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HomeMy WebLinkAboutAlaska Cogeneration System, Inc. Response to Proposal Clean Coal Plant 1996ALASKA COGENERATION SYSTEMS, INC. RESPONSE TO PROPOSAL ALASKA ENERGY NEEDS INTRODUCTION Alaska has many rural communities which are currently using diesel fuel-fired generators to produce electricity. The delivered diesel fuel is very expensive and poses substantial environmental risks. The cost of diesel fuel delivered to these communities ranges between $5 and $10/MM Btu. The State of Alaska, through DCRA, has implemented a policy to replace diesel fired generation in rural communities with coal fired generation. The University of Alaska, Fairbanks, estimates coal from the Evans Jones mine which is located in the Matanuska Valley, could be delivered to the larger coastal communities at approximately $2.50/MM Btu. The coal could be used to fire 3-18MW cogeneration plants, providing a realistic and cost effective solution to meet long term electrical requirements of communities, dispose of municipal waste in an environmentally acceptable manner, while supplying large amounts of waste heat which could be distributed throughout the communities via a community district heating system. In the larger communities, waste heat captured from the cogeneration plant could displace 2-3 million gallons of fuel oil presently used for spacing heating purposes, resulting in overall plant efficiencies in excess of 60 percent. Furthermore, for the first time in many years, major Alaskan utilities must begin the process of adding and replacing a combined total of approximately 300 MW’s of generation capacity. Much of this new and replacement capacity could be provided by coal fired cogeneration plants which would qualify as Qualifying Facilities (QF’s) under the Public Utilities Regulatory Policies Act (PURPA). Recognizing the need and opportunity to develop and construct coal fired cogeneration plants in Alaska, a group of three exceptionally qualified professionals with varied backgrounds in energy and environmental fields including: power plant design, electrical utility transmission and distribution design, environmental management and permitting, power plant operations and maintenance, thermal energy (waste heat) recovery system design and law, form Alaska Cogeneration Systems, Inc. (ACSJ) to pursue development of Alaska cogeneration opportunities. The background of the principals in ACSI are as follows: Name/Qualifications Title Frank J. Bettine, P.E., Esq. President Professional Electrical Engineer and General Manager Attorney at Law with extensive Alaska utility experience. 750 West Second Ave., Suite 205 Telephone (907) 274-4546, Anchorage, AK 99501 Fax/Tel. (907) 279 -1491 1.0 William D. Steigers, Jr. Ph.D. Vice President Professional Environmental Manager Environmental Manager with extensive Alaska permitting and clean coal technology experience. Michael W. Oswald Vice President Mechanical Engineer with extensive Engineering Manager experience in developing, constructing and operating thermal power plants. OVERVIEW In response to Alaska Power & Telephone’s (AP&T) Request for Proposal, Alaska Cogeneration Systems, Inc. (ACSI) is prepared to offer a carefully designed and fully integrated coal fired cogeneration power plant that will not only provide lower cost electric power, but it will also provide lower cost thermal energy to the community. The basic provisions of ACSI's offer is as follows: 1.1 1.2 1.3 1.4 ACSI will construct a small clean coal fired cogeneration power plant with an installed capacity of 3.5 MW. Assuming a 2.5% per year load growth, the 3.5 megawatts of capacity should be adequate to meet the baseload, intermediate, and peaking needs through the year 2025 without supplemental diesel capacity. A conceptual design layout for a cogeneration plant housing a single coal fired boiler and a single 3.5 MW turbine can be found in Appendix C). ACSI will construct the cogeneration plant on a site identified by AP&T. ACSI will provide information and the support necessary to obtain air quality and environmental permits. ACSI is proposing to design, supply, construct, commission and permit the cogeneration plant. Optionally, ACSI would be ready to operate and maintain the plant. ACSI intends to contract with a major contractor experienced in constructing similar projects in Alaska, such as Haskell Construction, Co. to assist in project construction. Haskell Construction, Co. is the contractor that was responsible for erecting an 11 MW coal plant at the OTH-B site near Gulkana. The ACSI design-build team would be composed of all the necessary expertise to successfully design, construct commission and permit the cogeneration plant. ACSI contemplates the project would be built under an EPC (Engineering, Procurement, Construct) contract arrangement. Studies conducted by ACSI have indicated that small coal fired cogeneration plants when coupled with district heating systems, can efficiently generate electric power in the range of 10-14 cents per kwh, depending on the price and quality of the coal and financing alternatives. 2.2 2.3 DISTINCT BENEFITS BEING OFFERED IN ACSI'S PROPOSED COGENERATION PLANT FOR AP&T 1. Lower cost power with practical and cost effective generation. 2: Lower cost space heating for businesses, housing and others. 3 Reduction in air emission pollutants exhausted into air shed. 4. Provides and option for the area’s solid waste and industrial waste disposal. 5. Reduced environmental liability from fuel oil handling and storage. 6. Short term economic benefit from project construction activities. 7. Long term benefit from project investments, operations and local employment. 8. Stimulation of Tok’s businesses and industry through the availability of stabilized power costs and lower heating costs. DESCRIPTION OF PROPOSED COGENERATION PROJECT ACSI is proposing to construct its offered cogeneration plant on a site identified by AP&T. ACSI presumes this plant would be constructed on non-permafrost, non-frost susceptible soils. If it is necessary to construct the plant on permafrost soils, passive and active refrigeration measures may need to be implemented to prevent deterioration of the underlying permafrost. For example, a small absorption refrigeration unit, power from waste heat could be installed to provide foundation refrigeration. ACSI's proposed project will be designed and constructed utilizing a clean coal combustion technology with stringent environmental emission controls that will meet or exceed the latest clean air act requirements. The air emissions from the cogeneration plant will be less than that currently emitted from the AP&T’s existing diesel plants. The cogeneration plant will further reduce emissions in the airshed by displacing fuel oil presently used for spacing and process heating. ACSI's proposed plant will consist of one For additional cost, a secondary oil fired boiler can be installed to provide a reliable source of steam during those times the primary coal boiler is out-of-service for maintenance or forced outages. 2.4 2.5 2.6 2.7 2.8 3.0 Se 32 4.0 4.1 In addition to consuming the coal with the properties identified in the request for proposal, the fluidized bed boiler would also be capable of consuming Tok's combustible solid wastes and waste oils. These combustible solid wastes and waste oils would provide a clean supplemental fuel input stream to the boiler and would reduce coal input requirements and hence energy cost to the consumers. As an important feature of our proposal, ACSI is offering to design and construct a district heating system for Tok as part of the construction effort. The district heating system would integrate closely with cogeneration plant operations and the heating needs of the community. Once in operation, the more waste heat that is consumed to displace heating oil, the more money saved by businesses and residents, and the lower the bus bar cost of power. ACSI would enlist the professional engineering services of Mr. Neil Hawthorne to work closely with the Tok community, ACSI's engineers and Summit Paving to establish a realistic preliminary design with a phased construction plan. Both Mr. Hawthorne and Summit Paving have extensive knowledge and experience in constructing utility systems through out Alaska. ACSI intends to provide its own construction management as well as its own quality assurance and quality control needs as may be necessary to insure that the project is constructed in accordance with the engineer's design and will perform as expected. ACSI would also work closely with the AP&T personnel throughout the construction process so that these personnel would gain invaluable insight on the design of the plant. Plant operators would also undergo extensive operations and maintenance training during the plant's startup and testing period whereby they would be ready and qualified to fill operator positions when the plant goes on line. The expected operational life of cogeneration is thirty (30) years or more. ON LINE DATE ACSI's estimates the plant could be on line within eighteen (18) months of contract award and notice to proceed. If selected as the successful proposer, ACSI is prepared to immediately begin design and permitting work on the project. RESOURCE RELIABILITY ACSI's cogeneration plant will consist of one (1) fluidized bed coal fired boiler capable of providing a reliable source of steam to drive one (1) 3.5 MW steam turbine generator with a net output of 3.4 MWs. Reliability is estimated at 92% for a single coal fired boiler system. With both a primary coal boiler and backup oil boiler the plant can deliver 3.4 MWs output at an estimated 99.5% reliability. 4.2 Assuming a 2.5% per year load growth, the 3.4 megawatts of capacity should be adequate to meet the area’s baseload, intermediate, and peaking needs through the year 2025 without supplemental diesel capacity. 5.0 LEGAL AND ENVIRONMENTAL 5.1. ACSI's proposed cogeneration power plant will easily comply with all applicable Federal, State, and Local laws and regulations. 5.2. ACSI's proposed plant will be permitted through the State's Department of Environmental Conservation in strict compliance with Federal clean air regulations. ACSI's plant will emit far less emission pollutants to air shed that what is currently being emitted from the utility’s diesel generators. 5.3 Permits and Regulatory Status Alaska Cogeneration Systems, Inc. has actively investigated permit requirements for coal fired cogeneration plants throughout Alaska. These investigations have included discussions with the Alaska Department of Environmental Conservation (ADEC) Air Quality Division, ADEC Solid Waste Division, and Alaska Department of Natural Resources (ADNR) Division of Lands. As a result of ACSI's investigations, we have developed a list of potential permits which could be required to construct and operate the facility. These potential permits are presented in Table 1. A description of each potential permit follows. National Pollutant Discharge Elimination System (NPDES) General Stormwater Permits are required of a facility during construction and operation to control and mitigate transport of pollutants off-site through discharges of storm water and site drainage. An NPDES General Stormwater Permit for construction activities is automatically issued by EPA following receipt of a simple notification of intent to discharge. A Storm Water Pollution Prevention Plan is required by the construction NPDES General Stormwater Permit to be prepared and in place prior to start of construction activities. A Spill Prevention Control and Countermeasure (SPCC) Plan would need to be developed if new construction entails more than 1,320 gallons of aboveground storage and/or more than 40,000 gallons of below ground storage of petroleum products. . Depending upon approach and departure flight paths of aircraft from nearby runways, and the height of the stack for the cogeneration project, a Notice of Proposed Construction may need to be filed with the Federal Aviation Administration (FAA) for a determination of no hazard to air traffic. LIST OF POTENTIAL ENVIRONMENTAL PERMITS AND APPROVALS NEEDED TO CONSTRUCT AND OPERATE THE CORDOVA TABLE 1. Permit/Approval FEDERAL National Pollutant Discharge Elimination System General Stormwater Permit Storm Water Pollution Prevention Plan Spill Prevention Control & Countermeasure Plan Federal Aviation Administration (FAA) Notice of Proposed Construction Division of Governmental Coordination (DGC) Coastal Zone Management questionnaire Alaska Department of Environmental Conservation (ADEC) General Wastewater Disposal Permit Permit to Operate Solid Waste Disposal Permit COGENERATION PROJECT U.S. Environmental Protection Agency (EPA) Discharge of site storm water runoff during construction and operation Required by NPDES General Stormwater Permit prior to construction Oil Spill plan for prevention and control during operation Determination of no hazard to air traffic for stack and buildings For projects located within the Coastal Zone Management Area Discharge of excavation wastewater during construction State air permit for construction and operation of power plant Disposal of ash po Depending upon the groundwater levels and quantities anticipated to be encountered during construction, a General Wastewater Disposal Permit may be required from ADEC for discharges of wastewater from excavations for building foundations footings, and other subsurface excavations. ACSI has conducted several discussions with representatives of ADEC's Air Quality Division regarding the particulars of air quality permitting of coal fired cogeneration facilities in Alaska. The Clean Air Act, as amended and as administered by ADEC, requires review and approval of the "construction" (including "reconstruction") or "modification" of all sources of air pollution to ensure that air quality in attainment areas is not deteriorated beyond allowable limits for any pollutants regulated by the Act. The proposed facility will be a fossil-fuel fired steam generation plant but should not exceed 50 MMBtu/hour heat input, and, therefore, should not come under formal review by the Air Quality Program administered by ADEC. The size of the cogeneration facility (3.5 MW) places it within Subpart Dc - Standards of Performance for Small Industrial - Commercial - Institutional Steam Generating Units (40 CFR). A facility within this classification must have a maximum design heat input capacity of 29 MW (100 MMBtu/hour) or less, but greater than or equal to 2.9 MW (10 MMBtu/hour). The proposed coal- and oil-fired boilers have a maximum combined design heat input capacity of which places the facility within the Subpart De classification. Because the facility would have a heat input capacity less than or equal to 22 MW (75 MMBtu/hr), the sulfur dioxide (SO, ) emission limits in 40 CFR 60.42c for minimum removal levels of SO, would not apply. Applicable emission limits in 40 CFR 60.43c for particulate matter would apply, however, and will be met with a baghouse. There are no nitrogen oxide (NO, ) emission limits for steam generating facilities within Subpart Dc. The proposed facility will also not be subject to PSD review and New Source Performance Standards specified in 40 CFR Subpart Da since it will be rated less than 250 MMBtu/hour. Prevention of Significant Deterioration (PSD) Class II increment modeling and National Ambient Air Quality Standards (NAAQS) modeling will be used to establish that the proposed facility does not violate PSD increments or NAAQS for regulated air pollutants. Meteorological data from the local area will be used to support the application for the air quality permit. An analysis of impacts to air quality related values (AQRVs), including an analysis for visibility impacts, will also be performed as part of the application process to ADEC. ACSI's preliminary discussion with permitting agencies, combined with our extensive experience in permitting coal-fired power projects in the State of Alaska, allow us to conclude that the proposed Cogeneration Project can be successfully permitted within a reasonable time frame, and that there are no permitting difficulties which would impede or prevent the successful permitting of this project. 6.0 INSURANCE AND BONDING REQUIREMENTS 6.1 ACSI, if selected as the successful offerer under this RFP, will provide certain insurance issued by underwriters acceptable to the AP&T, in a form acceptable to the AP&T, and having limits of liability acceptable to the AP&T. 6.2 Such insurance shall include but not be limited to workers' compensation, employers' liability, general liability, automotive liability, and, if appropriate, builder's risk, watercraft and aviation, and professional liability insurance. The contractor assisting ACSI in erecting the project, will post the necessary performance bonds. 7.0 QUALIFICATIONS AND EXPERIENCE Representative coal fired cogeneration projects in Alaska: ACSI is preparing to construct an 18 megawatt coal fired cogeneration plant in Valdez, Alaska. ACSI’s Valdez proposed cogeneration plant has been recognized by the Federal Energy Regulatory Commission (FERC) as a Qualifying Facility (QF) as defined in the Public Utilities Regulatory Polices Act. (PURPA). ACSI is presently awaiting a ruling from the Alaska Public Utilities Commission (APUC) to clear the way for the start of construction. An important feature of this plant is the construction of a district waste heating system for Valdez, which when fully operational would displace approximately 2.5 million gallons of fuel oil now being used for space heating purposes. ACSI will own and operate the plant and sell electric power and energy directly to Copper Valley Electric Association (CVEA). Energy from this plant would be sold to CVEA for approximately 10 cents per kwh. See Appendix A for a more detail concerning ACSI’s Valdez project. ACSI submitted a proposal to Cordova Electric Cooperative to construct a 6.5 megawatt coal plant to meet the future electric power and energy and space heating needs of the community. ACSI coal fired cogeneration plant competed head to head against two proposed hydroelectric alternatives. Although Cordova Electric ultimately chose to develop one of the hydroelectric alternatives, ACSI proposal demonstrated that small coal fired plants could generate power in the range of 12 cents per kwh. See Appendix A for a more detail concerning ACSI’s Cordova Proposal. A copy of ACSI’s business license and copies of ACSI’s Officers and Board of Directors business cards can be found in Appendix B. Resumes of ACSI’s Officers and Board of Directors Frank J. Bettine, P.E., ESQ. EDUCATION J.D. (1991), College of Law, University of Idaho M.S. (1978), Electrical Engineering, University of Oklahoma B.S. (1970) Electrical Engineering, Oklahoma State University REGISTRATION Professional Engineer - Alaska and Idaho Attorney at Law - Alaska SUMMARY OF QUALIFICATIONS Mr. Bettine is an Attorney and professional engineer with over eighteen years of design and management experience in the Alaska electric utility industry. He has worked as both a private consultant and as a utility employee. As President and General Manager of Alaska Cogeneration Systems, Inc., Mr. Bettine in addition to his management responsibilities, provides business and proposal development, technical design, contract document preparation/review, and contract negotiations. Mr. Bettine is a trained mediator and arbitrator and provides Alternative Dispute Resolution Services, as a partner in the firm of Bettine & Associates, to private parties, federal and state agencies. As a previous part-time employee at the engineering consulting firm of Dryden and LaRue, Inc., Mr. Bettine served as project manager and design engineer for a substantial portion of a 14 million dollar Static Var Compensation project, which consisted of two static var compensation stations, constructed for the Alaska Energy Authority. He also provided design engineering and served as project manager for the design phase of Golden Valley Electric Associations, 30 mile long Fort Knox, 138 kV transmission line. As Manager of Engineering with Copper Valley Electric Association he supervised the engineering and power production departments and was responsible for the planning and design of system improvements and replacements for hydroelectric, diesel, oil fired turbine generation, and high voltage transmission facilities. He was employed at Chugach Electric Association for several years as a substation and transmission design engineer. During the period he was employed by International Engineering Company, formerly R.W. Retherford Associates, his responsibilities included design of high voltage transmission and substation facilities, small diesel plants in rural Alaska and system studies. His original load flow studies demonstrated the feasibility of constructing the Anchorage/Fairbanks Intertie. He was also responsible for the design and construction of an experimental 40 kV Single Wire Ground Return Transmission System installed in western Alaska between Bethel and the village of Napakiak which remains in satisfactory operation today. This project received an Engineering Excellence Award from the Consulting Engineer's Association of California in 1982. In addition to an extensive engineering work history, Mr. Bettine also has extensive work and edu- cational experience in interpreting State and Federal Statutes in Administrative, Energy, Environmental and Contract Law. William D. Steigers, Jr., P.hD EDUCATION Ph.D. Wildlife and Range Resources, 1981, Brigham Young University, Utah State University M.S. Wildlife and Range Resources, 1978, Brigham Young University B.S. Wildlife and Range Resources, 1976, University of Idaho, Lewis Clark State College LICENSES AND REGISTRATIONS Certified Wildlife Biologist - The Wildlife Society (1984) SUMMARY OF QUALIFICATIONS Since 1982, Dr. Steigers has been a Project Manager for environmental services and responsible for both managing technical field studies and preparing impact assessments and mitigation plans for wildlife, fisheries, botanical resources, wetlands, air quality, visibility, cultural resources, socioeconomic, recreational resources, land use, and visual resources throughout the United States, including Alaska and Hawaii. Project supervisory responsibilities also include management of personnel in various engineering disciplines. He has managed large development-related environmental projects and environmental subcontractors. Dr. Steigers has prepared numerous environmental documents leading to federal Environmental Impact Statements (EIS) and federal and state permit applications for large and small development projects. Dr. Steigers has developed expertise in the successful permitting of fossil-fueled generating facilities. His notable achievement in Alaska is the provision of environmental project management services and the successful permitting of the coal-fired Healy Clean Coal Project with the Alaska Industrial Development and Export Authority. Similar services have been provided for gas- and diesel-fired combustion turbines and combined-cycle steam units. On these projects, his responsibilities included the management, development, and implementation of the environmental program to permit construction of the facilities; coordination of resource agency meetings; identification and implementation of environmental field studies to support development of federal and state EIS's and permits; development of project negotiating positions, mitigation options, and implementation of negotiations with agencies; and monitoring and compliance with federal and state permits. 10 Dr. Steigers' also has FERC licensing experience in Alaska, including managing and providing technical support to the environmental programs for licensing of the Bradley Lake Hydroelectric Project and the Susitna Hydroelectric Project. Dr. Steigers has over 18 years of technical experience. Most of that experience has been related to permitting and environmental impact assessments for fossil-fueled generating facilities, including air quality and visibility analysis, and hydroelectric development projects in Alaska. Dr. Steigers is Vice President and Environmental Manager of Alaska Cogeneration Systems, Inc. (ACSI) of Anchorage, Alaska. In this capacity, he is responsible for formulating conceptual approaches and implementing the environmental programs for new energy development projects undertaken by the ACSI. Dr. Steigers is also President of Steigers Corporation, and environmental and engineering consulting firm specializing in environmental project management and energy development. As President, he acquires, manages, and participates in all phases of the environmental and related engineering work of the firm. Michael W. Oswald EDUCATION B.S. (1973), Mechanical Engineering, Montana State University M.B.A. Courser (1976), Eastern Washington State University SUMMARY OF QUALIFICATIONS Mr. Oswald has over 20 years of experience in the Design, Manufacturing, Production, Construction, and the Operation and Maintenance of Fluidized bed Boiler systems and related steam and power plant equipment. Mr. Oswald was involved in the development of many of the features that have become standard for the industry in the design of fluidized bed combustion systems utilized for the combustion of various solid fuels. Mr. Oswald is the President of Precision Energy Service, Inc. which provides Operational and Maintenance services as well as consulting to energy plant owners and developers. These services are provide to major corporations such as DuPont, as well as independent project developers. Precision Energy Services is proficient in the design, construction and operation and maintenance of solid fuel fired energy systems and boilers. In providing O&M services the company has first hand experience as to the performance of equipment and systems in actual operating conditions. Prior to his employment with Precision Energy Services he was vice-president of a major fluidized bed design and manufacturing firm, JWP Energy Products (EPI), where he served in various technical and management positions. Over the course of his employment with EPI the company and its licenses placed into service over 65 commercial fluidized bed combustion and boiler systems. Many of the fluidized bed combustion and boiler systems were provided as part of a complete turn-key plant which 11 include the various necessary sub-systems such as fuel processing and storage, power generation, and emission controls.. Mr. Oswald is also a Vice-President and Engineering Manager for Alaska Cogeneration Systems, Inc. (ACSD of Anchorage, Alaska. In this capacity he is responsible for developing the conceptual and preliminary mechanical design of cogeneration facilities undertaken by ACSI and will be responsible for overseeing the detailed design performed by selected engineering firms. He has served on other Board of Directors including Northern Circle Construction. He has attended numerous seminars on management, technical subjects and operation and maintenance of power plants. Mr. Oswald has written numerous publications on the subject of solid fuel combustion, fuel handling and the application of fluidized bed systems to industrial and utility plants. 12 SECTION 2.1 - VALDEZ COGENERATION PROJECT 2.1.1 - INTRODUCTION ACSI is prepared to construct a thoughtfully conceived alternative power generation resource option that represents a fully integrated energy resource strategy, capable of meeting power requirements of CVEA and the heating and solid waste disposal needs of Valdez and its primary industries for the next thirty years. ACSI's integrated resource strategy will not only provide lower cost electric power, but it will also provide lower cost thermal energy to the community and will provide a means to alleviate Valdez's burgeoning solid waste disposal problem. To accomplish this goal ACSI is prepared to construct a small clean coal fired cogeneration power plant with an installed capacity of 18 megawatts, which is adequate capacity to meet CVEA's baseload, intermediate load, load growth, and peaking needs for the next 30 years. ACSI's cogeneration plant has been recognized by the Federal Energy Commission as a Qualifying Facility (QF) as defined in the Public Utilities Regulatory Polices Act (PURPA). ACSI's proposed cogeneration plant is being offered with it's entire thirty (30) year life cycle fuel input requirements being fully committed to the project. The life cycle fuel requirements for the cogeneration project will come from either the Evan Jones and/or Castle Mountain coal mines in the Matanuska Valley where processed coal will be loaded into fully enclosed metal shipping containers and transported via truck, railroad, and barge to Valdez. Once delivered to the plant, the coal will be burned in a clean coal combustion boiler to produce the thermal heat energy requirements to generate Valdez's power and heat energy needs. After the coal has been delivered to the power plant the empty containers will be available to transport the plant's boiler ash as well as Valdez's solid wastes back to an Alaska Department of Environmental Conservation (ADEC) approved regional solid waste disposal site. Valdez's combustible solid wastes, which makes up approximately 50% of the municipal waste volume, would provide a clean supplemental fuel input stream to the boiler that would reduce coal input requirements and hence energy cost to Valdez's consumers. The balance of Valdez's non- hazardous solid wastes, which would include the non-combustible materials, junk cars, scrap metal, glass, and the like, could easily be transported, along with our boiler ash, back to regional solid waste disposal site in the Matanuska Valley for disposal and/or to Anchorage recycling companies. As an important feature of our proposal, ACSI is offering to design and construct a municipal district heating system for Valdez that would integrate closely with ACSI's cogeneration plant operations and the heating needs of the community. ACSI has enlisted the professional engineering services of FVB District Heating, Inc. to work closely with ACSI's and Summit Paving to establish a realistic preliminary design with a phased construction plan. FVB District Heating, Inc. is a recognized world leader in the development, design, construction, and operation of district heating systems and utilities for northern climates. Summit Paving has extensive knowledge and experience in constructing utility systems through out Alaska. operation of district heating systems and utilities for northern climates. Summit Paving has extensive knowledge and experience in constructing utility systems through out Alaska. ACSI has computed the cost Estimated Cost of Power Graph of electrical energy for the Valdez Medium-High Load, Med. Fuel Coal Project based on the economic Zero Interest State Loan assumptions and parameters con- , tained in the Copper Valley Intertie Feasibility Stud ibyR.W Beck. The results of the calculations are graphically illustrated in Graphs 1 and 2. The graphs compare the cost of power for the Valdez Coal Project with Allison Lake and the Intertie for a zero interest State loan, and at an interest rate of six percent, for the Med-High Load, Med-Fuel _| {3 Valdez Coal Project Ej Allison Lake Cintertie scenario contained in the feasibility study. The costs of power for Allison Lake and the Intertie were obtained from the Intertie Feasibility study. The graphs clearly show the Valdez Coal Plant to be the "least-cost" option for supplying the future power needs of CVEA. A comparison of Graphs 1 and 2, also reveals the Valdez Coal Plant can provide lower cost power at a six percent financing rate than the Intertie can provide with a zero interest State loan. ACSI has also approached the City of Valdez, several Valdez area fish processors, the U.S. Coast Guard, the Department of Transportation and others to confirm the need and willingness of large energy consumers to purchase the | ject! h a hot Estimated Cost of Power copes | Semone asin Puexey Cougs a Medium-High Load, Med. Fuel water and/or steam district heating system Six Percent Interest Loan on a long term contractual basis. In fact, the potential Valdez area district heating load is more than adequate to ensure that es the Project will operate at an optimum 5 overall plant efficiency rate approaching 10.0 60-65% net thermal efficiency, which is é approximately twice the typical efficiency 5.0 of other electrical generating plants in the State. 0.0 3 Valdez Coal Project Ej Allison Lake Clntertie ] ACSI has identified several distinct economic advantages that our Valdez Coal Project offers over the other identified resource options, as follows: Economic Advantages Associated with the Valdez Clean Coal Project 1. Power generation capacity located at CVEA's major load center, thereby reducing losses and increasing reliability. 2. Reliance on an abundant clean Alaska energy resource, not subject to oil and/or gas price escalations, with excellent port facilities capable of economically receiving/handling coal in several bulk commodity forms. Bs Apparent “least-cost" option for CVEA consumers. 4. A clean and low cost Alaska energy resource, COAL, committed to supplying the life cycle needs of the project. 5: Provides highest degree of reliability to CVEA consumers with close integration with existing Solomon Gulch Hydroelectric Project and CVEA's Valdez Diesel Plant. 6. Provides twelve (12) long term plant operator jobs in Valdez. ae Offers significant energy savings as well as reduced environmental risk for large waste heat consumers. Waste heat sales are estimated to save Valdez waste heat consumers more than 5 million dollars over a 20 year period. 8. Lower cost steam heat for the canneries with options for absorption refrigeration to further reduce their energy costs. 9. Provides a means to alleviate Valdez's burgeoning solid waste disposal problem. 10. Reduced environmental liability from fuel oil handling and storage. 11. Short term economic benefit from project construction activities. 12. Provides twelve (12) long term mining jobs in Matanuska Valley 2.1.2 - PROJECT DESCRIPTION As presently contemplated, the Project consists of a coal-fired co-generation power plant with close operational integration with the local Utilities’ existing hydro electric and diesel power generation capacity. The Project will be located on private property adjacent to the Utilities' existing Diesel Generation Plant in Valdez, Alaska. The Project will be developed as a Qualifying Facility (QF) under federal regulation and as a primary power source for the Copper Valley Electric Association. ACSI hopes to obtain the right to construct and operate the Project through a Qualifying Facility (QF) status and negotiation process with the Utility and the Alaska Public Utility Commission. Primary components of the Project are a . Both the boilers and the turbine- generators have been purchased used and will be scheduled for extensive overhauling and reconditioning. The primary coal-fired boiler is a Babcock and Wilcox Company utility unit recently salvaged from the SEI/OTH-B Project and presently stored in Anchorage. The boiler was previously owned by the Chugach Electric Association, Inc and was decommissioned in 1986 after 26 years of operation using coal and natural gas as fuel. The boiler has been dismantled, and will be refurbished, transported and reassembled at the Project site. A state of the art fluidized bed combustion system as well as new convection tubes will be installed to insure that the boiler restoration will meet or exceed new boiler standards. The primary boiler is rated at 100,000 pounds of steam per hour at 850 pounds per square inch ("psi") and 900 degrees fahrenheit °F). A second 100,000 Ib/hr oil fired boiler will be installed to supplement the coal fired boiler as well as provide standby capacity when the primary coal fired boiler is out of service. The air pollution control system that will be installed will be recognized as best available contract technology (BACT) and will include the fluidized bed combustion system as well as a limestone injection system. The Project would also to be equipped with a pulse-jet baghouse for collection of sulfur dioxide ("SOx") captured by the limestone injection process and for collection of particulate emissions which are in the form of fly ash, sorbent salts and uncombusted material. The steam turbine-generators to be included in the Project were manufactured by General Electric and the Elliot Company and are rated 6 and 18 megawatts respectively. These turbine generators will be refurbished and will be made like new prior to installation at the Project site. These multi-stage turbines also have several extraction points capable of supplying our district and feedwater heating needs each with rated throttle steam conditions being the same as for the boiler outlet condition, 850 psi and 900°F. The turbine-generator packages including the condensers, lube oil systems and overhead maintenance crane that are presently installed at the SE/OTH-B Project near Glennallen and/or stored in Anchorage. The available steam supply provided by operating both boilers at full capacity will drive the turbine-generators to produce approximately 22 megawatts net output. The minimum power production level from one boiler and the smaller turbine generator is in the range of 1 - 1.5 megawatts below which the overall efficiency of the steam generation system may become to low to operate the system economically. Coal is to be delivered to the Project site via shipping containers which will be unloaded into a hopper with a vibrating feeder. The feeder will distribute the coal onto a conveyor which will direct the coal to either the storage silo or the coal storage bin. The storage silo will store, in total, approximately 4,000 tons of coal estimated to be approximately 30 days of fuel supply under average operating conditions. An ash handling system of a pneumatic dry type will be included. This system will include a mechanical exhauster, bottom ash hopper and all necessary pipes, fittings, valves and appurtenances. An ash storage silo will be included that will store 90 tons of ash which will be sufficient to handle approximately 7-10 days of ash production at the Project site. Annual ash production will be approximately 10 percent of the total coal consumed. Ash will be handled and stored dry and subsequently removed and transported to the locally permitted land fill or back to the coal mine for disposal, in the same containers that delivered the coal. Water supply for the Project is currently anticipated to be provided from existing City wells located near the Project site in Valdez, Alaska. The Valdez city water system is capable of supplying 300 gallons per minute (gpm) or more of high quality water which in total is more than three times the estimated maximum plant water requirement of 100 gpm. Water would be treated and demineralized prior to use in the steam generators. The exhaust steam from the turbine would be condensed in a large surface condenser. Water supply to the condenser would be cooled by a three- cell cooling tower. The cooling tower would be designed with consideration for the cold temperatures of the Project location. The relatively large Valdez district heating load will significantly reduce the plant's make up water requirements by reducing cooling tower plume/ evaporation. Process and sanitary wastewater, estimated to be generated at a rate of approximately 10,000 gallons per day will be pretreated, cooled and discharged directly into the Valdez Waste Water System. The Project also expects to utilize Valdez's existing waste water utility easement corridor to supply approximately 300,000 mmbtu/year in district heating to the local schools, hospitals, municipal buildings, state and federal facilities and commercial businesses. The Project's 24 megawatts worth of installed generator capacity will be steam limited to about 11 megawatts from the primary boiler and would rely on the standby oil fired boiler to be capable of driving another 11 megawatts worth of peaking capacity or for use when the primary coal- fired steam boiler was unavailable because of maintenance or forced outage. The Project will be configured with the coal and/or oil fired boilers driving two (2) steam turbine-generators, an integrated power distribution/control system with the Utilities' existing hydro electric and diesel generation capacity. As presently envisioned, power will be transmitted at 12,470 volts about a '/, mile to a single delivery point. The power transmission system would incorporate one (1) overhead feeder to the Utilities' existing Diesel Generator Plant substation. The Project's integrated power distribution and control system with the Utilities' diesel plant might also include a second lower voltage distribution feeder to service the Project's standby power needs (4.16KV or 480V). Initially the electric load requirement that the Utility is expected to need from our coal fired plant is nominally 10 megawatts of firm capacity during the Utilities Winter demand period of October through May (8 months) and will remain available to the Utility year round. Average load requirements for our plant are expected to be in the range of 5 to 10 megawatts over an average eight month period. However, the peak power requirements for the Utility are expected to fluctuate between 10 and 13 megawatts. As the utility load increased the operating period of the plant will increase from 8 months to 12 months. It is also anticipated that the coal plant will be base loaded during the months of September - May, with the hydro providing peaking during June - August, the hydro would be base loaded with the coal plant supplying peaking demand. The nature of the Utilities' load should allow the Project to integrate and load share in a complimentary manner with the Utilities' existing hydro electric and diesel generation capacity. ACSI will provide an extensive technical analysis of the Project's overall design to insure the operational reliability of the system and its beneficial integration with the Utilities' overall power generation scheme. This analysis, will be performed according to standards established by the Institute of Electrical and Electronics Engineers, will evaluate the likelihood of total system failure based on the probability of failure of individual system components. An additional analysis that will be conducted is a computerized dynamic simulation to verify the capability of the Project to meet the Utilities' power requirements for various anticipated operating levels. Both the reliability and the dynamic simulation analysis will be conducted for the proposed Project by an independent engineering consultant. The Project will be owned and operated by Alaska Cogeneration Systems Inc. (ACSI). Wieland & Lindgren (the "Design Engineer") will provide engineering services relating to final design of the Project. The Design Engineer has provided technical assistance to ACSI during the preliminary design phase of the Project and as a result is aware of the Project and its intended purpose. Construction, construction management, testing and startup of the Project will be performed by Haskell Corporation (the "Contractor"). Quality assurance, control and associated compliance documentation will be provided in house by ACSI. Specialty subcontractors will be retained directly by the Project to perform various Project related functions such as subgrade foundation design, permit application and boiler and turbine-generator refurbishment. A qualified soils engineer will be retained by the Project to provide geotechnical evaluation of the Project site and to design the Project subgrade foundation as well as to assist the Design Engineer with the design and routing of the District Heating System. 2.1.3 - PERMITS, LICENSES AND APPROVALS Various permits and authorizations have been identified by ACSI and the Project's environmental consultants as necessary for the construction and operation of the Project. Principal among these are the Air Quality Permit which will be issued by the Alaska Department of Environmental Conservation. ACSI intends to utilize, amendment and relocate the plant's existing air quality permit that was issued to Slana Energy, Inc., for the Over the Horizon Backscatter Project, for use in this Project. Various other permits will be needed prior to Project operation. These permits will include wastewater discharge and possibly water use permits. ACSI will have the responsibility of obtaining any applicable building permits related to construction of the Project. 2.1.4 - PROJECT OPERATION The Project will be operated directly by Alaska Cogeneration Systems Inc. (ACSI). ACSI will be responsible for operating, maintaining and repairing the Project, hiring and training personnel, purchasing replacement equipment, supplies and fuel, and keeping account of all business transaction associated with the Project. ACSI's duties will also include responsibility for adherence to all applicable laws, regulations and contractual obligations. Presently, Alaska Cogeneration Systems Inc. (ACSI) anticipates the employment of twelve (12) full-time employees in total to manage, operate and maintain the Project. The operations staff will live in the local community. A control room operator and a plant operator will be on duty at all times while one mechanic and/or electrician will work a full week to perform maintenance and repairs as necessary. In addition to its own staff ACSI will establish contracts with various maintenance service suppliers to provide periodic maintenance of the boilers and steam turbine-generators. Coal fuel will be supplied to the Project form the Evan Jones Coal Mine located near Sutton, Alaska. Coal consumption is estimated to be about 30,000 tons per year. Coal will be transported primarily by rail and barge to the Project during a eight (8) month period each year, (September through May), in shipping containers capable of transporting 25 tons each. At the Project, a conveyor system will transport coal from the delivery trucks to the storage silo which will feed directly to the boilers day bin. The storage silo will be designed to hold 4,000 tons of coal in total, equivalent to approximately 30 days of coal supply. Ash will be removed by the plant operator, stored temporarily on-site and transported back to the mine for disposal in the returning shipping containers. Ash removal from the boiler is expected to require about two hours of work time for the plant operators in each 24 hour period. The Project will produce about 2,400 tons of ash per year. Delivery of electric power to the Utility will be accomplished through an overhead transmission system. The Utility will be asked to maintain the transmission system. Disturbances to the transmission system are considered remote because of the Project's close proximity to the existing Valdez Diesel Plant and associated substation. The coal-fired steam generation system will serve as the primary source of electrical generation by the Project. ACSI anticipates a shut-down of each boiler and each steam turbine during the summer months during a thirty(30) day period each year for inspection, repairs and preventative maintenance. Extended shut-downs lasting thirty to sixty(30-60) days for each turbine generator maintenance would be scheduled approximately every five years during the summer months. 2.1.5 - The Contemplated CVEA Contract The Project will produce electric power to be sold to the Utility pursuant to a negotiated contract between Alaska Cogeneration Systems Inc. (ACSI) and Copper Valley Electric Association (CVEA). The contemplated CVEA Contract will specify among other things, the responsibilities of ACSI and the Utility, the period of power delivery, the amount to be paid for power, the general magnitude and characteristics of the Utility load requirement to be placed on the Project, and the liquidated damages to be paid by the Project for interruptions in power deliveries to the Utility. During the Operation Period the Project would be required to make at least 10 megawatts of electric generation capacity available to the Utility at all times during the Utilities' Winter demand period. The Project's anticipated load is estimated to average between 5 to 10 megawatts during the Winter demand period. However, should it become evident that the Project's total load demand might exceed 10 megawatts ACSI would then immediately fire the second oil fired boiler to raise its net spinning generation capacity to at least a 22 megawatts. The contemplated Utility Contract would require the Project to provide electrical service to a single delivery point at 12,470 volts. The Utility will be responsible for metering power deliveries and will also be responsible for controlling line voltage and frequency level. Alaska Cogeneration Systems Inc. (ACSI) will be responsible for compliance with applicable environmental and other regulations during construction and operation. Payment for power purchased by the Utility might be made based on two components. A "Capacity Charge", intended to recover the costs of developing the Project and providing firm generation capacity to the Utility, that would remain constant throughout the Operations Period and the "Energy Charge", intended to recover the costs of fuel as well as operations and maintenance, that would be adjusted based on changes in the consumer price index. 2.1.6 - CONCLUSION Our Project utilizing private financing could easily provide the long term energy needs of Copper Valley Electric at a cost which is well below their current firm avoided cost. However, if our Project is funded or partially funded by the State, anywhere in the same price range as contemplated with the CVEA/MEA intertie, than our associated power production costs would fall well below that which is even possible from the proposed intertie. If the State would be willing to loan ACSI 35 million dollars at zero interest to construct and operate our Valdez Clean Coal Project we could then provide the long term power needs of the Utility for less than 8.0 cents per kilowatt hour. SECTION 3.1 - CORDOVA COGENERATION PROJECT 3.1.1 - INTRODUCTION ACSI is offering to construct a small clean coal fired cogeneration power plant with an installed capacity of 6.5 megawatts at either one of the two sites that ACSI has identified as suitable for such a plant. The 6.5 megawatts of capacity is adequate to meet CEC's baseload, intermediate load, load growth, and peaking needs through the year 2015 without supplemental hydroelectric or diesel generation and when integrated with existing units at CEC's ORCA power plant, the cogeneration power plant will be capable of meeting the needs of CEC through the year 2025. The preferred site identified by ACSI as suitable for its cogeneration plant is the area immediately adjacent to CEC's existing ORCA diesel plant. When constructing at this site ACSI will offer to assume the ORCA plant property lease from the Cordova and/or CEC and if acceptable to CEC, ACSI would integrate the CEC's existing ORCA diesel power plant with the cogeneration plant to provide standby capacity. ACSI is fully prepared to construct its cogeneration plant at the ORCA site location if it is the successful proposer and the ORCA site is selected as the preferred site. ACSI has, however, identified a secondary site which is also suitable for constructing its cogeneration plant if the ORCA plant site is unavailable. This site is located in an area on the North Fill Dock near North Pacific Processor's Cannery. Environmental risk associated with constructing a coal fired fossil fuel facility on the North Fill Dock would be de-minimis since there are virtually no environmental liabilities connected with handling, transportation and storing coal in fully enclosed metal shipping containers. As part of its construction project, ACSI would be willing to relocate the two diesel generators from CEC's ORCA plant to our proposed North Fill Dock cogeneration facility where they would be integrated with the cogeneration plant to provide standby capacity. ACSI's proposed cogeneration plant is being offered with it's entire thirty (30) year life cycle fuel input requirements being fully committed to the project. The life cycle fuel requirements for the cogeneration project will come from either the Evan Jones and/or Castle Mountain coal mines in the Matanuska Valley where processed coal will be loaded into fully enclosed metal shipping containers and transported via truck, railroad, and barge to Cordova. Once delivered to the plant, the coal will be burned in a clean coal combustion boiler to produce the thermal heat energy requirements to generate Cordova's power and heat energy needs. After the coal has been delivered to the power plant the empty containers will be available to transport the plant's boiler ash as well as Cordova's solid wastes back to an Alaska Department of Environmental Conservation (ADEC) approved regional solid waste disposal site. The ash and solid waste will be used to reclaim large open strip pits left unreclaimed from past mining operations. ACSI is offering Cordova a thoughtfully conceived alternative power generation resource option that represents a fully integrated energy resource strategy, capable of meeting the heating, power and solid waste disposal needs of the community and its primary industries for the next thirty years. Figure 1 graphically illustrates the savings associated with the cogeneration plant when compared to continuing diesel generation by CEC under Base Line and Most Probable Conditions (MPC).' Busbar Energy costs from the cogeneration plant are shown in Figure 2 for the financing rates of 0%, and 6.5% along with energy cost of CEC's diesel plant CUMULATIVE PRESENT VALUE ANNUAL for Base Line and MPC. Tables 1 COST OF POWER IN 1994 DOLLARS compares and summarizes the pee CMELCAD CRON TE Present Value in 1994 dollars of ACSI's Cogeneration Plant, at an interest rate of 6.5%, with contin- ued CEC diesel generation for MPC and the Base Case load growth scenario. ACSI believes MPC represents the most realistic economic scenario for CEC, while an interest rate of 6.5% represents a realistic financing rate for the cogeneration plant. The 6.5% fi- nancing rate would be achieved through a blend of state Power Figure 1 Project Loan Funds and private financing. Figure 1 and Table 1 clearly demonstrate the savings to the community of Cordova associated with a fully integrated energy resource strategy is astounding. As shown in Table | and Figure 1, savings in electrical power costs to Cordova consumers in 1994 dollars, over the 30 year operational life of the cogeneration plant, is calculated at $25,000,000 which represents a saving of 40 percent over the cost of continued CEC diesel generation. ACSI estimates that Cordova consumers would also save and additional $5,000,000 (1994 dollars) in heating and solid waste disposal costs during this 30 year period as a direct result of ACSI's energy resource strategy. Busbar costs illustrated in Figure 2 clearly show that the cogeneration plant will provide lower cost electric power to CEC and Cordova consumers. An examination of Figure 2 will reveal that if ACSI could obtain zero percent or minimal rate financing to construct its cogeneration plant, such as available through the Power Project Loan Fund administered by the Department of Community and Regional Affairs (DCRA), busbar cost could approach eight cents per kWh. 1 Most Probable Conditions or Case (MPC) assumes diesel fuel will escalate at a rate of 1.5% above inflation and a five million dollar capital investment by CEC in 1997 for upgrading the ORCA plant to provide 5 megawatts of firm capacity and to bring the plant into compliance with air quality standards. 2 ACSI is willing to assist Cordova in siting a municipal waste processing facility near the cogeneration plant at which combustible solid wastes could be shredded and transported over to the cogeneration plant to be blended with the coal input stream. Cordova's combustible solid wastes, which makes up approximately 50% of the municipal waste volume, would provide a clean supplemental fuel input stream to the boiler that would reduce coal input requirements and hence energy cost to Cordova's consumers. The balance of Cordova's non-hazardous solid wastes, which would include the non-combustible materials, junk cars, scrap metal, glass, and the like, could easily be transported, along with our boiler ash, back to regional solid waste disposal site in the Matanuska Valley for disposal and/or to Anchorage recycling companies. CUMULATED PRESENT VALUE IN 1994 DOLLARS ($1000) BASE CASE LOAD GROWTH TABLE 1 1995-2025 (30 Years) pd Acs Cogen.Ptant | CEC Diesel (MPC) O & M Costs $3,397 $24,889 $21,492 $17,883 $28,356 $10,473 Capacity Costs $12,382 $5,847 ($6,535) Total Life Cycle Cost of $33,661 $59,092 $25,431 Power As an important feature of our proposal, ACSI is offering to BUSBAR COST COMPARISON design and construct a municipal BASE CASE LOAD GROWTH district heating system for Cordova that would integrate ‘closely with ACSI's cogeneration plant operations and the heating needs of the community. ACSI has enlisted the professional engi- neering services of FVB District Heating, Inc. and Mr. Neil Hawthome to work closely with the Cordova, ACSI's engineers and Summit Paving to establish a ~+ CEC Diesel, Most Probable Case realistic preliminary design with a fa ce tied eeaone phased construction plan. FVB District Heating, Inc. is a recog- Figure 2 nized world leader in the development, design, construction, and operation of district heating systems and utilities for northern climates. Summit Paving with their extensive knowledge and experience in constructing utility systems through out Alaska, including Cordova, has agreed to join ACSI as a co- developer of the municipal district heating system. Although ACSI is prepared to finance, design and construct a municipal district heating system for Cordova, we at ACSI believe that a district heating system could better serve the community as a Cordova or cooperative financed, owned and operated municipal utility service rather than a privately owned enterprise. The Cordova or cooperative could purchase waste heat from ACSI's cogeneration plant at wholesale rates for distribution and sale at retail rates to various consumers throughout the community. Once in operation as more waste heat is used to displace heating oil, Cordova businesses and residents will realize greater savings while lowering the busbar cost of power to CEC as well. Municipal district heating systems utilizing waste heat from power production are high priority objectives of Alaska's energy policy with strong State grant and/or financing incentives being offered to encourage rural and coastal communities to take advantage of the huge cost savings and environmental benefits that are possible. ACSI's proposed cogeneration project with its carefully integrated energy resource strategy will provide several distinct economic as well as environmental benefits to Cordova. These include the following: DISTINCT BENEFITS BEING OFFERED IN ACSI'S PROPOSED COGENERATION PROJECT FOR CORDOVA 1. Lower cost power with practical and cost effective utilization of existing power generation assets. 7 A clean and low cost Alaska energy resource, COAL, committed to supplying the life cycle needs of the project. 3 Lower cost steam heat for the canneries with options for absorption refrigeration to further reduce their energy costs. 4. Lower cost space heating for municipal buildings, State and Federal buildings, commercial businesses, apartment housing and others. 5: Significant reduction in air emission pollutants exhausted to Cordova's air shed. 6. Alleviates Cordova's burgeoning solid waste disposal problem. ds Reduced environmental liability from fuel oil handling and storage. 8. Short term economic benefit from project construction activities. 9. Long term benefit from project investments, operations and local employment. 10. Stimulation of Cordova's fish processing industry through the availability of lower cost power, steam and heat. ACSTs proposed cogeneration project with its carefully integrated energy resource strategy would also like to offer the Cooperative, the City, and the canneries practical power and energy sales agreements that are simple to understand, yet, will provide the necessary take or pay contract terms required to secure project financing. 3.1.2 - PROJECT DESCRIPTION ACSI is prepared to construct 6.5 MW cogeneration project on a one acre tract of ground adjacent to the Cooperative's ORCA plant site or on a one acre tract of ground within Cordova's North Fill Industrial Park. ACSI's proposed project will be designed and constructed utilizing a clean coal combustion technology with stringent environmental emission controls that will meet or exceed the latest clean air act requirements. The air emissions from ACSI's proposed cogeneration plant will be less than 25% of that currently emitted from the Cooperative's existing diesel plants. ACSI's plant will further reduce emissions in the airshed by displacing another two million gallons of fuel oil annually which is presently used for spacing and process heating. ACSI's proposed plant will consist of one(1) 80,000 lb/hr clean coal fired boiler as well as one(1) 80,000 Ib/hr standby oil fired boiler to provide a reliable source of steam to drive two(2) 3.75 MwW steam turbine generators capable of providing a net 6.5 MW output to the Cooperative while offering a high degree of reliability. If the cogeneration plant is constructed adjacent to the ORCA plant site, ACSI would integrate the Cooperative's existing ORCA diesel power plant with the cogeneration plant. The ORCA plant diesels generator units would provide ACSI with standby capacity and would enable ACSI to provide CEC and the community a totally integrated power generation resource with a total output capacity of 11.4 MWs. If the cogeneration plant is constructed on the North Fill Dock, ACSI would relocate the two diesel engine generator sets, switchgear and the 2.5 MVA, 4.16kV/12.47kV transformer presently located at CEC's ORCA plant to ACSI's cogeneration plant on the North Fill Dock. Relocating the ORCA power plant equipment would provide ACSI with standby capacity and would enable ACSI to provide CEC and the community a totally integrated power generation resource with a total output capacity of 11.4 MWs. ACST's proposed project will receive and consume approximately 20,000 tons of containerized coal per year from our Evan Jones Coal Mine near Sutton and will generate approximately 2,000 tons of coal ash per year. With each container carrying 25 tons of coal, ACSI anticipates shipping approximately 25 containers of coal every two weeks to meet the plants energy input requirements. After the coal has been received and unloaded at the plant, the plants coal ash will be loaded in approximately fifteen percent of the empty containers for transport to ACSI's and/or the Mat-Su Borough's regional solid waste disposal site for disposal. Containers will then be recycled through this process. The cogeneration plant would also be capable of consuming Cordova's combustible solid wastes, which makes up approximately 50% of the 3,500 tons of municipal solid wastes volume generated annually. These combustible solid wastes would provide a clean supplemental fuel input stream to the boiler and would reduce coal input requirements and hence energy cost to Cordova's consumers. ACSI is willing to assist the City of Cordova in siting a municipal waste processing facility near the cogeneration plant whereby combustible solid wastes could be shredded and pneumatically transported over to the cogeneration plant and blended with the coal input stream. The balance of Cordova's non-hazardous solid wastes, which would include the non-combustible materials, junk cars, scrap metal, glass, and the like, could easily be transported in surplus containers, along with containers filled with boiler ash, back to regional land fill space in the Matanuska Valley for disposal and/or to Anchorage recycling companies. As an important feature of our proposal, ACSI is offering to design and construct a municipal district heating system for Cordova that would integrate closely with ACSI's cogeneration plant operations and the heating needs of the community. However, we at ACSI believe that a district heating system could better serve the community as a City or cooperative financed, owned and operated municipal utility service rather than a privately owned enterprise. The City or cooperative would purchase waste heat from ACSI's cogeneration plant at wholesale rates for distribution and sale at retail rates to various consumers throughout the community. Once in operation, the more waste heat that is consumed to displace heating oil, the more money saved by Cordova businesses and residents, and the lower the bus bar cost of power becomes for the Cordova Electric Cooperative. ACSI is proposing that the district waste heat system be constructed in two phase, with both phase to be completed with a three year time period. ACSI estimates that upwards of two million gallons of fuel oil used for spacing heating and processing could be displaced with a district heating system. ACSI believes it is possible to install a district heating system with minimal disturbance to roadways if installation of the heating system could be started in the summer of 1995. ALASKA DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT P.O. BOX 110806, JUNEAU, AK 99811-0806 ALASKA BUSINESS LICENSE This is to certify that the licensee named below holds an Alaska Business License covering the period January 1 through December 31 of the license year(s), or fraction thereof. LICENSE YEAR(S) LiC. KPT ALS 12/51/97 This license shall not be taken as permission to do business in the state without having complied AOSV ILSOR with the other requirements of the laws of the : State of Alaska or of the United States. COMMISSIONER OF COMMERCE AND This license must be posted in a conspicuous place at the location. ECONOMIC DEVELOPEMENT It is not transferable or assignable. 08-079 (Rev. 9/91) éE #61217 BUSINESS CARD C-LINE Alaska Cogeneration Systems, Inc. 750 West Second Ave., Suite 205 Anchorage, AK 99501 (907) 274-4546 Fax (907) 279-1491 Frank J. Bettine, P.E. Attorney at Law Energy Systems President & General Manager for Alaska Alaska Cogeneration Systems, Inc. 750 West Second Ave., Suite 205 Anchorage, AK 99501 (907) 274-4546 Fax (907) 279-1491 E. Genivee Bettine, J.D. Manager - Administration Energy Systems and Finance for Alaska Alaska Cogeneration Systems, Inc. 750 West Second Ave., Suite 205 Anchorage, AK 99501 (907) 274-4546 Fax (907) 279-1491 William D. Steigers, Jr., Ph.D. Energy Systems Vice President, Environmental Manager for Alaska Alaska Cogeneration Systems, Inc. 750 West Second Ave., Suite 205 Anchorage, AK 99501 (907) 274-4546 Fax (907) 279-1491 Michael W. Oswald Energy Systems Vice President, Engineering Manager for Alaska FRANK J. BETTINE, P.-E. Attorney at Law LAW OFFICES OF BETTINE 750 West Second Ave, Suite 205 Anchorage, AK 99501 TEL. (907) 274-4546 FAX/TEL. (907) 279-1491 email - bettine@micronet.net E. GENIVEE BETTINE, J.D. LAW OFFICES OF BETTINE 750 West Second Ave, Suite 205 Anchorage, AK 99501 TEL. (907) 274-4546 FAX/TEI. (907) 279-1491 email - bettine@micronet.net STEIGERS CORPORATION Environmental Project Management WILLIAM D. STEIGERS, JR., PH.D. President 7005 SOUTH DAHLIA STREET, LITTLETON, COLORADO 80122-2327 MAILING ADDRESS: P.O. BOX 2059, LITTLETON, COLORADO 80161-2055 TELEPHONE: (303) 488-9920 FAX: (303) 488-9899 Michael Oswald President Precision Energy Services Inc. P. 0. Box 1004 Ph & Fax #: Hayden Lake, ID 83835 fan sara (208) 772-4457 1 30'-0" i ine COOLING TOWER, LOCATION T.B.D. TURBINE. GENERATOR TURBINE GENERATOR LEVEL WATER TREATMENT IN LOWER LEVEL ALASKA COGENERATION SYSTEMS, INC. PROPOSED POWER PLANT SITE PLAN ALASKA POWER & TELEPHONE COMPANY TOK, ALASKA pe eae emer em LATEST REVISION DATE 75'-0 PROPOSED POWER PLANT ELEVATION VIEW ALASKA POWER & TELEPHONE COMPANY TOK, ALASKA