HomeMy WebLinkAboutAPPLICATION - AVEC REF 15 Kalskag ApplicationRenewable Energy Fund Round 15
Grant Application – Standard Form
AEA 23046 Page 1 of 39 10/04/2022
SECTION 1 – APPLICANT INFORMATION
Please specify the legal grantee that will own, operate, and maintain the project upon completion.
Name (Name of utility, IPP, local government, or other government entity)
Alaska Village Electric Cooperative, Inc.
Tax ID # 92-0035763 Not-for-Profit
Date of last financial statement audit: December 2021
Mailing Address: Physical Address:
4831 Eagle Street 4831 Eagle Street
Anchorage, AK 99503 Anchorage, AK 99503
Telephone: Fax: Email:
(907) 561 – 1818 (800) 478 – 1818 fbutton@avec.org
1.1 Applicant Point of Contact / Grants Coordinator
Name: Title:
Forest Button Manager, Project Development & Key Accounts
Mailing Address:
4831 Eagle Street
Anchorage, AK 99503
Telephone: Fax: Email:
(907) 646 - 5961 (800) 561 - 2388 fbutton@avec.org
1.1.1 Applicant Signatory Authority Contact Information
Name: Title:
William R. Stamm President and CEO
Mailing Address:
4831 Eagle Street
Anchorage, AK 99503
Telephone: Fax: Email:
(907) 565 - 5351 (800) 562 - 4086 bstamm@avec.org
1.1.2 Applicant Alternate Points of Contact
Name Telephone: Fax: Email:
Onya Stein (907) 561 – 1818 (800) 478 -1818 ostein@avec.org
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Grant Application – Standard Form
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1.2 Applicant Minimum Requirements
Please check as appropriate. If applicants do not meet the minimum requirements, the application
will be rejected.
1.2.1 Applicant Type
☒ An electric utility holding a certificate of public convenience and necessity under AS 42.05
CPCN #169, or
☐ An independent power producer in accordance with 3 AAC 107.695 (a) (1)
CPCN #______, or
☐ A local government, or
☐ A governmental entity (which includes tribal councils and housing authorities)
Additional minimum requirements
☒ 1.2.2 Attached to this application is formal approval and endorsement for the project by the
applicant’s board of directors, executive management, or other governing authority. If the
applicant is a collaborative grouping, a formal approval from each participant’s governing
authority is necessary. (Indicate yes by checking the box)
☒ 1.2.3 As an applicant, we have administrative and financial management systems and follow
procurement standards that comply with the standards set forth in the grant agreement
(Section 3 of the RFA). (Indicate yes by checking the box)
☒ 1.2.4 If awarded the grant, we can comply with all terms and conditions of the award as
identified in the Standard Grant Agreement template at
https://www.akenergyauthority.org/What-We-Do/Grants-Loans/Renewable-Energy-
Fund/2022-REF-Application (Any exceptions should be clearly noted and submitted with the
application.) (Indicate yes by checking the box)
☒ 1.2.5 We intend to own and operate any project that may be constructed with grant funds for
the benefit of the general public. If no please describe the nature of the project and who will
be the primary beneficiaries. (Indicate yes by checking the box)
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Grant Application – Standard Form
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SECTION 2 – PROJECT SUMMARY
2.1 Project Title
Provide a 4 to 7 word title for your project. Type in the space below.
Kalskag Wind Feasibility and Conceptual Design
2.2 Project Location
2.2.1 Location of Project – Latitude and longitude (preferred), street address, or
community name.
Latitude and longitude coordinates may be obtained from Google Maps by finding you project’s
location on the map and then right clicking with the mouse and selecting “What is here? The
coordinates will be displayed in the Google search window above the map in a format as follows:
61.195676.-149.898663. If you would like assistance obtaining this information, please contact
AEA’s Grants Coordinator by email at grants@akenergyauthority.org or by phone at (907) 771-
3081.
Latitude 61.5371 Longitude -160.3123
Upper Kalskag (Kalskag) is located on the north bank of the Kuskokwim River, 2 miles upriver from
Lower Kalskag. It lies 30 miles west of Aniak, 99 miles northeast of Bethel, and 348 miles west of
Anchorage.
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
The project will benefit the communities of Upper Kalskag (population of 203 according to 2020
Census) and Lower Kalskag (population of 262 according to 2020 Census) for a total population of
465. Throughout this application, the two communities will be collectively referred to as Kalskag.
2.3 Project Type
Please check as appropriate.
2.3.1 Renewable Resource Type
☒ Wind ☐ Biomass or Biofuels (excluding heat-only)
☐ Hydro, Including Run of River ☐ Hydrokinetic
☐ Geothermal, Excluding Heat Pumps ☐ Transmission of Renewable Energy
☐ Solar Photovoltaic ☐ Storage of Renewable
☐ Other (Describe) ☐ Small Natural Gas
2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply)
Pre-Construction Construction
☐ Reconnaissance ☐ Final Design and Permitting
☒ Feasibility and Conceptual Design ☐ Construction
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2.4 Project Description
Provide a brief, one-paragraph description of the proposed project.
Alaska Village Electric Cooperative, Inc. (AVEC) is requesting $267,300 and will provide a match
of $29,700 to conduct a wind power feasibility and conceptual design project for the power
generation in Upper Kalskag that also serves the community of Lower Kalskag via an intertie.
AVEC, with the cooperation of the communities, would assess the feasibility of wind resources
suited to provide power to the communities and prepare a conceptual design of a wind facility.
2.5 Scope of Work
Provide a short narrative for the scope of work detailing the tasks to be performed under this
funding request. This should include work paid for by grant funds and matching funds or performed
as in-kind match.
AVEC proposes to install and operate a ZX300 wind LIDAR profiler to collect and analyze wind
data, complete a reconnaissance-level geotechnical effort, and work with Kalskag to determine the
feasibility, location, turbine type, and conceptual design of a wind project. AVEC would then use
the feasibility study to examine the potential for wind energy production to serve the communities.
The effort would culminate in a Conceptual Design Report (CDR), including an alternatives
evaluation and conceptual design, that could be used to seek future wind turbine construction
funding.
2.6 Previous REF Applications for the Project
See Section 1.15 of the RFA for the maximum per project cumulative grant award amount
Round
Submitted
Title of application Application
#, if known
Did you
receive a
grant? Y/N
Amount of REF
grant awarded
($)
N/A
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SECTION 3 – Project Management, Development, and Operation
3.1 Schedule and Milestones
Please fill out the schedule below (or attach a similar sheet) for the work covered by this funding
request. Be sure to identify key tasks and decision points, including go/no go decisions, in your
project along with estimated start and end dates for each of the milestones and tasks. Please
clearly identify the beginning and ending of all phases (I. Reconnaissance, II. Feasibility and
Conceptual Design, III. Final Design and Permitting, and IV. Construction) of your proposed
project. See the RFA, Sections 2.3-2.6 for the recommended milestones for each phase. Add
additional rows as needed.
Task
# Milestones Tasks
Start
Date
End
Date Deliverables
1 Project scoping and
contractor
solicitation
AVEC would select contractor(s)
for the wind feasibility,
geotechnical analysis, and CDR
immediately following AEA’s
authorization to proceed.
Aug 1,
2023
Aug 15,
2023
Contracts/
task Orders
2 Resource
identification and
detailed resource
analysis
AVEC would purchase, ship,
and install a ZX 300 Wind
LIDAR station to bring online
promptly in fall 2023. AVEC will
identify the LIDAR station site
and obtain a letter of non-
objection from the landowner,
along with any other approvals
from permitting agencies before
the grant is awarded to expedite
the start of data collection.
AVEC would operate and
monitor the LIDAR station for
one year, after which it would be
dismantled. A wind resource
report would be drafted
immediately following
completion of data collection.
Sep 15,
2023
Oct 31,
2024
Wind
Resource
Analysis
Report and
Preliminary
Geotechnical
Report
3 Identification of
land and regulatory
issues
If needed, AVEC would obtain a
letter of non-objection for the
placement of the LIDAR station
and geotechnical work.
Based on the outcome of the
wind study and meteorological
data analysis, AVEC would
identify a site for constructing
wind infrastructure and initiate
negotiations for site control for
turbine placement.
Sep 1,
2023
Jun 1,
2024
Site Control
Agreement
for LIDAR
station
Section in
the CDR
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4 Permitting and
environmental
analysis
AVEC would research and
conduct consultations with
agencies to determine needed
environmental permits for
construction of the project.
Sep 15,
2024
Dec 15,
2024
Section in
the CDR
5 Detailed analysis of
current cost of
energy and future
market
AVEC would analyze the
existing and future energy costs
and markets in Kalskag. The
information would be based on
AVEC records and community
plans. Community meetings
would help determine future
energy markets. Information
regarding energy markets would
be incorporated into the CDR.
Feb 1,
2024
Mar 30,
2024
Section in
the CDR
6 Assessment of
alternatives
AVEC would review turbine
types and turbine locations to
determine a recommended
location and turbine system best
suited for local conditions and
community preferences.
AVEC would also review wind-
to-heat location possibilities and
determine recommended
systems to provide heat from
wind power, if feasible.
May 1,
2023
Sep 30,
2024
Section in
the CDR
7 Conceptual design
report and costs
estimate
AVEC would examine various
wind turbines to determine the
best suited system to fit the
energy demand and existing
energy generation system in
Kalskag. The reconnaissance
level geotechnical study will
support a conceptual design and
cost estimate which will be
included in the CDR.
Sep 1,
2024
Nov 1,
2024
Conceptual
Design
Report and
Cost
Estimate
8 Detailed economic
and financial
analyses
AVEC would conduct an
economic and financial analysis
by examining potential final
design and construction,
operating and maintenance
costs, user rates, and other
fiscal components. This analysis
will be included in the CDR.
Jun 1,
2024
Aug 30,
2024
Section in
the CDR
9 Conceptual
business and
operations plan
As a utility cooperative, AVEC
has business and operation
plans currently in place for the
cooperative as a whole.
Operating and business plans
Aug 1,
2024
Dec 15,
2024
Section in
CDR
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may be updated to include wind
energy.
10 Final report and
recommendations
AVEC would combine all of the
memoranda and reports written
for the project in a final report for
submission to AEA. The Final
CDR will include the following
information:
• Wind Resource Analysis
• Site Control Agreements
Needs
• Existing and Future Energy
Costs and Markets Analysis
• Economic and Financial
Analysis
• Geotechnical Report
• Conceptual Design Report
and Cost Estimate, including
turbine evaluation
Sep 15,
2024
Dec 31,
2024
Final
Conceptual
Design
Report
3.2 Budget
3.2.1 Funding Sources
Indicate the funding sources for the phase(s) of the project applied for in this funding request.
Grant funds requested in this application $267,300
Cash match to be provideda $29,700
In-kind match to be provideda $0
Energy efficiency match providedb $0
Total costs for project phase(s) covered in application (sum of
above)
$297,000
Describe your financial commitment to the project and the source(s) of match. Indicate whether
these matching funds are secured or pending future approvals. Describe the impact, if any, that
the timing of additional funds would have on the ability to proceed with the grant.
AVEC will commit a 10% cash contribution ($29,700) of the total cost ($297,000) of the Kalskag
Wind Feasibility and Conceptual Design Study.
a Attach documentation for proof (see Section 1.18 of the Request for Applications)
b See Section 8.2 of this application and Section 1.18 of the RFA for requirements for Energy Efficiency
Match.
3.2.2 Cost Overruns
Describe the plan to cover potential cost increases or shortfalls in funding.
AVEC does not anticipate any cost increases or shortfalls in funding, basing the project budget on
years of experience conducting wind feasibility studies for comparable communities in Alaska.
However, cost overruns do happen – particularly in rural Alaska where extreme weather or
logistical obstacles beyond AVEC’s control can increase the justified cost estimates. Should the
project experience a funding issue, AVEC will seek alternative funding or allocate a larger cash
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match contribution. If needed, AVEC will cover any cost increase or shortfall in funding necessary
to complete a started project.
3.2.3 Total Project Costs
Indicate the anticipated total cost by phase of the project (including all funding sources). Use actual
costs for completed phases. Indicate if the costs were actual or estimated.
Reconnaissance Estimated $0
Feasibility and Conceptual Design Estimated $297,000
Final Design and Permitting Estimated $350,000
Construction Estimated $5,000,000
Total Project Costs (sum of above) Estimated $5,647,000
Metering/Tracking Equipment [not included in project
cost]
Estimated $400-1000 (pending
results of feasibility
study)
3.2.4 Funding Subsequent Phases
If subsequent phases are required beyond the phases being applied for in this application,
describe the anticipated sources of funding and the likelihood of receipt of those funds.
State and/or federal grants
Loans, bonds, or other financing options
Additional incentives (i.e. tax credits)
Additional revenue streams (i.e. green tag sales or other renewable energy subsidies or
programs that might be available)
Assuming wind energy proves to be a viable local energy resource and following successful
completion of the Kalskag Wind Energy Feasibility Study, AVEC will proceed with seeking funding
for final design and project construction. Although the proposed feasibility study and CDR will be
used to determine type, size, and number of turbines needed and subsequent costs, AVEC
anticipates that final design and construction of a wind energy system in Kalskag will cost about
$350,000 and $5 million respectively, for a total cost of approximately $5,647,000. Recognizing the
trend AEA has established for encouraging other-than-REF funds for construction phase projects,
AVEC will research and apply for federal grants or grant/loan funds for the construction phase of
this project. Priorities of the Infrastructure Investment and Jobs Act (IIJA) and Inflation Reduction
Act (IRA) include investment in renewable energy, and completing feasibility work for Kalskag now
will position AVEC and the community to take advantage of the upcoming federal infrastructure
funding with a fully planned and competitive project. Other grant opportunities include the USDA
Rural Utilities Service program and other state or federal grant programs. AVEC expects to provide
a 10% cash match for the final design and construction phases of the Kalskag wind project.
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3.2.3 Budget Forms
Applications MUST include a separate worksheet for each project phase that was identified in
Section 2.3.2 of this application — I. Reconnaissance, II. Feasibility and Conceptual Design, III.
Final Design and Permitting, and IV. Construction. Please use the tables provided below to detail
your proposed project’s total budget. Be sure to use one table for each phase of your project, and
delete any unnecessary tables. The milestones and tasks should match those listed in 3.1 above.
If you have any question regarding how to prepare these tables or if you need assistance preparing
the application please feel free to contact AEA’s Grants Coordinator by email at
grants@akenergyauthority.org or by phone at (907) 771-3081.
Phase 2 — Feasibility and Conceptual Design
Milestone or Task
Anticipated
Completion
Date
RE- Fund
Grant
Funds
Grantee
Matching
Funds
Source of
Matching
Funds:
Cash/In-
kind/Federal
Grants/Other
State
Grants/Other
TOTALS
1. Project scoping and
contractor solicitation Aug 15, 2023 $2,700 $300 Cash $3,000
2. Resource identification
and detailed resource
analysis
Oct 31, 2024 $144,000 $16,000 Cash $160,000
3. Identification of land
and regulatory issues Jun 1, 2024 $4,500 $500 Cash $5,000
4. Permitting and
environmental analysis Dec 15, 2024 $4,500 $500 Cash $5,000
5. Detailed analysis of
current cost of energy
and future market
Mar 30, 2024 $6,300 $700 Cash $7,000
6. Assessment of
alternatives Sep 30, 2024 $27,000 $3,000 Cash $30,000
7. Conceptual design
report and costs estimate Nov 1, 2024 $29,700 $3,300 Cash $33,000
8. Detailed economic and
financial analyses Aug 30, 2024 $9,000 $1,000 Cash $10,000
9. Conceptual business
and operations plan Dec 15, 2024 $4,500 $500 Cash $5,000
10. Final report and
recommendations Dec 31, 2024 $35,100 $3,900 Cash $39,000
TOTALS $267,300 $29,700 $297,000
Budget Categories:
Direct Labor & Benefits $30,600 $3,400 Cash $34,000
Travel & Per Diem $9,000 $1,000 Cash $10,000
Equipment $117,000 $13,000 Cash $130,000
Materials & Supplies $0 $0 -- $ 0
Contractual Services $110,700 $12,300 Cash $123,000
Construction Services $0 $0 -- $ 0
Other $0 $0 -- $ 0
TOTALS $267,300 $29,700 $297,000
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3.2.4 Cost Justification
Indicate the source(s) of the cost estimates used for the project budget, including costs for future
phases not included in this application.
AVEC based the proposed project budget for this grant application and estimates for subsequent
phases on experiences developing wind energy in rural Alaska. AVEC has successfully completed
wind resource feasibility studies and wind energy infrastructure projects in multiple remote Alaska
communities, including comparable projects in St. Mary’s, Emmonak, Stebbins, Bethel, and
Mekoryuk.
Costs for final design and construction are based on lessons learned from recent projects including
St. Mary’s, Stebbins, Emmonak, Mekoryuk, and Bethel. In addition, AVEC’s ample in-house
knowledge of rural Alaska construction projects, wind turbine technologies, logistics, and the
existing wind and construction market have helped to determine potential future costs.
.
3.3 Project Communications
3.3.1 Project Progress Reporting
Describe how you plan to monitor the progress of the project and keep AEA informed of the status.
Who will be responsible for tracking the progress? What tools and methods will be used to track
progress?
AVEC has systems in place to accomplish reporting requirements successfully. AVEC has
received funding and successfully administered grants from AEA, Denali Commission, US
Department of Agriculture, and US Department of Energy, completing more than 100 major
projects in its service area over the last 20 years.
The project will be managed out of AVEC’s Project Development and Key Accounts Department.
For financial reporting, the department’s accountant, supported by the Administrative Services
Department, will prepare financial reports. The accountant will be responsible for ensuring that
vendor invoices and internal labor charges are documented in accordance with AEA guidelines
and are included with financial reports. AVEC has sophisticated systems in place for accounting,
payables, financial reporting, and capitalization of assets in accordance with the State of Alaska’s
guidelines.
AVEC will require that monthly written progress reports be provided with each invoice submitted
from primary contractor(s). The progress reports will include a summary of tasks completed, issues
or problems experienced, upcoming tasks, and contractor’s needs from AVEC. Project progress
reports will be collected, combined, and supplemented as necessary and forwarded as one
package to the AEA project manager each quarter.
Because AVEC is responsible to its member communities and a board of directors, staying on
schedule and within budget is essential. This project will result in an analysis and recommendation
of a renewable energy from a wind farm and decreasing electricity costs in a rural, isolated, and
impoverished community. Kalskag residents are interested in this project because their energy
costs can be a large portion of their budgets. Residents will expect status updates on this project,
including when and what work will occur, who will be involved, and when it will be completed.
Community members will be able to contact AVEC’s President and CEO and Board of Directors
directly if they have an inquiry or concern about a project.
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An independent auditor’s report on compliance for each major federal program and report on
internal control over compliance required by Title 2 CFR 200 (Uniform Guidance) for AVEC in 2021
did not identify any deficiencies in internal control the auditor considered to be a material
weakness. In addition, the independent auditor’s report on compliance with aspects of contractual
agreements and regulatory requirements for AVEC in 2021 stated that nothing indicated AVEC
failed to comply with the terms, covenants, provisions, or conditions of loans, grants, and security
instruments as specified in 7 CFR part 1773. A copy of AVEC’s audit is available upon request.
Quarterly meetings will occur between AVEC and AEA to discuss the status of all projects funded
through the AEA Renewable Energy Grants program. Individual project meetings will be held, as
required or requested by AEA.
Forest Button will be responsible for tracking progress of project communications, and Onya Stein,
may be contacted as an alternative project manager.
3.3.2 Financial Reporting
Describe the controls that will be utilized to ensure that only costs that are reasonable, ordinary
and necessary will be allocated to this project. Also discuss the controls in place that will ensure
that no expenses for overhead, or any other unallowable costs will be requested for reimbursement
from the REF Grant Program.
AVEC’s accounting system consists of software, procedures, and controls driven by the daily
inputs and other actions of competent employees throughout the organization. The software is
comprised of a comprehensive suite of Daffron-brand modules including accounting
(payables/payroll/general ledger), work orders, purchase orders, customer service and billing, and
warehouse/inventory. Some ancillary functions are accomplished on spreadsheets with data
downloaded from the various Daffron modules.
Procedures and controls include but are not limited to adequate separation of duties, manager-
level approval of all expenditures, CEO-level approval of all major expenditures, a formal
purchasing system (including purchase orders) for acquisition of materials and components, and a
formal contracting system for acquisition of contractual services (consultants, construction
contractors, etc.). Accounts payable are processed and recorded by the AVEC Accounting
Department, all expenditures are coded to budget categories and assigned to appropriate work
orders. The Project Development and Key Accounts Department, particularly its Manager,
Assistant Project Manager, and Grant Accountant/Administrator are primarily responsible for all
grant reporting.
AVEC’s team, with years of experience and knowledge of managing AEA-funded project costs and
grant reimbursements, has a system in place for ensuring that only costs that are reasonable,
ordinary, and necessary are charged to a project, and that only costs that are eligible are submitted
for reimbursement. First, AVEC’s Assistant Project Manager (PM) is responsible for determining
whether costs are appropriate and acceptable. The PM reviews all invoices from contractors and
vendors and all in-house labor and equipment charges. Second, the Project Development and Key
Accounts Department Manager (DM) reviews costs associated with outsourced services, including
consultant and contractor invoices, to ensure that the charges are reasonable. The DM also
reviews his department’s staff labor charges (timesheets) to the project. Third, the Operations and
Engineering Department Managers review all in-house labor (timesheets) and expense reports for
their respective departments to make sure that the charges are acceptable. Finally, the Project
Development and Key Accounts Department Grant Accountant/Administrator, while preparing AEA
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financial reports and reimbursement requests, provides a review of both outsourced and in-house
charges to determine whether they are allowable costs.
AVEC has systems in place to keep unacceptable overhead costs from being charged to and
reimbursed through the REF Grant Fund Program. Upon project initiation, an AVEC work order
number is created to track all project labor and expenses. AVEC staff and contractors reference
this number on all timesheets and invoices when working on the project, ensuring that project costs
are known. Purchase orders are universally used to establish spending limits for purchases of
materials, which are then monitored by the Accounting Department through the enterprise
accounting system. Task orders and contracts are universally used to establish spending limits for
purchases of contractual services, which are then monitored by the Project Development and Key
Accounts Department utilizing spreadsheets. Direct labor expenses (gross payroll) are tracked
separately from overhead costs including employee benefits and payroll taxes. Once labor hours
have been calculated, overhead including employee benefits and payroll taxes are applied in a
separate transaction on the work order.
AVEC and AEA have an agreed rate cap for employer costs of payroll, consisting only of employee
benefits and payroll taxes. AVEC can ensure that only allowable costs would be requested for
reimbursement because the direct labor and indirect/overhead costs are separate transactions
(and thus the indirect/overhead amounts can be easily omitted from reimbursement), and because
the allowable rate has been established and agreed upon (and thus can be easily included for
reimbursement).
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SECTION 4 – QUALIFICATIONS AND EXPERIENCE
4.1 Project Team
Include resumes for known key personnel and contractors, including all functions below, as an
attachment to your application. In the electronic submittal, please submit resumes as separate
PDFs if the applicant would like those excluded from the web posting of this application.
4.1.1 Project Manager
Indicate who will be managing the project for the Grantee and include contact information. If the
applicant does not have a project manager indicate how you intend to solicit project management
support. If the applicant expects project management assistance from AEA or another government
entity, state that in this section.
Forest Button is the Project Manager and has served as manager of the Project Development and
Key Accounts Department for AVEC since 2016 where he leads a team focused on stabilizing the
cost of energy in rural Alaskan villages through improved power plant efficiency, renewable power
generation, wind to heat, recovered heat, and interties between villages.
Previously, Mr. Button worked as a project manager under contract to AVEC. He was responsible
for the management of the design and construction of capital projects and has 25 years of
experience managing construction projects throughout Alaska. Mr. Button has a degree in Mining
Engineering from the University of Alaska, Fairbanks.
4.1.2 Project Accountant
Indicate who will be performing the accounting of this project for the grantee. If the applicant does
not have a project accountant indicate how you intend to solicit financial accounting support.
Rebecca Lopez is the Chief Financial Officer at AVEC, which includes the Accounting, Purchasing,
IT, and Human Resources Departments. Ms. Lopez has more than 9 years of experience in the
Alaska electric utility industry and joined AVEC in 2021. She is responsible for all administrative
and financial records including preparing grant reports, Regulatory Commission of Alaska rate
filings, financial forecasts, budgets and PCE, as well as overseeing the day-to-day office
operations.
4.1.3 Expertise and Resources
Describe the project team including the applicant, partners, and contractors.
For each member of the project team, indicate:
the milestones/tasks in 3.1 they will be responsible for;
the knowledge, skills, and experience that will be used to successfully deliver the tasks;
how time and other resource conflicts will be managed to successfully complete the task.
If contractors have not been selected to complete the work, provide reviewers with sufficient detail
to understand the applicant’s capacity to successfully select contractors and manage complex
contracts.
AVEC would use a project management approach that has been used to successfully design and
construct wind turbines throughout rural Alaska: a team of AVEC staff and external consultants.
AVEC staff and their role on this project includes:
• Bill Stamm, President and Chief Executive Officer, would act as Project Executive and
will maintain ultimate programmatic and financial authority.
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• Forest Button, Manager, Project Development and Key Accounts, would lead the
project management team consisting of AVEC staff, consultants, and contractors. Mr.
Button will be the program manager for this project and will assign an assistant project
manager to implement the project. He will also be responsible for reporting directly to AEA
on the status of the project. Together with the Assistant Project Manager, Forest would
coordinate the wind data analysis, geotechnical work, conceptual design, and the concept
design report.
• Onya Stein, Assistant Project Manager. will assist on all milestones of the project. In
particular, she will be responsible for managing the consultant team. Onya would ensure
that all milestones and tasks are completed. Specifically, she would be responsible for
selecting, coordinating, and managing the wind resource specialist, engineers, and
permitting consultants and ensuring that their deliverables are on time and within budget.
• Daniel Allis, Manager of Operations, would provide oversight and input in planning for
construction, distribution, and energy generation components of the project. Specifically, he
would provide input on analysis of current cost (milestone 5); the assessment of
alternatives (milestone 6); the CDR (milestone 7); and the final report (milestone 10).
• Darren Westby, Manager of Engineering, would provide technical assistance and
information on the existing power system, possible issues, and project study needs.
Specifically, Darren would provide input on the detailed resource analysis (milestone 2);
analysis of current cost (milestone 5); the assessment of alternatives (milestone 6); the
CDR (milestone 7); and the final report (milestone 10).
• Rebecca Lopez, Chief Financial Officer, would assist with questions arising out of the
economic and financial analysis (milestone 8) and the business and operations plan
(milestone 9). In addition, related to grant management, she would provide support in
accounting, payables, financial reporting, and capitalization of assets in accordance with
AEA guidelines.
• Anna Sattler, Community Liaison, would communicate directly with Kalskag residents to
ensure that the community is informed. Specifically, Anna would assist by working with the
community on identification of land issues (milestone 3); assessment of alternatives
(milestone 6); and relaying information and recommendations from the CDR (milestone 7
and 10).
It is likely that one of AVEC’s in-house engineering contractors would lead the work. They would be
responsible for:
• Obtaining site control/access and permits for geotechnical work (milestone 2)
• Selecting, coordinating, and managing the wind resource, geotechnical, engineering, and
permitting consultants and ensuring that deliverables are on time and within budget
(milestones 2, 3, and 4)
• Prepare the CDR and cost estimates (milestone 7)
• Develop the existing and future energy costs and markets information and the conceptual
business and operating plan (milestone 8 and 9)
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Contractors for this project would include:
• Wind Resource Consultant. AVEC would seek a consultant best suited for assisting with
this effort based on experience in Alaska. This consultant would:
- Draft the wind resource report (milestone 2)
• Geotechnical consultant: AVEC would select and employ an experienced geotechnical
consultant who would:
- Conduct a reconnaissance level geotechnical and natural hazards field study and
report of the project area (milestone 2)
• Engineering consultant: AVEC would select and employ an engineering consultant who
would:
- Provide conceptual design and engineering specifications for the wind turbines and
reporting the information in the CDR and final report (Milestone 7 and 10)
• Environmental Consultant: AVEC currently has an on-call contract with Solstice Alaska
Consulting, Inc. for environmental permitting. Robin Reich’s (Solstice’s president) resume is
attached. Solstice would:
- Consult with agencies
- Document permit needs and environmental requirements for a future wind project
(milestone 4)
Selection Process for Contractors: The geotechnical and engineering consultant selection would
be based upon technical competencies, past performance, written proposal quality, cost, and
general consensus from an internal AVEC technical steering committee. The selection of the
consultant would occur in strict conformity with AVEC’s procurement policies, conformance with
OMB circulars, and DCAA principles.
Resumes for key staff, partners, and consultants can be found attached in Tab A.
4.2 Local Workforce
Describe how the project will use local labor or train a local labor workforce.
Recognizing that local labor boosts communities and families, AVEC uses local labor whenever
possible for daily operations and special projects. Local wages circulate, often multiple times,
within the community thereby benefitting the community as a whole.
AVEC is very proud of its training program wherein power plant operators are trained by an
itinerant training supervisor who travels continuously to AVEC communities and works one-on-one
with the operators as needed and throughout the year.
Local labor saves money as demonstrated when comparing local labor wages against imported
labor wages, travel, and per diem. Therefore, AVEC addresses local labor in its bid documents as
appropriate and allowed by law.
For this feasibility effort, it is expected that local labor could assist with some aspects of the project
including helping to determine a suitable location to set up the LIDAR station, setting up the LIDAR
station, downloading data, and demobilizing the station.
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Assuming the proposed wind feasibility study shows wind to be a viable resource in Upper
Kalskag, AVEC could include language similar to below in the construction bid documents and
contract. AVEC has included the following language in bid documents in the past:
“Local Labor and Local Firms Participation Goal: The participation goal for this project has been
established as a percentage of the total dollar amount awarded to the successful bidder in the
amount of 20% to local labor and local firms. The successful bidder shall provide the Owner
documentation to demonstrate compliance with this goal. If this goal cannot be reached and good
faith efforts were demonstrated through documentation to the Owner, the Owner has the right to
issue a variance to this section.”
“Use of Local Labor and Local Firms: To the maximum extent practicable, Contractor shall
accomplish the Project using local labor and Alaska firms.”
In most AVEC communities, Upper Kalskag being one of them, the power plant operators are
employees of their city government. Through a contract process, AVEC reimburses the city for the
wages and fringe benefits of the power plant operators. During project feasibility, design, and
construction phases, plant operators provide necessary assistance; typically, with tasks like taking
photographs, and hosting and assisting engineers and others coming into the community for
project work.
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SECTION 5 – TECHNICAL FEASIBILITY
5.1 Resource Availability
5.1.1 Assessment of Proposed Energy Resource
Describe the potential extent/amount of the energy resource that is available, including average
resource availability on an annual basis. For pre-construction applications, describe the resource to
the extent known. For design and permitting or construction projects, please provide feasibility
documents, design documents, and permitting documents (if applicable) as attachments to this
application (See Section 11). Likelihood of the resource being available over the life of the project.
See the “Resource Assessment” section of the appropriate Best Practice Checklist for additional
guidance.
According to existing knowledge and wind feasibility studies and the operational wind turbine in
nearby Bethel, it is assumed Upper Kalskag is rated as a class 6 wind regime. The purpose of the
feasibility study is to collect local wind data and conduct a thorough analysis to determine the wind
energy potential in the community.
The proposed feasibility study will identify a potential wind farm location, turbine, and method of
operation to maximize the renewable capacity factor while maintaining power quality for the
community.
5.1.2 Alternatives to Proposed Energy Resource
Describe the pros and cons of your proposed energy resource vs. other alternatives that may be
available for the market to be served by your project.
Wind energy has proven a viable energy resource in 12 AVEC communities with similar
environmental and climate conditions, including St. Mary’s, Bethel, Mekoryuk, and Emmonak.
Barging in diesel fuel is the primary source of local power, which is costly. Other alternative energy
resources (solar, hydroelectric, and geothermal) are not anticipated to be as cost effective or viable
as wind energy.
5.1.3 Permits
Provide the following information as it may relate to permitting and how you intend to address
outstanding permit issues. See the “Environmental and Permitting Risks” section of the appropriate
Best Practice Checklist for additional guidance.
List of applicable permits
Anticipated permitting timeline
Identify and describe potential barriers including potential permit timing issues, public
opposition that may result in difficulty obtaining permits, and other permitting barriers
FAA Air Navigation Hazard Permitting: The LIDAR station placement would be selected based
on airspace availability and limitations for a future wind turbine to meet the FAA’s Notice Criteria. If
the project proves to be feasible, AVEC would seek a no-hazard determination from FAA for the
potential project after the turbine location and type have been finalized.
Endangered Species Act/Migratory Bird Treaty Act Consultation: Consultation with the U.S.
Fish and Wildlife Service (USFWS) in compliance with the Endangered Species Act and Migratory
Bird Treaty Act would not be required for a LIDAR station. AVEC would begin discussions with
USFWS during this phase to determine whether there are wildlife or habitat issues with a future
wind project.
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Clean Water Act (Section 401) Permit: Because many locations within Kalskag are wetlands, it is
possible that a wetlands permit would be needed from the U.S. Army Corps of Engineers (Corps)
to install the temporary LIDAR station and to conduct geotechnical work. However, the footprint of
the ZX300 LIDAR station is small compared to traditional met towers and a permit is not
anticipated. During this phase, AVEC would determine whether a future wind farm would have
wetlands impacts to determine needed permitting requirements.
5.2 Project Site
Describe the availability of the site and its suitability for the proposed energy system. Identify
potential land ownership issues, including whether site owners have agreed to the project or how
you intend to approach land ownership and access issues. See the “Site control” section of the
appropriate Best Practice Checklist for additional guidance.
AVEC has not determined the exact location for the placement of the LIDAR station but expects to
place it fenced within the AVEC plant. AVEC will consult with the Kalskag residents and
landowners to select a site and to obtain site control for placement of the LIDAR station and
geotechnical fieldwork. A letter of non-objection or another approval will be sought from the
landowner, depending on location, after project funding is assured. Starting with a community
meeting to announce that the project has been funded, AVEC’s community liaison will lead the
effort to gain site control. Since the community supports the project (see attached letters of
support, Tab B), site control is not expected to be an obstacle to the placement of the LIDAR
station and in conducting geotechnical fieldwork.
The feasibility study and geotechnical analysis of this project will help AVEC determine a
permanent location for a turbine in the future.
5.3 Project Technical & Environmental Risk
5.3.1 Technical Risk
Describe potential technical risks and how you would address them.
Which tasks are expected to be most challenging?
How will the project team reduce the risk of these tasks?
What internal controls will be put in place to limit and deal with technical risks?
See the “Common Planning Risks” section of the appropriate Best Practice Checklist for additional
guidance.
The feasibility effort will help to identify and overcome the few technical risks that might be
expected with the implementation of a wind project in Kalskag. Some initial challenges that AVEC
will overcome could be:
Site Control/Access: Sometimes site control for the placement of study sites or turbines is
difficult; however, because the community supports the project (see letters of support), it is not
expected that gaining site control would be difficult. See discussion above.
Turbine Selection: AVEC will have to identify a suitable turbine which will involve AVEC
managers, consultants, and the community working together to determine the best choice for the
system’s needs.
Weather: Weather could delay geotechnical fieldwork and/or the installation of the LIDAR station;
however, experienced consultants and contractors, familiar with Alaska weather conditions, would
be selected to do this work. It is unlikely that a delay in the total project schedule would occur if the
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fieldwork or the LIDAR station start up is delayed. It is possible to mobilize and start the LIDAR
station during winter months, and the station would be installed to handle Kalskag’s winter weather
conditions. The LIDAR station would be monitored by local AVEC personnel to ensure it is up and
functioning properly throughout the year.
5.3.2 Environmental Risk
Explain whether the following environmental and land use issues apply, and if so which project
team members will be involved and how the issues will be addressed. See the “Environmental and
Permitting Risks” section of the appropriate Best Practice Checklist for additional guidance.
Threatened or endangered species
Habitat issues
Wetlands and other protected areas
Archaeological and historical resources
Land development constraints
Telecommunications interference
Aviation considerations
Visual, aesthetics impacts
Identify and describe other potential barriers
During the final design and permitting phases, once the wind project is better scoped, AVEC would
work with agencies to address the following potential environmental issues:
Threatened or endangered species: According to the U.S. Fish and Wildlife Service, Anchorage
Field Office, Section 7 Consultation Guide, there are no endangered species or federally
designated critical habitat areas listed in Kalskag. Wood bison are listed as a threatened species in
the area, but the proposed wind project is not anticipated to impact wood bison.
Habitat issues: This proposed wind feasibility project would not have habitat impacts. During
future permitting efforts, the project team would work with agencies to ensure that the project
would not impact any State refuges, sanctuaries or critical habitat areas, federal refuges or
wilderness areas, or national parks.
Wetlands and other protected areas: As previously mentioned, it is likely that a non-reporting
“Nationwide Permit” would be sufficient if the LIDAR station is placed in wetlands, and no
application/preconstruction notice would be needed. During this feasibility phase, AVEC would
determine whether a future wind farm would have wetlands impacts and determine needed
permitting requirements.
Archaeological and historical resources: Compliance with the National Historic Preservation Act
and consultation with the State Historic Preservation Officer would be during the design phase if a
wind project proves feasible.
Land development constraints: No land development constraints have been identified; however,
if any should arise, AVEC will work with the landowners to obtain site control.
Telecommunications interference: The LIDAR station and wind project would be placed in a
location that would not interfere with the telecommunications service.
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Aviation considerations: Unlike a met tower, the LIDAR station placement would not have
aviation airspace issue. The LIDAR station location, however, would be selected based on a future
turbine’s airspace availability and limitations to meet the FAA’s Notice Criteria.
Visual, aesthetics impacts: AVEC will conduct community meetings to discuss possible visual
impacts of a potential future wind farm and how they could be mitigated.
5.4 Technical Feasibility of Proposed Energy System
In this section you will describe and give details of the existing and proposed systems. The
information for existing system will be used as the baseline the proposal is compared to and also
used to make sure that proposed system can be integrated.
Only complete sections applicable to your proposal. If your proposal only generates electricity, you
can remove the sections for thermal (heat) generation.
5.4.1 Basic Operation of Existing Energy System
Describe the basic operation of the existing energy system including: description of control system;
spinning reserve needs and variability in generation (any high loads brought on quickly); and
current, voltage, frequency, and outage issues across system. See the “Understanding the Existing
System” section of the appropriate Best Practice Checklist for additional guidance.
The existing power generation system in Kalskag consists of 3 diesel generators in a three-phase
electrical system. A 236 kilowatt (kW) Detroit Diesel S60K4 1200 RPM is in the first position and
was installed in 2004. A 363 kW Detroit Diesel S60K4 1800 RPM is in the second position and was
installed in 2021. A 499 kW Cummins QSX15 G9 engine is in the third position and was installed in
2004. The most efficient available engine is used to meet the load through automated controls.
Individual generator efficiency is not tracked, but the aggregate diesel generator efficiency in 2021
was 13.7 kilowatt hours per gallon (kWh/gallon).
5.4.2.1 Existing Power Generation Units
Include for each unit include: resource/fuel, make/model, design capacity (kW), minimum
operational load (kW), RPM, electronic/mechanical fuel injection, make/model of genset
controllers, hours on genset
Unit 1: Diesel generator, Detroit Diesel S60K4 Engine, 236 kilowatt (kW), 50 kW min, 1200 RPM,
electronic fuel injection (FI), NEW HC 66G Generator, 52,198 hours, installed 2004
Unit 2: Diesel generator, Detroit Diesel S60K4 Engine, 363 kilowatt (kW), 50 kW min, 1800 RPM,
electronic fuel injection (FI), MAR 572 RSL 4027 Generator, 12,851 hours, installed 2021
Unit 3: Diesel generator, Cummins QSX15 G9 Engine, 499 kilowatt (kW), 50 kW min, 1800 RPM,
electronic fuel injection (FI), NEW HC 54F Generator, 8,679 hours, installed 2004
5.4.2.2 Existing Distribution System
5.4.2 Existing Energy Generation Infrastructure and Production
In the following tables, only fill in areas below applicable to your project. You can remove extra
tables. If you have the data below in other formats, you can attach them to the application (see
Section 11).
Is there operational heat recovery? (Y/N) If yes estimated
annual displaced heating fuel (gallons)
No operational heat recovery.
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Describe the basic elements of the distribution system. Include the capacity of the step-up
transformer at the powerhouse, the distribution voltage(s) across the community, any transmission
voltages, and other elements that will be affected by the proposed project.
The Upper Kalskag power plant generates at 277/480V three phase. There are six distribution feeder
breakers, four are in use and two are spare. Three of the feeder breakers feed three each 100 kVA
step up transformers. One feeder breaker feeds three each 50 kVA step up transformers. Voltage is
7200/12470 GNRDY. All distribution is overhead.
The Upper Kalskag power plant serves Lower Kalskag through the one-half mile intertie. There is
three phase service to the school, airport, lift station, and water treatment plant, and single phase
service to residential areas in Upper and Lower Kalskag.
5.4.2.3 Existing Thermal Generation Units (if applicable to your project)
Generation
unit
Resource/
Fuel type
Design
capacity
(MMBtu/hr)
Make Model Average
annual
efficiency
Year
Installed
Hours
N/A
5.4.2.5 Annual Electricity Production and Fuel Consumption (Existing System)
Use most recent year. Replace the section (Type 1), (Type 2), and (Type 3) with generation
sources
Month Generation
(Diesel)
(kWh)
Fuel
Consumption
(Diesel-
Gallons)
Fuel
Consumption
[Other]
Peak Load Minimum Load
(assumed half of
average load)
January 143,275 10,164 N/A 296.0 148.0
February 154,210 11,056 308.0 154.0
March 154,978 10,950 326.0 163.0
April 134,936 9,718 290.0 145.0
May 103,448 7,598 162.0 81.0
June 104,309 7,884 222.0 111.0
July 95,942 7,267 214.0 107.0
August 106,362 8,047 211.0 105.5
September 111,103 8,362 243.0 121.5
October 116,010 8,574 270.0 135.0
November 166,937 12,012 342.0 171.0
December 153,755 10,962 341.0 170.5
5.4.2.4 O&M and replacement costs for
existing units
Power Generation Thermal Generation
i. Annual O&M cost for labor $28,000
Based on AVEC
aggregate number
ii. Annual O&M cost for non-labor
iii. Replacement schedule and cost for
existing units
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Total 1,545,265 112,594 Average 268.8 134.4
5.4.2.6 Annual Heating Fuel Consumption (Existing System)
Use most recent year. Include only if your project affects the recovered heat off the diesel
genset or will include electric heat loads. Only include heat loads affected by the project.
Month Diesel
(Gallons)
Electricity Propane
(Gallons)
Coal
(Tons)
Wood
(Cords,
green tons,
dry tons)
Other
January N/A
February
March
April
May
June
July
August
September
October
November
December
Total
5.4.3 Future Trends
Describe the anticipated energy demand in the community, or whatever will be affected by the
project, over the life of the project. Explain how the forecast was developed and provide year by
year forecasts. As appropriate, include expected changes to energy demand, peak load, seasonal
variations, etc. that will affect the project.
According to U.S. Census data, the populations of Upper and Lower Kalskag have remained steady
for the past ten years (combined pop. 484 in 2010 to pop. 490 in 2020), suggesting trends in energy
demands for the existing diesel generator system will stay the same. Additional information will be
gathered during CDR phase to more accurately determine future trends.
Currently, major projects and increases in population are not planned or expected in Upper or Lower
Kalskag. Given recent infrastructure funding opportunities for improved broadband services, Kalskag
could receive better internet service in the future which would increase energy demand and peak
loads could moderately increase in the foreseeable future due to more electronics used.
Diesel energy costs in Kalskag are high. Power costs for residences and community facilities are
stabilized through Alaska’s Power Cost Equalization (PCE) program. For 2022 so far, the average
monthly cost of power before the PCE is $285, and with the PCE subsidy, the average monthly cost
was $193. With a median household income of $33,250 in Lower Kalskag and $41,250 in Upper
Kalskag, these costs represent approximately 7% of a household’s income. Future wind energy
development could be used to reduce the cost of energy and offset energy production from diesel
fuel.
5.4.4 Proposed System Design
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Provide the following information for the proposed renewable energy system:
A description of renewable energy technology specific to project location
The total proposed capacity and a description of how the capacity was determined
Integration plan, including upgrades needed to existing system(s) to integrate renewable
energy system: Include a description of the controls, storage, secondary loads, distribution
upgrades that will be included in the project
Civil infrastructure that will be completed as part of the project—buildings, roads, etc.
Include what backup and/or supplemental system will be in place
See the “Proposed System Design” section of the appropriate Best Practice Checklist for additional
guidance.
Renewable energy technology: Understanding that nearby Saint Mary’s has a Class 6 wind
regime, AVEC plans to conduct a feasibility analysis, resource assessment, and conceptual design
to assess the possibility of also using wind power in Kalskag. This feasibility study is intended to
determine how a wind energy project could be properly integrated into the existing power system
and what modifications would be required to have a meaningful impact on diesel consumption. If the
wind resource proves suitable and funding is obtained, wind turbines would be installed to serve the
communities.
Proposed capacity/capacity determination: Anticipated capacity and generation would be
examined to determine the best turbine option and number, secondary load options, and control
schemes for the community. A primary goal of this feasibility study is to evaluate the economic benefit
of large capacity wind generation relative to the size of the grid.
Currently, AVEC anticipates that three 100-kW NPS wind turbines would be installed, similar to
AVEC’s turbine in Emmonak and Mekoryuk. AVEC’s past experience implementing the 100-kW NPS
turbines is field proven to be exceptionally reliable in the harsh weather conditions. The 100-kW
turbine is the smallest size manufactured by NPS, the generator can reliably curtail and export power
below its rated power curve through Northwind’s advanced technology utilizing direct drive, variable
pitch blades and fully inverted power output.
The proposed feasibility study will help AVEC better estimate the total annual power generation
expected for Kalskag’s wind conditions and optimize the size of components for wind generation,
energy storage and dispatchable loads for the community. For the economic evaluation of this
application three 100-kW NPSs were selected and a capacity factor of 24% was applied. This
feasibility study will help AVEC better understand the monthly generation potential for wind, how that
compares to the varying monthly load of the community, and the potential opportunities for
dispatchable loads for heat, energy storage, or other beneficial electrification.
Integration plan: In every deployment, the integration of intermittent generation to the energy grid
is a key component to a successful project. The purpose of this feasibility work is to plan a future
wind facility and its integration. AVEC expects that the wind turbines would connect to the existing
diesel power plant via existing and possibly new transmission lines.
During development of the CDR, AVEC would examine whether and what upgrades to the power
plant would be needed to incorporate wind energy, including supervisory controls to interface with
the power plant, controls for the diesel engines, and controls on the wind turbine to ensure optimal
power production and generator efficiency.
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There are a number of community buildings that might be able to accept wind-to-heat, including the
school. The proposed feasibility study will help determine other buildings that may benefit from wind-
to-heat in Kalskag, if feasible.
Depending on the components of the proposed system, the diesel generators would continue running
at minimum levels.
Location: The physical location of the turbine will be determined during the feasibility study and
would depend on the wind regime, site access, land ownership and the landowner’s desire to sell or
lease, geotechnical and environmental conditions (wetlands, streams, topography), and community
support.
Civil infrastructure: Civil infrastructure access to a LIDAR station will be included in implementation
of the proposed feasibility study. Assuming wind energy proves a viable resource in Kalskag, and if
necessary, a wind turbine pad foundation will be included in the conceptual design and subsequent
final design and construction phases of the project.
Backup/supplemental system: The existing power plant with diesel fuel generators and the
existing power distribution system will be maintained to provide for the full power needs of the
community.
5.4.4.1 Proposed Power Generation Units
Unit # Resource/
Fuel type
Design
capacity
(kW)
Make Model Expected
capacity
factor
Expected
life
(years)
Expected
Availability
1 Wind 100
NPS Northwind
100
24% 20 2025
These values are speculative and used in the AEA/ISER model for the purpose of this
application. The proposed study would determine the design capacity, turbine, and
capacity factor.
5.4.4.2 Proposed Thermal Generation Units (if applicable)
Generation
unit
Resource/
Fuel type
Design
capacity
(MMBtu/hr)
Make Model Expected
Average
annual
efficiency
Expected
life
N/A
5.4.5 Basic Operation of Proposed Energy System
To the best extent possible, describe how the proposed energy system will operate: When will
the system operate, how will the system integrate with the existing system, how will the
control systems be used, etc.
When and how will the backup system(s) be expected to be used
See the “Proposed System Design” section of the appropriate Best Practice Checklist for additional
guidance.
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Wind System Operations
The primary use of wind generation would be for the displacement of diesel power generation.
Dispatch of the wind turbine, diesel power plant, secondary loads and possible energy storage would
be controlled through a central dispatch control panel at the power plant. The wind study and
conceptual design and report completed for this project would detail how a wind turbine would
operate and be integrated into the existing diesel power system in Kalskag.
One option is that the existing diesel system would operate at a lower capacity but remain online to
supplement wind energy. In this scenario wind could be the primary energy source and contribute
significantly to the existing energy system, but the diesel generator(s) would remain online to ensure
consistent energy access during wind fluctuations and function as a backup should wind energy go
offline at any point.
Another option is that energy storage would be used for spinning reserve to help stabilize energy
outputs and maintain power quality allowing the system to run with diesels off. AVEC would research
this option and the expected feasibility and fuel savings.
The anticipated effect of the proposed system is a decreased use of fuel for electrical power
generation. Also, the diesel generator use in Kalskag would be reduced, thereby decreasing diesel
operations and maintenance costs, enabling generators to last longer and need fewer overhauls.
5.4.3.1 Expected
Capacity
Factor
24%
This value is speculative and will be determined through the work
proposed here.
5.4.5.2 Annual Electricity Production and Fuel Consumption (Proposed System)
Month Generation
(Proposed System,
Wind)
(kWh)
Generation
(Type 2,
Diesel)
(kWh)
Generation
(Type 3)
(kWh)
Fuel
Consumption
(Diesel-
Gallons)
12.19 kW/gal
Fuel
Consumption
[Other]
Secondary
load
(kWh)
Storage
(kWh)
January 52,500 90,775 7,447
February 52,500 101,710 8,344
March 52,500 102,478 8,407
April 52,500 82,436 6,763
May 52,500 50,948 4,179
June 52,500 51,809 4,250
July 52,500 43,442 3,564
August 52,500 53,862 4,419
September 52,500 58,603 4,807
October 52,500 63,510 5,210
November 52,500 114,437 9,388
December 52,500 101,255 8,306
Total 630,000 915,265 75,083
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5.4.5.3 Annual Heating Fuel Consumption (Proposed System)
Month Diesel
(Gallons)
Electricity Propane
(Gallons)
Coal
(Tons)
Wood
(Cords,
green tons,
dry tons)
Other
January
February
March
April
May
June
July
August
September
October
November
December
Total
5.4.6 Proposed System Operating and Maintenance (O&M) Costs
O&M costs can be estimated in two ways for the standard application. Most proposed renewable
energy projects will fall under Option 1 because the new resource will not allow for diesel
generation to be turned off. Some projects may allow for diesel generation to be turned off for
periods of time; these projects should choose Option 2 for estimating O&M.
Option 1: Diesel generation ON
For projects that do not result in shutting down
diesel generation there is assumed to be no
impact on the base case O&M. Please indicate
the estimated annual O&M cost associated with
the proposed renewable project.
$ 28,000
Option 2: Diesel generation OFF
For projects that will result in shutting down
diesel generation please estimate:
1. Annual non-fuel savings of shutting off
diesel generation
2. Estimated hours that diesel generation
will be off per year.
3. Annual O&M costs associated with the
proposed renewable project.
We have assumed “0” hours of diesel-off in the
economic analysis. However, the final project
would likely include the ability to go diesels off.
5.4.7 Fuel Costs
Estimate annual cost for all applicable fuel(s) needed to run the proposed system (Year 1 of
operation - 2025)
Diesel
(Gallons)
Electricity Propane
(Gallons)
Coal
(Tons)
Wood
Other
Unit cost
($)
$3.08/gal
(based on
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AVEC
five-year
average
for
Kalskag
fuel)
Annual
Units
75,083
gals
Total
Annual
cost ($)
$231,256
5.5 Performance and O&M Reporting
For construction projects only
5.5.1 Metering Equipment
Please provide a short narrative, and cost estimate, identifying the metering equipment that will be
used to comply with the operations reporting requirement identified in Section 3.15 of the Request
for Applications.
Because this project involves feasibility, geotechnical and conceptual design work only, no meter
would be installed. AVEC installs meters on all renewable projects (primarily wind turbines) and
would install a meter on the turbine if the project proves feasible and AVEC moves forward with wind
energy construction. Metering equipment specifications and costs would be determined during the
proposed conceptual design work and subsequent final design project phases. When this project is
constructed, it is likely that the meter would be an Elster 16s (part number ZD3300K0082). This
meter costs about $400.
5.5.2 O&M reporting
Please provide a short narrative about the methods that will be used to gather and store reliable
operations and maintenance data, including costs, to comply with the operations reporting
requirement identified in Section 3.15 of the Request for Applications
As a cooperative, AVEC pools O&M costs of all member communities. Based on existing wind
turbines, current annual O&M costs are approximately $28,000. The LIDAR station would require
monthly monitoring and data management. It is expected that this would cost $700 total for the year
that the LIDAR station is installed. The cost would be funded by this grant. If the turbines prove
feasible, their maintenance would be funded by AVEC’s general operating costs.
SECTION 6 – ECONOMIC FEASIBILITY AND BENEFITS
6.1 Economic Feasibility
6.1.1 Economic Benefit
Annual
(Reference: REF
Model)
Lifetime (assume 20 yrs)
Anticipated Diesel Fuel Displaced for Power
Generation (gallons)
45,985 919,700
Anticipated Fuel Displaced for Heat
(gallons)
N/A N/A
Total Fuel displaced (gallons) 45,985 919,700
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Anticipated Diesel Fuel Displaced for Power
Generation ($)
$141,635 (first year,
based on AVEC 5
year fuel average for
Kalskag of $3.08)
$2,155,493 (See REF
Model, based on 2025
fuel cost of $3.08 and an
annual 1 percent
increase)
Anticipated Fuel Displaced for Heat ($) N/A N/A
Anticipated Power Generation O&M Cost
Savings ($)
Anticipated Thermal Generation O&M Cost
Savings
Total Other costs savings (taxes, insurance,
etc.)
Total Fuel, O&M, and Other Cost Savings $141,635 (first year) $2,155,493
6.1.2 Economic Benefit
Explain the economic benefits of your project. Include direct cost savings and other economic
benefits, and how the people of Alaska will benefit from the project. Note that additional revenue
sources (such as tax credits or green tags) to pay for operations and/or financing, will not be
included as economic benefits of the project.
Where appropriate, describe the anticipated energy cost in the community, or whatever will be
affected by the project, over the life of the project. Explain how the forecast was developed and
provide year-by-year forecasts
The economic model used by AEA is available at https://www.akenergyauthority.org/What-We-
Do/Grants-Loans/Renewable-Energy-Fund/2021-REF-
Applicationhttp://www.akenergyauthority.org/REFund8.html. This economic model may be used
by applicants but is not required. The final benefit/cost ratio used will be derived from the AEA
model to ensure a level playing field for all applicants. If used, please submit the model with the
application.
The purpose of this proposed feasibility study and CDR is to assess technical and economic viability
of wind infrastructure in Kalskag. The installation of three 100-kilowatt (kW) capacity turbines
(CF=24) in Kalskag is estimated to produce 630,000 kilowatt hours (kWh) annually, over one third of
Kalskag’s annual electric load. Based on this assumption, the possible displacement of diesel fuel
used for electricity generation would be approximately 45,985 gallons per year. Using AVEC’s five-
year average of fuel prices to Kalskag of $3.08, this project could save $141,635 during the first year
of operation. Over the 25-year life of the project, the estimated savings would be $2,155,293 based
on 2025 fuel cost of $3.08 and an annual 1 percent increase.
AVEC intends to utilize this intermediate phase of the project to identify an economically viable
system for wind energy in Kalskag.
Kalskag qualifies for Alaska’s power cost equalization program, providing economic assistance to
communities with high energy costs and subsidized energy rates up to 750 kWh. The average annual
price for residential electricity in Kalskag without PCE is $0.51 per kilowatt hour (kWh) as of
November 2022. The price per kWh in Upper and Lower Kalskag can be compared to the 2021
“extremely high” cost benchmark established by U.S. Rural Utilities Service (RUS) of $0.3627/kWh
or can be compared to Anchorage’s average cost of $0.20/kWh. The residents of Upper and Lower
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Kalskag would benefit from this project as it would mitigate the volatile energy costs found in rural
Alaska.
Immediate savings from this project will directly benefit AVEC and reduce Kalskag’s dependence on
the PCE program. The high cost of energy is an extreme hardship for the low-income families in
Upper and Lower Kalskag, even considering PCE credits. Un-subsidized energy costs are expected
to decrease for residents and commercial entities in Upper and Lower Kalskag, providing immediate
savings. Reduced energy costs for non-PCE community facilities may allow for increased or
improved community or social services. Similarly, reduced energy costs for other non-PCE
commercial energy customers such as stores that might pass along savings to residents.
Kalskag community members practice a subsistence lifestyle which is time consuming and often in
conflict with a cash economy. Many local residents, work in commercial fishing, but opportunities
along the Kuskokwim River have been limited in recent years due to the collapse of chum salmon.
In addition to commercial fishing, other sources of income come from wildland firefighting with some
limited jobs from local infrastructure like the Zackar Levi Elementary School, the Joseph & Olinga
Gregory Elementary School, the George Morgan Sr. High School, the health clinics in Upper and
Lower Kalskag, the municipal offices, the City of Upper Kalskag Community Tank Farm, the village
corporation offices, the U.S. Postal Service, and community stores. According to the 2020 census
data, the median household income in Lower Kalskag is $33,250 and in Upper Kalskag it is $41,250.
More than 40% of Lower Kalskag and more than 28% of Upper Kalskag persons are below the
poverty line.
The 2018 – 2023 Yukon-Kuskokwim Region Comprehensive Economic Development Strategy
(CEDS), which includes Kalskag, includes a goal to expand and improve energy infrastructure. The
plan includes wind as power alternative energy resource in the area and how the Association of
Village Council Presidents (AVCP) is prioritizing more wind feasibility projects for the communities it
serves. In the plan, a strength of the region is identified as its investment in wind energy as a
resource. A wind feasibility project for the area builds off of the goals and priorities defined in the
regional CEDS report.
In an interview for the CEDS, a community member stated, “Cost of energy is the center of our
universe. Energy drives transportation costs, grocery costs, and subsistence costs.” Many buildings
in Kalskag are old and inefficient. The high cost of electricity is a constraint to fulfilling the needs of
maintenance, repair and development within the community. This project, by reducing and stabilizing
the cost of electricality would help meet the goals of the community plan. Stabilizing the rising costs
of energy production would ease the burden felt by the residents and allow for progress in
achievement of community goals.
Sources: Yukon-Kuskokwim Region Comprehensive Economic Development Strategy, AVCP
6.1.3 Economic Risks
Discuss potential issues that could make the project uneconomic to operate and how the project
team will address the issues. Factors may include:
Low prices for diesel and/or heating oil
Other projects developed in community
Reductions in expected energy demand: Is there a risk of an insufficient market for energy
produced over the life of the project.
Deferred and/or inadequate facility maintenance
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Other factors
Economic risks from this project are primarily from the high startup costs, and economic viability is
dependent on successful implementation and operation of wind energy infrastructure over a 20-year
lifetime. Wind energy has proven an economically viable option for multiple communities in the lower
Yukon-Kuskokwim region, including the nearby villages of Stebbins, Saint Mary’s, and Bethel.
Although Kalskag has a small population, it has remained consistent throughout the years. Electricity
demand will remain and could increase if energy costs drop or if new opportunities in region arise.
AEA projections suggest the cost of fuel in Kalskag to increase for the foreseeable future, suggesting
costs for continued dependence on diesel powered electricity in Kalskag could become prohibitive.
With implementation of wind energy, energy costs will likely stabilize and help to ensure jobs in the
community and a reliable energy market.
Success of this project is dependent on maintenance of the existing energy infrastructure and the
distribution system and the new wind turbine. AVEC has a complete and thorough process for
tracking and maintaining energy infrastructure in all 58 communities the cooperative serves.
6.1.4 Public Benefit for Projects with Direct Private Sector Sales
For projects that include direct sales of power to private sector businesses (sawmills, cruise ships,
mines, etc.), please provide a brief description of the direct and indirect public benefits derived from
the project as well as the private sector benefits and complete the table below. See Section 1.6 in
the Request for Applications for more information.
Not applicable to this project.
Renewable energy resource availability (kWh per month)
Estimated direct sales to private sector businesses (kWh)
Revenue for displacing diesel generation for use at private sector businesses ($)
Estimated sales for use by the Alaskan public (kWh)
Revenue for displacing diesel generation for use by the Alaskan public ($)
6.2 Other Public Benefit
Describe the non-economic public benefits to Alaskans over the lifetime of the project. For the
purpose of evaluating this criterion, public benefits are those benefits that would be considered
unique to a given project and not generic to any renewable resource. For example, decreased
greenhouse gas emission, stable pricing of fuel source, won’t be considered under this category.
Some examples of other public benefits include:
The project will result in developing infrastructure (roads, trails, pipes, power lines, etc.) that can
be used for other purposes
The project will result in a direct long-term increase in jobs (operating, supplying fuel, etc.)
The project will solve other problems for the community (waste disposal, food security, etc.)
The project will generate useful information that could be used by the public in other parts of the
state
The project will promote or sustain long-term commercial economic development for the
community
Other public benefits from the proposed project include providing a reliable renewable resource
that would benefit all of Alaska as it mitigates potential hazardous environmental incidents that
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could threaten water and land resources. Implementing wind infrastructure and reducing
dependency on diesel powered electricity will reduce the potential for fuel spills or contamination,
improve air quality, and decrease reliance on fossil fuels.
Data from this project will provide important information regarding wind resources in rural Alaska to
be applied in future projects.
Upper and Lower Kalskag are isolated villages that rely on air transportation for many essential
resources. Reliable electric service is essential to maintaining vital navigation aids for the safe
operation of aircraft. Runway lights, automated weather observation stations, VASI lights, DME’s
and VOR’s are all powered by electricity. This project could lead to lower airport operating costs.
Incorporating wind energy into the community power system will help stabilize costs associated
with emergency medical service (EMS) provided in the health clinics by health aides and the
volunteer fire, volunteer search and rescue and EMS response teams.
Like all of Alaska, Kalskag is subject to long periods of darkness. Reliable electric service is
essential for the operation of home lighting, streetlights, and security lighting. Wind power could
help stabilize the cost of outside safety and security lighting of homes, roads (streetlights), the
airport runway, and other locations. This project could help reduce the costs associated with
lighting the community, which could leave more funds available for other community programs and
infrastructure.
Additionally, the LIDAR station purchased to measure wind feasibility in Kalskag can be used by
other AVEC communities to measure wind feasibility once the project is complete. The LIDAR
station is a singular unit that can be reused and transported more easily than a met tower. The
investment in the LIDAR station will lower the cost and increase the ease of producing wind
feasibility studies in the future, expanding benefits of wind power beyond Kalskag and to other rural
villages in Alaska.
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SECTION 7 – SUSTAINABILITY
Describe your plan for operating the completed project so that it will be sustainable throughout its
economic life.
At a minimum for construction projects, a business and operations plan should be attached and the
applicant should describe how it will be implemented. See Section 11.
7.1.1 Operation and Maintenance
Demonstrate the capacity to provide for the long-term operation and maintenance of the proposed
project for its expected life
Provide examples of success with similar or related long-term operations
Describe the key personnel that will be available for operating and maintaining the
infrastructure.
Describe the training plan for existing and future employees to become proficient at operating
and maintaining the proposed system.
Describe the systems that will be used to track necessary supplies
Describe the system will be used to ensure that scheduled maintenance is performed
As a local utility that has been in operation since 1968, AVEC is completely able to finance,
operate, and maintain this project for the design life. AVEC has the capacity and experience to
operate this project. AVEC has operating wind projects throughout the state and is very familiar
with planning, constructing, operating, and maintaining wind systems. See Section 10 for a
complete discussion of AVEC’s success with similar or related long-term operations.
AVEC has a large and geographically diverse staff capable of operating and maintaining energy
infrastructure. Immediate tasks during this project phase include operation and maintenance of the
LIDAR station, coordinated between AVEC and a local-hire technician. AVEC follows established
and proven protocols for training existing and future employees to operate and maintain the
proposed system. Throughout AVEC’s time as a leading energy cooperative, AVEC has had
success with training and onboarding of renewable infrastructure projects in Alaska. See Section 4
for a detailed discussion of key personnel assigned to ensure successful completion of this project.
AVEC will use tracking protocols already in practice to track necessary tasks associated with the
proposed feasibility study and conceptual design report, along with any subsequent project
phases.
Should wind power prove a viable resource in Kalskag and AVEC successfully implements wind
energy infrastructure, the local wind turbine would be incorporated into AVEC’s established and
proven operation and maintenance system. Local plant operators would provide daily servicing.
AVEC technicians would provide periodic preventative or corrective maintenance and be supported
by AVEC headquarters staff, purchasing, and warehousing.
7.1.2 Financial Sustainability
Describe the process used (or propose to use) to account for operational and capital costs.
Describe how rates are determined (or will be determined). What process is required to set
rates?
Describe how you ensure that revenue is collected.
If you will not be selling energy, explain how you will ensure that the completed project will be
financially sustainable for its useful life.
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The capital costs of the proposed wind turbine(s) in Kalskag would be determined through the
feasibility study and associated CDR. Wind experts and engineers would prepare a cost estimate
for installation of a suitable system.
The costs of operations and maintenance of the proposed project would be funded through
ongoing energy sales. Different turbines have different operating costs; however, using AVEC’s
average cost of O&M for wind energy, estimated O&M for this project would cost $28,000 annually.
AVEC has well established and proven processes in place to account for setting rates, ensuring
revenue is collected, and maintaining financial sustainability of infrastructure over their operational
lives.
Rates are inclusive of a kWh charge, a fuel charge, a flat customer charge fee, sales tax (in some
communities), a demand charge (if service is billed on a demand meter). Many residential and
community facilities receive a PCE deduction for up to 750kWh per month. As a recipient of PCE,
AVEC’s rates are reviewed and approved by the Regulatory Commission of Alaska. When
renewable energy is added to an existing diesel generation system, AVEC determines the cost of
electricity based on fuel use for generation and the cost of operating the new renewable energy
system.
AVEC ensures that bills are collected through monthly billing and easy payment options (mail,
online, over the phone, autopay, by credit card, etc.). AVEC helps customers obtain financial
assistance when needed. As a last resort, AVEC can disconnect customers for nonpayment.
7.1.2.1 Revenue Sources
Briefly explain what if any effect your project will have on electrical rates in the proposed benefit
area over the life of the project. If there is expected to be multiple rates for electricity, such as a
separate rate for intermittent heat, explain what the rates will be and how they will be determined
Collect sufficient revenue to cover operational and capital costs
What is the expected cost-based rate (as consistent with RFA requirements)
If you expect to have multiple rate classes, such as excess electricity for heat, explain what
those rates are expected to be and how those rates account for the costs of delivering the
energy (see AEA’s white paper on excess electricity for heat)..
Annual customer revenue sufficient to cover costs
Additional incentives (i.e. tax credits)
Additional revenue streams (i.e. green tag sales or other renewable energy subsidies or
programs that might be available)
Given that this project is in the feasibility and concept design stage, revenue and incentives are
unknown. Tax credits are not expected to be beneficial to the project due to AVEC’s status as a
non-profit entity. Nonetheless, in addition to saving the direct cost of fuel, AVEC could sell green
tags from the project.
Opportunities to fund energy infrastructure exist in the IIJA and IRA and developing a wind
feasibility study for Kalskag now, places the community in a more competitive position to take
advantage of federal funding opportunities.
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7.1.2.2 Power Purchase/Sale
The power purchase/sale information should include the following:
Identification of potential power buyer(s)/customer(s)
Potential power purchase/sales price - at a minimum indicate a price range (consistent with the
Section 3.16 of the RFA)
Identify the potential power buyer(s)/customer(s) and anticipated power purchase/sales price
range. Indicate the proposed rate of return from the grant-funded project. Include letters of support
or power purchase agreement from identified customers.
Identification of potential power buyer(s)/customer(s): AVEC, the existing electric utility serving
Upper and Lower Kalskag, is a non-profit, member-owned cooperative electric utility and owns and
maintains the generation, fuel storage, and distribution facilities in the villages it serves. No power
purchase or sales agreements would be needed for this project.
Upper Kalskag has approximately 65 households, three community buildings, and 25 streetlights
that purchase power from AVEC. Lower Kalskag has 80 households, seven community accounts,
and two streetlights that purchase power from AVEC. Both communities utilize the power produced
at the Upper Kalskag power plant through an electric intertie that travels the approximately half a
mile from Upper Kalskag to Lower Kalskag.
Potential power purchase/sales price: At this point in project development, the potential power
price and rate of return on the project is unknown. Work done under this grant would determine this
information.
SECTION 8 – PROJECT READINESS
8.1 Project Preparation
Describe what you have done to prepare for this award and how quickly you intend to proceed with
work once your grant is approved.
Specifically address your progress towards or readiness to begin, at a minimum, the following:
The phase(s) that must be completed prior to beginning the phase(s) proposed in this application
The phase(s) proposed in this application
Obtaining all necessary permits
Securing land access and use for the project
Procuring all necessary equipment and materials
Refer to the RFA and/or the pre-requisite checklists for the required activities and deliverables for
each project phase. Please describe below and attach any required documentation.
AVEC will take steps to prepare a LIDAR station for delivery and identify a location for its
installation before the AEA REF Grant is to be awarded to ensure project readiness. AVEC has
term agreements with engineering and wind consultants, which will allow work to begin on the wind
analysis and CDR quickly. FAA permitting process is to be completed by the time this grant is
awarded.
Once funding is known to be secured, AVEC would seek a lease for the LIDAR station, if needed,
and begin the environmental permitting process. AVEC would utilize field personnel and local hires
to install the LIDAR station and complete the geotechnical work once the grant agreement is in
place.
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The LIDAR station installation and geotechnical work would occur before winter. Work that can be
completed before the wind study is completed would occur over the winter, including analysis of
current cost of energy and future market, and the economic and financial analyses. Once the wind
study is completed, the conceptual design and permitting would occur.
The geotechnical work would be completed under the direction of the engineering consultants,
which have completed this type of work in the past. This would enable the geotechnical field effort
to occur before winter.
Furthermore, as noted in the attached letters of support, Upper and Lower Kalskag residents are
energized by the idea of a wind project in their community and are prepared to work with AVEC on
land agreements. At Kalskag’s annual community meeting with AVEC, the community drafted and
signed a resolution requesting that AVEC develop a wind feasibility study for the community. With
the wind analysis, geotechnical data, and site selection in hand, completion of the CDR would be
seamless. No other grants have been secured for this work in the past.
8.2 Demand- or Supply-Side Efficiency Upgrades
If you have invested in energy efficiency projects that will have a positive impact on the proposed
project, and have chosen to not include them in the economic analysis, applicants should provide
as much documentation as possible including:
1. Explain how it will improve the success of the RE project
2. Energy efficiency pre and post audit reports, or other appropriate analysis,
3. Invoices for work completed,
4. Photos of the work performed, and/or
5. Any other available verification such as scopes of work, technical drawings, and payroll for
work completed internally.
Not applicable to this project.
SECTION 9 – LOCAL SUPPORT AND OPPOSITION
Describe local support and opposition, known or anticipated, for the project. Include letters,
resolutions, or other documentation of local support from the community that would benefit from
this project. Provide letters of support, memorandum of understandings, cooperative agreements
between the applicant, the utility, local government and project partners. The documentation of
support must be dated within one year of the RFA date of November 16, 2021. Please note that
letters of support from legislators will not count toward this criterion.
The community is very committed to moving this project forward and supports evaluating wind
energy as a viable option for sustainable energy infrastructure in the community. The community
proposed a wind feasibility to AVEC during its annual meeting and strongly supports the
development of wind energy in Kalskag. Letters of support for this project have been received from
the Kuskokwim Corporation, the City of Upper Kalskag, the Native Village of Kalskag, the Village of
Lower Kalskag, and the City of Lower Kalskag. Letters of support can be found under Tab B.
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SECTION 10 – COMPLIANCE WITH OTHER AWARDS
Identify other grants that may have been previously awarded to the Applicant by AEA for this or
any other project. Describe the degree you have been able to meet the requirements of previous
grants including project deadlines, reporting, and information requests.
AVEC has been providing electrical services to rural, isolated, and economically disadvantaged
Alaska communities since 1968. The Cooperative began with three communities and a very small
staff and has steadily grown to the impressive non-profit organization it is today, with 58-member
villages. AVEC started out with loans from the USDA RUS and became a Denali Commission
partner in 2001. AVEC now has over 90 employees. There are generation technicians, linemen,
managers, engineers, expediters, and others in its central office in Anchorage, and plant operators
within member communities. With the signatures on this application, AVEC certifies that it is a
legally incorporated, non-profit entity eligible to receive federal grant funding for the proposed
project. Documentation of incorporation is available upon request.
AVEC has the largest geographic service area of any retail electric cooperative in world. It has
demonstrated non-stop dedication to bringing stable and efficient sources of electricity to homes,
schools, clinics, water and sewer systems, businesses, and communications infrastructure in its
member villages. AVEC operates 160 diesel generators throughout its service area and purchases
over 9 million gallons of fuel annually. The generators produce electric power for member
communities, running a cumulative total of more than 420,000 hours per year. In 2021, AVEC
generated 124 million kWh in power sales.
Each of AVEC’s 58 villages conducts an annual village meeting for the express purpose of electing
a delegate to represent their community at AVEC’s Annual Cooperative Meeting held in Anchorage
each April. At the Annual Meeting, the delegates discuss AVEC business and elect members to
serve on the seven-member board of directors. AVEC and the local governments operate as a
partnership. Under operating agreements with all member communities, local control is exercised.
The village governments hire the plant operators and oversee the day-to-day operation of power
generation plants.
The AVEC Board of Directors and staff are committed to the on-going effort of increasing the
efficiencies and effectiveness of power-producing facilities and distribution lines in all member
villages. They believe that by improving the power generation and distribution in each community,
they are helping to improve the future of all impacted residents.
Since 2000, AVEC has reliably and responsibly spent over $299 million of grant funds plus its own
money to construct over 120 major projects. This includes 36 bulk fuel tank farm upgrades or
replacements, 19 new diesel-fired power plants, 7 standby backup power plants, 22 (grant funded
or AVEC funded) recovered heat systems, 14 wind farms (32 total wind turbines), 8 village-to-
village interties, 1 photovoltaic (PV) solar array, and 33 other generation and distribution upgrades.
Funding for these projects has come from the Denali Commission ($227 million), the Alaska
Energy Authority ($38 million), USDA RUS direct awards ($14 million), USDE Office of Indian
Energy ($4 million), other grants ($18 million), and AVEC matching contributions ($37 million).
AVEC has been awarded 41 AEA grants, details for these grants are attached in Tab G.
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SECTION 11 – LIST OF SUPPORTING DOCUMENTATION FOR PRIOR PHASES
In the space below, please provide a list of additional documents attached to support completion of
prior phases.
Not applicable to this project.
SECTION 12 – LIST OF ADDITIONAL DOCUMENTATION SUBMITTED FOR CONSIDERATION
In the space below, please provide a list of additional information submitted for consideration.
Tab A – Resumes
Tab B – Letters of Support
Tab C – Heat
Tab D – Authority
Tab E – Electronic Application
Tab F – Certification
Tab G – Additional Materials (REF Round 15 Economic Evaluation Model; AVEC AEA Grant
Summary)
Tab A
Resumes
Tab B
Letters of Support
THE KUSKOKWIM CORPORATION 4300 B ST. SUITE 405 ANCHORAGE AK 99503 PHONE 907.243.2944 FAX 907.243.2984
November 23, 2022
William R. Stamm, President and CEO
Alaska Village Electric Cooperative, Inc (AVEC)
4831 Eagle Street
Anchorage, AK 99503
Re: Letter of Support to the Renewable Energy Fund: Kalskag Wind Feasibility Study Project
Dear Mr. Stamm,
On behalf of The Kuskokwim Corporation (TKC), thank you for the work Alaska Village Electric
Cooperative, Inc. (AVEC) is doing to power the middle Kuskokwim. As you know, reducing the high
cost of energy is critical to unlocking the economic potential of our region and will help our
shareholders and residents. The communities of Upper and Lower Kalskag experience high costs of fuel
and electricity. TKC writes in support of the Renewable Energy Fund (REF) application request AVEC
has submitted to the Alaska Energy Authority (AEA) and then to the State Legislature for consideration
to augment the diesel electric system serving both Upper and Lower Kalskag. We understand you are
requesting funding to study the feasibility of wind power generation.
Currently, both communities of Upper and Lower Kalskag generate power through a joint power plant
located in Upper Kalskag through an existing intertie. AVEC is requesting funding to study the
feasibility of wind to serve both communities to help stability energy costs and reduce diesel fuel
consumption.
TKC manages more than 950,000 acres of land, made up of ten (10) communities in the middle of the
Yukon Kuskokwim region along the Kuskokwim River. As the Village Corporation representing both
Upper and Lower Kalskag, TKC fully supports this multi-year project, in all of its stages; from wind
study, design and development, geotechnical survey to construction, as it will help determine if wind
power is a solution to high and unstable costs in both communities of Upper and Lower Kalskag. TKC is
willing to work with AVEC and both communities to find a good site for the LIDAR station and to help
AVEC get approvals for placement of the equipment. Please include this letter of support in your grant
application and TKC requests AEA and the State Legislature fully fund this important project.
Sincerely,
Andrea Gusty
President & CEO
The Kuskokwim Corporation
Tab C
Heat Project Information
No information provided in this section.
Not applicable to this project.
Tab D
Authority
Tab E
Electronic Application
Application was submitted electronically.
Not applicable to this project.
Tab F
Certification
Tab G
Additional Materials
‐ AVEC AEA Grant Summary
‐ Evaluation Model
Grant # /
Application #No.Description Notes Year Funded
Grant #2195244 Wind Turbine Foundation Design & Testing Project (DC project 27D Toksook Bay)Completed successfully; facilities now in service.2005 AES
Grant #2195281 Chevak Wind Farm Project (DC project 29E)Completed successfully; facilities now in service.2007 AES
Grant #2195412 Ambler Solar PV Construction Failed early feasibility evaluation, returned bulk of funds.2008 RD1
Grant #2195432 Bethel Wind Farm Completed successfully; facilities now in service.2008 RD1
Grant #2195413 Cosmos Hills Hydro Feasibility Completed successfully; feasibility only.2008 RD1
Grant #2195384 Mekoryuk Wind Farm Construction Completed successfully; facilities now in service.2008 RD1
Grant #2195431 Old Harbor Hydroelectric Final Design Completed successfully (design). FERC licensure in place.2008 RD1
Grant #2195383 Quinhagak Wind Farm Construction Completed successfully; facilities now in service.2008 RD1
Grant #2195385 Toksook Bay Wind Farm Expansion Construction Completed successfully; facilities now in service.2008 RD1
Grant #2195463 Shaktoolik Wind Construction Completed successfully; facilities now in service.2009 RD2
Grant #2195464 Teller Wind Analysis Completed successfully; feasibility only.2009 RD2
Grant #2195468 Emmonak/Alakanuk Wind Design and Construction Completed successfully; facilities now in service.2009 RD2
Grant #7030006 New Stuyahok Wind Analysis Completed successfully; feasibility only.2009 RD2
Grant #7030016 Kivalina Wind-Intertie Feasibility Analysis & Conceptual Design Completed successfully; feasibility only.2010 RD3
Grant #7040008 Stebbins Wind Feasibility Completed successfully; feasibility only.2011 RD4
Grant #7040014 Old Harbor Hydroelectric Project Completed successfully (design). FERC licensure in place.2011 RD4
Grant #7040017 St. Mary's/ Pitka's Point Wind Design and Construction Completed successfully; facilities now in service.2011 RD4
Grant #7040019 Eek Wind Feasibility Completed successfully; feasibility only.2011 RD4
Grant #7040021 Marshall Wind Feasibility Study Completed successfully; feasibility only.2011 RD4
Grant #7040022 Scammon Bay Wind Feasibility Completed successfully; feasibility only.2011 RD4
Grant #7040030 Selawik Hybrid Wind Diesel System Turbine Upgrade Assessment Completed successfully; feasibility only.2011 RD4
Grant #7040049 Kaltag Solar Construction Completed successfully; facilities now in service.2011 RD4
Grant #7040052 Koyuk Wind Feasibility Study Community declined to participate. Returned funding.2011 RD4
Grant #7040053 Elim Wind Feasibility Study Completed successfully; feasibility only.2011 RD4
Grant #7050870 Surplus Wind Energy Recovery for Mekoryuk Water System Heat Completed successfully; facilities now in service.2012 RD5
Grant #7050871 Shaktoolik Surplus Wind Energy Recovery for Water System Heat Completed successfully; facilities now in service.2012 RD5
Grant #7050875 Surplus Wind Energy Recovery for Chevak Water System Heat Completed successfully; facilities now in service.2012 RD5
Grant #7050876 Surplus Wind Energy Recovery for Gambell Water System Heat Completed successfully; facilities now in service.2012 RD5
Grant #7060939 Stebbins Heat Recovery Project Completed successfully; facilities now in service.2013 RD6
Grant #7071067 Mountain Village Wind Feasibility and Conceptual Design Completed successfully; feasibility only.2014 RD7
Grant #7071068 Stebbins St. Michael Wind Energy Final Design and Permitting Completed successfully; final design and permitting.2014 RD7
Grant #7081118 Bethel Power Plant Heat Recovery Assessment & Conceptual Design Completed successfully; feasibility and coceptual design.2015 RD8
Grant #7091223 Shishmaref Wind Energy Feasibility and CDR In progress. 2018 RD9
Grant #7091224 Mountain Village-St. Mary's Wind Intertie Project Completed successfully; facilities constructed. 2018 RD9
Grant #7110056 Togiak RPSU Completed successfully; facilities now in service.2017
Grant #7110082 Anvik DERA Replace Engine Position 3 Completed successfully; new engine commissioned and on-line.2019
Grant #7210025 Holy Cross BFU Completed successfully; facilities now in service.2017
Grant #7310305 Grid Bridging System Research and Development In progress.2019
Application #13002 Goodnews Bay Wind Energy Feasibility & Conceptual Design Project In progress.2020 RD13
Application #13003 Kotlik Wind Energy Feasibility & Conceptual Design Project In progress.2020 RD13
Application #14004 Pilot Station Wind Energy Feasibility Study & Conceptual Design Project In progress.2021 RD14
Application #14002 Holy Cross Solar Energy & Battery Storage Feasibility Project In progress.2021 RD14
Renewable Energy Fund Economic Benefit-Cost Analysis Model
Project Description
Community
Nearest Fuel Community
Region
RE Technology
Project ID
Applicant Name
Project Title
Results
NPV Benefits $1,762,836.96
NPV Capital Costs $5,482,524
B/C Ratio 0.32
NPV Net Benefit ($3,404,968)
Performance Unit Value
Displaced Electricity kWh per year 630,000
Displaced Electricity total lifetime kWh 12,600,000
Displaced Petroleum Fuel gallons per year 45,985
Displaced Petroleum Fuel total lifetime gallons 919,708
Displaced Natural Gas MCF per year -
Displaced Natural Gas total lifetime MCF -
Avoided CO2 tonnes per year 469
Avoided CO2 total lifetime tonnes 9,372
Proposed System Unit Value
Capital Costs $5,647,000$
Project Start year 2025
Project Life years 20
Displaced Electric kWh per year 630,000
Displaced Heat gallons displaced per year
Renewable Generation O&M (Electric)$ per year 28,000
Renewable Generation O&M (Heat)$ per year
Diesels OFF time Hours per year
Electric Capacity kW 300
Electric Capacity Factor %24%
Heating Capacity Btu/hr
Heating Capacity Factor %#DIV/0!
Total Other Public Benefit 2021$ (Total over the life of the project)0
Base System
Size of impacted engines (select from list)$/hr
Diesel Generator O&M 361-600kW 9.95$
Applicant's Diesel Generator Efficiency kWh per gallon 13.7
Total current annual diesel generation kWh/gallon
1,545,265 13.70
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Kalskag
Kalskag
Rural
Wind
Alaska Village Electric Cooperative (AVEC)
Kalskag Wind Feasibility and Conceptual Design
Diesel Generation Efficiency
Annual Cost Savings Units 2025 2026 2027 2028 2029
Entered Value Project Capital Cost $ per year 5,647,000$
CALCULATION Electric Cost Savings $ per year 113,635$ 115,051$ 116,468$ 117,884$ 119,300$
CALCULATION Heating Cost Savings $ per year -$ -$ -$ -$ -$
Entered Value Other Public Benefits $ per year -$ -$ -$ -$ -$
CALCULATION Total Cost Savings $ per year 113,635$ 115,051$ 116,468$ 117,884$ 119,300$
CALCULATION Net Benefit $ per year (5,533,365)$ 115,051$ 116,468$ 117,884$ 119,300$
(5,418,314)$ (5,301,846)$ (5,419,730)$ (5,300,429)$
Electric Units 2025 2026 2027 2028 2029
Enter Value if generation changes Renewable Generation kWh per year 630,000 630,000 630,000 630,000 630,000
Entered Value Renewable scheduled replacement(s) (Electric)$ per year -$ -$ -$ -$
REFERENCE: Cell D34 Renewable O&M (Electric)$ per year 28,000$ 28,000$ 28,000$ 28,000$ 28,000$
Entered Value Renewable Electric Other costs $ per year
Entered Value Renewable Fuel Use Quantity (Biomass)green tons
Entered Value Renewable Fuel Cost $ per unit
CALCULATION Total Renewable Fuel Cost (Electric)$ per year -$ -$ -$ -$ -$
Proposed Generation Cost (Electric)$ per year 28,000$ 28,000$ 28,000$ 28,000$ 28,000$
REFERENCE: Cell D32 Displaced Fossil Fuel Generation kWh per year 630,000 630,000 630,000 630,000 630,000
REFERENCE: Worksheet 'Diesel Fuel
Prices'Displaced Fuel Price $ per gallon 3.08$ 3.11$ 3.14$ 3.17$ 3.20$
Enter Value if Diesels are OFF Displaced Scheduled component replacement(s)$ per year -$ -$ -$ -$
CALCULATION Displaced O&M $ per year -$ -$ -$ -$ -$
CALCULATION Displaced Fuel Use gallons per year 45,985 45,985 45,985 45,985 45,985
CALCULATION Displaced Fuel Cost $ per year 141,635$ 143,051$ 144,468$ 145,884$ 147,300$
CALCULATION Base Generation Displaced Cost $ per year 141,635$ 143,051$ 144,468$ 145,884$ 147,300$
Proposed
Base
Annual Cost Savings Units 2030 2031 2032 2033 2034
Entered Value Project Capital Cost $ per year
CALCULATION Electric Cost Savings $ per year 120,717$ 122,133$ 123,549$ 124,966$ 126,382$
CALCULATION Heating Cost Savings $ per year -$ -$ -$ -$ -$
Entered Value Other Public Benefits $ per year -$ -$ -$ -$
CALCULATION Total Cost Savings $ per year 120,717$ 122,133$ 123,549$ 124,966$ 126,382$
CALCULATION Net Benefit $ per year 120,717$ 122,133$ 123,549$ 124,966$ 126,382$
(5,179,713)$ (5,057,580)$ (4,934,030)$ (4,809,064)$ (4,682,682)$
Electric Units 2030 2031 2032 2033 2034
Enter Value if generation changes Renewable Generation kWh per year 630,000 630,000 630,000 630,000 630,000
Entered Value Renewable scheduled replacement(s) (Electric)$ per year -$ -$ -$ -$
REFERENCE: Cell D34 Renewable O&M (Electric)$ per year 28,000$ 28,000$ 28,000$ 28,000$ 28,000$
Entered Value Renewable Electric Other costs $ per year
Entered Value Renewable Fuel Use Quantity (Biomass)green tons
Entered Value Renewable Fuel Cost $ per unit
CALCULATION Total Renewable Fuel Cost (Electric)$ per year -$ -$ -$ -$ -$
Proposed Generation Cost (Electric)$ per year 28,000$ 28,000$ 28,000$ 28,000$ 28,000$
REFERENCE: Cell D32 Displaced Fossil Fuel Generation kWh per year 630,000 630,000 630,000 630,000 630,000
REFERENCE: Worksheet 'Diesel Fuel
Prices'Displaced Fuel Price $ per gallon 3.23$ 3.26$ 3.30$ 3.33$ 3.36$
Enter Value if Diesels are OFF Displaced Scheduled component replacement(s)$ per year -$ -$ -$ -$
CALCULATION Displaced O&M $ per year -$ -$ -$ -$ -$
CALCULATION Displaced Fuel Use gallons per year 45,985 45,985 45,985 45,985 45,985
CALCULATION Displaced Fuel Cost $ per year 148,717$ 150,133$ 151,549$ 152,966$ 154,382$
CALCULATION Base Generation Displaced Cost $ per year 148,717$ 150,133$ 151,549$ 152,966$ 154,382$
Proposed
Base
Annual Cost Savings Units 2035 2036 2037 2038 2039
Entered Value Project Capital Cost $ per year
CALCULATION Electric Cost Savings $ per year 127,799$ 129,215$ 130,631$ 132,048$ 133,464$
CALCULATION Heating Cost Savings $ per year -$ -$ -$ -$ -$
Entered Value Other Public Benefits $ per year -$ -$ -$ -$ -$
CALCULATION Total Cost Savings $ per year 127,799$ 129,215$ 130,631$ 132,048$ 133,464$
CALCULATION Net Benefit $ per year 127,799$ 129,215$ 130,631$ 132,048$ 133,464$
(4,554,884)$ (4,425,669)$ (4,295,037)$ (4,162,990)$ (4,029,526)$
Electric Units 2035 2036 2037 2038 2039
Enter Value if generation changes Renewable Generation kWh per year 630,000 630,000 630,000 630,000 630,000
Entered Value Renewable scheduled replacement(s) (Electric)$ per year -$ -$ -$ -$ -$
REFERENCE: Cell D34 Renewable O&M (Electric)$ per year 28,000$ 28,000$ 28,000$ 28,000$ 28,000$
Entered Value Renewable Electric Other costs $ per year
Entered Value Renewable Fuel Use Quantity (Biomass)green tons
Entered Value Renewable Fuel Cost $ per unit
CALCULATION Total Renewable Fuel Cost (Electric)$ per year -$ -$ -$ -$ -$
Proposed Generation Cost (Electric)$ per year 28,000$ 28,000$ 28,000$ 28,000$ 28,000$
REFERENCE: Cell D32 Displaced Fossil Fuel Generation kWh per year 630,000 630,000 630,000 630,000 630,000
REFERENCE: Worksheet 'Diesel Fuel
Prices'Displaced Fuel Price $ per gallon 3.39$ 3.42$ 3.45$ 3.48$ 3.51$
Enter Value if Diesels are OFF Displaced Scheduled component replacement(s)$ per year -$ -$ -$ -$ -$
CALCULATION Displaced O&M $ per year -$ -$ -$ -$ -$
CALCULATION Displaced Fuel Use gallons per year 45,985 45,985 45,985 45,985 45,985
CALCULATION Displaced Fuel Cost $ per year 155,799$ 157,215$ 158,631$ 160,048$ 161,464$
CALCULATION Base Generation Displaced Cost $ per year 155,799$ 157,215$ 158,631$ 160,048$ 161,464$
Proposed
Base
Annual Cost Savings Units 2040 2041 2042 2043 2044
Entered Value Project Capital Cost $ per year
CALCULATION Electric Cost Savings $ per year 134,880$ 136,297$ 137,713$ 139,129$ 140,546$
CALCULATION Heating Cost Savings $ per year -$ -$ -$ -$ -$
Entered Value Other Public Benefits $ per year -$ -$ -$ -$ -$
CALCULATION Total Cost Savings $ per year 134,880$ 136,297$ 137,713$ 139,129$ 140,546$
CALCULATION Net Benefit $ per year 134,880$ 136,297$ 137,713$ 139,129$ 140,546$
(3,894,646)$ (3,758,349)$ (3,620,636)$ (3,481,507)$ (3,340,961)$
Electric Units 2040 2041 2042 2043 2044
Enter Value if generation changes Renewable Generation kWh per year 630,000 630,000 630,000 630,000 630,000
Entered Value Renewable scheduled replacement(s) (Electric)$ per year -$ -$ -$ -$ -$
REFERENCE: Cell D34 Renewable O&M (Electric)$ per year 28,000$ 28,000$ 28,000$ 28,000$ 28,000$
Entered Value Renewable Electric Other costs $ per year
Entered Value Renewable Fuel Use Quantity (Biomass)green tons
Entered Value Renewable Fuel Cost $ per unit
CALCULATION Total Renewable Fuel Cost (Electric)$ per year -$ -$ -$ -$ -$
Proposed Generation Cost (Electric)$ per year 28,000$ 28,000$ 28,000$ 28,000$ 28,000$
REFERENCE: Cell D32 Displaced Fossil Fuel Generation kWh per year 630,000 630,000 630,000 630,000 630,000
REFERENCE: Worksheet 'Diesel Fuel
Prices'Displaced Fuel Price $ per gallon 3.54$ 3.57$ 3.60$ 3.63$ 3.67$
Enter Value if Diesels are OFF Displaced Scheduled component replacement(s)$ per year -$ -$ -$ -$ -$
CALCULATION Displaced O&M $ per year -$ -$ -$ -$ -$
CALCULATION Displaced Fuel Use gallons per year 45,985 45,985 45,985 45,985 45,985
CALCULATION Displaced Fuel Cost $ per year 162,880$ 164,297$ 165,713$ 167,129$ 168,546$
CALCULATION Base Generation Displaced Cost $ per year 162,880$ 164,297$ 165,713$ 167,129$ 168,546$
Proposed
Base