Loading...
HomeMy WebLinkAboutBethel Fuel Co-Op Bulk Fuel 1992all FE VY State of Alaska !) Walter J. Hickel, Governor Alaska Energy Authority A Publi€é Corporation March 18, 1992 Mr. George Hohman, City Manager City of Bethel P.O.Box 388 Bethel, Alaska 99559 Dear Mr. Hohman; The purpose of this letter is to reiterate our support for the City of Bethel's bulk fuel oil storage project which would be used to substantially lower the cost of diesel fuel to the electric utility. We met with senior officials of the Co-Bank's Denver office today in order to explore the use of their low interest money on projects that we have identified as having high payback to both the State PCE program and to local consumers. Your project was, of course, used as one of the prime examples of the savings that could be obtained in short order from an investment in Alaskan infrastructure. The gross savings of nearly $1.3 million per year for an investment of $3.3 million presents a very attractive project for both the City and the State. We are pursuing the accomplishment of the project through borrowing from the Co- Bank, but we heard today that such projects could obtain financing on only approximately 75% of the "hard" costs of the project (not including for example the engineering, supervision, inspection, nor contingencies). This results in a requirement of $1.35 million of the total project estimate of $3.3 million which must be made available from other sources beside the cooperative bank. We are investigating methods by which we might fund the design work on this project now in order to expedite the early operation of such a facility, but have not identified as of yet a source of funds. I will keep you appraised of our efforts here to obtain funds through financing mechanisms. We look forward to assisting the City in accomplishing this project. Charlie Bussell Executive Director CB/gds QO PO.BoxAM Juneau, Alaska 99811 (907) 465-3575 x PO. Box 190869 701 EastTudorRoad Anchorage, Alaska 99519-0869 (907) 561-7877 PROPOSED TANK FARM SITE BETHEL BULK FUEL TANK FARM PROPOSED TANK FARM SITE SITE LOCATION PHOTO setecov =] QO BETHEL BULK FUEL TANK FARM PROPOSED TANK FARM SITE. AE ane BETHCOV SITE LOCATION PHOTO POWER Sy PLANT ! 3: SITE & BETHEL BULK FUEL TANK FARM PROPOSED TANK FARM SITE EXE me SITE LOCATION PHOTO BETHCOV TRIP REPORT - BETHEL (FUEL CO-OP RTA) January 23, 1992 Date: February 12, 1992 To: Project File From: Brian cray Pte Re: Meeting With City Manager to Discuss Options and Survey Potential Sites for a Bulk Fuel Facility for the Electric Utility Summary: There is the potential to save approximately $1.3 million in annual fuel cost by constructing a bulk fuel storage facility in Bethel and having the utility purchase fuel in bulk with other western Alaskan utilities. The identified potential site adjacent to the power plant appears to be adequate for development. Trip Report: Thursday, 1/23/92 I departed Anchorage at 10:20 AM, arriving in Bethel at 11:30 AM. I was met at the airport by City Manager George Hohman. We went to the Bethel Utilities Corporation (BUC) plant to meet with the owner Hal Borrego. BUC currently purchases approximately 2.4 million gallons of fuel per year from Bethel Fuel Sales (Warren Hurlbert) at a delivered cost of approximately $1.25 per gallon. The Western Alaska Fuel Co-Op purchased fuel last year at approximately $0.70 per gallon. The proposed site on BUC property adjacent to and south of the existing power plant is approximately 3.5 acres in size, has a gentle easterly slope, is reported to be covered with undisturbed tundra (I could not confirm this because of the snow cover), and appears to be well suited to construction of a tank farm. The existing waste heat transmission piping runs along the easterly boundary, making connection of a tank heating system very convenient. I then went to the city office to discuss the project scope with George Hohman. He produced some figures for City fuel use. In the previous year the city consumed 159,000 gallons of heating fuel, 13,000 gallons of diesel fuel, and 21,000 gallons of gasoline. We decided that the quantity of gasoline did not justify the expense and additional hazard of trying to incorporate bulk gasoline storage into the proposed tank farm, but the quantity of diesel/heating fuel would probably justify the capital cost of an additional tank. A separate tank would need to be installed since the city would use #1 arctic heating fuel for building heating and equipment operation and the utility would use #2 diesel fuel for power generation. We decided that 200,000 gallons of #1 heating fuel and 2,000,000 gallons of #2 diesel fuel storage should be adequate and allow for reasonable growth since Bethel can get both early summer and late fall barge deliveries. At 7:00 PM I attended a council finance committee meeting and made a brief presentation on the tank farm concept and potential economic benefits. I departed Bethel at 8:10 PM arriving in Anchorage at 9:20 PM. On the return flight I sat next to Richard Romer, Special Assistant for Rural Affairs, of the Governor’s Office. I explained our involvement in the bulk fuel program and gave him an overview of the issues we are addressing. He was very interested and would like to discuss matters in greater depth in the future. BETHBGRI1 ts To7> Jim ren Fie-p Nees >45-ZoF | 4 B. Ver # 79000 [se <z $5,,| mi | Soe FO ug Wnt ts teed shrane @ exist bth ghd Whe js oe Whit” will be oka BP tkin Smit ab Ja aut ef thet business £ — (oss: ble ce IU (poe hceete 4s ethar cus touers 2 gat pach. 0:r2° Arrive Belhe} /)% W to meet 2/ Hal pares ot Be (I of awners) 2 rsible sites - cue (tae) next b the Aaut rein B., to ubility - he au exiSti abe” an ste- ofler oe civer~ Jack ad{acec 3B fo oxic blk placct (cross ney = 3500’ from pled — al tent 5 (eZ ‘gol dehinied f Dt foal deluer charse 4t/oal wpe © dock (ity dock wae teh legs: . Weg pied he IP willert Sy flare BN Plast Vepact bel G2 A are huh 9% FH Bolsa Sard — 45,00 KOSH = (ale gd* $/0,000 Za sHis (00 yd =$30}60c5 Dia Arca - Zea © /00% t20°%7 s a | #« 0’ loot, Goin 7 4 Liner - ZQ200 ft © #Z/ft = #100600 welll (ste) — (260 lw. fk — Bleoese 2 Rigid Dewl-12") - 2S000 #0 $24/A = $50,800 Theme files — $l0Qa807 Feuce — 1100 lnk @ 420/f- = 420,000 fipry — SF whded - 4000 lin He Ft, = $/60,000 Teak its Loils Af 5 1 fs tertols +10Q68> % Leading Tak F249a90 $ Cost EST Veergn~ Leotech tauat £ Fecovt, Sh Tus - Z ca | mill gel @ 40:15 / gal) =4/, 566,802 | ca ZE9%O 50.0 b1eeGd = % 280,680 SUMMARY Tawhks $1,700, 06c> ke, Liner, fas, Feua, eke. G\O, 880 figing , aul coils, loading rack A\D, 202 Verign % 21K 296,080 Freee Wk Fried Cost $zgt5B8O- Contig (10% ) 390,802 Clef a7 ei Cost 4 3,300,000 FY93 CAPITAL PROJECTS BUDGET REQUEST BETHEL FUEL CO-OP SUMMARY Community: Bethel Election District: 25 Population Served: 4,674 plus surrounding communities Project Cost: $3,300,000 Funds Available: 0 Funds Required: $3,300,000 PROJECT DESCRIPTION Design and construction of a 2.2 million gallon bulk fuel storage facility to store diesel fuel for the power plant and heating fuel for City owned buildings. The intent is to construct the facility adjacent to the power plant. Design to be accomplished in the fall and winter of 1992 with construction commencing in the spring of 1993 and completion in time for a fall 1993 fuel delivery. PROJECT JUSTIFICATION/BENEFITS The power plant consumes approximately 2.4 million gallons of diesel fuel annually at a current cost of $1.25 per gallon. Other comparably sized utilities in western Alaska have been purchasing fuel in bulk at a cost of approximately $0.70 per gallon. With a bulk storage facility, the utility could realize a net annual fuel cost reduction of approximately $1.3 million: $900,000 in savings to the local consumers and $400,000 in savings to the Power Cost Equalization program. In addition, the City could realize a net savings of approximately $70,000 in heating fuel. BUDGET Construction $2,600,000 Design 200,000 Supervision, Inspection & Administration 200,000 Project Contingency 300,000 Project Total: $3,300,000 file: BETHBGP1 author: BCG date: 1/27/92 reviewer: GDS PROPOSED TANK FARM SITE BETHEL BULK FUEL TANK FARM PROPOSED TANK FARM SITE SITE LOCATION PHOTO POWER PLANT EXISTING WASTE HEAT PIPE 200,000 GALLON ITY HEATII TANK reece 3500 FEET (APPROX) TRUCK LOADING RACK PIPE LINE TO FUEL DOCK _ 1,000,000 GALLON-<} UTILITY DIESEL FUEL TANKS EXISTING PROPERTY LINE ROJECT State of Alaska ALASKA ENERCY AUTHORITY P.O. Box 190869 701 East Tudor Rood BETHEL BULK FUEL TANK FARM 3 oak : nN UTLE PROPOSED TANK FARM SITE Anchorage, Aloska 99519-0869 5 | i k ALASKA ENERGY AUTHORITY RURAL PROGRAMS Revision No. PROJECT BUDGET Comunity, | _ BETHEL pudget 37) Bemmey Pua <o-0F ETA Pd CODE NAME PJ CODE | PROJECT NAME Preparer —————E= tm Besa pate _|/23/92_ Source(s) of Funding PROJECT Line Chart of Accounts FYI2-ZTA : TOTAL 1 Direct Personal Serv W/Benefits veep LLP ea cccecccasesiscetacersccneeeantecesesredvaces 2 Indirect Personal Services saaeeee me GENS) «-SGEEGRSSGESSSEWSGUSSNS © -«sUUSUDSUET EGU ST ISU dee cn : [Line 2 = 50% X Line 1] 3 71000 PERSONAL SERVICE SUBTOTAL >, 3 BB2D>_ [Line 3+ tnt + Line 2] 4 72000 TRAVEL & PER DIEM ' 5 Engineer & Prof Serv Contracts 6 Freight 7 Project Comtingeaey 9000000 cecccseusssQisQUMeecs «© secasseuccrceuscestess © GeaveceaeBosss¥estesua® ss : Nagar sataeacsaascesielicststew tests ser savers 8 Indirect Non-Personal Services cecseeeeecs ASS cecteeceecteeeeeeueees 0 sueeaeceeeeeeeeeeeeeree ues eee Tete Teer [Line 8 = 18% X Line 1) 9 73000 OTHER SERVICES SUBTOTAL ! 8 ~ (Line 9 = Sum of Lines 5,6,7,8) 10 74000 PROJECT MAT'LS & EQUIPMENT Ze20 11 75000 AEA EQUIPMENT 2 O 12 77000 GRANTS Oo © [ste BuOGET ON REVERSE S10] Se {Line 13 + Sum of Lines 3, 13 TOTAL 5,200 5.2022 4,9,10,11,12) ’ NOTES: Matrix Code VA I Project AR TD OYYQ Project CC CY LD ; Project LC yy N51 _i { (}y cc: Gloria Mann BUDGET APPROVALS (Please initig) and date) if / ; Don Whelan ‘ j ‘ j Garysmith Project Manager Manager/Rural Projects Director/Rural Programs Pat Woodell Janet Hanser: Executive Director ALASKA ENERGY AUTHORITY RURAL PROJECT DEVELOPMENT WORKSHEET Project Manager: Eg tar Date: \/23/2z Community: ®eTxe— Project Description [Describe reason for initiating project (response to correspondence, Site visit, etc.) the situation, needs, proposal for resolving same, and issues pertinent to funding source restrictions (e.g., life, health, and safety improvements; efficiency improvements; emergency nsk, etc.)] ReQvesT Fren The aity To IWvestioate THE FaAneuty OF A CITY Co-eF Vee FveL FAUUTY To epueé Clectuc CATES a PLE outs, Scope of Work (__ Preliminary _4 Final) [Iternize tasks in as much detail as possible] |) QUEVEY FRefesep sites. 2) HeeT WITH aTy OFBiumS 1% Devse NEES. 3) erpte BUErF Heler sores FE PuBUC MEETING , Preliminary Cost Estimate (Total): $ Proposed Funding Source(s) = appropriation(s), Outside funding source(s), Other agency funding, Financing through onds or other means] FY9~ BIA If any outside source funding is involved, describe on reverse side the proposed billing arrangements, conditions for receipt of and use of funds, and any other issues affecting project management. Project Management Plan (__ Preliminary _W Final) Who will be the eventual owner of this project? City Alaska Energy Authority IRA Council Other (spect) Private Utility 4. N/A (STOX Over ) ye Will AEA grant funds for the project? Yes x No If so, specify method: Through Trustee Directly to Grantee Ss Check proposed extent of involvement of AEA staff, contractors, City/Utility staff, and/or force account labor for the activities listed below: EXTENT. OF IN ACTIVITY ———AGCTIVILY = GROUP ~-~~- None Minimal Oversight Moderate Heavy Project AEA Staff x Management AEA Contractors (Se City/Utility Staff ee | eee City/Utility Contractors eee Design | ~AEAStaff c AEA Contractors Po City/Utility Staff PE Gupte Coumacors [TT Materials AEA Staff a Purchasing AEA Contractors ee ee City/Utility Staff pe a | Sees FL Construction | AEA Staff pT AEA Contractors a Pe WW J Force Account Labor . Eee Te A__|_ Sahil Coneacton” | Inspection AEA Staff | OT AEA Contractors i Ps a) A) / City/Utility Staff ES | | OT a es | Operation & AEA Staff fT aintenance AEA Contractors DE En eee City/Utility Staff ln Be City/Utility Contractors Pe 4. Estimated Project Start Date \J2z ez ; End Date 6) [ 27 5. On reverse side, provide additional information and/or describe pertinent issues that will affect the management of this project. Project Development Schedule YIN # x « « [o | IT Estimated Item Staff Responsible Completion Date A. Project Planning Tasks: PCE Analysis George Matz NA Other Econ./Finan. Analysis MH Final Scope of Work | /23 /Aeu Final Management Plan Project Budget Budget Review - Directorate Gary S./Dave D-C - Agency (over $50K) — Brent Petrie BIAS Loan/Financing Application Marcey Rawitcher ie ns Lae At B. Grant/Project Agreement Preparation: Draft Grant/Project Agreement Pat Woodell In-house Review of Draft Community/Utility Draft Review Attorney General Draft Review Pat Woodell Final Grant/Project Agreement Pat Woodell Attorney General Approval Pat Woodell Community/Utility Approval Agency Approvals Marlys Hagen C. Trustee Project Setup: Complete Set-up Sheet Request Check From Accounting Pat Woodell Receive Check at AEA Don Whelan Forward Check/Set-up to KPMC Pat Woodell D. Commence Project \ jjzsfau _ It (i.e., purchase materials, let contracts, hire labor, etc.) ALASKA ENERGY AUTHORITY PROJECT BUDGET WORKSHEET Project Information Community: BETREL ProjectName: _BETHEL FUEL CO-oF PTA Number: AEA Proj Manager: LAY Date prepared: ia ieee eee 2% Date of Basis: OEE Prepared by: _B. GRAY Approved by: RPO401-1 ALASKA ENERGY AUTHORITY PROJECT BUDGET WORKSHEET Project Information MATERIAL | Description Notes [| Amount _ filets, ETE | 200 Total [ Z20 FREIGHT Description Notes Amount | | SUMMARY Toate Personal Services(A+D) Travel & Perdiem (C) Material (E) Freight (F) Contract (B+G) Total RPO401-2 Purchase Request No. | Purchase Request No. | AEA92-A 4056 Please place the Purchase Request Number on your billing invoice. The Alaska Energy Authority will NOT approve invoices for payment without a Purchase Request Number. ') Alaska Energy Authority PURCHASE REQUEST NOTICE TO VENDORS NOT VALID FOR PURCHASES OVER $1,000.00 DELIVERY INFORMATION Project/Community Ledger Code Telephone: 5 6/- 777 Geneceh Admin PR 812000 12 Ordered By: Fy Whit. cn mb Date of Request //27/7 2 Date Required i/2 72 Date Scheduled Date Delivered / Commodity # FOB Point On V-E0 ORDERING INFORMATION Contact Name “7p d¢/ Telephone Number GSS Vendor # Shipping Instructions UNIT EXT. em | QUANTITY il DESCRIPTION PRICE PRICE ] L lee. |Shse parcel tn Bethol 18.00 18.00 [ bee TOTAL ia ACCOUNTING INFORMATION PREF | TYPE NUMBER AMOUNT DATE COMMENTS 1 PVN = DO 3 WRK AUTHORITY BILL TO: Alaska Energy Authority; P.O. Box 190869; Anchorage, AK 99519 Distribution: | Original — Vendor Yellow — Accounting Pink — Project Goldenrod — Procurement/Property CITY OF BETHEL P.O. Box 388 » Bethel, Alaska 443-7787 — ran Garin ant 543-1047 January 22, 1992 MEMORANDUM - FAX: 561-8584 TO: Gary Smith Sue White Alaska Energy Authority , FROM: George H. Hohman, Jr. / say SUBJ: Bulk Fuel Tank Storage Farm The City of Bethel requests the assistance of the Alaska Energy Authority to help develop the concept of a city cooperatively- owned bulk fuel tank storage farm similar to the one that is under construction in Dillingham. “Deep Sea Port and Transportation Center of the Kuskokwim” Laseus/ Peel eared 4ofo. 4/ $6,263 Gocrout 273. 7o 37/0 6 425: 0s 6, Seo " 646. og GF 267 " 1°S0- 00 /2, 008 ” Zoes 2130.00 iy, fos “ Zeos ae (S0S.e4 17, £09 - Foos !ULo. oo (Gove 2 Ze09 1260.0- cee tae 4f6 os [4,e00 2,000 9 et oleae eae) 414.111. f0 Sb 940 Gne pala ri