HomeMy WebLinkAboutChignik Lagoon Hydroelectric Project AppCHIGNIK LAGOON POWER UTILITY RENEWABLE ENERGY FUND GRANT APPLICATION
CHIGNIK LAGOON HYDROELECTRIC PROJECT
OCTOBER 8, 2008 PAGE 1 OF 12
AEA-09-004 - RENEWABLE ENERGY GRANT
APPLICATION
C HIGNIK L AGOON H YDROELECTRIC P ROJECT
October 8, 2008
prepared by
polarconsult alaska, inc.
1503 West 33rd Avenue, Suite 310
Anchorage, Alaska 99503
Phone: (907) 258-2420
prepared for
CHIGNIK LAGOON POWER UTILITY
PO Box 130
Chignik Lagoon, Alaska 99565
CHIGNIK LAGOON POWER UTILITY RENEWABLE ENERGY FUND GRANT APPLICATION
CHIGNIK LAGOON HYDROELECTRIC PROJECT
OCTOBER 8, 2008 PAGE 2 OF 12
Table of Contents
SECTION 1. - APPLICANT INFORMATION....................................................................3
1.1. Applicant point of contact ......................................................................................3
1.2. Applicant minimum requirements ..........................................................................3
SECTION 2. - PROJECT SUMMARY..............................................................................4
2.1. Project Type ..........................................................................................................4
2.2. Project Description ................................................................................................4
2.3. Project Budget Overview.......................................................................................4
2.4. Project Benefit.......................................................................................................4
2.5. Project Cost and Benefit Sumary ..........................................................................4
SECTION 3. - PROJECT MANAGEMENT PLAN ............................................................5
3.1. Project Manager ....................................................................................................5
3.2. Project Schedule ...................................................................................................5
3.3. Project Milestones .................................................................................................5
3.4. Project Resources .................................................................................................5
3.5. Project Communications .......................................................................................5
3.6. Project Risk ...........................................................................................................5
SECTION 4. - PROJECT DESCRIPTION AND TASKS ..................................................6
4.1. Proposed Energy Resource ..................................................................................6
4.2. Existing Energy System ........................................................................................7
4.2.1. Basic configuration of Existing Energy System...............................................7
4.2.2. Existing Energy Resources Used ...................................................................8
4.2.3. Existing Energy Market...................................................................................8
4.3. Proposed System ..................................................................................................8
4.3.1. System Design ...............................................................................................8
4.3.2. Land Ownership .............................................................................................8
4.3.3. Permits ...........................................................................................................9
4.3.4. Environmental.................................................................................................9
4.4. Proposed New System Costs (Total Estimated Costs and proposed Revenues).9
4.4.1. Project Development Cost .............................................................................9
4.4.2. Project Operating and Maintenance Costs .....................................................9
4.4.3. Power Purchase/Sale ...................................................................................10
4.4.4. Cost Worksheet ............................................................................................10
4.4.5. Business Plan ...............................................................................................10
4.4.6. Analysis and Recommendations ..................................................................10
SECTION 5. - PROJECT BENEFIT ...............................................................................10
SECTION 6. - GRANT BUDGET ...................................................................................10
SECTION 7. - ADDITIONAL DOCUMENTATION AND CERTIFICATION.....................12
CHIGNIK LAGOON POWER UTILITY RENEWABLE ENERGY FUND GRANT APPLICATION
CHIGNIK LAGOON HYDROELECTRIC PROJECT
OCTOBER 8, 2008 PAGE 3 OF 12
SECTION 1. - APPLICANT INFORMATION
Name Chignik Lagoon Power Utility (CLPU)
Type of Entity: Public Utility
Mailing Address PO Box 31
Chignik Lagoon, AK 99565
Physical Address PO Box 31
Chignik Lagoon, AK 99565
Telephone 907-840-2277
Fax
Email diana.clpu@ak.net
1.1. Applicant point of contact
Name Diana Moore
Chignik Lagoon Power Utility
Title: Project Manager
Mailing Address PO Box 31
Chignik Lagoon, AK 99565
Telephone 907-840-2277
Fax
Email diana.clpu@ak.net
1.2. Applicant minimum requirements
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);
Endorsements
Yes 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 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 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.)
CHIGNIK LAGOON POWER UTILITY RENEWABLE ENERGY FUND GRANT APPLICATION
CHIGNIK LAGOON HYDROELECTRIC PROJECT
OCTOBER 8, 2008 PAGE 4 OF 12
SECTION 2. - PROJECT SUMMARY
2.1. Project Type
Hydropower project - Feasibility, Design, and Permitting
2.2. Project Description
The Chignik Lagoon Hydroelectric Project is located on Packers Creek in Chignik
Lagoon. The 190 kW project can provide for most of the communities current power
needs, which peak at about 125 kW. The plant would eliminate about 85% of 50,000
gallons of diesel consumed by the generators annually. There will also be excess
energy that could be used for heating the school and other local structures. The project
would also enable the community to add a freezer/processing facility to further improve
the local economy.
2.3. Project Budget Overview
The first tasks for CLPU will be to get the project engineer to perform all the necessary
surveying, geology investigation, and final design. The surveying may be accomplished
using either lidar or traditional on the ground topographical methods. The cost for either
method is about the same. The geology investigation is required to determine footing
requirements for the powerhouse and to design and anchor the pipeline system. Once
all field data is collected, the final project design can proceed.
A construction cost estimate will then be prepared so that CLPU will know how much, if
any, additional funds may be required to construct the Project. Permi ts will then be
applied for while CLPU, in conjunction with the engineer, will then decide on a
construction method – whether to put the Project out to bid or to hire local labor with an
experienced construction supervisor and engineer to oversee the work.
Total Project costs are estimated to be about $1.9 million. The work in this grant
represents about $150,000 of that total.
2.4. Project Benefit
The hydroelectric power generating system on Packers Creek will allow for
improvements to the local infrastructure and alleviate economic hardships by offsetting
the ever-increasing costs of diesel generated electric power. Environmentally,
renewable energy will significantly reduce the necessity of hauling, storing, and
consuming fossil fuels. The permitting of project will be simple because the land is
locally owned. There are no unusual terrain or other factors that will make construction
difficult. There is even equipment within the community to construct the plant. All of the
local residents strongly support this project.
The project is expected to displace 42,500 gallons of fuel. The last purchase price for
fuel, in May of 2008, was $4.62/gallon. This equates to a savings of about $196,000
per year. Over the life of the project, 30 years, this savings has a present value of $3.8
million using a net rate of 3% (5% discount, 2% inflation).
2.5. Project Cost and Benefit Sumary
2.5.1 - Total Project Cost $1,900,000
2.5.2 - Grant Funds Requested in this application $150,000
2.5.3 - Other Funds to be provided (Project match)
CHIGNIK LAGOON POWER UTILITY RENEWABLE ENERGY FUND GRANT APPLICATION
CHIGNIK LAGOON HYDROELECTRIC PROJECT
OCTOBER 8, 2008 PAGE 5 OF 12
2.5.4 - Total Grant Costs (sum of 2.5.2 and 2.5.3) $150,000
2.5.5 - Estimated Benefit (Savings) $3,800,000
2.5.6 - Public Benefit $2,000,000
SECTION 3. - PROJECT MANAGEMENT PLAN
3.1. Project Manager
The owner and developer of the Project is the Chignik Lagoon Power Utility. Diana
Moore has performed exceptionally well as the head of CLPU. CLPU will contract with
Polarconsult to provide design services and construction management. Polarconsult
has extensive experience in the construction of small hydroelectric systems in Alaska.
Included in the supplementary information is some information on Polarconsult's
experience with hydroelectric project design and construction.
3.2. Project Schedule
Permitting work will begin immediately after the grant is awarded. Initial surveying and
other fieldwork will be performed in the early summer of 2009. Design work will begin in
the fall of 2009 and should be completed by early 2010.
3.3. Project Milestones
The basic project milestones, based on the schedule shown above, are the following:
· Apply for permits.
· Install a stream gage.
· Perform lidar or gps survey of the project area.
· Check geology along the project centerline.
· Complete project design and cost estimate.
3.4. Project Resources
CLPU plans to contract with Polarconsult for this Project. Polarconsult has extensive
experience working on small hydroelectric projects. Additionally, Polarconsult has done
stream gaging and a feasibility study for a hydroelectric project in Chignik Lagoon.
Daniel Hertrich will serve as Polarconsult's project manager. A Polarconsult brochure
and resume for Daniel Hertrich is attached.
3.5. Project Communications
Diana Moore of CLPU will be the primary point of communications. She will coordinate
all efforts between the AEA and CLPU consul tant. CLPU will require such progress
reports as needed to track the progress of it's consultant. CLPU will also require
backup for all invoices including timesheets and receipts. CLPU will forward all
information and any other required information to the grant administrator.
3.6. Project Risk
The primary risk with this project is going to be cost overruns and the amount of water
available. Cost overruns primarily apply to the construction phase. As part of the
permitting and design work, a stream gage will installed to shore up the existing
hydrology data.
CHIGNIK LAGOON POWER UTILITY RENEWABLE ENERGY FUND GRANT APPLICATION
CHIGNIK LAGOON HYDROELECTRIC PROJECT
OCTOBER 8, 2008 PAGE 6 OF 12
SECTION 4. - PROJECT DESCRIPTION AND TASKS
4.1. Proposed Energy Resource
The following chart represents the expected streamflows at the intake location of
Packers Creek. The chart is taken from the June 26th, 1995 feasibility study performed
by Polarconsult.
Chignik Lagoon Streamflows (est.)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
11/30 1/14 2/28 4/14 5/29 7/13 8/27 10/11 11/25 1/9 2/23
DateStreamflow (cfs)Estimated Flows
Actual Flows
The following map details the basic parameters of the proposed hydroelectric project.
CHIGNIK LAGOON POWER UTILITY RENEWABLE ENERGY FUND GRANT APPLICATION
CHIGNIK LAGOON HYDROELECTRIC PROJECT
OCTOBER 8, 2008 PAGE 7 OF 12
4.2. Existing Energy System
4.2.1. Basic configuration of Existing Energy System
Chignik Lagoon currently meets all of its electrical energy demand through diesel
generation. In 2007 CLPU generated 540,000 kWh while burning 47,000 gallons of
fuel.
CHIGNIK LAGOON POWER UTILITY RENEWABLE ENERGY FUND GRANT APPLICATION
CHIGNIK LAGOON HYDROELECTRIC PROJECT
OCTOBER 8, 2008 PAGE 8 OF 12
4.2.2. Existing Energy Resources Used
Chigni k Lagoon relies exclusively on diesel fuel for their electrical and heating needs.
The hydroelectric project will significantly reduce the use of diesel fuel for electrical
generation.
4.2.3. Existing Energy Market
The primary impact of this project will be the stabilization of energy rates. If a significant
portion of construction is eventually funded then the impact on the local energy market
will be a reduction in electrical rates.
4.3. Proposed System
4.3.1. System Design
The physical features of the Project include an intake and desander to collect and filter
water, a 3800’ pipeline to transport water to the powerhouse that will contain the pelton
turbine, generator, controls, and switchgear. The final component is a transmission line
to convey the power to the community.
The intake will consist of a low height structure (less than 10') that will impound the
water enough to collect it into a desander box and transport it by gravity flow to the
powerhouse. The intake may be out of rock filled gabions, concrete, or even rock fill.
The location of the intake is just below the confluence that occurs at about elevation
540'.
The desander box will be constructed from concrete or all weather wood and will ensure
that sand, gravel, leaves, and other debris carried by the creek does not enter into the
penstock and damage the turbine.
The penstock, or pipeline, which conveys the water to the powerhouse, will be 16 inch
in diameter. In the upper part of the Project where the pressure is low the buried
pipeline will be constructed from High Density Polyethylene. In the lower, higher
pressure, areas the pipeline will be constructed form either PVC or coated steel stab
joint pipe.
The powerhouse will consist of a treated wood or metal structure with a single impulse
or cross flow turbine. The dimensions of the powerhouse will be approximately 20 x 22
feet. The generator will likely be a 480V three phase generator directly coupled to the
turbine.
The controls for the powerhouse will be solid state, PLC based with a load-controlled
governor and a head level control from the intake. This type of governor will allow easy
and less expensive application of a system to capture excess electricity and displace
heating fuel.
The 3000' power line to the town will be three phase at 7.2/l2.4 kV and will be either
buried or on poles. A communications wire will also be included and will be used for
data and voice transmission. There will be a 250 kVA step up transformer from the 480
volt to transmission voltage. A summary of the Project features is below.
4.3.2. Land Ownership
All of the project is located on land owned by the local native corporation and the
village.
CHIGNIK LAGOON POWER UTILITY RENEWABLE ENERGY FUND GRANT APPLICATION
CHIGNIK LAGOON HYDROELECTRIC PROJECT
OCTOBER 8, 2008 PAGE 9 OF 12
4.3.3. Permits
Federal Energy Regulatory Commission (FERC) - Declaration/Non-juridiction.
US Army Corps of Engineers (USACE) - Wetlands Permit
State of Alaska, Department of Environmental Conservation - Water Quality Certificate
State of Alaska, Division of Mining, Land, and Water - Water Rights Permit
Additional stream gaging will likely be required by DNR.
State of Alaska, Office of Habitat Management and Permitting - Consistency and
Coastal Review
State of Alaska, Alaska Department of Fish and Game - Anadromous Fish Passage
Permit
The powerhouse will be located above fish habitat.
4.3.4. Environmental
There are no significant environmental impacts associated with this project.
4.4. Proposed New System Costs (Total Estimated Costs and proposed
Revenues)
4.4.1. Project Development Cost
The current state of project development dictates that only a simple cost estimate is
able to be made. The following table details the major project items and the estimated
costs.
land $ 30,000
materials
pipe $ 180,000
turbine $ 150,000
controls $ 50,000
intake $ 50,000
powehouse $ 80,000
transmission $ 50,000
labor $ 200,000
equipment $ 100,000
shipping $ 200,000
engineering $ 200,000
subtotal $ 1,260,000
contingency (20%) $ 252,000
administrative $ 50,000
profit/overhead (25%) $ 315,000
total $ 1,877,000
CLPU is asking for State grant funding for Permitting and Design work for fiscal year
2009.
4.4.2. Project Operating and Maintenance Costs
Because the hydroelectric project will practically displace all diesel generation the
operations and maintenance costs for the electric utility should decrease. The
hydroelectric project will certainly not require the major overhaul and rebuilding
expenses associated with the diesel plant. However, there may be some
troubleshooting costs during the first years of the hydroelectric operation. For this
CHIGNIK LAGOON POWER UTILITY RENEWABLE ENERGY FUND GRANT APPLICATION
CHIGNIK LAGOON HYDROELECTRIC PROJECT
OCTOBER 8, 2008 PAGE 10 OF 12
reason, CLPU is assuming that the entire maintenance budget will simply be applied to
the hydroelectric project. Thus, rates will not be affected by the project.
4.4.3. Power Purchase/Sale
Because CLPU, the local utility, will own and operate the project there won't be a
requirement for a power purchase agreement. CLPU may be required to obtain bonds
or other financing to build the project. The savings in fuel costs from the displaced
diesel operations would fund the necessary financing.
4.4.4. Cost Worksheet
Attached is a completed cost worksheet for the project.
4.4.5. Business Plan
CLPU will utilize existing personnel and procedures for operation and maintenance of
the project. As part of the design and construction a complete operations and
maintenance procedure will be implemented.
4.4.6. Analysis and Recommendations
The project has the potential to stabilize, or with construction grant assistance, reduce
power generation rates in the community of Chignik Lagoon. With the utilization of the
excess power the hydroelectric project is the best opportunity for the community of
Chignik Lagoon to maintain and improve their economic status and stimulate the
potential for future improvements and growth. With the reduction in reliance on diesel
generation Chignik Lagoon will be an asset to the State.
SECTION 5. - PROJECT BENEFIT
The hydroelectric power generating system on Packers Creek will allow for
improvements to the local infrastructure and alleviate economic hardships by offsetting
the ever-increasing costs of diesel generated electric power. Environmentally,
renewable energy will significantly reduce the necessity of hauling, storing, and
consuming fossil fuels. The permitting of the project will be simple because the land is
locally owned. There are no unusual terrain or other factors that will make construction
difficult. There is even equipment within the community to construct the plant. All of the
local residents strongly support this project.
The village is presently in a crisis situation due to the exploding fuel costs to operate
their diesel electric generators. The board members of the Chignik Lagoon Power
Utility (CLPU) are trying to address this crisis and develop a plan to keep the utility
solvent in the short term, and viable in the long term with an alternative energy source
of a hydroelectric generation system that will be affordable and will help ensure the
economic survival of the village.
With increased utilization of the excess Project power the local residents could realize
additional economic benefits at virtually no additional costs. The local processing plant
burned to the ground this past summer. They probably will not rebuild, but rather have
floating processor and tender fish to Kodiak and Sand Point like they did after the plant
burned down. Other Kodiak buyers are paying more money and taking more and more
of the salmon and cod, and it this makes it less feasible to rebuild the local facility.
There are 12 local boats that have halibut quota. There is no local ma rket for this fleet to
sell to now that the plant has burned down. The fleet has to run clear to Sand Point or
Kodiak. If we had cheap power the little plant could proccess all of the halibut. This
CHIGNIK LAGOON POWER UTILITY RENEWABLE ENERGY FUND GRANT APPLICATION
CHIGNIK LAGOON HYDROELECTRIC PROJECT
OCTOBER 8, 2008 PAGE 11 OF 12
would bring in about $750,000 to the fleet in ex vessel prices. Taxes would be paid on
this amount. Total contribution would be over one million dollars for both the fishermen
and plant combined.
Also there is no market for the cod jig quota of 730,000 lbs and rockfish quota of
100,000 lbs. The remoteness of the fleet from a processing facility leaves this product
un harvested. Prices for jig cod are $.70 lb. and rockfish is $.50 lb. There is around a
dozen vessels with jiggers that can not fish because there is no buyer. This is another
$500,000 ex vessel that the local fleet could make if we can get the hydro faciltiy.
The processing facility would have a cold storage that would hold up to 60,000 lbs of
capacity. This product would be frozen and stored until the fall when the salmon
season has ended. Local fishermen could then smoke this product to value add just a
very small portion of their catch. This amount would bring in over $1,000,000 to the
local economy.
These products plus a little salmon fillets would bring in an additional $2,000,000 per
season. This would provide a revenue stream for a tax base that could provide the
money for jobs to maintain the local infrastructure.
Not only does rising fuel costs impact the electrical generation rates, it has a significant
impact of the operating costs of the fishing boats. Alleviating the burden of paying high
electrical rates will allow the local residents to absorb the additional costs for their only
economic base – fishing.
SECTION 6. - GRANT BUDGET
BUDGET INFORMATION
PERMITTING AND DESIGN
Local Match Funds
Milestone or Task
Federal
Funds State Funds (Cash) (In-Kind)
Other
Funds TOTAL
1 Permitting $25,000 $25,000
2 Stream Gage $20,000 $20,000
3 Surveying $40,000 $40,000
4 Design $65,000 $65,000
Total $0 $150,000 $0 $0 $0 $150,000
BUDGET INFORMATION
PERMITTING AND DESIGN
Milestone or Task Direct Labor and Benefits Travel, Meals, or Per Diem Equipment Supplies Contractual Services Construction Services Other Direct Costs TOTAL
1 Permitting $25,000 $25,000
2 Stream Gage $20,000 $20,000
3 Surveying $40,000 $40,000
4 Design $65,000 $65,000
Total $0 $0 $0 $0 $150,000 $0 $0 $150,000