HomeMy WebLinkAboutMetlakatla Ketchikan Intertie 2008-1
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 1 of 19 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 19 9/3/2008
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Metlakatla Indian Community (MIC)
Type of Entity:
MIC is a federally recognized Indian Tribe organized under the provisions of Section 16 of the Indian Reorganization Act,
25 U.S.C. Section 476. Electric power is provided to the community by Metlakatla Power & Light (MP&L), a community
owned utility.
Mailing Address
P.O. Box 8
Metlakatla, AK 99926
Physical Address
8th and Upper Milton Street
Metlakatla, AK 99926
Telephone
907-886-4441
Fax
907-886-4471
Email
info@metlakatla.com
1.1 APPLICANT POINT OF CONTACT
Name
Paul Brendible
Title
Director of Contracts and Grants
Mailing Address
P.O. Box 8
Metlakatla, AK 99926
Telephone
907-886-4441
Fax
907-886-4470
Email
paul.brendible@metlakatla.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
An independent power producer, or
A local government, or
X A governmental entity (which includes tribal councils and housing authorities);
Yes
1.2.2. Attached to this application is formal approval and endorsement for its project by
its board of directors, executive management, or other governing authority. If a
collaborative grouping, a formal approval from each participant’s governing
authority is necessary. (Indicate Yes or No in the box )
Yes
1.2.3. As an applicant, we have administrative and financial management systems and
follow procurement standards that comply with the standards set forth in the grant
agreement.
Yes
1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached
grant form. (Any exceptions should be clearly noted and submitted with the
application.)
Renewable Energy Fund
Grant Application
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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 transmission line between Metlakatla and Ketchikan that will allow for
the use of Metlakatla’s existing surplus hydroelectric generation capability to offset diesel
generation in Ketchikan. The Metlakatla-Ketchikan Intertie has been studied extensively in the
past and MIC is requesting a grant for Final Design and Permitting, and for 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 Metlakatla-Ketchikan Intertie is a 34.5-kV transmission line that will interconnect
the electric systems of Metlakatla Power & Light (MP&L) and Ketchikan Public Utilities (KPU).
The Intertie will include 16 miles of overhead wood pole transmission line to be constructed on
Annette Island between Metlakatla and Race Point and an approximate one mile submarine cable
crossing of Revillagigedo Channel between Race Point and KPU’s Mountain Point Substation.
The project will also include control system upgrades to allow for the integrated operation of the
interconnected systems’ generating plants. The Metlakatla-Ketchikan Intertie will provide
benefits to both Ketchikan and Metlakatla, allowing for significantly improved utilization of
Metlakatla’s existing hydroelectric generating resources while reducing diesel generation in
Ketchikan.
2.3 PROJECT BUDGET OVERVIEW
Briefly discuss the amount of funds needed, the anticipated sources of funds, and the nature and source
of other contributions to the project. Include a project cost summary that includes an estimated total cost
through construction.
The total estimated cost of the Metlakatla – Ketchikan Intertie through construction is
$7,652,000. MIC has received a grant of $500,000 from the Denali Commission towards the
Intertie project. MIC is requesting a grant of $7,152,000 from the Renewable Energy Fund
program. No other funds are presently available for the Intertie project.
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 Metlakatla-Ketchikan Intertie will allow for the transmission of surplus hydroelectric energy
available on Metlakatla to Ketchikan where the energy will be used to offset diesel generation.
At the present time, the amount of available surplus hydroelectric generation is approximately
8,500,000 kWh per year. This amount of energy would offset approximately 580,000 gallons of
diesel fuel per year in Ketchikan. At $3.10 per gallon, this would result in savings of about $2
million per year in power production costs. This cost savings is expected to be shared by electric
consumers in both Metlakatla and Ketchikan. The reduction in pollutants emitted from diesel oil
combustion will provide benefits to the general public and the regional environment.
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Grant Application
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In addition, the project will provide greater interconnected system reliability and will allow for
the development of future hydroelectric and renewable energy generation projects on an
integrated, regional basis. For example, potential hydroelectric resources on Annette Island,
such as the Triangle Lake project, can be developed if deemed economically viable with a larger
market for the power output. With the Metlakatla-Ketchikan Intertie and the Swan-Tyee Intertie
currently under construction, the electric systems of Metlakatla, Ketchikan, Petersburg and
Wrangell will all be interconnected.
An important benefit to the Ketchikan area will be that the Metlakatla – Ketchikan Intertie will
provide power from a source that is not dependent on the existing transmission line to Swan
Lake. When the Swan Lake transmission line is unavailable for any reason, Ketchikan is
isolated from much of its hydroelectric generation. The Intertie will still be available to provide
power from an alternative direction and as such, adds another source of backup generation in the
event of failure of the Swan Lake transmission line.
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.)
$ 7,652,000
2.5.2 Grant Funds Requested in this application. $ 7,152,000
2.5.3 Other Funds to be provided (Project match) $ 500,000
2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $ 7,652,000
2.5.5 Estimated Benefit (Savings) $ 2,000,000 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.)
$ Not Available
Renewable Energy Fund
Grant Application
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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.
The Project Manager for the Metlakatla-Ketchikan Intertie will be Paul Brendible, MIC Director
of Contracts and Grants. Mr. Brendible will be assisted by C. Paul Bryant, General Manager of
Metlakatla Power & Light. Consultants and contractors will be retained as needed. No project
management assistance will be needed from AEA or any other government entity.
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.)
As presently proposed, design and permitting of the Metlakatla – Ketchikan Intertie will be
conducted in 2009. With design and permit acquisition substantially complete, MIC will
proceed with material procurement in late 2009. Construction of the Intertie project is
anticipated for 2010 and completion is expected in August 2010.
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
Scheduled project milestones are as follows:
Select Consultant for Design Services February 15, 2009
Specify Design Criteria March 31, 2009
Complete Preliminary Design May 31, 2009
Complete Final Design November 30, 2009
Select Consultant for Permitting Services February 15, 2009
Complete Field Research and Studies June 30, 2009
Complete Permitting October 31, 2009
Initiate Power Sales Negotiations January 15, 2009
Complete Power Sales Negotiations April 15, 2009
Request Bids for Materials & Construction January 15, 2010
Select Construction Contractor February 28, 2010
Begin Construction April 15, 2010
Install Submarine Cable July 15, 2010
Complete Construction August 31, 2010
Renewable Energy Fund
Grant Application
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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.
At the present time, Electric Power Systems, Inc. (EPS) has been retained to provide
engineering and design services related to the section of the overhead transmission line between
Metlakatla and the ferry terminal on Waldon Point. EPS has also been retained to provide an
estimate of the cost to provide the power plant control system upgrades. Poles and hardware
have already been ordered for the transmission line to the ferry terminal. It is expected that EPS
will also prepare the design of the remaining overhead transmission line to Race Point and the
submarine cable termination facilities.
MIC will retain other consultants and engineers as needed to provide design, permitting and
construction services. These contractors will be retained through a process of solicitation of
proposals, evaluation of proposals by MIC and MP&L and final selection by MIC.
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
MIC will provide written monthly summary reports of progress on the project. The monthly
reports will include status of activities presently underway, selection of contractors, budget status
and schedule progress. Achievement of milestones will be reported as will commitments for
material and construction services procurement. In addition, MIC will provide ongoing status
reports on its website and will remain in regular telephone contact with the Authority’s project
representative.
c3.6 Project Risk
Discuss potential problems and how you would address them.
The Metlakatla-Ketchikan Intertie is a low risk project. Uncertainty with regard to conditions of
the seafloor at the location of the submarine crossing exist at the present time. Various studies
including a bathymetric survey and shoreline investigations will be conducted early in the design
process to determine the best location for the cable. These studies will also help identify key
factors to be used in the specifications for the submarine cable, such as armoring.
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.
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Grant Application
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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 hydroelectric energy resources available in Metlakatla at the present time are the 1.0 MW
Chester Lake project and the 3.0 MW Purple Lake project. The two plants are capable of
generating 25,045 MWh per year on average of which about 8,758 MWh is presently estimated to
be surplus to the needs of MP&L. Studies have been conducted in the past that have identified
potential expansions to the existing hydroelectric facilities as well as a new hydroelectric facility
at Triangle Lake. It is estimated that these potential new hydroelectric resources could generate
an additional 20,700 MWh on an average annual basis.
Ketchikan Public Utilities (KPU) owns and operates 11.7 MW of hydroelectric generating
capacity at three separate facilities located relatively close to Ketchikan and 23.0 MW of diesel
generation capacity located in its Bailey Powerplant. The 22.5 MW Swan Lake hydroelectric
project, owned by the Four Dam Pool Power Agency, is also available to KPU and provides a
significant amount of the total power supply requirement in Ketchikan. The total amount of
energy available from the combined hydroelectric resources is about 137,000 MWh on an average
annual basis. To the extent that the combined hydroelectric resources are not sufficient to supply
the entire power supply requirement at any time, diesel generation is used as a supplement.
With the high price of heating oil, there is a significant change to the use of electric space heat by
the residential, commercial and public building customers in Ketchikan. The switch to electric
space heat is causing a noticeable increase in electric loads and as a result, more demand is being
placed on KPU’s diesel generators to meet the growing need for electricity. The present cost of
diesel generation in Ketchikan is estimated to be approximately 23 cents/kWh, a cost that is much
higher than was experienced just a few years ago when fuel prices were lower.
The primary purpose of the Metlakatla – Ketchikan Intertie will be to make additional existing
hydroelectric generation available to serve loads in Ketchikan. KPU has evaluated several
alternative energy resources in recent years including the Whitman Lake and Mahoney Lake
hydroelectric projects, a municipal solid waste to energy project, bio-diesel generation, and new
diesel generators. KPU has also considered the Metlakatla-Ketchikan Intertie among the power
supply options available to it for many years. Provision was made in the design of KPU’s
Mountain Point substation for eventual connection to MP&L’s system.
There are many advantages to the Metlakatla-Ketchikan Intertie when compared to the other
alternatives being considered. Principal among the benefits of the Intertie are that it provides for
the use of existing surplus hydroelectric energy generation capability. As such, no fuel of any
kind is needed and the environmental impacts of the Intertie are very low compared to building
new generating plants. In using hydroelectric energy to supplant diesel generation, the Intertie
project will reduce CO2 and NOx emissions in the region. Further, the reduction of diesel
generation will reduce the amount of diesel fuel that must be barged into Ketchikan thereby
providing an incremental reduction in the probability of fuel spills and other fuel handling
mishaps.
A noticeable benefit of the Intertie project will be that it will provide clean, hydroelectric energy
to Ketchikan that can then be used to offset the use of oil for space heating. Many residents,
schools and businesses in Ketchikan are considering converting to electric space heat but the high
cost of electricity produced with diesel generation is a deterrent to this transition. Replacing oil
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heat with electric heat will reduce the amount of pollutant emissions in the area including CO2,
SO2 and NOx.
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 electric system in Metlakatla includes 4.0 MW of hydroelectric capacity and 3.3 MW of
diesel generating capacity. The diesel generator, a 4,500 hp Caterpillar unit, is used primarily as
a backup emergency reserve. A 1.0 MW Battery Energy Storage System (BESS) was installed in
1997 to provide emergency backup power for a limited time as well as balance out frequency and
voltage fluctuations on the MP&L system.
The Chester Lake hydroelectric project was constructed in 1986. It includes a 40 foot high
concrete arch dam, a 20 inch diameter steel penstock approximately 3,521 feet long and a
powerhouse with a single 1,042-kW Pelton turbine generating unit.
The Purple Lake hydroelectric project is comprised of a dam, reservoir, tunnel, penstock and
powerhouse containing three horizontal Francis type turbine generating units, each rated at 1,000-
kW during normal operation. The project was originally built in 1956, however a new control
system was installed in 1997, the generators were all rewound in the 1990’s and the turbine
runners were refinished in the 1990’s as well.
The existing generating units in Ketchikan are shown in the following table:
Year
Installed
Rated
Capacity(kW)(1)
Energy Generation
Capability (MWh)(2)
KPU Owned Hydroelectric
Silvis Lake 1968 2,100 10,300
Beaver Falls Unit #1 1947 1,000 37,800 (3)
Beaver Falls Unit #3 1954 2,200 -
Beaver Falls Unit #4 1954 2,200 -
Ketchikan Unit #3 1923 1,400 18,000 (3)
Ketchikan Unit #4 1938 1,400 -
Ketchikan Unit #5 1957 1,400 -
Subtotal 11,700 66,100
Swan Lake Hydroelectric 1983 22,500 71,400
KPU-Owned Diesel(4)
Bailey Unit #1 1970 3,500 -
Bailey Unit #2 1970 3,500 -
Bailey Unit #3 1976 5,500 -
Bailey Unit #4 1998 10,500 -
Subtotal 23,000 -
Total 57,200 137,500
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(1) The rated capacity may exceed the normal maximum operating capacity from the generating units.
(2) Energy generation capability for hydroelectric resources is based on average water conditions and load levels
similar to those experienced in 2000. Hydroelectric energy generation varies from year to year.
(3) Energy generation for the KPU-owned hydroelectric resources is not differentiated by unit.
(4) Diesel generators are shown as capacity resources only, although they are used to provide energy supplemental to
that provided by the hydroelectric facilities. At a 70% annual plant factor, the annual energy generation capability
of the four diesel units is 141,040 MWh.
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.
At the present time, MP&L uses its hydroelectric generating resources, the Chester Lake and
Purple Lake projects, to meet its own load. Additional energy generation capability, surplus to
the needs of MP&L, exists at these plants.
In Ketchikan, KPU fully utilizes the generating capability of its City-owned hydroelectric
generating facilities. Power is then purchased from the Swan Lake project to meet the remaining
energy requirement. At certain times, the generating capability of the combined hydroelectric
facilities is insufficient to supply the total load in Ketchikan. This hydroelectric shortage can
actually last for an extended time if local precipitation is low. During the times when
hydroelectric energy is insufficient, diesel generation is used to meet the remaining load
requirement.
With the Metlakatla-Ketchikan Intertie, additional hydroelectric energy generation will be
available to KPU to supply loads and avoid all or a portion of the amount of diesel generation that
would be needed otherwise. Another advantage of the Intertie will be that the power production
systems of MP&L and KPU will become interconnected. As such, the hydroelectric facilities of
the two utilities can be operated in a coordinated fashion so as to maximize the capability of all
the facilities. This operating improvement is typical of larger systems where individual
generating units can be operated within their most efficient ranges and the various reservoirs can
be operated most effectively.
With the Metlakatla-Ketchikan Intertie and the Swan-Tyee Intertie, currently under construction,
a significantly larger southern Southeast Alaska interconnected electric system will exist. The
various hydroelectric facilities within this four community system can be operated on an
integrated basis for overall maximum efficiency. Reliability in the four communities will be
improved through additional backup options and maintenance on various generating units and
transmission lines can be effectively coordinated to reduce outage impacts to electric consumers.
Further benefits can be gained with incorporation of fiber communication strands in the
submarine cable as well as in the overhead transmission line. This can provide very high speed
communications systems to residents and businesses on Annette Island. Fiber optic cables are
typically bundled into electric submarine cables.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
In 2007, the total energy sales in Metlakatla were approximately 14,500 MWh of which 6,180
MWh, or 43%, was to residential customers. As previously indicated, the total annual
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hydroelectric energy generation capability of the existing hydroelectric resources in Metlakatla is
about 25,000 MWh.
Total energy sales in Ketchikan in 2007 were about 155,800 MWh. Energy sales in Ketchikan
are expected to increase noticeably in the immediate future as various residential, public authority
and commercial customers switch to electric heat in response to continuing high oil prices. The
Metlakatla-Ketchikan Intertie will contribute to lower power costs in Ketchikan. As a municipal
electric utility, KPU sets rates based on its costs. Lower power costs will mean lower electric
rates, a direct benefit to electric consumers.
It is expected that the benefits of the Intertie in offsetting diesel generation costs will be jointly
shared by Ketchikan and Metlakatla. In Ketchikan, the benefits will mean lower electric rates to
consumers. In Metlakatla, the benefits can also mean lower electric rates to electric consumers.
The benefits in Metlakatla can also be utilized in paying the costs of repairs, replacements and
improvements to MP&L’s electric system.
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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 Metlakatla-Ketchikan Intertie will be 17 miles in length and includes overhead and
submarine components. The line would originate at KPU’s Mountain Point substation and cross
underwater to Race Point on Annette Island, a cable crossing distance of about one mile. A 16-
mile overhead line on Annette Island would extend from the cable landing point to an MP&L
substation to complete the system.
The line is expected to be sized for a delivery of 8 MW from MP&L resources to KPU. The line
is specified at 34.5-kV which is adequate for the anticipated power loads as well as capable of
accommodating higher power loads. KPU’s transmission system at the Mountain Point
substation is also at 34.5-kV. Overhead conductors for the line were specified in previous studies
to be 4/0 Penguin/AW and the submarine cable was specified to be a three conductor, bundled
cable at 35-kV, 1/0 AWG.
Provision was made at KPU’s Mountain Point substation at the time the substation was
constructed for eventual interconnection with MP&L’s system. Not all of the components needed
for the interconnection are presently installed, but the substation design is in place and the
necessary modification is not expected to be significant from a time or cost perspective. Further,
electric conduits are currently installed under the Tongass Highway that can be used for bringing
the cable from the shoreline to the substation.
Although earlier studies identified a possible route for the portion of the Metlakatla – Ketchikan
Intertie on Annette Island following a proposed road alignment to Walden point, a shorter route
along the Upper and Lower Todd Lakes has also been identified. A detailed route evaluation will
be conducted as part of final design to determine the optimal location of the overhead line. At the
present time a transmission line is being built between Metlakatla and the Walden Point ferry
terminal along the road to the ferry terminal. This line is designed for 34.5-kV but unless the
Metlakatla – Ketchikan Intertie is developed, it will only be operated at 12.47-kV. The
transmission line to the ferry terminal will be a part of the Metlakatla – Ketchikan Intertie. Since
the road to the ferry terminal is already in place, installation of the overhead transmission line will
be much easier than if it were being installed in uncleared forest.
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.
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The overhead portion of the Metlakatla – Ketchikan Intertie will be located entirely on Annette
Island and as such, MIC will have authority over all aspects related to land ownership and site
approval. MIC has approved the Intertie project and will work with its consultants, engineers and
advisors to approve the appropriate location for the Intertie.
No significant land issues are expected to be found on the Ketchikan side of the submarine cable
crossing. KPU has indicated that it will assist MIC with regard to bringing the cable to the
Mountain Point substation.
4.3.3 Permits
Provide the following informationas it may relate to permitting and how you intend to address
outstanding permit issues.
• List of applicable permits
• Anticipated permitting timeline
• Identify and discussion of potential barriers
Several permits are expected to be needed, all with regard to the placement of the submarine
cable. These permits are summarized as follows:
Army Corps of Engineers Permit
Alaska Coastal Questionnaire
State Fire Marshal
U.S. Coast Guard Notification
NOAA Notification
Alaska DOT
Ketchikan Gateway Borough Planning
It is anticipated that the permitting process will require approximately six months to complete,
however, some additional time may be needed if certain field investigations can not be completed
on a timely basis due to weather conditions, fish and wildlife migrations or other factors.
It is noted in nautical charts that cable areas are presently identified in the vicinity of the proposed
Intertie submarine cable. To the extent that communication cables are already submerged in these
areas, it may be necessary to place the Intertie cable in a slightly different location to avoid
contact with the other cables. This will be investigated in the permitting and design effort for the
Intertie.
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
None of these environmental issues are expected to be applicable to the Intertie project. MIC will
assure that the overhead portion of the Intertie meets with all standards on Annette Island. As
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previously indicated, some conflict with existing submerged telecommunications cables may exist
but these conflicts will be addressed in the final design of the Intertie project and are not expected
to cause a significant change to the overall project.
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
A current cost estimate has been prepared for the Metlakatla – Ketchikan Intertie project based
on estimates from previous engineering studies adjusted for current labor and material prices and
other factors. Earlier in 2008, MP&L requested a bid for the design and staking of the section of
the line from Metlakatla to the ferry terminal at Walden Point. The bid from EPS is attached to
this grant application. The cost of this work, estimated to be $150,000, is included in the total
cost of engineering and design for the Intertie project. In addition, an engineer’s estimate for the
control system upgrades was developed recently by EPS. This estimate is attached to the grant
application also for reference.
By far the most significant component of cost of the Metlakatla – Ketchikan Intertie is the
submarine cable between Annette Island and KPU’s Mountain Point substation. This crossing is
approximately one mile in length and the maximum depth of the channel is estimated to be about
550 feet. Submarine cables are specially manufactured for each application and installation
requires specialized equipment and labor skills. KPU is in the process of installing a submarine
cable between Ketchikan and Gravina Island, a crossing of about one mile. The characteristics
of the cable that KPU is using is nearly identical to what is expected to be used for the
Metlakatla – Ketchikan Intertie. KPU recently received a bid for the Gravina cable including
installation. The bid amount of KPU’s cable has been used to estimate the cost for the Intertie
submarine cable included in the cost estimate.
It is important to note that the cost of transmission materials has increased significantly in recent
years.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 14 of 19 9/3/2008
The estimated development cost of the Metlakatla – Ketchikan Intertie is summarized in the
following table. The amount of the requested grant is $7,152,000.
Metlakatla – Ketchikan Intertie
Estimated Project Total Cost and Grant Funding Requested
Overhead Transmission Line
Right of Way Clearing 145,000$
Overhead Line Materials and Labor 640,000
Helicopter Assistance 615,000
Subtotal 1,400,000$
Contingency % 20%
Contingencies 280,000
Subtotal - Overhead 1,680,000$
Submarine Cable
Materials and Installation 3,200,000$
Termination Facilities 200,000
Subtotal 3,400,000$
Contingency % 20%
Contingencies 680,000
Subtotal - Overhead 4,080,000$
Metlakatla Control System Upgrades
Hydroelectric Plant Controls 556,000$
SCADA Controls 146,000
Substation Modifications for Interconnection 200,000
Subtotal 902,000$
Contingency % 10%
Contingencies 90,000
Subtotal - Overhead 992,000$
Total Project Cost
Materials and Installation 5,702,000$
Indirect Costs
Engineering, Field Surveys, Staking 500,000$
Permitting 200,000
Owner's Administration 200,000
Subtotal - Indirect Costs 900,000$
Contingency 1,050,000
Total Project Cost 7,652,000$
Less: Denali Commission Grant (500,000)
Net Grant Funding Requested 7,152,000$
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
The annual O&M costs for the Metlakatla – Ketchikan Intertie are expected to be relatively
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 15 of 19 9/3/2008
minor. Transmission lines of this type typically require very little maintenance in the early years
of operation providing the lines are designed properly and danger trees and other hazards are
cleared out during construction.
It is estimated that annual O&M costs will be $60,000 per year and that an additional $50,000 per
year will be needed for capital repairs, improvements and replacements. These costs will be paid
through revenues received from power sales over the Intertie. No grant funds will be needed for
O&M costs.
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 will be sold over the Metlakatla-Ketchikan Intertie to Ketchikan Public Utilities (KPU).
The power sales price will be negotiated between MIC and KPU and is expected to be reflective
of the cost of power available to KPU from other alternatives. At the present time, KPU pays 6.8
cents per kWh for Swan Lake power that it purchases from the Four Dam Pool. Other new
hydroelectric alternatives for KPU are estimated to have a cost of power in the range of 7.0 cents
per kWh and the cost of diesel generation for KPU is about 23 cents per kWh when diesel fuel is
at $3.10 per gallon. It is estimated that the sales price of power over the Intertie will be in the
range of 6.0 to 12.0 cents per kWh.
4.4.4 Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
See attached application worksheet.
It is important to note the in the estimation of benefits for the Metlakatla – Ketchikan Intertie,
only the net fuel and incremental diesel O&M savings have been included. Additional “capacity”
benefits will be realized by Ketchikan in that the Intertie will provide additional reserve benefits
to KPU. The value of this capacity benefit has not been estimated at this time.
Fuel savings have been estimated assuming that the full amount of surplus hydroelectric
generation available in Metlakatla will be sold to KPU. Energy loads in Ketchikan are expected
to increase significantly as more emphasis is placed on electric space heat in the community.
The calculation of the Benefit Cost ratio shown in the Cost worksheet is based on the net present
value of estimated net benefits over a 30 year project life assuming a 5.5% discount rate.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 16 of 19 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.
The Metlakatla – Ketchikan Intertie will be operated by MP&L in coordination with KPU.
Agreements will be established to assure effective maintenance and operating standards are in
place and administered. Further, standard utility operating procedures to assure safe and reliable
operation will be identified in contracts between MP&L and KPU and will be adhered to. Both
MP&L and KPU currently own, operate and maintain utility properties similar to the Intertie and
are very familiar with what will be needed to assure a long, useful life for the Intertie.
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your
recommendation for additional project development work.
A detailed analysis of the benefits of the Intertie project has been developed. The analysis
estimates the amount of surplus hydroelectric power available in Metlakatla and the amount of
diesel fuel offset on a yearly basis assuming a fuel use rate of 14.5 kWh per gallon. Based on an
assumed present cost of diesel fuel of $3.10 per gallon and assumed escalation in diesel fuel of
3% per year, the annual savings in fuel costs is estimated. The incremental savings in diesel
generator O&M is also estimated based on an O&M cost of 1.5 cents per kWh.
The estimated annual savings in fuel costs are reduced by the O&M costs for the Intertie and the
amount that will be paid to MP&L for power purchased from MP&L’s hydroelectric projects.
For the purpose of this analysis, the assumed rate for power sales is 8.5 cents per kWh, escalated
at 1% per year.
The total net present value savings of the estimated net benefits of the Intertie over a 30-year
analysis period has been calculated assuming a 5.5% discount rate. The net present value savings
based on this analysis is $21,463,000 resulting in a benefit to cost ratio of 2.80 for the Intertie cost
of $7,652,000.
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)
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 17 of 19 9/3/2008
• Discuss the non-economic public benefits to Alaskans over the lifetime of the project
As indicated in Section 4.4.6, the net present value savings of the net benefit of the Metlakatla-
Ketchikan Intertie project is $21,463,000 over the life of the project (30 years for this analysis).
This benefit will be derived almost entirely from the savings in fuel costs for diesel generation. It
is also estimated that about $700,000 per year could be paid to MIC for power purchased from
MP&L by Ketchikan.
Other economic benefits that have not been evaluated yet include the capacity benefit that KPU
will realize with the Intertie since MP&L’s generating resources will be available to serve loads
in Ketchikan even when the Swan Lake project or the Swan Lake transmission line are
unavailable.
It is also important to note that with the Intertie, KPU will be able to provide lower power costs in
Ketchikan than could be realized with diesel generation. These lower power costs will then help
local residents, public facilities and businesses realize greater savings if they choose to transition
from oil to electric space heat. The lower electric rates will consequently serve as an additional
incentive to convert to electric heat. The amount that local consumers would save in heating bills
by converting to electric heat has not been evaluated as part of this application.
Other benefits of the Metlakatla – Intertie include:
More efficient use of the area’s hydroelectric generating resources
Relatively minor negative environmental impacts related to installation and operation of
the Intertie
Reduced oil consumption in the area
Reduced air pollution from burning of oil
Incrementally lower risks of fuel handling mishaps
Incrementally lower need for fuel deliveries in and transport through Southeast Alaska
Lower greenhouse gas emissions
Greater electric system reliability
Interconnection of previously isolated electric systems
Future development of new resources can be accomplished over a wider geographic area
More encouragement to convert to electric space heat in the area
Potential for improved high speed fiber optic communications systems to Metlakatla
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 18 of 19 9/3/2008
SECTION 6 – GRANT BUDGET
Tell us how much your total project costs. Include any investments to date and funding sources,
how much is requested in grant funds, and additional investments you will make as an
applicant.
Include an estimate of budget costs by tasks using the form - GrantBudget.xls
The Metlakatla – Ketchikan Intertie is expected to be fully grant funded. Detailed costs are
provided in the attached budget form.
Alaska Energy Authority - Renewable Energy FundBUDGET INFORMATIONBUDGET SUMMARY:Metlakatla ‐ Ketchikan Intertie ProjectMilestone or Task Federal Funds State FundsLocal Match Funds (Cash)Local Match Funds (In‐Kind)Denali Commission Grant TOTALS1 Preliminary Design 240,000$ 240,000$ 2 Permitting 240,000 240,000 3 Final Design 340,000 340,000 4 Overhead Line Construction 1,220,000 500,000 1,720,000 5 Submarine Cable Construction 4,120,000 4,120,000 6 Control System Upgrades 992,000 ‐$ 992,000 7,152,000$ 500,000$ 7,652,000$ Milestone # or Task #BUDGET CATAGORIES:123456TOTALSDirect Labor and Benefits 10,000$ 10,000$ 10,000$ 10,000$ 10,000$ ‐$ 50,000$ Travel, Meals, or Per Diem‐ Equipment‐ Supplies‐ Contractual Services 230,000 230,000 330,000 30,000 30,000 850,000 Construction Services 1,680,000 4,080,000 992,000 6,752,000 Other Direct Costs‐ TOTAL DIRECT CHARGES 240,000$ 240,000$ 340,000$ 1,720,000$ 4,120,000$ 992,000$ 7,652,000$ RFA AEA09-004 Budget Form
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 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. 100% for transmission line
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 Railbelt1 grid, leave this section blank)
i. Number of generators/boilers/other 4
ii. Rated capacity of generators/boilers/other 23,000 kW
iii. Generator/boilers/other type Diesel generators
iv. Age of generators/boilers/other Varies – 1970 through 1998
v. Efficiency of generators/boilers/other Approximately 14.5 kWh per gallon of diesel fuel
b) Annual O&M cost (if system is part of the Railbelt grid, leave this section blank)
i. Annual O&M cost for labor $30,000
ii. Annual O&M cost for non-labor $30,000
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] 164,800,000 (2007 actual for KPU)
ii. Fuel usage
Diesel [gal] 180,000 (Estimated for 2007 for KPU diesel generation)
Other
iii. Peak Load NA
iv. Average Load 18,800 kW (2007 actual for KPU)
v. Minimum Load NA
vi. Efficiency NA
vii. Future trends Significant increases with local conversions to electric space heat.
d) Annual heating fuel usage (fill in as applicable)
i. Diesel [gal or MMBtu] Unknown
ii. Electricity [kWh] Unknown
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.
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 2
iii. Propane [gal or MMBtu] Unknown
iv. Coal [tons or MMBtu] Unknown
v. Wood [cords, green tons, dry tons] Unknown
vi. Other Unknown
3. Proposed System Design
a) Installed capacity No new capacity to be installed.
b) Annual renewable electricity generation
i. Diesel [gal or MMBtu]
ii. Electricity [kWh] 8,500,000 (currently surplus hydroelectric energy)
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 $7,652,000
b) Development cost $7,652,000
c) Annual O&M cost of new system $60,000
d) Annual fuel cost None
5. Project Benefits
a) Amount of fuel displaced for
i. Electricity 600,000 gallons per year
ii. Heat
iii. Transportation
b) Price of displaced fuel $1,872,000 per year at current fuel price
c) Other economic benefits $130,000 per year (incremental diesel O&M savings)
d) Amount of Alaska public benefits $2,002,000 per year
6. Power Purchase/Sales Price
a) Price for power purchase/sale Assumed 8.5 cents/kWh (Price to be negotiated later)
Renewable Energy Fund
RFA AEA 09-004 Application Cost Worksheet revised 9/26/08 Page 3
7. Project Analysis
a) Basic Economic Analysis
Project benefit/cost ratio 2.8
Payback 6 Years
May 21, 2008
Paul Bryant
Metlakatla Power and Light
PO Box 359
Metlakatla, Alaska 99926
Dear Paul:
Electric Power Systems, Inc (EPS) has prepared a budgetary estimate for the replacement of the Metlakatla
Light and Power (MLP) hydro generator controls. The existing controls do not have the ability to operate the
unit(s) in isochronous control, therefore leaving MLP relying on the BESS system or diesel generator to provide
isochronous control. The existing controls are also based on a proprietary control system that has become very
difficult to support and repair. MLP has only once source for replacement parts and repairs. The hydro
generator controls can be upgraded to include isochronous control.
The controls budgetary estimate is based on the following tasks:
• Replace existing Beckwith generator protective relay with modern microprocessor based relay(s).
• Replace generator controls (Black Box) with PLC based governor system including integrated
generator controls.
o PLC based governor
o Hardware interface kit (hydraulics)
o Integrated unit control
o Installation assistance from factory supplier
• Replace existing communication equipment between plants and Centennial
• Upgrade Centennial plant HMI controls to interface with new hydro controls and existing BESS controls
• Provide engineering support and project management to MLP
Below is a summary of the budgetary estimate. Please see attached tables and quotes for a more detail.
GOVERNOR/SPEED AND UNIT CONTROL, EQUIPMENT AND INSTALLATION
AUXILIARY DEVICE UPGRADES (RELAY, SCADA INTERFACE, PROJECT MANAGEMENT)
CHESTER LAKE SUBTOT
GOVERNOR/SPEED AND UNIT CONTROL, EQUIPMENT AND INSTALLATION
AUXILIARY DEVICE UPGRADES (RELAY, SCADA INTERFACE, PROJECT MANAGEMENT)
PURPLE LAKE SUBTOT
HMI UPGRADE, APPLICATION MODIFICATIONS/REDESIGN
HMI SUBTOT
TOT
CHESTER LAKE
PURPLE LAKE
CENTENNIAL SCADA CONTROL
SUMMARY
WWW.EPSINC.COM
PHONE (907) 522-1953 y 3305 ARCTIC BLVD., SUITE 201, ANCHORAGE, ALASKA 99503 y FAX (907) 522-1182
133,400$
55,398$
AL 188,798$
224,375$
143,200$
AL 367,575$
145,869$
AL 145,869$
AL 702,243$
If you have questions or would like to discuss this in detail, please feel free to contact me.
Sincerely,
David Buss
Electric Power Systems, Inc
PHONE (907) 789-2474 y 2213 JORDAN AVE, JUNEAU, ALASKA 99803 y FAX (907) 789-4939
PHONE (425) 883-2833 y 4020 148th AVE. N.E., SUITE C, REDMOND, WASHINGTON 98052 y FAX (425) 883-8492
Metlakatla Hydro Controls Upgrade
Controls and Relaying Budgetary Estimate
Activity Description
Labor
(hrs)
Labor
Rate Labor Total Materials Quantity Total
ENGINEERING ENGINEERING DESIGN 40 134$ 5,360$ -$ 1 5,360$
DRAFTING 40 85$ 3,400$ -$ 1 3,400$
PROJECT MANAGEMENT 16 134$ 2,144$ -$ 1 2,144$
10,904$
MATERIALS COMMUNICATIONS EQUIPMENT 4 134$ 536$ 4,000$ 1 4,536$
RELAY UPGRADE (SR489) 2 134$ 268$ 6,500$ 1 6,768$
MISC WIRE, AUX RELAYS, ETC 4 134$ 536$ 5,000$ 1 5,536$
16,840$
INSTALLATION ASSIST WITH GOVERNOR INSTALLATION 40 134$ 5,360$ 5,000$ 1 10,360$
RELAY INSTALLATION 32 134$ 4,288$ -$ 1 4,288$
COMMISSIONING (ENGINEER)40 134$ 5,360$ -$ 1 5,360$
EXPENSES 10 111$ 1,110$ 1,500$ 1 2,610$
22,618$
50,362$
5,036$
55,398$
Activity Description
Labor
(hrs)
Labor
Rate Labor Total Materials Quantity Total
ENGINEERING ENGINEERING DESIGN 30 134$ 4,020$ -$ 3 12,060$
DRAFTING 30 85$ 2,550$ -$ 3 7,650$
PROJECT MANAGEMENT 12 134$ 1,608$ -$ 3 4,824$
24,534$
MATERIALS COMMUNICATIONS EQUIPMENT 4 134$ 536$ 4,000$ 1 4,536$
RELAY UPGRADE (SR489) 2 134$ 268$ 6,500$ 3 20,304$
MISC WIRE, AUX RELAYS, ETC 2 134$ 268$ 6,500$ 3 20,304$
45,144$
INSTALLATION ASSIST WITH GOVERNOR INSTALLATION 30 134$ 4,020$ 5,000$ 3 27,060$
RELAY INSTALLATION 32 134$ 4,288$ -$ 3 12,864$
COMMISSIONING (ENGINEER)30 134$ 4,020$ -$ 3 12,060$
EXPENSES 10 134$ 1,340$ 1,500$ 3 8,520$
60,504$
130,182$
13,018$
143,200$
Activity Description
Labor
(hrs)
Labor
Rate Labor Total Materials Quantity Total
Engineering OVERVIEW DESIGN 32 134$ 4,288$ -$ 1 4,288$
INTERFACE DRAWINGS 24 128$ 3,072$ -$ 1 3,072$
DRAFTING 32 85$ 2,720$ -$ 1 2,720$
PROJECT MANAGEMENT 8 134$ 1,072$ -$ 1 1,072$
11,152$
Materials
HMI EQUIPMENT UPGRADE (INCLUDES PROGRAMMING, TESTING &
COMMISSIONING)4 134$ 536$ 109,220$ 1 109,756$
109,756$
Installation HMI INSTALLATION 40 134$ 5,360$ -$ 1 5,360$
EXPENSES 10 134$ 1,340$ 5,000$ 1 6,340$
11,700$
132,608$
13,261$
145,869$
344,468$
CHESTER LAKE CONTROLS AND RELAYING UPGRADES
Engineering Subtotal
Materials Subtotal
Installation Subtotal
Subtotal
Contingency (10%)
Total
PURPLE LAKE CONTROLS AND RELAYING UPGRADES
Engineering Subtotal
Materials Subtotal
Installation Subtotal
Subtotal
Contingency (10%)
Total
CENTENNIAL/HMI UPGRADE
Engineering Subtotal
Total
Total For All Plants
Materials Subtotal
Installation Subtotal
Subtotal
Contingency (10%)
5/21/2008
Metlakatla Hydro Controls Upgrade
Governor Budgetary Estimate
ITEM DESCRIPTION QTY COST EACH EXTENDED
A GOVERNOR 3 33,620.00$ 100,860.00$
B HARDWARE INTERFACE 3 9,635.00$ 28,905.00$
129,765.00$
C BASIC UNIT CONTROL ADDED 1 14,800.00$ 14,800.00$
D SOFTWARE PACKAGE 1 4,960.00$ 4,960.00$
E INSTALLATION ASSISTANCE/COMMISSIONING 3 24,950.00$ 74,850.00$
94,610.00$
224,375.00$
ITEM DESCRIPTION QTY COST EACH EXTENDED
A GOVERNOR 1 51,565.00$ 51,565.00$
B HARDWARE INTERFACE 1 30,350.00$ 30,350.00$
81,915.00$
C BASIC UNIT CONTROL ADDED 1 14,800.00$ 14,800.00$
D SOFTWARE PACKAGE 1 4,960.00$ 4,960.00$ *
E INSTALLATION ASSISTANCE/COMMISSIONING 1 36,685.00$ 36,685.00$
51,485.00$
133,400.00$
357,775.00$
Note -
GOVERNOR UPGRADE ESTIMATE SUMMARY
* Included with Purple Lake
Budgetary numbers provided by L&S Electric Inc. on March 25, 2008 Quote #E02044-JS-
032481(Francis & Pelton)
TOTAL
TOTAL BOTH PLANTS
PURPLE LAKE
CHESTER LAKE
SUBTOTAL
OPTIONS SUBTOTAL
SUBTOTAL
OPTIONS SUBTOTAL
TOTAL
5/21/2008