of 18 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.
The proposed project is a 5 to 7-MW hydroelectric facility that would utilize the water resources
of Grant Lake/Creek and possibly Falls Creek near Moose Pass, Alaska. The project’s
Reconnaissance Phase (“Phase 1”) was initiated in August 2008 with a site visit. The Engineer’s
(HDR Alaska, Inc.) initial site assessment recommends advancing the project to further
resource assessment and feasibility studies. A copy of HDR Alaska’s initial site assessment is
attached for review in the Section 7 appendices.
This application seeks funding to assist in furthering the “Phase 2” Resource Assessment,
Feasibility Analysis and Conceptual Design(s). The funds from this application would support
work associated with Phase 2 as explained herein, and FERC Preliminary Permit requirements
leading up to, and including, the preparation and filing of a FERC license. Should the project
remain viable and grant funding remain available beyond the FERC license application, the
project would seek future grant funds in support of Final Design, Licensing and Construction.
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 proposed 5 to 7-MW Grant Lake/Falls Creek hydro project is located near Moose Pass,
Alaska (see map in HDR’s attached site assessment). Kenai Hydro seeks to develop the project
in compliance with current low impact hydro guidelines and practices. The scope of this project
will also involve looking at the feasibility of a design that includes diverting flows from Falls
Creek into Grant Lake. Kenai Hydro has secured a Preliminary Permit for this project, issued by
FERC on October 7, 2008. A copy of the Preliminary Permit is attached in the Section 7
appendices. Power from the project would be available to customers of Homer Electric
Association and other areas served by the existing Railbelt transmission grid. Kenai Hydro, LLC
is a partnership among Homer Electric Association (HEA), enXco and Cook Inlet Region, Inc.
(CIRI) that was formed for the purpose of evaluating and developing this site as a low impact
hydroelectric facility.
Additional information on this project may be found in the attached initial site assessment
reported by HDR Alaska, Inc.
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.
It is estimated that approximately $1,020,000 in funds are needed to complete a Phase 2 study
of the Grant Lake project that would culminate in a FERC license application. Kenai Hydro
would anticipate AEA to provide 80% of this amount, or $816,000.
Phase 1 Reconnaissance studies are in progress and are expected to be completed by January
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Grant Application
AEA 09-004 Grant Application Page 4 of 18 9/3/2008
2009. The grant funds from this Phase 2 application would not be utilized unless there is a
successful outcome from the Phase 1 studies. The Phase 1 effort is partially funded by Alaska
Energy Authority (AEA) under an earlier grant award. This grant provided for up to $50,000 in
matching funds. Stakeholder consultations and preliminary identification of necessary studies
and permitting will be accomplished in Phase 1. Phase 2 will build on the foundation of work
completed in Phase 1 and carry out studies to answer concerns and issues raised by
stakeholders in Phase 1.
Phase 2 funds will initially be drawn from a combination of existing and future grant funding as
well as internal financing. As long as the project continues to remain economically and
environmentally viable, the companies that constitute Kenai Hydro, LLC are committed to
providing the 20% matching funds in cash, as well as the in-kind match for the cost of
management and administrative staffing.
PROJECT COST SUMMARY
The preliminary total cost estimate for the project through construction is $26,924,120. This
estimate includes a $22,750,000 capital cost (based on a 7-MW project at an estimated
$3,250/kW) and an estimated $4,174,120 for development costs.
Description
Preliminary Cost
Estimate
% of
Construction
Cost
Phase 1 Reconnaissance 105,000$ 0.5%
Phase 2 Resource Assess/Feasibility Analysis/Concept Design 1,569,120$ 6.9%
Phase 3 FERC Licensing & Final Design 2,500,000$ 11.0%
Phase 4 Construction & Commissioning 22,750,000$
Total Preliminary Cost Estimate 26,924,120$
2.4 PROJECT BENEFIT
Briefly discuss the financial benefits that will result from this project, including an estimate of economic
benefits (such as reduced fuel costs) and a description of other benefits to the Alaskan public.
The power from the proposed project would reduce consumption of non-renewable carbon-
based energy sources, thereby helping to improve air quality in Kenai Peninsula Borough. The
renewable energy will also serve to incrementally stabilize the long term price of power to
consumers. The project is an important step toward diversifying HEA’s future generation
portfolio.
In 2008 dollars, it is estimated that nearly $41,000,000 can be saved in avoided fuel cost over a
50-year period. This represents a tremendous value to the rate payers of Alaska and a
generation asset will continue to produce clean, renewable power for Alaskans over the next
century.
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.)
$26,924,120
2.5.2 Grant Funds Requested in this application. $816,000
2.5.3 Other Funds to be provided (Project match) $204,000
2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $1,020,000
2.5.5 Estimated Benefit (Savings) $41,000,000
2.5.6 Public Benefit (If you can calculate the benefit in terms of $ TBD (To Be Determined)
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 5 of 18 9/3/2008
dollars please provide that number here and explain how
you calculated that number in your application.)
SECTION 3 – PROJECT MANAGEMENT PLAN
Describe who will be responsible for managing the project and provide a plan for successfully
completing the project within the scope, schedule and budget proposed in the application.
3.1 Project Manager
Tell us who will be managing the project for the Grantee and include a resume and references
for the manager(s). If the applicant does not have a project manager indicate how you intend to
solicit project management Support. If the applicant expects project management assistance
from AEA or another government entity, state that in this section.
Mr. Steve Gilbert (enXco) will oversee the development of this project with the assistance of Mr.
Brad Zubeck (HEA). Their brief professional biographies are attached in Section 7, Attachment
A as requested.
These individuals have the guidance, support and staffing of their parent organizations for
managing this project from its current state through design, construction and operation. Where
needed, Kenai Hydro, LLC will contract with qualified firms and consultants to conduct the
engineering, studies and detailed design associated with the project.
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.)
Please refer to the Gantt chart attached with this grant application showing the proposed
schedule for Phase 2 activities. A summary of the dates is provided below:
PHASE 2 – Schedule Summary
Task Name Start Finish
Task 6 – Field Studies 1/1/2009 12/31/2010
2009 Field Studies ~3/2/2009 ~10/30/2009
Milestone # 3: At conclusion of 2009 Study
Season
~11/1/2009 ~12/31/2009
2010 Field Studies ~5/3/2010 ~9/30/2010
Task 7 – Engineering, Design & Management 1/1/2009 12/31/2010
2009-2010 Engineering & Management 1/1/2009 12/31/2010
2009 Study Oversight ~3/2/2009 ~10/30/2009
2010 Study Oversight ~5/3/2010 ~9/30/2010
Task 8 – FERC License Application ~8/3/2009 12/31/2010
FERC License Manager & Activities ~8/3/2009 12/31/2010
Milestone # 4: Final Decision to Make FERC
License Application
~11/1/2010 12/31/2010
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 6 of 18 9/3/2008
In the attached schedule, two milestones are proposed. The first, labeled Milestone # 3, is
intended to be a project evaluation and decision based upon the findings of the 2009 season’s
studies. If the project continues to look economically and environmentally feasible, Kenai Hydro
will proceed with plans for implementing follow-up studies and engineering work for the 2010
season. As shown in the schedule, the Milestone # 3 decision would be made near the end of
the 2009 calendar year. The second milestone, labeled Milestone # 4 in the attached schedule,
is meant to be a comprehensive revisiting and confirmation of all the work accomplished in
Phases 1 and 2, and based on the outcome of the Phase 1 and 2 analyses, as well as the
status of negotiation of parallel project agreements, Kenai Hydro will decide whether or not to
proceed with filing of a FERC license application. The Milestone # 4 decision would be made
over the last couple of months in the 2010 calendar year.
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.
Mr. Steve Gilbert (enXco) and Mr. Brad Zubeck (HEA) will be responsible for management and
direct oversight of the project development. These individuals have the guidance, support and
staffing of their parent organizations for managing this project from its current state through
design, construction and operation.
Kenai Hydro, LLC is a partnership among Homer Electric Association (HEA), enXco and Cook
Inlet Region, Inc. (CIRI) that was formed for the purpose of evaluating and developing this site
as a low impact hydroelectric facility. Where needed, Kenai Hydro, LLC will contract with
qualified firms and consultants to conduct the engineering, studies, permitting, process
management and facilitation associated with the project.
Based on their recent FERC relicensing performance with the Cooper Lake hydro facility, Long
View Associates (LVA) was hired to prepare FERC preliminary permit applications. The
preliminary permit for this project is secured and was issued by FERC October 7, 2008. LVA is
likely to be used again in various capacities on this project, such as permitting or FERC license
application management.
Kenai Hydro interviewed prospective engineering firms and decided upon HDR Alaska, Inc.
(HDR) to provide engineering and consulting services for the feasibility phase of this project.
HDR is currently under contract to provide these services on a Task Order basis. HDR is a
nation-wide engineering firm with a full-service office located in Anchorage, Alaska. HDR
Alaska, Inc. has a long history in this State and offers a full spectrum of engineering, planning,
and environmental services. Résumés of HDR’s key personnel are provided in Section 7
appendices.
An organizational chart is provided below representing the general tasks and planned
assignments.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 7 of 18 9/3/2008
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
The project manager will issue reports on a mutually agreeable schedule throughout the life of
the grant. These reports can be customized to meet AEA reporting requirements. Our
expectation is that these reports could be kept to a one page summary document on a quarterly
basis. Significant events, such as milestone decisions, will be detailed in the reports, possibly in
the form of attachments. The project would also expect to process requests for reimbursement
on a monthly basis.
3.6 Project Risk
Discuss potential problems and how you would address them.
The following is a list of potential risks and the steps that Kenai Hydro is taking to mitigate them:
1. Missing a critical seasonal window to conduct field studies or data collection.
Kenai Hydro has engaged the services of HDR Alaska, Inc. to plan and schedule the field
studies well in advance of the next season. HDR has significant experience with Alaskan
hydro projects and is familiar with the unique challenges and seasonal constraints that exist
in our region. We will be conducting stakeholder and agency meetings during the fall 2008 in
order to document and address important stakeholder concerns and issues. The study plan
for next season will be designed to address these important issues. We are confident that
HDR will be prepared to conduct any needed studies in a timely manner.
Kenai Hydro, LLC
(HEA, enXco, CIRI)
Steve Gilbert, Manager
Brad Zubeck, Project
Engr
Feasibility Study
HDR Alaska, Inc.
Todd Bethard, Bob Butera,
Paul McClarnon, Mark Dalton
FERC Process
FERC Licensing
Manager
To Be Determined
Stakeholder
Meetings
HDR Alaska, Long View
Associates,
Subcontractors as
needed
Support Staff
Accounting, Finance,
Technical Resources
from KHL Partners: HEA,
enXco & CIRI
Land Use & Leases
HDR Alaska,
Subcontractors as
needed
Permitting
HDR Alaska,
Subcontractors as
needed
Environmental &
Field Studies
HDR Alaska,
Subcontractors as
needed
Engineering Design
HDR Alaska,
Subcontractors as
needed
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 8 of 18 9/3/2008
2. An important stakeholder issue is overlooked during the preliminary permit phase and it
becomes a significant project impediment during the FERC license application.
As noted in the response above, Kenai Hydro will consult with potential stakeholder entities
(i.e., agencies, NGOs, Native Corporations, and communities) as part of Phase 1 to ensure
that all significant concerns are identified and planned for in the field studies in anticipation
of the licensing process for the Grant Lake / Grant Creek project. By working through and
finalizing issues and studies during the Phase 1 and the preliminary permitting stage, we
hope to avoid any latent concerns and move into a FERC licensing application with the full
support stakeholders. The studies conducted as part of Phase 2 will be focused on
addressing the issues and concerns of stakeholders identified in Phase 1.
3. Risk of not being able to successfully negotiate satisfactory future project agreement such
as power purchase price, interconnection and transmission agreements. Such agreements
will be the subject of discussion amongst the Kenai Hydro partners on an ongoing basis. It is
the intent of the partnership that these agreements be executed in advance of a FERC
license application. The cost of developing these agreements will not be borne by the grant
funding.
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.
Energy Potential
Quantifying the energy available from Grant Lake will be part of the work performed with the
funds requested by this grant. Initial estimates are that between 5-7MW gross capacity, or 20-28
GWh annually, can be delivered based on the current hydrology data available. The addition of
flows from Falls Creek will add to this potential capacity, but the benefit-cost analysis will be
determined during the course of the Phase 2 studies.
Pros & Cons
Hydropower is renewable, long-lived, efficient, dispatchable and environmentally responsible
energy that emits no greenhouse gases, wastes or air pollution. It uses readily available existing
technologies, is low maintenance and displaces consumption of fossil fuels. It provides long-term
stability in the price of power to consumers.
Disadvantages of hydropower include high initial cost, relatively long time required to
permit/license, potential impact on habitats and water quality.
Renewable Energy Fund
Grant Application
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By contrast, the most expedient alternative solution to our local energy needs is to construct
natural gas-fired generation. Relative to hydropower, these units are inexpensive to procure and
install, require a much shorter time to permit, and have a relatively small footprint. On the
negative side, gas-fired units emit greenhouse gases, are not sustainable, are subject to market-
driven fuel pricing and availability, are shorter lived, and cost more to operate and maintain than
hydropower units.
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 proposed project is intended to provide one piece of the future energy needs of Homer
Electric Association. HEA currently purchases most of its energy from Chugach Electric
Associate (CEA). This contractual purchase of power will continue until 2014, at which time its
contract with CEA expires and HEA plans to independently provide for its own generation
requirements.
The following is a current list of HEA’s generation assets:
Unit Description Size Date Installed Fuel Type
Nikiski Plant 39.0 MW ~2000 Natural Gas,
Simple Cycle
Bradley Lake* ~11.0 MW ~1992 Hydro
Totals 50.0 MW -- --
* This is HEA’s share of Bradley Lake’s 120 MW capacity.
HEA’s average load is approximately 60-MW, with its peak load near 85-MW. For HEA to be
independent beyond 2014, it needs to construct enough new generation capacity to provide for
the difference in its current load and that anticipated in years to come, plus spinning reserve. In
short, HEA needs to double its current generation capacity.
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.
As noted in the section above, HEA is challenged with developing new generation assets to
meet the needs of it customers beyond 2014. This requires that HEA nearly double its current
generation capacity.
Approximately eighty (80%) percent of the existing generating capacity relies on natural gas as
the fuel source. HEA seeks to diversify its generation portfolio beyond 2014 and reduce its
reliance on natural gas. Part of this diversification is to develop renewable generation resources
to fulfill future needs. The proposed project represents approximately ten (10%) percent of
HEA’s future generation need. It would be a significant step toward both providing for HEA’s
future generation capacity as well as adding renewable energy to its portfolio.
Adding hydroelectric facilities with storage to HEA’s generation portfolio will facilitate the further
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development of other renewable generation resources such as wind.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
The primary market for the energy from this project is the customers of HEA. The secondary
market is other Railbelt utilities. A potential market also exists for selling Renewable Energy
Credits to utilities at large looking for means to offset fossil-fuel generation to comply with various
Renewable Energy Standards or Policies.
This project will have the following positive impacts on the existing energy system and its
customers:
1. Provide approximately 10% of HEA’s immediate generation needs from clean,
renewable hydropower.
2. Incrementally stabilize the long-term price of power.
3. Offset and reduce greenhouse gas emissions.
4. Provide stored, dispatchable energy required to develop utility-scale wind generation.
5. Improve consumer confidence in its utility leadership and management.
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 on the initial field reconnaissance and a cursory review of the 1984 Ebasco study, two
alternative project layouts are proposed for further evaluation (a copy of Ebasco’s Final Report is
attached on the enclosed CD-ROM). Further development of the concept layouts will be
completed under Phase 1 reconnaissance studies that should be complete by January 2009.
HDR’s preliminary assessment of the project is attached and an augmented excerpt from their
report is provided in the paragraphs below.
The first alternative consists of an intake near the saddle on Grant Lake; a penstock following the
saddle to Trail Lake; a power house within a cove on Trail Lake and a tailrace to Trail Lake.
Powerhouse access would be via a bridge across Lower Trail Lake, where the transmission line
would also be routed. Intake access would be along the saddle. The project would obtain storage
from lake drawdown. Due to the elevation of the saddle the intake would likely be a horizontal
tunnel with a lake tap. Water to maintain stream flow in Grant Creek would be provided via a low
level outlet. Additional project water would be diverted from the Falls Creek basin.
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The second alternative is based on the preferred alternative originally selected by the Ebasco
study. This consists of an lake tap on Grant Lake; a tunnel to Trail Lake; a power house within a
cove on Trail Lake and a tailrace to Trail Lake. Access would be via a bridge across the narrows
of Lower Trail Lake, where the transmission line would also be routed. The project would obtain
storage from lake draw down. The Ebasco study considered dewatering Grant Creek and
providing mitigation for the fishery. Whether this is possible needs to be investigated further. The
actual design used to tap the lake may take several different forms using a combination of one or
more of the following: siphon-intake, tunnel, above-grade and below-grade penstock.
In 1984, the Ebasco study determined that diversion of Falls Creek to Grant Lake would not be
economic. This diversion may be economic today and may be essential to project viability
depending upon the instream flow required.
The Ebasco study also looked at a range of 6- to 8-MW installed capacities and settled on a 7-
MW installation with an estimated benefit-cost ratio of 1.20 (see Table 16-4, Volume 1, 1984
Ebasco Study). The proposed Phase 2 studies will also seek to optimize the installed capacity,
building on the existing analysis, verifying and confirming appropriate assumptions.
Phase 2 funds will facilitate engineering and field studies to further refine these design
alternatives and economic analysis. Under the Phase 2 work, a final design concept will be
selected and developed. This design will then be included in a FERC license application.
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 legal description and ownership of lands (ADNR 2006) within the proposed project
boundary are provided in the table below. All land is referenced to the Seward Meridian.
Un-shaded rows pertain to the Grant Lake outlet and Grant Creek. Shaded rows include
Grant Lake in its entirety and potential transmission areas.
Township Range Section Ownership
5N 1W 36 Private
5N 1E 27 USDA Forest Service
5N 1E 28 USDA Forest Service
5N 1E 29 USDA Forest Service
5N 1E 30 State patented land
5N 1E 31 State patented land
5N 1E 32 State patented land
5N 1E 33 USDA Forest Service
5N 1E 34 USDA Forest Service
5N 1E 35 USDA Forest Service
5N 1E 36 USDA Forest Service
4N 1E 1 USDA Forest Service
4N 1E 2 USDA Forest Service
4N 1E 3 USDA Forest Service
4N 1E 5 USDA Forest Service
4N 1E 6 State patented land
4N 1E 7 State patented land
4N 1W 1 Private
4N 1W 12 Private
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4.3.3 Permits
Provide the following information is it may relate to permitting and how you intend to address
outstanding permit issues.
• List of applicable permits
• Anticipated permitting timeline
• Identify and discussion of potential barriers
A comprehensive listing of permits will be developed during Phase 1 work currently in
progress. Phase 2 efforts should include preliminary applications for these permits in
support of a FERC license application. This work will be accomplished during 2009-
2010. A preliminary list of permits is provided below:
• USDA Forest Service, Special Use Application (SUA)
• Alaska Railroad Corp., Access Road & Transmission Line ROW Crossing
of Tracks
• Transmission Line Right-of-Way, lease or purchase agreements
• ADNR, Water Rights
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
Nearly all of the issues listed in 4.3.4 above will be addressed during the Phase 2 studies that
would be funded by this grant request. Most of these issues were addressed within the context of
the 1984 Ebasco study for Grant Lake and this project will seek to build on the work contained in
this document. Many of these issues will be reviewed and addressed during the Phase 1 work in
progress during consultations with the various Stakeholder groups and agencies.
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
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 13 of 18 9/3/2008
• Identification of other funding sources
• Projected capital cost of proposed renewable energy system
• Projected development cost of proposed renewable energy system
Phase 1 Reconnaissance
The cost of the reconnaissance phase is fairly well identified and is based on cost estimates
provided by consultants currently under contract for this work. There are still some unknowns
related to certain engineering elements, such as aerial surveys and winter study work. Phase 1
is currently scheduled to be complete by early 2009 and should cost approximately $105,000.
Phase 2 Resource Assessment, Feasibility Analysis and Concept Design
This grant application is for funds to support Phase 2 studies and work. The cost estimate for this
Phase is our best estimate based on Phase 1 consultant costs and an initial understanding of the
scope of work to be accomplished under the FERC preliminary permit. The duration of the FERC
preliminary permit is initially limited to 3-years and it is the goal of Kenai Hydro to complete the
necessary work before the expiration of the FERC preliminary permit period. The costs
requested in this application cover studies and work for a two (2) year period, during the 2009
and 2010 seasons. The Phase 2 cost estimate includes only anticipated consultant fees and
does not specifically include estimates of equipment, supplies, travel, per diem, or other direct
costs… although the charges from the consultants may request or include some or all of these
items.
It is estimated that approximately $1,020,000 in funds are needed to complete a Phase 2 study
of the Grant Lake project that would culminate in a FERC license application. Kenai Hydro
requests as part of this application that AEA provide 80% of this amount, or $816,000.
Phase 2 funds will initially be drawn from a combination of existing and future grant funding as
well as internal financing. Kenai Hydro, LLC is committed to providing the 20% matching funds in
cash, as well as the in-kind match for the cost of management and administrative staffing. A 1.5
Full Time Equivalent (FTE) is projected for the management and administration of Phase 2. The
estimated value of the 1.5-FTE is $549,120 over the two (2) year period of the Phase 2 request
and will be an in-kind match by Kenai Hydro, LLC.
Phase 3 FERC Licensing & Final Design
The extent of costs associated with the final engineering design work and FERC Licensing are
not well known at this time, but are estimated at approximately eleven (11%) percent of the
projected cost of construction, roughly $2.5-million. This work would be the actual final
engineering effort to prepare plans and specifications for construction in accordance with any
FERC license requirements, as well as any follow-up studies or continuing data acquisition.
Phase 4 Construction and Commissioning
The cost of construction and commissioning is conservatively estimated at $3,250/kW or
$22,750,000 for a nominal 7.0-MW plant. Recent costs of construction for similarly sized plants
in remote locations in Alaska have come in at approximately $3,000/kW. It is our hope that this
project might ultimately beat the $3,250/kW cost and improve on this preliminary estimate. For
now, this remains our best estimate and target budget. By the end of Phase 2, we hope to have
a better handle on the final design concept that will help refine the projected construction cost.
Other Funding Sources
As other potential sources of funding become available, Kenai Hydro will pursue them as long as
the project continues to pass successive project milestones and economic and environmental
reviews. No specific alternate sources of funding are known at this time.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 14 of 18 9/3/2008
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 grant application is for feasibility studies only and not for actual construction or operation of
a facility. No O&M funds are requested as part of this application.
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 the project is intended to be sold to Homer Electric Association (HEA) for the use
and benefit of its customers. HEA is a partner in Kenai Hydro, LLC and the power purchase price
will be the subject of future negotiation amongst the vested parties. It is likely that the acceptable
rate-of-return will be kept to single-digit margins.
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.
See the attached Cost Worksheet completed for the proposed Grant Lake project.
Renewable Energy Source
USGS stream gage 15256000, Grant Creek near Moose Pass, was located on Grant Creek
approximately 1/3 mile upstream from the mouth and has of an 11-year period of record from
1947 to 1958. This stream gage has a drainage basin of 44.2 square miles and the average
annual flow for the period of record was 193-cfs.
See the attached benefit-cost analysis in the form of an excel spreadsheet. This simple analysis
shows a benefit-cost ration of 1.09, whereas earlier, more thorough studies showed a ratio of
1.20 for the 7-MW project (see Table 16-4 of the Ebasco study).
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.
Two of the three business entities that comprise Kenai Hydro, LLC have experience in operation
and maintenance of power generation facilities. Operation of the proposed facility would be a
natural extension of either HEA or enXco’s core business. HEA currently operates and maintains
the 120MW Bradley Lake hydroelectric plant and enXco is a nation-wide company that founded
its business on the operation and maintenance of wind generating facilities throughout the United
States.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 15 of 18 9/3/2008
Once a decision is made to apply for a FERC license, a new business model will be created and
adopted through the vehicle of a Project Development Agreement (PDA). The PDA will include
terms for the construction as well as the future operation and maintenance of the facility. This
agreement will include, at least by reference, a Power Sales Agreement (PSA) between the
facility and HEA.
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your
recommendation for additional project development work.
The 1984 Ebasco study concluded that the Grant Lake project was economically feasible with
the outcome of the economic analysis being particularly dependent on the assumptions made for
the price of gas and the rate of escalation of that gas. The same remains true today when
running a benefit-cost analysis.
The Ebasco study concluded that the 7-MW project had a benefit-cost ratio of 1.20 (Table 16-4
of the Ebasco’s report). The Kenai Hydro economic analysis, based on more recent
assumptions, estimates a ratio of 1.09. The economics and assumptions will be refined as better
cost information is developed during the course of the Phase 2 studies. Better understanding of
future gas pricing and markets may also be developed during Phase 2. The economic model will
be updated and confirmed as part of each of the decision making, milestone activities.
SECTION 5– PROJECT BENEFIT
Explain the economic and public benefits of your project. Include direct cost savings,
and how the people of Alaska will benefit from the project.
The benefits information should include the following:
• Potential annual fuel displacement (gal and $) over the lifetime of the evaluated
renewable energy project
• Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price,
RCA tariff, or avoided cost of ownership)
• Potential additional annual incentives (i.e. tax credits)
• Potential additional annual revenue streams (i.e. green tag sales or other renewable
energy subsidies or programs that might be available)
• Discuss the non-economic public benefits to Alaskans over the lifetime of the project
Potential Fuel Displacement
In 2008 dollars, it is estimated that nearly $41,000,000 can be saved in avoided fuel cost over a
50-year period. This represents a tremendous value to the rate payers of Alaska and a
generation asset will continue to produce clean, renewable power for Alaskans over the next
century.
Anticipated Annual Revenue
The annual revenue is unknown at this time and will be the subject of future negotiations outside
the scope of this grant request.
Potential Additional Annual Incentives
The potential tax credits are purely speculative at this time and will be dependent on the form of
the business entity that takes the project into licensing, construction and operation. This has yet
to be determined.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 16 of 18 9/3/2008
Potential Additional Annual Revenue Streams
It may be possible to sell Renewable Energy Credits, or “green tags”, from the energy produced
by this project. However, it is too early and speculative to estimate what this revenue stream
might be.
The renewable energy will also serve to incrementally stabilize the long term price of power to
consumers and thereby, attract business to the area.
Non-Economic Public Benefit
The power from the proposed project would reduce consumption of non-renewable carbon-
based energy sources, thereby helping to improve air quality in Kenai Peninsula Borough. The
project is also an important step toward diversifying HEA’s future generation portfolio.
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
Provide a narrative summary regarding funding sources and your financial commitment to the
project.
Overview
The Grant Lake hydro project has been the subject of several studies conducted during the past
century. The most recent and significant of these studies was published by Ebasco in 1984.
Electronic copies of Ebasco’s complete report are provided along with this grant application on
CD-ROM. Ebasco’s effort was funded by the State of Alaska through AEA’s predecessor,
Alaska Power Authority. This extensive study ultimately recommended that the State file a
license application with FERC and proceed with further development of the Grant Lake project
to displace gas-fired generation. It is our position that this recommendation is even more
relevant and valid in today’s environment and Railbelt’s heavy dependence on gas-fired
generation.
It is likely that the current project can build on the work of the 1984 Ebasco study and thereby,
minimize the scope and cost of new studies that will be required.
Phase 2 is broken into the following three general Tasks:
• Task 6 – Field Studies
• Task 7 – Engineering, Design & Management of Studies
• Task 8 – FERC License Preparation & Application.
The Task numbering starts at “6” because Phase 2 builds on the work of Phase 1, which
included Tasks 1 to 5. Tasks 6 through 8 are meant to be performed concurrently.
Task 6 – Field Studies
The budget proposed for Task 6 is limited to the following scope of studies: fisheries, wildlife,
cultural resources and recreational use. The fisheries budget entails rebuilding of the Grant
Lake USGS gaging station, review and analysis of historical data, and some flow measurement
and analysis. Wildlife study is limited to a literature review and summary of existing research
and data. Cultural studies may include consultation with various groups, entities or persons to
collect and summarize existing information. Recreational studies could include quantifying the
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 17 of 18 9/3/2008
use of the site and related resources and facilities. All other potential studies, such as a
geotechnical investigation, etc. have not been included or contemplated by this budget.
Task 7 – Engineering, Design & Management
This budget is intended to cover the cost of engineering, planning, oversight, and surveying
required to refine concept layouts and studies.
Task 8 – FERC License Preparation & Application
This budget is for a FERC licensing manager and costs or expenses related to developing the
FERC license application, including the Notice of Intent (NOI) and Pre-Application Document
(PAD). Budget funds here might also include planning for further studies and data acquisition.
The total cost of Phase 2 including all State and Local Matching Cash and In-Kind funds is
$1,569,120.
Please refer to this application’s Budget Form for the discussion that follows related to the
source of funds.
State Funds
This application requests $1,020,000 to complete the activities associated with the Phase 2
Feasibility Analysis/Concept Design of the proposed project. This is to cover all costs other than
the Direct Labor and Benefits of Kenai Hydro, LLC management and administrative staff. The
State would be expected to provide 80% of the $1,020,000 for Phase 2, or approximately
$816,000.
Local Match Funds (Cash)
Kenai Hydro, LCC plans to honor a 20% match in cash, or $204,000 of the $1,020,000
estimated for Phase 2.
Local Match Funds (In-Kind)
Kenai Hydro, LLC intends to bear the cost of the project management and administrative
staffing. The estimated value of these personnel is $549,120 for the two year period proposed
for the Phase 2 work. This is based on an estimated 1.5 Full Time Equivalents (FTE) at an
annual average burdened rate of $183,040/FTE (i.e., $88/hr).
Nature & Source of Funds
Funds will initially be drawn from a combination of existing and future grant funding as well as
internal financing. Alaska Energy Authority (AEA) has already committed to providing up to
$50,000 in matching funds to this project. This has helped to initiate the reconnaissance phase
of the project. It has passed the initial engineering assessment, and now further reconnaissance
and feasibility work needs to be done. As long as the project continues to remain economically
and environmentally viable, the companies that constitute Kenai Hydro, LLC are committed to
providing the 20% matching funds, plus the financial commitment of the managing and
administrative staffing.
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
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 18 of 18 9/3/2008
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 Steve Gilbert
Signature
Title Manager, Kenai Hydro LLC
Date October 8, 2008
SECTION 7 – ADDITIONAL DOCUMENTATION AND CERTIFICATION
SUBMITTED WITH THIS APPLICATION:
A. Resumes of Applicant’s Project Manager, key staff, partners, consultants, and
suppliers per application form Section 3.1 and 3.4
- Kenai Hydro LLC Key Personnel
- HDR Alaska, Inc. Key Personnel
B. Cost Worksheet per application form Section 4.4.4
C. Grant Budget Form per application form Section 6.
D. Governing Body Resolution per RFA Section 1.4
- HEA Certificate of General Manager
- WEA Letter of Support & Authorization
E. HDR Initial Site Assessment Report – Grant Lake
F. Proposed Project Schedule per Section 3.2
G. Kenai Hydro LLC Benefit-Cost Analysis Spreadsheet
H. Table 16-4, Determination of Optimum Installed Capacity for Alternative D,
excerpted from 1984 Ebasco Grant Lake Hydroelectric Project Detailed Feasibility
Analysis
I. FERC Order Issuing the Preliminary Permit to Kenai Hydro LLC for Grant Lake
J. Grant Lake Hydroelectric Project, Detailed Feasibility Analysis, Final Report,
Ebasco Services Inc., January 1984 ( three separate files on enclosed CD-ROM)
Kenai Hydro, LLC
KEY PERSONNEL
Steve Gilbert, Manager
Steve Gilbert is Manager of Alaskan Projects for enXco, a major U.S. wind project
developer. enXco and CIRI are joint owners of Wind Energy Alaska. He came to his
current post after 17 years with Chugach Electric where he served as Manager, Energy
Projects Development. During his years at Chugach he managed three of Chugach’s
four power plants, including hydro, served as lead electrical engineer for the 1 MW fuel
cell and micro turbine projects and the investigation of renewable energy for Chugach
including Fire Island.
After completing training in electrical power engineering Steve started his career in 1980
in start up of large coal and nuclear power plants. He provided consulting and technical
services to client companies across the U.S. Steve has managed numerous multi-million
dollar power projects. Steve was Alaska’s electrical engineer of the year in 2000 and for
the 12 western states in 2001.
Brad Zubeck, Project Engineer
• Mr. Zubeck came to Homer Electric Association following a successful career as
an owner and officer of an Alaskan heavy highway and utility general contracting
company. He brings over 20-years of experience in cost estimating and
managing construction of multi-million dollar general civil projects.
• Much of Mr. Zubeck’s experience is in construction of municipal utility piping &
mechanical systems along with related structures and facilities. His hydro
experience includes on-site consulting services for construction of HDPE
penstock for a 2-MW hydro project in Ecuador.
• Since joining HEA in 2006, he has managed a variety of small to large projects,
including the following:
- Healy Clean Coal Plant (HCCP) Development and Restart Engineering Phases
- Renewable Energy Resource Development for Wind and Hydro
• Mr. Zubeck holds a BS and an MS in Civil Engineering, both from Oregon State
University.
HDR Alaska, Inc.
Key Personnel Résumés
Renewable Energy Fund
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. The water resource is well documented in the form
of USGS stream gaging data available on Grant
Creek and Fall Creek, as well as in the referenced
1984 Ebasco study.
Unit depends on project type (e.g. windspeed, hydropower output, biomasss fuel)
2. Existing Energy Generation
a) Basic configuration (if system is part of the Railbelt 1 grid, leave this section blank)
i. Number of generators/boilers/other Left Blank – System is on Railbelt Grid
ii. Rated capacity of generators/boilers/other
iii. Generator/boilers/other type
iv. Age of generators/boilers/other
v. Efficiency of generators/boilers/other
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor Left Blank – System is on Railbelt Grid
ii. Annual O&M cost for non-labor
c) Annual electricity production and fuel usage (fill in as applicable) (if system is part of the
Railbelt grid, leave this section blank)
i. Electricity [kWh] Left Blank – System is on Railbelt Grid
ii. Fuel usage
Diesel [gal]
Other
iii. Peak Load
iv. Average Load
v. Minimum Load
vi. Efficiency
vii. Future trends
1 The Railbelt grid connects all customers of Chugach Electric Association, Homer Electric Association, Golden
Valley Electric Association, the City of Seward Electric Department, Matanuska Electric Association and Anchorage
Municipal Light and Power.
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 1
Renewable Energy Fund
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] Left Blank – System is on Railbelt Grid
ii. Electricity [kWh]
iii. Propane [gal or MMBtu]
iv. Coal [tons or MMBtu]
v. Wood [cords, green tons, dry tons]
vi. Other
3. Proposed System Design
a) Installed capacity Nominally 7.0-MW
b) Annual renewable electricity generation
i. Diesel [gal or MMBtu]
ii. Electricity [kWh] ~ 28.2 GWh
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 $22,750,000
b) Development cost $4,174,120
c) Annual O&M cost of new system ~$250,000
d) Annual fuel cost $0
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity
ii. Heat
iii. Transportation
b) Price of displaced fuel ~ $3.16-million/year in 2016 dollars (when the project
would be on-line producing power).
c) Other economic benefits
d) Amount of Alaska public benefits
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 2
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 3
6. Power Purchase/Sales Price
a) Price for power purchase/sale This will be the subject of future negotiation.
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio > 1.0, (range between 1.09 to 1.20) this ratio is sensitive to the price of
natural gas and projections of future pricing.
Payback To Be Determined
Alaska Energy Authority ‐ Renewable Energy FundBUDGET INFORMATIONBUDGET SUMMARY: GRANT LAKE HYDRO PROJECTMilestone or Task Federal Funds State FundsLocal Match Funds (Cash)Local Match Funds (In‐Kind)Other FundsTOTALSPHASE 2 ‐ RESOURCE ASSESSMENT, FEASIBILITY ANALYSIS & CONCEPTUAL DESIGN (Funds requested in this grant application)Task 6 ‐ Field Studies$432,000.00 $108,000.00 $274,560.00 $814,560.00Studies including fisheries, wildlife, cultural resources and recreational. resulting from Stakeholder Consultations determined in Phase 1. Does not include budget for other studies, such as Geotechnical, etc.Milestone # 3: Project Report and Decision based on the results of the field studies at the conclusion of Task 6.Task 7 ‐ Engineering, Design & Management$240,000.00 $60,000.00 $137,280.00 $437,280.00Planning, Oversight, Engineering, Surveying and Refinement of Preliminary Designs, Studies and other activitiesTask 8 ‐ FERC License Preparation & Application$144,000.00 $36,000.00 $137,280.00 $317,280.00FERC Licensing manager and management, Notice of Intent and PAD, Summary of Studies, Planning & Prep of follow‐up studies & data acquisitionMilestone #4: Decision to file FERC License Application following 2010 studies and follow‐up work.TOTALS$0.00 $816,000.00 $204,000.00 $549,120.00 $0.00 $1,569,120.00Milestone # or Task #BUDGET CATAGORIES:Task 6 Task 7 Task 8 4 5 6 TOTALSDirect Labor and Benefits $274,560.00 $137,280.00 $137,280.00 $549,120.00Travel, Meals, or Per Diem$0.00Equipment$0.00Supplies$0.00Contractual Services $540,000.00 $300,000.00 $180,000.00 $1,020,000.00Construction Services$0.00Other Direct Costs$0.00TOTAL DIRECT CHARGES $814,560.00 $437,280.00 $317,280.00 $0.00 $0.00 $0.00 $1,569,120.00RFA AEA09-004 Budget Form
Corporate Office Central Peninsula Service Center
3977 Lake Street 280 Airport Way
Homer, Alaska 99603-7680 Kenai, Alaska 99611-5280
Phone (907) 235-8551 Phone (907) 283-5831
FAX (907) 235-3313 FAX (907) 283-7122
CERTIFICATE OF GENERAL MANAGER
OF HOMER ELECTRIC ASSOCIATION, INC.
IN SUPPORT OF KENAI HYDRO, LLC GRANT APPLICATION
I am the General Manager of Homer Electric Association, Inc. (the "Cooperative"). I am authorized
by the Board of Directors of the Cooperative pursuant to Board Policy 203, and by formal action of
the Board of Directors of the Cooperative at a special meeting held on April 18, 2008 to certify as
follows:
1. Homer Electric Association, Inc. is an equity partner in Kenai Hydro, LLC.
2. The Board of Directors of the Cooperative has authorized the application for project
funding and agrees to honor the match amounts contained in the application to which this
certificate is attached.
3. The Board of Directors of the Cooperative has authorized Mr. Steve Gilbert to act as
Manager of Kenai Hydro, LLC and to represent the Cooperative for the purposes of the
application.
4. The Cooperative is in good standing with respect to any existing credit and federal tax
obligations.
Dated at Kenai, Alaska, this 7th Day of October, 2008.
____________________________________
Bradley P. Janorschke
General Manager
Wind':~•.....
Energy~iA
6921 Howard Ave,Anchorage,Alaska 99504
October 8,2008
Alaska Energy Authority
813 West Northern Lights Boulevard
Anchorage,AK 99503
Subject:Round I Grant RFA,Kenai Hydro,LLC
Dear Alaska Energy Authority,
Alaska Wind Energy,LLC,dba Wind Energy Alaska,is a partnership of Cook Inlet Region,
Inc.and a major renewable energy developer,enXco Development Corp.Wind Energy
Alaska has partnered with Homer Electric to form Kenai Hydro,LLC.Wind Energy Alaska
is the manager of Kenai Hydro under the terms of that entity's governing documents,and
therefore has the requisite authority to submit an application on its behalf.Kenai Hydro
appreciates the opportunity to present the enclosed application for partial funding for the
study of the Grant Lake low impact hydroelectric generation project on the Kenai
Peninsula.The project represents an important opportunity for the community to reduce
electric costs over the long term while diversifying the energy mix for Alaskans.The
project also represents an opportunity to generate electricity from a renewable resource
close to the rural Kenai Peninsula communities that it will ultimately serve.
The management of Wind Energy Alaska is prepared to match the amounts indicated in
the grant under its partnership with Homer Electric.For purposes of this application,Mr.
Steve Gilbert is manager and point of contact.Wind Energy Alaska is in compliance with
applicable local,state and federal law including credit and federal tax obligations.
Sincerely,
~c;p-
Senior Vice President,Land and Legal Affairs
Cook Inlet Region,Inc.
Scott Nelson
Vice President,Development
enXco Development Corp
Memo
To: Kenai Hydro LLC
From: HDR Project: Grant Lake
CC:
Date: 9/15/08 Job No:
Trip Report: Grant Lake
Trip Date: 8/26-27/08
Present: Todd Bethard (HDR), Bob Butera (HDR), Paul McLarnon (HDR), Brad Zubeck
(HEA)
General Description:
Grant Lake is located at an elevation of 700 feet and is located one mile east of the community of
Moose Pass (Figure 1). The lake is approximately 6 miles long and approximately 2000 feet in
average width. The lake is in a dogleg shape with the lower portion trending north south and the
upper portion trending east west. The drainage area of Grant Lake is 44 square miles. The lake
drains westward via Grant Creek, Trail Lake and Trail Creek to Kenai Lake. At the west end of
the lake there is a low ridge between Grant Lake and Trail Lake. A saddle is located
approximately in the middle of this low ridge. Trail Lake is at elevation 470 feet giving a
potential elevation difference between the two lakes of 230 feet. Grant Creek flows from Grant
Lake to Trail Lake. Grant Creek is approximately 1 mile long and descends through a series of
canyons for about 2/3 of its length.
The USGS performed a study of Grant Creek as a potential hydroelectric power site in 1952.
This study focused on the geologic conditions in the area for the purpose of dam site and power
tunnel construction. The report concluded that a dam at the lake outlet would be founded on
bedrock; that a tunnel to the west to a powerhouse on Trail Lakes could be constructed in
competent rock; or alternatively a tunnel could be constructed horizontally at the 700-foot level
through the ridge that separates the two lakes and then a conduit could continue to the
powerhouse. The saddle in the ridge was noted as about 50 feet above the lake level.
USGS stream gage 15256000, Grant Creek near Moose Pass, was located on Grant Creek
approximately 1/3 mile upstream from the mouth and has of an 11-year period of record from
1947 to 1958. This stream gage has a drainage basin of 44.2 square miles and the average annual
flow for the period of record was 193 cfs.
A Grant Lake Hydroelectric Project Detailed Feasibility Analysis was completed in 1984 by
Ebasco Services Incorporated for the Alaska Energy Authority. This study evaluated six
alternative development scenarios for generating power from the Grant Lake Basin. The
originally selected alternative was for a lake tap on Grant Lake and a tunnel to a powerhouse on
Trail Lakes. This alternative also included diversion and conveyance of flow from Falls Creek to
HDR Engineering, Inc
Trip Report Grant Lake with photos
HDR Alaska Inc
2525 C st., Suite 305
Anchorage, AK 99503-2632
Phone: 907-644-2000
Fax: 907-644-2022
www.hdrinc.com
Page 1 of 6
Grant Lake. Further refinement of the project concluded that it was not economic to include the
Falls Creek diversion in the Grant Lake Project.
Grant Lake has been documented to contain a small population slimy sculpin and a dense
population of stickleback. Neither of the fish species would pose any significant detriment to a
hydroelectric project. Previous studies have documented the absence of anadromous fish and
resident salmonids such as lake trout or arctic char in Grant Lake. As such, Grant Lake does not
directly support a viable sport fishery.
Grant Creek is approximately 1 mile long ¾ of which is mapped as an anadromous stream by the
Alaska Department of Fish and Game. Grant Creek also supports some resident fish species such
as rainbow trout and Dolly Varden, which likely occupy the stream in greater numbers during the
summer when salmon are present.
Field Reconnaissance
A site visit was conducted on Tuesday, August 26 by Todd Bethard, P.E. (HDR), Bob Butera,
P.E. (HDR), Paul McLarnon (HDR) and Brad Zubeck (HEA). A floatplane was used to overview
the Grant Lake drainage basin. We landed on the west end of the lake for a ground
reconnaissance of the saddle area and the outlet. Later that day a reconnaissance of Grant Creek
was conducted by boat and foot. The boat was needed to cross Trail Lake and a trail along the
south bank was used to follow the creek upstream from the mouth. This trail paralleled the creek
and was badly over grown. We hiked the trail to the former USGS gaging station site. The
hydraulic control section of the creek appeared to still be stable and the historic rating curves for
this site may be usable as a basis of preliminary streamflow data if a gage were to be reinstalled at
this site. The cable car across the river was still in place (a cable car is required for streamflow
measurements at this site because the creek is too large to wade and too small to boat) and the
gage house is still standing. Both structures would need to be rehabilitated.
One potential alternative was reviewed for a project layout. This was an intake at the saddle area
with a powerhouse at Trail Lake. A second potential alternative would be a lake tap as was
proposed in the Ebasco report.
Discussion during the field reconnaissance yielded the following ideas concerning the project.
• The optimum penstock route appears to be at the saddle midway along the north-South
leg of Grant Lake. There is a significant (50’+/-) rise from the lake to the high point of
this saddle.
• A bedrock sill was noted at the lake outlet that would be ideal for placement of a concrete
structure should it be required in the preferred alternative.
• The terrain downstream of the lake outlet was too rough for a penstock.
• Power house sites at Trail Lakes looked feasible and could be tucked into coves to
minimize visual impact.
• The powerhouse/intake access road would require a bridge across Trail Lakes. The
logical location for this bridge is at the narrows where there are bedrock abutments on
both sides, but depending on powerhouse location, a longer bridge may be preferable to
additional access road.
• Access route would require crossing of the ARRC tracks. Setback distance of tracks to
highway may present problems for vehicle queuing.
• The operation of the project will require that water be released from the lake to maintain
instream flow in support of fish populations in Grant Creek. The amount of water
HDR Engineering, Inc
Trip Report Grant Lake with photos
HDR Alaska Inc
2525 C st., Suite 305
Anchorage, AK 99503-2632
Phone: 907-644-2000
Fax: 907-644-2022
www.hdrinc.com
Page 2 of 6
required will be based on the results of an instream flow analysis and negotiations with
resource agencies.
• No fish other than Sticklebacks were observed in the lake.
• Chinook and sockeye salmon were observed in Grant Creek in relatively small numbers
and Chinook salmon were seen in the creek as far up stream as the gaging station.
Observations were not made further upstream than the gaging station. Grant Creek likely
supports larger salmon returns during spring seasonal runs of Chinook and sockeye
salmon in May and June, which tend to spawn in tributaries in greater numbers, as
opposed to fall salmon runs which tend spawn in greater numbers in the mainstem areas
of the Kenai River.
• Grant Lake is forested to the edge of water. Lowering the lake level rather than raising
(other than a few feet) will require less clearing and be less of an impact on surrounding
habitat and recreational aesthetics.
• Instream flow for Grant Creek may require a low level outlet. The lake was fairly
shallow to about 100 feet out. Should a low water outlet be required, this may need to be
dredged into a channel, depending on how the project is operated.
• Diversion of water from Falls Creek to the Grant Creek basin may be a preferable way to
use this water, rather than a stand alone project on Falls Creek. A potential use of a
portion of the Falls Creek water would be to address instream flow requirements in Grant
Creek. This was not considered in the Ebasco study which determined the diversion of
water from Falls Creek uneconomic.
• The Ebasco Grant Lake report shows an intake at the 1400 foot elevation. This intake
site noted in the Ebasco report was not visited due to time constraints. A separate site
visit is planned to hike up the trail to identify the proposed intake site and assess the
ability to route the penstock out of the incised canyon. If this is determined in the field
investigation to indeed be the most advantageous site for the intake, then power
generation with the diversion water may be worth further investigation. Otherwise, an
intake could be located further downstream in the basin.
• The 11 years of existing streamflow data will be adequate for power studies. If additional
streamflow data is necessary for other reasons such as environmental baseline work,
reestablishment of the historic gaging site at Grant Creek is the appropriate location for
future streamflow data collection.
• Fisheries investigations would need to be conducted to accurately determine the fish
species abundance and establish appropriate instream flow needs.
Based on this field reconnaissance and a cursory review of the Ebasco study, two alternative
project layouts are proposed for further evaluation. A reconnaissance study is the next step to
determine project viability.
The first alternative consists of an intake near the saddle on Grant Lake; a penstock following the
saddle to Trail Lake; a power house within a cove on Trail Lake and a tailrace to Trail Lake.
Powerhouse access would be via a bridge across Lower Trail Lake, where the transmission line
would also be routed. Intake access would be along the saddle. The project would obtain storage
from lake drawdown. Due to the elevation of the saddle the intake would likely be a horizontal
tunnel with a lake tap. Water to maintain stream flow in Grant Creek would be provided via a
low level outlet. Additional project water would be diverted from the Falls Creek basin.
The second alternative is based on the preferred alternative originally selected by the Ebasco
study. This consists of an lake tap on Grant Lake; a tunnel to Trail Lake; a power house within a
cove on Trail Lake and a tailrace to Trail Lake. Access would be via a bridge across the narrows
HDR Engineering, Inc
Trip Report Grant Lake with photos
HDR Alaska Inc
2525 C st., Suite 305
Anchorage, AK 99503-2632
Phone: 907-644-2000
Fax: 907-644-2022
www.hdrinc.com
Page 3 of 6
of Lower Trail Lake, where the transmission line would also be routed. The project would obtain
storage from lake draw down. The Ebasco study considered dewatering Grant Creek and
providing mitigation for the fishery. Whether this is possible needs to be investigated further.
The Ebasco study also determined that diversion of Falls Creek to Grant Lake would not be
economic. This diversion may be economic today and may be essential to project viability
depending upon the instream flow required.
Photographs of the site visit were kept. Several general shots with notations are included in this
report.
HDR Engineering, Inc
Trip Report Grant Lake with photos
HDR Alaska Inc
2525 C st., Suite 305
Anchorage, AK 99503-2632
Phone: 907-644-2000
Fax: 907-644-2022
www.hdrinc.com
Page 4 of 6
Falls Creek Valley
Natural outlet
Possible intake site
South leg Grant Lake
Grant lake looking south towards natural outlet. Proposed intake is nearest bay on right.
East leg Grant Lake
Possible
location for
dredging of
lake
Grant Lake channel which may need dredging to increase usable project storage.
HDR Engineering, Inc
Trip Report Grant Lake with photos
HDR Alaska Inc
2525 C st., Suite 305
Anchorage, AK 99503-2632
Phone: 907-644-2000
Fax: 907-644-2022
www.hdrinc.com
Page 5 of 6
Potential intake site Potential power
conduit route
South leg Grant
Lake
Area that may
require dredging for
low level outlet
Natural outlet
Grant Lake looking north with natural outlet in foreground. Potential intake site third bay on left
hand side of lake.
HDR Engineering, Inc
Trip Report Grant Lake with photos
HDR Alaska Inc
2525 C st., Suite 305
Anchorage, AK 99503-2632
Phone: 907-644-2000
Fax: 907-644-2022
www.hdrinc.com
Page 6 of 6
IDTask NameStartFinish1PHASE 2 - RESOURCE ASSESSMENT, FEASIBILITY ANALYSIS & CONCEThu 1/1/09Fri 12/31/102TASK 6 - Field StudiesMon 3/2/09Thu 9/30/1032009 Studies: Fisheries,Biological, Cultural, RecreationalMon 3/2/09Fri 10/30/094Milestone # 3: Project Report and decision based on 1st year results of Thu 12/31/09Thu 12/31/0952010 Studies: Fisheries,Biological, Cultural, RecreationalMon 5/3/10Thu 9/30/106TASK 7 - Engineering, Conceptual Design & Study ManagementThu 1/1/09Fri 12/31/1072009-10 Engineering: Fine-Tune Phase 1 Work & Designs based on StuThu 1/1/09Fri 12/31/1082009 Season Oversight of Studies, Permitting, Land Use, etc.Mon 3/2/09Fri 10/30/0992010 Season Oversight of Studies, Permitting, Land Use, etc.Mon 5/3/10Thu 9/30/1010TASK 8 - FERC License ApplicationMon 8/3/09Fri 12/31/1011FERC License Manager Activities: NOI, PAD, Study SummariesMon 8/3/09Fri 12/31/1012Milestone # 4: FERC License ApplicationMon 11/1/10Fri 12/31/1012/31JFMAMJJASONDJFMAMJJASONDHalf 1, 2009Half 2, 2009Half 1, 2010Half 2, 201020092010GRANT LAKE, PHASE 2 - RESOURCE ASSESSMENT, FEASIBILITY ANALYSIS & CONCEPTUAL DESIGNPage 1
GRANT LAKE/CREEK HYDRO BENEFIT-COST ANALYSISASSUMPTIONS7.0 MW, Power Capacity 6% /Year, Discount Rate 9.6Mcf per MWh for LM2500 Gas-fired Plant50% CAPACITY FACTOR 3% /Year, Cost Escalation for O&M & Gas beyond 2033 294,336Mcf, Gas Required for Equivalent Hydro Energy3.5 aMW, Net Capacity 5% /Year, Power Price Escalation8760 Hours Per Year 10% /Year, Cost of Capital100% Availability Multiplier 10.00$ /MWh, Estimated O&M Cost30660000 kWh, Estimated Annual Power Production3,250.00$ /kW Estimated Construction CostDATE YEAR #DESIGN & PERMITTING COSTCONSTRUCTION COSTPay PeriodCost of Capital (Interest on Loan) O&M COSTPresent Worth (PW) of Design & Permitting CostsPW of Construction CostPW of Cost of CapitalPW of O&M CostPW of All CostsProjected Price of Gas ($/Mcf)Annual Avoided CostPresent Worth of Annual Avoided CostNet Present Worth = PW Avoided Costs - PW All CostsBenefit:Cost RatioPRESENT WORTH (2008) TOTALS($1,178,144) ($14,273,631) ($17,405,720) ($4,841,645)($37,699,140) ($41,074,666) ($3,375,526)1.092008 1 $170,000 $0 $0($160,377)2009 2 $265,000 $0 $0($235,849)2010 3 $65,000 $0 $0($54,575)2011 4 $250,000 $0 $0($198,023)2012 5 $250,000 $0 $0($186,815)2013 6 $250,000 $0 $0($176,240)2014 7 $250,000 $0 $0($166,264)10.55$ 2015 8 $0 $22,750,000 1 $2,275,000 $0($14,273,631) ($1,427,363)10.73$ $3,158,2252016 9 $0 $0 2 $2,261,170 $306,600($1,338,383) ($181,476)10.74$ $3,161,169($1,871,091)2017 10 $0 $0 3 $2,245,956 $315,798($1,254,130) ($176,340)10.68$ $3,143,508($1,755,319)2018 11 $0 $0 4 $2,229,222 $325,272($1,174,326) ($171,349)10.49$ $3,087,585($1,626,501)2019 12 $0 $0 5 $2,210,814 $335,030($1,098,707) ($166,500)10.33$ $3,040,491($1,511,031)2020 13 $0 $0 6 $2,190,565 $345,081($1,027,022) ($161,787)10.06$ $2,961,020($1,388,242)2021 14 $0 $0 7 $2,168,291 $355,433($959,037) ($157,209)10.22$ $3,008,114($1,330,492)2022 15 $0 $0 8 $2,143,790 $366,096($894,529) ($152,759)10.45$ $3,075,811($1,283,429)2023 16 $0 $0 9 $2,116,838 $377,079($833,286) ($148,436)10.66$ $3,137,622($1,235,113)2024 17 $0 $0 10 $2,087,192 $388,392($775,109) ($144,235)10.89$ $3,205,319($1,190,341)2025 18 $0 $0 11 $2,054,581 $400,043($719,810) ($140,153)11.29$ $3,323,053($1,164,211)2026 19 $0 $0 12 $2,018,709 $412,045($667,209) ($136,186)11.68$ $3,437,844($1,136,252)2027 20 $0 $0 13 $1,979,249 $424,406($617,139) ($132,332)12.00$ $3,532,032($1,101,304)2028 21 $0 $0 14 $1,935,844 $437,138($569,439) ($128,587)12.34$ $3,632,106($1,068,404)2029 22 $0 $0 15 $1,888,098 $450,252($523,957) ($124,947)12.68$ $3,732,180($1,035,699)2030 23 $0 $0 16 $1,835,577 $463,760($480,549) ($121,411)13.04$ $3,838,141($1,004,815)2031 24 $0 $0 17 $1,777,805 $477,673($439,080) ($117,975)13.40$ $3,944,102($974,109)2032 25 $0 $0 18 $1,714,255 $492,003($399,419) ($114,636)13.78$ $4,055,950($945,031)2033 26 $0 $0 19 $1,644,350 $506,763($361,445) ($111,392)14.16$ $4,167,798($916,124)2034 27 $0 $0 20 $1,567,455 $521,966($325,040) ($108,239)14.58$ $4,292,832($890,196)2035 28 $0 $0 21 $1,482,870 $537,625($290,094) ($105,176)15.02$ $4,421,617($865,001)2036 29 $0 $0 22 $1,389,827 $553,754($256,502) ($102,199)15.47$ $4,554,265($840,520)2037 30 $0 $0 23 $1,287,479 $570,366($224,163) ($99,307)15.94$ $4,690,893($816,732)2038 31 $0 $0 24 $1,174,897 $587,477($192,983) ($96,496)16.42$ $4,831,620($793,617)2039 32 $0 $0 25 $1,051,056 $605,102($162,869) ($93,765)16.91$ $4,976,568($771,156)2040 33 $0 $0 26 $914,832 $623,255($133,736) ($91,111)17.42$ $5,125,866($749,331)2041 34 $0 $0 27 $764,985 $641,952($105,500) ($88,533)17.94$ $5,279,642($728,123)2042 35 $0 $0 28 $600,153 $661,211($78,083) ($86,027)18.48$ $5,438,031($707,516)2043 36 $0 $0 29 $418,838 $681,047($51,408) ($83,592)19.03$ $5,601,172($687,492)2044 37 $0 $0 30 $219,391 $701,479($25,404) ($81,226)19.60$ $5,769,207($668,035)2045 38 $0 $0 31 $722,523($78,928)20.19$ $5,942,283($649,128)2046 39 $0 $0 32 $744,199($76,694)20.79$ $6,120,552($630,757)2047 40 $0 $0 33 $766,525($74,523)21.42$ $6,304,168($612,905)2048 41 $0 $0 34 $789,520($72,414)22.06$ $6,493,293($595,559)2049 42 $0 $0 35 $813,206($70,365)22.72$ $6,688,092($578,703)2050 43 $0 $0 36 $837,602($68,373)23.40$ $6,888,735($562,325)2051 44 $0 $0 37 $862,730($66,438)24.11$ $7,095,397($546,410)2052 45 $0 $0 38 $888,612($64,558)24.83$ $7,308,259($530,946)2053 46 $0 $0 39 $915,270($62,731)25.57$ $7,527,506($515,919)2054 47 $0 $0 40 $942,729($60,955)26.34$ $7,753,332($501,317)2055 48 $0 $0 41 $971,010($59,230)27.13$ $7,985,931($487,129)2056 49 $0 $0 42 $1,000,141($57,554)27.95$ $8,225,509($473,342)2057 50 $0 $0 43 $1,030,145($55,925)28.78$ $8,472,275($459,946)2058 51 $0 $0 44 $1,061,049($54,342)29.65$ $8,726,443($446,929)2059 52 $0 $0 45 $1,092,881($52,804)30.54$ $8,988,236($434,280)2060 53 $0 $0 46 $1,125,667($51,310)31.45$ $9,257,883($421,989)2061 54 $0 $0 47 $1,159,437($49,858)32.40$ $9,535,620($410,046)2062 55 $0 $0 48 $1,194,220($48,446)33.37$ $9,821,688($398,441)2063 56 $0 $0 49 $1,230,047($47,075)34.37$ $10,116,339($387,164)2064 57 $0 $0 50 $1,266,948($45,743)35.40$ $10,419,829($376,206)COSTSPower Production & Construction Financial Avoided CostsSAVINGSAEA Grant RFA, Round 1 Application, October 8, 2008
TABLE 16-4
DETERMINATION OF OPTIMUM INSTALLED CAPACITY FOR ALTERNATIVE D1/
FERC
ACCOUNT DESCRIPTION
INSTALLED CAPACITY
6MW 7MW BMW
($1 000 )(SloOO)($1000 )
1/All costs fnJanuary 1983 dollars.
2/Based on 3.SS interest and a SO year lffe.
!/Transmission losses to seward are 1.8S for energy and 0.8S for capacity.!/Based on value of displaced combined cycle combustion turbine variable
costs (see section 4.3.3).!/Based on value displaced combfned cycle combustion turbine capftal and
fixed costs.!/Ratio of present worth of benefits to present worth of costs.
I
I
··r·
I
I
1
I
I
~
I
I
I
I
I
I
000
2435 2724 2968
7312 7352 7389
2733 3001 3295
1300 1428 1569
.·-·-···-··~-645-.-----645---··.·-645 _-
1498 1498 1498
.15923 16648 .17J64
TRANSMISSION PLANT STRUCTURES AND IMPROVEMENTS 5 5 5
STATION EQUIPMENT 469 469 469
WOOD POLES AND FIXTURES 46 46 46
OVERHEAD CONDUCTORS AND DEVICES 73 73 73
TOTAL TRANSMISSION PLANT 593 593 593
tcrtA(OIRECT COSTS 16516 17241 17957
INDIRECT COSTS
TEMPORARY CONSTRUCTION·FACILITIES 200 200 250
LABOR EXPENSE 150 150 195
MOBILIZATION/DEMOBILIZATION 826 862 898
TOTAL INDIRECT CONSTRUCTION COSTS 1176 1212 1343
.SUBTOTAL 17692 18453 19300
CONTINGENCY 2654 2768 2895
SUBTOTAL INCLUDING CONTINGENCY 20346 21221 22195
ENGINEERING &OWNER ADMINISTRATION 2847 2971 3107
TOTAL PROJECT COSTS (IN JANUARY,1983 DOLLARS)23194 24192 25302
DEBT SERVICE 989 1031 1079
o &M 302 302 302
TOTAL ANNUAL COST ~1291 1333 1381
PRESENT WORTH OF COS~/26386 27256 28222
AVERAGE ANNUAL ENERGY AFTER LOSSES (GWH)1!24.82 24.94 24.81
PRESENT WO~TH OF ENERGY BENEFIT!/21396 21498 21379
DEPENDABLE CAPACITY AFTER LOSSES (MW~5.70 6.55 7.02
PRESENT WORTH OF CAPACITY BENEFIT!/9719 11156 11967
PRESENT WORTH OF BENEFITS 31115 32654 33346
BENEFIT COST RATIa!/1.18 1.20 1.18
PRODUCTION PLANT
LAND AND LAND RIGHTS
STRUCTURES AND IMPROVEMENTS
RESERVOIRS,DAMS AND WATERWAYS
WATER WHEELS,TURBINES AND GENERATORS
ACCESSORY ELECTRICAL EQUIPMENT
.···HISCEl;f;ANEOUS-POWER-Pl:ANT··EQUIMNT··
.ROADS ,J!AJLROADS.AROB.RlQGE:S
TOTAL PRODUCTION PLANT
TRANSMISSION PLANT
61
64
69
60
352
353
355
356
331
332
333
334
··············-335
.....3.36.
UNITED STATES OF AMERICA 125 FERC ¶62,018
FEDERAL ENERGY REGULATORY COMMISSION
Kenai Hydro,LLC Project No.13212-000
ORDER ISSUING PRELIMINARY PERMIT
(Issued October 07,2008)
On April 28,2008,Kenai Hydro,LLC filed an application,pursuant to section 4(f)of
the Federal Power Act (FPA),1 to study the feasibility of the Grant Lake Project.The project
would be located on Grant Lake and Creek in Kenai Peninsula Borough,Alaska,and would
occupy federal lands managed by the Chugach National Forest.
The proposed project would consist of:(1)an earth filled,concrete faced gravity dam
10 feet high and 200 feet wide;(2)a reservoir with an approximate surface elevation of 800
feet MSL,an approximate surface area of 1,888 acres,and a storage capacity of 37,760 acre
feet;(3)a 5 foot diameter,1 mile long penstock constructed of high density polyethylene or
steel;(4)a powerhouse containing one turbine generator unit with a total installed capacity of
about 5 MW;(5)a 1-2 mile long,115 kV transmission line and;(6)appurtenant facilities.
The annual production would be 17.5 GWh,which would be sold to a local utility.
Background
The Commission issued public notice of the application on July 21,2008.The U.S.
Department of the Interior and the U.S.Department of Agriculture (USDA)filed motions to
intervene to be parties in the proceeding.2 The USDA also filed comments.
USDA commented on resource issues that need to be evaluated by the permittee
during the course of the preliminary permit.These issues include fish and wildlife,recreation,
and visual resources.The USDA also states the permittee will need to obtain a Special Use
Authorization in order to perform work related to the permit on National Forest lands.
Discussion
1 16 U.S.C.§797(f)(2000).
2 Timely,unopposed motions to intervene are granted by operation of Rule 214 of the
Commission’s Regulations.Id.§385.214(a)(3)(2008).
20081007-3019 FERC PDF (Unofficial) 10/07/2008
Project No.13212-000 2
The purpose of a preliminary permit is to maintain priority of application for a license
during the term of the permit while the permittee conducts investigations and secures data
necessary,after consultation with the appropriate resource agencies,to determine the
feasibility of the proposed project and prepares an acceptable development application.The
permit confers no authority on the permittee to undertake construction of the proposed project
or any part thereof,3 or to occupy or use lands or other property of the United States or of any
other entity or individual.
If,during the course of the permittee’s investigation into the feasibility of the proposal,
the permittee decides to prepare a development application,it must first prepare a Notice of
Intent (NOI)and Pre-Application Document (PAD)pursuant to Sections 5.5 and 5.6 of the
Commission’s Regulations.Pursuant to Part 5 of the Commission’s regulations,18 C.F.R.
Part 5,the permittee must use the Integrated Licensing Process unless the Commission grants
a request to use an alternative process (Alternative or Traditional Licensing Process).
Pursuant to Section 5.3,such a request must accompany the NOI and PAD and set forth
specific information justifying the request.4 Should the permittee file a development
application,notice of the application will be published,and interested persons and agencies
will have an opportunity to intervene and to present their views concerning the project and the
effects of its construction and operation.
A preliminary permit is not transferable.The named permittee is the only party
entitled to the priority of application for license afforded by this preliminary permit.In order
to invoke permit-based priority in any subsequent licensing competition,the named
permittee must file an application for license as the sole applicant,thereby evidencing its
intent to be the sole licensee and to hold all proprietary rights necessary to construct,operate,
and maintain the proposed project.Should any other parties intend to hold during the term of
any license issued any of these proprietary rights necessary for project purposes,they must be
included as joint applicants in any application for license filed.In such an instance,where
parties other than the permittee are added as joint applicants for license,the joint application
will not be eligible for any permit-based priority.See City of Fayetteville,16 FERC 61,209
(1981).
The Director orders:
3 Issuance of this preliminary permit is thus not a major federal action significantly
affecting the quality of the human environment.
4See Commission Order 2002,issued July 23,2003.
20081007-3019 FERC PDF (Unofficial) 10/07/2008
Project No.13212-000 3
(A)A preliminary permit is issued for the this project to Kenai Hydro,LLC,for a
period effective the first day of the month in which this permit is issued,and ending either 36
months from the effective date or on the date that a development application submitted by the
permittee has been accepted for filing,whichever occurs first.
(B)This preliminary permit is subject to the terms and conditions of Part I of the
Federal Power Act and related regulations.The permit is also subject to Articles 1 through 4,
set forth in the attached standard form P-1.
(C)This order is issued under authority delegated to the Director and constitutes final
agency action.Requests for rehearing by the Commission may be filed within 30 days from
the date of issuance of this order,pursuant to 18 C.F.R.385.713.
William Guey-Lee
Chief,Engineering and Jurisdiction Branch
Division of Hydropower Administration
and Compliance
20081007-3019 FERC PDF (Unofficial) 10/07/2008
Form P-1 (Revised February 2007)
FEDERAL ENERGY REGULATORY COMMISSION
TERMS AND CONDITIONS OF
PRELIMINARY PERMIT
Article 1.The purpose of the permit is to maintain priority of application for a license
during the term of the permit while the permittee conducts investigations and secures data
necessary to determine the feasibility of the proposed project and,if said project is found to be
feasible,prepares an acceptable application for license.In the course of whatever field studies
the permittee undertakes,the permittee shall at all time exercise appropriate measures to
prevent irreparable damage to the environment of the proposed project.All test sites shall be
restored as closely as possible to their original condition and to the satisfaction of the
Commission's authorized representative or,where federal lands are affected,to the
satisfaction of the agency administering such lands.
Article 2.The permit is not transferable and may,after notice and opportunity for
hearing,be canceled by order of the Commission upon failure of the permittee to prosecute
diligently the activities for which a permit is issued,or for any other good cause shown.
Article 3.The priority granted under the permit shall be lost if the permit is canceled
pursuant to Article 2 of this permit,or if the permittee fails,on or before the expiration date of
the permit,to file with the Commission an application for license for the proposed project in
conformity with the Commission's rules and regulations then in effect.
Article 4.At the close of each six-month period from the effective date of this permit,
the permittee shall file four copies of a progress report with the Secretary,Federal Energy
Regulatory Commission,888 First Street,N.E.,Washington,D.C.20426;and shall serve a
copy on the interveners in this proceeding.The report shall describe,for that report period,
the nature and timing of what the permittee has done under the pre-filing requirements of 18
CFR §§4.38 and 5 and other applicable regulations;and,where studies require access to and
use of land not owned by the permittee,the status of the permittee's efforts to obtain
permission therefor.
20081007-3019 FERC PDF (Unofficial) 10/07/2008
Document Content(s)
19694789.DOC..........................................................1-4
20081007-3019 FERC PDF (Unofficial) 10/07/2008