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HomeMy WebLinkAboutREFAC Meeting agenda and minutes 9-22-2014= ALASKA... mm ENERGY AUTHORITY RENEWABLE ENERGY FUND ADVISORY COMMITTEE MEETING Westmark Fairbanks Hotel & Conference Center Rampart Room Fairbanks, Alaska Monday, September 22, 2014 9:00 am — 12:30 pm Teleconference: 1-888-585-9008, code 683021989# AGENDA J 1. Call to Order 2. Roll Call (committee members, staff, public) / 3. Agenda Approval \/4. Public Comments Ove? _ Jo Mon EY? Js. Approval of Meeting Minutes — May 13, 2014 APP ve. Renewable Energy Fund Status Update - SAN SK ALEMG fi. Community Assistance and Regional Planning Updates — jw He an 8. Alaska Affordable En Strategy Introduction $e isle Boni remy reoe 9. xt Meeti bate: ed a eeting Dates (proposed): ae at0 Cote | gpereaccre pe) Wednesday, November 12, 2014, Anchorage eran uation status) Friday, January 9, 2015, Anchorage (Review of recommendations) Vv lor Wednesday, May 20, 2015, location TBA (R8 wrap-up, R9 Prep) a foTure ATE 10. Adjournment S Ke ae 813 West Northern Lights Boulevard Anchorage, Alaska 99503 1 907.771.3000 Toll Free (Alaska Only) 888.300.8534 F 907.771.3044 Renewable Energy Fund Advisory Committee Meeting Minutes May 13, 2014 Page 1 of 7 Renewable Energy Fund Advisory Committee Meeting May 13, 2014 Kodiak Electric Association Board Room Kodiak, Alaska 2:35 p.m. to 4:50 p.m. DRAFT MINUTES 1. Call to Order The Renewable Energy Fund Advisory Committee (REFAC) convened at 2:35 p.m., with Mr. Brad Reeve presiding. There was a quorum. 2s Roll Call Committee Members Chair Chris Rose (phone), 2/2 Jodi Mitchell, 2/2 Representative Bryce Edgmon, 2/2 Acting Chair Brad Reeve, 2/2 Senator Anna Fairclough, 2/2 Senator Lyman Hoffman, 2/2 Kathy Wasserman, 1/2 Representative Charisse Millett (phone), 1/2 3: Public Comments AEA Staff Sean Skaling Sara Fisher-Goad Shawn Calfa Audrey Alstrom Alan Baldivieso Yolanda Inga Josh Craft Sandra Moller Devany Plentovich Jim Vail David Lockard Cady Lister Rich Stromberg Kim Lomen Teri Webster Chris Gobah Other Participants Senator Gary Stevens Representative Paul Seaton (phone) Sandy Burd (Senator Hoffman's Office) Darron Scott, Kodiak Electric Maggie McKay (phone), Marsh Creek, LLC Marc Mueller-Stoffels, ACEP Miranda Studstill, Accu-Type Depositions Jason Meyer, ACEP Han Saelor Terry Gryting Adam Pigg Russell Westbrook (phone) Shelley Brimner (phone) Chandler Kemp Warren Barry Andy Baker (phone) YourCleanEnergy Russel Stothers Wyn Alder (phone), Energy Action Daniel Hertrich (phone), Hatch Ms. Alder asked when it is appropriate to ask questions regarding the Renewable Energy Fund update. Acting Chair Reeve stated Mr. Skaling can be contacted after the meeting to answer questions. Renewable Energy Fund Advisory Committee Meeting Minutes Page 2 of 7 May 13, 2014 Mr. Baker provided comments from clients who had submitted applications in Round 7 for heat pumps. The escalation rates that were applied for Juneau and Sitka for heating fuel were much lower than those used by the cities for their public works projects. The escalation rate for electricity was higher than what they used for their public works projects. Mr. Baker requested a list of the escalation rates be disclosed and allow the cities to have input so there is not as much deviation. Secondly, the biomass applications were allowed to claim as a match fuel on-hand, but that match was not offered to any other heat technologies, which created an inequity in the process. Mr. Baker requested consideration of the claim. Thirdly, the long-term jobs counted toward biomass projects included harvesting the fuel. In order to keep equity in the process, consideration of the long-term job creation by selling additional electricity for heat pumps should also be counted. Senator Stevens expressed his appreciation to the Committee for traveling to Kodiak and believes it is crucial the Committee is able to see what is happening in the rural communities. He expressed his appreciation to the Committee for all the work they have done. Senator Stevens is very proud of the accomplishments of the Committee, Mr. Scott, and Kodiak Electric. Representative Seaton stated the Tidal Energy Incubator Project in Homer is proceeding. The University of Alaska Anchorage Engineering Department students are assisting with the design. The project will include a test bed for instrumentation and turbine designs that can be raised and lowered in order to be easily accessible to the grid. Mr. Skaling responded to Mr. Baker's comments. He noted the model used for the fuel cost escalation rate is linked on the website and encouraged applicants to use it. Mr. Skaling believes AEA can review the escalation rate percentage on fuel costs year-to-year in communities. The biomass fuel on-hand claim was meant as an encouragement to move projects forward. Mr. Skaling believes jobs are treated fairly in the process. Ms. Fisher-Goad believes one of the things happening with this program is that heat pumps work very well in areas that generally have lower electricity costs. The scoring criteria gives fewer points for heat pumps because the target of this program is for higher cost power areas. Ms. Alder asked if Round 8 will require applicants to demonstrate integration with existing energy systems. Mr. Skaling agreed and noted that is consistent with previous rounds. One of the most important aspects of a renewable system is ensuring successful integration. Ms. Alder does not believe the applications specifically ask for that information. Mr. Skaling noted staff will review proper integration during the design phase of a project. Mr. Stothers stated his company is new to this process and wants to ensure they stay involved regarding the next round of funding and project proposals. 4. Agenda Comments Mr. Skaling stated a few committee members will need to leave early to catch their flights and wanted to ensure the most important aspects of the agenda are addressed first. He recommended moving Item 9. Economic Evaluation Improvements to after Item 6. Kodiak Electric Presentation. There were no objections. Renewable Energy Fund Advisory Committee Meeting Minutes Page 3 of 7 May 13, 2014 55 Approval of Meeting Minutes - January 7, 2014 MOTION: A motion was made to approve the meeting minutes from January 7, 2014, Renewable Energy Fund Advisory Committee meeting. Seconded by Senator Fairclough. The minutes were approved unanimously. 6. Kodiak Electric Presentation Mr. Scott expressed his appreciation to the Board for conducting the meeting in Kodiak and believes the REFAC is a partner in Kodiak's ongoing projects, some of which the Committee was able to tour today. Mr. Scott provided a detailed overview presentation of the current projects and explained the Board of Kodiak Electric set a vision several years ago to be 95% renewable by 2020. They are well on their way to achieving that goal. There are currently six wind turbines totalling nine megawatts of wind, three megawatts of battery and the additional hydro unit is performing. Mr. Scott noted the benefits to the community includes savings of about seven million gallons of diesel at $3.50 a gallon, approximately $24 million saved. This saved 80,000 tons of greenhouse gases, 86 tons of carbon monoxide, 2.2 million tons of smog from being emitted and produced. Mr. Scott gave a comparison of a Kodiak electric bill in 2001, using 600 kilowatt hours was $105, and the same bill in 2014, was $101, which equals a 4.5% drop in electric cost. He believes the price will remain flat for the next several years. Mr. Scott expressed his appreciation because these projects could not have been completed without the help of REFAC. Acting Chair Reeve asked if Kodiak is seeing many people using heat pumps. Mr. Scott said that many new homes are being built with heat pumps. The Coast Guard is adding 20 new units of residential this summer with all electric heat. 9. Economic Evaluation Improvements Mr. Skaling requested Ms. Lister give a presentation regarding the Economic Evaluation Improvements for Round 8. Ms. Lister stated the main drivers behind the changes are outlined in the one-page sheet included in the packet. The intent is to be more thorough on the costs associated with renewable energy projects and integration, as well as the impacts to the base case. There will be changes to the operations and maintenance (O&M) model, including integrating repair and replacement (R&R) costs. Changes will be made to the standard efficiency used on the base case. The loss of heat recovery that is currently being used will be included in the assessment. The Railbelt base case will be updated with more current information. The Railbelt wind cost assumptions will be updated for reconnaissance and feasibility applications. Solar cost assumptions will be created with the assistance of the solar program manager. Ms. Lister advised the cost of integration and analysis of the impacts on existing systems will be required in the evaluation for construction application. Alaska Center for Energy and Power is providing the natural gas price projections and the Institute for Social and Economic Research (ISER) will provide the diesel price projections. For the purposes of the economic analysis, the Renewable Energy Fund Advisory Committee Meeting Minutes Page 4 of 7 May 13, 2014 cost of instrumentation to collect and report data that is outside the scope of normal implementation is not included as a project cost. Senator Hoffman commented evaluation of the program's purpose and intent needs to occur every year and operation of inefficient systems should not be encouraged. He asked if the recommended changes will create a more complicated application process. Senator Hoffman asked how the overall program is being improved and if there is another concentrated focus on heating projects like last year. Mr. Rose asked if diesel availability rates, the percentage of time the system is actually running as opposed to the percentage of the time the system is down for maintenance, for projects should be included in the cost analysis for diesel. Ms. Lister believes that analysis is part of the construction application, including design documents. She will follow up on the specifics with Mr. Rose. Mr. Rose stated he is glad the disclosure was given that cost of instrumentation to report data outside the scope cannot be included for the economic evaluation, but data collection is still encouraged. Mr. Rose asked where these issues are covered in the application guidelines. Mr. Skaling noted the current guidelines are from Round 7 and these changes discussed will be found in the guidelines for Round 8 requests for applications. Mr. Rose asked if applicants are going to be alerted in the next round that 10 years' worth of data is going to be required. Mr. Skaling noted 10 years' worth of data will be asked for in the next round. AEA is discussing the possibility of building a system to collect the information more automatically, which would relieve the pressure from applicants. Acting Chair Reeve believes there needs to be additional discussion before more data is requested from projects, especially smaller communities, who may have issues and there is currently no system to address them. Senator Stevens believes Senator Hoffman raised very important questions for which he heard no answers. He requested answers be provided. The two issues he wants responses to include if the changes being made are making the application more complicated and are ways being found to lower the cost of power in areas where there is a very high cost of power. Ms. Lister advised most of the changes to the economic evaluation affect the AEA staff, consultants, and economists. A newly formatted O&M portion of the application may be included. She believes this new format will make it clearer and easier for the applicant. The additional analysis that is being asked for is not being asked of the applicant, necessarily. Ms. Fisher-Goad noted the O&M costs are important to understand for planning and the burden will be on AEA to review the evaluations. Additional discussions with the applicant are anticipated to determine appropriate scoring. AEA will continue to provide technical assistance to applicants. Senator Fairclough requested a status update on the regional plans to include, how funds are best invested in local communities, the completion rate of projects, and how the projects are incorporated in the larger plan. Ms. Fisher-Goad stated the regional plan is ongoing with the overlay of SB 138 requirements. A team has been developed and will be partnering with ACEP in working toward the goal of January 1, 2017. The regional plans provide regional Renewable Energy Fund Advisory Committee Meeting Minutes Page 5 of 7 May 13, 2014 prioritization in determining what projects make sense to go forward. The REF allows the communities to apply for individual projects, but they do not have to be approved through a separate regional planning process. Senator Hoffman requested Ms. Fisher-Goad provide a brief update on the implementation of the required report to the Legislature. Ms. Fisher-Goad stated part of the report was to assess the conversion cost of the power houses. There will be an evaluation of the potential natural gas delivery system to parts of the state that aren't directly related to the pipeline. Ms. Fisher-Goad is happy to include a status of the current regional planning in a future REFAC meeting. Senator Fairclough requested clarification on the structure of the regional plans. Ms. Fisher- Goad noted AEA is somewhat following the process that was used for the Southeast Integrated Resources Plan, which used an entity to help coordinate the plan to ensure stakeholder groups are involved and have a role. Senator Fairclough commented great faith is being given to AEA in pulling those regional plans together to create sustainability and affect how the Legislature distributes money in the next three to five years. It is important to focus on completing the projects already started and fund only a few new start-up projects because the revenue stream is projected to decrease over the next five years. Acting Chair Reeve believes the Committee should spend time at a future meeting deciding what to do if funding for the program gets reduced substantially in future years. Mr. Rose agrees the efforts AEA is making toward the regional plans is a valuable tool for the REF. He believes applications communities are making with the REF can be aligned with other potential funding sources, so the funding process is streamlined. Senator Hoffman requested another meeting be held to continue discussion on these topics. Mr. Skaling noted he will follow up and query the Committee members regarding the date and city for that meeting. Ms. Fisher-Goad stated AEA will provide a regional energy plan overview at that meeting. 7. Overview of Changes for Round 8 Mr. Skaling gave a presentation describing an overview of the changes for Round 8. One of the changes is paper applications are no longer required. They will still be accepted, but are not required. This is to simplify the process. The application due date is 5:00 p.m. on September 22nd, which is in conjunction with the Rural Energy Conference that begins September 23rd. The request for applications will go out on or about July 1. Mr. Skaling requested the Committee give brief feedback on whether or not partial funding should be utilized. Acting Chair Reeve asked if there are other funding sources available to assist with the unfunded portion and these can be discussed at a later meeting. Mr. Skaling noted there is a Power Project Loan Fund that could possibly matched to some of the projects. Mr. Rose suggested finding other financial mechanisms that can be aligned with the fund application, particularly as the grant money declines in the future. If the SETS funding were to be recapitalized, it could be used for loans for renewable energy and energy efficiency projects. Ms. Fisher-Goad noted federal funding could also be a possible source. Senator Fairclough stated the Rasmuson Foundation could be a potential partner on some of these projects. Acting Renewable Energy Fund Advisory Committee Meeting Minutes Page 6 of 7 May 13, 2014 Chair Reeve suggested the partial funding issue should be added as an agenda item for another meeting. Mr. Skaling reported another recommended change involves the Stage 4 regional spreading to return to the original calculation using the cost of electricity in the region. 8. Data Collection Update, ACEP Mr. Meyer gave a detailed presentation regarding the ACEP activity through the Data Collection and Management Program in support of the Renewable Energy Fund. The Lessons Learned Reports for each project provide useful information to future related projects and for potential funding of future projects. Mr. Meyer gave examples of aspects implemented through the data collection plan and highlights of key performance metrics utilized for long-term commercial projects. He described the automated reporting systems, which is intended to reduce cost and reduce work by the recipient. Quality assurance is a key component of these reports. The current delivery date for the automated specific data sets is June 30th. The next steps are to identify several currently funded projects that are in need of these types of services and coordinating with AEA to implement this type of data collection on those projects. Work on Round 8 will be conducted on select projects, as needed. Mr. Rose noted the rollout for the pilot of automated reporting is due June 30th and asked how AEA and ACEP are approaching their ability to automatically record data of renewable energy projects so it is not onerous for applicants, but also satisfies the state of Alaska's tracking requirements. Mr. Meyer stated one of the approaches is to identify projects that already have tracking systems installed in order to receive, manage, archive, and disseminate that utility grade performance data. Mr. Skaling noted AEA is interested in ACEP's final automatic data collection product, including how it is developed, how easy it is for communities to tap into it, how much it costs, and what the next steps are. Mr. Meyer expressed there is a balance between getting high quality data from these projects while being mindful of limited project budgets. A collaborative effort with projects in developing the data collection plan is important. 10. Review of Evaluation Guidelines Acting Chair Reeve noted the review of evaluation guidelines was covered previously in the meeting. 11. Committee Member Comments Ms. Wasserman apologized for missing her first meeting. She expressed her appreciation for being on the Committee. Ms. Mitchell noted another source of possible funding is working with the local Tribes. She expressed her appreciation for the tour. Representative Edgmon expressed his appreciation for the tour. Renewable Energy Fund Advisory Committee Meeting Minutes Page 7 of 7 May 13, 2014 Mr. Rose expressed his appreciation for all of the work in hosting the meeting. Mr. Rose stated he was sorry for not being at the meeting in-person and thanked Acting Chair Reeve for chairing the meeting today. Acting Chair Reeve expressed his appreciation for the tour. 12. Next Meeting Dates (proposed): Wednesday, November 12, 2014; Friday, January 9, 2014; Wednesday, May 20, 2015. The listed proposed meeting dates will remain, unless otherwise determined by staff. Mr. Skaling thanked Kodiak Electric and others involved for their effort in hosting the tour and meeting today. 13. Adjournment The meeting was adjourned at 4:50 p.m. STATUS: Active Renewable Energy Fund Advisory Committee (REFAC) Meeting ALASKA ENERGY AUTHORITY Regular Meeting Public Notice Renewable Energy Fund Advisory Committee Notice is hereby given that the Renewable Energy Fund Advisory Committee will hold a regular meeting on Monday, September 22, 2014 from 9:00 am to 12:30 pm. For additional information, contact Sean Skaling with Alaska Energy Authority at (907) 771-3079 or Chris Rose, Chairman. This meeting will be conducted by electronic media pursuant to AS 42.45.045 and AS 44.62.310 at the following location: Westmark Fairbanks Hotel & Conference Center - Rampart Room, 813 Noble Street, Fairbanks, Alaska; A teleconference line has been set up for those unable to participate in person. Dial 1-888-585-9008 and enter conference room 683-021-989#. The public is invited to attend. The State of Alaska (AEA) complies with Title Il of the Americans with Disabilities Act of 1990. Persons requiring special accommodations to participate should contact AEA staff at (907) 771-3903 to make arrangements. Attachments, History, Details Attachments Details None Department: Commerce Community and Economic Development Revision History Category: Public Notices / Created 9/15/2014 12:12:36 PM by yminga Sub-Category: Advisory Committee Meeting Location(s): Anchorage, Fairbanks Project/Regulation #: Publish Date: 9/15/2014 Archive Date: 9/23/2014 Events/Deadlines: