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HomeMy WebLinkAboutNome Waste Heat Correspondence, Memos 1992-1993POWER & C NTROleceweo ENGINEERING FEB 23 1993 1 ORITY P.O. BOX 231929 ANCHORAGE, ALAS HORS ENERGY AUTH TELEPHONE 907-345-7117 FAX 907-345-9684 23 February 1993 Brian Gray Steve Stassel Alaska Energy Authority Tudor Road Anchorage, Alaska REF: Drawings and computer files for Nome Joint Utility Waste Heat recovery upgrade. I hand carry to you today one blue line copy of the design drawings - for this project.’ This includes the cover sheet and drawings 1 to 5 which were last updated on Sept. 17, 1993. I also include computer drawing files of these same five drawings in a DXF format. These files were created by Generic Cadd 6.0 and usually cross to Autocad with minimal problems. I hope that this satifies the need for documentation required to close this grant on behalf of Nome Joint Utilities. POWER, & CONTROL ENGINEERING 4 we Robert E. Dryden, P.E. cc: Gary Butcher, General Manager, NJU poy w CD Qa Whee PP/ur POWER GENERATION DISTRIBUTION C FUEL TANK FARMS CONTROL AND METERING wo NOME JOINT UTILITY SYSTEM Pouch 70 © Nome, Alaska * 99762 (907) 443-5288 © Fax (907) 443-3028 RECEIVED mero PS feu YE pjaske EbCTOY Authority Mr. David Denig-Chakroff Director of Rural Programs (Wn pores fl Alaska Energy Authority ¥ P.O. Box 190869 Nee , Anchorage, Alaska 99519-0869 2 O- ee Subject: Project Agreement No. 2800434 Dear David: Enclosed is an invoice in the amount of $20,000 for reimbursement of costs relating to the engineering and construction management services of a waste heat recovery system at the NJUS Power Plant, to provide heat to the City water system. Also enclosed are copies of check requests, check copies and invoices in support of actual costs of the project. We will ask Mr. Robert Dryden of the engineering firm Power & Control Engineering, to provide directly to the AEA, copies of the system as-built in AutoCad Release 10 or higher format per Article B, section 3 of the grant agreement. Thank you very much for your support which has allowed us to develop our waste heat recovery system. Being a rural utility, we greatly appreciate the financial and technical assistance we have received in the past years from the Alaska Energy Authority. Thank you again. Vl Gay Y utcher, Utility Retaeal NOME JOINT UTILITY SYSTEM Sincerely GLB/mt cc: Berda Willson, Office Manager Mary Honsberger, Accounts Receivable NOME JOINT UTILITY SYSTEM Pouch 70 ¢ Nome, Alaska ® 99762 (907) 443-5288 © Fax (907) 443-3028 INVOICE RECEIVED TO: ALASKA ENERGY AUTHORITY DATE: 12/31/92 vAN 25 1990 Ajaska Eneray AUTOr ity FR: NOME JOINT UTILITY SYSTEM REIMBURSEMENT TO COVER COSTS FOR THE ENGINEERING AND CONSTRUCTION OF A WASTE HEAT RECOVERY SYSTEM AT THE NOME JOINT UTILITY SYSTEM POWER PLANT, TO PROVIDE HEAT TO THE CITY WATER SYSTEM REFERENCE: Alaska Energy Authority Contract No. 2800434 Requested Reimbursement Amount: $20,000.00 NOTE: We have enclosed documentation of the actual cost of the "Project", which exceeds AEA grant amount of $20,000, with the understanding that only the grant amount will be reimbursed. Please send payment to: Nome Joint Utility System P.O. Box 70 Nome, Alaska 99762 Thank you. cc: Berda Willson, Office Manager Mary Honsberger, NJUS Accounts Receivable Alaska Energy Authority A Public Corporation January 20, 1993 Mr. Gary Butcher General Manager Nome Joint Utilities P.O. Box 620070 Nome, AK 99762-0070 SUBJECT: Agreement #2800434 for Waste Heat Design and Construction Management Dear Mr. Butcher: This letter is in response to our telephone conversation today regarding the above project. Please find attached a copy of the agreement and the revision dated April 6, 1992. The agreement is for a not-to-exceed amount of $20,000 for engineering and construction management services for connection of Unit #12 jacket water, oil cooler, and aftercooler loop heat recovery to the City water heating system. The grant does not include materials or construction labor. The expiration date of the agreement is April 30, 1993. If current eligible expenses have reached the not-to-exceed amount, or if you have completed the design and construction management portion of the project, I would appreciate your sending us an invoice with documentation of actual costs so that we may close-out this project . I will contact Mr. Dryden's office and request a copy of the design, directly. If you have any questions or need additional information, please call me at (800) 478- 7877 or (907) 561-7877, or fax your comments to (907) 561-8584. Sincerely, Ahr J fone ; i 4 Steve Stassel \ Engineer II SS/ attachments PO. Box 190869 704 East Tudor Road Anchorage, Alaska 99519-0869 (907) 561-7877 Fax: (907) 561-8584 Bulan State of Alaska . walter J. Hickel, Governor Alaska Energy Authority A Public Corporation August 3, 1992 Mr. Joe Murphy Utility Manager Nome Joint Utility System P.O. Box 70 Nome, Alaska 99762 Dear Mr. Murphy: This is in response to your letter of June 29, 1992, to the Alaska Energy Authority. First of all, I would like to congratulate you and the Nome Joint Utility Board for the fine work that has been performed by the electrical utility since 1985 resulting in the aggressive and professional plan that generated technical and financial efficiencies, which in turn have benefited the local electrical customers and the state in general by diminishing the annual Power Cost Equalization (PCE) requirement of the Nome Electrical Utility. The PCE payments to a utility, independently from the actual cash amount, serve to reduce the cost of power to the electrical customers within the statutory ranges and we are confident that your customers receive all the PCE benefit allowed by the law, including the increased fuel expenses. It is then up to the local utility to set up retail rates based on the applicable tariff{s) and internal policies. With respect to your project requests, we can provide you with technical assistance, if needed, in analyzing your proposed waste heat project. However, we do not have any capital funding this fiscal year for construction of waste heat projects. If you are interested in technical assistance, please contact David Denig-Chakroff, Director of Rural Programs at 561-7877. In addition, we are currently researching the viability of battery energy storage systems for applications in Alaska. Once we have learned more about this technology, we would be happy to share our findings with you and discuss the potential benefits for Nome and the possibility of future funding for a project. Also, let me express our sincere appreciation for your cooperative efforts with the Energy Authority in assisting the City of Gambell to resolve their fuel crisis this Spring. Sincerely, Ronald A. Garzini Interim Executive Director GM:RAG;jd OPO. Box 110809 Juneau, Alaska 99811-0809 (907) 465-3575 KPO. Box 190869 704 East Tudor Road ~=Anchorage, Alaska 99519-0869 (907) 561-7877 92Q3\D3311(1) State of Alaska DN Walter J. Hicke!l. Governor Alaska Energy Authority A Public Corporation (Z May %, 1992 Mr. Steve Willson Power Plant Foreman Nome Joint Utility System P.O. Box 70 Nome, AK 99762 SUBJECT: Project Agreement #2800029 Dear Mr. Willson: In response to your May 11, 1992 request for information regarding the above project, please find enclosed a copy of the Project Agreement #2800029. According to this agreement, NJUS is responsible for the ownership, operation and maintenance of the engine-generator set that was installed as part of this agreement. The Nome City School district is responsible for the ownership, operation and maintenance of the "entire project" except the engine-generator set. If you have any questions or need additional information, please call me at 800 478-7877 or (907) 561-7877. FAX (907) 561-8584. Sincerely, Cex Remote Systems Engineer II SS/ SoA 4 oS cc: Gary Smith bul 4 Ceres Ratt brg* piso : © PO.BoxAM Juneau, Alaska 99814 (907) 465-3575 x PO. Box 190869 701 EastTudor Road Anchorage, Alaska 99519-0869 (907) 561-7877 ve Aor so WUrie IUTNT UTILITIES P.171 ay fv + par tok Yr Cy fy AP DATE: 5-11-92 Gen Z [ Total Pages Including Cover Page: 1 FROM: STEVE WILLSON TG: PETER HANSEN ALASKA ENERGY AUHORITY 561~-8584 Pena enenel concerning project agreement #2800029, dated nov. 18, 1986. Thank you very much. x gh apt & pte Cte ve: pboet Ava pry) ~ AMES (Mv 7. Ow YWUEZC btl+syst_ ee ee eee a a ee ee Pr Salar stasse/ State of Alaska N Walter J. Hickel, Governor Alaska Energy Authority A Public Corporation April 1, 1992 Mr. Joe Murphy, Utility Manager Nome Joint Utility System P.O. Box 70 Nome, Alaska 99762 RE: AEA Contract No. 2800434 NJUS Rural Technical Assistance Dear Mr. Murphy: This letter is in reference to your March 23 request to extend our contract for an additional year. This extension is fine with us, and | am enclosing a grant amendment that would move the ending date from April 30, 1992, to April 30, 1993. Please sign and notarize the amendment and return both copies to us for signature. We will send you a fully-executed copy after our Executive Director has signed. Singerely, Enclosure as stated FN:njuslet QO PO.BoxAM Juneau, Alaska 99844 (907) 465-3575 OPO. Box 190869 704 East Tudor Road ~=Anchorage, Alaska 99519-0869 (907) 561-7877 Te rk le NOME JOINT UTILITY SYSTEM 3 [27/4 P.O. Box 70 NOME, ALASKA 99762 (907) 443-5288 FAX (907) 443-3028 RECEIVED MAR 2 7 1392 piesa Energy Authority March 23, 1992 Mr. David Denig-Chakroff Director of Rural Programs Alaska Energy Authority P.O. Box 190869 Anchorage, Alaska 99519-0869 Dear David: This letter is to act as a written request for a year extension on the Grant Agreement between Alaska Energy Authority and Nome Joint Utility System, AEA Contract No. The Nome Joint Utility System is experiencing a delay in undertaking the Project due to several large Capital Projects currently being performed in this time frame. Thank you for your consideration of this request. If you have any questions, please contact me. , Sincerely, A 2 phy Joe Murphy, Utility Manager NOME JOINT UTILITY SYSTEM ; JM/mt ane Nur — CAN you plese Amnseary thre) Cra * DAD (AR Aon) EXTEW fe~ i] pute. ) 408 db-C Ay aliewy Seen pen hk Aji ere Osan ete NOME JOINT UTILITY SYSTEM 3 {27/93 P.O. Box 70 NOME, ALASKA 99762 (907) 443-5288 FAX (907) 443-3028 RECEIVED MAR 2 7 T9332 aska Energy Authority March 23, 1992 Ab Mr. David Denig-Chakroff Director of Rural Programs Alaska Energy Authority P.O. Box 190869 Anchorage, Alaska 99519-0869 Dear David: This letter is to act as a written request for a year extension on the Grant Agreement between Alaska Energy Authority and Nome Joint Utility System, AEA Contract No. 2800434. The Nome Joint Utility System is experiencing a delay in undertaking the Project due to several large Capital Projects currently being performed in this time frame. Thank you for your consideration of this request. If you have any questions, please contact me. Sincerely, Ze aaa Joe Murphy, Utility Manager NOME JOINT UTILITY SYSTEM JM/mt FROM: Stassel, Steven TO: Smith, Gary DATE: 01-27-92 TIME: 4:14 PM cc: Gray, Brian Stassel, Steven SUBJECT: Nome Waste Heat PRIORITY: 3 ATTACHMENTS: I talked with Joe Murphy of NJU. He informed me that the waste heat design draft had been completed and the fina design is in process. He expects that the construction will be started in a couple of months and will take two weeks. He will forward a copy of the design on AutoCad Rev10 or higher when avaible. STeve. _-—— - mina ~—S Sr te, be | oe mews A) J\ POWER & CONTROL RAS ENGINEERING ie P.O. BOX 231929 ANCHORAGE. ALASKA 99523 Fax (907)-349-8819 = 2 Telephone (907)-349-8001 , 2 This message consists of S pages including this page. My 2 Sent to: GAY SMUT @ AEA — cs ROME JOWWT UTUTIES - JOE MORPHY — Sent by: R DRYDEN ar COMMENTS: POWER GENERATION DISTRIBUTION BULK FUEL TANK FARM CONTROL AND METERING KY 0 Wes eune CN Qu vy ENGINEERING PO. BOX 231929 ANCHORAGE. ALASKA 99523 TELEPHONE 907-349-8001 FAX 907-349-8819 7 August 1991 Gary Smith Alaska Energy Authority FAX 561-8584 PH 561-7877 REF: Nome Joint Utilities Joe Murphy asked me to forward this informal letter of proposal regarding proposed work on the waste heat recovery system. As I note in the letter, some preliminary investigation must be done in order to better assess what is required in construction and engineering cost. AEA as well as NJU would ‘be party to final definition of project scope. If you need other information please feel free to call me. POWER & CONTROL ENGINEERING Robert E. Dryden, P.E. cc: Joe Murphy POWER GENERATION DISTRIBUTION BULK FUEL TANK FARM CONTROL AND METERING AUG— re ae WED 15:56 FP.os Ai /\ POWER & CONTROL L Pf o*] 4 ZY ENGINEERING P.O BOX 231929 ANCHORAGE. ALASKA 99523 TELEPHONE 307-349-8001 FAX 907-349-8819 5 18 June 1991 Joe Murphy Nome Joint Utilities P.O. Box 70 Nome, Alaska REF: Waste Heat Recovery System, Improvements As we discussed last week, I have considered the task of re- engineering the waste heat recovery system in your plant. The obvious problem we discussed is that the new 3616 recovers only the jacket heat. I did a little research on the Cat 3616 and find that the total heat available in the oil cooler and aftercooler loop is 1.5 times the amount in the jacket water loop. Since the city water is at a very low temperature, both jacket and intercooler water are useful for heating. This would multiply the useful heat to the city water by 2.5. A very rough guess is that this improvement is equal to about 300,000 gallons of diesel fuel per year. Since the purpose of heating the water is to prevent freezing and subsequent loss of service and repairs, it is difficult to assess the real value of the additional heat. Some argument could also be made that energy savings are realized by all the customers who must warm or heat the water for use, again a substantial factor but difficult to quantize. It would be difficult to estimate the scope of the work in detail at this time. It may entail changes to unit 12 only or a more complete revision of the entire plant system may be indicated. The best approach is to spend several days on a preliminary design and cost estimate with options and then let you decide the final direction. As we discussed, I would expect to work closely with the your crew, who would actually do the majority of the construction. This saves writing contracts, highly detailed drawings, and a good deal of administrative tasks. This "force account” approach also leaves your crew with more knowledge of the system. They did a very workmanlike job on the Unit 12 installation piping. I offer a preliminary definition of work items, assuming that the major change required is related to Unit #12: Nome Preliminary proposal to re-engineer waste heat system Page 1 POWER GENERATION DISTRIBUTICN BULK FUEL TANK FARM CONTROL AND METERING AUG— e- Vil WED i1>:51 P.ad4 a. Preliminary Office Work Collect initial information on engine heat rejection data, pump curves, and heat exchanger sizing. NJU should furnish readily available equipment nameplate data. 8 hrs @ $80 $640 b. Initial field trip Collect data on all the equipment in the plant and any equipment which might be utilized. Collect data on flow rates of water system, temperature norms, etc. Sketch up preliminary one line diagram. Work out preliminary equipment placement and pipe routing. Look at electrical service or modifications required. Discuss plans with plant operators. 20 hrs including travel $1600 2 days room and board @ $110 $220 Airline Ticket $500 c. Office Work Make up one line diagram, equipment position drawing, electrical diagram, cost estimate and get approval to proceed. 24 hrs @ $80 $1920 d. Construction Assistance Assist in ordering equipment & placing purchase orders. Technical assistance, questions. 24 hrs @ $80 $1920 e. Start-up system 16 hrs including travel $1280 room and board 2 days $110 $220 Airline Ticket $500 Misc copying, long distance, etc. $250 It is easy to underestimate the time required to do older plant retrofit designs. It is often difficult to get the engineering Nome Preliminary proposal to re-engineer waste heat system Page 2 — Fook Z os Ke all AUG— T-g9si1 WED 15:51 P es data on older equipment and you must deal with an existing set of problems. New design is considerably simpler. I have tried to be generous. As I stated above, once the actual scope of the project is defined, I can give you a better overall estimate. I would propose to bill you on actual time and expense basis. My time is billed at $80 per hour for work time, half time for travel, and engineering related expenses are without markup. I charge 10% to handle material through my accounts. Combining this work with other small projects helps defray travel and lodging expense. I am presently in Seattle and should be back in my office by Friday. Pi R & CONTROL ENGINEERING Robert E. Dryden, P.E. CC: Gary Smith AEA Nome Preliminary proposal to re-engineer waste heat system Page 3 DEPARTMENT OF THE ARMY U.S. ARMY ENGINEER DISTRICT, ALASKA POUCH 898 ANCHORAGE, ALASKA 99506-0898 June 18, 1985 REPLY TO ATTENTION OF RECEIVED Flood Plain Management Services JUN 2.0 1985 ALASKA POWER AUTHORITY, Mr. Peter N. Hansen Alaska Power Authority 334 West 5th Avenue Anchorage, Alaska 99501 Dear Mr. Hansen: This is in reply to your letter dated June 12, 1985 in which you requested a flood hazard evaluation on property described as: The installation of a 2.85 MW capacity diesel generator at the existing power plant at Snake River The above mentioned property is located in a classified flood hazard zone "A-13" as designated by the Federal Insurance Adminis- tration. The base flood elevation is 15 ft (MLLW) at this location. We recommend that any structure built in this area be constructed with the first habitable floor at 1 foot above the base flood elevation or 16 ft (MLLW). This evaluatin is for flood insurance requirements only and is not a Department of the Army (DA) permit for the discharge or placement of fill within a water of the United States. Inquiries regarding wetland determinations or DA permit should be addressed to the Regulatory Functions Branch at 753-2720 If I can be of further assistance, please contact me at 753-2612. Sincerely, Kibe tel Kenneth E. Hitch, P.E. Chief, Flood Plain Mgmt Services \ Nowe PPLE $ sine DEPARTMENT OF THE ARMY Aee\ aa U.S. ARMY ENGINEER DISTRICT, ALASKA POUCH 898 ANCHORAGE, ALASKA 99506-0898 nervy vo June 18, 1985 ATTENTION OF RECEIVED Flood Plain Management Services JUN 20 1985 ALASKA POWER AUTHORITY Mr. Peter N. Hansen Alaska Power Authority 334 West 5th Avenue Anchorage, Alaska 99501 Dear Mr. Hansen: This is in reply to your letter dated June 12, 1985 in which you requested a flood hazard evaluation on property described as: The installation of a 2.85 MW capacity diesel generator at the existing power plant at Snake River The above mentioned property is located in a classified flood hazard zone “A-13" as designated by the Federal Insurance Adminis- tration. The base flood elevation is 15 ft (MLLW) at this location. We recommend that any structure built in this area be constructed with the first habitable floor at 1 foot above the base flood elevation or 16 ft (MLLW). This evaluatin is for flood insurance requirements only and is not a Department of the Army (DA) permit for the discharge or placement of fill within a water of the United States. Inquiries regarding wetland determinations or DA permit should be addressed to the Regulatory Functions Branch at 753-2720 If I can be of further assistance, please contact me at 753-2612. Sincerely, Kidde tel Kenneth E. Hitch, P.E. A Chief, Flood Plain Mgmt Services chy - @ APA Finanes Gree. the Munnar . Per Doon coo A Power howe Llen-~ io /SFtHMew): Dit will ba on 8" pedectel Hur m 1% VQ hase . All were erectracl Ne her mo frctlern with PAA ee APTS P28, MEMORANDUM TO FROM 02-001 A(Rev 10/79) State of Alaska William H. Batt ander oate, June 12, 1985 Associate Executive Director 7 Finance and Administration FILE NO: TELEPHONE NO: Edwin Morris thr susyect: Nome Joint Utility Associate Executive Director Loan Application Planning The application by Nome Joint Utilities to purchase a new 2850kw EMD should have some additional backup even though we have been advised that the unit has already been ordered. The application we received contained no financial statements of the utility. However, we are aware that the utility has very little outstanding debt and has a history of steady sales which should make it a good financial risk if certain other securities are provided. Additional comments and questions are listed below: 1) There is no evidence that the project has been engineered or reviewed by engineers that may be on retainer to the utility. This is unusual for a project of this magnitude. The new prime power unit is proposed to be housed at the Snake River Powerplant which fs prone to flooding. Two recommendations are important in this regard: a) The unit should be located at a more secure site such as the Belmont Point site which currently houses another EMD or b) Nome Joint utflities should provide evidence of suffic- jient insurance to pay off the loan balance should the unit be damaged or destroyed by flood. 2) Transport. The latest application lists $85,000 for surface Freight while earlier estimates listed $85,000 for air freight. It is unclear if the unit is being transported by air or surface transportation. This may be the perogative of Nome Joint utilities but we would have to question the need __ for transporting a unit wefghing 50 tons by air when surface transportation is available and when the application does not demonstrate an urgency for air delivery. If surface transpor- tation is being used then this is a moot point. 9709/390 . © ( Ske a 3) The unit is manufactured by the Electromotive Diesel division of General Motors, and Nome seems to be having good results using another EMD (Engine #8) at their Belmont Point plant. The application is not clear as to whether the unit is being purchased directly from the factory or through an agent. If {t is being acquired through an agent, we presume there may be several that could service Alaska clients and procurement through competitive bidding might require less financing for the same product. This could be important as loan funds are limited. 4) Waste Heat. The loan application makes no mention of utiliz- ing waste heat although earlier estimates did include $85,000 for a heat exchanger. With the placement of a second EMD at the Belmont Point site, "firm heat" could be provided to a district heating system supplying heat to parts of Nome. In summary the Nome application is the most unclear of several that we have reviewed recently. There definitely appears to be a need for the unit but we recommend further security in the form of site location or insurance. A competitive bidding process may have been helpful in lowering loan requirements and waste heat utilization could provide an added benefit and revenue source to the city. PNH/se 9709/390 al Jl as “COCA WR Fir ALASKA POWER AUTHORITY 334 WEST 5th AVENUE - ANCHORAGE, ALASKA 99501 Phone: (907) 277-7641 ; (907) 278-0001 June 11, 1985 Mr. S.D. Wolfe Utility Manager Nome Joint Utility Board Box 70 Nome, Alaska 99762 Dear Mr. Wolfe: Your application for a Power Project Fund loan is being processed, and is expected to be presented for the approval of the Alaska Power Author- ity Board of Directors at their meeting on June 24, 1985. In that regard, the Power Authority staff wishes to convey their concern over the proposed location of the new equipment at the Snake River Plant, an area prone to flooding. As a condition of the loan, if approved, the Power Authority will require that: 1) The prime power unit purchased with this loan be placed at a more secure location such as the Belmont Point Power Plant site; or that , 2) Nome Joint Utilities provide evidence in the form of a certif- icate of insurance that sufficient insurance on the unit will be in force over the life of the loan to pay off the loan balance in the event the unit is damaged or destroyed by flooding. Please call me if you have any questions concerning this matter. Sincerely, 4 Zar yt Ay ely eee on LY | Ernie R. Whitney Auditing Manager ERW/ala cc: William H. Batt, Alaska Power Authority Rudy Etheridge, Alaska Power Authority Ed Morris, Alaska Power Authority Co: Pekie WS ON 9708/053 June 12, 1985 District Engineer U.S. Army Corps of Engineers P.0. 898 NPAEN-PL-FP Anchorage, Alaska 99506 Attention: Flood Plain Management Services Dear Sirs: The Alaska Power Authority is currently evaluating a loan applica- tion for a Rural Electrification Revolving Loan Fund loan from Nome Joint Utilities in Nome. The proposed project includes the instal- lation of a 2.85 MW capacity diesel generator at the existing power plant at Snake River. Estimated cost of the project is $1,050,000. The Power Authority is concerned about the potential for flooding in the proposed location at Snake River and we kindly request assistance from Flood Plain Management Services in assessing this potential. We would be very grateful if you could provide a map showing flood potential in this area. Also, your written comments and recommendations would be greatly appreciated. If you have any questions in regards to this request, please do not hesitate to contact me. Sincerely, LL. (fy, Ho~nA ~ eter N. Hansen Rural Systems Engineer PNH/amh 9740/406 TO; Eynie PAS FROM: Brent Oe — Aenpuage Fo hettin 5 Norma, — Qe She Sua fa Mee ew (Bene Apixt— i Pros % thro ding. She Ke hawt NY 2) Norox Tont sl: tres prow le evict in the fom of a wt feat of myctare. Hak neFiciut Crtuteuom, wet Ae Len : L “oe M1 Ko Ove CY Cea eR RAL Ha be oF Ha Law res of Ste own hokarras cr SOX brew fhe nit 7) Men ared or ail MEMORANDUM Date: may 38, 1985 To: Brent N. Petrie From: Peter N. Hansen VY Subject: Nome Joint Utility Loan Application My review of this loan application has raised a number of questions in regards to the procedures followed for this project. These questions are centered around the apparent lack of attempts to reduce the cost of the project and the future operating expenses of the system. My questions are as follows: A. Why was it decided to purchase a new generator set for $739,888 when a practically identical set with a total running time of 188@ hours could have been purchased for 375,08. The used generator set is identical to Nome Joint Utilities unit #8 which was installed in 1989. B. Why was it decided to get the generator set delivered by air? C. Who provided engineering and cost estimates for the projects the cost estimates seem sketchy at best. D. Why has no attempts been made to utilize waste heat in Nome? Earlier studies have determined that this would be quite feasible if the Belmont Point Power Plant was equipped with waste heat recapture equipment and upgraded through proper engineering of soundproofing etc. With another generator set installed at Belmont Point "firm heat" could be delivered and thus this new unit should not be installed at Snake River. E. How does Nome Joint Utilities expect te deal with the fact that the Snake River Power Plant is located in a flood plain and subject to severe flooding. This would render Nome without a workable power system as all controls are located at Snake River. In general, the loan application is very weak and contains absolutely no evidence that the project has been properly prepared, engineered or reviewed by competent personnel. The last generator set installation in Nome obviously was done with in- house “engineering” which resulted in unneccessary and serious environmental problems (noise) around the Belmont Point Power Plant. Sa MEMORANDUM State of Alaska to: Rudy Etheridge DATE: May 29, 1985 Assoc. Exec. Director of Projects : FILE NO: Ed Morris Assoc. Exec. Director of Planning TELEPHONE NO From: William H. Batt Le (Gu) SUBJECT: Nome Power Project Associate Executive Director of Loan Fund Application Finance and Administration The attached application is provided for your department's review and written recommendation as per Alaska Power Authority Operating Policy Number 4-01, Items missing from the Nome loan application include a certified copy of a resolution authorizing the loan and a copy of the utility's certified financial statements. These documents have been requested from Nome and copies will be provided to you when they are received. Your recommendations should be provided to me by June 14, 1985. Attachment as stated. EW/WHB/ala 9563/075 NOME JOINT UTILITY BOARD Owned by City of Nome Box 70 * Nome, Alaska * 99762 February 19, 1985 Executive Director Alaska Power Authority 334 West 5th Ave. Anchorage, Alaska 99501 Dear Sir, Contained within the body of this letter with appropriate attachments, is an application for a loan in the amount of $765,000.00 to be made to the City of Nome,Alaska for the purpose of partially financing the purchase, delivery and installation of a 2850 kw diesel driven electric generator, built by Electromotive Division of the General Motor Company, Elgin, Illinois. The unit is needed for the purpose of assuring a con- tinous and reliable supply of electric energy service to the residents of Nome, Alaska and will be installed into an existing power generating plant. The Utility is a part of the City Government appratus of the City of Nome, Alaska. The project is estimated to cost about $1,015,000.00 with the utility system supplying about $250,000.00 of the cost, thus establishing a need to borrow about $765,000.00. More particular information is enclosed. Sincerely, Nome Joint Utility Board TH Paul Merkouw“is, Chairman of the Utility Board Xe. Bill Balt S Whit Box 70 + Nome, Alaska * 99762 + (907) 443-5288 APPLICATION A LOAN OF $765,000.00 TO HELP FINANCE THE COST OF ACQUIRING AND INSTALLING A 2850 KW ELECTRIC GENERATOR FOR THE CITY OF NOME, ALASKA. Statutes 3AAC 94.070 1. The applicant is the City of Nome, Alaska who is the owner of the electric generating equipment and other utility facilities in the City of Nome, Alaska. 2. A Certified resolution in support of the application will be submitted to Alaska Power Authority prior to "closing" the loan application. 3. The operator of the electric generating and other utility facilities owned by the City of Nome, is the Nome Joint Utilities Board, managed by S. D. Wolfe, who is the official correspondent or representative of the applicant. 4. The principal officers of the applicant is Leo Rasmussen, Mayor, Linda Conley, City Clerk and S. D. Wolfe, General Manager of the Utility System. 5. The firm of Lane, Powell, Barker & Hicks, 550 West Seventh > Avenue, Anchorage, Alaska 99501, is legal counsel to the applicant with Mr. Bob Hicks being the “attorney of record." There are no other advisors or consultants involved in this project. 6. The amount of the loan being requested is $765,000.00. 7. The funds will be used to partially fund the cost of: A. Modifying the building that will house the generator installation. : B. To acquire a new and additional generator which is needed to supply electrical power to the residents of Nome, Alaska because: c. (1) Load growth increased use of electric power by the residents of Nome. (2) To partially relieve the obsolete exist- ing generating equipment. (3) To assure the residents of Nome of a continuing and reliable supply of elec- tric power for their use. The Project is anticipated to cost approximately $1,015,000-.00 illustrated as follows: (A) Purchase Price F.O.B. Itasca, Illinois $740,000.00 Estimated Surface Freight $85,000.00 Off loading, handling to site, preparation of site and installation $190,000.00 The Nome Joint Utility System, composed electric gen- erating stations totaling approximately 6,800 kw to- gether with overhead electrical lines and water-sewer line service to the residents of Nome, has operated and provided excellent quality electrical utility service for several years. The technical ability to provide this level of ser- vice has been demonstrated many times over. While no "retained advisory" consultants have been utilized full time, the administrative and supervisory staff have from time to time practiced the use of special- ists to solve problems which occasionally occurs with the plant. The supervisory and the operating and maintenance personnel are very familiar with the existing diesel- electric generating equipment and have demonstrated the mechanical ability to perform all needed: over- hauls in an exemplary manner. The selection and purchase of the new diesel-elec- tric equipment is of the type, brand and size that is virtually identical with previously purchased equipment. This is very important in that a common- ality of parts inventory may be achieved. Thus greatly facilitating early completion of repairs when and if needed. Page 2 10. (B) The City of Nome has been in the utility business for a long time and has a demonstrated record of "financial borrowings" for utility purposes by the issuance of both revenue and G.O. bonds for which they have been répaid as scheduled. The City Council of Nome has the power to approve and/or reject all sales rates and further the Council of Nome has the power and exercises that power to control the operating and maintenance budget of the Utility System. The Council has the power to set rates sufficient to repay any and all utility loans. To increase the generating capacity of the electric gen- erating plants in the City of Nome does not require approval from any known federal or state agencies. Financial Statements of the Nome Joint Utility System is furnished certified by the CPA who does the Annual Audit, Mr. Britt Crosley & Associates, 2600 Denali, Suite 300, Anchorage, Alaska 99503. ASSET RECOVERY CONSULTANTS LTD. CONSULTANTS AND APPRAISERS 401 E. ERIE AVENUE / P.O. BOX 6108 PHILADELPHIA, PA 19115-0108 HAROLD AR. BORCK, PRESIDENT (215) 426-6627 RECEIVED JAN 2 8 1985 ALASKA POWER AUTHORITY We have available at the Philadelphia Electric Company Utility the Following: (3) General Motors ( E.M.D.) Diesel Generators 2000 KW (6000 KW) 10% overload 16-567-D-4 Turbo Charged Diesel Engines Mod. A-20 Sync. Gen. 2400/4160 Vts. 3 Phase 60 HZ 900 RPM P.F. 0.8 Unit One Unit Two Unit Three Diesel S/N 63,000 63,001 63,002 Gen. S/N 5,942 60C1L 60D1 Hours 9,637 4,580 11,004 1. Overall dimensions each unit: 12' x 42'. 2. Overall weight each unit: 194,000 lbs. 3. One separately enclosed diesel unit control room and battery. These can be purchased at a sacrifice price., Time is of the essence as the area where they are located will be used for other purposes. Call for information and inspection. Sincerely, HARODD R. BORCK, President