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HomeMy WebLinkAboutAllison Lake Project App Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 1 of 15 9/2/2008 Copper Valley Electric Association, Inc. ALLISON LAKE PROJECT 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 proj ect, 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 15 9/3/2008 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) Copper Valley Electric Association, Inc. (CVEA) Type of Entity: Electric Utility Mailing Address PO Box 45 Physical Address Mile 187 Glenn Highway Telephone 907-822-3211 Fax 907-822-5586 Email Matthews@cvea.org 1.1 APPLICANT POINT OF CONTACT Name Jaime L. Matthews Title Manager of Administration & Finance Mailing Address PO Box 45 Glennallen, AK 99588 Telephone 907-822-8311 Fax 907-822-5586 Email Matthews@cvea.org 1.2 APPLICANT MINIMUM REQUIREMENTS Please check as appropriate. If you do not to meet the minimum applicant requirements, your application will be rejected. 1.2.1 As an Applicant, we are: (put an X in the appropriate box) x An electric utility holding a certificate of public convenience and necessity under AS 42.05, or An independent power producer, or A local government, or A governmental entity (which includes tribal councils and housing authorities); Yes or No 1.2.2. Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate Yes or No in the box ) Yes or No 1.2.3. As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement. Yes or No 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.) Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 3 of 15 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. CVEA is proposing a hydroelectric project located near Valdez, Alaska. In 2006 CVEA prepared a reconnaissance level study of power supply alternatives. This study, entitled the Alternative Generation Review, evaluated the potential for geothermal, fuel cells, solar, wind, coal, and hydro via Allison or Silver Lake. The study recommended Allison Lake be further evaluated. Previous reports prepared by HDR Engineering in 1992 and by the Army Corps of Engineers in 1982 evaluated potential project configurations for maximizing the Allison Lake resource. The Alternative Generation Study is available on our website at the following location: http://www.cvea.org/resources/pdfs/AlternativeGenerationReview.pdf In September 2007, CVEA entered into a Professional Services Contract with Hatch Acres Corporation to provide consulting services for a pre-feasibility study. In February 2008, CVEA completed this pre-feasibility study (attachment A) for the Allison Lake Hydropower Development. On March 3, 2008 CVEA filed an application for a preliminary permit (attachment B) with the Federal Energy Regulatory Commission (FERC) to undertake an Allison Lake Hydroelectric Project. On June 19 CVEA was advised FERC had accepted CVEA’s preliminary permit application for filing as of March 3, 2008. CVEA was awarded the preliminary permit on September 4, 2008 (attachment C). The purpose of the preliminary permit is to secure and maintain priority to allow CVEA to study the power potential of Allison Lake and develop information necessary to support a license application. The term of the permit is three years. During this time, CVEA will study the potential regulatory and environmental considerations associated with developments of this type. At the conclusion of the three year permit, CVEA expects to file a license application for the project. Once FERC reviews the application and issues a license, construction on the project would begin. 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 Allison Lake Hydroelectric Project is located adjacent to the Prince William Sound, immediately south of Valdez, Alaska. CVEA is a member-owned electric cooperative providing central station electrical service to a relatively large geographical area of Eastern Interior and Gulf Coast Alaska. CVEA is a stand-alone (not interconnected to another power system) electric utility. The service territory is divided into two districts, the Valdez district and the Copper River Basin district. The Valdez district is comprised of the organized area of the City of Valdez. The Copper Basin district incorporates many outstretched communities including: Glennallen, Gakona, Gulkana, Tazlina, Copper Center, Kluti-Kaah, Copperville, Kenny Lake, Tolsona, Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 4 of 15 9/3/2008 Mendeltna, Nelchina, Eureka, and Sheep Mountain. CVEA’s corporate office is located in Glennallen while the engineering and power production functions are managed from the Valdez district office. CVEA’s personnel are extensively involved with the Allison Lake Project. CVEA has hired Hatch Acres to assist in coordinating the work and field studies and license application. 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. CVEA’s pre-feasibility study identified three alternatives for construction. Project costs range from $27-$45 million dollars; this is the total estimated costs through construction. CVEA estimates the cost of a reconnaissance study and to submit a license application (Phases I & II) to be approximately $2.46 million dollars, which would complete Phase II of the project. As part of the Alaska State FY 09 Capital Budget, CVEA was awarded $1 million dollars towards Phases I and II of the project. The remaining $1.46 million dollars for Phase II will be part of this request for funding. CVEA estimates the cost of Phase III, preliminary engineering, to be approximately $1.4 million. CVEA has committed internal resources which are not included in the request for the $2.86 million dollar estimate. This is labor for staff dedicated to the project. CVEA is not requesting reimbursement for these costs. CVEA will commit 20% matching funds which are estimated to be $572,000. Please see the attached project cost information on budget form AEA09-004 for more detail. 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. CVEA’s primary source of power is from the Solomon Gulch Hydroelectric Project, a 12- megawatt hydroelectric facility, owned by the Four Dam Pool Power Agency (FDPPA) and operated under contract by CVEA. Due to the seasonal pattern of the power production from this resource, CVEA must rely on other resources during the winter months. In an average year Solomon Gulch typically provides 60% of CVEA’s generation, the remaining 40% is generated with fossil fuel. Allison Lake is estimated to provide approximately 35% of CVEA’s generation needs, leaving only 5% to be generated by fossil fuels after the Allison Lake Project is complete. This allows CVEA to displace approximately 3,125,000 gallons of fuel per year, which equates to approximately $9,885,000 per year. With the estimated cost per kWh for Allison Lake, this nets a savings of approximately $4,830,000 to CVEA members per year. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 5 of 15 9/3/2008 Public benefits include local jobs during construction and the b enefits of alternative energy. CVEA acknowledges and agrees that the Allison Lake Project shall be constructed, owned, and operated for the benefit of the general public and will not deny any person the benefit of project facilities. Other benefits include reduction of greenhouse gases, improved air quality, and public relations. 2.5 PROJECT COST AND BENEFIT SUMMARY Include a summary of your project’s total costs and benefits below. 2.5.1 Total Project Cost (Including estimates through construction.) $45,058,000 2.5.2 Grant Funds Requested in this application. $2,288,000 2.5.3 Other Funds to be provided (Project match) $ 572,000 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $2,860,000 2.5.5 Estimated Benefit (Savings) $4,830,000 per 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.) No effort has been made to quantify the reduction of greenhouse gases. 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. Please see attachment D for all resumes. CVEA has contracted with Hatch Acres to manage the activities for the license application. Richard Griffith is the lead consultant for Hatch Acres and has over 45 years of experience in the hydro industry. CVEA’s Chief Executive Officer (CEO) Robert A. Wilkinson has been in the utility industry for 22 years. Robert provides support to Hatch Acres and communicates results and decisions to CVEA’s Board of Directors. CVEA’s Chief Operating Officer (COO) Steve Bushong has worked in the utility industry for nearly 30 years. Steve plays a key role in the technical aspects of the project. CVEA’s Manager of Administration & Finance is Jaime Matthews who has worked in the utility industry for 8 years. Jaime will be the grant manager for CVEA. CVEA’s current plan is to hire a Hydro Manager who will assist in managing this project. Our goal is to have this individual selected in the 4th quarter of 2008. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 6 of 15 9/3/2008 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.) Attachment E provides detail on each phase of the project along with estimated amounts. A summary on a proposed schedule is provided below: 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. Below is a milestone for each quarter of Phases II and III of the project: 1st Quarter 2009 Public notices will be sent out for scoping meetings 2nd Quarter 2009 Scoping meetings complete 3rd Quarter 2009 Respond to comments from meetings; File six month report with FERC and submit draft license application to FERC 4th Quarter 2009 Second field season report completed 1st Quarter 2010 Respond to questions on draft application for license, File six month report 2nd Quarter 2010 Modify application to reflect comments on draft license application 3rd Quarter 2010 Submit license application to FERC, begin Phase III preliminary engineering 4th Quarter 2010 Respond to any FERC questions 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. Hatch Acres is our main contractor for this project. Richard Griffith is the lead consultant for Hatch Acres and brings over 45 years in the hydro industry. His resume is included in Attachment C. Hatch Acres will contract out the field work necessary to complete the field studies and license application. At this stage of the project CVEA has not purchased any major equipment. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 7 of 15 9/3/2008 3.5 Project Communications Discuss how you plan to monitor the project and keep the Authority informed of the status. Monthly written and financial reports will be prepared for updating the CVEA Board of Directors at our monthly board meetings, which occur on the third Thursday of each month. CVEA will submit reports as required by AEA on progress-to-date, accomplished milestones, and any changes or updates to the scope of the project. 3.6 Project Risk Discuss potential problems and how you would address them. Access has been one of the biggest issues for this project due to the remote location of the site. CVEA’s intention is to develop an access road. This will be discussed this winter after field reports are available. If other issues arise the Project Manager will conduct a teleconference to communicate the issue. If the decision needs to be directed to the CVEA Board of Directors, CEO Robert Wilkinson will coordinate that activity. SECTION 4 – PROJECT DESCRIPTION AND TASKS Tell us what the project is and how you will meet the requirements outlined in Section 2 of the RFA. The level of information will vary according to phase of the project you propose to undertake with grant funds. If you are applying for grant funding for more than one phase of a project provide a plan and grant budget for completion of each phase. If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are satisfied and funding for an advanced phase is warranted. 4.1 Proposed Energy Resource Describe the potential extent/amount of the energy resource that is available. Discuss the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. The pre-feasibility study for the Allison Lake Project identified three alternatives that have a range of 20,500MWh-24,700MWh added hydro generation per year. The study indicated an average of 34,400 acre feet inflow per year and reservoir storage ranging from 12,100-19,500 acre feet. The general pros and cons of each alternative begin on page 34 of the pre-feasibility study (attachment A). At this phase in the project, alternative 2 is the favored option. All numbers will represent alternative 2. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 8 of 15 9/3/2008 4.2 Existing Energy System 4.2.1 Basic configuration of Existing Energy System Briefly discuss the basic configuration of the existing energy system. Include information about the number, size, age, efficiency, and type of generation. CVEA generates electrical power at its two diesel plants, one in Valdez and one in Glennallen, and a Cogeneration project in Valdez. In addition CVEA purchases power, under a long-term contract, from the Four Dam Pool Power Agency (FDPPA) Solomon Gulch hydroelectric facility in Valdez. CVEA operates and maintains the Solomon Gulch facility for the FDPPA. Power is transferred between the two districts on a 106-mile transmission line through Thompson Pass and the Chugach Mountains. The CVEA Cogeneration Plant is a state-of-the-art facility located at the Petro Star Valdez Refinery. It is a five-megawatt Solar turbine and heat recovery unit that utilizes "light straight run" as its fuel source and provides exhaust heat to the attached crude heater for Petro Star’s use in the refining process. The plant was completed in the spring of 2000 and is remotely controlled from the Solomon Gulch hydroelectric facility. Efficiency for this unit is 9.3 kWhs per gallon for production of electricity but the project sells heat at a combined efficiency of 75 -80%. Annual O&M costs for 2008 are estimated to be $87,000 which does not include labor. The Glennallen Diesel Plant (GDP) is the oldest of CVEA’s three thermal plants. It has expanded over the years to meet the needs of our customers. The available generation capacity of the plant is 6.9 megawatts. The GDP houses a total of six diesel engines; three Fairbanks Morse 38D8 1/8 opposed piston units, two Enterprise DSR 46 units, and one Caterpillar 3516B unit. The three largest units are remotely controlled from the Solomon Gulch hydroelectric facility. CVEA is currently installing an EMD unit with a capacity of 2.8 megawatts, which will improve reliability in the Copper Basin. The current average efficiency is 14 kWhs per gallon. Once the new EMD unit is online, the average efficiency will increase to 15 kWhs per gallon. Annual O&M costs for 2008 are estimated to be $211,000 which does not include labor. The Valdez Diesel Plant (VDP) was constructed after the 1964 Good Friday Earthquake that caused the city of Valdez to relocate to its present location. The plant houses three Fairbanks Morse 38D8 1/8 opposed piston units, three Enterprise DSR 46 units, and a trailer-mounted Solar Centaur turbine unit. The available generation capacity of this plant is 8.15 megawatts. The three largest units are remotely controlled from the Solomon Gulch hydroelectric facility. The average efficiency is 13.7 kWhs per gallon. Annual O&M costs for 2008 are estimated to be $200,000 which does not include labor. Currently owned by the Four Dam Pool Power Agency (FDPPA) and operated by CVEA: Solomon Gulch, the 13-megawatt hydroelectric facility located on Dayville Road in Valdez. Power is generated by two Fuji Francis water turbines. The facility began providing power to CVEA customers in 1982. CVEA operates its dispatch center from this facility. The plant is manned 24 hours a day, seven days a week. Plant operators are responsible for the operation of up to four generation plants at one time via remote control operations. From the hydro plant, operators can start and stop units in any or all of CVEA's three generation facilities: Glennallen diesel, Valdez diesel, or the cogeneration plant, as well as the hydro project. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 9 of 15 9/3/2008 CVEA's service areas are tied together with a 106-mile, 138-kilovolt transmission line that is owned by the Four Dam Pool Power Agency (FDPPA) and operated by CVEA. The transmission line provides a link to all four generating plants. Power can flow from any of the generating facilities to end consumers. Historically, power flows from the Solomon Gulch hydro plant to the Copper Basin district during the summer months. The transmission line traverses severe terrain between the two districts and parts of it, in the Thompson Pass area, are in potential avalanche danger. The transmission line was last damaged by an avalanche in 2006. CVEA’s Rates CVEA’s base rates have not changed since 1998. The Fuel and Purchased Power Charge (FPPC) changes monthly based on actual fuel and purchased power costs. This has caused the overall rate to vary based on our seasonal generation. Rates are lower in the summer while we are generating nearly 100% hydro, and higher in the winter when we are generating with fuel. The below graph illustrates CVEA’s average revenue per kWh collected for 2007 and year-to- date 2008. CVEA is projecting our 4th quarter average FPPC rate to be near 20¢ per kWh. The average 2007 rate was 13¢ per kWh. This would put our average rates listed below approximately 8¢ per kWh higher than 2007. Avoided Cost CVEA’s avoided cost of energy for 2008 is 16.34¢ per kWh and is based on 36,577,350 kWhs and $5,977,790. This is calculated each year as part of our annual budget process. 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. Currently we generate approximately 40% of our kWhs with fossil fuel. The Allison Lake Project will reduce our fossil fuel consumption from 40% to approximately 5%. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 10 of 15 9/3/2008 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. This project would have a positive impact on CVEA’s members by lowering the FPPC rate and would allow us to not be as dependent on fossil fuels as we are today. In addition, the project will provide long term energy at a stable price. 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 The pre-feasibility study identifies three alternatives. The first field season is complete and once the reports are available, the schedule calls for identification of a single alternative. Details of the three alternatives begin on section 3, page 7 of the pre-feasibility study (attachment A). See below for annual energy production, rated capacity and installed capacity estimates. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 11 of 15 9/3/2008 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 land surrounding Allison Lake is state land. Please see the project maps on pages 49-51 of the Application for Preliminary Permit (attachment B). The field work requires a physical crossing of Alyeska property; CVEA has acquired an access permit from Alyeska for field studies. 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 CVEA was awarded the FERC preliminary permit on September 4, 2008 (attachment C). The purpose of the preliminary permit is to secure and maintain priority to allow CVEA to study the power potential of Allison Lake and develop information necessary to support a license application. The term of the permit is three years. During this time, CVEA will study the potential regulatory and environmental considerations associated with developments of this type. At the conclusion of the three year permit, CVEA expects to file a license application for the project. CVEA will obtain authorizations from all applicable agencies for any use of land or resources for feasibility activities. 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 Hatch Acres is working with Environmental Research & Services to accomplish a 2008 environmental study plan. Additional environmental studies will continue in 2009. The initial report is unavailable at this time; however, CVEA will receive this report near the end of 2008. Additional information on the specific studies begins on page 39 of the Application for Preliminary Permit (attachment B). Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 12 of 15 9/3/2008 4.4 Proposed New System Costs (Total Estimated Costs and proposed Revenues) The level of cost information provided will vary according to the phase of funding requested and any previous work the applicant may have done on the project. Applicants must reference the source of their cost data. For example: Applicants Records or Analysis, Industry Standards, Consultant or Manufacturer’s estimates. 4.4.1 Project Development Cost Provide detailed project cost information based on your current knowledge and understanding of the project. Cost information should include the following: Total anticipated project cost, and cost for this phase Requested grant funding Applicant matching funds – loans, capital contributions, in-kind Identification of other funding sources Projected capital cost of proposed renewable energy system Projected development cost of proposed renewable energy system Total costs for this project range from $27 to $45 million dollars. CVEA received a capital budget appropriation from the State of Alaska for the first $1,000,000 towards license application. CVEA is pursuing funding in this grant request for additional funds for Phases II and III of the Allison Lake Project. Additional costs for Phases II and III total $2,860,000. CVEA is requesting grant funding for $2,288,000. Applicant matching funds will be 20% which is estimated to be $572,000. CVEA is pursuing all funding opportunities as they become available. 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 Project O&M costs are unknown at this time. For purposes of the total cost, annual O&M is estimated at $10/MWh. CVEA is not pursuing grant funding for O&M as O&M costs would be funded through 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 CVEA estimates the first year cost of power to range from 16.5¢-18.1¢ per kWh. This estimate includes financing the project for 30 years at a rate of 7%. CVEA will use 100% of the project output. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 13 of 15 9/3/2008 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. Please see the attached RFA AEA09-004 Application Cost Worksheet which summarizes all cost information for CVEA and this project. Please see the attached RFA AEA09-004 Budget Form which details costs of the Allison Lake Project. 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. CVEA is a locally regulated electric utility organized under AS 10.25. CVEA was incorporated in 1955 and has been providing electric service since 1958 in the Copper Basin and 1964 in Valdez. CVEA holds a Certificate of Public Convenience and Necessity No. 10 which was granted by the Alaska Public Utilities Commission in 1964. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. At a cost per gallon of $3.50, CVEA is estimating winter diesel fuel costs to be approximately 25¢ per kWh, this varies significantly with the price of oil. The Allison Lake Project estimates energy to cost 16.5¢-18.1¢ per kWh. This will provide CVEA members 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 This project allows CVEA to displace approximately 3,125,000 gallons of fuel per year which equates to approximately $9,885,000 per year at today’s fuel prices. The project has an economic life of 50 years. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 14 of 15 9/3/2008 With the addition of Allison Lake and the projected costs, our members will save approximately $4,360,000 per year. Other benefits include reduction of greenhouse gases and improved air quality. 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 costs for this project range from $27 to $45 million dollars. CVEA received a capital budget appropriation from the State of Alaska for the first $1,000,000 towards the licensing application. In this application, CVEA is requesting grant funding for $2,288,000. Applicant matching funds will be 20% which is estimated at $572,000. Please see the attached RFA AEA09-004 Budget Form which details costs of the Allison Lake Project.