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HomeMy WebLinkAboutFinish Construction of the Falls Creek Hydroelectric Project Gustavus App Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 1 of 15 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 15 9/3/2008 SECTION 1 – APPLICANT INFORMATION Name (Name of utility, IPP, or government entity submitting proposal) GUSTAVUS ELECTRIC COMPANY Type of Entity: REGULATED ELECTRIC UTILITY Mailing Address P.O. Box 102 Gustavus, AK 99826 Physical Address 101 DOCK ROAD Gustavus, AK, 99826 Telephone 907-697-2299 Fax 907-697-2355 Email richardlevitt@cs.com 1.1 APPLICANT POINT OF CONTACT Name RICHARD LEVITT Title PRESIDENT Mailing Address P.O. BOX 102 GUSTAVUS, ALASKA 99826 Telephone 907-697-2299 Fax 907-697-2355 Email richardlevitt@cs.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) 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 1.2.2. Attached to this application is formal approval and endorsement for its project by its board of directors, executive management, or other governing authority. If a collaborative grouping, a formal approval from each participant’s governing authority is necessary. (Indicate Yes or No in the box ) Yes 1.2.3. As an applicant, we have administrative and financial management systems and follow procurement standards that comply with the standards set forth in the grant agreement. Yes 1.2.4. If awarded the grant, we can comply with all terms and conditions of the attached grant form. (Any exceptions should be clearly noted and submitted with the application.) Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 3 of 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. FINISH CONSTRUCTION OF THE FALLS CREEK HYDROELECTRIC PROJECT 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 Falls Creek Hydro Electric Project is an 800 kW run-of-river hydroelectric facility, located in Gustavus Alaska, which will provide electric power to the community of Gustavus. The project is being built by Gustavus Electric Company to displace existing diesel generation. Construction of the project is approximately 90% complete and will provide 90% of the communities electric needs.. 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. Gustavus Electric Co. will need $750,000 to complete the facility as of August 20, 2008. In the absence of any grant funding, debt and equity funding would have to be used to complete the project. For preconstruction and licensing, a total of $1,563,000 was spent. From the start of construction in April, 2006 until August 20, 2008, $7,865,000 has been spent. The total of the project is then $10,153,000. The preconstruction phase included federal grants of $835,000 and debt and equity financing of $710,000, including an AEA loan of $180,000. The construction phase up to August 20, 2008 included $4,300,000 in federal grants, $1,450,000 in state grants and $2,115,000 in debt and equity financing, including an AEA loan of $950,000. This $2,115,000 in debt and equity funding should be considered as an applicant match of cash in-kind contribution. 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. When the Falls Creek hydro project goes online, there will be an immediate reduction in the cost of electricity of $.368/kWhr. This is the cost of fuel to generate by diesel. The rate reduction is covered in the Cost of Power Adjustment which is filed quarterly with the Regulatory Commission of Alaska. The capital cost of building the project must be added to the rate base. The lower the capital costs – the lower the rates to the electric user. The debt must be repaid at the borrowed interest rate. Equity is repaid at a rate of return approved by the Regulatory Commission of Alaska. If Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 4 of 15 9/3/2008 the $750,000 grant requested here is not forthcoming, and is debt financed at 6% over 30 years, the annual revenue requirement to repay the debt will be $54,488 payable for 30 years. This would be a total cost to the ratepayer of $1,634,625 over the 30 year life of the note. At sales of 2,000,000 kWhr per year, the rate increase would be over $0.027/kWhr. While this increase is small compared to the decrease from getting off diesel, it is a benefit this grant will provide immediately and long term. 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.) $10,153,000 2.5.2 Grant Funds Requested in this application. $750,000 2.5.3 Other Funds to be provided (Project match) $0 2.5.4 Total Grant Costs (sum of 2.5.2 and 2.5.3) $750,000 2.5.5 Estimated Benefit (Savings) $0.027/kwhr (see 2.4) 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.) $ 1,634,625 over 30 yrs. See 2.4 Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 5 of 15 9/3/2008 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 Falls Creek Hydro Electric Project is Richard Levitt, President of Gustavus Electric. Mr. Levitt has been project manager since the start of construction. There are construction superintendents for various phases of the project, including earth work, penstock installation and the powerhouse construction. These superintendents have been on this project for quite some time. 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.) It is expected that the powerhouse and penstock will be substantially completed by early November at which time the project should be able to start producing electricity. Further required work such as erosion, sediment control, pipeline backfill, final surveying, and other miscellaneous work will be done in the spring of 2009 and completed by June 2009. 3.3 Project Milestones Define key tasks and decision points in your project and a schedule for achieving them. There are two remaining milestones to the project. The first is the production of electricity scheduled for early November of 2008 and completion of all work in early summer of 2009. 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. Gustavus Electric Company presently has on site all personnel and equipment required to complete this project. The equipment is owned by Gustavus Electric Company and includes two track excavators, one articulated dump truck, two track dozers, one loader, one backhoe, one crane truck, an HDPE Pipe Fusion Machine, and much other miscellaneous equipment. Alaska Power and Telephone serves as the consulting engineers. R&M Engineering provides geotechnical consulting and materials testing. The Federal Energy Regulatory Commission approves all plans and regularly conducts sight inspections. All major materials used on the project have been purchased except the power house control system. This will be provided by Phoenix Power Control, Inc. of Monroe, Washington. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 6 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. Gustavus Electric Company prepares and submits a monthly report to the Federal Regulatory Commission. These reports include: Progress of the Work, Status of Construction, Construction Difficulties, Critical Events and Dates, Sources of Major Construction Material, Materials Testing and Results ,Photographs, Environmental Compliance Issues, and Compliance Issues in Need of Immediate Attention and Wildlife Activity. These reports have been sent to David Lockhard of the Alaska Energy Authority for the past several years. These reports and all other communication and pertinent information concerning the project are available on the Gustavus Electric Company Website, www.gustavuselectriccompany.com. GEC will provide to the Authority any information it desires concerning the project. 3.6 Project Risk Discuss potential problems and how you would address them. Erosion and landslides are potential risks to the project. A portion of the funds that are being requested here will be used to reduce or eliminate this risk and to prevent encroachment onto adjoining private property. No other potential problems are known. 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 Falls Creek Hydro Electric Project is a 800 KW run-of-river project expected to provide 90% of Gustavus Electric Needs. The only viable alternative is diesel generation which is presently being used. Other alternatives for electric generation were analyzed at length in the Project’s Environmental Impact Statement of June 2004. None were found to be viable. 4.2 Existing Energy System Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 7 of 15 9/3/2008 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 existing energy system in Gustavus consists of 3 diesel generators. This system was provided as a grant from the Alaska Energy Authority in December 2007. This new diesel system was designed to work in conjunction with the new Hydro Electric Project. There are two 750 KW and one 100 KW generators. They are new, efficient generators that provide 14 KWH per gallon. 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. Gustavus uses primarily propane for heating hot water, clothes drying and cooking. Stove oil and wood are primary home heating fuel. Gasoline and diesel are used for transportation. The Falls Creek Hydro Project will provide three times the present peak electrical demand. It is expected that as the price of electricity falls, customers will switch from propane to electricity as an energy source. It is not expected that residences will switch to electric space heating. It is expected that some electric vehicles will come to Gustavus, as it geography is ideal for their use. 4.2.3 Existing Energy Market Discuss existing energy use and its market. Discuss impacts your project may have on energy customers. The Falls Creek Hydro Electric Project will reduce the use of diesel generated electricity by 90%. The present cost of just the diesel fuel for electricity is approximately 37 cents per KW hour. The cost of electricity will be immediately reduced by approximately 33.3 cents per KW hour immediately upon startup of the Hydro Project. It is expected that electric usage will increase as the price decreases, thus spreading the fixed revenue requirement over a larger KW hour base. This will further lower the cost of electricity to the public. As the Falls Creek Project is gradually more fully utilized, the cost of electricity will decline and Gustavus will become less dependent on fossil fuels. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 8 of 15 9/3/2008 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 Falls Creek Hydro Electric Project uses standard hydro technology which has been in existence for well over a century. Project features include a dam/intake structure, 9,600 foot penstock, powerhouse, access roads and 6.3 mile interconnect transmission line. The installed capacity of this project is 800 KW based upon generating capacity of the stream and projected usage by the community. If the project could utilize every kilowatt it \was able to produce, it could generate 6,300,000 per year. It is anticipated that the project will generate over 2,000,000 kilowatt hours its first year. The economic analysis used in the EIS used a 2% annual rate of usage increase. We expect this rate of increase to be higher when the project goes online. There are no anticipated barriers to this project going online before winter 2008. Provisions for integration with existing utility system have already been incorporated. The interconnecting transmission line from the Falls Creek Hydro Project to the existing utility system has been installed. 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 where the Falls Creek Project is located is owned by the State of Alaska. Gustavus Electric Company has all of the state permits and land leases necessary to construct and operate this project. 4.3.3 Permits Provide the following information as it may relate to permitting and how you intend to address outstanding permit issues.  List of applicable permits  Anticipated permitting timeline  Identify and discussion of potential barriers All required permits for this project have been obtained. The long list of required permits from state and federal resource agencies are listed in the final EIS for this project. This document may be viewed at www.ferc.gov for project #P-11659. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 9 of 15 9/3/2008 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 A thorough and exhausting environmental analysis was completed. Please see the final EIS at the FERC website mentioned above. No new environmental issues which could present potential barriers have arisen during construction. 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 The total cost of the project is projected to be $10,178,000. The total amount spent as of August 19, 2008 is $9,428,000. Of this amount, $1,563,000 was for licensing and preconstruction studies; and $7,865,000 was for construction. The $1,563,000 spent for preconstruction was financed by: $853,000 in federal appropriation grants; $710,000 in debt and equity financing. $180,000 of this debt is an AEA loan. The $7,865,000 spent on construction was financed by: $2,800,000 grant from the Denali Commission; $1,500,000 grant from the Rural Utilities Service; $1,450,000 Alaska State grants – legislative appropriations; $2,115,000 debt and equity financing. $950,000 of this debt is an AEA loan. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 10 of 15 9/3/2008 The amount needed to finish construction of the project from August 20, 2008 until finished is $750,000. Gustavus Electric Co. is requesting a grant for this amount to finish the project. GEC feels that the Authority should consider the $2,825,000 financed by debt and equity as applicant matching funds, cash contributions. Should this grant not be forthcoming, GEC will raise capital through investors and loans. 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 expected annual O&M cost for the Falls Creek hydroelectric project is $55,000. When hydro comes online, the O&M costs for diesel generation will be reduced by approximately the same amount. Therefore, O&M costs for the utility will remain the same, simply diverted from diesel to hydro. Funding for O&M has come from the sale of electricity, and since sales will increase with hydro, O&M for the hydro will easily be funded. GEC is not requesting any grant funding for O&M. 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 The Falls Creek Hydro Electric Project is being built by Gustavus Electric Company to replace diesel generation presently owned and operated by Gustavus Electric Company. Hydro electric power produced will be sold to the public at a cost regulated by the Regulatory Commission of Alaska. The price of electricity from the Falls Creek Project will be a function of repaying the capitol cost of construction. Any grant funded financing will not and cannot go into the rate base of the cost of electricity. The rate of return from this grant funded project will be the avoided interest rate on debt or the avoided rate of return on equity investment. 4.4.4 Cost Worksheet Complete the cost worksheet form which provides summary information that will be considered in evaluating the project. The existing generation system was new in December, 2007. It was built and installed by the Alaska Energy Authority using Denali Commission grant funding. The O&M cost for this system is based of historical costs for diesel generation systems. The annual electricity production and fuel usage is from known and measured data. The project benefit, of course, is that it greatly reduces the cost of fuel in electric generation. In Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 11 of 15 9/3/2008 this respect, the benefit/cost ratio is very high and the payback is quite fast. However, the reduced fuel cost is partially offset by higher capital recovery costs. The increase in these costs is a function of how much of the project is financed by debt and equity and how much is financed by grants, which does not go into the rate base. This grant request for $750,000 will eliminate the need for the electric rate payers to pay off that amount as a debt. If that amount is financed at 6% over 30 years, the revenue requirement from the ratepayers would be $54,488 per year, or a total of $1,635,000 paid out over the life of the note. This results in a benefit ($1,635,000)/cost (750,000) ratio of 2.2:1. At a savings of $54,488 per year, the grant would pay back in 13.7 years. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 12 of 15 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. Gustavus Electric Company will operate and maintain this hydro electric plant using existing utility company employees that have been properly trained to operate and maintain hydro electric systems. Two employees received training supplied by the Alaska Energy Authority. The cost for operating and maintaining the diesel generators will decrease dramatically when the hydro comes online. The operating and maintenance cost for the hydro electric system is not expected to be higher than those costs of the diesel generating system. Gustavus Electric has maintained the utility system for decades using revenues from the sale of electricity. It is certain that the same electric sales will provide sufficient revenue to maintain the hydro electric system. 4.4.6 Analysis and Recommendations Provide information about the economic analysis and the proposed project. Discuss your recommendation for additional project development work. The Falls Creek Hydro Electric Project will greatly lower the cost of electricity to Gustavus rate payers and reduce the community’s dependence on fossil fuel. When the project is complete and operating, Gustavus Electric Company looks forward to finding ways to replace the remaining 10% of diesel generation necessary with cheaper, renewable sources. 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 In the twelve month period September 1, 2007 to August 31,2008, GEC generated 1,822,252 kWhr and used 128,949 gal of diesel fuel at a cost of $465,700, for an average cost of $3.51/gal. The August, 2008 price of diesel was $4.84/gal. Using the most recent cost of fuel, the Falls Creek Project will displace 117,000 gallons of this diesel for an annual savings of $566,000. The life of the hydro project is at least 50 years (some hydros are over a century old), so this benefit may be considered in pertuity. Using the savings in fuel costs, a grant of $750,000 would have a payback of 1.5 years and an exceptionally high benefit/cost ratio. However, the fuel saving will materialize regardless of the grant. The actual savings this grant will bring is to eliminate capital recovery of construction Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 13 of 15 9/3/2008 costs. To debt service $750,000 at 6% for 30 years would be payments of $54,488 annually, or total outlay of $1,634,000. The benefit/cost ratio would then be 2.2 :1, and the payback would be 13.7 years. The electric rate in Gustavus, for most customers, is $.7770/kWhr, of which $.3682/kWhr is for the cost of the diesel fuel. The rate will be immediately be reduced by $.3314 when the hydro comes on line. This will be a tremendous relief for the PCE program and ratepayers, especially those not on PCE. This hydro project will also serve to reduce the dependence on fossil fuels in Gustavus and reduce greenhouse gas emissions. The city of Gustavus lists reduction of electrical rates as its number one priority. Attached to this application is City of Gustavus Resolution #2008-12 supporting the application for and the use of grants for the Falls Creek Hydroelectric project. 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 total cost of the project is projected to be $10,178,000. The total amount spent as of August 19, 2008 is $9,428,000. Of this amount, $1,563,000 was for licensing and preconstruction studies; and $7,865,000 was for construction. Preconstruction was largely between 1992 through 2005. The $1,563,000 spent for preconstruction was financed by: $853,000 in federal appropriation grants; $710,000 in debt and equity financing. $180,000 of this debt is an AEA loan. Construction started in March of 2006. Some material and equipment was purchased prior to that. The $7,865,000 spent on construction was financed by: $2,800,000 grant from the Denali Commission; $1,500,000 grant from the Rural Utilities Service; $1,450,000 Alaska State grants – legislative appropriations; $2,115,000 debt and equity financing. $950,000 of this debt is an AEA loan. The amount needed to finish construction of the project from August 20, 2008 until completion is $750,000. Gustavus Electric Co. is requesting a grant for this amount at this time to finish the project. GEC feels that the Authority should consider the $2,825,000 financed by debt and equity and already spent as applicant matching funds, cash contributions. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 14 of 15 9/3/2008 Should this grant not be forthcoming, GEC will raise capital through investors and loans. On the Grant Budget Form, three milestones are listed in the Budget Summary, which encompasses the project from the beginning. The first milestone is the preconstruction process and the second milestone covers the beginning of construction through August 19, 2008. The third milestone is construction from August 20, 2008 through completion, which includes this grant request. Budget Categories are for this grant request and are listed for milestone #3 only. Work remaining to be completed from August 20,2008 include; Complete welding of 1200 feet of steel penstock. Prepare bedding and foundation for the penstock pipe. Form and pour five concrete thrust blocks for the penstock. Perform ultrasonic testing of pipeline welds. Paint and backfill the pipe. Complete finish work on the powerhouse. Finish turbine/generator installation. Complete purchase of generator control system from Phoenix Power Controls. Install the control system. Complete the substation. Complete installation of the fiberoptic communication cable. Finish miscellaneous items at the intake structure. Install slope protection at the powerhouse. Complete erosion and sediment control work throughout the project per the Environmental Compliance Monitor. Survey the project boundary per the State of Alaska specifications. Various other finish work as required. Renewable Energy Fund Grant Application AEA 09-004 Grant Application Page 15 of 15 9/3/2008 SECTION 7 – ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Resumes of Applicant’s Project Manager, key staff, partners, consultants, and suppliers per application form Section 3.1 and 3.4 B. Cost Worksheet per application form Section 4.4.4 C. Grant Budget Form per application form Section 6. D. An electronic version of the entire application per RFA Section 1.6 E. Governing Body Resolution per RFA Section 1.4 Enclose a copy of the resolution or other formal action taken by the applicant’s governing body or management that: - authorizes this application for project funding at the match amounts indicated in the application - authorizes the individual named as point of contact to represent the applicant for purposes of this application - states the applicant is in compliance with all federal state, and local, laws including existing credit and federal tax obligations. F. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations. Print Name Richard H Levitt Signature Title President Date 8/3/08