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REFAC Meeting agenda minutes and docs 5-9-2012
j= ALASKA mm ENERGY AUTHORITY RENEWABLE ENERGY FUND ADVISORY COMMITTEE MEETING Loussac Library Public Conference Room 3600 Denali Street Anchorage, AK 99503 Wednesday, May 9, 2012 1:00 pm to 5:00 pm AGENDA Call to Order Beltrami Roll Call (Committee Members, Staff, Public, Phone) Public Comments (limit of 2 minutes) Agenda Comments (changes/additions/deletions) Approval of Meeting Minutes — January 13, 2012 oO ONnNOaaPpwnd = RE Fund Process Evaluation Results C. Badger, VEIC Regional Energy Planning Program Update Vo Next Meeting Date Beltrami Adjournment Beltrami 813 West Northern Lights Boulevard Anchorage, Alaska 99503 T 907.771.3000 Toll Free (Alaska Only) 888.300.8534 F 907.771.3044 Renewable Energy Fund Advisory Committee Meeting January 13, 2012 — AEA Aspen Room 10:00am to 2:00 pm DRAFT MINUTES 1. Call to Order The Renewable Energy Fund Advisory Committee (REFAC) convened at 10:03 a.m., with Chairman Vince Beltrami presiding. 2. Roll Call Committee Members AEA Staff Other Participants Chairman Vince Beltrami Sara Fisher-Goad Denali Daniels, Denali Commission Jodi Mitchell Sandra Moller Julie Estey, ACEP Chris Rose Peter Crimp Gene Strong, IPEC Board Member Senator Lyman Hoffman Devany Plentovich Richard George, IPEC Board Member Brad Reeve Jim Strandberg Floyd Kookesh, Kootznoowoo, Inc. Wyn Menafee Richard Stromberg Clinton White, STG, Inc. Rep. Bill Thomas (phone) David Lockard Brian Bjorkquist, DOL Kirk Warren Brian Hirsch, NREL Alaska Josh Craft Gwen Holdmann, ACEP (phone) Jim Vail Chris Badger, VEIC PM (phone) Helen Traylor Jim Griffith (phone) Audrey Alstrom Emily Binnian Alaina Hawley (Student Mentor) Shauna Howell May Clark 3. Public Comments Gene Strong, resident of Haines, AK and non-profit IPEC (Inside Passage Electric Cooperative) board member, requested AEA’s reconsideration of $170,000 funding for the Walker Lake Hydro Project feasibility. He said at the time the application was submitted by (IPEC), much information was not revealed to AEA; specifically, the utility lines are now in place within two miles of the hydro project. He said they were unaware of an appeal deadline. He said the project is viable with the potential of producing 1.5 MW and could save up to $12 M in diesel costs. Fish & Game and miners support the project. 4. Agenda Comments The Agenda was approved as amended. ———————————————————————————— REFAC Draft Minutes 1-13-12 Page 1 5. Approval of Meeting Minutes MOTION: Mr. Rose moved to approve the meeting minutes from the November 22, 2011 Renewable Energy Fund Advisory Committee meeting. Seconded by Ms. Mitchell. The minutes were unanimously approved. 6. Review AEA Round 5 Recommendations 7. Discussion of Recommendations, Geographic Spreading Mr. Crimp distributed a two-page Summary of Allocations to date from Rounds 1 to Round 4 and 5. They will be sent out to the distribution list. Page one showed a cumulative allocation of funding from rounds one through four totaling $186.9 M and representing $150 M from rounds one through three, plus a round four allocation of $36.9 M. The budget was $26.6 M with the idea that we would reallocate earlier funds to pick up the additional $10 M. We are recommending 41 projects at $43.3 M. Senator Hoffman stated the intent of the legislation was to get energy projects to those areas of the state that have the highest energy costs. When the additional funding is put in to meet the 50%, it’s misleading and does not meet the intent of the legislation. Ms. Mitchell said IPEC received significant funding under the REF, however, categorizing IPEC with an average cost of power at 14 cents ($/kWh) is not fair. They are nowhere near that and it should be shown differently. Mr. Rose referred to Senator Hoffman’s request at the last meeting to show funding by community rather than by region. Mr. Crimp said that has been done. Mr. Rose said part of the issue is that we are not getting quality projects from some of the regions, and technical assistance should be a priority. Mr. Crimp said individual project selection is based on regional allocations and on the average cost of energy. In response to Senator Hoffman’s concerns, he said we have just not seen proposals from that region. Ms. Mitchell said it’s still misleading and makes it look like we (Southeast Alaska) are being overfunded. Mr. Rose said AEA is doing a very good job and huge demands for the program exist and improvements have been made. He said Senator Hoffman’s statements are crucial and agreed the highest cost areas are not submitting projects. Senator Hoffman said if the policy isn’t there, that there should be a legislative request this year for funding so AEA could get it done as nothing has been done to rectify the problem acknowledged three years ago. He said the villages are not going to do it. The (REF) program is a success except for that area. Mr. Reeve said proposers lack assistance and technical support to follow program criteria. He said we need to find a way to address the Senator’s concerns, perhaps with a separate appropriation. Senator Hoffman said residents are paying $9/gallon for fuel in the lowest income areas of the state. It is incumbent on the program administrators to find out how those people can get assistance. The current projects are wonderful and are assisting the State, but the intent again is to help the high cost areas of the state. The program looks good on paper, but the high cost areas aren’t getting help. Mr. Rose said it’s a systemic problem, having to do with education and workplace development too. We need people to run and maintain the projects. It will take a lot of cohesive action by the state and other agencies beyond AEA to make it work. Representative Thomas said he is aware the funding can’t meet all the demands and through the direct appropriation process has been working with the villages to reduce their energy costs. Senator Hoffman said he is not trying to change what is being recommended. Mr. Crimp said aggressive energy planning and project development is needed in rural areas. Senator Hoffman asked where the request was for supporting this work; if it’s needed he doesn’t see it. a EEEEEE————————————————————E—E—E—X—={=E=Z—=z&z=—=~—~=~—~—~—~—=—~=~—=~=E=E=~=E~222A2»2~~~2~~2~7~22Y2‘-292A99A92A—————ESESESE es REFAC Draft Minutes 1-13-12 Page 2 Ms. Fisher-Goad said AEA has requested continuance of energy planning with Sandra Moller, AEA Deputy Director for REG, heading up the effort and has discussed holding regional meetings. We are aware of all of the issues discussed so far, including current programs and others we could combine, such as the bulk fuel and RPSU for communities that want renewable projects and getting them the technical assistance. She said Senator Hoffman’s comments will be shared with the AEA Board of Directors and the Administration. Mr. Stromberg said AEA previously offered assistance to some communities to develop wind programs and the quality of the submissions were good and there are improvements in some of the communities. Senator Hoffman asked about the status of the caps. Mr. Crimp confirmed the caps remain at $4 M for low cost areas and $8 M for high cost areas. AEA received a number of appeals and requests for reconsideration, for example, Kootznoowoo was initially recommended against funding however, based on additional information provided, AEA decided to proceed with recommending the Thayer Lake project. Ms. Mitchell introduced Mr. Floyd Kookesh, Board Chairman, Kootznoowoo, Inc. Mr. Reeve said it seemed some of the matches were lower than were proposed in the past. Mr. Rose said a major concern is that some of the communities don’t have match funds and maybe we could consider a different match system. Senator Hoffman said he disagrees with AEA’s awarding the Railbelt $12 M at 19 cents/kWh. He said he agreed with Ms. Mitchell’s comment that the Southeast number should also be amended since many of their communities have high diesel costs — reiterating, the intent is to get those high cost areas down and not to get the low areas lower. Mr. Crimp said the RFA and Legislature establishes the rules. We have not seen good quality projects come out of the rural areas and all recommended projects warrant funding. There have been many biomass projects this time around. Mr. Rose shared the frustration of not getting the quality projects we want, however, he said we cannot fund projects that are not quality and will fail. We need good projects and if there’s a need for more technical assistance, then we should ask for it. Mr. Hirsch said we will be talking about that in the START (Strategic Technical Assistance Response Team) program, which will provide three to five communities with technical assistance at the outset. AEA and the Denali Commission support the project. Mr. Crimp said we need to focus on all the projects the REF has already successfully supported. There are many construction projects and perhaps at the next meeting we could look at progression of the entire program. Senator Hoffman agreed. He said the Ms. Mitchell concern should also be addressed. In the weatherization program, allocations were done by region, which was a better distribution of funds than the REF. Ms. Fisher-Goad said AEA will be providing a program summary to legislature. Senator Hoffman asked how there can be regional distribution when four projects receive $20 M, and the other 11 regions get only $4 M. ——=E=_Z£{[{{_&£_:_ —z{z_—=X—z—=—=£z=zZ=z—=z—&—£E£—£{_{E——————————————————— REFAC Draft Minutes 1-13-12 Page 3 Ms. Fisher-Goad said we discussed if a project was estimated over $10 M, it could possibly be under a separate RFA (program evaluation issue). She said REFAC needs to advise AEA about future recommendations, especially in the area of regional spreading. Senator Hoffman pointed out that one fourth of the money is going to areas with less than 20 cents/kWh and that’s not following legislative intent. Mr. Rose said we’d like to see the high cost areas get more money, but we have to make sure they are good projects through technical assistance. If we can figure out ways to get people into zero energy homes, a lot of money can be saved. We should focus on housing as well as on generation. Ms. Fisher-Goad said she appreciated the conversation. She pointed out the recommended projects are ranked through the RFA process. If the REFAC is contemplating some type of recommendation on regional spread, they need to clarify what AEA is to do, as there are legitimate concerns associated with the list. Mr. Rose said we should not move it around just to fund bad projects and it would be helpful to see how many feasibility or design projects proceed to construction and how much funding will be needed. Ms. Fisher-Goad said the analysis by region has been done. Mr. Reeve said we’ve developed a good process over time and said a lot of the discussion is about weighting. We should look at the weighting we have and give more credence to those extremely high cost areas. We need good solid projects and a plan to get technical assistance to the communities. Reconnaissance type work could be done by AEA; NREL has done half the job and the state knows what energy plan has been developed to date and what available resources are in an area. Feasibility could be accomplished by state and regional planning. To reevaluate our judging criteria and sticking with the same system makes more sense. We should not start over. Our criterion is understandable and there are ways to balance that to meet the goals within our structure. We should first review where we’re at on the weighting and then maybe look at its redistribution to achieve a criterion that is skewed — allowing us to meet the intent of the legislation. Mr. Crimp reviewed the current weighting criterion: 1) Cost of Energy (25%) 2) Matching Funds (20%) 3) Economic & Technical Feasibility (20%) 4) Project Readiness (10%) 5) Public & Economic Benefit (15%) 6) Sustainability (5%) 7) Local Support (5%) He distributed and reviewed the following documents requested by the REFAC at the last meeting: 1) Number of REF Applications & Recommended Funding by Cost of Energy Score, Rounds 1-5; 2) Percentage of REF Applications & Recommended Funding by Cost of Energy Score, Rounds 1-5; 3) Regional Summary Round 5 Ranking at the $25 M allocation; and 4) Regional Summary Round 5 Ranking at the $43.1 M allocation. Senator Hoffman pointed out that in five rounds the lower cost energy areas received more funding than the high cost areas — he said the intent of the legislation is not working. Mr. Rose pointed out that the legislation is for projects, not technical assistance, but agreed there should be a funding mechanism for that. Ms. Fisher-Goad said per the statute, the legislature directed AEA to develop three primary weighting criteria and projects in high cost areas have significant weight per match. Another significant weight is in regional spreading. AEA has attempted to follow legislative intent. Senator Hoffman said it wasn’t AEA, but legislature that set the split on the weighting. He said the problem is the low cost areas are getting most of the funding and the high cost areas are not and will never have match funds. Mr. Reeve said we have shown the program is successful and we should try and get the resource tools, | ace SR RS TENN a Sd REFAC Draft Minutes 1-13-12 Page 4 regional trainers, etc. to the areas that need them. Mr. Rose said we can do more energy efficiency right now. Chairman Beltrami said if rescoring wouldn’t take that long and if higher cost areas would rise up a bit as a result, maybe we should rescore now and not wait till Round 5. Mr. Rose said match credit should be given to high cost energy areas and we should not penalize them for not having match funds. Mr. Reeve agreed. Senator Hoffman said adjustments should be submitted to legislature and they can make a fair distribution, as it’s not being done (here). Ms. Mitchell said she supports increasing weighting on cost of energy and that IPEC doesn’t have cash for match funds. The REFAC revised the weighting criterion as follows: 1) Cost of Energy (35%) 2) Matching Funds (15%) 3) Economic & Technical Feasibility (20%) 4) Project Readiness (5%) 5) Public & Economic Benefit (15%) 6) Sustainability (5%) 7) Local Support (5%) Lunch break — 12:10 p.m. to 12:45 p.m. The REFAC will return to this agenda item when the adjusted weighting criterion is completed. 8. REF Program Evaluation: Introduce VEIC team Julie Estey, Business Director, Alaska Center for Energy & Power, University of Alaska Fairbanks, said that although the Vermont Energy Investment Corporation (VEIC) is managing the program evaluation project, the ACEP was sub-awarded to provide the Alaska concept. Chris Badger, project manager, participating via teleconference said VEIC is a Vermont non-profit experienced in both valuating programs and administering energy efficiency programs. He said the process evaluation looks at the REF for questions and issues raised and at the overall process, recommendations for AEA and what’s happened so far and program goals. Stakeholders will be identified, program documentation will be reviewed, as well as cost of energy issues and a qualitative program review with interviews and surveys will be developed. Ms. Estey said they will also look at how the REF is meeting legislative intent by translating the regulations, RFA, how outreach happens and support mechanisms, scoring and recommendations and legislative approval process and AEA’s involvement in grant administration. A letter will be sent out to the mailing lists and list serves introducing the program and an on-line survey will be conducted where an option will be provided for a personal interview. On January 23, 2012 the VEIC team will conduct phone and personal interviews, as well as visit rural Alaska. Mr. Badger said the first draft process evaluation should be done by February 15, 2012 and the final report should be completed in the April first-June 30 timeframe. They will look at comparisons to programs in other states and Canadian provinces. Ms. Mitchell pointed out the Alaska Power Association will be holding a Legislative Fly-In January 25 and 26, 2012 and many managers will be in attendance. Ms. Estey said they were aware of that. 9. NREL/Denali Commission START Program Denali Daniels, Manager of the Energy Program for the Denali Commission said their primary focus has been on rural Alaska in upgrading fuel facilities and rural power system upgrades. They have also been —z——————————————————————————— REFAC Draft Minutes 1-13-12 Page 5 working on integrating renewable alternative energy in rural areas and have invested seed funding in the REF and EETF. The REFAC has evolved into the START (Strategic Technical Assistance Response Team) Program. The Denali Commission’s Energy Advisory Committee (DCEAC) recommended $300,000 funding to renewable energy technical assistance in the first work plan draft, partnering with the DOE/NREL. Mr. Hirsch said the DOE/NREL is based in Golden, CO and he is the Alaska Project Leader in Anchorage. He said the START Program began as DOE’s newly-created office of Indian Energy Policy and Programs (Indian Energy). They asked for program ideas and NREL suggested a rural technical assistance program. Applications for technical assistance from the communities are due January 15, 2012. They expect 20- 30 submissions with five selected by the review committee about January 31 and February 1. On behalf of REFAC, Mr. Rose will assist in the application review. The Denali Commission and the Office of Indian Energy will make the final determination on which communities will receive the assistance. Other agencies involved in the program include AHFC, RURALCAP, EPA, DOI, USDA and ANTHC. The technical assistance process will take place in the next six to eight months and hopefully the selected communities will be prepared to submit REF application(s) in the fall. Return to Agenda Item 6 - Review AEA Round 5 Recommendations Mr. Crimp reviewed the ranking spreadsheet with the adjusted weighted scores. The differences were not significant. In terms of energy sources, the highest heat recovery projects are the highest rated projects mostly due to excellent benefit to cost ratio and technical feasibility. Senator Hoffman agreed the changes were minor, but said maybe the next go around we could reevaluate the caps, with higher caps given to higher cost areas. AEA should make those recommendations. Mr. Reeve said the cap level is based on the amount funded and we should think about it that way. Senator Hoffman said the legislature is reducing the amount of funding and AEA needs to analyze whether we are going to reach the state’s goal of 50% renewable energy by 2025. He said short-funding would cause an unrealistic goal. Mr. Crimp said the potential to set aside funds for construction versus pre-construction activity was raised by Ms. Fisher-Goad, which may be easier to work with, as the caps generally apply to construction. Mr. Rose said if this is about future changes, it may be possible to give each region their share to spend at their own pace over time, based on the proposed regional plan. Mr. Crimp said the REF is a project financing tool, however, identifying a full set of good projects to be financed have eluded us and the regional energy plans are the best way to accomplish that since they address energy efficiency too. Ms. Fisher-Goad said we are keeping track of the grantees’ progress, which could make funding available for reallocation if they are not progressing on a project. 10. Round 6 Funding Discussion Mr. Rose said a Round VI would be possible if the program doesn’t end until June 30, 2013. Program dates, timing and funding were discussed. Ms. Fisher-Goad said this has not yet been discussed with DOL, but it’s assumed we wouldn’t have a program in 2013. Senator Hoffman said he discussed this with Representative Thomas and they each intend to introduce (a bill) in their respective finance committees and see them all the way through the process. Chairman Beltrami referred to the IPEC Walker Lake Hydro issue, stating AEA will continue to assist with the project. Ms. Fisher-Goad said she spoke with IPEC and they discussed other project options. She noted the draft Southeast Integrated Resource Plan is out for comment and it contains ee REFAC Draft Minutes 1-13-12 Page 6 recommendations for additional reconnaissance of Southeast projects, including Walker Lake. She said out of 65 projects not recommended for funding, nine appeals were received. Ms. Mitchell said she was out of the office for three weeks in December and did not know how they were notified of the appeal deadline. Ms. Fisher-Goad said the notification was sent by email to 65 applicants for project not recommended for funding as per usual. Staff will check on where the email was sent. Mr. Reeve said it would be helpful to look through the projects and identify at what stage the projects are to get them to feasibility and through the legislative process. 11. Next Meeting Date The next meeting will be held in conjunction with the Emerging Energy Technology Fund Advisory Committee (EETFAC) and the AEA board, possibly the last week of February. The board will be polled for availability and future board meetings will be held off site. Mr. Crimp suggested an update on EETF projects at the next meeting. He said AEA is preparing a project status report for Legislature, which the REFAC will be copied. Chairman Beltrami thanked staff for their support. 12. Adjournment The meeting was adjourned at 1:44 p.m. Ee REFAC Draft Minutes 1-13-12 Page 7 — VERMONT ENERGY INVESTMENT CORPORATION Alaska Energy Authority Renewable Energy Grant Recommendation Program Process Evaluation Renewable Energy Fund Advisory Committee Meeting May 9*, 2012 Agenda Overview VERMONT. ENERGY * Introductions (Peter Crimp) — 5 min * Review Agenda and Background (Chris Badger) — 10 min - 1-1/2 Hr (Presentation with clarifying questions) - 1/2 Hr Open Discussion & Next Steps * General Recommendations (David Hill) — 15 min * Methodology and Research Objectives (Chris Badger) — 10 min * Detailed Findings &Recommendations (Chris Badger) — 45 min * Conclusions and Looking Forward (David Hill) — 5 min * Discussion and Program Options (Group) — 30 min Context and Background VERMONT ENERGY INVESTMENT CORPORATION ¢ 2011 RFP for a Program Process and Impact Evaluation = Energy Authority retained VEIC & ACEP team * Phase | — Process Evaluation (December - March 2012) = Documentation review , customer and stakeholder feedback « Assess success and challenges of the program ¢ Phase Il — Impact Evaluation (April - June 2012) « Analysis of program costs and benefits » Assess success and challenges of the program VERMONT ENERGY INVESTMENT CORPORATION Organizational Overview VEIC * 501(c)(3), private, nonprofit corporation founded in 1986 * Mission: Reduce the economic and environmental costs of energy use * Provides energy efficiency and renewable energy consulting and implementation services at the national and international levels * 275 employees * $74 million annual revenue * Locations in Vermont, Massachusetts, District of Columbia, New Jersey, and Ohio VEIC Consulting & Implementation YEErontensrsy Areas of Expertise * Policy development & regulatory support * Program delivery structure * Market research & analysis * Program design & implementation VEIC work in the United States * Project feasibility & technology support * Transportation research & policy 1995 — 2012 Range of Clients * Regulators * Government agencies * Advocates Utilities — |OUs, munis, co-ops * Foundations Range of Jurisdictions * 30 states, 6 Canadian provinces * China, Vietnam, Mexico, Ireland, United Kingdom, others VERMONT ENERGY INVESTMENT CORPORATION Alaska Center for Energy and Power * University of Alaska Fairbanks applied energy research program established in 2008 * Developing, refining, demonstrating, and ultimately helping commercialize marketable technologies * Key partnerships with over 75 private companies, utilities, and native organizations throughout Alaska, as well as national laboratories and research centers world-wide * Utilizes integrated, interdisciplinary teams to meet the research needs of clients * Manages over $15M in competitive research grants and contracts and has 20 active research projects VEIC/ACEP Team Roles VERMONT , INVESTMENT CORPORATION David Hill, VEIC Project Team Leader Chris Badger, VEIC Project Manager interviews Gwen Hoidmann, ACEP Alaska Stakeholder Outreach Interviews Dennis Witmer, ACEP Technical Advisor Molly Hooker Hatfield, VEIC Julia Estey, ACEP Stakeholder Outreach Administrative Coordinator intanees Overview of Recommendations _ vermont enercy INVESTMENT CORPORATION ¢ Evaluation Findings - reflects feedback from stakeholders = directly collected through one or more of the outreach channels = confidential feedback from full range of program stakeholders ¢ Evaluation Recommendations - professional opinions of our team = based on the research findings and our collective experience in the promotion and development of renewable energy markets = highlight opportunities for AEA to modify and enhance the REGRP process to better serve target markets and meet legislative objectives Overview of Recommendations _vermontenercy INVESTMENT CORPORATION General Establish and maintain a higher level of program Recommendation 1: eliicic-aliclicel ae = REGRP serves a wide span of project type and market actors « Size - utility scale projects to ones serving rural communities = Project Type — Resource assessment, design & construction « Project Technology — Wind, hydro, biomass, heat recovery, etc. = Program lumps together projects with inherently different costs and benefits, challenges and potential = Recommendation « Create at least two — and possibly more — channels of program support, funding opportunities, and processes «= Example — Separate rural and Railbelt projects VERMONT ENERGY Overview of Recommendations = “®™™oroution General Coordinate and/or tie program design and funding Recommendation 2: | decisions more closely to rural infrastructure, regional energy planning and state level renewable energy goals. = “Bottoms up approach” = REGRP primarily relies on the open market — through solicitation applications — to define and identify the best opportunities for program support « Results in missed project opportunities, coordination, potential conflicted interests, and duplication of efforts. * Opportunity for clustering funding around specific technologies identified in regional energy plans VERMONT ENERGY Overview of Recommendations ““™™ rots General : Provide more proactive and targeted services to markets. Recommendation 3: « Distinguish the most effective and efficient services for each market segment and project type * Technical assistance, training and outreach both in the pre- application and post-construction phases — as well as during project development and construction * Review non-grant financing options for highly leveraged projects = Example - loan guarantees, feed-in tariffs, low-interest loans = Community “Key account manager” for improved outreach and communications VERMONT ENERGY Overview of Recommendations = "“=™remton General Increase sharing of lessons learned and emphasize Recommendation 4: | economic as well as energy impacts. = Obtain and analyze detailed technical cost and performance data to identify the positive and negative lessons learned for project types and technologies « Maintain cumulative reporting on the dollar as well as energy impacts « Clearly define economic benefits accrued by the state (e.g. reduced PCE expenditures) — rather than directly to individual households or to the community VERMONT ENERGY Overview of Recommendations “™ rT General Seapets Streamline and modify funding timelines. = Reduce the scheduling, cost and logistic problems facing most energy development projects in Alaska = Propose and adopt funding cycles that maintain an adequate level of political review and oversight, while seeking to streamline and shorten application to funding time requirements * Consider pre-approval of funding dedicated to resource and feasibility projects, as well as fast tracking low risk/high reward construction projects Process Evaluation Research VERMONT ENERGY INVESTMENT CORPORATION * Review of program documentation, program databases, authorizing legislation, supporting regulations, program reports, and related literature; * Development of evaluation criteria for 6 priority areas: ¢ Program Outreach * The Request for Applications (RFA) Process * The Request for Applications Project Feasibility and Evaluation * The Renewable Energy Fund Advisory Committee * Grant Awards Process, and * Grant Administration * Primary research gathering feedback from REGRP Stakeholders: * 50+ in person interviews, some with multiple participants ¢ 24 telephone interviews, and * 108 on-line survey responses VERMONT ENERGY INVESTMENT CORPORATION Program Activity since 2008 * 5 Solicitations or Request for Applications (RFA) * Reviewed 551 grant applications ¢ Received $177M for 207 projects in first 4 rounds * Round V — Two recommended funding levels * 19 Projects for a total recommended funding of $25M ¢ 41 Projects for a total recommended funding of $41M Process Evaluation oa VERMONT ENERGY Key Program Stakeholders 2 INVESTHENT CORPORATION « Program Participants RE Fund Appropriation = Utilities, Tribal and Government Orgs, Application Review & Rank AtA | (SER / Dept Natural Resources | REFAC aa) Sy rears anaes " AEA Staff = Communities, IPPs & Developers Potential Funding Sources Federal Sources {State Agencies | Legislative | (DOE, USDA, Denali Commission) | (AEA, AIDEA) | Dwective Private Capital | Other Resources / Support Industry * Broad foundation of human resources and industries « Funding sources include REGRP grants, sources of public and private capital. Stakeholder Online Survey a oil INVESTMENT CORPORATION " Opportunity for a larger community of stakeholders to participate in the REGRP Process Evaluation = Survey results include responses to open ended questions and quantitative results for discrete questions. 11% @RE Industry @ independent Power Producer ™ Other Local Government AEA Staff or Advisory Committee | MRE Advocate ™ Non-AEA State Government ™ Federal Government @ Utilities © Tribal Government @ Regional! Native Non-Profit = Other (please specify) Stakeholder Online Survey aaa net, INVESTMENT CORPORATION = Confidentiality of the responses « Stakeholders represent a wide distribution of Alaska regions and respondent type. a Interior (excluding Fairbanks) 10% 9% 1% po, @ Bering Straits ONorth Slope oNorthwest Arctic @ Lower Yukon-Kuskokwim a Bristol Bay mKodiak GAleutians m Copper River/Chugach @ Railbelt (including Fairbanks and Anchorage) [ O Southeast Stakeholder Interviews = 50+ In-person and Phone Interviews VERMONT ENERGY INVESTMENT CORPORATION « List chosen to reflect the breadth of stakeholders in the REGRP « Additional interviewees added based on response to public outreach Baker Andy Consultant Alaska Sea Life Center Consultant Kenai Baldwin Bob Trustee Kenai River Watershed Foundation Conservation Kenai Bell Susan Commissioner State of AK | AEA BOD SE Denali Commission and Executive President of Beltrami Vince Commissioner - Denali Commission the Alaska AFL-CIO REFAC ANC Binnian Emily GIS, Dats Mapping AEA Current AEA ANC Carlson Dave Executive Director Southeast Alaska Power Association IPP SE Catugen Sissy Environments! Coordinator Native Village of Unalakleet Tribal Non Profit Coffee Chris Project mansger City of Juneau Municipality SE Conner Valerie Conservation Director Alaske Center for the Environment Conservation ANC Cooney Mike Concerned citizen Moose Pass Conservation | Kenai Coplin Clay General Manager Cordova Electric | Rural Utility SE Craft Mike President Alaska Environmental | pp Interior Crimp Peter Deputy Director - AEEE AEA Current AEA ANC Daniels Denali Energy Project Manager Denali Commission Funder Federal Deering Bob US Coast Guard Federal federal Edgemon Bryce Previous House Energy Co-chair State of AK Legisisture YK Delta Eller Don General Manager Tanana Power Rural Utility Interior Fay Ginny il Project Manager, Economic Analysis ISER ISER ANC Fisher-Goad Sara Executive Director AEA Current AEA ANC Fredenberg Connie Ex Grant Administrator TOX Power | Rural Utility Aleutians Haagenson Steve Previous ED 2008-2011 AEA PrevAEA FAL VERMONT ENERGY Stakeholder Interviews INVESTMENT CORPORATION Handeland GM Nome Joint Utility System Rural Utility Hirsch Alaska Coordinator National Renewable Energy Lab | Federal Federal Alaska Senate - Chair of Finance Committee, Hoffman Legislative Senator others REFAC YK Delta Isaac Director Tanana Chiefs Conference Regional Non proft Interior Ivanoff City Administrator City of Unalakleet Municipality Western Ivanoff Community Development Director Norton Sounds Economic Development Corp Econ Dev Western Jensen Previous Wind PM AEA Prev AEA ANC Johnson | Douglas | VP Development - Alaska ORPC Product Developer ANC Kari Bernie President Chena Power _| IPP Fairbanks Ketzler Bear City Manager City of Tanana Rural Community Interior Kohler Meera CEO Alaska Village Electric Cooperative Rural Utility ‘| statewide Lamal Kate VP of Transmission Golden Valley Electric Association Railbelt Utility FAI 1 Leland Marilyn _| Executive Director Alaska Power Association UtilityRep Statewide Current Bulk Fuel Eng, previous lo Lockard Davic__|_ geothermal PM AEA Current AEA | ANC Lutz Susan Associate City Administrator City of Akutan Rural Utility YK Delta MacMillan Linda Deputy Director - Operations | AEA Current AEA ANC R. Senate Finance, Previous Energy Co- Maguire Lesil chair State of AK Legislature ANC _| Mann Rey Consultant City of Akutan Consultant Bristol Bay Mathiasson Ingemar | “Energy person" Northwest Artic Borough Non Profit NWA Meiners Dennis President EIS Project Developer ANC Millet i Cherisse_|_R. Previous House Energy Co-chair [Stete of AK Legislature ANC Moeller Sandra Deputy Director - Rural Energy Group AEA Current AEA ANC Naoroz Peter Executive Director Kootsnoowoo Tribal Non Profit SE i Nibeck Melody | Energy Coord Bristol Bay Native Association | Tribal Non Profit YK Delta On Douglas _| Hydro Program Manager AEA Current AEA ANC Paskvan Joe Dem. Co-Chair, Senate Resources State of AK | Legisisture statewide _| Petrie Brent Manager, community Development AVEC Rural Utility Statewide Plentovich Devany | Biomass Program Manager AEA | Current AEA [anc VERMONT ENERGY Stakeholder Interviews INVESTMENT CORPORATION THLE TYPE REGION Pruitt Lance House Energy Co-Chair State of AK Legislature Rehfeld Karen Director Office of Management and Budget AK Gov Statewice Business/Organization involved in Rose Chris renewadle energy Renewable Energy Alaska Project 1 REFAC ANC aay Rose Walter | Energy Specialist Kewerak Tribal Non Profit Western Ruaro Rancy Governor's Chief of Staff State of AK AK Gov Statewide Christop Rutz her Procurement Officer AEA Current AEA ANC Sargent __| John Grant Manager City of Bethel Municipality YK Delta Schaefermeyer | Darryl Operations Manager Alaske Sealife Center Non Profit Kenai Scott Tt Darron Kodiak, recipient Kodiak Electric Association Rural Utility Kodiak Sharp John Twin Hills Native Group Local Native YK Delta Short Hugh Chair - AEABOD AEABOD ANC St. George Jim President STG Project Developers ANC Steyer Phil { Manager Chugach Electric Association Railbett Utility ANC Strandberg Jim AEA Current AEA ANC Stromberg Rich | Wind Program Manager AEA Current AEA ANC Swenson Bob Alaska State Geologist Department of Natural Resources AK Gov Statewide Bill Alaska House - Chair of Finance Committee, Thomas (William) | Legislative Representative others. REFAC SE Thomas Mayor Mayor Angoon Rural Community SE Towersk ke General Manager Unalakleet Village Electric Coop Rural Utility Western _| Venables Robert Energy. Coodinator Southeast Conference Regional Rep SE Wagoner Tom Senate Resources Co-Chair State of AK Legislature ANC Weilokowski Bob D_ Previous Energy Co-chair State of AK m3 Legislature ANC White Butch Previous Grant Manager AEA Prev AEA ANC White Clinton STG Project Developer | ANC Woracheck Aiden Head of Accounting: AVEC | Rural Utility ANC REGRP RFA Process scanour suet Stages and Resources Staff and Non-AEA Resources Grant Administrator Program Manager(s) RFA Process Stage Key Activities : leteness and e =©Review applications for completeness one, Review « Key metrics: Include project details and establish that both the project and applicant are eligible forthe RE Fund Outcome Stage 1: Pass/Fail with appeal opportunity Project Managers Dept. Natural Resources ISER / Economists Program Managers Outcome Stage 2: Pass (Minimum score and adequate detail)/Fail with appeal opportunity e Score and evaluate applications based on seven weighted . ibility and Public e Review application for technical and economic merits Stage npn ii e Key metrics: RE resource availability, cost-effectiveness and project development experience ctileria e Grant Administrator Stage 3: Evaluation of Individual |. Key criteria: Cost of Energy, Matching Funds, Feasibility, i eee Applications Project Readiness, Public Benefits, Sustainability and Local | ° REF, ae VS ESCO Support. High level requirements for statewide equitable ° _ISER (scoring) distribution of funds and performance on previous grants Outcome Stage 3: Preliminary ranking and recommended funding levels (full/partial/none) with specific project guidance e Develop final statewide and regional ranking of applications | ° — Administrator Stage 4: Regional and Final ¢ Key metrics: Annual funding availability, the number and types | ° |, 9am Manager Ranking Recommendations of project within each region, regional rank, and statewide rank | ° AEA Executive Director of each application « REFAC (Regional Ranking) Outcome Stage 4: Final report to the legislature summarizing applications and recommended priority for awarding grants | REGRP Evaluation Priorities Public Outreach Grant Administration RFA Process Led oleh) REGRP Process Evaluation aN Evaluation Process Grant Award Process REFAC Participation VERMONT ENERGY INVESTMENT CORPORATION Public Outreach Findings VERMONT ENERGY INVESTMENT CORPORATION = Formidable and often unique challenges of developing renewable energy projects in Alaska = Coordinate the REGRP with regional planning and/or other rural infrastructure development activities = Develop more targeted engagement regarding renewable energy technologies and available in-state technical resources « Increase the quality and quantity of information AEA shares with stakeholders — more proactive communications and outreach = Increase outcome based reporting providing insights on “what we have done, and what we have learned” through the REGRP * Capitalize on the first point of contact through other AEA programs to cross-promote the REGRP. Public Outreach 7 VERMONT ENERGY INVESTMENT CORPORATION Recommendations « Develop a coordinated “account manager” model for providing outreach, communications and services, particularly for “harder” to serve target audiences. « Increase emphasis of program outreach and coordination with regional energy planning, infrastructure development and investments. « Provide technical assistance to communities, including assessing and recommending possible application opportunities = Document best practices and analysis of primary data from completed construction and feasibility projects. « Improve branding of the Program, accessibility and general format of content on the REGRP area of AEA website. RFA Process Findings VERMONT evel INVESTMENT CORPORATION = AEA has developed a robust process for soliciting applications. = Formalize procedures for addressing questions around RE fund process and around appeals. = Consider more differentiated application requirements and processes for different types of projects and different project stages. « Increase the training and support for smaller projects/communities during the application process. « Use regional planning or a more structured set of AEA program targets and goals to solicit and encourage a more coordinated set of applications RFA Process Recommendations _ YERMONTENERGy = Develop a complementary framework that articulates regional and/or technology specific renewable energy goals. = RFA process and overall program design should reflect differences in project types and phases — and the type of support required. « Identify additional methods for providing high quality support and training for communities seeking to participate in the REGRP. « Review options for direct grants to support feasibility studies and smaller renewable energy applications on a rolling basis * Identify opportunities to create longer term visibility of the program goals and objectives, limiting the impact of the start/stop nature of the individual funding cycles. REGRP RFA Evaluation Process deamon nee INVESTMENT CORPORATION Findings Specific weighted criteria and scoring struggles to balance identifying strong projects while also meeting legislative intent. Evaluation process may not allow for an appropriate level of public input as part of the evaluation and scoring of applications. Technical and economic review process fails to reflect the full benefits to both the state, as well as individual communities. Program guidance can be perceived as placing unduly restrictive requirements on specific project designs — and potentially impartial. REGRP RFA Evaluation Process am VERMONT ENERGY INVESTMENT CORPORATION Recommendations = Establish more than one solicitation to better serve the target markets for the REGRP. * Encourage local investment in projects by differentiating community derived matching funds vs. non-local sources in evaluation process « Enlist independent engineering firms to conduct technical feasibility reviews and/or provide increased technical support to communities « Allow for technical and economic scoring and feedback on all applications = Review program processes to allow for a structured opportunity for expressions of community support or opposition. REFAC Participation Findings one = General lack of awareness of Advisory Committee, its responsibilities, and composition of its membership. =" Periodic REF Advisory Committee meetings may not allow for sufficient expression of local opposition or feedback on projects prior to the initial project evaluation by AEA. 7 REFAC Participation NEMO CoRR INVESTMENT CORPORATION Recommendations = AEA and the REF Advisory Committee should develop a charter to outline their role with respect to the RE Fund as well as defining specific goals for the program on an annual basis. = Increase and improve visibility to the public process and the REF advisory committee meetings on the Authority’s website. = Utilize the Advisory Committee to review, endorse adopt, and/or modify specific recommendations or modifications, including for example, greater program differentiation. Grant Award Process Findings er eee « The timing and duration of the award process can create significant negative impacts on efficient project development. = Funding for sequential phases of development under separate rounds can slow project development significantly leading to higher costs. « Allow AEA to grant awards directly, at least for feasibility and potentially smaller scale construction projects. Grant Award Process VERMONT ENERGY INVESTMENT CORPORATION Recommendations = Fund smaller projects and feasibility studies without further rounds of legislative review. « Develop Program non-grant funding and financing options. = Develop grant milestone payments and phasing based on the experience of project teams and the level of matching funds provided. Grant Administration Process — nel INVESTMENT CORPORATION Findings = AEA has a dedicated and knowledgeable team to administer the program, but often appears stretched from a staffing level. = Clearly define AEA’s level of engagement with project design or active project management. = Level of reporting for grantees can vary between individual project managers and should reflect specific cost structures native to the RE industry. = Improve post-operational performance reporting increasing the value of lessons learned and transparency to the public in this area. Grant Administration Process aaa nue Recommendations = Develop a detailed staffing plan to address AEA’s role in rural and renewable energy development in the State of Alaska. « Clarify AEA’s role with respect to project developers and the evaluation of projects to retain a neutral stance in its administrative responsibilities. * Conduct an internal review of how AEA organizes and manages information related to the REGRP. « Modify reported savings to include gallons of fuel displaced, fuel type and dollars saved to better reflect the economic benefit to Alaska ratepayers. Looking Forward NEEM SREB SN * The Program played an important role in serving both remote and Railbelt communities in developing renewable energy systems. * Significant opportunity to reduce energy costs in rural Alaska and to help the state tap more of its substantial renewable energy resources. * Program successes are widely recognized — but the key findings and recommendations of this evaluation identify needs and opportunities for changes that can make the program more effective. * Recommendations are reasonable, can be implemented efficiently, and will help AEA improve the REGRP program and processes — capturing significant net benefits and increasing the deployment of renewable energy in Alaska. Looking Forward oon Phase II, the Impact Evaluation, will summarize energy savings, avoided emissions and costs and benefits from REGRP supported projects — highlighting the full range of project types, renewable energy resources and communities that have participated in the program. The framework for the Impact Evaluation includes: * RE Market Overview and RE Fund Participation Demographics * Cost-Benefit Analysis at both the Project and Program Level ¢ RE Market Development since Program Inception « Lessons Learned from Research and Program Results VERMONT ENERGY INVESTMENT CORPORATION Thank You! Vermont Energy Investment Corporation 128 Lakeside Avenue, Suite 401 Burlington, VT 05401 USA Chris Badger David Hill cbhadger@veic.org Dhill@veic.org (802) 540-7765 (802) 540-7734 VERMONT ENERGY INVESTMENT CORPORATION Discussion & Questions Copper Valley Electric Association, Inc. P.O. Box 45 + Glennallen, Alaska 99588 * www.cvea.org Telephone: 907-822-3211 + Facsimile: 907-822-5586 * Valdez: 907-835-4301 May 8, 2012 email: wilkinson@cvea.org Mr. Vince Beltrami Denali Commission, Alaska AFL-CIO 3333 Denali Street, Suite 125 Anchorage, Alaska 99503 SUBJECT: Renewable Energy Fund Round VI Recommendations Dear Mr. Beltrami: Copper Valley Electric Association’s Allison Creek Project has received various forms of State support which includes money from Round I of the REF and through two separate capital budget appropriations. We have language from the 2011 (FY 2012) Capital Budget associated with our project that caps the state investment at 50 percent. CVEA’s desire and goal is to attain a 50 percent state investment in the project. CVEA did not receive funding in Round V as a consequence of the 2011 Capital Budget appropriation and the expected timing of future expenditures. Notwithstanding, the 2011 appropriation CVEA intends to apply for Round VI funding to fulfill the 50 percent investment limit. It is anticipated that project construction will begin in 2013 and continue through the following construction season. In addition to the eligibility question for Round VI funding, we are also uncertain as to how AEA would prioritize funding sources where more than one grant exists for a given project. On a different note but related to funding, CVEA also supports the continuation of project limits with a heavier weighting on projects for construction, similar to Round V. This promotes the use of funds for projects that are ready to be built. If you have questions or we can provide additional information on the foregoing, please contact Jaime Matthews at 907-822-8311 or via email: Matthews@cvea.org. Thank you for your consideration. Sincerely, TZ ae Robert A. Wilkinson Chief Executive Officer s:\raw\12-refadvisoryctteS82012.docx