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HomeMy WebLinkAbout07182007 PACAB Packet SEWARD PORT AND COMMERCE ADVISORY BOARD Regular Meeting July 18, 2007 NOON COUNCIL CHAMBERS Deborah Altermatt Chair Term Expires 2007 1. CALL TO ORDER 2. PLEDGE OF ALLEGIANCE Karl Van Buskirk Vice Chair Term Expires 2007 3. ROLL CALL Paul Schuldt Board Member Term Expires 2009 4. SPECIAL ORDERS, PRESENTATIONS AND REPORTS A. ARRC Representative Louis Bencardino Darryl Schaefermeyer Board Member Term Expires 2009 B. Chamber Director Laura Cloward Ron Long Board Member Term Expires 2008 C. KPB/EDD - City Councilmember Valdatta D. Administrative Report Vacant Board Member Term Expires 2008 5. Citizens' comments on any subject except those items scheduled for public hearing. [Those who have signed in will be given the first opportunity to speak. Time is limited to 2 minutes per speaker and 30 minutes total time for this agenda item.} Theresa Butts Board Member Term Expires 2009 6. Approval of agenda and consent agenda [Approval of Consent Agenda passes all routine items indicated by asterisk Phillip Oates City Manager Scott A. Ransom Harbormaster 7. UNFINISHED BUSINESS i Anne Bailey Executive Liaison A. Project Status List- On-Going........... .......... .Page 3 City of Seward, Alaska July 18, 2007 PACABAgenda Page 1 8. NEW BUSINESS * A. April 4, 2007 Regular Meeting Minutes.......................................Page 4 B. Discuss Resolution 2007-02 providing a recommendation to Council for pursuit of Andy Baker's YOURCLEANENERGY LLC, Lowell Creek and Marathon Creek in-stream hydroelectric projects as a source of alternative energy for the Seward Utility District................................ ...Page 10 9. CORRESPONDENCE, INFORMATIONAL ITEMS AND REPORTS (No action required)- A. Alaska Coastal Management Program Seward Boat Harbor Travel Lift Public Notice..................... ...... ......... ......................... ...Page 47 B. WTCAK's Trade Development Programs Focus on Alaska's Top Markets and the Search for New, High-Potential Markets on the Future.. ....Page 49 C. Status ofSMIC Development Plan Update..............................Page 51 D. WTCAK's Passport to Profit Special Report.......................... . Page 52 11. BOARD COMMENTS 12. CITIZENS' COMMENTS [5 minutes per individual- Each individual has one opportunity to speak. ] 13. BOARD AND ADMINISTRATION RESPONSE TO CITIZENS' COMMENT 14. ADJOURNMENT . 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Z Gl ~ AI m () m z Z m Z CIl .. Gl en m en Gl (") m Gl ::r B c )> II> m .... J: .... Z ~. - 12. m m )> " Z 3 Z N III C - , 0 0 m z en 0 III en 0 r- < !!!. 0 m ~ 0 ~ ;lJ Gl '" ~ 0 iij" (") )> 0 !ii ...... en ~ )> )> ,., ~ (") .. .... c OJ m 6" =i 0 I: , m Z Il<> Z ::c III m s:: 0 z ~ J: .... (") ~ !!l- s:: 1J Z 0 )> m 8 ~ :i" 1J 0 Gl Z 1J en ~ , $! Gl ;lJ ... m 0' 0 0 1J 5" m ... -< ~ c... m en Ii 0 c:5 s:: m Z s:: ~ (") f.:! m 1J .... a C'5 z > m m C .... CIl )> z d 3 City of Seward, Alaska April 4, 2007 Port and Commerce Advisory Board Minutes Volume 3, Page 230 CALL TO ORDER The regular April 4, 2007 meeting of the Seward Port and Commerce Advisory Board was called to order at 12:00 pm by Board Member Long. PLEDGE OF ALLEGIANCE TO THE FLAG Board Member said the pledge of allegiance. There were present: Ron Long presiding, and Theresa Butts Darryl Schaefermeyer Paul Schuldt Absent: Deborah Altermatt Karl Van Buskirk Mike Banas Comprising a quorum of the Board; and Scott Ransom, Harbor Master Christy Terry, Executive Liaison ARRC Representative Louis Bencardino Bencardino updated the Board about the coal dust problems that have occurred in Seward and Healy. He stated that they began spraying water to control the dust but the railroad was looking for other alternatives to avoid similar situations in the future. He noted that March was the most productive March since he had been there and that there had been a lot of activity in the freight and cruise ship docks. Bencardino updated the Board on the status of the Tote freight through Seward. In response to Butts, Bencardino stated the conveyor was built in 1985 and had been continually maintained until the present. KPBIEDD - City Councilmember Valdatta . Valdatta Campbell discussed the opening of Pollack season and stated he should receive a letter from Jeremiah Campbell, a member of the Fisheries Board. Valdatta suggested ideas to promote gray cod fisheries. He discussed ARRC, SMIC updates, the prison and economic development items. Parks and Recreation Director Karin Sturdy- Parks and Recreation Special Events Permit y City o/Seward, Alaska April 4, 2007 Port and Commerce Advisory Board Minutes Volume3, Page 231 Sturdy discussed how to speed up the process if a non-city government group wanted to hold a special event. Sturdy separated out the forms Parks and Recreation used for special events and discussed individual forms. She reminded them of the insurance requirements and discussed the forms needed for parades. She continued to describe the process for events not found in the packets. Sturdy stated the applicant filled out the application and then City Staff converted the application into the actual permit. Long stated that this was brought up by a certain individual to explore ways to meet a mutual interest of protecting the City and inviting activities to generate income for business. He stated that he would like to get the City to the point where there is a consistent application process to potential vendors and others. Long stated for those who are locally based it may not be hard to get the extra rider but for others it may not be an option. He continued to express his concerns and his desire to move this process along without exposing the City to excessive risk. Long stated that there were other cities with blanket permits. He stated he would like to reduce some of the steps but still provide adequate coverage. Sturdy responded those questions seem to be similar to Y oders. Schaefermeyer stated that the City was in the process of developing a new website and suggested the forms and guides should be incorporated. Schuldt concurred. Chamber Report Laura Cloward Laura Cloward provided a laydown addressing information on starting a business in Seward. She discussed the difficulties with this project and stressed that some of the problems were with ownership of information. Cloward stated she would like to market what departments are doing to encourage businesses to do business in Seward. She also provided information of what was important for those who are interested in Seward as a potential investment. Long stated that all agreed that economic development might not be ours to win but it was ours to lose. Administrative Report Ransom gave an update on the South Harbor Project. In response to Long, Ransom stated that the occupancy was full and yearly moorage had been paid. He stated that there would be a pump out station and a floating fish cleaning facility. In response to Schuldt and Butts, Ransom stated he did not know the amount of fish waste that was dumped in deep water. He stated that he knew the cubic yards of the barge and how often they were dumped and he would provide that information to the Board. .5 City of Seward, Alaska April 4, 2007 Port and Commerce Advisory Board Minutes Volume 3, Page 232 In response to Schuldt, Ransom stated that the waste could not be taken to the meal plant because it was not a controlled product. Citizens' Comments on Any Subject except Those Items Scheduled For Public Hearing - Kim Hughes, Old Exit Glacier Road, discussed her concerns with the coal dust in the harbor. She requested help to find out what to do about the coal dust that had covered their boat at E dock. Ransom stated he would work with boat owners to clarify how the coal dust could be cleaned off their boats. Approval of agenda and consent agenda Motion (SchaefermeyerlButts) Approve the Agenda Motion Passed Unanimous Consent The following items were approved under the Consent Agenda: March 7, 2007 Regular Meeting Minutes New Business Items requiring a Public Hearing Seward Marine Industrial Center Development Plan Updates Notice of public hearing being posted and published as required by law was noted and the public hearing was opened. DJ Whitman, Seward Ships Dry Dock, stated the 3rd paragraph on page 1 needed some work. He referred to pages 12 and 13 and stated that dumping used oil should be changed to all liquids. Whitman noted that the Board had done a good job trying to keep it as a development plan. Deputy Fire Chief Eddie Athey asked for support to re-implement item 5 on page 19. He explained that area is difficult to respond to and the statement gave them the ability to encourage sprinkler systems in construction phase to maintain ISO rating. He noted that he had a DVD which showed the importance of sprinklers. He stated that it took 10 minutes to respond to two residential fires in town and that it would take longer to respond at SMIC. No one else requested to be heard and the public bearing was closed. Long stated that this was a development plan and did not include policy. l.o City of Seward, Alaska April 4. 2007 Port and Commerce Advisory Board Minutes Volume 3. Page 233 Schaefermeyer stated the Fire Departments sprinkler requirement should be decided by Council. He supported what Athey said but did not support this item in the Development Plan. Butts noted her frustration with the parameters of the plan. Schaefermeyer emphasized this was a development plan not a marketing plan. He suggested that there be a broader document such as a SMIC Master Plan to consider the long range vision of the facility. Long stated Council had directed the Board to update the development plan. Butts thought more could be done more could be done by the Board in regards to the SMIC development plan. Commission recessed from 1:15 to 1:20. The Board discussed changes to the document. The Board suspended the rules to allow Russ Maddox to speak. Russ Maddox, 3385 Nash Road, stated he had discussed specific liquids which included solvents, antifreezes and petroleum for the SMIC Development Plan. Maddox alleged that harbor employees had dumped antifreeze near the City Shop and stated there needed to be a disposal plan for antifreeze. Ransom clarified that Harbor workers did not dispose of antifreeze in an illegal manner. The Board was back under the rules of procedures. The Board discussed what should be included in the plan with regards to liquid collection. Ransom referred to the upland boat work policy stating the best management was included there. The Board suspended the rules to allow Russ Maddox to speak. Maddox suggested providing a location for legal dumping of antifreeze. The Board was back under the rules of procedure. Long responded that there needed to be a disposal plan but not necessarily by the City. Schaefermeyer pointed out that this had been accomplished in the first paragraph of the section. 7 City ofSi!Ward, Alaska April 4, 2007 Port and Commerce Advisory Board Minutes Volume 3, Page 234 Motion (Butts/Schuldt) Forward the SMIC Development Plan to the Planning and Zoning Commission for comments. Motion Passed Unanimous UNFINISHED BUSINESS Project Status List- On-Going NEW BUSINESS- Resolution 2007-02, recommending Andy Baker's Lowell Creek Hydro Engineering Proposal After Board discussion, Resolution 2007-02 was postponed until next Regular Meeting. Set April 18, 2007 Work Session Board set the work session topic as Resolution 2007-02 and Passenger Fees. CORRESPONDENCE, INFORMATIONAL ITEMS AND REPORTS (No action required)- Harbor Master Scott Ransom's update on South Harbor Fill Plans, including Corps of Engineering requirements City of Seward Facility Use and Event Permit Forms City of Seward Building Permit Application Packets BOARD COMMENTS- Butts stated she spent time strengthening the language for the Andy Baker Resolution and passed out her changes for discussion at the work session. CITIZENS' COMMENTS [5 minutes per individual- Each individual has one opportunity to speak. ] Ransom noted that Christy Terry had taken the Engineering Executive Assistant position. BOARD AND ADMINISTRATION RESPONSE TO CITIZENS' COMMENTS- None. Adjournment Meeting adjourned at 1 :55 pm. 8 City of Seward, Alaska April 4, 2007 Port and Commerce Advisory Board Minutes Volume 3, Page 235 Christy Terry Executive Liaison Ron Long Board Member (City Seal) g - MEMORANDUM Date: July 5, 2007 From: Phillip Oates, City Manager Tim Barnum, Electric Utility Manager ~J) To: Subject: Lowell Creek Hydro: Response to Theresa Butts statements. Opinion: >- Construction of a hydro electric project involves highly specialized contractors. Some of the work could be accomplished by some of our talented local contractors but, a large portion would probably go to outside (Seward) contractors. >- It would not be cost effective to employee 2 maintenance employees' for a facility that; in a years time only produces what we use in a month. >- The fuel surcharge that we pay is the actual cost of fuel used by Chugach Electric to produce our power. Their generators are large, between 60-140 KWeach. When you have the load to run a generator at its peak efficiency, you get more power out for the fuel you put in. They don't operate a generator just for the City Of Seward. You can actually have the situation of using more fuel for less power. >- The City Of Seward has previously paid a highly experienced, nationally known Engineering firm to study flows at Lowell Creek. It was at their recommendation that the study be stopped in the early stages, due to insufficient water flows. >- Mr. Baker's proposal is an unsolicited proposal; he is not the first or only person to have the ideal of hydro power from Lowell Creek. It is easy to be enthusiastic when you need a job and it's not your money on the table. If it's such a great ideal, why doesn't Mr. Baker put together investors and develop the project and sell it back to the City, Chugach Electric, ML & P, Homer Electric or Matanuska Electric? >- Mr. Baker's proposal also guarantees his a $90,000.00 per year salary as the project manager. >- It would be very fiscally irresponsible to spend $60,000.00 of our rate payer's money on a project that is not eligible for grant funding because, it doesn't meet any of the criteria. Example: 1) Hydro project needs to have a projected cost of S$0.05/kwh. 2) Does the project offset/replace existing hi-cost generation? No. >- Glacial silt is detrimental to turbines. The only way, to my knowledge, that water from glacial streams can be used in turbines is to build a dam and put the water intake in the back water so that the silt can settle out of the water before it is taken into the turbine. >- Even with modern screens, how do you screen out the amount of material that came out of the tunnel this last October? If the penstock or screening system gets plugged, it could lead to a breach of Lowell Creek above the hospital, endangering that facility and residents along Jefferson. >- The tail race (out flow) of a hydro plant is loud. It is like sitting on the banks of a It"'\ , rushing river. )> After the tsunami, the property east of Ballaine was considered unstable and not appropriate for housing. That is why it is used for City parks and RVltent camping. )> Our current energy cost is $O.0401/kwh. We also have a fuel surcharge that is a straight pass thru to the customer, it ranges from about $O.02-$O.06/kwh. The demand charge that is on our bill from Chugach Electric is covered by our rate structure and is not an additional cost, such as the fuel surcharge. )> The cost of power will be more from Lowell Creek Hydro than our existing sources (see attached). );> It is my recommendation that the City Of Seward NOT continue with this proposal, at this time. I \ ,. -l :::r iii' "0 ~ .Q, CD o ~ . () il;'r::: '" l/l c: - 3 0 -.3 .g ~ Dl r::: =l/l ~ :i' :::rco 11 ~ o 0 0-" l'i ::;;: CD :::r 0- _ III 3 -0 r:J ~ st !t() (;0 ii1 en CD + "r- <0 0 lil ::;;: '" ~ III '" "0 ~ o "0 o '" CD c.. ::;;: o c: a: o III r::: '" CD - :::r CD ~ III CD '" - o o r::: '" o 3 CD ~ l/l - o () ~ ~ 5l CD c:~ ~ :c e-.-< III c.. ~a '" . CD II Cil II ~ ~9' ~O'I . ~ .....~ ~ :i" :::rQ. r::: -c c.. 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Statement of Facts and Conclusions: ~ Construction and maintenance portions of this proposal may be underestimated. o Agreed, please also note that the magnitude of this project will also provide jobs for many local companies and individuals for several years. This project also pays for two full time maintenance positions - all included in the cost jkWh. ~ Project feasibility hinges on flow analyses of creeks and other unknown factors. o Agreed. Though in my opinion this is unlikely (see below), and, if flow analysis started to look bad, the project would be tabled at that time. ~ PACAB recommends "sole sourcing" the entire project to Your Clean Energy LLC. o Yes, P ACAB asked that of YCE. It did not seem wise to fragment leadership of this project. It was Andy Baker's idea and enthusiasm that got us this far. YCE's actual proposal provides for that option if you wish. ~ Proposal assumes total Capital Cost, of construction, will be funded by grants totaling $6,000,000.00. o Yes, if this does not seem possible, the project would be reevaluated at that time. (The current status of the Energy bill looks rather good). ~ Flow analysis was conducted by CH2M Hill and concluded insufficient flow from Lowell Creek to sustain a hydro project. o On the contrary, as noted on page 2-1 of the CH2M study, "a substantial amount of the total runoff could be lost to subterranean flow...." Based on measurements of 100 ds at the old intake structure (up the canyon a bit), and only 40 ds at the tunnel. o The Y ourCleanEnergy plan is designed to capture most of that flow, which may be 60% of the total flow, thereby doubling the flow rates documented in 1978 o In addition, if currently popular models prove true, Seward will, on average, be experiencing greater precipitation in the coming decades. Page 1 of4 ,~ Rebut to Tim Barnum's Memo as detailed below By Theresa Butts as a private individual Black text is the original memo, red (grey) text is added o That was a completely different design, fragmenting the" drop" into 3 separate places, the modem proposal gathers all that energy into one location and so is more efficient by nearly an order of magnitude o Modem screens and penstock teclmology increase efficiency even further and reduce wear such that the designs are not even comparable to each other - especially in the areas of. o (conclusion) - comparing the energy extraction and production of the two designs is not appropriate, the CH2M plan is still a bad idea. The Y ourCleanEnergy plan is an improvement by an order of magnitude. );> Sighting new facility in campground area will introduce high noise levels into the camping area o No it will not. A properly built structure will not be any louder than the generators already run at that location by the RVs and the RVs can all be put on meters and their generators silenced to make up for it. ...and places the generation infrastructure in a Tsunami zone,\ o As is most of the town. o Anywhere there is powerful drop (head) will be near the ocean. .. .built on property that is unstable. o This is the first I have heard of this. I do not know what Tim's source is. Of course this should be evaluated as a part of the overall engineering and may or may not have an impact. );> Current energy cost is $0.0401 per KWH. o No it is not. As Tim Barnum explained to me himself. See attached. o I cannot fathom why this number is misrepresented in this way. );> Projected energy cost from hydro Is $0.097 per KWH. o Yes. The construction costs will probably be higher, but the generation will also probably be greater (perhaps much greater), so in my opinion this number is more than fair. o );> Total project cost is estimated at $10,277,600.00. o This number is correct. );> Total projected production of project is 6,273,300 KWH per year. o This number is correct, though as I have said, this estimate is quite conservative. o This number is based on a high-flow rate of 50ds (based on the flow data from 1979) and actual flow could be double or more, bringing the cost much lower. );> Current average monthly usage is 5,320,869 KWH. o This number is almost the same as Mr. Barnum told me in April. o Equals 63,850,428 kWh per year, so the project will contribute approximately Page 2 of 4 IL\ Rebut to Tim Barnum's Memo as detailed below By Theresa Butts as a private individual Black text is the original memo, red (grey) text is added Opinion: ~ Lowell Creek has insufficient flow to sustain an affordable hydro project. o Wrong. See above ~ A $10,000,000.00 hydro project with a projected $0.097 KWH cost is not a viable candidate to receive grant funding, to be a viable project the KWH cost needs to be in the $0.04-0.05 range and offset existing generation. o 1 do not know what Tim's source is, mine disagree 100% ~ Lowell Creek hydro would not offset any of the generation used to supply power to Seward. o Would have offset its share of all the generation we have been using in recent months. o Minimum year-round generation wilI offset a minimum 240kW of any Chugach interruption and a maximum of 2MW depending on flows at that time and efficiency of turbines. ~ In fact, it could reduce the efficiency of CEA generation, causing our rates to increase. o Really. o How, specifically? And in what ratio compared to the fuel price increases that are likely certain in coming years and decades. ~ Our cost of the power generated by Lowell Creek hydro would be at least $105,000.00 per year more than what we currently pay (including fuel surcharge) for the same amount of power. o This math does not add up. 1 would like to see the documentation for that. See attached. o What we currently pay is also largely irrelevant. What we wilI be paying over the next 40 years is what is relevant. ~ Your Clean Energy LLC. Has no experience developing a hydro project. o YCE is a new company. Andy Baker has extensive (15 years) experience developing large and medium-sized water projects outside and in Alaska o Andy Baker has been working in Alaska for nine years and so is familiar with our special needs and challenges. ~ If the goal is to have more renewable energy for our customers, the City can enter into negotiations with another buyer of the power produced by the Bradley Lake hydro project and purchase more of the output. o This project is not so much about renewable energy as it is about fiscal responsibility, economic security, and risk management (I refer to diversifying the actual supply of energy and working toward being independent of fuel prices) o Having access to your very own renewable energy source is simply by far the most effective way of accomplishing those goals. }- It is my recommendation that the City Of Seward NOT continue with this proposal, at this time. o ??? Page 3 of 4 I~ Rebut to Tim Barnum's Memo as detailed below By Theresa Butts as a private individual Black text is the original memo, red (grey) text is added )> A turbine can produce efficient power at as little as 10ds flow. ? Because much of the flow will be coming from underground, it is entirely likely that at least 10ds will flow all year. ? This will produce power (240kW) and keep the intake and penstock from freezing, saving tons on maintenance. ? Every second this project produces power beyond the 40 term projected, the only cost of that power is the cost of maintenance. This electricity will be virtually free compared to what I can imagine fuel-based power will cost in 40 years when there are about 10 billion people supplying the demand. ? YCE's information presentation was designed to show that even with documented surface flows, this project is viable, and actual flows are likely to be much greater, propelling this project from "viable" into the range of "lucky us!" Page 4 of 4 11.0 "'. MEMORANDUM Date: June 18, 2007 From: Phillip Oates, City Manager Tim Barnum, Electric Utility Manager ji) To: Subject: Lowell Creek Hydro: Proposal by Andy Baker, Your Clean Energy LLC. Statement of Facts: ~ Construction and maintenance portions of this proposal may be underestimated. ~ Project feasibility hinges on flow analyses of creeks and other unknown factors. ~ PACAB recommends "sole sourcing" the entire project to Your Clean Energy LLC. ~ Proposal assumes total Capital Cost, of construction, will be funded by grants totaling $6,000,000.00. ~ Flow analysis was conducted by CH2M Hill and concluded insufficient flow from Lowell Creek to sustain a hydro project. ~ Sighting new facility in campground area will introduce high noise levels into the camping area and places the generation infrastructure in a Tsunami zone, built on property that is unstable. ~ Current energy cost is $0.0401 per KWH. ~ Projected energy cost from hydro is $0.097 per KWH. ~ Total project cost is estimated at $10,277 ,600.00. ~ Total projected production of project is 6,273,300 KWH per year. ~ Current average monthly usage is 5,320,869 KWH. Opinion: )> Lowell Creek has insufficient flow to sustain an affordable hydro project. ~ A $10,000,000.00 hydro project with a projected $0.097 KWH cost is not a viable candidate to receive grant funding, to be a viable project the KWH cost needs to be in the $0.04-0.05 range and offset existing generation. ~ Lowell Creek hydro would not offset any of the generation used to supply power to Seward. In fact, it could reduce the efficiency of CEA generation, causing our rates to increase. )> Our cost of the power generated by Lowell Creek hydro would be at least $105,000.00 per year more than what we currently pay (including fuel surcharge) for the same amount of power. )> Your Clean Energy LLC. Has no experience developing a hydro project. ~ If the goal is to have more "renewable energy" for our customers, the City can enter into negotiations with another buyer of the power produced by the Bradley Lake hydro project and purchase more of the output. )> It is my recommendation thaHhe City Of Seward NOT continue with this proposal, at this time. \1 Rebut to Tim Barnum's Memo as detailed below By Theresa Butts as a private individual Black text is the original memo, red (grey) text is added MEMORANDUM From: June 18, 2007 Date: To: Phillip Oates, City Manager Tim Barnum, Electric Utility Man Subject: Lowell Creek Hydro Proposal by A Statement of Facts and Conclusions: )> )> oposal e underestimated. of this project will also provide several years. This ositions. and other unknown factors. ly (see below), if flows started that time. )> o Th mayb in 1978 o . In addition, if currently popular models prove true, Seward will, on average, be experiencing greater precipitation in the coming decades. o That was a completely different design, fragmenting the" drop" into 3 separate places, the modern proposal gatl1ers all that energy into one location and so is more efficient by nearly an order of magnitude eem possible, the project would be reevaluated at that tus of the Energy bill looks rather good). d by CH2M Hill and concluded insufficient flow from ydro project. -1 of the CH2M study, "a substantial amount of the total st to subterranean flow.. .." Energy plan is designed to capture most of that flow, which of the total flow, thereby doubling the flow rates documented \8 Page 1 of3 Rebut to Tim Barnum's Memo as detailed below By Theresa Butts as a private individual Black text is the original memo, red (grey) text is added o Modern screens and penstock tedmology increase efficiency even further and reduce wear such that the designs are not even comparable to each other - especially in the areas of. o (conclusion) - comparing the energy ex designs is not appropriate, the CH2M I Y ourCleanEnergy plan is an imp en );> Sighting new facility in campground ar ntr camping area o No it will not. A properly built generators already run at that lac put on meters and their generator ... and places the generation infrastru o Yes, anywhere there is powerf ... built on property that is unst o This is the first I have he course this should be ev );> Current energy cost is $0.040 o No it's not. As Tim o r cannot fathom );> Projected energy cost o Yes. The co also proba );> Total pro'ect cost is );> Tot ducti );> C hly us production of the two . d idea. The of magnitude. 'se levels into the t flow to sustain an affordable hydro project. o );> Lowell Cr Seward. o It would 0 fset any generation that occurred during flow months (Apr-Oct), i.e. the ones in recent months ~ In fact, it could reduce the efficiency of CEA generation, causing our rates to increase. o How, specifically? And in what ratio compared to the fuel price increases that are H*ely certain in coming years and decades. ject with a projected $0.097 KWH cost is not a viable unding, to be a viable project the KWH cost needs to be d offset eXisting generation. lat Tim's source is, mine disagree 100% ould not offset any of the generation used to supply power to Page 2 of3 \9 Rebut to Tim Barnum's Memo as detailed below By Theresa Butts as a private individual Black text is the original memo, red (grey) text is added ~ Our cost of the power generated by Lowell Creek hydro would be at least $105,000.00 per year more than what we currently pay (including fuel surcharge) for the same amount of power. o This math does not add up. I would like See attached. ~ Your Clean Energy LLC. Has no experie o YCE is a new company. Andy B projects exactly like these for h' )> If the goal is to have more renewable into negotiations with another buyer of t hydro project and purchase more of the o This project is not so much about responsibility, economic securi an diversifying the actual supp independent of fuel price ~ It;s my recommendation that t at this time. o I think PACAB was wis dro project. rience developing Page 3 00 20 Sponsored by: Board CITY OF SEWARD, ALASKA PORT AND COMMERCE ADVISORY BOARD RESOLUTION 2007-02 RESOLUTION OF THE PORT AND COMMERCE ADVISORY BOARD, PROVIDING A RECOMMENDATION TO COUNCIL FOR PURSUIT OF ANDY BAKER'S YOURCLEANENERGY LLC, LOWELL CREEK AND MARATHON CREEK IN-STREAM HYDROELECTRIC PROJECTS AS A SOURCE OF ALTERNATIVE ENERGY FOR THE SEWARD UTILITY DISTRICT WHEREAS, the Seward City Council has tasked the Port and Commerce Advisory Board to research possible sources of alternative energy for the community; and WHEREAS, future costs of fuel-based electricity are uncertain and this project offers a potential to sell fixed-cost hydroelectric power profitably over time; and WHEREAS, a diverse, stable, fixed-price energy supply is becoming a vital component of economic health and independence; and WHEREAS, hydroelectric power generated from Lowell Creek may be feasible as affordable, reliable and safe energy for Seward; and WHEREAS, Andy Baker, P.E., d/b/a, YourCleanEnergy, LLC. has submitted a proposal dated March 6, 2007 to perform a pre-design study of Lowell Creek to determine its feasibility to support a hydroelectric generation facility; and WHEREAS, the Port and Commerce Advisory Board finds sufficient merit in the proposal to recommend it to the City Council for consideration and funding; and WHEREAS, the Board acknowledges that the construction and maintenance portions of this proposal may be underestimated; and WHEREAS, the proposed project has the potential to be NOT feasible at all, it also has the potential to be VERY beneficial to this community; and WHEREAS, the engineering costs proposed are quite reasonable; and WHEREAS, this project's feasibility hinges on the flow-analysis of the creeks and other key factors; and 2\ Port and Commerce Advisory Board Resolution 2007-02 Page 2 of2 WHEREAS, the City may be able to reduce the amount of money at stake by minimizing or alternately re-structuring the proposed contract; and NOW, THEREFORE, BE IT RESOLVED by the Seward Port and Commerce Advisory Board that: Section 1. The Board recommends the Seward City Council undertake the necessary steps to make Seward's electrical future safe, secure, reliable and stable in cost. Section 2. The Board Recommends that the Seward City Council authorize the Administration to enter into fixed price contract negotiations with Y ourCleanEnergy LLC for engineering services outlined in the proposal. Section 3. This resolution shall take effect immediately upon its adoption. PASSED AND APPROVED by the Port and Commerce Advisory Board this 6th day of June 2007. THE CITY OF SEWARD, ALASKA ::z:t1ffi ~V/~ Deborah Altermatt, Chair AYES: NOES: ABSENT: ABSTAIN: ATTEST: Jean Lewis, City Clerk (City Seal) 22 . Iii. Celebrate The Power Of Nature TM with... YourCleanEnergy LlC Port And Commerce Advisory Board City Of Seward, Alaska PO Box 167 Seward AK 99664 April 4, 2007 RE: Comments on Draft Resolution - Lowell Creek Hydro Project Dear PACAB Members, In review of the draft resolution forwarded to me by Christy Terry on March 30, 2007, I respectfully respond to the following items: PACAB - "the Board recommends the Seward City Council examine closely if the proposal might be minimized into basic steps to verify feasibility" - I understand this to mean "let's see how much flow we measure before we spend money on other aspects of the pre-design study" - perhaps a lesson learned from the 1997 study. It is true that this project is mostly about getting as much flow into the screen intake at high elevation - this is where the power will come from that will make the project economically feasible. Including the Marathon creek flow in the study is important because this flow may supplement Lowell Creek flow year round and increase feasibility. I do not think there is much question that there is enough flow to have a hydroelectric facility, it's more a question of what the fixed cost of power will be once the project is completed, given the flow characteristics. Aside from the flow characteristics, there are other preliminary challenges that must be addressed, specifically: Securing a preliminary FERC permit. Securing cooperation and acceptance from other agencies, especially Army Corps of Engineers. Establishing base topo and geologic mapping of stream channel in area of proposed intake - the flow monitoring points will have to be located strategically. There is efficiency in addressing secondary considerations in the study scope parallel with the flow monitoring exercise. This is because many of these tasks can be addressed during the same site visits and these tasks may also have significant impacts on construction costs. Further, completion of the pre-design study can be expedited as soon as the one-year flow study matures. The sooner you complete the entire study, the sooner you may apply for grant funding, moving ahead will give you some priority and momentum that will work in favor of getting in line for revolving funds and appropriations. PACAB - YourCleanEnergy LLC would supply all services including subcontractors, and would provide a final product to include complete engineering studies and permitting - this is a good idea, it will be most efficient to get it all done in one year as the subcontractors can be coordinated more effectively. In summary, I ask you to consider the above and I will be available for a conference call during the meeting today if you would like to this discuss more. Sincerely, Andy Baker, PE YourCleanEnergy LLC 308 G Street #212, Anchorage, Alaska 99501 907-274-2007 23 . 0 IiiJ Celebrate The Power Of Nature 1M with. YourCleanEnergy c March 6, 2007 Port And Commerce Advisory Board City Of Seward, Alaska PO Box 167 Seward AK 99664 RE: Estimation Of Benefits And Financial Analysis - Lowell Creek Hydro Project Dear PACAB Members, As presented to you at your February 21, 2007 workshop, the attached handout outlines benefits to the City for a hydro project on Lowell Creek; an estimation of probable design and construction costs; and a preliminary evaluation of financial analysis for the same. The evaluation indicates that it may be possible to fix hydroelectric power generated from Lowell Creek under $0.10/kwh for 40 years. This evaluation is based on components that have been estimated with the best information available to me at this time. Cost component assumptions presented here in which I bring to your attention at this time are as follows: Federal and state grants secured prior to final design for $6,000,000 Base construction cost of $6,000,000 Municipal Bond issued @4% interest for 40 year term Annual O&M costs of $180,000 (two full time hydro operators) Annual administration cost of $90,000 (one full time project administrator) Annual Energy Cost = $0.097 per KWH produced from Lowell Creek In view of rising electric grid costs, rising diesel fuel costs and the increasing potential to sell fixed cost hydroelectric power profitably over time, the Lowell Creek Hydro and Marathon Creek Hydro projects are worthy of consideration. If you have any questions regarding the attached, please feel free to contact me. Again I am willing to make one final summary presentation of this project information to City Council, the City Manager and the Mayor if requested. Sincerely, Andy Baker, PE andybaker@yourcleanenergy.us YourCleanEnergy LLC 308 G Street #212, Anchorage, Alaska 99501 907~274~2007 2L\ 03/01/2007 22:58 FAX 8073448770 FED EX KINKOS I4J 0021001:1 . Ill. Celebrate The Power Of Nature 1M with... YourCleanEnergy u.c March 1, 2007 Port And Commerce Advisory Board City Of Seward, Alaska PO Box 167 Seward AK 99664 ....\----~ RE: Scope, Schedule & Budget Proposal - Pre-Design Study. Lowell Creek Hydro Project Dear PACAB Members, I have enjoyed the two presentations that we have had together discussing the potential of Lowell Creek as an affordable, reliable and safe source of clean electrical energy for the City of Seward. As I have disclosed in the presentations, the viability of developing this Independent and fixed cost energy supply in Seward Is worthy of your consideration. With more rising grid electricity and diesel fuel costs Inevitable in the near future, this project will enable the City to apply for various grants and loans to significantly lower the Initial capital costs of final design and construction. This Wlllln tum lower the fixed unit cost of power generated over the 40 year design life of the hydro project In order to secure permits and funding for this project, it will be necessary to condUct stream flow monitoring for at least one year, and re-evaluate the design aspects covered by previous studies as well as the new concepts presented. The intent of this proposal is to pro\lide the City with the hard data and analysis required to undertake such a project responsibly and profitably. "Further, the completed Pre-Oesigll,study will place the City in a favorable position to secure funding to advance the hydro project to final design and construction. I have included the option of a Rehabilition study of the existing Marathon Creek Hydro Project which ca.n be done cost effectively in parallel with the Lowell Creek Hydro Project Pre-Design Study as they are In the same project area. I am pleased to submit the following items for your review and consideration for the Lowell Creek Hydro Project Pre-Design Study: . Exhibit A: exhibit B: Exhibit C: Scope of Content of Pre-Design Study (2 pages) Schedule To complete Flow Monitoring & Study (1 Page) Budget Estimate To complete Pre-DeSign Study (3 pages) I trust that you will find the scope, budget and schedule reasonable and that you will consider recommending them to City Council. If you have any questions regarding these items. please feel free to contact me. I am willing to make one final summary presentation of this proposal to City Council, City Manager and the Mayor, if requested. Sincerely, I"'J J a4r~ Andy Saker, PE andybaker@yourcleanenergy.u9 ~~'.~. . YourCleanEnergy u.c 308 G street: #212, AnchOrclge, Alaska 99501 ')t::.. 907-274-2007 03/01/2001 22:58 FAX 8013448110 FEDEli KINKOS III 003/008 . II. Celebrate The power Of Nature TM with... YourCleanEnergy ILC LOWELL CREEK HYDRO PROJECT - PROJECT SCOPE - PAGE 1 OF 2 03101107 EXHIBIT A. SCOPE OF CONTENT FOR PRE-DESIGN STUDY REPORT STUDY SCOPE; 1. INTRO A. B. C. D. PROJECT HISTORY EXISTING GENERATION FACILITIES CURRENT PPA WITH CHUGACH BASE MAPPING .).>. 2. POTENTIAL HYDRO. ELECTRIC FACILITIES & POWER A. PROJECT AREA GEOLOGY & SNOW FIELDS B. SURFACE HYDROLOGY C. SUB.SURFACE HYDROLOGY D. ESTIMATE OF AVAILABLE HYDRO ENERGY E. OPEAATIONS 1. INTAKE SCREENING OPTIONS 2. INFILTRATION GALLERY OPTIONS 3. PENSTOCK DESIGN OPTIONS A. PIPE MATERIAL SELECTION B. CORROSION CONTROL C. THRUST RESTRAINT I SEISMIC DESIGN D. FREEZE PROTECTION I INSULATION E. POTENTIAL UTILITY CONFLICTS F. ANCHORING! FLOOD EAOSION I FLOATING G. ACCESS FOR INSPECTION I MAINTENANCE 4. SEASONAL FLOW TURBINE OPERATIONS , 5. TURBINE WHEEL MAINTENANCE/REPAIR OPTIONS 6. NOISE MITIGATION ft-o>" 7. DOWNSTREAM GRAVEL DEPOSITION/REMOVAL F. WATER RIGHTS 3. DESIGN ALTERNATIVES - INTAKE LOCATIONS & HYDRO-PLANT SITES ;/ , A. ALTERNATIVE LAYOUTS 1. UPPER INTAKE + CAMPGROUND HYDRO PLANT SITE 2. UPPER INTAKE + ALTERNATE HYDRO PLANT SITE 3. LOWER INTAKE + CAMPGROUND HYDRO PLANT 4. LOWER INTAKE + ALTERNATE HYDRO PLANT SITE YourCleanEnergy u.c 308 G Street "212, Anchorage, AlaSka 99501 ') I^ 907-274-2007 03/01/2007 22:58 FAX 9073448770 FEDEX KINKOS ~ 004/008 . g. Celebrate The Power Of Nature '!1/1 with... YourCleanEnergy LLC fJ-"-~ LOWELL CREEK HYDRO PROJECT ~ PROJECT SCOPE - pAGE 2 OF 2 03101/07 EXHIBIT A. SCOPE OF CONTENT FOR PRE-DESIGN sroDY REPORT (CONT'D) ~""f.J B. EQUIPMENT & FACILITY OPTIONS ,. IMPULSE TURBINE SELECTION 2. ELECTRICAL EQUIPMENT & CONTROLS 3. CONNECTION TO CITY uTILITY GRID 4. HYDRO SlDG DESIGN CONSIDERATIONS A. EQUIPMENT FOOTPRINT 8. OVERHEAD TRAVELING CRANE I lOADING BAY C. NOISE & VIBRATION MITIGATION D. FLOOD & TSUNAMI PROTECTION E. SEISMIC DE:SIGN F. OPERATION & MAINTENANCE REQ'TS G. VISITOR ACCESS OPTIONS H. TAILRACE TO RESURECTION BAY I. SALMON RELEASE f RECREATIONAL QI:ITI0NS ,,.r':t 4. PROBABLE PROJECT IMPLEMENTATION SCHEDULE 5. DAM SAFETY. ENVIRONMENTAL IMPACTS. REQUIRED PERMITS A. DAM SAFETY B. ENVIRONMENTAL IMPACTS C. SEISMICITY D. FISH & WILDLIFE E. FORESTRY & MINING F. RECREATION G. PERMITS 6. POWER MARKET ANALYSIS 7. COST AND BENEFIT ANALYSIS 8. RECOMMENDED AL TEANATIVE 9. STRATEGIES FOA PROJECT FINAL DESIGN & CONSTAUCTION FUNDING A. FEDERAL CLEAN ENERGY GRANTS (DOE. USDA) " B. FE:DERAL CONGRESSIONAL APPROPRIATION C. STATE OF ALASKA - RENEWABLE ENERGY GRANt"FUNDS D. STATE OF ALASKA - ALASKA ENERGY AUTHORITY GRANT E. DENALI COMMISSION GRANTS & LOANS F. LOW IMPACT HYDRO Oe:SIGNATION G. MUNICIPAL BONDS H. GREEN TAGS L CRUISE SHIP POWER PURCHASE AGREEMENT YourCleanEnergy LLC 308 G Street #212, ....nchorage, Alaska 99501 r'J, 907-274-2007 ,.,~" -.,~.'..~ "lJ "lJ 2 :tI n ':1 m "'/'I ~ m c z j m ~ ~ OJ m "'/'I ~ !Z = ::I:l 0 ~ j ~ 0 () ;: ~ 0 ~ i - 0 C5 ~ 8 "lJ "D m !;2 ~ c F z 1ft F "'/'I :tI tIJ ..& Z C r 0 :D m ::lIii C 8 ...... () - m ::! 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YourClaanEnergy Ll.C EXHIBIT C: PROPOSED BUDGET OF PRE-DESIGN STUDY lowell Creek Hydro Project Page 1 of 3 03101107 The following is a summary of budget estimates to complete a Pre-Design Study that will enable the City to seek grant funding for final design and construction of this project. It will be economically efficient and recommended to Include the Marathon Creek Hydro Project in this process as many tasks can be done during site visits for the Lowell Creek Project A summary of the budget is as follows: 1. LOWELL CREI:K HYDRO PRE-DESIGN STUDY: A. CONTRACT WITH YourCleanEnergy llC PRE-DESIGN STUDY LABOR COSTS DIRECT COSTS - TRAVEL EXPENSES DIRECT COSTS - OFFICE EXPENSES TOTAL BASE CONTRACT - YourCleanEnergy LlC $29.800 ~ ,< ~ $3,510 $1,040 ---- $34,350 B. MINOR GOODS Be SERVICES PURCHASED DIRECTLY BY THE CITY STREAM FLOW DATA COLLECTION SUB-SURFACE TEST BORING AND MONITORING WELLS BASE MAPPING TOPO SURVEY (RECOMMENDED) TOTAL MINOR PURCHASE CONTRACTS C. TOTAL TO COMPLETE PRE-DESIGN STUDY (A +8) 2. MARATHON CREEK HYDRQ PROJECT REHAB STUDY:. PREPARE PRE-DESIGN STUDY - YourCleanEnergy LLC STREAM FLOW DATA COLLECTION -Minor purchase TotAL TO COMPLETE MARATHON CREEK HYDRO STUDY yourCleanEnergy Ll.C 308 G Street #212, Anchorage, Alaska 99501 '7Q $9,500 $9,600 $9.800 $28,900 --- $63.250 .'~, $9,600 $ 6,000 $15,600 907-274-2007 03/01/2001 22:59 FAK 9013448110 FEDEX KINKOS ~ 001/008 L.owell Creek Hydro project Celebrate the power of nature,... with... YourCleanEnergy LLC EXHIBIT C: PROPOSED BUDGET - ITEMIZED - PRE-DESIGN STUDV 03101107 PaGe 2 of 3 TASK PERFORMED BV VourCleenEnerav LLC HOURS RATE COST --- - PREPARE'" SUBMrr FERC PREUMINARV APPUCATION 8 5100 $800 .-1t~... NOTIFY & COORDINATE WITH FEDERAL & STATE AGENCIES PREPARE LETTERS OF INTENT TO AGENCIES 8 $100 $800 CONDUCT SeOPING MEETINGS 20 $100 $2,000 BEGIN STREAM MONITORING PROGAM SECURE STREAM MONITORING PERMIT 8 $100 $800 SECURE EQUIPMENT AND SUPPLIES 8 5100 S800 SUPERVISE INSTALlATION OF DATA MONITORS 8 $100 $800 SUPERVISE DATA COLLECTION FOR FIRST SIX MONTHS 8 $100 $800 BEGIN SUBSURFACe FLOW MONITORING PROGRAM SECURE SUB-SURFACE FLOW MONITORING PERMIT 8 5100 $800 SECURE GEe- TECH CONTRACTOR AND SUPPLIES 8 $100 $800 SUPERVISE FlEW WORK OF GEO-TECH CONTRACTOR 8 $100 $800 SUPERVISE DATA COLLECTION FOR FIRST SIX MONTHS a 5100 5800 BEGIN BASE MAPPING SURVEY SECURE PERMISSION FROM DNR, caE 8 $100 $800 SECURE SERVICES OF LAND SURVEYOR 8 $100 $800 SUPERVISE SURVEYING ACTIVITIES 8 $100 $800 PREPARE PRE-De&IGN STUDV - LOWELL CREEK HVDRO PROJECT . PROJECT HISTORY 6 $100 $600 EXISTING GENERATION FACILITIES 6 $100 $600 CURRENT POWER AGREEMENT WITH CHUGACH ELECTRIC 6 $100 5600 BASE MAPPING 8 $100 $800 PROJECT AREA GEOLOGY & SNOW FIELDS 8 $100 $BOO SURFACE HYDROLOGY 8 $100 $800 SUB-SURFACE HYDROLOGY 8 $100 $800 ESTIMATE OF AVAILABLE HYDRO ENERGY 8 $100 $800 OPERATIONS 16 $100 51,600 WATER RIGHTS 2 $100 $200 ALTERNATIVE LAYOUTS B $100 $800 EQUIPMENT & FACILITY OPTIONS 20 $100 $2.000 PROBABLE PROJECT IMPLEMENTATION SCHEDULE 6 $100 $600 DAM SAFETY, ENVIRONMENTAL IMPACTS. REaUIRED PERMITS 16 $100 $1,600 POWER MARKET ANALYSIS 16 $100 $1,600 COSTS AND BENEFITS 16 $100 $1,600 RECOMMENDED ALTERNATIVE 8 $100 5800 STRATEGIES FOR PROJECT DESIGN/CONSTRUCTION FUNDING B $100 $800 TOTAL Tille EFFORT 298 $100 $29,800 "...'" YourCleanEnergy LLC 308 G street /1212. Anchorage, AK 99501 ~() 907-274-2007 03/01/2007 22:59 FAX 9073448770 FEDEX KINKOS Lowell Creek Hydro Project Celebrate the power of nature TN III OOB/OOIl _~1IJ__ oMlh... YourCleanEnergy LLC EXHIBIT C: PROPOSED BUDGET. ITEMIZED. PRE-DESIGN STUDY 03101107 Paae 3 of 3 DIR~CT EXPENSes - YourCleflnEnergy LLC TRAVEL EXPENSES (RECEIPTS REQUIRED) TRAVEL - AlITO MILES - ANCHORAGE-SEWARD -10 ROUND TRIPS TRAVEL - LODGING IN SEWARD TRAVEL - MEALS IN SEWARD SUB-TOTAL OFFICE EXPI!NSES (RECeiPTS REQUIRED) OFFICE EXPENSE. MAILING OFFICE EXPENSE - COMPUTER TECH SUPPORT OFFICE EXPENSE - PHOTOCOPYING & PRINTING REPORTS SUB-TOTAL LABOR (Page ') + DIRECT EXPENSES - YourCleanEnergy LLC MINOR SERVICES TO BE PURCHASED DIRECTLY BY THE CITY' STREAM FLOW DATA COLLECTION STREAM MONITORING -INSTALL DATA LOGGERS STREAM MONITORING -12 MONTH DATA LOGGING SUB-TOTAL SUB-SURFACE TEST BORING AND MONITORING WELLS GEe-TECH CONTRACTOA SERVICE GROUNDWATER TEST WELL - 12 MONTH DATA LOGGING SUB-TOTAL BASE MAPPING TOPO SURVEY (OPTIONAL BUT RECOMMENDED) LAND SURVEYING CREW CONTRACT CAD TECH SERVICE TO ASSEMBLE BASE MAPPING PLOTS SUB-TOTAL TOTAL MINOR GOODS & SERVICES COSTS UNIT QUANT UNITS COST TOTAL 2600 MILES 20 NIGHTS 40 MEALS $0 $9'0 $100 $2,000 $16 $600 $3,510 120 ITEMS 4 HRS 1200 PAGES $2 $240 $50 $200 $1 $600 $1,040 $34,350 -J>. 12 LS $3,500 $3,500 MO 5500 $6,000 $9,500 4 WELLS $900 $3,600 12 MO 5500 $6,000 $9,600 LS $8,000 $8,000 24 HOURS $75 $1,800 59,800 $28,900 (ITEMS BELOW ARE FOR MARATHON CREEK HYDRO PLANT REHAB STUDY QPTION) PREPARE PRE.DESIGN STUDY - MARATHON HYDRO REHAB HISTORV, HYDROLOGY, ENERGY ESTIMATES OPERATIONS, WATER RIGHTS, REHAB AL. TERNATIVES PERMITS, SCHEDUL.E, POWER MARKET ANAL VSIS COSTJElENEFITS, RECOMMENDATIONS, FUNDING STRATEGIES TOTAL TIME EFFORT - YourCleanEnergy LLC MARATHON CREEK STREAM FLOW DATA COLLECTION STREAM MONITORING - 12 MONTH DATA LOGGING YourCleanEnergy LLC 308 G Stl'eet #212, Anchorage. AK 9950' ~\ HOURS 24 24 24 24 MR~ $100 52,400 $100 $2,400 $100 $2,400 $100 $2,400 96 $100 $9,600 UNIT QUANT UNITS COST TOTAL 12 MO $500 $6,000 907-274-2007 ESTIMATION OF BENEFITS AND FINANCIAL ANALYSIS AS PRESENTED TO PACAB FEBRUARY 21, 2007 Lowell Creek Hydro Project Affordable, Reliable, & Safe Energy for Seward Wanner temperatures and heavy rains will increase flood melt from the snow fields - a 2"" conduit Is needed to supplement capacity of existing tunnel Project concept that allows maximum hydro power to be harnessed 32 BENEFITS TO CITY FROM LOWELL CREEK HYDRO PROJECT _ Additional flood capacity of 100 cfs is made available in 48 inch penstock _ Maintenance costs from tunnel damage, dredging, flooding are reduced _ Public safety is increased in uncertain future of climate change and floods _ Seward develops its own source of affordable, reliable and safe electrical power to hedge off increasing cost of grid power from fossil fuel sources _ Marathon Creek Hydro Project can be rehabilitated when Lowell Creek project is constructed to reduce costs of study, permits, & flow monitoring _ Electrical costs in Seward will be reduced and stabilized over the 40 year project life with local hydro power, especially if capital costs funded by grants _ Reduced cost in emergency power generation when hydro is available, every unit of hydro power produced from Lowell Creek will offset expensive fuel consumption by City's back up diesel generators _ Hydro project will create several new permanent year round jobs in Seward, and seasonal work to perform routine maintenance BENEFITS TO CITY FROM LOWELL CREEK HYDRO PROJECT _ Hydro power does not have the liabilities of pollution, and low impact hydro projects like Lowell Creek are favorable to the public & agencies _ City may be eligible for congressional appropriations/grants for clean energy _ State of Alaska will soon establish a Renewable Energy Fund to be administired by the Alaska Energy Authority, fund will start with $10 million _ City will generate the most power when population is highest in summer months and cruise ships are in Seward harbor _ City can negotiate agreements with cruise ship companies to supply clean power for retail rates while ships are in port, as done successfully in Juneau _ Lowell Creek Waterfall can retain minimum flow even when hydro is operating, this will keep its historic and scenic character preserved _ Hydro plant tail race outfall can create a new salmon release area and increase recreation value of waterfront _ Hydro turbine building could create additional revenue as a visitors center by presenting clean energy science and technology displays, gift shop, etc. ~~ PROJECTED FLOWS BASED ON EXISTING DATA Duration curve of 1979 study was based on flow measured at tunnel entrance, not at higher elevations (guaging of stream flows was not done at upper intake locations proposed in the study) 1979 Study observed that 60% of flow is lost to underground gravel aquifer before it ever reaches the tunnel entrance, some of this underground flow can be intercepted year round with an infiltration gallery It appears possible to collect @50 cfs at least half the year (6 months), with normal rainfall and snow melt flows allowing @75 cfs for up to 2 months in summer PROJECTED FLOWS BASED ON EXISTING DATA Initial turbine sizing would be two pelton wheels, each rated for 50 cfs flow (1.2 MW capacity each turbine) During low flow periods in winter, a single turbine can be run as low as 20% capacity and still produce efficient power (10 cfs = 0.24 MW = 240 KW) Groundwater infiltration gallery at stream intake may allow continuous minimum winter flows of 10 cfs, enough to keep one turbine running from December through March and keep intake and penstock from freezing oY Hvdro Power = Elevation Drop x Flow Thru Turbine specifically: Theoretical Power (kW) = HEAD (feet) x FLOW ~ 11.81 Actual power must account for: Energy losses thru screen intake & collection channel Energy losses thru penstock, bends, valves, nozzles Energy losses in turbine, shaft, drives, generator, wiring ESTIMATED POWER BASED ON PROJECTED FLOWS Net head available at turbine = 360 ft elevation minus screen intake loss (5 ft). minus pipe friction (35ft). minus tailrace drop to MSL (20ft) = @300ft net head Hydro mechanicaVelectrical system efficiency (turbine to grid) = 85% (turbine) x 90% (alternator) x 90% (grid tie) = @70% For 6 months avg flow @ 50cts For 4 winter months, avg flow @10cts For remaining two months. avg flow @75cts = 3,840,800kwh = 512,100kwh = 1,920,400kwh --------------------- TOTAL ANNUAL HYDRO POWER = 6,273.300kwh Market value of this power @ $0.12/kwh = $752,800/year ~~ EV ALUA TING HYDRO PROJECT COSTS vs BENEFITS Hydroelectric projects can be evaluated two ways: A. Life cycle cost (how many years to fully pay back initial capital investment?) B. Annual energy costs ($ per kwh over project life) Typically, once a hydro power resource is developed, they are run as long as the community can maintain them! What is most important is keeping the annual enerav costs as low as possible to stabilize overall grid power costs. Use 40 year project life to evaluate annual energy costs ESTIMATE PROBABLE CAPITAL COSTS Land and land rights $0 Access road to new intake site $100,000 Intake screens and collection channel $350,000 Groundwater Infiltration gallery piping and collection $200,000 Penstock (6,400ft x 48 inch diameter), inc utility relocation and road resurfacing $2,560,000 Power plant building $1,500,000 Turbine and generator equipment $600,000 Electrical control equipment $400,000 Misc power plant equipment $100,000 Substation equipment $60,000 Poles and fixtures $20,000 Overhead conductors and devices $30,000 Communications equipment $20,000 Tailrace and jetty structure $50,000 CONSTRUCTION SUB TOTAL @ $6,000,000 ~tD ESTIMATION OF PROBABLE CAPITAL COSTS (cont.l CONSTRUCTION COST SUB-TOTAL $6,000,000 CONTINGENCY AND UNLISTED ITEMS (20%) $1,200,000 ---- TOTAL DIRECT COST $7,200,000 INDIRECT COSTS: TEMP FACILITIES, BOND, INSURANCE, OHEAD (17%) $1,224,000 TOTAL CONSTRUCTION COSTS $8,424,000 ENGINEERING,LEGAL, ADMINISTRATION (15%) NET INTEREST DURING CONSTRUCTION (7%) LESS STATE (@$2 MILLION) AND FEDERAL (@$4 MILLION) GRANT FUNDS $1,263,600 $590,000 ($6,000,000) TOTAL INVESTMENT $4,277,600 BOND ISSUE (110% OF TOTAL INVESTMENT) $4,705,360 ESTIMATION OF PROBABLE ANNUAL COSTS BOND ISSUE (110% OF TOTAL INVESTMENT) $4,705.360 INTEREST & AMORTIZA nON (40 YEARS @ 4% INTEREST RATE) INTERIM REPLACEMENTS (1.0% OF TOTAL CONSTRUCTION COSTS) INSURANCE (0.4% OF TOTAL CONSTRUCTION COSTS) OPERATION AND MAINTENANCE ADMINISTRATIVE AND GENERAL (60% OF O&M COSTS) LESS INTEREST EARNED ON RESERVE FUNDS (@ 6%) $237,600 $84,000 $34,000 $180,000 $90,000 ($14,200) TOTAL ANNUAL COSTS $611,400 TOTAL KWH PRODUCED PER YEAR (FROM PREVIOUS SLIDE) 6,273,300 KWH ANNUAL ENERGY COSTS = TOTAL ANNUAL COSTS' KWH PER YEAR $0.097 per KWH ~I HOW TO GET YOUR HYDRO PROJECT MOVING AHEAD SUGGESTED PLAN OF ACTION FOR HYDRO PROJECT Secure services of professional energy consultant to prepare permit applications, coordinate with agencies, supervise flow data collection and prepare pre-design report. Include rehabilitation of the City's existing 200kw Marathon Creek Hydro system in this scope to increase efficiency of permitting & flow monitoring and eligibility for small hydro grant funds. Prepare and submit Preliminary Applications with Federal Energy Regulatory Commission Schedule scoping and coordination meeting(s) with state and federal agencies that may be involved in the hydro permitting process Once Preliminary FERC permit is issued, begin stream flow and underground flow monitoring program to collect data ~B COORDINATION WITH AGENCIES IS CRITICAL Federal Aaencies: Federal Energy Regulatory Commission (FERC) U.S. Fish & Wildlife Service Environmental Protection Agency Army Corps Of Engineers National Marine Fisheries Service Interior Department Environmental Division National Park Service COORDINATION WITH AGENCIES IS CRITICAL State Of Alaska: Department Of Environmental Conservation (DEC) - master permit application/stream discharge Department Of Natural Resources (DNR)- water rights & dam protection Department Of Fish & Game - habitat protection Office Of Management & Budget - coastal management Alaska Public Utilities Commission - utility interconnection Regulatory Commission of Alaska (RCA) - power purchase agreement with Chugach Electric Association o~ Proposal For Professional Engineering Services from YourCleanEnergy LiC .0. .0. Andy Baker, PE - Independent Clean Energy Consultant Committed and motivated to achieve a successful project for the City Extensive experience in municipal projects and project management Organizing and communicating with agencies, other disciplines Independent, creative and efficient approach to work Office based in downtown Anchorage, easy travel to Seward Close to most federal and state agency offices Cost advantage over medium and large size consulting firms - lower management costs and overhead - Base rate of $100/hour + expenses Proposal For Professional Engineering Services from YourCleanEnergy LLC .0. .0. Andy Baker, PE - Independent Clean Energy Consultant Scope. Schedule & Budaet - submitted to City on March 1. 2007 Scope of engineering services to the City will begin from present pOint and continue through completion of a pre-design report The intent is to provide documentation and planning so that grant and/or loan funds for final design & construction can be secured by the City Coordination with other specialty consultants and City departments Coordination with local, state and federal agencies on behalf of the City Consulting services could begin in April so that FERC Preliminary Permit and flow monitoring can be started this summer Flow monitoring will require one year so that flow data can be fully utilized YO City of Seward, Alaska June 25. 2007 City Council Minutes Volume 37, Page OTHER NEW BUSINESS A work session for the Library/Museum Project was not deemed urgent and scheduled on September 24, 2007 at 6:30 p.m. Discussion ensued on the Lowell Canyon Tunnel Hydro Project. INFORMATIONAL ITEMS AND REPORTS (No action . Oates agreed to make sure PACAB had all of the same information and Tim Barnum would add actual kilowatt hour costs. Council Member Thomas had a concern for bed loading go' COUNCIL COMMENTS Amberg stated the Senior Center was 100 g attending the LTCF meeting on Friday and tonight's public stressed funding for schools cess with the Borough and thought Valdatta co Touchstone. randing which was mentioned in the AML by. andie Roach' on school bus budget cuts wer.e disturbing. ding since educational opportunities for children were less lllingim had passed away in Seattle and services would be July they met with a congressional staffer to explore grant money options on were too many big projects out there to compete with. She felt they had great meetings, met John Katz, and spoke of economic development projects and how education funding was affecting our community. CITIZENS' COMMENTS Theresa Butts said P ACAB had been concentrating on giving good information to the city council. A lot of issues brought up had already been looked at. She encouraged department heads to attend their meetings. She stated those invitations had been politely declined in the past. Butts agreed the more infonnation they had the better and she emphasized the engineers portion of the bid y\ 78 rY' ,..,..,,, ,',,--, , .-'. ,"',',--, ......,+0......0. ..... . ". ,5 ~.\^\.^...<.~...........:..i.:::.,.).;.?:........; ...... "', .;01>1 .. . F . E "lJ\Ru.,.,. ':"... . .......... ..... " RfNcE;,1.1ER~R)\i;;.::~Seward;,;.i; '. "D' .......0.. "'>N" .,.0.::.....:17. ....DE.:{A.O~~:':\~JE;:'>...<::.,.'- :,".::: ~<; '. ...'.> '.' .:.,',:" :IVl, '/,:v;: .:.<.~: i:-:::,'~ "'.,,;;::,::)::'.~ <:',T,':";','. ...... ....-..:...1..,,\ '~.'..;...'; '. .:. ...:;:...... :..;;:> ....,'.. '. ....... .... ,. .,.. .,' ......:... ..:,~.L_.. :,....:;,.'_'>.-,':..;..:. "';'""-:-_"-'-.':.' "f,--'-" " --,.-..,. .---_.~.-_.--,.,. E2 ALASKA EARTHQUAKE, MARCH 27, 1964 ganizations and individuals, gave un- stintinglY of their time and facilities. Within a few days, there was tem- porary restoration of water, sewerage, and electrical facilities. The U.S. Army Corps of Engineers was authorized to select sites and con- struct a new dock for the Alaska Rail- road, a new small-boat basin, and re- lated facilities. The firm of Shannon and Wilson, Inc., under contract to the Corps of Engineers, investigated sub- surface soils extensively to determine the factors responsible for the sliding along the Seward waterfront and to. ussist in site selection for reconstruction of the destroyed harbor facilities. Bor- ings were made along the Seward water- front and at the head of the bay, and laboratory tests were conducted on per- tinent samples. These studies were augmented by geophysical studies botb on land and in the bay. In addition, the Corps of Engineers made shallow borings on the intertidal fiats at the head of the bay and performed pile- driving and load tests. Borings also were drilled and test pits were dug in tbe subdivision of Forest Acres. Sliding along the Seward waterfront markedly deepened the water along the~ form e l' shoreline. postearthquakel\' slopes of the bay fioor immediately of!'- shore also are steeper in places thlln before the earthquake. The strong ground motion of the earthquake trig- gered the landsliding, but several fac- tors may have contributed to the magni- tude and characteristics of the slides. These factors are: (1) the long duration of strong ground motion, (2) the grain size and texture of the material in- volved in the sliding, (3) the proba- bility that the finer grained materials liquefied and flowed seaward, and (4) the added load of manmade facilities built on the edge of the sMre. Sec- ondary effects of the slides themselves- sudden drawdown of water, followed by the weight of returning waves-also may have contributed to the destruction. Submarine sliding at the nortbwest corner of the bay occurred in fine. grained deltaic deposits whose frontal slOpes probably were in ,metastable equilibrium under static conditions. Uplift pressures from aquifers under hydrostatic head, coinbined with the prolJable liquefaction characteristics of the sediments when vibrated by strong ground motion, probably caused the ma- terial to slide and flow seaward as a heavy slurry. Under static conditions, no major shoreline or submarine landsliding is ex. pected in the Seward area; in the event of another severe earthquake, however, additional sliding is likely along the Seward waterfront and also in the deltaic deposits at the northwest corner of the bay. Fractured ground in back of the present shoreline along the Seward waterfront is an area of incipient landslides that would be un- stable under strong shaking. For this reason the Scientific and Engineering Task Force placed the area in a high. risk classification and recommended no repair, rehabilitation, or new construc- tion in this area involving use of Fed- eral funds; it was further recommended that the area should be reserved for parle or other uses that do not involve large congregations of people. The deltaic deposits at the head of the lJaY probably also would be susceptible to sliding during another large earthquake. This sliding would result in further landward retreat of the present shore- line toward the new railroad dock. Specifications for the new dock, whose seaward end is now approximately 1,100 feet from the back scarp of the sub- aqueoUS landsliue, require design pro- visions to withstand seismic shock up to certain limits. Earthquake-induced fracturing of the ground in the subdivision of Forest Acres was confined to the lower part of a broad alluvial fan. There, sewer and water lines were ruptured and the foundations of some homes were heavily dama~d. Landsliding, such as oc- curred along the shoreline of the bay, was not a contributing cause of the fracturing. Two hypotheses are of- fered to explain the fracturing: 1. Seismic energy was transformed into visible surface waves of such amplltude that the strength of surface layer was exceeded and rupturing occurred; tensional and compressional stresses alternately opened and closed the fractures and forced out water and mud. 2. Compaction by vibration of the fine- grained deposits of the fan caused ground settlement and fracturing; ground water under temporary hydrostatic head was forced to the surface as fountains and carried the 1I.ne1' material with it. Water waves that crashed onto shore, while shaking was still continuing, were generated chiefty by onshore and oll'. shore landsllding. Waves that overran the shores about 25 minutes after shak- ing stopped and that continued to ar- rive for the next several hours are be. lieved to be seismic sea waves (tsunamis) that originated in an up- lifted area in the Gulf of Alaska. Dur- ing the time of seismic sea-wave activity and perhaps preceding it, seiche waves also may have been generated within Resurrection Bay and complicated the wave ef!'ects along the shoreline. INTRODUCTION AND ACKNOWLEDGMENTS Seward was one of the cities most heavily damaged by the great Alaska earthquake of March 27, 1964. The city is near the head of Resurrection Bay, on the southeast coast of the Kenai Peninsula, and about 75 airline miles south of A11chorage (fig. 1; pI. 1). The climate is mild and humid because of the influence of the Gulf of Alaska, and Seward is one of. the few ports in south-central Alaska that is ice free the entire year. n therefore provides yel1r-round access from the coast by rl1ilrol1d and highwl1Y to Anchorage and the interior of All1ska. Yb Before the earthquake of March~27, 19M, the economy of Seward was based mostly on shipping. Freighters, barges, tankers, and fishing boats docked regularly in the hl1rbor. Most of the freight ,vas transhipped to other com- munities boy road or rail. Texaco, Inc., and the Standl1rd Oil Co. of E8 ALASKA EARTHQUAKE, MARCH 27, 1964 3. Aeri1l1 view of the southern llart of the Se\Yard \Y",terf,.ont sho\Ying extent of ground fracture anc1 earthquake damage. r, 44 EFFECTS AT SE~ARD E9 IJ)c U.S. Army; mosaicked by U.S. Geological Survey. See figure 4 (next page) for view of northern waterfront and Index map. 232-728 0-67~3 Y5 E32 occur under static conditians. The same statement probably holds true for the area ta the east. Deltaic and marine deposits will gradually accumulate to establish profiles similar ta those that ex- isted be f a I' e the earthquake. Whether the 3 : 1 slape formed by dredging at the end of the new railraad dock (pI. 2) will be stable under static conditions is un- knawn. There is' little doubt, however, that periodic dredging . will be necessary in the area in front af the dock and at the en- trance to the small-boat basin. Sediment brought in by the Resur- rection River and by creeks will continue to accumulate in this area as it has in the past. Tides and offshore currents will tend to spread .this material into the dredged areas. DYNAMIC CONDITIONS In the event of anather large earthquake, additional onshore and submarine landsliding can be expected along that part of the Seward waterfront that slid dur- ing the earthquake af 1964:. As discussed previously (p. E29) the area of fractured graund back of the present shoreline (figs. 3,4) is believed to represent incipient landslides. Had shaking con- tinued longer during the 1964 earthquake, a large part of this area wauld have slid into the bay. Thus, sliding af similar extent can he expected during a future large earthquake. Because of the potential insta- !Jilit,y af the Seward waterfront 111'1311, the Scientific and Engineer- ing Task Force of the Reconstruc- tion Cammission, ,,,hich based its decisian upon the investigations af Shannon and Wilson, Inc., the Corps of Engineers, and the U.S. Geological Survey, placed a large part of this area in a high-risk elassification. A. map depicting ALASKA EARTHQUAKE, MARCH 27, 1964 the extent of this area is shown by Eckel and Schaem (1966). In general, the limits af the area shown as high risk include the area of fractured ground (figs. 3, 4). The Task Force recommended that the high-risk part af the water- frant area should be reserved for park or other uses that da not in- valve large cangregatians af pea- pIe. Shannan and Wilsan (1964, p. 23) further stated that "The stability af the waterfrant could be impraved by flattening the un- derwater slopes and buttressing the tae af the slide with fill. Haw- ever, due t() the great depth we daubt that slape flattening and toe buttressing are practicable." The writer concurs in both statements. The remaining part af dawn- town Seward was classified by the Task Force as nominal risk-risk na greater than is narmally ex- pected in the constructian indus- try. However, ane must consider whether fracturing wauld extend into the eastern part af the nom- inal-risk area if an additional strip af shoreline shauld slide into the bay. This possibility calmat be discounted, but the geologic en- vironment indicates that it wauld, at most, be of small extent. The thickest part of the fan deposits lllld probably all the intertangued marine sediments lie between Seventh Avenue and the bay (sec- tion 0-0', pI. 2). West, fram Seventh Avenue toward the busi- ness district, the fan depasits be- came progressively caarser, are prabably anly 100-150 feet thick, are nearly horizontally bedded, and lie on a fairly flat platfarm af compact stable till. It is there- fore prabable that fracturing, at least west of Sixth Avenue, would be minor. The earthquake triggered small- scale landsliding offshore from the old milraad dock, and anather Ylo severe earthquake could cause additional sliding. The relatively shallow depth to bedrock and the possibility that only thin deposits of fluvial material rest on a stable platform of till probably explain why this area was less susceptible to sliding than other parts af the waterfront. Additional submarine landslid- ing can be expected along the present face of the deltaic deposits in the northwest corner of the bay in the event of another large earth- quake. The present landslide scarp has about the same slope as the preearthquake foreset bedding. The material back of the scarp has virtually tIle same physical prop- erties as that involved in the slid- ing, and landward retreat of tIle landslide scarp can be expected. Shannon and Wilson, Inc. (1964, p. 25), estimated that "additional sliding may be expected to envelop an area to the north of the present scarp for a distance of some 600 feet." They further stated that "It would be prudent in our opin- ion ta site the proposed improve- ments [new Alaska Railroad dock] so that an adequate set-back from this zone of potential sliding is maintained." The end af the new railroad dock is approxi- mately 1,100 feet from the edge of the scarp (pI. 2). In the writer's opinion, the amount of scarp re- treat will depend in part on tIle intensity of sllaking, but even more on the duration of future shaking. St.rong ground motion during t.he 1964 earthquake lasted approxi- mately 4 minutes. During this period, there was a landward re- treat of the delta face of 400-500 feet.. If the materials are lique- fied during shaking, as believed, then the accumulation of debris at the toe of the slide will not be a deterrent to further sliding. Pro- vided there is no change in the characteristics of the materials in- Public Notice Alaska Coastal Management Program Dated June 29, 2007 1-.11 ALASKA COASTAL MANAGEMENT PROGRAM Seward Boat Harbor Travel Lift Your Opportunity to Comment Project Title/State 10#: Seward Boat Harbor Travel Lift! AK0706-12AA Applicant! Agent: City of Sewardffryck Nyman Hayes Inc. Location: Kenai Peninsula Borough Coastal District. The project is located on the north shore of the Seward Small Boat Harbor; within Section 3, Township 1 South, Range 1 West, Seward Meridian; Latitude 60.12060 North, Longitude 149.43750 West. Review ScheduJe (50 days): . Day 1 ............................................ 06/29/07 . Comments due on or before.......07/28/07 . Final determination issued by.......08/13/07 How you can participate: This project is being reviewed for consistency with the Alaska Coastal Management Program. Your comments on the proposed project's consistency must be submitted in writing to the Office of Project Management and Permitting (OPMP). Comments about inconsistency must identify the relevant enforceable policy and explain how the project is not consistent with that policy. Deadline for written comments: 5:00 PM on July 28, 2007 Contact: Jim Renkert, Project Review Coordinator Alaska Coastal Management Program, OPMP 550 W. 7111 Ave, Suite 705, Anchorage, AK 99501 Phone: 907-269-0029 Fax: 907-269-3981 Email: jim.renkert@alaska.gov Web site: htto://www.alaskacoast.state.ak.us/ 47 Project Description: The proposed project is to construct a new boat travel lift facility and also to repair and upgrade existing docks at the Seward boat harbor. The project would be constructed in two phases or stages. Phase/Stage I would include construction of a pile- supported dock and a sheetpile bulkhead to support a new boat travel lift. The dock would be located on the east side of the proposed boat lift berth and would consist of a 4' x 60' pre-cast concrete box girder supported by 24" diameter, Yo" thick galvanized steel pipe piles. On the west side ofthe proposed boat lift berth, a cast-in-place concrete grade beam would be fIxed to the top of a sheetpile bulkhead. Additional sheetpile bulkhead would be installed on both sides of the travel lift to facilitate dredging and to allow larger vessels to access the area. A total of 280 linear feet of sheetpile bulkhead would be installed. To provide vessel access to the facility, dredging to- 12' MLL W would be necessary. To prevent liquefaction of soils at the base of the sheetpile wall during seismic events, existing soils would be dredged to a depth of -24' MLL W and replaced with structural fill to a finish elevation of -12' MLLW. Total volume dredged would be 9,660 cubic yards. The area behind the sheetpile bulkhead would be backfilled with 9,675 cubic yards of clean gravel fill. This may include suitable clean gravel fIll that is dredged during the project. Area fIlled below the high tide line (HTL) would be approximately 0.10 acre, of which 0.06 acre would be below mean high water (MHW). Phase/Stage I would also include repairs and upgrades to the existing "f' and "T" docks. This would consist of replacing all decking, bullrails, fender chocks, safety ladders and select broken/damaged timber fender piling and electrical and water system components. Any removed timbers containing creosote would be properly disposed of at a permitted landfill facility. Phase/Stage II would consist of installing an additional 224 linear feet of sheetpile wall and 11,325 cubic yards of backfill. It also would include an additional 340 cubic yards of dredging, using the same procedures as in Phase/Stage I. Area filled below the HTL would be 0.28 acre, of which 0.26 acre would be below MHW. Scooe ofProiect to be Reviewed The project subject to this consistency review consists of all the above described work with the exception ofthe repairs and upgrades to the "P' and "T" docks above the HTL. For your information: Individuals with disabilities who may need auxiliary aids, services, or special modifications to participate in this review may contact the OPMP review staff at the above address. Public notice posted in Seward at City Hall, the U.S. Post Office, the Harbormasters Office and on the ACMP web site. A complete copy of the project packet is available for review and copying at the Kenai Peninsula Borough offices at 144 N. Binkley, Soldotna, AK 99669. ~~ AMBASSADOR CIRCLE AWARD 1997 - John McCleLlan i998 - Bilan Brundin 1999. Pete Nelson 2000 . Bel' Barerra 2002 - Dennis B:rd 2006 . Joseph Heilri WORLD TRADE CENTER ALASKA 29 June 2007 WTCAK's Trade Development Proe:rams Focus on Alaska's Top Markets and the Search for New. Hil!h-Potential Markets of the Future Dear Members and Friends of the Center: Over the past several years, World Trade Center Alaska (WTCAK) has put into motion a number of trade development programs that seek to expand exports and other business activities with Alaska's top trading partners. The latest of these focused programs is the Canada: Opportunities Next Door program that was announced earlier this month. The Canadian program joins WTCAK's trade development portfolio that also includes programs involving Japan, Korea and China, the state's top three markets, respectively. In addition to these four country-focused efforts, WTCAK also has a program that endeavors to identify emerging new markets for Alaskan exporters. The New Markets-New Customers program has begun its search for high-potential opportunities in places like Singapore, Vietnam and India. This is a forward-looking effort to expand Alaska's exports by finding new customers and then helping Alaskans to pursue these opportunities. (Please see attached page listing the five programs) I should point out that WTCAK provides information and assistance to our members and community partners wherever in the world they seek to do business. However, with nearly 70 percent of Alaska's overseas business taking place in these top four markets, it happens that many of our members are seeking to initiate or expand business in these particular countries. OW'trade development programs are geared towards helping Alaskans: learn more about these markets, make contacts with business and government officials, and to find customers. To find out more about any of these programs, please visit our website www.\\1cak.org or contact World Trade Center Alaska at 278-7233 or by email: inforCihvtcak.Orl.!. Best Regards, Greg Wolf Executive Director 431 West Seventh Avenue, Suite 108, Anchorage, Alaska 99501.3511, USA Phone 907.278.7233 Fax 907.278.2982 email info@wtcak.org http://www.wtcak.org ~ ALASKA ftcreldll-i/t:(( I:; LJq ~~..,..,..", . '"'t' .' For more information on these programs and other activities please visit our web site: www.wtcak.org WORLD TRADE CENTER ALASKA TRADE DEVELOPMENT PROGRAMS: Japan :; ~ /{ /' MEMORANDUM Date: To: Through: From: Subject: July 18, 2007 ~ Port and Commerce Advisory Board Harbor Master Scott Ransom Enginoering Ex"",,"ve A"imant CbMy Torry · SMIC Development Plan Update The Planning and Zoning Commission held a work session on the SMIC Development Plan on June 19,2007. The Commission's Regular Meeting was cancelled for July. Approving their comments to send back to the Port and Commerce Advisory Board is an item on the agenda for their August 7, 2007 Regular Meeting. The SMIC Development Plan will then return to the Port and Commerce Advisory Board for their review of the Planning Commission's comments. ~\ Special Report on Canada: Opportunities Next Door Welcome to World Trade Center Alaska's Passport to Profit series ofspe- cial reports. Published periodically, ther are designed to provide members and community partners with a time~y overview of a particular export market or trade opportunity. This edition is focused on Canada, one of the state's major trading partners. We hope you find these reports to be an informative tool as you explore and pursue international business opportunities. Neiahbors and Partners Alaska's relationship with its next-door neighbor, Canada, is one of the state's most important international partnerships. Approximately 1,500 miles of com- mon border and many shared interests drive this long-standing, multi- dimensional connection. This report is focused primarily on the extensive com- mercial ties that exist between Alaska and Canada; however, there are also many cultural exchanges that provided depth to the overall relationship. Several aspects of these ties are noted in the report as well. Alaska's 4th Laraest EXDort Market Trailing only Japan and South Korea, Canada has traditionally been the state's third largest export market. Two years ago, it fell to the fourth position as Alaska's business with a rapidly developing China propelled that country into the third ranking. In 2006, shipments from Alaska to Canada totaled $445 million, a dramatic 100 percent in- crease over the previous year. This represents 11 percent of the state's total worldwide commodity exports. The in- crease was fueled primarily by the higher prices received for minerals exports rather than a substantial increase in quantities shipped. Last year, minerals accounted for 72 percent of the state's exports to Canada. The two other ma- jor export categories were seafood at 15 percent and energy products at 4 percent. Not Onlv Customers. Investors Too Canadian companies are not only customers of Alaskan re- source exports, they are, in many cases, investors in the very projects that produce the exports, whether they are ultimately destined for Canada or markets elsewhere around the world. Alaska's mining industry, in particular, has attracted consid- erable Canadian participation. There is sizable Canadian investment in the state's minerals and metals sector. Teck Cominco, Ltd., a Canadian firm, owns Red Dog Mine, the world's largest producer of zinc concentrate, located near Kotzebue in Northwest Alaska. To date, the company has invested more than $700 million in facilities at the mine. The company employs nearly 500 (continued on next page) World Trade Center Alaska 431 W. 7th Ave., Suite 108 Anchorage, Alaska 99501 Phone: (907) 278-7233 Fax: (907) 278-2982 e-mail: info@wtcak.org ~? Special Report - Canada 2 June 2007 Fort Knox, Photo Courtesy of the Government of Canada workers, and more than half of these are'shareholders of NANA Regional Corp., the landholder where the mine is located. Toronto-based Kinross Corp. owns Fort Knox, a gold mine just north of Fairbanks. The Fort Knox Mine oper- ates year-round and employs some 425 workers. Another example is the Canadian-Japanese joint venture develop- ment of the Pogo Gold Mine. A partnership between Teck Cominco and Sumitomo Metal Mining, the mine poured its first gold in February last year and production is expected to average400,000 ounces per year. In addition to owning and operating mines, Canadian companies are leaders in the exploration of new mineral and metal deposits in Alaska. In a recent McDowell Group study of the economic impact of Alaska's mining industry, it was noted that since 1981 mining and explo- ration companies have spent $1 billion on mineral explo- ration programs. The bulk of these expenditures can be attributed to Canadian firms. In 2005, for example, 72% of the record $103 million in exploration spending was derived from Canadian sources. Canadian firms engaged in exploration programs included Nova Gold Resources, Northern Dynasty and St. Andrews Gold Fields, Ltd. More Than Minina It is not just mining that has brought Canadian enter- prises to Alaska. Calgary-based Agrium Inc. bought the former Unocal fertilizer plant in Nikiski on the Kenai Peninsula in 2000. The plant produces urea and ammo- nia for agricultural and industrial customers. The com- pany then exports these products to buyers in Asia, Mexico, and the Lower 48. In the state's oil and gas sector, the Canadians also have a presence. Petro- Canada, one of the country's largest oil and gas compa- nies, and Talisman Energy, through its Alaska subsidi- ary FEX, are actively exploring for oil in the National Petroleum Reserve. In May, Talisman announced that they had struck oil during a series of exploratory wells located on the federal lands about 60 miles southeast of Barrow. Canada is a sizeable participant in Alaska's seafood industry both as a processor and as an export destina- tion. In 2006, seafood exports from Alaska to Canada totaled $67 million. Alaska General Seafoods, owned by the Jim Pattison Group, Canada's third-largest pri- vately owned company, is one of the larger seafood processing firms in Alaska. The Vancouver-based com- pany produces canned salmon and salmon roe products from its plants in Naknek, Ketchikan and Egegik. Dur- ing the peak season, the company employs more than 600 workers. Alaskan ComDanies in Canada It should be noted that the flow of investment and busi- ness is not entirely in one direction. A growing number of Alaskan firms have set up shop in Canada, including Rank as of 2006 Country 2004 , $1,189,666,446(1] $579,610,263 (21 :$241,501,571 (41 Alaska's Top 10 Export Partners U.5. Dollar 2005 . $1,180,644,227.(1) $683,537,334 (2] $337,i:(4;518(.] 2006 $1,095,8E;9,$~() $725,681,530 . $474,279,855 . %Change 2006/2005 -7.18 6.17 .40.65 $146,5.30,789tSI . $69,978,834 (9, $107,664,717(6) $92,385,427181 $92,64.7,515 (7) Belgium $52,826,636 (10) ( ) Number in parentheses Indicates Tank In given year Source: US Census Bureau $180,080,.321(51.... $71,446,569 (0) $165,705;611.161' $114,298,057 (7) $103,405,853 (81. $38,347,651 (ll) .. $241,527;683 $143,748,487 . $128,983,31:\0 $124,533,651 $11.5,152,768 $94,202,870 www.wtcak.org 53 Special Report - Canada Alaska's Exports to Canada Yearly Totals. In Millions $445 $450 $400 $350 $300 $250 $200 $150 $100 $50 $0 ~ ~ ~ $ # ~ ~ ~ a ~ ~ ~. ~. ~ ~ ~ ~ ~ ~ ~ ~ ~ Source: us Census Bureau . those that are pursuing opportumtles in the booming energy and mining sectors. VECO, an Anchorage-based company engaged in construction, project management, and oil and gas field services, has established a regional office in Calgary. Another example is Lynden Interna- tional, a diversified transportation and logistics solutions provider. The company maintains offices in Toronto and Vancouver. 3 June 2007 overall rela- tionship. In the field of education, for example, the University of Alaska An- chorage offers programs and scholarship opportunities for students seeking to study about or actually study abroad in Can- ada as part of their overall educational experience. The Elizabeth Tower Endowment for Canadian Studies pro- vides funding support to raise the visibility of the school's Canadian course and makes possible scholar- ships to students seeking to study in Canada. Through the National Student Exchange Program, Alaskan stu- dents can study at a variety of universities across Can- ada. Some students utilize the program to do French language immersion courses. There are, of course, many other areas of cultural ex- change, including music and sports. In addition, as strong allies, there is considerable coordination and teamwork between American and Canadian military forces. The North American Aerospace Defense Com- mand (NORAD), established in 1958, is an example of this close cooperation. The richness of the Alaska - Canada relationship is celebrated each year in Anchor- age during the Canada Day Picnic & Celebration. Skagway Entry Point Photo Courtesy of the Government of Canada Visitors from Canada Alaska also benefits from the growing number of Cana- dians who visit the state each year. It is estimated that nearly 100,000 Canadians travel to Alaska each year. As with most other travelers to the state, these visits occur predominantly during the summer months. In terms of the overall summer visitor market, Canadians accounted for 6 percent last year. Looking at just the international visitors, Canadians made up nearly 40 percent of those traveling to Alaska during the 2006 summer season. Alaska and Canada have partnered to cooperatively pro- mote tourism. There are, for example, two important Alaska/Canada Highway promotions jointly fund by Alaska and several Canadian provinces. The ''North to Alaska" partnership program includes brochures, direct mail packages, e-mail campaigns and a special website. The Yukon, British Columbia and Alberta provinces, along with Alaska, fund the program jointly. Another partnership is the AlaskalYukon Joint Marketing Pro- gram. This program seeks to expand the number of high- way vacationers on both sides of the border. . Cultural Links The relationship between Alaska and Canada is defined not only by strong commercial ties but also by the many and varied cultural connections that provide depth to the www.wtcak.org oY Resources to Provide Assistance World Trade Center Alaska and a number of other organizations and agencies stand ready to assist you in learning more about Alaska-Canada business op- portunities. Please see the box on the right that lists a number of these organizations and provides con- tact information and website addresses. One or more of these can furnish you with the information and assistance needed to initiate or expand business activities. ~. LOOK FOR WORLD TRADE CENTER ALASKA'S SPECIAL RESEARCH REPORT ON CANADA, AVAILABLE IN SUMMER 2007 Trade Mission to Canada In September 2007, World Trade Center Alaska, in cooperation with the U.S. Commer- cial Service offices in Anchorage and Calgary, will conduct a trade mission to Edmonton and Calgary. The timing of the mission coincides with a major oil sands tradeshow and confer- ence. Mission participants will have the oppor- tunity to attend the conference and take part in a guided tour of the Fort McMurray oil sands de- velopment. There will also be meetings and briefings in Calgary. The mission is an excellent venue to learn about new business opportunities and make valuable contacts. For more information, contact WTCAK at 278-7233 or bye-mail: info@wtcak.org 4 www.wtcak.org 05 July 2007 Monthly Planner Sunday Monday Tuesday Wednesday Thursday Friday Saturday 1 2 3 4 5 6 7 7:30 PM P &Z . Meeling Happy 4th of July OffICes Closed 8 9 10 11 12 13 14 7:30 PM C~y 6:30 PM CC WS 11:30AM Council Meeting L rCF Access LibrarylMuseum Issues Steering Committee 15 16 17 18 19 20 21 6:30PM P &Z Work Session 11:30 AM PACAB Meeting 6:30 PM Historic Preservation Meeting 9:00 AM -1:00 PM Social Securlty Rep 22 23 24 25 26 27 28 7:30 PM C~ Council Meeting 29 30 31