HomeMy WebLinkAboutREF Round 14 Application - City of Kotzebue Wind to Heat System (Full Proposal)Alaska Energy Authority – AEA 23001
Renewable Energy Fund Grant Application
City of Kotzebue
Kotzebue Wind to Heat System
i
City of Kotzebue
Kotzebue Wind to Heat System
Application Contents
SECTION 1: Applicant Information ................................................................... 1
SECTION 2: Project Summary ........................................................................... 3
SECTION 3: Project Management, Development, and Operation ................... 6
SECTION 4: Qualifications and Experience ................................................... 13
SECTION 5: Technical Feasibility ................................................................... 16
SECTION 6: Economic Feasibility and Benefits ............................................ 28
SECTION 7: Sustainability ............................................................................... 32
SECTION 8: Project Readiness ....................................................................... 34
SECTION 9: Local Support and Opposition ................................................... 35
SECTION 10: Compliance with Other Awards................................................ 35
SECTION 11: List of Supporting Documentation for Prior Phases .............. 36
SECTION 12: List of Additional Documentation for Consideration .............. 36
SECTION 13: Authorized Signers Form.......................................................... 37
SECTION 14: Additional Documentation and Certification ........................... 38
Appendix A ................................................................................................. 39
Technical Memorandum – Kotzebue Wind-To-Heat Expansion .............. 40
Appendix B ................................................................................................. 59
City of Kotzebue Resolution ................................................................... 60
ANTHC Letter of Commitment ................................................................ 62
KEA, Inc. Letter of Support ..................................................................... 63
Appendix C ................................................................................................. 64
Fuel Invoices .......................................................................................... 65
Attachment A ..................................... Submitted Separately with Application
Evaluation Model ........................... Submitted Separately with Application
Attachment B ...................................... Submitted Separately with Application
Resumes of Key Personnel ........... Submitted Separately with Application
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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)
City of Kotzebue
Tax ID # 92-6001350
Date of last financial statement audit: 09/20/2021 (for CY 2020)
Mailing Address: Physical Address:
Po Box 46 258A Third Avenue
Kotzebue, Alaska Kotzebue, AK 99752
99752
Telephone: Fax: Email:
(907) 442-5209 mlazarus@kotzebue.org
1.1 Applicant Point of Contact / Grants Coordinator
Name: Title:
Yekaterina Karankevich Project Manager II
Mailing Address:
Alaska Native Tribal Health Consortium
Division of Environmental Health and Engineering
Rural Energy Program
4500 Ambassador Dr. Suite 225
Anchorage, Alaska 99508
Telephone: Fax: Email:
520-900-2500 907-437-2176 yakarankevich@anthc.org
1.1.1 Applicant Signatory Authority Contact Information
Name: Matt Lazarus Title: Water Plant Manager
Mailing Address:
Po Box 46
Kotzebue, Alaska 99752
Telephone: Fax: Email:
907-442-5209 mlazaraus@kotzebue.org
1.1.2 Applicant Alternate Points of Contact
Name Telephone: Fax: Email:
Mayor Sandra
Shroyer-Beaver
907-412-1353 sandy.shroyerbeaver@maniilaq.org
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Chelsea Sieh 907-442-5120 esieh@kotzebue.org
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 #______, 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/2021-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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SECTION 2 – PROJECT SUMMARY
2.1 Project Title
Provide a 4 to 7 word title for your project. Type in the space below.
Kotzebue Wind to Heat System
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 at (907) 771-3081.
Latitude 66.89988 Longitude -162.583169
New WTP was constructed next to the old WTP.
2.2.2 Community benefiting – Name(s) of the community or communities that will be the
beneficiaries of the project.
Kotzebue, Alaska.
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2.3 Project Type
Please check as appropriate.
2.3.1 Renewable Resource Type
☒ Wind to Heat ☐ Biomass or Biofuels
☐ Hydro to Heat ☐ Solar Thermal
☐ Heat Recovery from Existing Sources ☐ Heat Pumps
☐ Other (Describe)
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
2.4 Project Description
Provide a brief, one-paragraph description of the proposed heat project.
This project would utilize 213,000 KWH of excess wind energy from the non-profit Kotzebue
Electric Association, Inc.’s (KEA) wind turbines in the form of heat delivered to the Water
Treatment Plant (WTP). This utilizes wind energy that would otherwise be wasted. The proposed
project will provide public benefits to both the local electric utility and individual rate payers in the
form of additional revenue for KEA and reduced water utility bills for community members due to
the avoided diesel fuel use. This project would make the local utility financially stronger, keep
money that would have otherwise have gone to the fuel provider circulating within the community,
and reduce both fuel costs and fuel use.
As KEA adds more turbines, solar, and batteries to their grid over the next two to three years, the
amount of recovered heat available from the power plant will decrease significantly, raising the
price of operating the WTP. This rise in costs can be mitigated and reversed with the addition of an
electric boiler, control panels, and a transformer to allow curtailed wind to be utilized and sold at a
discounted rate to the city. The newly constructed WTP includes space for a future electric boiler
with hydronics already installed to accommodate a project like this.
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.
The conceptual design will be finished and a final design will be drawn up by ANTHC mechanical
engineers. A 300 KW electric boiler will be installed in the new WTP feeding heat to the two water
storage tanks. A transformer and control panel will be installed on the KEA side for power delivery.
A Watt Node will be installed to accurately measure received heat and assess system for future
maintenance purposes. The operators will be trained on annual maintenance and troubleshooting
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of the electric boiler during commissioning. The boiler’s energy data will be collected for one year
after commissioning for a final report on performance.
Conceptual Design: Using the technical memo and Tetratech drawings drafted for the proposed
wind to heat system, complete a 35% conceptual design through ANTHC engineering in
collaboration with KEA to prepare for bid.
Design: This design effort will provide a construction ready design for the wind to heat project to
include a kickoff meeting, civil, mechanical, and electrical engineering, support will include CAD
and survey; the design phase will also include the production of a heat sales agreement.
Pre-Construction: construction schedule, schedule of values, material take-off, heavy equipment
and tool take off, work force planning, field office and accommodations, establishing local labor
force accounts and insurance policies, design review, cost estimate, pre-construction conference.
Construction: Installation of the system as designed, on-site testing and inspections, field survey,
construction management reports, materials ordering and expediting, compiling of manufacturer’s
literature, creation of O&M manual, local labor force payroll administration, as-built redlines,
quarterly grant reports, superintendent supervision and assistance.
Post-Construction: Pre-final and final inspections, closeout documentation, record drawings,
demobilization, start-up and operator training.
Project Management: will be ongoing through all project phases; this will include but is not limited
to: coordinating with the funding agency on reporting, working as the liaison between stakeholders
and the community, providing status updates, managing the project budget, coordinating with
design and construction personnel.
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 N/A N/A N/A 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
II Conceptual
Design to 35%
Use ANTHC
engineering to add
boiler to Tetratech
drawings, collaborating
with KEA for boiler and
controls specifications,
kick off meeting
7/22 9/22 Conceptual Design
Drawings to 35%
III-1 65% Design
Initial site visit, 65%
draft drawings, specs,
and cost estimate
9/22 11/23 65% design drawings
III-2 Heat sales
agreement
Develop and route KEA
heat sales agreement 10/22 11/23 Heat sales agreement
III-3 95% Design
95% design review
meeting, finalize system
after comments
11/23 1/23 95% design drawings
III-4 Final Design
and Permitting
Finalize design, obtain
permits 1/23 2/23 IFC Drawings and Spec
IV-0 Project
management
Throughout
design and
construction
IV-1 Pre-
construction
Create bid packet, bid
out construction, hold
pre-construction
meeting
2/23 4/23
IV-2 Construction
Install boiler, control
panels, transformer,
watt node, and
complete training.
5/23 10/23
IV-3 Commissioning 10/23 11/23
IV-4 Final inspection
and follow up
ANTHC engineering will
perform this 11/23 12/23
Fully operational wind to
heat system serving
WTP
IV-5 Project
Closeout
Monitor Project
performance, write final
grant report, financial
closeout
12/23 12/24
Final grant report
detailing results of
remote monitoring data
collection
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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 $ 702,435
Cash match to be provideda $ 0
In-kind match to be provideda $ 0
Energy efficiency match providedb $ 0
Total costs for project phase(s) covered in application (sum of above) $ 702,435
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.
While the City of Kotzebue has not secured matching funding or in-kind resources that will support
this project, the city and ANTHC are both highly invested in and committed to the successful
completion of the project. ANTHC, the city, and KEA have already invested substantial staff time in
project development and the completion of a feasibility study. The cost estimates presented in the
table below represent anticipated costs of the proposed system with potential unexpected changes
in site conditions, unknowns, and logistics incorporated.
a Attach documentation for proof (see Section 1.18 of the RFA)
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.
ANTHC will make every effort to keep the project within the budget. In pr evious instances where
there were project overruns, ANTHC has successfully tapped into other funding opportunities to
make up the budget deficits. The proposed project is fairly straightforward, consisting largely of
routine component installations and no remodeling, so the potential for cost overruns or significant,
unexpected expenses impacting the proposed budget is minimal. KEA will be required to cover any
overruns on its side of the meter, including any potential increase in the costs of the transformer,
control panel, and/or installation of the transformer.
ANTHC will work with the City of Kotzebue to identify additional funding sources on an as-needed
basis to see this project through to completion. ANTHC personnel have extensive experience
identifying and acquiring supplemental funding in order to complete projects, including a Grants
Planning and Development Division that operates the Healthy Alaska Natives Foundation, which
serves as the fundraising arm of the ANTHC.
3.2.3 Total Project Costs
Indicate the anticipated total cost by phase of the project (including all funding sources). Indicate if
the costs were actual or estimated. Use actual costs for completed phases.
Feasibility – Denali Commission Funded Actual $ 19,400
Conceptual Design Estimated $ 10,878
Final Design and Permitting Estimated $ 83,305
Construction Estimated $ 608,252
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Total Project Costs (sum of above) Estimated $ 721,835
Metering/Tracking Equipment [not included in project
cost] – Helmsley Charitable Trust WASH Grant
Estimated $ 15,000
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)
If awarded, AEA funding will support the completion of the conceptual design, final design,
permitting, and construction, at which point the project will be concluded. No subsequent phases
will require further financial support.
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
(List milestones based on
phase and type of project. See
sections 2.3 thru 2.6 of the
RFA )
Feasibility Report Completed $ 0 $ 0 $ 0
Conceptual Design (35%) 10/2023 $10,878 $ 0 $ 10,878
TOTALS $10,878 $ 0 $ 10,878
Budget Categories:
Direct Labor & Benefits $ 7,825 $ 0 $ 7,825
Travel & Per Diem $ 0 $ 0 $ 0
Equipment $ 0 $ 0 $ 0
Materials & Supplies $ 0 $ 0 $ 0
Contractual Services $ 0 $ 0 $ 0
Construction Services $ 0 $ 0 $ 0
Other $ 3,053 $ 0 $ 3,053
TOTALS $ 10,878 $ 0 $ 10,878
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Phase 3 — Final Design and Permitting
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
(List milestones based on
phase and type of project. See
sections 2.3 thru 2.6 of the
RFA )
Design review (65% and 95%) 1/2023 $ 7,081 $ 0 $ 7,081
Final design documents 3/2023 $ 70,809 $ 0 $ 70,809
Permitting 3/2023 $ 5,415 $ 0 $ 5,415
$ 0 $ 0 $ 0
$ 0 $ 0 $ 0
$ 0 $ 0 $ 0
$ 0 $ 0 $ 0
$ 0 $ 0 $ 0
$ 0 $ 0 $ 0
$ 0 $ 0 $ 0
$ 0 $ 0 $ 0
$ 0 $ 0 $ 0
TOTALS $ 83,305 $ 0 $ 83,305
Budget Categories: $ 0
Direct Labor & Benefits $ 67,420 $ 0 $ 67,420
Travel & Per Diem $ 3,874 $ 0 $ 3,874
Equipment $ 0 $ 0 $ 0
Materials & Supplies $ 0 $ 0 $ 0
Contractual Services $ 0 $ 0 $ 0
Construction Services $ 0 $ 0 $ 0
Other $ 12,012 $ 0 $ 12,012
TOTALS $ 83,305 $ 0 $ 83,305
Phase 4 — Construction
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
(List milestones based on
phase and type of project. See
sections 2.3 thru 2.6 of the
RFA )
Construction and
commissioning 10/2023 $ 532,220 $ 0 $ 532,220
Final inspection and follow up 10/2023 $ 15,206 $ 0 $ 15,206
$ 0
Project Management and
Close out 10/2023 $ 60,825 $ 0 $ 60,825
$ 0 $ 0 $ 0
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$ 0 $ 0 $ 0
$ 0 $ 0 $ 0
$ 0 $ 0 $ 0
$ 0 $ 0 $ 0
TOTALS $ 608,252 $ 0 $ 608,252
Budget Categories: $ 0
Direct Labor & Benefits $ 45,735 $ 0 $ 45,735
Travel & Per Diem $ 3,874 $ 0 $ 3,874
Equipment $ 0 $ 0 $ 0
Materials & Supplies $ 0 $ 0 $ 0
Contractual Services $ 0 $ 0 $ 0
Construction Services $ 447,915 $ 0 $ 447,915
Other $ 110,729 $ 0 $ 110,729
TOTALS $ 608,252 $ 0 $ 608,252
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.
Costs for this project were taken from the Wind to Heat Feasibility Study for Kotzebue, AK
prepared by ANTHC in 2021. These costs were developed based on engineering expertise and
recent design and construction costs of similar ANTHC projects. The detailed costs from this study
for material, subcontractor, and local labor were then inflated by 3% until the expected construction
date.
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?
The City of Kotzebue will enter into a Cooperative Project Agreement (CPA) with ANTHC which
will authorize Consortium personnel to provide project and grant management services for the
proposed heat recovery project.
The Grants Management and Compliance Department is overseen by the Grants and Other
Restricted Revenue Manager, with personnel staffed to provide comprehensive grants
administration and assistance. The department manages an approximate total of $250 million in
grant-funded projects on an annual basis, and ANTHC’s current portfolio includes grants from a
variety of federal and state government agencies, as well as a number of nonprofit organizations
and foundations from within and outside the State of Alaska.
Grant Specialists with ANTHC’s Grants Management and Compliance Department work to
coordinate grant reporting activities with project managers, communicate with external funding
agencies to ensure goals and objectives are met, grant reports and closeout data are submitted on
time, and project managers, supervisors, and accounting staff manage grant-funded projects
according to the grantor’s requirements. ANTHC’s Grant Specialists use the Microsoft office suite
of software to monitor grant activities and reporting requirements, working closely with project
managers and finance staff to continuously review and improve departmental operations.
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ANTHC prepares quarterly reports on all of the capital projects that it currently manages. This
same methodology of reporting will be utilized for this project should grant funds be awarded to the
City of Kotzebue. Reporting for this project will provide monthly financial and narrative reports as
required by AEA.
Financial reports with detailed expense information on each community for labor, materials, travel,
and indirect will be produced. Narrative reporting will discuss the status of the project as a whole
and any problems in carrying out the scope.
ANTHC Energy Department’s Project Manager, Katya Karankevich, will serve as the project
manager responsible for tracking the progress of this project using ANTHC’s budget and project
tracking software tools (Cognito, INFOR, etc.). Written monthly project progress reports will be
provided to the AEA project manager as required by the grant and meetings will be conducted by
ANTHC, the City of Kotzebue, KEA, AEA and other project stakeholders as needed to discuss the
status of the project on an ongoing basis.
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.
The City of Kotzebue will enter into a Cooperative Project Agreement (CPA) with ANTHC to
provide comprehensive project and financial management for the proposed heat recovery project.
The following information illustrates the organizational capacity and financial controls that are in
place to ensure grant funds are managed efficiently:
ANTHC is a large organization with over 2,939 employees and a Fiscal Year 2021 operating
budget of $701.4 million. Of that amount, approximately $308.5 million is grant-funded. The
Consortium’s Chief Financial Officer has the overall responsibility for the fiscal and administrative
oversight of grant awards.
In an effort to ensure that ANTHC is compliant with all federal, state and private funding received
as well as the Uniform Administrative Requirements, Cost Principles and Audit Requirements for
federal awards (2 CFR Part 200), a Grants Management and Compliance Department was created
and works in partnership with the ANTHC Finance department. The financial accounting system
includes controls to prevent incurring obligations in excess of total funds available for the grant.
ANTHC performs in-house financial management and has sufficient internal controls in place to
establish proper segregation of time management and segregation of duties.
All funds awarded to the City of Kotzebue and contracted to ANTHC will be maintained and
accounted for separately and distinctly from other sources of revenue/funding. Internal controls are
in place to ensure that federal and state funds are used solely for the authorized purposes
intended by using multiple levels of approval ensuring award funds are managed properly. The
Consortium meets all funders requirements and assigns a unique accounting – cost center number
to each award received. ANTHC also has an annual independent audit completed.
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The Procurement and Contracting Department works with program managers to ensure
appropriate scopes of work, performance measures, and compliance requirements are
incorporated into all contracts. This is completed through a computerized contracts procurement
and management software.
The Finance Department oversees the implementation and maintenance of internal monetary
and accounting controls, follows corporate accounting policies, provides compliance monitoring
and enforcement of financial requirements, and performs mandated record retention for the
Consortium.
ANTHC has an 18-year history of clean audits, conducted by an independent accounting firm in
accordance with the Single Audit Act. ANTHC will provide records and accounting records
available to state and federal auditors on request. Project finance information will be kept in
ANTHC Infor, a job cost accounting software that accounts expenditures by phase
code and cost types. Procurement and Contracting and Finance staff are the primary users of the
system, with information available to project teams on an ongoing basis.
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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.
Katya Karankevich
Project Manager II, ANTHC
Katya will be responsible for all project management and most administration of the grant. She has
13 years of experience involving project management, with six of those relating to energy and a
master’s in Sustainability. Her experience working in the Energy Department at ANTHC and in her
previous public facing roles have given her management, communication and budget allocation
skills. She will be responsible for the fulfillment all milestones (phase II-IV) and tasks. She will use
a calendar, Kronos, Infor and other software to manage time and resource conflicts,
communicating weekly with whoever is responsible for the completion of specific project tasks.
Email: yakarankevich@anthc.org Phone: 520-900-2500
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.
Elliott Lin
Finance Accountant II, ANTHC
Elliott received his Bachelor’s degree in Business Administration with an accounting concentration
from the University of Alaska – Anchorage (UAA) in December of 2018, and has two and a half
years of experience overseeing finance and reimbursement requests. Elliott has been working in
ANTHC’s Finance Department since July of 2021, providing accounting support to internal and
external customers, serving as an accounting technical resource to ANTHC’s program and project
managers, and is currently pursuing a Master’s degree in Business Administration through UAA to
continue developing his knowledge and skills. Elliott will work closely with the project manager to
ensure financial requirements are met according to the grant’s established timeline and reporting
deadlines are met for all phases of the project.
Email: elin@anthc.org Phone: 907-729-3619
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;
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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.
The ANTHC Rural Energy Program has worked in partnership with rural communities, tribal
organizations, funding agencies, and other ANTHC departments over the past 12 years to identify,
develop, and implement more than 230 renewable energy and energy efficiency projects that have
already saved communities over $24 million in energy costs, with more than $3.9 million in savings
continuing to accrue annually.
ANTHC’s Division of Environmental Health and Engineering (DEHE) has a full service engineering
group to utilize for this project to either design the system internally or provide design review if
subcontracted. Our projects are focused on the planning, design, construction and operations of
public health infrastructure throughout the state of Alaska. Professional engineers at DEHE are
involved in all aspects of a project, from planning to design to force account construction.
Additionally, ANTHC maintains a list of term contractors which undergo a competitive procurement
process that meets or exceeds all federal agency requirements.
Key personnel for each department include the following:
Dustin Madden
Rural Energy Program Manager, ANTHC
Dustin oversees ANTHC’s Rural Energy Program, which will be responsible for the overall
development, reporting, and project management activities of the proposed Kotzebue Wind to Heat
System. He manages a team of eight staff with a portfolio of approximately $21 million in
renewable energy and energy efficiency projects. He has extensive background in energy and
economic analysis, program evaluation, and energy modeling, all focused on Alaska. Dustin will be
involved in providing support throughout all phases of the project.
Matthew Lazarus
Water Plant Manager, City of Kotzebue
Matt will be the community champion and city contact who will review monthly reports and handle
city-related grant communication. He will sit in on design review meetings and represent the city’s
interests. He has 17 years of experience running and managing the WTP in Kotzebue, which has
given him a deep knowledge of the plant’s operation, fuel usage and maintenance needs. He has
certifications for Water Treatment Level 4 and Water Distribution Level 3. He will be active in all
phases of this grant.
Bailey Gamble, P.E.
Mechanical Engineer IV, ANTHC
Bailey is a mechanical engineer with a master’s in Environmental Engineering. She has over six
years of experience designing and managing energy projects for ANTHC. Ms. Gamble will be
designing the Wind to Heat system (phase II-III). Having designed several W ind to Heat systems
previously, she has the skills and experience to complete this portion of the project. A timeframe
will be given to the design team to help them stay on schedule. Bailey will also conduct
Construction Administration services during and after the installation is complete, and will be
responsible for performing the final inspection (phase IV).
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Will Fraser, P.E.
Lead Mechanical Engineer, ANTHC
Will is a seasoned mechanical engineer with 29 years of experience in the field. He has spent the
majority of his career with ANTHC, designing water and sewer infrastructure along with energy
projects, in addition to managing the Engineering Department. He has designed previous Wind to
Heat systems and will be assisting in the design of the Kotzebue Wind to Heat System. Will
developed the Kotzebue Wind to Heat feasibility study using HOMER modeling software and is
credited as the inventor of the solar powered thermosiphon. A timeframe will be given to the design
team to help them stay on schedule for W ill’s part in phase II.
Richard Wooten, PMP, CDT, CPSM
Manager - Contract Delivery Team, ANTHC
Richard is the manager of the Contract Delivery Team at ANTHC and will be assisting in bidding
out the construction component of the project. He has been writing, managing, and executing
complex contracts and picking contractors for over eight years. He will take the final design and
create the contract agreement for construction (phase IV). Rich is well organized and can deliver a
new contract ready for bid within four weeks. The entire contracts process should take about 2.5
months, including bidding and selection.
4.2 Local Workforce
Describe how the project will use local labor or train a local labor workforce.
Completion of the scope of work in this proposal will rely largely upon the ANTHC Rural Energy
Program’s extensive experience in designing, constructing, and maintaining energy systems in
rural Alaska. The construction component of the project will be carried out through a contracting
method that is designed to produce the most cost effective, quality end product, selecting from
several contractors who have delivered on similar projects in the past. The project team will use
local force account labor as available for the implementation of the construction portion of the
project.
The transformer and control panel installation portion of the project that requires KEA’s
involvement is expected to involve local labor. The plant operators will be trained on electric boiler
maintenance and troubleshooting during commissioning. The construction portion may or may not
have local labor, depending on the winning bidder for that portion. The City’s Water Plant Manager,
Matt Lazarus, has a budget in this proposal of $15,010 to review monthly reports, sit in on design
review meetings and facilitate access to the site.
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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.
The current excess wind availability from the feasibility study is 1,060,000 KWH/year, with the
existing hospital system and proposed additional system sharing all available excess energy
annually. The feasibility study is attached along with several key engineering drawings that show
the saved location of a future electric boiler and location of where it is proposed that it be tied in to
heat the water. The entire set of plans is included as well.
The likelihood of the wind resource being available for the life of the project is high as KEA has a
track record of keeping their three turbines online with a 15% downtime annually for repairs. The
resource availability gets higher as two to three new turbines are added in the coming years, which
will allow for more excess wind discharged to the WTP. KEA plans on doubling the battery install
and doubling the solar PV installation as well in the same time period. The batteries will lower
available excess wind fraction, but additional solar and turbines will more than make up for this.
The value of this additional solar and future wind is not included in this feasibility study, but will
have a positive impact on displacing more fuel and decreasing community bills.
5.1.2 Alternatives to Proposed Energy Resource
Describe the pros and cons of your proposed energy resource versus other alternatives that may
be available for the market to be served by your project.
The Pros:
The pros of using excess wind as heat are that it is sold at 40% off the equivalent gallon of diesel,
which lowers end user water bills and decreases reliance on costly, imported fuel. Another benefit
is that electric boilers are relatively maintenance-free, so they are not nearly as much of a burden
to maintain as Heat Recovery systems or the diesel burning boilers currently installed in the new
plant. Decreasing the diesel boiler use will reduce maintenance costs as well, although the savings
are in the low hundreds of dollars per year when factoring in the minor maintenance needs for the
electric boiler.
KEA’s ability to care for and expand renewable resource use in Kotzebue has helped drive the
economics for greater electrification, including providing heat to the local hospital, which has seen
an average of $130,000 per year in savings with their Wind to Heat system that ANTHC designed.
This form of energy is available in the winter, unlike solar, with the quantity only expected to
increase in the near future. The $57,934 per year that is not spent on diesel fuel can be
recirculated in the community, with 60% of those savings returning to the utility, making them more
solvent.
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Since KEA plans to install more wind turbines and solar PV in the next several years, this wind to
heat system will reduce the available recovered heat that the WTP will receive due to the power
plant being able to run for longer periods on wind power alone. Decreased generator use at the
power plant reduces the amount of recovered heat available to add to the water main outside of
the WTP, which increases the WTP’s diesel fuel costs and use. This project would partially insulate
all community members from increasing costs seen from the future lower heat recovery output.
This is accomplished by offsetting diesel heat needed at the WTP to heat water heading to the
storage tanks, which later passes through the point of recovered heat add on its way to community
end points. While the wind to heat project cannot replace all recovered heat lost in the future to
decreasing recovered heat output, it can mitigate some of those near future rising costs with heat
add to the storage tanks.
Another benefit is that it avoids the discharge of 123 tonnes of CO2 annually with a lifetime
avoidance of 2,456 tonnes. This reduces the negative impacts of climate change, the effects of
which are impacting Arctic regions far greater than other regions of the planet.
The Cons:
Wind is an intermittent energy resource, which is why it is so heavily discounted by the utility in
relation to equivalent diesel fuel. Another negative is that the hospital will have to share this excess
resource, which will increase their heating fuel use by up to 4,000 gallons annually. For the last five
years, they have been the sole recipient of excess wind energy, which has saved them $130,000
to $140,000 annually. The return on investment for the hospital was paid in year three, due to the
robust nature of the available excess wind and the large heat load that the hospital has. The
hospital’s contract with KEA has a provision for sharing excess wind with other users. This small
increase in the hospital’s bills will be mitigated in the future, as two to three more turbines and
more solar are added to the grid.
Alternatives:
An alternative that could be considered to provide heat to the WTP is the installation of a used oil
boiler. The pros of burning used oil are that it is an unutilized resource. The con is that to get that
oil to the WTP, there would need to be an economic analysis done and a feasibility study written in
determining the quantity available the right pricing structure that generates enough savings while
still incentivizing local partner participation. This option would likely not bring in as much total
annual heat as the Wind to Heat project, but it would allow control over dispatch during the coldest
times, where an intermittent resource like wind falls short. It would also be less expensive overall to
install since it would not demand a transformer, but potential investment returns cannot be
determined without a feasibility study. This option would add more labor hours to the operator’s
responsibilities, but may provide an additional part time job in the community if the economics are
correct.
A biomass system was not considered as it is not feasible in the area where wood resources are
scarce nearby. A community scale solar system would not offer heat in the winter, but would offer
options for solar to heat in the spring, so it was not examined.
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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
No permits are anticipated for this wind to heat project, as work will be restricted to project
locations owned and managed by the City of Kotzebue and KEA. If during the course of the project
it is determined that permits are needed, ANTHC and/or any contractors working on the project will
obtain the appropriate permits.
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.
There are no apparent conflicts with land ownership, as the wind to heat boiler and electrical
supply lines are entirely within the existing building and on city and KEA property. The city is the
applicant and KEA has submitted a letter of support for the project.
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.
In general, there are no technological or financial risks. ANTHC has successfully designed and
installed numerous wind to heat systems before, namely in the Kotzebue hospital, which has been
extremely successful over the past five years. ANTHC has been working with Tetratech, which has
graciously been able to provide engineered plans and provide review and feedback on ANTHC’s
feasibility study. Through this partnership, it has been determined that the space Tetratech has
designated for a future electric boiler will be placed in a location that will easily allow for the project
team to tap into the water line right before it enters the two large storage tanks. This will save
significant construction costs and greatly reduce the complexity of engineering design work
required.
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.
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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
Threatened and Endangered Species
There are three species listed as threatened under the Endangered Species Act (ESA) potentially
present in Kotzebue: polar bear, spectacled eider and Steller’s eider. The project occurs within an
existing building. Exterior improvements are limited to the installation of a transformer on a
concrete pad adjacent to the building on the existing gravel pad. Because the improvements occur
within the boundaries of the city on an existing pad, ESA-listed species are not expected to be
present. The project would not affect ESA-listed species (USFWS 2018).
USFWS 2018 U.S. Fish and Wildlife Service (USFWS). ESA Section 7 Consultation for Native
Alaska Village Upgrades (Programmatic). Consultation 07CAAN00-2018-I-0145. August 7, 2018.
Habitat Issues
There are no habitat issues associated with the project. The project occurs within an existing
building and on an existing gravel pad.
Wetlands and Other Protected Areas
The USFWS National Wetlands Inventory has mapped wetlands in the project area. A review of
NWIs and aerial imagery show there are no wetlands in the project area. The project area is not
located within the 100-year or 500-year floodplain (Kotzebue 2014).
Kotzebue 2019. City of Kotzebue. Hazard Mitigation Plan Update. Prepared by the City of
Kotzebue Mitigation Planning Team in collaboration with LeMay Engineering and Consulting, Inc.
November 2019.
Archaeological and Historical Resources
There are no archaeological or historical resources issues associated with the project. The project
occurs within an existing building and on an existing gravel pad.
Land Development Constraints
No land will be developed for this project. The WTP and gravel pad are existing.
Aviation Considerations
The airport is over 0.8 miles south of the project area. No feature 200 feet above the ground level
is associated with the project. There would be no impacts to aviation from interior or exterior
construction.
Visual, Aesthetics Impacts
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The project area is within the developed portion of the city inside and adjacent to the existing WTP.
The project is consistent with the existing surrounding area and would not change the aesthetics of
the area or create additional visual impacts.
Identify and Describe Other Potential Barriers
No additional barriers are anticipated. The majority of work will be restricted to the interior of the
existing structure, where no environmental risk or potential for damage to cultural resources exists.
One transformer will be put on a concrete pad outside on the ground on city land, which will have
minimal negative aesthetic impact.
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 do sections applicable to your proposal. If your proposal does not include or affect the heat
recovered from the diesel gensets or include the additional electric heat loads, you can remove the
sections for power (electricity) generation.
5.4.1 Basic Operation of Existing Energy System
Describe the basic operation of the existing energy system including: generation by source on at
least a monthly basis 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.
Kotzebue Electric Association (KEA) power generation facilities consist of a diesel generator plant
and a combined wind turbine and solar site located approximately 4.5 miles from the generator
plant. Power is distributed through town over a 12,500 VAC 3 wire 3 phase system with the
following electrical characteristics:
Power factor 0.92 lagging
Average Load: 2500 KW
Peak load: 3700 KW
Minimum load: 1700 KW
Facility power generation equipment is listed below:
Diesel Generators
1025 KW 3516 Series CAT – Restricted to 1000 KW
3080 KW EMD 710 Series
1025 KW 3512 Series CAT – Restricted to 900 KW
1025 KW 3512 Series CAD – Restricted to 810 KW
2600 KW EMD 710 Series
2800 KW EMD 710 Series
Wind Turbines:
1 North Wind 100 100KW each
2 EWT54-900 900KW each
Solar Array:
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532KW (AC array)
Battery Energy Storage System:
1.225MW (950 KWH) Lithium Ion
Renewable energy currently provides approximately 20% of KEA’s annual electrical production
using both wind and solar resources. Power Cost Equalization data from 2017 to early 2020
suggests KEA averages about 4.7 x 106 KWH of wind energy production annually. HOMER
simulations indicate the system has the potential to provide 5.25 x 106 KWH annually but would
need larger dump load capacity to do so in order to avoid wind turbine curtailment.
Adding a KEA controlled electric boiler at the WTP would provide additional dump load capacity
and reduce the need for wind or solar curtailment. Comparing historical data to the HOMER Model
suggests that the wind turbines are producing about 70-75% of the theoretical annual maximum
(assuming no downtime or curtailment). Per discussions with Matt Bergan of KEA, the wind
turbines require about 15% downtime annually for maintenance, allowing a potential uptime of 85%
if no curtailment occurs.
Assuming no significant changes to KEA operations, adding a 300 KW electric boiler would allow
an additional 213,000 KWH of wind-to-heat to be used.
Currently the Kotzebue WTP uses approximately 15,000 gallons of heating fuel per year and
receives no Wind to Heat benefit. The existing distribution system in Kotzebue uses recovered
heat from the generator plant to make up for heat loss to the environment, and also provides most
of the heat to raise the circulating water temperature to 42 F. This heat recovery system is
predicted to diminish significantly, as more wind and battery resources are slated to be installed at
KEA, allowing them to decrease their diesel generator use within the next three years. This would
increase the WTP’s reliance on diesel fuel and increase costs by up to 30% annually, assuming no
increase in diesel costs.
The City of Kotzebue and ANTHC do not have monthly records for former WTP heating fuel use,
as those are not kept, with the fuel tank being topped off intermittently. Verbal reports from the City
Manager state that they spend at least $120,000 annually on heating the existing WTP with both
heating fuel and recovered heat costs, which translates to roughly 15,000 gallons for the old plant.
Those heating fuel records would not be particularly relevant since the new plant is much larger,
has a different design and will be commissioned in spring. Since this proposed system will be in
the new plant, ANTHC wrote the feasibility study based on modeling that Tetratech had done on
energy consumption for the new building. The heat recovery system is not supplying heat to the
WTP generally for June, July, August and September. Voltage, frequency and outage issues are
not a concern for this existing system.
Tetra-Tech estimates that the new WTP could use up to 42,300 gallons / year of diesel at current
water use rates. This is in addition to known average recovered heat going to the water main. In
the absence of other sources of heat, future fuel consumption is modeled to rise at the new WTP
unless another heat source is incorporated. This is undesirable from both a cost and an
environmental viewpoint. Please see Tetratech memo 6 and Kotzebue Wind to Heat Feasibility
Study for more details.
The below graph shows the total energy used per month that currently is being served by
recovered heat alone on the existing smaller WTP. Since fuel oil usage is modeled for the new
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plant and not actual, it has not been added to this graph. The large summer drop occurs because
water heating systems are turned off during the summer when there is no concern of freeze up.
Graph 1: WTP process heating demand
5.4.2 Existing Energy Generation and Usage
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).
5.4.2.1 Existing Power Generation Units (if applicable to your project)
Unit
#
Resource/
Fuel type
Design
capacity
(kW)
Make Model Minimum
design
load
Year
Installed
Hours of
Operation
Is there operational heat recovery? (Y/N) If yes estimated
annual displaced heating fuel (gallons)
Yes. Heat sales records indicate
displaced fuel for the WTP to be
35,770 gallons annually for the existing
plant.
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5.4.2.2 Existing Thermal Generation Units
Generation
unit
Resource/
Fuel type
Design
capacity
(MMBtu/hr)
Make Model Average
annual
efficiency
Year
Installed
Hours
boiler Diesel 2 various various 77% 2021
Heat
Recovery
Diesel 80% 2005
5.4.2.4 Annual Electricity Production and 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
Month Generation
(Type 1)
(kWh)
Generation
(Type 2)
(kWh)
Generation
(Type 3)
(kWh)
Fuel
Consumption
(Diesel-
Gallons)
Fuel
Consumption
Peak
Load
Minimum
Load
January
February
March
April
May
June
July
August
September
October
November
December
Total
5.4.2.5 Average Annual Heating Fuel Consumption (Existing System)
Month Heating
fuel
Diesel*
(Gallons)
Electricity
(kWh)
Propane
(Gallons)
Coal
(Tons)
Wood
(Cords,
green tons,
dry tons)
Other
Heat Recovery
(gallons)
January 4,722
February 5,015
March 5,391
April 4,981
5.4.2.3 Operations and Maintenance (O&M) and replacement costs for existing heating units
i. Annual O&M cost for labor 8 hours clean + tune x 2 boilers x $54 loaded local labor
= $864
ii. Annual O&M cost for non-labor 200 x 2 boilers = 400
iii. Replacement schedule and cost for
existing units
20 years for each system
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May 3,821
June 0
July 0
August 0
September 0
October 3,924
November 3,753
December 4,163
Total 42,300* 35,770
*This figure represents the Tetratech Memo 6 modeled estimate for the building’s “present
heat required for circ water main” and “present heat required for distribution water
heating” and “estimated building heat loss”. Recovered heat available has already been
subtracted from this modeled load.
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.
The energy demand for the water utility proposed to be served is expected to stay approximately
the same over the life of the project. This is an essential facility in the community, and the AK-DOL
population projection for 2019-2045 shows slow growth for the region, so it will likely continue to be
used at the same or slightly greater level.
As more wind turbines come online over the next two to three years, in addition to a planned
doubling of solar PV, the recovered heat portion received by the WTP will decrease due to power
plant generators running less frequently, making less excess heat available to be captured. KEA
plans to eventually run diesels off, which will increase excess renewable energy availability. KEA
also plans to add another battery of the same size as is currently operating to take some of the
excess wind/solar when the renewable fraction is increased with more assets. More battery
capacity would decrease the available excess fraction, but that would be mitigated with more
turbines and solar on the grid.
Overall, the wind-to-heat system is expected to provide an increased benefit over time due to
increased availability of excess wind energy.
5.4.4 Proposed System Design
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.
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The proposed 300 KW electric boiler would take excess wind energy in the form of electricity from
KEA and heat water in the storage tanks. A 200 KW boiler and 300 KW boiler were modeled to
determine best monetary savings annually. The 300 KW boiler determined to have the better
savings of avoiding 12,100 gallons per year over the 200 KW, which saved 8,700 gallons per year.
This translates to an avoided fuel cost of $57,934/year when the hospital and WTP have shared
priority of dispatch.
Integration Plan:
Existing building has space set aside for electric boiler. There is sufficient space to run approximately
50 feet of piping between the electric boiler and the tie in point for the heat add. A new transformer
and concrete pad will be required as well as a new service meter on the building. The system will be
controlled via digital radio from KEA’s power plant using KEA’s control algorithm copied from the
hospital. A watt node will be included in the electric boiler control panel to see real time usage.
5.4.4.1 Proposed Thermal Generation Units
Generation
unit
Resource/
Fuel type
Design
capacity
(MMBtu/hr)
Make Model Expected
Average
annual
efficiency
Expected
life
KW Wind
Electricity
1.02MMBtu/hr 100% 20
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.
When excess wind is available, the electric boiler will turn on and add heat to the two water storage
tanks, offsetting water plant fuel use to raise the circulating water temperature. There is sufficient
thermal storage capacity in the water storage tanks to ensure that all of the excess wind energy
can always be used. When the wind is not blowing, the electric boiler turns off and the two diesel
boilers make up the difference required to raise the water temperature to the circulating water
temperature.
The same control panel that the hospital uses to control their wind to heat system will be used to
control the delivery of this heat as well. The controls algorithm will be the same.
The recovered heat adds heat to the circulating water mains, which are the distribution systems
within the city. When wind energy has added sufficient heat to the storage tank, there will be less
required recovered heat needed, which further decreases costs. But primarily, this system is
designed to take the heating load of the diesel boilers at the water plant by raising the water
storage tank temperature, which is not served by recovered heat.
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5.4.5.1 Annual Heating Fuel Consumption (Proposed System)
Month Heating
Fuel
Diesel
(Gallons)
Electricity
(MWH Million
Watt
Hours/month)
Propane
(Gallons)
Coal
(Tons)
Wood
(Cords,
green tons,
dry tons)
Recovered Heat
(Gallons)
January 45.7 34.12 4,722
February 45.4 5,015
March 40.2 5,391
April 32.7 4,981
May 34.5 3,821
June 0 0
July 0 0
August 0 0
September 0 0
October 48.2 3,924
November 52.9 3,753
December 54.2 4,163
Total 30,200 354 MWH
(12,100
gallon
equivalent)
35,770
5.4.7 Fuel Costs
Estimate annual cost for all applicable fuel(s) needed to run the proposed system (Year 1 of
operation)
Diesel
(Gallons)
Electricity
(Gallons)
Propane
(Gallons)
Coal
(Tons)
Wood
Recovered Heat
(Gallons)
Unit cost
($)
$4.74 0.60 x
$4.74 =
$2.70
Annual
Units
12,100
Total
Annual
cost ($)
$32,670
5.4.6 O&M, Replacement, and Other Costs for Proposed System
i. Annual O&M cost for labor Annual inspection 4 hours x 55$ loaded local labor =
$220
ii. Annual O&M cost for non-labor None
iii. Replacement schedule and cost for
proposed units
20 years, $50,000 to purchase replacement
iv. Other new costs (insurance, taxes, etc.) heating element rod replacement every 10 years at
$15,000 to replace all rods
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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 RFA.
LoraWAN architecture will be installed with watt node output on the electric boiler reporting data to
the open source and publically available www.anthc.bmon.org website, which houses all active
remote monitoring projects that ANTHC has built. A watt node is roughly $5,000 purchased an
installed, which is part of the budget scope. AEA can access the website to see real time monitoring
and track historical performs with custom reports features.
A BTU meter will be installed on the WTP side to read the amount of delivered recovered heat coming
from the power plant. A fuel tank gauge will be installed on the day tank so that the operator can
start to log more precise fuel data. This will likely cost roughly $15,000, but will be purchased through
a different grant.
A year of data after commissioning will be collected and reported on in a final report, which will detail
how much of each heat source was used every month, along with subsequent savings.
5.5.2 O&M reporting
Please provide a short narrative about the methods that will be used to gather and store reliable
operations and maintenance data, including costs, to comply with the operations reporting
requirement identified in Section 3.15 of the RFA
This system is almost maintenance free. Any maintenance on the side of KEA will be their
responsibility. Electric boiler maintenance will be logged by the plant operators. The watt node will
report to the anthc.bmon.org website, where the remote monitoring data will be stored separately.
AEA can see the data at any time, with the ability to generate reports over time or see any
performance time point.
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SECTION 6 – ECONOMIC FEASIBILITY AND BENEFITS
6.1 Economic Feasibility
6.1.1 Direct Economic Benefits
Annual Lifetime
Anticipated Diesel Fuel Displaced for Power
Generation (gallons)
Anticipated Fuel Displaced for Heat
(gallons)
12,100 242,000
Total Fuel displaced (gallons) 12,100 242,000
Anticipated Diesel Fuel Displaced for Power
Generation ($)
Anticipated Fuel Displaced for Heat ($) $57,934 (first year of
operation)
$959,018 net present
value
Anticipated Power Generation O&M Cost
Savings (Increases)
Anticipated Thermal Generation O&M Cost
Savings (Increases)
Total Other costs savings (taxes, insurance,
etc.)
Total Fuel, O&M, and Other Cost Savings $57,934 (first year of
operation)
$959,018 net present
value
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-Application . 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.
Economic models often overlook the benefit to a community when switching to purchasing locally-
sourced energy instead of buying fuel from an outside entity that does not reinvest those funds back
into the local economy. This proposed project benefits the community in two ways: 1) by reduc ing
the cost of the water utility, which is paid by user fees by the population, and 2) by increasing the
revenue of the non-profit electric cooperative, which benefits the community the same way as any
revenue-generating renewable energy project would. The utility can direct those funds towards
investments in operator training, deferred maintenance, renewable energy investments, all of which
continue to economically impact the community.
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For this reason, the price of the excess electricity is not included in this analysis. If excess energy
were not used by the electric boiler, this energy would be wasted through pitch-controlled braking of
the wind turbines. The price paid by the City merely reflects how the benefits are distributed and is
not indicative of the total economic benefit of the project.
Adding the secondary load electric boiler at the water treatment plant is assumed to have a net zero
impact on the overall operations and maintenance costs for both the water and electric utilities. The
use of the electric boiler is assumed to result in an equivalent reduction of use of the oil-fired boiler
at the water treatment plant. The lower general O&M requirements for an electric boiler as compared
to an oil-fired boiler are assumed to be negated by higher potential O&M associated with
troubleshooting the more complicated controls of the grid-controlled electric boiler.
The direct economic benefits to the community of Kotzebue are $57,934 annually starting in 2023
with the city’s contracted 2022 fuel cost of $4.74/gallon. A fuel escalation factor was listed to be the
same as KEA’s. Sixty percent of the savings will go to KEA in the form of a heat sales agreement.
Forty percent of the benefit will go to the City directly, which they can use to reduce water/sewer bills
or reduce the costs of other essential services. The AEA economic model shows a great cost benefit
ratio of 1.45, with a net present value to society of $959,018 over the lifetime of the asset. See
attached AEA economic model for details.
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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
Other factors
Future lower prices for diesel fuel will positively affect the community bills, as the heat billed from
the electric boiler is dependent on annual bulk purchase prices of diesel fuel, giving a 40% savings
of an equivalent gallon no matter what the changing cost is. If other wind to heat projects are
developed in the future that require a large heating dump load, such as a second boiler for the
hospital, KEA will communicate that to the City and priority dispatch options can be negotiated.
If the WTP has a reduction in expected energy demand, which is not likely from Tetratech’s system
modeling, the wind to heat system will still offer the cheapest source of heat that will be prioritized
over the diesel boiler via the controls system. Given that electric boilers have lower maintenance
needs (with efficiency at 100% over an average diesel boiler of 77%) than diesel boilers or heat
recovery systems, the electric boiler has a better chance of continuing to perform well under
conditions of maintenance neglect than the other two heating systems. The only part of an electric
boiler that requires replacement at 10 years are the heating rods, which is something an operator
can do without the need to bring in a technician.
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 RFA for more information.
Not applicable, as this project will not directly or substantially impact sales of power to private
sector businesses.
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
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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
Apart from the long-term cost savings from which the community will collectively benefit, no
additional direct public benefits have yet been identified. Reducing an estimated $57,934 in
annual fuel costs will present many opportunities for the city to save and reinvest resources in a
variety of ways, including the expansion of services offered to the residents of Kotzebue.
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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 Sustainability
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
Kotzebue is served by the Kotzebue Electric Association, which provides both billing support and
technical support for systems connected to water and sewer facilities, including electric boilers.
This technical support includes regional remote maintenance workers located in Kotzebue. This
project also has budgeted for the ANTHC Energy team to provide on-site training to local
personnel on proper operations and maintenance procedures for the electric boiler. This training
includes a visual manual in the form of wall charts that are placed near different key components of
the system that describe their function as well as operations and maintenance needs; these wall
charts are essential to facilitate easy learning for new staff that hasn’t received the initial in-person
training. Dustin Madden heads ANTHC’s Rural Energy program, which regularly provides technical
assistance through a DOE Technical Assistance grant that has a statewide focus.
Finally, the remote monitoring equipment that will be installed for the system will allow for early
diagnostic of operations issues. This data is all uploaded to ANTHC’s web-based portal in near
real-time, and is regularly reviewed by ANTHC Energy Department staff, as well as regional remote
maintenance workers. Automated alerts will be set to send texts and/or emails to staff when
temperatures or rates of the system are outside of normal bounds, allowing for quick response to
any potential issues.
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.
An updated heat sales agreement between KEA and the City of Kotzebue will be developed,
which typically requires payment for the recovered heat that is equivalent to approximately 60% of
what it would have cost to heat the facilities using diesel fuel. This payment provides financial
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incentive for KEA to ensure that the Wind to Heat system is operating as designed and to
provide regular maintenance on the system. KEA currently operates a successful wind to heat
system for the hospital, and has extensive experience and resources to be able to continue doing
so.
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)
The heat sales agreement already in place at the hospital has a rate of 60% of the cost of fuel.
This will be copied for the new heat sales agreement for the city. The current negotiated 2022
diesel prices are $4.74/gallon, which translates to a 2022 rate of $2.84 per equivalent gallon. While
this project strengthens the local utility by providing additional annual revenue which the utility
could in theory use to lower electrical rates, it will likely not immediately decrease or increase rates.
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.
Not applicable.
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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.
The City of Kotzebue has prepared for the award by identifying the project opportunity and
collaborating with ANTHC to develop the project. KEA and City administrators identified the facility
that would benefit from a Wind to Heat system, provided billing and historical data, and have
worked with ANTHC staff to ensure all necessary information is available for project development.
ANTHC has already prepared for this award by:
- Conducting a feasibility study in 2021
- Engaging the KEA team and ANTHC Energy Department to ensure they have the time and
capacity to take on this project if awarded
- Engaging the ANTHC Energy Department to ensure availability and capacity to provide
training and remote monitoring installation.
- Notifying ANTHC’s design department of the project and the grant application for fast in-house
turn around.
- Building a strong relationship with Kotzebue city leadership to ensure engagement throughout
the process
ANTHC’s Division of Environmental Health and Engineering (DEHE) is always prepared to
implement and manage projects effectively through maintaining:
- Both a full service engineering design and construction department
- Construction support staff including purchasing, shipping, and receiving departments
- A full time environmental manager, permit consultant, cultural resources manager, and land
survey team to ensure all necessary permits are quickly obtained
- A full finance team and grants compliance staff to ensure each project is meeting the needs
and deadlines of the funding agencies.
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 renewable energy 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.
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Not applicable.
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 do not count toward this criterion
The City of Kotzebue has passed a resolution approving the development and submission of this
application for funding to support the project. In addition, the Kotzebue Electric Association has
provided a Letter of Support, and ANTHC has submitted a Letter of Commitment included in this
proposal.
SECTION 10 – COMPLIANCE WITH OTHER AWARDS
Identify other grants that may have been previously awarded to the Applicant by the Authority 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.
The City of Kotzebue does not have record of any recent prior Alaska Energy Authority gr ant
awards. ANTHC has provided project management services for many previously-awarded AEA
Renewable Energy Fund grants to rural communities around the state, and has a great deal of
success completing them. The Rural Energy Program team has managed installation of heat
recovery systems for the communities of Emmonak, Russian Mission, and Chevak through the
Renewable Energy Fund program, in addition to many other projects throughout the state.
Currently, ANTHC is managing AEA funding for the Shungnak Heat Recovery Expansion project,
the Togiak Heat Recovery project, and the Shishmaref Heat Recovery project.
ANTHC has been successful in these projects through the various divisions and controls that it
has in place to successfully manage grant-funded projects. The Consortium is structured in a way
that allows for maximum oversight in project management and fiscal reporting. DEHE leadership
has extensive experience coordinating grant-funded projects in rural Alaska communities, and will
be responsible for managing project tasks to completion, utilizing the various organizational
divisions, controls, personnel, and processes it has established for these functions.
In addition to the staff identified in Section 4, ANTHC’s DEHE has the benefit of drawing from
the expertise of over twenty engineers presently licensed in the State of Alaska across multiple
disciplines, with additional staff actively pursuing licensure, several of whom will likely have
attained licensure by the beginning of the project period. ANTHC’s DEHE also has multiple
Certified Energy Managers (CEM) on staff, with several others working towards that certification.
The Grants Management and Compliance department is staffed to ensure that financial
management and grant reporting are completed accurately and on time for all restricted sources of
funding received, which includes funds received through contracting with entities that ANTHC
partners with to complete grant-funded projects.
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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.
Appendix A
1. Technical Memorandum - Kotzebue Wind to Heat
SECTION 12 – LIST OF ADDITIONAL DOCUMENTATION SUBMITTED FOR CONSIDERATION
In the space below, please provide a list of additional information submitted for consideration.
Appendix B
1. City of Kotzebue Resolution
2. ANTHC Letter of Commitment
3. Kotzebue Electric Association Letter of Support
Appendix C
1. Fuel Invoice
Attachment A
1. Evaluation Model REF R14 – Kotzebue Wind to Heat
Attachment B
Resumes of Key Personnel
a. William Fraser
b. Bailey Gamble
c. Elliott Lin
d. Katya Karankevich
e. Matthew Lazarus
f. Dustin Madden
g. Richard Wooten
1/12/2022
37 38
38 38
39
Alaska Energy Authority – AEA 23001
Renewable Energy Fund Grant Application
Appendix A
MEMORANDUM
DATE: December 14, 2021
FROM: William Fraser, P.E.
Lead Mechanical Engineer
ANTHC-DEHE
TO: For the Record
SUBJECT: Technical Memorandum – Kotzebue Wind-To-Heat Expansion
Introduction
This memo explores the potential benefit of installing an electric boiler and associated
infrastructure at the new Kotzebue water treatment plant (WTP) currently being designed. The
boiler would provide intermittent dispatchable power at a 40% discount compared to using a fuel
oil fired boiler. The electric boiler would be similar in operation to the electric boiler at
Kotzebue’s Maniilaq Hospital, which receives curtailed wind energy from Kotzebue Electric
Association (KEA), saving the hospital over $100,000 per year, and providing up to 20% of their
annual heat load.
A technical memorandum produced by Tetra Tech (Technical Memorandum 6, attached) was
used as a basis to estimate the WTP total annual energy use and to size an electric boiler at the
new WTP facility. Historical fuel consumption records from Maniilaq were used to estimate
amount of power currently provided to the hospital electric boiler.
To evaluate the quantity of dispatchable power available to the WTP, HOMER Pro software was
used to model the existing Wind to Heat system. This was then compared to power already used
by the Maniilaq hospital and the projected heating load at the water treatment plant.
For the purposes of this analysis, it was assumed that KEA would continue to use their current
control strategy for dispatchable power. It is possible that KEA will revise their strategy to
reduce diesel generator operation further, which could result in less dispatchable power available
to end users such as the hospital and the WTP. This risk could be mitigated with a contract which
guarantees a minimum benefit to the end user.
A budgetary cost estimate and simple payback analysis has been developed for the electric boiler
at the WTP with the assumption that space would be provided in the WTP for the electric boiler.
New WTP Heating load
The new water treatment plant estimated building and process heating loads used in this
technical memo are based on existing water use in Kotzebue and estimated heating loads
40
provided by Tetra Tech. The WTP design is sized to accommodate future expansion so future
loads could be higher.
Currently the Kotzebue WTP uses approximately 15,000 gals of heating fuel per year and
receives no Wind to Heat benefit. The existing distribution system in Kotzebue uses recovered
heat from the generator plant to make up for heat loss to the environment, and also provides most
of the heat to raise the circulating water temperature to 42 F. This heat recovery system is
predicted to diminish significantly, as more wind and battery resources are slated to be installed
at KEA, allowing them to decrease their diesel generator use within the next three years. This
would increase the WTP’s reliance on heating oil fuel and increase costs by up to 30% annually.
Tetra-Tech estimates that the new WTP could use up to 42,300 gals / year of fuel oil at current
water use rates, assuming no recovered heat is provided by the generator plant. In the absence of
other sources of heat, future fuel consumption is likely to rise at the new WTP unless another
heat source is incorporated. This is undesirable from both a cost and an environmental viewpoint.
Excess wind energy offers the potential to offset a significant portion of the water distribution
system heating load currently served by recovered heat at the power plant. Because excess wind
energy is highly variable, it is less expensive than recovered heat and is an attractive source of
inexpensive renewable energy. While recovered heat is sold at 30% off of the gallon fuel rate,
wind heat would be sold at a rate 40% off of fuel oil prices. However, wind is extremely
variable. In order to effectively use excess wind energy, a large thermal reservoir is required. For
the purposes of this analysis it was determined the two existing 1.5 million gallon water storage
tanks would be sufficient to provide sufficient thermal storage capacity.
The below graph shows the total energy used per month that currently is being served by
recovered heat. The large summer drop occurs because water heating systems are turned off
during the summer when there is no concern of freeze up.
Graph 1: WTP process heating demand
41
Proposed size of Electric Boiler:
For the purposes of this analysis, excess wind power was selected as the preferred heating
method, followed by recovered generator heat, and finally by fuel oil. In other words, as much of
the heating load as possible will be met at the WTP with the electric boiler. If the electric boiler
cannot meet the load, the recovered heat from the power plant will provide additional heat
through the circulating water main. Additional heating demand beyond that will be met with fuel
fired boilers at the WTP. This allows maximum use of renewable energy and minimizes
operating cost at the WTP and generator plant.
By injecting excess wind energy in the form of heat into the water storage tanks, a highly
fluctuating energy source can be smoothed out without a complex control strategy. Two sizes of
electric boiler were considered: a 680 MBH (200 KW) and a 1024 MBH (300 KW) electric
boiler. The 300 KW boiler was selected for better payback. This is discussed further in the Fuel
and Financial Savings section below.
The existing KEA System
Kotzebue Electric Association (KEA) power generation facilities consist of a diesel generator
plant and a combined wind turbine and solar site located approximately 4.5 miles from the
generator plant. Power is distributed through town over a 12,500 VAC 3 wire 3 phase system
with the following electrical characteristics:
Power factor 0.92 lagging
Average Load: 2500 KW
Peak load: 3700 KW
Minimum load: 1700 KW
Facility power generation equipment is listed below.
Diesel Generators:
Unit 7: 1025 KW 3516 Series CAT – Restricted to 1000 KW
Unit 10: 3080 KW EMD 710 Series
Unit 11: 1025 KW 3512 Series CAT – Restricted to 900 KW
Unit 12: 1025 KW 3512 Series CAD – Restricted to 810 KW
Unit 14: 2600 KW EMD 710 Series
Unit 15: 2800 KW EMD 710 Series
Wind Turbines:
1 North Wind 100 100KW each
2 EWT54-900 900KW each
Solar Array:
532KW (AC array)
Battery Energy Storage System:
1.225MW (950 KWH) Lithium Ion
42
Renewable energy currently provides approximately 20% of KEA’s annual electrical production
using both wind and solar resources. Power Cost Equalization data from 2017 to early 2020
suggests KEA averages about 4.7 x 106 KWH of wind energy production annually. HOMER
simulations indicate the system has the potential to provide 5.25 x 106 KWH annually but would
need larger dump load capacity to do so in order to avoid wind turbine curtailment.
Adding a KEA controlled electric boiler at the WTP would provide additional dump load
capacity and reduce the need for wind or solar curtailment. Comparing historical data to the
HOMER Model suggests that the wind turbines are producing about 70-75% of the theoretical
annual maximum (assuming no downtime or curtailment). Per discussions with Matt Bergan of
KEA, the wind turbines require about 15% downtime annually for maintenance, allowing a
potential uptime of 85% if no curtailment occurs.
Assuming no significant changes to KEA operations, adding of 200 KW electric boiler capacity
would allow an additional 158,000 KWH of wind-to-heat. A 300 KW electric boiler would
allow an additional 213,000 KWH of wind-to-heat.
Table 1: Wind to Heat energy available
Heat demand compared to Wind to Heat Supply:
The Maniilaq Hospital:
The hospital uses a 450 KW electric boiler controlled by KEA to offset between 9 and 20% of
annual fuel consumption. The heating loads at the hospital are fairly stable and usually exceed
the amount of heat that can be provided by the wind to heat boiler. For the purposes of this
analysis, it was assumed that the hospital will receive and use any wind-to heat energy up to the
average heating demand for the hospital for any given month.
Wind to Heat Capacity Maximum WTH
(KWH / Year)
Curtailed Production
(KWH / Year)
Fuel Oil avoided
(Gallons)
450 KW (Existing) 847,000 506,000 28,900
650KW (Considered) 1,005,000 348,000 34,300
750 KW (Proposed) 1,060,000 292,000 36,000
43
Graph 2: Hospital Heating Load and available WTH
The New Water Treatment Plant:
The below graph shows available wind to heat at the WTP with demand assuming the WTP is
the top priority for WTH. This analysis assumes the system uses as much as possible up to the
limit of the boiler. If the loads are less than the available energy, the WTP uses as much energy
as needed to meet the heating load. (Whichever is less). With the exception of the summer
months, the system can use all of the available wind energy.
Graph 3: WTP Heating load and Available Wind to Heat
44
Because the hospital is currently the only customer in Kotzebue using wind to heat, they have
been the sole beneficiary of available excess wind power. Adding an additional electric boiler
will lower the amount of energy available to the hospital unless KEA prioritizes the hospital as
the top user. The below table compares keeping the hospital as the top priority vs sharing priority
and the WTP as the top priority.
Table 2: WTH Prioritization (300 KWH boiler at WTP)
Priority User Hospital
Benefit (KWH)
WTP Benefit
(KWH)
Total Benefit
(KWH)
Hospital (current) 847,000 213,000 1,060,000
WTP 566,000 494,000 1,060,000
Shared 707,000 354,000 1,060,000
The below table shows the benefit by month to the WTP assuming the hospital and WTP share
the benefit equally.
Table 3: WTP MWH / Month
KW Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Total
200 32.9 32.4 29.2 23.3 25.6 0 0 0 0 34.9 38.3 39.4 256
300 45.7 45.4 40.2 32.7 34.5 0 0 0 0 48.2 52.9 54.2 354
Fuel and Financial Savings
For the purposes of comparison, this study assumes an average boiler efficiency of 77% and a
fuel heating value of 130,000 BTU / gal., for a net heating per gallon of 100,000 BTU / Gal. The
actual heating value and efficiency could be off by 10% or more depending on condition of
boilers and specific fuel burned. A fuel price of $4.50 / Gal was used. This is likely to fluctuate
significantly over time and will depend on the volume of fuel purchased.
If the hospital remains the top priority:
Annual fuel savings at the WTP are estimated to be:
·200 KW Boiler: 5,400 gals / year, for an avoided fuel cost of $24,300 / year.
·300 KW Boiler: 7,300 gals / year, for an avoided fuel cost of $32,900 / year
Annual fuel savings at the Hospital are estimated to be:
·28,900 gals / year, for an avoided fuel cost of $130,000 / year
If the priority is shared between WTP and Hospital:
Annual fuel savings at the WTP are estimated to be:
·200 KW Boiler: 8,700 gals / year, for an avoided fuel cost of $39,300 / year.
·300 KW Boiler: 12,100 gals / year, for an avoided fuel cost of $54,300 / year
Annual Savings at the hospital are estimated to be:
·200 KW Boiler: 25,600 gals / year for an avoided fuel cost of $127,800 / year
·300 KW boiler: 24,100 gals / year for an avoided fuel cost of $108,500 / year
45
Shared priority was assumed for the remainder of the economic analysis for the following
reasons:
1. Assigning top priority to the WTP has a large impact on the performance of the WTH
system at the hospital and will significantly impact their annual operating cost.
2. Assigning top priority to the Hospital lowers the benefit to the WTP and extends the
payback period of the project beyond 20 years.
3. Shared (equal) priority lowers benefit slightly at the hospital but remains comparable to
what the hospital has historically received and allows the WTP to have sufficient benefit
to make a WTH boiler economically viable.
KEA charges 70% of the avoided heating cost for recovered heat and 60% of the avoided heating
cost for excess wind power. If wind is substituted for recovered heat, the net savings to the WTP
compared to recovered heat would be:
·200 KW Boiler: $3,900 per year.
·300 KW Boiler: $5,400 per year
Compared to fuel oil, the net savings to the WTP would be
·200 KW Boiler: $15,700 per year.
·300 KW Boiler: $21,700 per year
Note that the estimated fuel savings are dependent on the following assumptions which are
subject to change:
·WTP actual heating loads are similar to expected loads.
·KEA maintains an average up-time for the wind turbines of 85%
·The Hospital and WTP share priority of wind-to heat.
·No additional wind to heat customers are added
·KEA makes no major changes to their system or operations.
·The rate structure remains unchanged.
Budgetary Construction Cost
Construction cost was estimated with the following important assumptions:
1. The WTP boiler room has space to accommodate the electric boiler and associated
controls, pumps and piping.
2. The Wind to heat boiler will have its own service drop for separate billing of wind-to-
heat.
3. The work will be performed separately from construction of the WTP. Though it would
be ideal if both projects could occur simultaneously, this is not expected.
Without these assumptions, the cost will be considerably higher to include additional contracting
costs, housing, mobilization and demobilization, transportation, etc.
46
Table 4: Estimated additional cost to add WTH boiler at WTP
200KW Boiler 300KW Boiler
Construction 418,975$ 447,915$
CA Services 3% 12,569.24$ 13,437.44$
Permitting 1% 4,189.75$ 4,479.15$
Contingency 15% 65,360.04$ 67,187.20$
Engineering 15% 62,846.20$ 67,187.20$
Subtotal 563,939.87$ 600,205.62$
PM Services 10% 56,393.99$ 60,020.56$
Inflation (2 years) 6% 37,220.03$ 39,613.57$
Grand Total 657,554$ 699,840$
Budget Estimate
Conclusion:
Adding an electric boiler to the WTP to take advantage of excess wind energy will save money
and reduce the consumption of fossil fuel at the WTP. Under the current rate structure, 50% of
the benefit will go to KEA, 50% goes to the end user. The below table summarizes the cost and
benefits:
Table 4: summary of costs and benefits
200KW Boiler 300 KW Boiler
Installation Cost $657,600 $699,800
Fuel Savings (Gal / Year) 8,700 12,100
Total Avoided fuel cost ($ / Year) $39,300 $54,300
Avoided CO2 Production (tons / year) 195 271
Benefit to KEA $23,580 $32,580
Benefit to WTP $15,720 $21,720
Overall Simple Project Payback 16.7 years 12.9 years
It is recommended that the City of Kotzebue consider adding a 300KW electric boiler to save
$5,400 to $21,700 annually with a Wind to Heat system. Savings will increase beyond this
estimate in the coming years as more turbines are added, reducing the recovered heat from the
power plant and fuel oil prices vary.
William Fraser, PE
Lead Mechanical Engineer
ANTHC-DEHE
4500 Diplomacy Drive
Anchorage, AK 99508
(907)-952-9807
47
200KW Boiler 300KW Boiler
Construction 418,975$ 447,915$
CA Services 3%12,569.24$ 13,437.44$
Permitting 1%4,189.75$ 4,479.15$
Contingency 15%65,360.04$ 67,187.20$
Engineering 15%62,846.20$ 67,187.20$
Subtotal 563,939.87$ 600,205.62$
PM Services 10%56,393.99$ 60,020.56$
Inflation (2 years)6%37,220.03$ 39,613.57$
Grand Total 657,554$ 699,840$
Budget Estimate
48
Kotzebue WTP Wind to Heat Budgetary Cost Estimate 11/15/21
200 KW Cost Estimate
Labor Qty Week Days Hours Manhours Unit Price Cost
Project Super 1 4 6 10 240 135$ 32,400$
Electrician 1 2 6 10 120 135$ 16,200$
Pipe Fitter 1 2 6 10 120 135$ 16,200$
Local Labor (man-weeks)2 5 6 10 600 50$ 30,000$
94,800$
Construction Key Personel Qty Week Days Hours Manhours Unit Price Cost
CM 1 12 2 8 192 109$ 20,928$
Scheduler 1 12 1 4 48 101$ 4,848$
Shipping & Receiving 1 6 2 8 96 91$ 8,736$
Purchasing 1 4 3 8 96 89$ 8,544$
43,056$
General Conditions Qty Unit Price Cost
Material 1 206,569$ 206,569$
Fuel 100 6$ 550$
Housing/Utilities 2 2,500$ 5,000$
Travel 8 1,000$ 8,000$
Mobilization 1 10,000$ 10,000$
Misc. Freight 1 20,000$ 20,000$
Demobilization 1 5,000$ 5,000$
Insurance 3 500$ 1,500$
256,619$
Equipment Qty Unit Price Cost
Monthly Billing -$
(1) Four Wheelers month 1,200$ -$
(1) Backhoe 1 month 2,500$ 2,500$
(1) Pick-Up Trucks 1 month 2,000$ 2,000$
4,500$
Subcontracts Qty Unit Price Cost
KEA Controls upgrades 1 LS 20,000$ 20,000$
20,000$
Unit
Equipment Sub-Total
Unit
Subcontracts Sub-Total
General Conditions Sub-Total
Craft Labor Sub-Total
ANTHC Key Personel Sub-Total
Unit
Lump Sum
gallons
Month
Trips
Lump Sum
Lump Sum
Lump Sum
Month
49
300 KW Cost Estimate
Materials List Quantity Units Unit Cost Total Notes
Mechanical
3" type K copper pipe 100 lf 48.50$ 4,850.00$
2" type K copper Pipe 40 lf 24.87$ 994.80$
1" type K copper Pipe 100 lf 9.06$ 906.00$
3/4" type K copper pipe 50 lf 7.70$ 385.00$
3" ball valves 4 ea 1,401.00$ 5,604.00$
2" ball valves 2 ea 640.00$ 1,280.00$
3/4" Ball valves 10 ea 18.83$ 188.30$
3" Elbows 10 ea 54.80$ 548.00$
2" Elbows 4 ea 27.96$ 111.84$
3" x 3/4" x 3" Tees 10 ea 331.00$ 3,310.00$
3/4" Elbows 10 ea 1.97$ 19.70$
3" Strainers 1 ea 498.00$ 498.00$
Electric Boiler 1 ea 50,000.00$ 50,000.00$
Pump Grundfos Magna3 50-80 80 GPM 1 ea 2,500.00$ 2,500.00$
Automatic air vents 2 ea 60.00$ 120.00$
Miscellaneous mechanical 1 LS 10,000.00$ 10,000.00$
Electrical
300 KVA Transformer 1 ea 70,000.00$ 70,000.00$
Transformer Pad 1 ea 10,000.00$ 10,000.00$
Conduit, rigid galv Stl 1-1/2" Dia 150 ft 9.80$ 1,470.00$
Elbows, Rigid Galv Stl 1-1/2"8 ea 16.90$ 135.20$
Couplings, Conduit, Rigid 1-1/2" 8 ea 8.10$ 64.80$
Circuit Breaker 100 Amp 1 ea 200.00$ 200.00$
Disconnect 1 ea 300.00$ 300.00$
Control Conduit 100 ft 1.49$ 149.00$
Control wiring 150 ft 2.76$ 414.00$
#4 Electrical conductor 350 ft 1.70$ 595.00$
#8 Copper Ground 150 ft 1.10$ 165.00$
100 Amp service drop 1 ea 10,000.00$ 10,000.00$
Miscellaneous electrical 1 ea 15,000.00$ 15,000.00$
Controls & Instrumentation -$
Pressure indicator 4 ea 50.00$ 200.00$
Tempearture element 4 ea 75.00$ 300.00$
Tempearture indicator 4 ea 50.00$ 200.00$
Thermal Management Panel 1 ea 40,000.00$ 40,000.00$
Miscellaneous electrical 1 LS 5,000.00$ 5,000.00$
Total 235,508.64$
50
300 KW Cost Estimate, Cont.
Labor Qty Week Days Hours Manhours Unit Price Cost
Project Super 1 4 6 10 240 135$ 32,400$
Electrician 1 2 6 10 120 135$ 16,200$
Pipe Fitter 1 2 6 10 120 135$ 16,200$
Local Labor (man-weeks)2 5 6 10 600 50$ 30,000$
94,800$
Construction Key Personel Qty Week Days Hours Manhours Unit Price Cost
CM 1 12 2 8 192 109$ 20,928$
Scheduler 1 12 1 4 48 101$ 4,848$
Shipping & Receiving 1 6 2 8 96 91$ 8,736$
Purchasing 1 4 3 8 96 89$ 8,544$
43,056$
General Conditions Qty Unit Price Cost
Material 1 235,509$ #######
Fuel 100 6$ 550$
Housing/Utilities 2 2,500$ 5,000$
Travel 8 1,000$ 8,000$
Mobilization 1 10,000$ 10,000$
Misc. Freight 1 20,000$ 20,000$
Demobilization 1 5,000$ 5,000$
Insurance 3 500$ 1,500$
#######
Equipment Qty Unit Price Cost
Monthly Billing -$
(1) Four Wheelers month 1,200$ -$
(1) Backhoe 1 month 2,500$ 2,500$
(1) Pick-Up Trucks 1 month 2,000$ 2,000$
4,500$
Subcontracts Qty Unit Price Cost
KEA Controls upgrades 1 LS 20,000$ 20,000$
20,000$
Unit
Equipment Sub-Total
Unit
Subcontracts Sub-Total
General Conditions Sub-Total
Craft Labor Sub-Total
ANTHC Key Personel Sub-Total
Unit
Lump Sum
gallons
Month
Month
Trips
Lump Sum
Lump Sum
Lump Sum
51
200 KW Cost Estimate
Materials List Quantity Units Unit Cost Total Notes
Mechanical
4" type K copper pipe 100 lf 64.00$ 6,400.00$
2" type K copper Pipe 40 lf 24.87$ 994.80$
1" type K copper Pipe 100 lf 9.06$ 906.00$
3/4" type K copper pipe 50 lf 7.70$ 385.00$
3" ball valves 4 ea 1,401.00$ 5,604.00$
2" ball valves 2 ea 640.00$ 1,280.00$
3/4" Ball valves 10 ea 18.83$ 188.30$
3" Elbows 10 ea 54.80$ 548.00$
2" Elbows 4 ea 27.96$ 111.84$
3" x 3/4" x 3" Tees 10 ea 331.00$ 3,310.00$
3/4" Elbows 10 ea 1.97$ 19.70$
3" Strainers 1 ea 498.00$ 498.00$
200 KW Electric Boiler 1 ea 40,000.00$ 40,000.00$
Pump Grundfos Magna3 50-80 80 GPM 1 ea 2,500.00$ 2,500.00$
Automatic air vents 2 ea 60.00$ 120.00$
Miscellaneous mechanical 1 LS 10,000.00$ 10,000.00$
Electrical
200 KVA Transformer 1 ea 50,000.00$ 50,000.00$
Transformer Pad 1 ea 10,000.00$ 10,000.00$
Conduit, rigid galv Stl 1-1/2" Dia 100 ft 9.80$ 980.00$
Elbows, Rigid Galv Stl 1-1/2"8 ea 16.90$ 135.20$
Couplings, Conduit, Rigid 1-1/2" 8 ea 8.10$ 64.80$
Circuit Breaker 100 Amp 1 ea 200.00$ 200.00$
Disconnect 1 ea 300.00$ 300.00$
Control Conduit 100 ft 1.49$ 149.00$
Control wiring 150 ft 2.76$ 414.00$
#4 Electrical conductor 350 ft 1.70$ 595.00$
#8 Copper Ground 150 ft 1.10$ 165.00$
100 Amp service drop 1 ea 10,000.00$ 10,000.00$
Miscellaneous electrical 1 ea 15,000.00$ 15,000.00$
Controls & Instrumentation -$
Pressure indicator 4 ea 50.00$ 200.00$
Tempearture element 4 ea 75.00$ 300.00$
Tempearture indicator 4 ea 50.00$ 200.00$
Thermal Management Panel 1 ea 40,000.00$ 40,000.00$
Miscellaneous electrical 1 LS 5,000.00$ 5,000.00$
Total 206,568.64$
52
Technical Memorandum 6
Draft Version.2
City of Kotzebue
Water Treatment Plant
THERMAL SOURCE ALTERNATIVE ANALYSIS
April 2019
EXISTING CONDITIONS
The Kotzebue Water Treatment Plan (WTP) being designed will provide high level water treatment for the
citizens of Kotzebue. Current demand for potable water averages approximately 200 gallons per minute
(gpm). The new WTP is being designed for a flow rate of 300 gpm, with the ability to expand to 450 gpm.
Based on current design development, the WTP will be housed in a building approximately 70’ by 180’.
The building heating requirements will be provided by a glycol/water loop sending heated liquid to air
handlers, fan coils, unit heaters and cabinet fans. Hot water/glycol will be sent to each unit and the heat
transferred to the building via a coil. In addition, the distributed water will seasonally require heating to
assure proper circulation. This is based on maintaining an outgoing temperature of 42oF in the water loops
and includes heating raw water as well as any heat loss in the distribution loops. This heat will be transferred
to the water prior to exiting the WTP for distribution or a portion added by Kotzebue Electric Association
(KEA), as is current practice.
The base option for providing the thermal requirements for the WTP is for the building heating being
supplied by an oil-fired boiler with the distribution heating being provided from the Kotzebue Electric
Association, Inc. This is the arrangement for providing thermal heating to the existing WTP.
The purpose of this report is to explore options that should be considered by Kotzebue for the WTP thermal
needs that may be less costly, more environmentally sustainable, provide additional beneficial impacts or
better accomplish overall operations. These options are:
•Oil-fired boiler – This option would include all thermal requirements being supplied by oil fired
boiler(s) located in the WTP. Design requirements would include 100% redundancy.
•Dual fuel boiler – This option would include all thermal requirements being supplied by a
biomass/oil fired boiler located on land near the WTP with heat transfer equipment installed in the
WTP to provide all building heating, raw water heating and loop water heating.
•Central Heating Plant (waste heat from KEA) – This option would involve KEA supplying all
thermal needs of the WTP from recovered heat off their engine driven generators. A sub-option
would be for KEA to supply only the raw water and loop water heating.
•Solar (thermal sourced from existing PV / solar heating at the WTP).
A December 2012 study identified significant quantities of excess biomass was being generated in
Kotzebue in part due to the incoming shipments utilizing cardboard and wooden pallets. One option
identified for the utilization of these biomass sources was to provide all, or a portion, of the thermal
requirements for the WTP.
The current WTP relies on an oil-fired boiler to provide the thermal requirements of the building and
operation, while the heating of water for the distribution loops is provided from recovered thermal energy
from KEA. The thermal energy supplied by KEA is recovered from their oil-fired generators. The return
line of the Lagoon loop is directed to the KEA electrical generation plant where plate and frame heat
53
Technical Memorandum
2
exchangers are used to add heat to the potable circulated water. The heated water is sent to the WTP via
the return line. Heat is added at the direction of the WTP operators. It is approximately 2/3 of a mile from
the KEA plant to the WTP.
FUTURE OPTIONS
Based on the preliminary design and review of operating conditions, Tetra Tech has developed an estimate
of future thermal needs of the WTP. The calculations indicate that, at WTP design flow rate, the system
will require up to 1,950,000 BTUs/hr to provide building heating, raw water and returning loop water
heating. This number includes 700,000 BTUs/hr for restoring heat lost in the distribution loops. This is
based on historical data from 2016 to 2018 of the heat supplied by KEA. All calculations used for
comparison were based on historical average climate conditions and will need to be adjusted to expected
temperatures. The systems would provide less than design temperatures during extreme conditions. In
addition, the final system will require greater volumes of fuel once the efficiency of thermal transfer from
the boiler to the building heat and water loop heating is calculated. This increase could be approximately
20%. Attachment 1 shows the assumptions and calculations used in this comparison.
The heat load calculations show that a 60 HP boiler could supply all the thermal requirements of the water
system, including building, loop water and raw water heating. At the maximum future flow of 450 GPM,
this would increase to 75 HP. For this analysis, the base load will be based on 75 HP of boiler capacity
with each option designed for 100 % redundancy.
Heating Loads
Preliminary heating loads required for the new WTP have some components that are relatively easy to
estimate and others that include some uncertainty. The three major heating functions are:
•Building Space Heating: To heat the existing WTP, the City used 14,600 gal of fuel oil in FY
2017 and 15,900 gal in FY2018. Although the new WTP is proposed to have a significantly larger
footprint, it will be insulated to higher level and provided with heat recovery ventilating units. The
preliminary estimate for heating the new WTP in an average year is just over 1,000 million BTUs
per year which equates to about 10,000 gal of fuel oil,
•Water Heating within the Process Area: The operators report an increase of several degrees in
water temperature from the raw water supply to the treated water discharge. This may be provided
by pumping energy imparted to the water or building heat being transferred to the water. The new
WTP will pump the water to higher pressures required by the membrane processes. An increase of
1 to 3 deg F is not unusual in other membrane plants. How much of this increase is due to pumping
and how is due to heat transfer from the building spaces is not precisely known. For this analysis
it is assumed that any increase comes from scavenged building heat. This thermal transfer is
included in the boiler sizing.
•Add-Heat to the Distribution System: Presently, the amount of heat added by KEA to the water
circulation system varied from 3,582 million BTUs in FY17 to 568 million BTUs in FY18. Based
on the agreed upon adjustment factor of 70% of the cost fuel oil heating, the cost of adding heat to
the distribution has varied from over $90,000 in FY 17 to about $17,000 in FY18. Tetra Tech has
calculated the required addition of water loop heating, based on a loop temperature of 42oF.
54
Technical Memorandum
3
Option1 - Oil fired boilers at the WTP
Under Option 1, the boiler system will be designed to provide all thermal requirements of the building
heating and water circulation loops. For purpose of this study, it is assumed that the oil-fired boiler at the
WTP would provide all the thermal needs of the water system. Required capital expenditure would include
two (2) 75 HP oil-fired boilers installed in the WTP building, a primary boiler and a redundant boiler at
100% of design capacity. Glycol loops would be installed to provide the building heat with a separate loop
designed to transfer heat to both the fresh water and to the loop return lines.
Based on the above assumptions, the heating of the building and water loops at design flow rate would
require approximately 98,900 gallons of oil annually at a cost of $456,900 based on oil cost of $4.62 per
gallon.
Option 2 – Dual fuel boiler
This option is to allow the use of biomass from shipping activities to provide the thermal requirements of
the water system. The system would be housed in a building separate from the WTP and the building would
include biomass receiving, processing and storage. The biomass would be reduced to a 2” +/- particle size
and be fed into a 75 HP biomass boiler. The use of a dual fuel boiler that can utilize biomass or oil could
be utilized to allow either biomass or oil as the primary fuel source. The biomass plant would replace the
proposed oil-fired boiler in the WTP as well as the purchase of thermal energy from KEA. However, to
provide 100% redundancy, there will still be a 75 HP oil fired boiler installed in the WTP. Because of this,
it is recommended to purchase the biomass boiler without the oil burner, since redundancy will be available
at the WTP
To provide the same level of heating as Option 1 would require approximately 1175 tons/year of biomass.
This option will require the installation of hot water lines from the biomass plant to the WTP. These lines
would serve both the water and building heating requirements.
Interest
rate Term
Capital 4% 20 150,000.00$
Annual Payment for Capital $11,037.26
Oil 456,900.00$
Payment to KEA -$
Net Cost $467,937.26
OPTION 1 - OIL FIRED at WTP
55
Technical Memorandum
4
Option 3 – KEA Supply All Heating Requirements
The use of the waste heat from the KEA generators could provide a viable option to supply all the thermal
requirements of the WTP building. This option would require a dedicated hot water line from the KEA
plant to the WTP. This option would include a 75 HP oil fired boiler at the WTP for redundancy. For KEA
to become the primary heat supplier, a revised thermal supply contract would need to be executed.
Option 4 – KEA Supply Water Heating
This option would have the heating requirements of the water system supplied as it is now. The building
heat would be supplied by boilers in the WTP. To supply this heat will require a 50 HP boiler. There will
be a redundant 50 HP boiler as well. based on discussions with KEA, the current configuration should be
able to supply all the water and loop make-up heating with the current installation.
Interest
rate Term
Capital 4% 20 1,700,000.00$
Annual Payment for Capital $125,088.98
O&M $375,000.00
Debt + Operating $500,088.98
Avoided biomass cost -$58,700.00
Net Cost $441,388.98
OPTION 2 - BIOMASS PLANT
OPTION 3 - KEA supply all heating needs
Interest
rate Term
Capital 4% 20 546,000.00$
Annual Payment for Capital $40,175.64
Oil -$
Payment to KEA 319,800.00$
Net Cost $359,975.64
Interest
rate Term
Capital 4% 20 125,000.00$
Annual Payment for Capital $9,197.72
Oil 43,000.00$
Payment to KEA 186,300.00$
Net Cost $238,497.72
OPTION 4- WTP supplies building heat. KEA
supplies raw water and loop loss heat.
56
Technical Memorandum
5
In all options, the payment to KEA is based on the structure of the current contract. All calculations are
based on a cost of oil of $4.62 per gallon and utilize the calculated heat loads shown in Attachment 1.
DEVELOPMENT OF HEATING PLANS
Following review of the data and proposed options with the City, it is proposed that the more specific
designs and costs be developed for each option agreed upon.
57
Technical Memorandum 6
Draft Version.2
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Heat Required Fuel Oil[1] Oil Cost[2]KEA Cost [3]
Estimated Building Heat Loss (btuh)[btu/year][gal][$] [$]
At Monthly Average Outside Air Temps 176,882 172,824 170,309 142,642 95,540 63,758 41,350 37,281 68,331 109,031 138,824 164,364 1,008,229,000 9,300 $43,000 -
Distribution Water Heating
Mean Raw Water Temp (⁰F) 2016-2018 35.4 35.1 34.8 34.8 36.0 49.7 59.9 56.3 47.8 35.9 36.0 35.9
Assume Increase in Trt Process (⁰F)4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0 4.0
Increase from Pumping Energy (⁰F)0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8 0.8
Increase from Bldg Heat (⁰F)3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2 3.2
Bldg Heat as Source of Increase
Present Production (gpm)191 218 203 192 170 181 187 206 188 173 175 183 189
Present Production + reject (gpm) [5]238 273 254 240 213 227 234 257 235 216 219 229 239
Present Heating Reqd (btuh)381,000 436,000 406,000 383,000 340,000 346,000 350,000 366,000 2,165,760,000 20,100 $92,900
Design Production (gpm)300 300 300 300 300 300 300 300 300 300 300 300 300
Design Production + reject (gpm) [5]375 375 375 375 375 375 375 375 375 375 375 375 400
Design Heating Reqd (btuh)600,000 600,000 600,000 600,000 600,000 600,000 600,000 600,000 3,456,000,000 32,000 $147,800
Future Production (gpm)450 450 450 450 450 450 450 450 450 450 450 450 450
Future Production + reject (gpm) [5]563 563 563 563 563 563 563 563 563 563 563 563 600
Future Heating Reqd (btuh)720,000 720,000 720,000 720,000 720,000 720,000 720,000 720,000 4,147,200,000 38,400 $177,400
Circulation Water Heating
Desired Min Distribution Temp(⁰F)42.0 42.0 42.0 42.0 42.0 42.0 42.0 42.0 42.0 42.0 42.0 42.0
Required Temp Increase (⁰F)2.6 2.9 3.2 3.2 2.0 2.1 2.0 2.1
Present Flow (gpm)191 218 203 192 170 181 187 206 188 173 175 183 189
Present Heating Reqd (btuh)253,000 320,000 321,000 311,000 172,000 186,000 175,000 192,000 1,389,600,000 12,900 $59,600 $41,700
Design Flow (gpm)300 300 300 300 300 300 300 300 300 300 300 300 300
Design Heating Reqd (btuh)397,000 440,000 475,000 487,000 304,000 321,000 300,000 315,000 2,188,080,000 20,300 $93,800 $65,700
Future Flow (gpm)450 450 450 450 450 450 450 450 450 450 450 450 450
Future Heating Reqd (btuh)596,000 660,000 713,000 731,000 455,000 482,000 450,000 473,000 3,283,200,000 30,400 $140,400 $98,300
Heat Loss in Circulation Loops
Average Winter Assumptions [4]700,000 700,000 700,000 700,000 700,000 700,000 700,000 700,000 4,032,000,000 37,300 $172,300 $120,600
Total Heat Loads - Process Temp Increase from bldg heat
Present Flow (btuh)1,510,882 1,628,824 1,597,309 1,536,642 1,307,540 1,341,031 1,363,824 1,422,364 8,595,589,000 79,600 $367,800 $257,500
Design Flow (btuh)1,873,882 1,912,824 1,945,309 1,929,642 1,699,540 1,730,031 1,738,824 1,779,364 10,684,309,000 98,900 $456,900 $319,800
Future Flow (btuh)2,192,882 2,252,824 2,303,309 2,293,642 1,970,540 2,011,031 2,008,824 2,057,364 12,470,629,000 115,500 $533,600 $373,500
Present Flow BHP 45 49 48 46 39 40 41 42
Design Flow BHP 56 57 58 58 51 52 52 53 [1]Based on system effic = 80%and 135,000 btu/gal
Future Flow BHP 66 67 69 69 59 60 60 61 [2]Based on price of oil = $4.62
Present Flow kW 443 477 468 450 383 393 400 417 [3]Based on KEA cost @ 70%of oil system
Design Flow kW 549 561 570 566 498 507 510 522 [4]Based on circ system heat loss =700,000 btuh
Future Flow kW 643 660 675 672 578 589 589 603 [5]Based on recovery rate =80%
[6]Assumed heat gain =4.0
Table 1. Project Heating Loads
Annual
Oil
consumption
at existing
WTP
averaged
15,200 gal for
FY17 and
FY18 ($68k
per year)
58
59
Alaska Energy Authority – AEA 23001
Renewable Energy Fund Grant Application
Appendix B
CITY OF J�q
CITY OF KOTZEBUE
RES OLUTION NO. 21-36
A RESOLUTI ON OF THE CITY COUNCIL OF THE CITY OF KOTZEBUE
REQUESTING FUNDING FROM THE ALASKA ENERGY AU THORITY
RENEWABLE ENERGY FUND, ROUND 14, AND COMMITMENT THERETO.
WHEREAS: The City of Kotzebue is established as a municipal government and primary
operator of community facilities which stand to benefit from the proposed project;
WHEREAS: The Kotzebue Energy Association, Inc. (KEA, Inc.) is the primary supplier of
electrical power and will serve as an integral partner for the proposed wind to heat project;
WHEREAS: The Alaska Native Tribal Health Consortium (ANTHC) is a statewide tribal health
consortium;
WHEREAS: The ANTHC will be the primary contractor, responsible for project management;
WHEREAS: These facilities are managed by the City of Kot zebue and KEA, Inc. to provide
power services to and for the benefit of Tribal members and residents of the City of Kotzebue;
WHEREAS: The City of Kotzebue recognizes that this project will benefit the community and
all residents there within by improving access to affordable energy, clean water, sanitation, and
other services necessary for maintaining the health and wellbeing of the whole community;
WHEREAS: The Alaska Energy Authority, Renewable Energy Fund is soliciting applications to
support projects that will reduce the cost of energy and improve community energy efficiency as
set forth in the Technical Memorandum -Kotzebue Wind-to-Heat Expansion of November 15,
2021, attached hereto as Exhibit "A" and incorpor ated by reference herein;
WHEREAS: The City of Kotzebue and the ANTHC are committed to making public health
services more affordable through diverse energy projects;
WHEREAS: The City of Kotzebue is compliant with applicable federal, state, and local laws,
including existing credit and federal tax obligations;
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January 10, 2022
Mr. Curtis Thayer
Alaska Energy Authority
813 West Northern Lights Blvd.
Anchorage, AK 99503
RE: Letter of Commitment for the City of Kotzebue’s application for Alaska Energy Authority,
Renewable Energy Fund Grant Program, Round 14 funding opportunity
Dear Mr. Thayer,
Please accept this letter of commitment on behalf of the Alaska Native Tribal Health Consortium
(ANTHC) in support of the City of Kotzebue’s application for the Alaska Energy Authority,
Renewable Energy Fund Grant Program, Round 14 funding opportunity. If awarded, the funds will
be used to construct a wind-to-heat energy system that will benefit community facilities throughout
the City of Kotzebue, resulting in an overall reduction to the community’s energy costs.
As part of ANTHC’s Division of Environmental Health and Engineering (DEHE), the Rural
Energy Program works with communities to make public health services more affordable through
diverse energy projects. The cost of energy in rural communities across our state often poses a
challenge to local governments responsible for maintaining reliable public health infrastructure.
If the City of Kotzebue is awarded funding under this proposal, ANTHC’s Rural Energy Program
is committed to providing comprehensive project management services to the community in
pursuit of our shared goals. ANTHC is prepared to commit the resources identified in the City of
Kotzebue’s grant application to ensure the project is implemented successfully for the benefi t of
the community.
The ANTHC Rural Energy Program is pleased to commit these resources to the project through
partnership and collaboration with the City of Kotzebue’s project team.
Sincerely,
Monique Martin
Chief of Staff
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January 6, 2022
Alaska Energy Authority
Mr. Curtis Thayer
813 West Northern Lights Blvd.
Anchorage, AK 99503
• K_Q I Z E B_ll..E ELECTRIC AII0CIATI0N Post Office Box 44 Kotzebue. Alaska 99752 Tel. 907-442-3491 Fax. 907-442-2482 RE: Letter of Support, City of Kotzebue, Alaska Energy Authority, Renewable Energy Fund Grant Program, Round 14 application
Dear Mr. Thayer,
The Kotzebue Electric Association, Inc. (KEA) understands that the City of Kotzebue and the Alaska
Native Tribal Health Consortium (ANTHC) are preparing an application to fund a project designed to reduce community utility costs by designing and constructing a wind to heat system that will benefit
community facilities. We recognize that this project will help improve the quality of life for City of
Kotzebue and KEA residential and commercial customers.
KEA has partnered with ANTHC's Division of Environmental Health and Engineering (DEHE) on prior
occasions for the benefit of customers we jointly serve. Our organizations are both committed to
reducing energy costs for our customers, and we look forward to continuing our efforts to ensure
community facilities are efficiently operated.
Our cooperative would like to express support for this project and our willingness to work with the
project team to ensure it is implemented successfully.
Sincerely,
-��
Martin Shroyer
CEO/General Manager
Kotzebue Electric Association, [nc.
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Alaska Energy Authority – AEA 23001
Renewable Energy Fund Grant Application
Appendix C
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**This fuel invoice reflects costs as of December of 2021 - the City of Kotzebue has received confirmation that costs for January of 2022 have escalated to $4.74 per unit, which is reflected in the Economics for this proposed project.66