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Home My WebLink AboutWhitman Lake Hydroelectric Project Ketchikan App KETCHIKAN PUBLIC UTILITIES Electric Division 1065 Fair Street Ketchikan, AK 99901 Phone (907) 225-5505 Fax (907) 247-0755 October 7, 2008 Grant Manager: Butch White Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 Dear Mr. White, The City of Ketchikan d.b.a. Ketchikan Public Utilities (KPU) is pleased to submit the enclosed Application for Renewable Energy Grant for the proposed Whitman Lake Hydroelectric Project (Whitman Lake Project). The proposed project would be located near the southeast end of Revillagigedo Island, approximately four miles east of the City of Ketchikan, Alaska. Development of hydroelectric power at the site will include construction of a powerhouse, two Francis turbine/generators, penstocks, new deep water intake, creek diversion with pipeline, tailrace, valve house, head tank, access roads, pressurized supply line, switchyard, and transmission line. KPU herein provides one (1) hard copy of their complete application, including appendices that can be duplicated, and one (1) electronic version on CD in PDF format in a sealed envelope clearly labeled as per the instructions in the RFA issued on September 3, 2008. KPU submits this application to fund Phase III – Final Design and Permitting. KPU requests state funding in the amount of $1,300,000 and will provide a local match: local match funds (cash and in kind) in the amount of $320,000 for Phase III work. KPU provides a detailed discussion of the phased funding within the attached Application for Grant and plans to submit in the second round due at AEA on November 8, 2008, an application for grant funding for Phase IV – Final Design and Permitting and Construction and Project Setup. KPU acknowledges and agrees that the Project shall be constructed, owned and operated for the benefit of the general public and will not deny any person use and/or benefit of Project facilities due to race, religion, color, national origin, age, physical handicap, sex, marital status, changes in marital status, pregnancy or parenthood. I will serve as Grantee Project Manager. If you have any questions regarding this submittal, please do not hesitate to call me at 907-225-5505. Thank your for your consideration of the enclosed application. Sincerely, Ed Schofield Acting Electric Division Manager Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 1 of 17 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 17 9/3/2008 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Ketchikan Public Utilities Electric Division Type of Entity: Municipal Utility – Electric Division Mailing Address Ketchikan Public Utilities Ed Schofield Electric Division 1065 Fair Street Ketchikan, Alaska 99901 Physical Address Ketchikan Public Utilities Water Warehouse 1029 Fair Street Ketchikan, Alaska 99901 Telephone Electric Division Mgr. 907-225-5505 Fax 907-225-3543 Email eds@city.ketchikan.ak.us 1.1 APPLICANT POINT OF CONTACT Name Ed Schofield Title Acting Electric Division Manager Mailing Address 1065 Fair Street Ketchikan, AK 99901 Telephone 907-225-5505 Fax Email eds@city.ketchikan.ak.us 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) X An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer, or X A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes 1.2.2. Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate Yes or No in the box ) Yes 1.2.3. As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement. Yes 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.) Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 3 of 17 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 Whitman Lake Hydroelectric Project is a conventional hydropower project that would be located at an existing dam in the city of Ketchikan. Completed project phases include: • Phase I Reconnaissance Studies • Phase II Licensing and Feasibility Studies Proposed Project phases include: • Phase III Final Design and Permitting • Phase IV 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 Whitman Lake Hydroelectric Project, FERC No. 11841 (Project) is located near the southeast end of Revillagigedo Island, approximately four miles east of the City of Ketchikan, Alaska. KPU proposes to install 4.6 MW of hydropower generating capacity at KPU’s existing Whitman Lake Dam to provide an additional source of clean renewable energy to KPU’s customers, in the city of Ketchikan and the Borough area including Saxman Village, while also enhancing the conversion of oil heat to electric heat and displacing expensive and non- renewable diesel generation. The Project will be interconnected to KPU’s existing distribution system and the grant project will involve KPU. 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. KPU expects to receive a FERC license in November 2008. The following phases have been completed: • Phase I Reconnaissance Studies • Phase II Licensing and Feasibility Studies Funding for the Project would occur in two phases: • Phase III Final Design and Permitting • Phase IV Construction and Project Startup PHASE DESCRIPTION SCHEDULE COST ESTIMATE I Reconnaissance Studies Completed $470,000 II Licensing and Feasibility Studies Complete $600,000 III Final Design and Permitting 11/2008 – 11/2010 $1,620,000 IV Construction and Project Startup 11/2010 – 11/2012 $15,020,000 TOTAL $17,750,000 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 4 of 17 9/3/2008 Anticipated sources of funds: PHASE DESCRIPTION GRANT LOCAL MATCH III Final Design and Permitting 80% 20% IV Construction and Project Startup 80% 20% 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. Financial Benefits include: • Reduced reliance on diesel generation and oil heat • Availability of clean renewable energy and power to serve KPU customers and attract new economic development to the local area. • Improvements to the existing Whitman Lake Hatchery as agreed to in the Settlement Agreement filed with FERC in February 2008. Enhanced reliability of water supply to the Hatchery and physical improvements to water delivery system to the Hatchery. • Instream flow releases to Whitman and Achilles Creeks as agreed to in the Settlement Agreement filed with FERC in February 2008. Releases will improve the baseline as flow would occur in some months when the existing conditions mean that segments of these creeks are dry. • Enhanced system stability • Proposed recreation trail near the project 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.) $17,750,000 2.5.2 Grant Funds Requested in this application. $1,300,000 2.5.3 Other Funds to be provided (Project match) $320,000 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $1,640,000 2.5.5 Estimated Benefit (Savings) i. With 80% grant funding ii. Without grant funding $2,880,000/year $1,440,000/year 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.) Project provides reliable water supply to SSRAA hatchery (estimated hatchery benefit of $25,000,000 per year to community) 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. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 5 of 17 9/3/2008 Project Managers: Ed Schofield, Acting Electric Division Manager Ketchikan Public Utilities 1065 Fair Street Ketchikan, Alaska 99901 TEL: (907) 225-5505 E-mail: EDS@city.ketchikan.ak.us Jennifer Soderstrom, Senior Project Engineer 1433 Millar Street Ketchikan, Alaska 99901 TEL: (907) 228-4733 E-mail: jennies@kpunet.net References: Karl R. Amylon General Manager Ketchikan Public Utilities 334 Front Street Ketchikan, AK 99901 TEL: (907) 228-5603 FAX:(907) 225-5075 E-mail: karla@city.ketchikan.ak.us KPU has contracted Hatch Acres Corporation to manage the activities for the proposed phases. This includes field work, results, work papers, etc. Richard Griffith is the lead consultant for Hatch Acres. Please see Attachment A for resumes. 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.) 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. Please see Attachment B 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 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 6 of 17 9/3/2008 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. Hatch Acres Corporation is KPU’s main contractor for this Project. Richard Griffith is the lead consultant for Hatch Acres and brings over 45 years experience in the hydro industry. His resume is included in Attachment A. Hatch Acres will contract out the field work necessary to complete the final design and construction. The consultant team to provide field and office study support will include: • Richard Griffith • Keith Moen • Carl Mannheim • Nan Nalder • Heidi Wahto Partnerships or Commitments: Settlement agreement with: • Alaska Department of Fish & Game (“ADF&G”); • Alaska Department of Natural Resources, Division of Mining, Land & Water, Water Resources Section (“ADNR Water Resources”), and; • Southern Southeast Regional Aquaculture Association (“SSRAA) Existing Contracts: KPU with Hatch Acres Hatch Acres with Frances Francis KPU with Frances Francis Resumes and References for Personnel Please see Attachment A. 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. KPU intends to contract out construction management (but will provide a project manager for more general oversight). KPU will require monthly progress reports from the contractor(s) and submit quarterly reports to the AEA. 3.6 Project Risk Discuss potential problems and how you would address them. Potential Problems Solutions to Problems Rising diesel costs Closely monitor market escalation and factor into total cost of project Rising equipment costs Factor into total cost of project Lead time Factor into total cost of project Inclement weather Monitor weather conditions and adjust schedule accordingly Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 7 of 17 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. Potential Extent/Amount of Energy Resource KPU proposes to operate the project utilizing water stored within Whitman lake to generate power and to supply the Whitman Hatchery with water. Total generating capacity of this project would be 4.6 MW, with 16,000 MWh produced in an average year. KPU proposes to operate Unit 1 between reservoir El. 370 and 379.8 feet msl for the primary purpose of generating power. Unit 1 would obtain water via the 60-inch diameter penstock through a new screened intake and would have a minimum hydraulic capacity of 50 cfs and a maximum hydraulic capacity of 150 cfs. Flows discharged from Unit 1 would enter the project tailrace and discharge into Herring Cove. KPU proposes to operate Unit 2 on a year-round basis for the primary purpose of supplying Southern Southeast Regional Aquaculture Association (SSRAA) with water. Water would be delivered to Unit 2 via the 36-inch diameter penstock. Once reservoir levels drop below El. 363 msl, a vacuum pump connected to the deep water intake would be utilized to ensure reliable operation of the siphon down to El. 343 msl. Unit 2 would have a minimum hydraulic capacity of 12 cfs and a maximum hydraulic capacity of 32 cfs. Discharge from Unit 2 would enter the 30- foot diameter head tank via a pressurized tailrace. Flows from the head tank would then be controlled by SRAA for use at the Whitman Hatchery. KPU also proposes to construct a pressure-reducing valve that would be routed to the head tank in the event Unit 2 goes offline. Any overflow from the head tank or Unit 2 flow in excess of hatchery demand would discharge into the project tailrace. KPU proposes to release between 6 and 11 cfs (depending on the time of year) downstream of Whitman Dam during normal conditions. During dry conditions, a Dry Conditions/Low Reservoir Protocol Plan would be implemented. Once levels drop below El. 363 msl, minimum in stream flows would be reduced to flows agreed upon by a Reservoir Action Team (composed of representatives from KPU, SSRAA, ADF&G, ADNR, and the USFS), or to between 2 to 7 cfs, depending upon the time of year, if consensus is not reached. Pros and Cons of Whitman Lake vs Other Available Alternatives Pros: • Uses existing infrastructure previously used or hydropower • Smaller environmental footprint versus constructing infrastructure for another energy source Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 8 of 17 9/3/2008 • Diesel fuel is vulnerable to fluctuations of availability and cost • Minimal transmission lines required to connect to system • Established technology Cons: • Maintaining water supply to SSRAA hatchery restricts operational flexibility 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. KPU Electric operates an “islanded” system. This means all of KPU’s service territory consists of islands not connected to a power grid as most electric companies in the world exist. All of the power distributed by KPU Electric is generated and consumed locally. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 9 of 17 9/3/2008 System operations, generation dispatch, and system restoration are controlled from KPU’s Bailey Plant. A new SCADA system went on line in 2004. A CertaLogic GIS system was implemented in 2004 as well that will improve system records and mapping/planning functions. The new SCADA master and the new GIS system will work together to facilitate outage management. Swan Lake Hydro is a remote (accessible only by boat or plane) facility connected to the rest of the system via a 30 mile 115 kilovolts (kV) line that terminates at our Bailey Substation where it is stepped down to 34.5 kV. The 34.5 sub-transmission circuit feeds 6 substations that step down to our distribution voltage of 12.47 kV. The rest of the hydro plants operate at various locations along the 34.5 kV circuit. A 57-mile, 115 kV line is under construction that will connect Swan Lake Hydro with Tyee Hydro, a 20 MW, Four Dam Pool facility that currently serves only the town of Wrangell and Petersburg. This Intertie will eventually be a part of the future “Southeast Intertie” that will connect all the communities of Southeast Alaska with a common power grid. KPU is developing the hydropower potential at Whitman Lake to augment KPU’s resources to serve the load. Whitman Lake’s generation will reduce KPU’s need to use Tyee’s power. 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. Ketchikan’s Existing Generation Resources • Ketchikan Lakes Hydro and Beaver Falls Hydro (including the Silvis Plant) generates 11.5 MW • Swan Lake Hydro generates 22.5 MW • Four-unit diesel plant with a capacity of 23 MW The following chart lists existing hydropower projects within Southeast Alaska. Project Name Nearest Load Center Licensee / Permittee Installed Capacity Average Energy (GWh) Firm Energy (GWh) Source - Comments A South Fork Prince of Wales APT 2.0 6.7 5.5 APT generation records B Black Bear Lake Prince of Wales APT 4.5 21.4 19.2 APT generation records C Swan Lake Ketchikan FDPPA 22.5 72.0 59.0 KPU generation records D Tyee Lake Wrangell / Petersburg FDPPA 22.5 116.8 67.2 Commonwealth Associates, Inc., "Southeast Alaska Energy Export Study", 2006 E Silvis Ketchikan KPU 2.1 11.4 9.6 KPU generation records F Ketchikan Lakes Ketchikan KPU 4.2 19.8 15.0 KPU generation records G Beaver Falls Ketchikan KPU 6.0 38.4 33.0 KPU generation records H Purple Lake Metlakatla MP&L 3.9 12.6 10.7 MP&L generation records I Chester Lake Metlakatla MP&L 1.0 3.5 2.1 MP&L generation records J Blind Slough Petersburg PMP&L 2.0 10.4 10.0 Acres International Inc., "Flow Studies and Hydrology Report", 2002 Another existing energy resource used is diesel plants ranging from a few kWs to 10.5 MW which supply communities in SE Alaska with firm power, as backup in some communities and as primary in others. The total capacity of in-service diesel plants in SE Alaska totals 56.65 MW. Fuel prices vary by community or load center and range from $2.20/gallon in Ketchikan to $2.68/gallon in Wrangell. Compared to the cost of existing hydro power in the range of $10/MWh to $20/MWh, and the lowest cost proposed hydro power in the $55/MWh to $87/MWh Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 10 of 17 9/3/2008 range, diesel is both costly to the communities and a contributor to greenhouse gas emissions in the region. Impacts of Whitman Lake on Existing Energy Infrastructure and Resources Development of the Whitman Lake Hydropower Project would displace the need for dependence on diesel generation in Ketchikan. Power from Whitman Lake would be available, not only to displace the cost of operating diesel generation to replace lost power when the transmission lines are down, but would also encourage new economic development in Ketchikan and other interconnected communities in southern Southeast Alaska. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. Existing Energy Market Ketchikan Public Utilities buys, generates, and resells all of the electricity consumed in the City of Ketchikan/Ketchikan Gateway Borough area. KPU owns Ketchikan Lakes Hydro and Beaver Falls Hydro (including the Silvis Plant) totaling 11.5 MW, and operates Swan Lake Hydro (22.5 MW) which is owned by the Four Dam Pool Power Agency (FDPPA). KPU also owns and operates a four-unit diesel plant with a capacity of 23 MW. Monthly sales and generation date were available for Ketchikan for the years 2000 to 2006. The data are summarized on an annual basis below. Although some growth is evident into 2006, total sales and generation are lower for 2006 than in either 200 or 2001. Monthly sales display consistent seasonal patterns over the years. Residential sales are markedly lower in the summer, particularly August and September and peak in December and January. The seasonal pattern for non-residential sales, however, is less well defined displaying only slightly lower consumption in the summer and slightly higher in the winter. Residential Non-Residential Total Net Peak Customers Consumption Customers Consumption Consumption Generation Demand 2000 5,612 56,769,397 1,909 102,635,997 159,405,394 166,375,424 28,100 2001 5,662 58,008,912 1,846 100,594,515 158,603,427 166,133,715 27,400 2002 5,643 56,913,013 1,828 87,226,943 144,139,956 151,502,672 26,300 2003 5,577 56,723,524 1,914 88,277,148 145,000,672 153,472,585 25,900 2004 5,597 57,332,811 1,842 88,063,078 145,395,889 150,586,782 27,600 2005 5,584 56,815,618 1,859 88,428,512 145,244,130 153,306,333 27,000 2006 5,630 59,870,257 1,882 92,289,675 152,159,932 159,543,140 28,900 2007 159,728,689 29,000 2008 109,385,809 28,800 The diagram below depicts the seasonal consumption patterns for Ketchikan. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 11 of 17 9/3/2008 Ketchikan - Seasonal Sales Patterns Residential Sales Non-Residential SalesTotal Sales 0% 2% 4% 6% 8% 10% 12% Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Project Impact on Energy Customers • Reducing reliance on diesel generated power • Increased power reliability during power outages • Reduced energy cost for customers • Enable new economic development in isolated load centers • Improve quality of life for customers facing high energy costs from diesel generation 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 Information for the Proposed Renewable Energy System: • Description of renewable energy technology specific to project location - Development of hydroelectric power at the site utilizing an existing dam. New construction includes a powerhouse with two Francis turbine/generators, penstocks, new deep water intake, creek diversion with pipeline, tailrace, valve house, head tank, access roads, pressurized supply line, switchyard, and transmission line. • Optimum installed capacity-4.6 MW (3.9 MW Unit 1, 700 kW Unit 2) • Anticipated capacity factor-Unit 1 = 0.23, Unit 2 = 0.68 • Anticipated annual generation-16,000 MWh • Anticipated barriers - None • Basic integration concept-Electric power from Whitman Lake would be integrated to Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 12 of 17 9/3/2008 KPU’s resources to serve current and future loads. • Delivery methods-Electric power from Whitman Lake powerhouse would be transmitted by overland transmission via a 1,500-foot-long 34.5 kilovolt transmission line. 4.3.2 Land Ownership Identify potential land ownership issues, including whether site owners have agreed to the project or how you intend to approach land ownership and access issues. Land Ownership Issues The construction, operation, and maintenance of this project is mainly on 155 acres of USFS land. The project also involves the easement of 4 acres of ADNR owned or managed lands with the diversion of up to 35 cfs of Achilles Creek to Whitman Lake. Summary of land use: • ADNR Easement – Lot 107 U.S.S. 3385 & State Community Grant Property - ADL 107151 – KPU has applied for Easement • USBLM – KPU will Purchase – Lot 106 • Mental Health Trust Land – KPU will Purchase – Lot 112, U.S.S. 3385 • Tongass National Forest Land – KPU will apply for Special Use Authorization following FERC issuance of License • 4.3.3 Permits Provide the following information as 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 permits have been submitted or are being prepared: • Application for Easement, AS 38.05.850 • Application for Water Rights-LAS#23222 and LAS#23223 • DNR Land Easement, ADL#107151 • FERC License #11841 • NWP No. 17, Hydropower Projects • POA-1998-1027, Whitman Lake, Ketchikan Public Utilities • Title 16 Fish Habitat Permit FH08-VII-0027 • USFS Special Use Permit No barriers are foreseen. 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 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 13 of 17 9/3/2008 • Identify and discuss other potential barriers Environmental and Land Use Issues • Threatened or Endangered species – None in vicinity of Project • Habitat issues • Whitman Lake – water will continue to be delivered to the Whitman Lake Hatchery; Deer Creek, tributary to Whitman Lake – reservoir management will not adversely affect Dolly Varden in Deer Creek; • Whitman Creek to its confluence currently is dewatered approximately 35% of the time due to Hatchery withdrawals – under terms of the Settlement Agreement, KPU will release an instream flow to Whitman Creek • Achilles Creek – under terms of the Settlement Agreement, KPU will release an instream flow to Achilles Creek and develop and implement a Terrestrial Species Connectivity Plan for wildlife crossings along the Achilles Creek pipeline • KPU will develop and implement a Nesting Survey Plan to include surveying for any newly constructed marbled murrelet, goshawk, and bald eagle nests prior to construction. • Wetlands and other protected areas – KPU provided Jurisdictional Wetlands Delineation Report to the USACE; KPU will work with USACE and landowners to avoid the identified wetlands, and if required will develop and implement a plan regarding future activities in the vicinity of the jurisdictional wetlands. • Archaeological and historical resources – KPU will revise and implement the Historic Properties Management Plan and conduct a HABS/HAER for the NRHP eligible shed; KPU will avoid the area occupied by the NRHP eligible shed. • Land development constraints – There are no identified constraints; KPU will occupy State-owned lands under the terms and conditions of an Easement (ADL 107151); and National Forest Lands under the terms and conditions of a Special Use Authorization issued by the USFS. • Telecommunications interference – Not Applicable • Aviation considerations – Not Applicable • Visual, aesthetics impacts – KPU will comply with terms and conditions of the above noted State easement for use of State Lands, and the Special Use Authorization for use of National Forest Lands. KPU will develop and implement a Scenery Management Plan in consultation with state and federal agencies. KPU will develop and implement a Vegetation Management Plan in consultation with state and federal agencies. • No other potential barriers identified at present 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 14 of 17 9/3/2008 • Identification of other funding sources • Projected capital cost of proposed renewable energy system • Projected development cost of proposed renewable energy system • Total anticipated project cost, and cost for this phase: o Total project cost= $17,750,000 o Cost for this phase= $1,620,000 • Requested grant funding=$1,300,000 (for Phase III, request for Phase IV - $12,020,000 to come at a later date) • Applicant matching funds= $320,000 ($270,000 cash, $50,000 in kind) for Phase III. • Identification of other funding sources - none • Projected capital cost of proposed renewable energy system – see attached RFA AEA09- 004 Budget form for breakdown of potential State Funds and local match (see Attachment C). • Projected development cost of proposed renewable energy system. In addition to the matching funds, KPU has provided development funds to date (see Attachment C). 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 Estimated Project O&M costs $240,000 based on comparable project O&M costs in the Southern Southeast Alaska region. KPU will not request grant funding for any O&M costs for the new facilities. O&M costs will be funded through the electric rates. 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 Purchase Sale Information • Potential customer: this Project will meet the overall demand for increased energy as more customers convert from oil to electric heat. The proposed Project will also improve KPU's ability to address the increasing demand for energy without resorting to using expensive diesel generation. • KPU proposes to sell power to its ratepayers under the rates approved by the Ketchikan Municipal Code. In KPU estimates the first year cost of power to be 4 ¢/kWh with 80% grant funding and 13¢/kWh without. • KPU is a municipal utility and does not earn a rate of return from any of its projects. 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Please see Attachment C. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 15 of 17 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. Existing Electric System Operations KPU proposes to construct and operate the Whitman Lake Hydroelectric Project and integrate its output with KPU’s other generation resources. KPU also owns and operates the diesel-fueled Bailey Plant (20.5 MW) and two standby units (3.2 MW). System operations, generation dispatch and system restoration are controlled from KPU’s Bailey Plant. A new SCADA system went on line in 2004. A CertaLogic GIS system was implemented in 2004 as well that will improve system records and mapping/planning functions. The new SCADA master and the new GIS system work together to facilitate outage management. Future Modifications to System Operations Presently KPU operates as a remote system; with completion of the Swan-Tyee Intertie in 2010, the Swan Lake Project located near Ketchikan will be interconnected with the FDPPA-owned Tyee Lake Project located near Wrangell. The FDPPA is developing a proposed coordinated operations plan for the Swan and Tyee projects. The FDPPA is currently going through Divestiture and ownership of the Swan and Tyee Projects, the Swan-Tyee Intertie, and the line from Tyee to Wrangell and Petersburg will be transferred to a new entity, the Southeast Alaska Power Agency (SEAPA). KPU will be a member of SEAPA, but will continue to operate the electric distribution system to provide service to Ketchikan’s customers. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. KPU’s diesel generation will cost approximately 22¢/kWh. Absent grant funding, the estimated cost of power from the Whitman Lake Project is approximately 13¢/kWh, with grant funding the cost of power is approximately 4¢/kWh. . Whitman Lake will provide KPU and other utilities in the Southeast region with long-term sustainable environmentally clean energy. 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 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 16 of 17 9/3/2008 Project Benefits Information • Potential annual fuel displacement (gal and $) over the lifetime of the evaluated renewable energy project: Generation from the Project will displace approximately $1,080,000 gallons of diesel generation or $2,880,000/year worth (with 80% grant funding), and $1,440,000/year (without grant funding). • Anticipated annual revenue (based on i.e. a Proposed Power Purchase Agreement price, RCA tariff, or avoided cost of ownership): $143,520,000 (using the current 8.97¢/kWh commercial rate) • Potential additional annual incentives (i.e. tax credits): KPU does not propose to apply for additional annual incentives. • Potential additional annual revenue streams (i.e. green tag sales or other renewable energy subsidies or programs that might be available): Not applicable Non-economic Benefits to Alaskans • Provide a minimum instream flow downstream of the mouth of the Achilles Creek • Year-round water supply for SSRAA Whitman Lake Hatchery • Develop and implement a scenic trail that avoids the pipeline and penstock corridor • Develop a Terrestrial Species Connectivity Plan that includes site-specific plans for wildlife crossings along the Achilles Creek pipeline and wildlife crossing monitoring • Develop and implement a Fire Prevention Plan • Develop and implement a Scenery Management Plan SECTION 6 – GRANT BUDGET Tell us how much your total project costs. Include any investments to date and funding sources, how much is requested in grant funds, and additional investments you will make as an applicant. Include an estimate of budget costs by tasks using the form - GrantBudget.xls Total cost to develop the Whitman Lake Project is approximately $17,750,000. Total local match funds (cash) are estimated at $4,480,000. In this request, KPU is requesting grant funding for $13,270,000. The Grant Budget.xls form is provided in Attachment D. SECTION 7 – ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Resumes of Applicant’s Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4 B. Cost Worksheet per application form Section 4.4.4 C. Grant Budget Form per application form Section 6. D. An electronic version of the entire application per RFA Section 1.6 E. Governing Body Resolution per RFA Section 1.4 Enclose a copy of the resolution or other formal action taken by the applicant’s governing body or management that: Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 17 of 17 9/3/2008 - 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 ATTACHMENT A RESUMES ATTACHMENT B SECTION 3.3 – PROJECT MILESTONES Project Milestones Phase Activities/Description Expected Completion Date FERC License Approval 1 Expected date of FERC License approval. December 2008 FERC PRO Approval 1 Expected date of FERC PRO approval of license. May 2010 Final Design Complete /Construction Year 1 Bid Process 1 Final design drawings and specs are completed. Contract bid packages prepared; contracts advertised and bids solicited for Construction Year 1 activities: 1) Equipment procurement contract; and 2) General site clearing and access roads contract. August 2010 Equipment Procurement Contract Awarded 2 Bid evaluation completed and contract awarded for purchase of large equipment with potentially long lead times: turbines, generators, transformers, and large valves. November 2010 General Site Clearing and Access Road Contract Awarded 2 Bid evaluation completed and contract awarded for project site preparations: the powerhouse area will be cleared and surveyed; the pipe alignment will be surveyed and cleared; the access roads to the dam and the Achilles Diversion will be surveyed, cleared, and constructed; laydown areas at the hatchery and at the dam and Achilles Diversion will be prepared. November 2010 Start of Year 1 Construction Large equipment purchased. General site clearing, laydown areas, and access roads will be completed. January 2011 Construction Year 2 Bid Process Contract bid packages prepared; contracts advertised and bids solicited for Construction Year 2 activities: 1) Construction contract for installing project features; and 2) Hatchery improvement contract. April 2011 Construction Contract Awarded 2 Bid selection completed and contract awarded for general project construction: installation of pipelines, construction of powerhouse, installation of intakes at dam, construction of Achilles Diversion, and startup testing. May 2011 Hatchery Improvement Contract Awarded 2 Hatchery improvements completed and startup testing completed. May 2011 End of Year 1 Construction 2 September 2011 Start of Year 2 Construction 2 Project features will be installed and tested to ensure performance standards are met. Hatchery improvements will be completed. January 2012 End of Year 2 Construction 2 October 2012 Project Testing and Startup 2 Performance testing completed. November 2012 ATTACHMENT C SECTION 4.4.4 – COST WORKSHEET 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. Hydropower output = 16,000,000 kWh 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 KPU owns 7 hydroelectric generators at the Ketchikan, Beaver Falls and Silvis power plants. It operates and additional 2 hydroelectric generators at Swan Lake, which is owned by the FDPPA. KPU also operates the Bailey diesel plant with 3 operable internal combustion engines. ii. Rated capacity of generators/boilers/other Ketchikan (hydro): 3 – 1,400 kW units (4.2 MW total) Beaver Falls (hydro): 1 –1,000 kW unit, 2 – 2,000 kW units (5 MW total) Silvis (hydro): 1 – 2,100 kW unit (2.1 MW total) Swan Lake (hydro): 2 – 11.25 MW units (22.5 MW total) Bailey (diesel): 1 – 4.5 MW unit, 1 – 6.45 MW unit, 1 – 10.5 MW unit (21.5 MW total) (Total hydro: 33.8 MW) (Total diesel: 21.5 MW) iii. Generator/boilers/other type KPU owns and operates both hydroelectric and internal combustion diesel generators. iv. Age of generators/boilers/other Ketchikan (hydro): Unit 3 (installed1923, rebuilt 1952), Unit 4 (1938), Unit 5 (1957) Beaver Falls (hydro): Unit 1 (manufactured 1904, rebuilt and installed 1947), Units 3 & 4 (1954) Silvis (hydro): 1968 Swan Lake (hydro): Units 1 & 2 (1983) Bailey (diesel): Unit 1 (1969), Unit 3 (1976), Unit 4 (1998) v. Efficiency of generators/boilers/other The peak efficiency of the hydro turbines is about 85% for Units 3 &4 at Beaver Falls and 89-94% for the units at Ketchikan (KPU is replacing turbines for increased efficiency) Silvis is expected to be similar. Renewable Energy Fund RFA AEA 09-004 Application Cost Worksheet Page 2 b) Annual O&M cost i. Annual O&M cost for labor $3,389,605 (2007, for KPU-owned facilities) ii. Annual O&M cost for non-labor $6,173,623 (2007, for KPU-owned facilities) c) Annual electricity production and fuel usage (fill in as applicable) i. Electricity [kWh] 159,729,689 kWh (2007) 159,543,140 kWh (2006) 153,306,333 kWh (2005) 150.586,782 kWh (2004) ii. Fuel usage (if system is part of the Railbelt grid, leave this section blank Diesel [gal] 1,160,944 gal (through September 2008) 174,783 gal (2007) 121,529 gal (2006) 87,645 gal (2005) 58,420 gal (2004) Other iii. Peak Load 29,000 kW (hourly peak, 2007) iv. Average Load 18,200 kW (hourly average, 2007) v. Minimum Load 10,500 kW (hourly low, 2007) vi. Efficiency vii. Future trends KPU projects that loads will increase 3000 kW by the end of 2008, and that residential and non-residential conversions to electric heat will continue. d) Annual heating fuel usage (fill in as applicable) i. Diesel [gal or MMBtu] Estimated (738,236) gal in 2007 Estimated (956,025) gal in 2006 ii. Electricity [kWh] Unknown iii. Propane [gal or MMBtu] Unknown iv. Coal [tons or MMBtu] Unknown v. Wood [cords, green tons, dry tons] Unknown vi. Other NA 3. Proposed System Design a) Installed capacity 4.6 MW b) Annual renewable electricity generation i. Diesel [gal or MMBtu] NA ii. Electricity [kWh] 16,000,000 kWh iii. Propane [gal or MMBtu] NA iv. Coal [tons or MMBtu] NA v. Wood [cords, green tons, dry tons] NA Renewable Energy Fund RFA AEA 09-004 Application Cost Worksheet Page 3 vi. Other 4. Project Cost (2009 dollars) Without Grant Funding With 80% Grant Funding for final design and const. a) Total capital cost of new system $17,750,000 $3,550,000.0 b) Development cost licensing, feasibility & final design $2,730,000 $1,380,000 c) Annual O&M cost of new system $240,000 $240,000 d) Annual fuel cost NA NA 5. Project Benefits a) Amount of fuel displaced for i. Electricity Current use of diesel for generation to provide electric service ii. Heat NA iii. Transportation NA b) Price of displaced fuel Generation from the will displace approximately 16,000,000 kWhr/year worth of diesel generation c) Other economic benefits Anticipated annual revenue of $143,520,000 (using the current 8.97¢/kWh commercial rate) Availability of clean renewable energy and power to serve customers and attract new economic development to the local area. Enhanced system stability / reliability For KPU: Improvements to the existing Whitman Lake Hatchery & scheduled instream flow releases to Achilles and Whitman Creeks d) Amount of Alaska public benefits Reduced greenhouse gas emissions Reduced reliance on fossil fuel 6. Power Purchase/Sales Price a) Price for power purchase/sale KPU purchases power from the FDPPA (Swan Lake) for $0.068 per kWh. In 2007, KPU purchased 79,172,000 kWh at a total cost of $5,383,696. Project power is expected to be $0.13 per kWh w/o grant funding and $0.04 per kWh w/ 80% grant funding through final design and construction. Renewable Energy Fund RFA AEA 09-004 Application Cost Worksheet Page 4 7. Project Analysis a) Basic Economic Analysis Without Grant Funding With 80% Grant Funding for final design and construction Project benefit/cost ratio 1.7 5.5 Payback 30 years 2 years ATTACHMENT D SECTION 6 - GRANT BUDGET Alaska Energy Authority - Renewable Energy FundBUDGET INFORMATIONMilestone or Task Federal Funds State FundsLocal Match Funds (Cash)Match Funds (In-Kind)Other FundsTOTALSI Reconnaissance $0 $0 $470,000 $470,000II Licensing & Feasibility $0 $0 $640,000 $640,000III Final Design$0$1,300,000$270,000 $50,000$1,620,000IV Construction $0 $12,020,000 $3,000,000 $50,000 $15,020,000Totals$13,320,000 $4,380,000 $100,000 $17,750,000IIIIII IV TOTALS1 Direct Labor and Benefits $50,000 $50,000 $100,0002 Travel, Meals, or Per Diem$03 Equipment$7,770,000 $7,770,0004 Supplies$05 Contractual Services$470,000 $640,000$1,570,000$200,000 $2,880,0006 Construction Services$6,920,000 $6,920,0007 Other Direct Costs$80,000 $80,000TOTAL DIRECT CHARGES$470,000 $640,000$1,620,000$15,020,000 $17,750,000Legend:Completed or ongoing activitiesRenewable Energy Fund request activitiesFuture activitiesBUDGET SUMMARY:BUDGET CATAGORIES:Milestone # or Task #RFA AEA09-004 Budget Form ATTACHMENT E CITY OF KETCHIKAN, ALASKA RESOLUTION NO. 08-2247