PRELIMINARY PERMIT APPLICATION

FOR THE

TALKEETNA RIVER DAM HYDROELECTRIC PROJECT

PREPARED FOR:

Glacial Energy, LLC.

PREPARED BY:

Northwest Power Services, Inc. P.O. Box 872316

Wasilla, AK 99687

September 9, 2014

Preliminary Permit Application for the Talkeetna River Dam Hydroelectric Project

Opening Statement The applicant for the proposed Talkeetna River Dam Hydroelectric Project is Glacial Energy, LLC. The information contained in this application has been prepared by Northwest Power Services, Inc. on behalf of Glacial Energy, LLC. The applicant, Glacial Energy, LLC is not claiming municipal preference under section 7(a) of the Federal Power Act.

Identification Statement

(1) For a preliminary permit or license, identify every person, citizen, association of citizens, domestic corporation, municipality, or state that has or intends to obtain and will maintain any proprietary right necessary to construct, operate, or maintain the project;

Glacial Energy, LLC. P.O. Box 872316 Wasilla, Alaska 99687

(2) For a preliminary permit identify (providing names and mailing addresses):

(i) Every county in which any part of the project, and any Federal facilities that would be used by the project, would be located;

Lonnie McKechnie, County Clerk Matanuska-Susitna Borough 350 E. Dahlia Ave. Palmer, AK 99645

(ii) Every city, town, or similar local political subdivision: In which any part of the project, and any Federal facilities that would be used by the project, would be located; or) That has a population of 5,000 or more people and is located within 15 miles of the project dam;

There are no cities, towns or similar political subdivisions with a population over 5,000 located within 15 miles of the project. The closest city in the United States with a population over 5,000 is Wasilla, Alaska, located approximately 70 miles southeast. City of Wasilla 290 E. Herning Ave. Wasilla, Alaska 99654

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(iii) Every irrigation district, drainage district, or similar special purpose political subdivision: In which any part of the project, and any Federal facilities that would be used by the project, would be located; or that owns, operates, maintains, or uses any project facilities or any Federal facilities that would be used by the project;

Not applicable.

(iv) Every other political subdivision in the general area of the project that there is reason to believe would likely be interested in, or affected by, the application;

Alaska Department of Fish and Game 1255 West 8th Street P.O. Box 115526 Juneau, Alaska 99811-5526 U.S. Fish & Wildlife Service 1011 E Tudor Rd, #200 Anchorage, Alaska 99503

(v) All Indian tribes that may be affected by the project.

Bureau of Indian Affairs Juneau Area Office P.O. Box 25520 Juneau, Alaska 99802 Bureau of Indian Affairs 1675 C Street Anchorage, Alaska 99501 (4) (i) As to any facts alleged in the application or other materials filed, be subscribed and verified under oath in the form set forth in paragraph (a) (3)(ii) of this section by the person filing, an officer thereof, or other person having knowledge of the matters sent forth. If the subscription and verification is by anyone other than the person filing or an officer thereof, it shall include a statement of the reasons therefore.

(ii) This (application, etc.) is executed in the

State of Alaska County of Matanuska-Susitna Borough

by: Brent L. Smith, P.O. Box 872316, Wasilla, Alaska 99687

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Initial Statement

(a) Initial Statement:

Before the Federal Energy Regulatory Commission

(1) Glacial Energy, LLC applies to the Federal Energy Regulatory Commission for a preliminary permit for the proposed Talkeetna River Dam Hydroelectric Project water power project, as described in the attached exhibits. This application is made in order that the applicant may secure and maintain priority of application for a license for the project under Part 1 of the Federal Power Act while obtaining the data and performing the acts required to determine the feasibility of the project and to support an application for a license. (2) The location of the proposed project is: State or territory: Alaska County: Matanuska-Susitna Borough Township or nearby town: Talkeetna, Alaska Stream or other body of water: Talkeetna River (3) The exact name, business address, and telephone number of the applicant are: Glacial Energy, LLC. P.O. Box 872316 Wasilla, Alaska 99687 Primary Contact:

Mr. Brent L. Smith Northwest Power Services, Inc. P.O. Box 872316 Wasilla, Alaska 99687 Phone: 907-414-8223 Email: bsmith@nwpwrservices.com

Secondary Contact: Northwest Power Services, Inc. P.O. Box 535 Rigby, Idaho 83442 Phone: 208-745-0834 Fax: 208-745-0835

A copy of the status and date of the applicant organization is provided in Attachment 1.

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(4) Glacial Energy, LLC is a private company and is not claiming preference under section 7(a) of the Federal Power Act. (5) The proposed term of the requested permit is 36 months. (6) If there is any existing dam or other project facility, the applicant must provide the name and address of the owner of the dam and facility. If the dam is federally owned or operated, provide the name of the agency.

Not applicable.

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Exhibit 1

(1) The number, physical composition, dimensions, general configuration and, where applicable, age and condition, of any dams, spillways, penstocks, powerhouses, tailraces, or other structures, whether existing or proposed, that would be part of the project;

Existing Structures Description Currently there are no existing structures at the proposed site. Proposed Dam and Penstock Description The proposed Talkeetna River Dam Hydroelectric Project is located on the Talkeetna River in Matanuska-Susitna Borough, Alaska. The project will consist of a dam, spillway, penstock, and a powerhouse. The dam will be approximately 2,300 feet long and will be located approximately 1,350 feet northwest of the location of the proposed powerhouse. The top of the dam will be at approximately 970 feet elevation with the dam height of 370 ft. The top of the flood control pool will be approximately 960 ft. Normal pool operation will range between 800 ft elevation and 920 ft elevation. The penstock will be constructed of steel and is anticipated to be 12 feet in diameter. The penstock will be approximately 2,700 ft long. Proposed Spillway The preliminary general configuration of the spillway will be a concrete open channel spillway approximately 1,500 ft long by 50 ft wide with 20 ft tall walls. The spillway will be located on the west abutment of the dam exiting directly downstream of the dam. Proposed Powerhouse Description The proposed powerhouse will be a concrete structure containing the turbine and generator equipment, controls equipment, battery system and additional equipment required for the operation of the project. The preliminary dimensions of the powerhouse will be 75 feet long by 125 feet wide. Final size will be determined during final design. Proposed Turbine Description It is currently proposed to have three equally sized Francis turbines, sized at 25 MW each. During low flows, only one turbine will be operational. As flow increases, the other two turbines will be brought online for operation with a total installed plant capacity of 75 MW. Proposed Tailrace Description Flows exiting from the proposed powerhouse will be directed back into the Talkeetna River just below the dam via a concrete tailrace approximately 100 ft wide, 30 ft deep and 35 ft long.

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(2) The estimated number, surface area, storage capacity, and normal maximum surface elevation (mean sea level) of any reservoirs, whether existing or proposed, that would be part of the project;

The proposed impoundment above the diversion is designed for a maximum flood storage at reservoir elevation 960 ft. At the maximum flood storage level the reservoir will have an area of 4,454 acres and storage of approximately 865,000 acre feet. The exact dimensions and storage capacity will be determined in further studies.

(3) The estimated number, length, voltage, interconnections, and, where applicable, age and condition, of any primary transmission lines whether existing or proposed, that would be part of the project [ see 16 U.S.C. 796(11)];

The proposed 11 miles of 69 kV line will interconnect with the existing transmission line directly west of the project. (4) The total estimated average annual energy production and installed capacity (provide only one energy and capacity value), the hydraulic head for estimating capacity and energy output, and the estimated number, rated capacity, and, where applicable, the age and condition, of any turbines and generators, whether existing or proposed, that would be part of the project works;

The Talkeetna River Dam Hydroelectric Project will have an installed generating capacity of 75 MW. At the selected size, the project will use flows ranging from 500 cfs to 2,800 cfs, and will have a normal static head of 320 feet. On average, the project will generate approximately 311 GWh per year.

(5) All lands of the United States that are enclosed within the proposed project boundary described under paragraph (e)(3) of this section, identified and tabulated on a separate sheet by legal subdivisions of a public land survey of the affected area, if available. If the project boundary includes lands of the United States, such lands must be identified on a completed land description form, provided by the Commission. The project location must identify any Federal reservation, Federal tracts, and townships of the public land surveys (or official protractions thereof if unsurveyed). A copy of the form must also be sent to the Bureau of Land Management state office where the project is located;

There are no Federal Lands within the proposed project boundary.

(6) Any other information demonstrating in what manner the proposed project would develop, conserve, and utilize in the public interest the water resources of the region.

Upon approval, the proposed Project would provide enhanced value to the region's water resources, as well as providing additional stable renewable energy to the residents of the state of Alaska. The flood storage capacity of the reservoir will provide additional recreational benefit to the public.

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Exhibit 2 (1) General requirement. For any proposed project, a study plan containing a description of:

i. Any studies, investigations, tests, or surveys that are proposed to be carried out, and any that have already taken place, for the purposes of determining the technical, economic, and financial feasibility of the proposed project, taking into consideration its environmental impacts, and of preparing an application for a license for the project; and

The applicant anticipates the need for the following studies:

• Energy production studies: Within the first six months o This proposed study will look at the potential energy production at the proposed

site. Sizing and optimization of a facility is a critical component which needs to be determined initially. This study will ultimately determine the powerhouse size and where a suitable powerhouse will be located.

• Study on energy needs: Within the first year o The study will address the potential areas for distribution of energy produced at

the proposed facility. • Water rights study: Within the 18 months

o This proposed study will look at what impacts the amount of water needed for the project would have on existing water rights and determine if agreements can be made to acquire the necessary water for the project.

• Environmental impacts: Within the first two years o This study will address the potential environmental impacts of the project, which

will include impacts on the riparian and aquatic habitats, fisheries, wildlife, plants, sensitive species, and cultural resources.

• Water quality study: Within the first two and a half years o This study will address the potential impacts to reservoir and riverine water

quality when water is impounded and released into waters of the United States. • Engineering studies, including soils, test pits, and core holes: Within the first three years

o This study will look at the geology and soils to determine what types of structures need to be created to meet safety standards. It will also address potential areas for building materials and ultimately determine the suitability of the site.

Additional studies may be required as issues arise through the licensing process.

ii. The approximate locations and nature of any new roads that would be built for the purpose of conducting the studies; and

At this time no additional roads are planned for the study phase of the project. If new roads are required for any studies they will be presented and reviewed with the stakeholders during the licensing process.

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(2) Work plan for new dam construction. For any development within the project that would entail new dam construction, a work plan and schedule containing

i. A description, including the approximate location, of any field study, test, or other activity that may alter or disturb lands or waters in the vicinity of the proposed project, including floodplains and wetlands; measures that would be taken to minimize any such disturbance; and measures that would be taken to restore the altered or disturbed areas; and

ii. A proposed schedule (a chart or graph may be used), the total duration of which does not exceed the proposed term of the permit, showing the intervals at which the studies, investigations, tests, and surveys, identified under this paragraph are proposed to be completed.

iii. For purposes of this paragraph, new dam construction means any dam construction the studies for which would require test pits, borings, or other foundation exploration in the field.

The project will consist of a dam, spillway, penstock, and a powerhouse. The dam will be approximately 2,300 feet long and will be located approximately 1,350 feet northwest of the location of the proposed powerhouse. The top of the dam will be at approximately 970 feet elevation with the dam height of 370 ft. The top of the flood control pool will be approximately 960 ft. Normal pool operation will range between 800 ft elevation and 920 ft elevation. The penstock will be constructed of steel and is anticipated to be 12 feet in diameter. The penstock will be approximately 2,700 ft long. The design of the dam will advance as more studies are conducted. It is anticipated that there will be no sub-surface studies or testing during the permitting process that would disturb or alter the environment in the region of the proposed dam. A work plan and schedule for the new dam design and construction will be included in the license application. (3) Waiver. The Commission may waive the requirements of paragraph (c)(2) pursuant to §385.207 of this chapter, upon a showing by the applicant that the field studies, tests, and other activities to be conducted under the permit would not adversely affect cultural resources or endangered species and would cause only minor alterations or disturbances of lands and waters, and that any land altered or disturbed would be adequately restored.

Response Required if Section 2 is not completed.

(4) Statement of Cost and Financing i. The estimated costs of carrying out or preparing the studies, investigations, tests, surveys, maps, plans or specifications identified under paragraph (c) of this section;

The cost to complete the proposed studies and licensing process during the requested three year period is estimated at $3,000,000 to $5,000,000.

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ii. The expected sources and extent of financing available to the applicant to carry out or prepare the studies, investigations, tests, surveys, maps, plans, or specifications identified under paragraph (c) of this section;

It is anticipated that these costs will be funded by private investors and members of Glacial Energy, LLC.

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Exhibit 3

(d) Exhibit 3 must include a map or series of maps, to be prepared on United States Geological Survey topographic quadrangle sheets or similar topographic maps of a State agency, if available. The maps need not conform to the precise specifications of §4.39 (a) and (b). If the scale of any base map is not sufficient to show clearly and legibly all of the information required by this paragraph, the maps submitted must be enlarged to a scale that is adequate for that purpose. (If Exhibit 3 comprises a series of maps, it must also include an index sheet showing, by outline, the parts of the entire project covered by each map of the series.) The maps must show:

(1) The location of the project as a whole with reference to the affected stream or other body of water and, if possible, to a nearby town or any permanent monuments or objects that can be noted on the maps and recognized in the field;

(2) The relative locations and physical interrelationships of the principal project features identified under paragraph (b) of this section;

(3) A proposed boundary for the project, enclosing:

(i) All principal project features identified under paragraph (b) of this section, including but not limited to any dam, reservoir, water conveyance facilities, powerplant, transmission lines, and other appurtenances; if the project is located at an existing Federal dam, the Federal dam and impoundment must be shown, but may not be included within the project boundary;

(ii) Any non-Federal lands and any public lands or reservations of the United States [ see 16 U.S.C. 796 (1) and (2)] necessary for the purposes of the project. To the extent that those public lands or reservations are covered by a public land survey, the project boundary must enclose each of and only the smallest legal subdivisions (quarter-quarter section, lots, or other subdivisions, identified on the map by subdivision) that may be occupied in whole or in part by the project.

(4) Areas within or in the vicinity of the proposed project boundary which are included in or have been designated for study for inclusion in the National Wild and Scenic Rivers System; and

(5) Areas within the project boundary that, under the provisions of the Wilderness Act, have been:

(i) Designated as wilderness area;

(ii) Recommended for designation as wilderness area; or

(iii) Designated as wilderness study area.

Please see attached map.

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Attachment 1