HomeMy WebLinkAboutNushagak Area Hydropower Project App
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 1 of 14 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 14 9/3/2008
SECTION 1 – APPLICANT INFORMATION
Name (Name of utility, IPP, or government entity submitting proposal)
Nushagak Electric & Telephone Cooperative, Inc.
Type of Entity:
Utility
Mailing Address
P.O. Box 350
Dillingham, AK 99576
Physical Address
557 Kenny Wren Rd.
Dillingham, AK
Telephone
907-842-5251
Fax
907-842-2780
Email
www.nushtel.com
1.1 APPLICANT POINT OF CONTACT
Name
Frank Corbin
Title
CEO / General Manager
Mailing Address
P.O. Box 350
Dillingham, AK 99576
Telephone
907-842-6315
Fax
907-842-2780
Email
fcorbin@nushagak.coop
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 authorit y. 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 14 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.
Nushagak Electric & Telephone Cooperative, Inc. is proposing to construct the initial
portion of the Nushagak Area Hydropower Project. This portion, phase one at Lake Elva, is a
rock filled dam with reservoir capable of producing 1.5-megawatts of renewable energy.
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 Lake Elva facility will consist of a dam constructed 8,500 feet downstream from the
existing outlet of the lake. A rock fill structure with a projected height of 120 feet above the
estimated base; the dam crest will be 625 feet long and 20 feet wide with a 2.5:1 upstream and
a 2.1:1 downstream slope. This dam will increase the existing lake from its’ initial surface area
of 300 acres at 325 El. The reservoir formed by the dam will provide 26,800 acre feet of active
storage above the minimum operational pool at 320 El. The lake surface area will be 820 acres
at normal pool El 370. A 50 foot wide spillway with 10 feet of freeboard to the dam crest will
discharge over natural terrain into the existing creek channel. Cresting at El 370 the spillway is
designed to discharge the probable maximum flood of 3,790 cfs. A buried concrete pipe will
provide the power conduit from the power intake to the power house. A 60 inch diameter
vertical shaft power intake will be set at El 310, ten feet below minimum operation pool. The
intake will be protected with a steel trash-rack. The 60 concrete encased steel water conduit
will be used to divert flows during construction. Upon completion this conduit will transition to an
electrically controlled 36 inch butterfly valve downstream for inspection and emergency closure
operations. The control valve will transition to a 48 inch steel pipe and then into concrete
sections following the terrain where it will be connected to a 24 inch steel bifurcation 100 feet
above the power house. The powerhouse will contain two 750 kW turbines. Under a rated net
head of 280 feet each unit will drive a 900 kVa, 0.9 pf, 2.4 kV generator. This steel framed
structure will be located approximately 1,800 feet upstream from the Elva Creek confluence with
Lake Nerka. It is planned to be on a 20 by 80 foot concrete foundation with a height of 20 feet
above the generator floor. The average discharge head from the power house will be 60 cfs.
This project will necessitate the construction of approximately 33 miles of new three phase
transmission tie line from the project site to close proximity of the village of Aleknagik.
The Nushagak Area Hydropower Project will initially serve the communities of Aleknagik,
Dillingham, and Kanakanak in the Nushagak and Wood River areas (future interties to
Manokotak and Ekwok - New Stuyahok - Koliganek are under consideration). This first phase
with inter-tie is estimated to cost $22 million and replace 500,000 gallons of diesel fuel annually,
for a yearly savings of $2,105,700 at today’s fuel prices. Currently all power in the area is
generated with diesel by Nushagak Cooperative (NETC), with a current residential rate at
$0.463 cents per kilowatt hour. Nushagak Cooperative would develop, maintain, and operate
the Lake Elva facility and associated infrastructure.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 4 of 14 9/3/2008
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.
Nushagak Area Hydropower Project estimated costs: $60,000,000
Phase 1, Lake Elva dam: $10,000,000
Phase 2, Lake Elva inter-tie/substation: 12,000,000
Phase 3, Grant Lake diversion facility: 20,000,000
Phase 4, Grant Lake inter-tie: 18,000,000
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 Nushagak Area Hydropower Project is intended to provide 100% of NETC’s energy
requirements relegating the existing diesel plant to standby status. Existing fuel costs, almost
$0.30/kWh today, and their associated volatility will be eliminated and a stable debt service
burden will replace that factor as a major rate component. It is expected that the debt service
burden will be less than future fuel costs (the yearly cost of borrowing funds to finance fuel
purchases adds $0.0075/kWh to the electric rate all by itself). And, instead of rates increasing
with future increases in diesel fuel costs, this project will allow future rates to be lowered upon
debt satisfaction. Construction of the new three phase inter-tie will substantially reduce the line
loss in the existing Aleknagik inter-tie saving additional costs. Other new construction
considerations include proximity to a potential wind farm – reducing the interconnection costs of
that facility, as well as reducing the costs of a Manokotak inter-tie and the capability of inter-tie
delivered power up to several Nushagak River communities in the future.
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 for Phases 1 and 2
(Including estimates through construction.)
$ 22,000,000
2.5.2 Grant Funds Requested in this application. $ 10,000,000
2.5.3 Other Funds to be provided (Project match) $ 12,000,000
2.5.4 Total Costs (sum of 2.5.2 and 2.5.3) $ 22,000,000
2.5.5 Estimated Benefit (Savings) meeting 40% of demand over
30 years
$ 63,171,000
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.)
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 5 of 14 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.
Nushagak Cooperative will employ their Project Manager, Michael Favors, as the single point
of contact for the successful contracting entity (NETC will contract out all construction activities
including direct project management of this project). Other directly involved NETC employees
are Frank Corbin, CEO / GM and James Thames, Electric Division Manager.
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.)
4Q 2008 - $10,000,000 grant award
2Q-3Q 2009 environmental impact and historic preservation assessments onsite
4Q 2009/1Q 2010 equipment and material moved on site
2010-2011 construction
1Q 2012 construction equipment removal
2Q-3Q 2012 site remediation
4Q 2012 power generation
3.3 Project Milestones
Define key tasks and decision points in your project and a schedule for achieving them.
Updated comprehensive feasibility study completed Feb. 2009
2009-2012 construction of Lake Elva facility
2011-2013 construction of Grant Lake facility
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.
NETC has awarded its’ first contract through the RFP process to EES Consulting for an
updated feasibility study. All future contracts/contractors will be acquired through standard RFP
processes. NETC has also engaged C. Mike Prewitt as a consultant – he is expected to remain
for the life of the project.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 6 of 14 9/3/2008
3.5 Project Communications
Discuss how you plan to monitor the project and keep the Authority informed of the status.
NETC’s Project Manager, Michael Favors, will file quarterly progress reports and all
additional required information with the Alaska Energy Authority during the life of this project.
3.6 Project Risk
Discuss potential problems and how you would address them.
This hydropower project was conceived, studied, and recommended for construction in the
1970’s. Since that time a State Park has been designated in the surrounding area. Fortunately,
the hydropower resources at Lake Elva and Grant Lake were “grandfathered in” as a “not
incompatible use” of the natural resources via State of Alaska Statute, AS 41.21.167 (c).
As a majority stakeholder in this process the State of Alaska, through the Department of
Natural Resources, is being kept apprised of the progress of this project. In addition, meetings
are taking place to ensure that the interests of the State are fully considered and integrated into
the ongoing methodology of this project.
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 Lake Elva powerhouse will contain two 750 kW turbines. Under a rated net head of 280
feet each unit will drive a 900 kVa, 0.9 pf, 2.4 kV generator. The average output of this facility
will be 8,370 MWh/yr - @ 40% of NETC’s load. Upon completion of the Grant Lake phase of
this project the Lake Elva site will remain on line for peak usage, back up, and scheduled
maintenance periods.
This area of Alaska is lacking in other significant renewable alternatives. Potential wind
resources (if available) would prove more economical to interconnect with this hydro resource
than with the existing diesel generation plant.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 7 of 14 9/3/2008
4.2 Existing Energy System
4.2.1 Basic configuration of Existing Energy System
Briefly discuss the basic configuration of the existing energy system. Include information about
the number, size, age, efficiency, and type of generation.
NETC currently supports a diesel fueled power house comprised of :
1 – 350 ekW 1962 Superior (scheduled for replacement with a Cat 3456 in 4Q 2008)
5 – 1050ekW 3512 Caterpillars, vintages, 2001 2006, & 2008
1 – 1135ekW 3516 Caterpillar circa 1988
Our current power house efficiency overall is 14.16 kWh/gal at the recloser servicing an
average yearly load of 2MWh.
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.
Decades old wind studies indicated an unfavorable wind resource in our area. Newer
technology appears to have raised wind turbine capabilities in that a recent wind study in our area
indicated a class three wind resource. Another study is planned beginning in October 2008 in a
more distant area – bringing additional concerns about available infrastructure and costs.
There are no studies to indicate that Solar power is a viable resource. However, our utility is
investigating that potential for power stabilization at a remote telecommunications site. Tidal and
“in-river” options have been discussed within our community although significant concerns about
impacts on the local fishery and interconnection criteria have dampened interest in those options.
4.2.3 Existing Energy Market
Discuss existing energy use and its market. Discuss impacts your project may have on energy
customers.
NETC serves electric power from one substation to an isolated network of three communities
over about 100 miles of distribution. The total demand averages about 2 MW over the course of a
year – peaking in summer during the fish processing season with lower demand in the spring and
fall.
This project will stabilize electric rates which have risen over the past five years due to an
average annual fuel price increase of 30%. Steady rates with the future possibility of a rate
decrease will encourage businesses and residents to remain in the area and enhance local
productivity.
The added potential of a wind power element as well as the possibility of sharing this stable
power with additional Bristol Bay communities enhances the value of this project.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 8 of 14 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 Lake Elva facility is a rock filled dam with reservoir providing hydro powered generation.
The installed and anticipated capacity will be 1.5 MW with a projected average annual delivery of
8,370 MWh. This power will be delivered over a 33 mile inter-tie connected to a new substation
in order to integrate the hydro power with diesel backup facilities.
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.
All of the identified land involved is held in trust by the State of Alaska. NETC is working
with the SOA / DNR to mitigate any and all issues.
4.3.3 Permits
Provide the following information is it may relate to permitting and how you intend to address
outstanding permit issues.
List of applicable permits
Anticipated permitting timeline
Identify and discussion of potential barriers
The FERC has made a “non-jurisdictional” ruling (2Q-2008) in regards to this project. All
future permitting and license applications will be conducted through applicable State of Alaska
processes.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 9 of 14 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
All of these issues have been investigated during previous studies of this project and none of
them have been identified as probable roadblocks. NETC will update and/or re-do the necessary
studies and mitigate the concerns as required going forward.
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
Nushagak Area Hydropower Project estimated costs: $60,000,000
PHASE:
Phase 1, Lake Elva dam: $10,000,000 (requested grant funding)
Phase 2, Lake Elva inter-tie/substation: 12,000,000 (applicant provided funding)
Federal, State, and applicant funding:
Phase 3, Grant Lake diversion facility: 20,000,000
Phase 4, Grant Lake inter-tie: 18,000,000
Estimated Total Project Cost $60,000,000
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 10 of 14 9/3/2008
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
$22,000,00 total project cost funding for phases 1 and 2:
$10,000,000 requested grant funding for phase 1:
$12,000,000 funding provided by the applicant for phase 2 (inter-tie/substation)
O&M costs funded through existing overhead in electric rate base
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
Purchasers of this power will be the 940 member owners of Nushagak Cooperative served
within our electric distribution serving area at the current residential rate of $0.463/kWh.
This project phase will “payback in 10.5 years with a 3:1 ROI over 30 years.
4.4.4 Cost Worksheet
Complete the cost worksheet form which provides summary information that will be considered
in evaluating the project.
Attached:
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 11 of 14 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.
This facility will be maintained and operated within the current business structure of our cooperative utility.
4.4.6 Analysis and Recommendations
Provide information about the economic analysis and the proposed project. Discuss your recommendation for
additional project development work.
ROI Analysis for this project was done using current diesel fuel prices for cost / benefit comparisons.
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
The potential annual fuel displacement of this project phase is 500,000 gal/year. At today’s
prices that will be $2,105,700/year and $63,171,000 over thirty years.
NETC serves electric power from one substation to an isolated network of three communities
over about 100 miles of distribution. The total demand averages about 2 MW over the course of a
year – peaking in summer during the fish processing season with lower demand in the spring and
fall.
This project will stabilize electric rates which have risen over the past five years due to an
average annual fuel price increase of 30%. Steady rates with the future possibility of a rate
decrease will encourage businesses and residents to remain in the area and enhance local
productivity.
The added potential of a wind power element as well as the possibility of sharing this stable power with
additional Bristol Bay communities enhances the value of this project.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 12 of 14 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
Nushagak Area Hydropower Project estimated costs: $60,000,000
Phase 1, Lake Elva dam: $10,000,000
Phase 2, Lake Elva inter-tie/substation: 12,000,000
Phase 3, Grant Lake diversion facility: 20,000,000
Phase 4, Grant Lake inter-tie: 18,000,000
To date: NETC has contracts for an in progress comprehensive feasibility study and ongoing consultative
support. Together both of those commitments are not expected to exceed $300,000.
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 13 of 14 9/3/2008
Renewable Energy Fund
Grant Application
AEA 09-004 Grant Application Page 14 of 14 9/3/2008