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HomeMy WebLinkAboutAEEC Summit Lake Wind Round XIV REF Grant Application FINAL SIGNEDAlaska Electric & Energy Cooperative, Inc. 3977 Lake Street  Homer, Alaska 99603  (907) 235-8551 Alaska Electric & Energy Cooperative, Inc. (907) 235-8551 January 17, 2022 AEA 15003 Renewable Energy Grant Application Alaska Energy Authority 813 W. Northern Lights Blvd. Anchorage, AK 99503 Dear Alaska Energy Authority: RE: Renewable Energy Fund Round XIV Grant Application Homer Electric Association, Inc. (HEA) through its generation subsidiary, Alaska Electric and Energy Cooperative, Inc. (AEEC) appreciates the opportunity to present the enclosed Renewable Energy Fund Round XIV Grant Application for feasibility studies and conceptual design for the Summit Lake Wind Project on the Kenai Peninsula. This project is an important step towards Homer Electric Association’s and the State of Alaska’s goals to reach 50% renewable energy and it has the potential to do so while reducing electrical costs. This project will reduce the consumption of natural gas, thereby conserving Cook Inlet gas supplies. Additionally, this wind project would help stabilize the long-term price of power to consumers. HEA/AEEC have invested considerable effort and resources in first pursuing greater efficiencies in their gas-fired generators and most recently in siting the largest Battery Energy Storage System (BESS) in the State to now be able to incorporate the type of cost-effective intermittent renewable energy that this project would produce. Thank you for this opportunity. Please feel free to contact me with questions at (907) 283-2375. Sincerely, Mikel Salzetti Manager of Renewable Energy Development Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 1 of 36 11/16/2021 Application Forms and Instructions This instruction page and the following grant application constitutes the Grant Application Form for Round 14 of the Renewable Energy Fund (REF). A separate application form is available for projects with a primary purpose of producing heat (see Request for Applications (RFA) Section 1.5). This is the standard form for all other projects, including projects that will produce heat and electricity. An electronic version of the RFA and both application forms is available online at: https://www.akenergyauthority.org/What-We-Do/Grants-Loans/Renewable-Energy-Fund/2021- REF-Application. What follows are some basic information and instructions for this application: • The Alaska Energy Authority (AEA) expects this application to be used as part of a two-year solicitation cycle with an opt-out provision in the second year of the cycle. • If you are applying for grants for more than one project, provide separate application forms for each project. • Multiple phases (e.g. final design, construction) for the same project may be submitted as one application. • If you are applying for grant funding for more than one phase of a project, provide milestones and grant budget for each phase of the project (see Sections 3.1 and 3.2.2). • In order to ensure that grants provide sufficient benefit to the public, AEA may limit recommendations for grants to preliminary development phases in accordance with 3 Alaska Administrative Code (ACC) 107.605(1). • If some work has already been completed on your project and you are requesting funding for an advanced phase, submit information sufficient to demonstrate that the preceding phases are completed and funding for an advanced phase is warranted. Supporting documentation may include, but is not limited to, reports, conceptual or final designs, models, photos, maps, proof of site control, utility agreements, business and operation plans, power sale agreements, relevant data sets, and other materials. Please provide a list of supporting documents in Section 11 of this application and attach the documents to your application. • If you have additional information or reports you would like the Authority to consider in reviewing your application, either provide an electronic version of the document with your submission or reference a web link where it can be downloaded or reviewed. Please provide a list of additional information; including any web links, in Section 12 of this application and attach the documents to your application. For guidance on application best practices please refer to the resource-specific Best Practices Checklists; links to the checklists can be found in the appendices list at the end of the accompanying REF Round 14 RFA. • In the Sections below, please enter responses in the spaces provided. You may add additional rows or space to the form to provide sufficient space for the information, or attach additional sheets if needed. • If you need assistance with your application, please contact AEA’s Grants Coordinator by email at grants@akenergyauthority.org or by phone at (907) 771-3081. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 2 of 36 11/16/2021 REMINDER: • AEA is subject to the Public Records Act AS 40.25, and materials submitted to AEA may be subject to disclosure requirements under the act if no statutory exemptions apply. • All applications received will be posted on the Authority web site after final recommendations are made to the legislature. Please submit resumes as separate PDFs if the applicant would like those excluded from the web posting of this application. • In accordance with 3 AAC 107.630 (b) Applicants may request trade secrets or proprietary company data be kept confidential subject to review and approval by AEA. If you want information to be kept confidential the applicant must: o Request the information be kept confidential. o Clearly identify the information that is the trade secret or proprietary in their application. o Receive concurrence from the Authority that the information will be kept confidential. If the Authority determines it is not confidential, it will be treated as a public record in accordance with AS 40.25 or returned to the applicant upon request. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 3 of 36 11/16/2021 SECTION 1 – APPLICANT INFORMATION Please specify the legal grantee that will own, operate, and maintain the project upon completion. Name (Name of utility, IPP, local government, or other government entity) Alaska Electric & Energy Cooperative, Inc. Tax ID # 92-0177236 Date of last financial statement audit: December 31, 2020 Mailing Address: Physical Address: 3977 Lake Street, Homer, AK 99603 Same Telephone: Fax: Email: 907-283-2375 msalzetti@homerelectric.com 1.1 Applicant Point of Contact / Grants Coordinator Name: Mikel Salzetti Title: Manager of Renewable Energy Development Mailing Address: 3977 Lake Street, Homer, AK 99603 Telephone: Fax: Email: 907-283-2375 msalzetti@homerelectric.com 1.1.1 Applicant Signatory Authority Contact Information Name: Bradley P. Janorschke Title: General Manager Mailing Address: 3977 Lake Street, Homer, AK 99603 Telephone: Fax: Email: 907-283-2312 907-283-7122 bjanorschke@homerelectric.com 1.1.2 Applicant Alternate Points of Contact Name Telephone: Fax: Email: David Thomas, P.E. 907-283-2364 dthomas@homerelectric.com 1.2 Applicant Minimum Requirements Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 4 of 36 11/16/2021 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 #_640__, 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) Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 5 of 36 11/16/2021 SECTION 2 – PROJECT SUMMARY 2.1 Project Title Provide a 4 to 7 word title for your project. Type in the space below. AEEC Summit Lake Wind 2.2 Project Location 2.2.1 Location of Project – Latitude and longitude (preferred), street address, or community name. Latitude and longitude coordinates may be obtained from Google Maps by finding you project’s location on the map and then right clicking with the mouse and selecting “What is here? The coordinates will be displayed in the Google search window above the map in a format as follows: 61.195676.-149.898663. If you would like assistance obtaining this information, please contact AEA’s Grants Coordinator by email at grants@akenergyauthority.org or by phone at (907) 771- 3081. Latitude 60.686389 Longitude -149.378889 The proposed project will study the feasibility of locating a wind energy generation facility consisting of 9-turbiness (30 MW) in the northeastern Kenai Peninsula on the mountain ridgelines above Summit Lake to the east of the Seward Highway. The turbines will be dispersed throughout the site based upon available resource and applicable exclusions. 2.2.2 Community benefiting – Name(s) of the community or communities that will be the beneficiaries of the project. The member-owners of Homer Electric Association will benefit from these grant funds. Homer Electric’s certificated territory encompasses a vast majority of the population and communities on the Kenai Peninsula and essentially all of populated portions of the central and western Kenai Peninsula including the incorporated cities of Kenai, Soldotna, and Homer and the villages/communities of Nikiski, Salamatof, Sterling, Kasilof, Clam Gulch, Ninilchik, Anchor Point, Kachemak City, Halibut Cove, Seldovia, Port Graham and Nanwalek. 2.3 Project Type Please check as appropriate. 2.3.1 Renewable Resource Type ☒ Wind ☐ Biomass or Biofuels (excluding heat-only) ☐ Hydro, Including Run of River ☐ Hydrokinetic ☐ Geothermal, Excluding Heat Pumps ☐ Transmission of Renewable Energy ☐ Solar Photovoltaic ☐ Storage of Renewable ☐ Other (Describe) ☐ Small Natural Gas 2.3.2 Proposed Grant Funded Phase(s) for this Request (Check all that apply) Pre-Construction Construction Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 6 of 36 11/16/2021 ☐ Reconnaissance ☐ Final Design and Permitting ☒ Feasibility and Conceptual Design ☐ Construction 2.4 Project Description Provide a brief, one-paragraph description of the proposed project. Homer Electric Association, Inc. (HEA) through its generation subsidiary Alaska Electric & Energy Cooperative, Inc. (AEEC) plans to construct a 30-MW wind energy generation facility located on the Kenai peninsula. The project will consist of 9 wind turbines disbursed throughout the site and electrically interconnected to the HEA transmission system. In addition to turbines, the project will need to construct turbine access roads and crane pads, plus connect the turbines through an electrical collector system. The proposed project will study the feasibility of locating the wind energy generation facility in the northeastern Kenai Peninsula on the mountain ridgelines above Summit Lake to the east of the Seward Highway. 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. This funding request is for the Feasibility Analysis phase. HEA has already initiated Reconnaissance phase analysis to identify the sites with the highest probability of success. This grant request is to determine the feasibility of the project and develop a conceptual design. Scope will include: 1. Project scoping and contractor solicitation a. HEA has performed screening-level desktop project scoping and initial contractor solicitation for several tasks. HEA will refine the full scope of work for the project and will solicit, screen and hire contractors to complete the remaining development tasks. b. A development schedule will be developed to incorporate all the necessary permit, milestones, spending, and time allocations. 2. Detailed resource assessment a. HEA has a draft resource assessment plan that includes the preliminary locations and numbers for meteorological towers and remote sensing devices to measure the wind resource at the proposed project location. This plan will be finalized and executed as part of the grant scope. b. A site visit will be conducted to determine the most appropriate locations from which to gather meteorological data. c. HEA will purchase or rent and install necessary meteorological equipment. d. Wind data will be monitored and QC’d. e. HEA will commission a wind resource assessment and project layout design effort after on-site met data has been collected. 3. Identification of land and regulatory issues a. HEA will engage with additional landowners to secure necessary land. b. HEA will engage with federal, state and local authorities, as needed, to determine regulatory issues the project may face. 4. Permitting and environmental analysis a. An initial permitting matrix has been developed and will be refined during this period. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 7 of 36 11/16/2021 b. HEA’s desk-top screening has already avoided National and State Parks, Wilderness area and minimized impact to federal and state protected species, waters of concern, wetlands, and other protected areas. Additional desktop screening will be done during the scope and solicitations will be prepared for necessary environmental analysis. 5. Detailed analysis of current cost of energy and future market a. HEA will conduct an analysis of current and future costs of energy. b. This information will be combined with the cost projections for this project to determine if the project, as proposed, is feasible. 6. Assessment of alternatives a. HEA will balance this proposed project vs. alternatives to determine whether pursuing this project is in the best interest of HEA members and the people of the State of Alaska. b. Assuming this project is competitive with alternatives, a recommendation to move into the next phase will be delivered. 7. Conceptual design and costs estimate a. Based on the site visits and the other analysis, the design of the project will be refined to include: i. Turbine locations, ii. Access roads, and iii. Collector and electrical systems. b. These designs will then be used to determine site-specific project costs. 8. Detailed economic and financial analyses a. Based on the overall system cost, coupled with the energy production estimates, the overall cost of energy will be calculated. HEA intends to be the primary consumer of the energy produced by this facility, but analysis will be done to determine if other markets exist for this power. b. HEA has invested in developing and training staff in a financial model for renewable energy projects. Once costs and revenues are better refined as part of this grant, HEA will use this model to develop high, low and base cases for the financial returns of the project. 9. Conceptual business & operations plan a. Based on the information gathered in the steps above, HEA will develop an operations plan for the long-term success of the project. b. HEA will develop a business case for proceeding with, modifying or terminating this project. 10. Final report and recommendations a. Based on projected returns, potential risks and project timeline, HEA will evaluate whether this site is recommended for further advancement toward final design and permitting. b. Report will include a plan for project next steps. 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 ($) NA Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 8 of 36 11/16/2021 SECTION 3 – Project Management, Development, and Operation 3.1 Schedule and Milestones Please fill out the schedule below (or attach a similar sheet) for the work covered by this funding request. Be sure to identify key tasks and decision points, including go/no go decisions, in your project along with estimated start and end dates for each of the milestones and tasks. Please clearly identify the beginning and ending of all phases (I. Reconnaissance, II. Feasibility and Conceptual Design, III. Final Design and Permitting, and IV. Construction) of your proposed project. See the RFA, Sections 2.3-2.6 for the recommended milestones for each phase. Add additional rows as needed. Task # Milestones Tasks Start Date End Date Deliverables 1 Cost Estimating Develop a Preliminary construction and component delivery cost forecast 7/22 9/22 Preliminary construction and component delivery cost forecast 2 Financial Analysis Develop a detailed project economic feasibility report 10/22 5/23 Detailed project economic feasibility report 3 Resource Assessment Install Meteoritical Monitoring Equipment 8/22 7/23 Raw Meteoritical Data 4 Resource Assessment Monitor, Process & QC Met Data 8/22 7/23 Processed Meteoritical Data 5 Resource Assessment Develop Energy Forecast 8/23 11/23 Energy Forecast 6 Conceptual Design Develop a conceptual turbine array design and civil layout 9/22 12/22 A conceptual turbine array design and civil layout 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 $232,000 Cash match to be provideda $58,000 In-kind match to be provideda $ Energy efficiency match providedb $ Total costs for project phase(s) covered in application (sum of above) $290,000 Describe your financial commitment to the project and the source(s) of match. Indicate whether these matching funds are secured or pending future approvals. Describe the impact, if any, that the timing of additional funds would have on the ability to proceed with the grant. HEA’s generation subsidiary’s (AEEC’s) Board of Directors, has passed Resolution 01.2022.01, “Grant Funding Authorization for Summit Lake Wind Project” which is attached. Also attached is a certification by the AEEC General Manager, Bradley P. Janorschke, that the Cooperative will honor the match amounts and is in a financial condition to do so. Both documents are included as Attachment C. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 9 of 36 11/16/2021 a Attach documentation for proof (see Section 1.18 of the Request for Applications) b See Section 8.2 of this application and Section 1.18 of the RFA for requirements for Energy Efficiency Match. 3.2.2 Cost Overruns Describe the plan to cover potential cost increases or shortfalls in funding. HEA/AEEC would cover any cost overruns required to complete this stage of feasibility analysis. 3.2.3 Total Project Costs Indicate the anticipated total cost by phase of the project (including all funding sources). Use actual costs for completed phases. Indicate if the costs were actual or estimated. Reconnaissance [Actual/Estimated] $12,500 Feasibility and Conceptual Design [Actual/Estimated] $290,000 Final Design and Permitting [Actual/Estimated] $2,497,500 Construction [Actual/Estimated] $105,000,000 Total Project Costs (sum of above) Estimated $107,800,000 Metering/Tracking Equipment [not included in project cost] Estimated $ 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) As for all large projects, HEA/AEEC would examine current interest rates and loan terms from its two primary lenders National Rural Utilities Cooperative Finance Corporation (CFC) – a not-for- profit lender set up by its member electrical utilities and the USDA Rural Utilities Service (RUS). Any applicable state or federal grants would be applied for and the possibility of bringing in a tax- equity partner to access federal Investment Tax Credits (ITCs) or Production Tax Credits (PTCs) would be considered once meteorological data and refined construction cost estimates allow for more accurate cost of plant and cost of energy to be calculated. HEA has been and will continue to track (and advocate for) a direct-pay provision for ITCs and PTCs to be distributed directly to cooperatives and government entities currently contained in the pending BBB federal infrastructure bill. Renewable Energy Certificates would be obtained for all energy eventually put onto the grid (as CEA already does with Fire Island wind energy) and monetized, although that has historically yielded less than $1/MWh. Should a mandatory Renewable Portfolio Standard (RPS) be enacted in Alaska, HEA would diligently monetize any excess RECs (beyond HEA’s own statutory requirements) for resale to other utilities at rates of potentially $10-20/MWh which is a significant portion of the energy cost. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 10 of 36 11/16/2021 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 ) $ $ $ Cost Estimating 9/22 $36,000 $9,000 $45,000 Financial Analysis 5/23 $32,000 $8,000 $40,000 Resource Assessment 11/23 $144,000 $36,000 $180,000 Conceptual Design 12/22 $20,000 $5,000 $25,000 TOTALS $232,000 $58,000 $290,000 Budget Categories: Direct Labor & Benefits $ $ $ Travel & Per Diem $ $ $ Equipment $ $ $ Materials & Supplies $ $ $ Contractual Services $232,000 $58,000 $290,000 Construction Services $ $ $ Other $ $ $ TOTALS $232,000 $58,000 $290,000 Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 11 of 36 11/16/2021 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. The cost estimates are based on a detailed desktop review of the proposed project footprint including analysis of construction and component delivery constraints. The cost estimates also incorporate recent experience on other similarly situated wind projects, as well as the development team’s extensive experience in US wind development and knowledge of prudent industry practice. 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 Project Manager will conduct regularly scheduled meetings with the contractors providing the feasibility analysis for this Project to track progress, schedule and budget. Project management and financial control will issue reports to AEA on a mutually agreeable schedule throughout the life of the grant. These reports can be customized to meet AEA needs. 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. HEA has a dedicated financial controller. Ms. Clymer, HEA’s Controller has acted as financial control for several other AEA awarded grants. HEA uses Southeastern Data Corporation (SEDC) for our financial services software to assist with accounting and financial control systems. Every year, HEA’s and AEEC’s financial statements and accounting procedures are audited by an outside firm (which in recent years has been BDO USA, Inc). Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 12 of 36 11/16/2021 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. HEA’s Manager of Renewable Energy Development, Mike Salzetti, will be the Project Manager for this Project. He has 31 years of engineering experience with 21 of those years including Project Management responsibilities. Mr. Salzetti’s contact information in shown in Section 1.1 of this application and his professional qualifications are included in Attachment A. 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. Katheryn Parke, HEA’s Plant Accounting Supervisor will be performing the accounting for this Project. 4.1.3 Expertise and Resources Describe the project team including the applicant, partners, and contractors. For each member of the project team, indicate: • the milestones/tasks in 3.1 they will be responsible for; • the knowledge, skills, and experience that will be used to successfully deliver the tasks; • how time and other resource conflicts will be managed to successfully complete the task. If contractors have not been selected to complete the work, provide reviewers with sufficient detail to understand the applicant’s capacity to successfully select contractors and manage complex contracts. HEA’s Manager of Renewable Energy Development, Mike Salzetti, will be the Project Manager for this Project. Mike has over 31 years of engineering experience with 21 of those years including Project Management responsibilities. Mr. Salzetti played an integral role in the design of Homer Electric’s new generation facilities and successfully shepherded the Grant Lake Hydroelectric Project through an original FERC licensing process. Mr. Salzetti has the guidance, support, staffing, and resources of Homer Electric Association to support him in all phases of this project. The professional biographies of HEA’s Executive Management Team are included as part of Attachment A to this application. HEA has partnered with ReGenerate Consulting and Pivot Power Management for this project. ReGenerate Consulting is a technical consulting firm exclusively focused on renewable energy. Every member of ReGenerate’s staff on this project has a minimum of 17 years developing wind projects. ReGenerate staff have worked on more than 100 wind projects in more than 25 Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 13 of 36 11/16/2021 countries. In the past 10 years, ReGenerate has helped clients build more than 10,000 MW of wind projects. Pivot Power Management is an independent developer of utility scale wind and solar projects with a specialty in commercial transactions and project finance. The Pivot Power management team has participated in the development of over 5,000 MW of wind projects and has raised over $3bn of project finance. Resumés for ReGenerate and Pivot Power’s staff are included as part of Attachment A to this application. 4.2 Local Workforce Describe how the project will use local labor or train a local labor workforce. HEA Management Directives governing contracting and procurement include considerations for such things as material procurement from pre-qualified businesses operating on the Kenai Peninsula, possession of an Alaska Business license, maintenance of an office and staff within Alaska and advertisements in general circulation publications as defined by Alaska State Statutes that promote local contracting and procurement. Pursuit to Board Policy 401 – Contracting and Purchasing, Section II, part H, HEA and AEEC give a 5% preference to vendors maintaining an office or place of business in the cooperative’s service area (unless prohibited by statute, regulation or grant). Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 14 of 36 11/16/2021 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 project is a 9-turbine (30 MW) wind energy generation facility located in northeastern Kenai Peninsula on the mountain ridgelines above Summit Lake to the east of the Seward Highway. The turbines will be dispersed throughout the site based upon available resource and applicable exclusions. A preliminary design and energy analysis was completed based on 200m resolution mesoscale modeled wind data showing an expected average wind speed of 14 m/s at a 120m hub height. Based upon site conditions and available technology, a review of mid-sized turbines from top-tier manufacturers (Vestas, GE, Siemens Gamesa Renewable Energy) showed multiple potential turbines with similar production. Ultimately, the GE 3.4-140 h117 turbine was utilized for planning purposes. This turbine is considered representative of the current state of the art in the wind industry and yields an expected net capacity factor of 48.3% at this site. The wind rose shows prevailing winds from the east. Further on-site data collection is required to both validate and refine these expectations. Prior to final design, the project will commission a detailed analysis of the wind resource using on- site met data, wind flow modeling and energy production estimates from a qualified wind resource consultant. A site visit will be conducted by the consultant to confirm optimal location of turbines and coordination with turbine manufacturers to confirm turbine suitability. 5.1.2 Alternatives to Proposed Energy Resource Describe the pros and cons of your proposed energy resource vs. other alternatives that may be available for the market to be served by your project. Homer Electric Association’s Board of Directors has developed a Board Policy (505 - Renewable Portfolio Goal) that states, “It is the policy of the Cooperative to use best efforts to meet a renewable portfolio goal of 50% of its annual energy needs by the end of 2025.” HEA staff is in the process of analyzing and developing a suite of firm and non-firm renewable energy projects to meet this goal. It is anticipated that a mix of renewable energy projects will be needed to cost effectively achieve this goal. AEEC / Summit Lake Wind Project Pros: 1. It is forecast to provide an excellent (48.3%) capacity factor at a site along existing transmission lines and highway. 2. The site is a short distance from the Seward Highway and Chugach Electric Association’s 115,000-volt transmission line. 3. The extensive mountain ridges in this area all model as having excellent wind resources and could allow this site to be expanded larger than 30 MW should other Railbelt utilities desire to participate or co-own such facilities. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 15 of 36 11/16/2021 4. Wind at all sites modelled by HEA, including this one, has higher energy production in winter months which matches HEA’s seasonal load profile. 5. It is anticipated that the cost of energy will be lower than the cost of avoided gas consumption, even with integration costs. 6. AEEC already possess a BESS of sufficient capacity to integrate this non-firm resource. 7. As a not-for-profit entity, HEA has the following advantages over an IPP executing a similar project: a. No profit margin required b. Access to lower financing rates c. No property taxes d. Access to an existing work force and remote dispatch system 8. The single landowner at this location - the USDA Forest Service (plus possible, small areas for access through DNR land), allow for a single path for permitting and easement/lease negotiations. 9. Power transmitted south from Summit Lake to HEA/AEECs system starting in Soldotna is the reverse flow compared to Bradley Lake, Cooper Lake, and some economy energy sales that always result in net north-bound flow. By reducing net current on the line, line losses are reduced for all users in both directions. Line losses represent energy generated but never delivered to the Railbelt ratepayers. This project is beneficial for HEA owner-member, citizens of the Kenai Peninsula Borough and the environment. AEEC / Summit Lake Wind Project Cons: 1. Wind is intermittent and while HEA possesses an adequately sized BESS, the use of the BESS is not free. The round-trip efficiency of the BESS ranges from 85% if cycled fully to 93% if kept in a tighter range. Any use of a BESS consumes energy that must be replaced in the hours ahead – ideally when generation assets have excess, economic energy available, but will not always be the case. 2. As a not-for-profit entity, HEA does not currently qualify for tax credits, although there is proposed Federal legislation that would provide direct incentives to nonprofit entities in lieu of tax credits. Preliminary financial modeling suggests HEA’s lower cost of capital is a more significant factor than monetizing tax credits through a tax-equity partner, but privately financed projects are currently assuredly of ITCs or PTCs. 3. AEECs generation assets will be more complicated to operate, maintain and dispatch with the addition of new, non-firm projects. For instance, AEEC’s gas deliveries must be “nominated” in 6-hour blocks, 24 hours in advance which will require forecasting how wind occurs throughout the next day – something that adds uncertainty to the process and potential costs if penalties are assessed for deviating from one’s nominated quantities. 4. The high access costs for this site require it be circa 30 MW or larger. 5. The steep slopes and high elevations of this site require significant civil work within a short annual building season(s). 6. Winter access for maintenance could be delayed during storms and would, in all seasons be more involved and expensive. 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 Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 16 of 36 11/16/2021 • 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 Permit Name Permit Trigger NEPA Environmental Review Federal funds or lands Section 10 Rivers and Harbors Permit Navigable waters of the U.S. Alaska Regional Condition J Impacts to waters AK Fish Habitat Permit Activities within or across an anadromous waterbody Construction General Permit for Stormwater (AK) Projects that disturb greater than or equal to 1 acre of land Nationwide Permit 51 Land-Based Renewable Energy Generation Facilities Impacts to waters of the U.S. Bald and Golden Eagle Take Permit Effects to eagles The project expects to initiate its environmental permitting and monitoring program in the spring of 2023 with the permitting effort expected to continue throughout 2025. 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. This location has an excellent wind resource and is close to existing transmission lines and roads. The average and maximum slopes of project roads are high to very high. The location is visible from the Seward Highway (during clear weather) but not from any residences. HEA commissioned a detailed site selection effort that compared the revenue vs. cost of sites over the entire Kenai peninsula and this site was chosen as one of the top sites. The cost of capital is fundamental to the economics of any project and HEA/AEEC lost-cost funding sources result in lower energy costs than for-profit corporations are willing to offer. Further, HEA now owns and operates the largest Battery Energy Storage System in Alaska, which was acquired, in part, to more economically and reliably integrate non-firm renewable energy resources without combustion turbines incurring greater fuel usage and maintenance costs if used to “follow” a large non-firm energy source. The layout is preliminary and is based upon available resource, parcels information and exclusions considered as part of the prospecting effort to identify new sites. Exclusions considered include: roads, railroads, airports, existing power plants, designated wilderness areas, designated refugee areas, state parks, national parks, military, high population areas, legislatively designated areas, wildlife refuges, transmission lines and wetlands. HEA is familiar with arranging land-use permits, easements and easements with the USFS and does not see any insurmountable hurdles but would expect detailed discussions and ultimately conditions placed on any such development. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 17 of 36 11/16/2021 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. HEA has undertaken a rigorous site-prospecting effort to identify this site as one of the most promising within their target area. This evaluation included developing and consolidating dozens of GIS layers that included wetlands, historical sites, land cover, wind production, and existing infrastructure. Sites were analyzed both for high return on investment (wind energy revenue less project execution costs) and risks were considered when selecting sites. This thorough process produces sites with lower overall risk. The largest risk to any wind project is that the project resource is overestimated due to lack of onsite wind measurements. This risk will be mitigated by a rigorous onsite measurement campaign and validation of the energy assumptions. The next largest risk to the project is equipment supply risk caused by the remote location of the project, limited construction season and the size of turbine components. This is mitigated by careful supply chain and transportation planning. In conjunction with expert consultants, HEA will Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 18 of 36 11/16/2021 analyze both these aspects in detail and determine whether it is worth stocking parts locally or securing guarantees from suppliers about timing and delivery options. HEA will only use proven, reliable wind turbines from leading manufactures and the best operations staff. This is further required by our lenders. As part of the overall project execution plan, HEA will include contingency planning for critical milestones throughout the design and construction phases of the project. At this time, we do not foresee problems or risks that would cause project delays, other than unpredictable delays in delivery of equipment required for the construction of the wind project. Project partners, ReGenerate Consulting and PivotPower, have a proven track record of developing and operating wind projects utilizing similar turbines and infrastructure. At this time, we do not anticipate significant opposition to the project, considering public advocacy in favor of renewable resources voiced at several HEA Board meetings and during public forums. The current project cost estimate has an uncertainty of +/- 20 percent that adds a risk of cost over- runs that will not be covered by grant money. To mitigate this risk HEA is committed to covering costs above those estimated in this proposal. The risks associated with negotiations include the inability to successfully negotiate a land use agreement with the USFS. 5.3.2 Environmental Risk Explain whether the following environmental and land use issues apply, and if so which project team members will be involved and how the issues will be addressed. See the “Environmental and Permitting Risks” section of the appropriate Best Practice Checklist for additional guidance. • Threatened or endangered species • Habitat issues • Wetlands and other protected areas • Archaeological and historical resources • Land development constraints • Telecommunications interference • Aviation considerations • Visual, aesthetics impacts • Identify and describe other potential barriers Species Name Scientific Name Status Presence Green Sturgeon Acipenser medirostris Threatened May Occur Eskimo Curlew Numenius borealis Endangered Not Likely to Occur Steller Sea Lion Eumetopias jubatus Endangered Not Likely to Occur Beluga Whale Delphinapterus leucas Endangered Not Likely to Occur Habitat issues The species identified above may occur within or around the project footprint. Wetlands and other protected areas Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 19 of 36 11/16/2021 Archaeological and historical resources The project site is an undeveloped area with a highway and a 115,000-volt transmission line to its west with no known documented archaeological and historical resources in the project footprint, although historic mining cabins are located to the northwest of the site and may exist elsewhere. Land development constraints The site footprint itself lacks any current, active development. The access road from the northwest might pass through or close to mining claims. Telecommunications interference No telecommunication interference analysis has been conducted to-date. Aviation considerations No aviation analysis has been conducted. Visual, aesthetics impacts No visual or aesthetic analysis has been conducted to-date, but the project would be visible from the Seward Highway. Identify and describe other potential barriers Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 20 of 36 11/16/2021 The extreme slopes and short building season create higher costs and scheduling constraints. Backcountry skiers are known to use the area, although not as much as to the north of the proposed project area nor as much as similar other high-wind resources areas accessible to both transmission and highways. 5.4 Technical Feasibility of Proposed Energy System In this section you will describe and give details of the existing and proposed systems. The information for existing system will be used as the baseline the proposal is compared to and also used to make sure that proposed system can be integrated. Only complete sections applicable to your proposal. If your proposal only generates electricity, you can remove the sections for thermal (heat) generation. 5.4.1 Basic Operation of Existing Energy System Describe the basic operation of the existing energy system including: description of control system; spinning reserve needs and variability in generation (any high loads brought on quickly); and current voltage, frequency, and outage issues across system. See the “Understanding the Existing System” section of the appropriate Best Practice Checklist for additional guidance. AEEC owns and operates three plants that are fueled by natural gas. The Nikiski Plant is an 80 MW baseload generating plant fueled by natural gas and recovered heat. HEA has two backup generating plants: the Soldotna Plant, a 48 MW generating plant; and the Bernice Lake Plant, a 73 MW generating plant that are used for backup, peaking, and reserve capacity. Additionally, AEEC has access to 14 MW of purchased power capacity at the State’s Bradley Lake Hydroelectric facility. 5.4.2.1 Existing Power Generation Units Include for each unit include: resource/fuel, make/model, design capacity (kW), minimum operational load (kW), RPM, electronic/mechanical fuel injection, make/model of genset controllers, hours on genset Unit 1: Nikiski Combined Cycle Plant: Natural Gas/ Steam, CT GE Frame 6B Combustion Turbine, 40-MW ST GE SC2-22, HRSG Deltak Dino 4128 Heat Recovery Steam Generator, 40- MW , NCC design capacity 80 MW, NCC minimum operational load 20 MW, CT RPM 5105, ST RPM 3600, Emerson Ovation DCS Unit 2: Soldotna Combustion Turbine Plant: Natural Gas, GE LM6000 Combustion Turbine Generator, design capacity 48 MW, minimum operational load 3 MW, RPM 3600, Emerson Ovation DCS Unit 3: Bernice Lake Combustion Turbine Plant: Natural Gas, GE Frame 5 Combustion Turbine, design capacity 19 MW, design capacity 27 MW, design capacity 27 MW, minimum operational load 3 MW, minimum operational load 6 MW, minimum operational load 6 MW, RPM 3600, Emerson Ovation DCS Unit 4: Bradley Lake Hydroelectric Project (Hydro), Fuji generators, Andritz hydro runners, design capacity 64 MW per unit (HEA 14 MW share), no minimum operational load, RPM 300, Emerson Ovation DCS Unit 5: 5.4.2 Existing Energy Generation Infrastructure and Production In the following tables, only fill in areas below applicable to your project. You can remove extra tables. If you have the data below in other formats, you can attach them to the application (see Section 11). Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 21 of 36 11/16/2021 Unit 6: 5.4.2.2 Existing Distribution System Describe the basic elements of the distribution system. Include the capacity of the step-up transformer at the powerhouse, the distribution voltage(s) across the community, any transmission voltages, and other elements that will be affected by the proposed project. The HEA system has a total of 2,491 miles of energized line that distributes power to 35,599 meters in a 3,166 square-mile service area on the Kenai Peninsula. At 30 MW, it is likely that this project will need to tie into the transmission system at transmission voltages not distribution lines and voltages. One of the advantages of this proposed site is its proximity to both the Nikiski Plant Substation and the Bernice Lake Substation both with access to a ringed transmission system. As part of the Construction and Final Design stage of the Project, a complete Interconnection Impact Study will be completed. Is there operational heat recovery? (Y/N) If yes estimated annual displaced heating fuel (gallons) 5.4.2.3 Existing Thermal Generation Units (if applicable to your project) Generation unit Resource/ Fuel type Design capacity (MMBtu/hr) Make Model Average annual efficiency Year Installed Hours Nikiski Combined Cycle Plant Natural Gas/ Steam CT 40 MW, ST 40 MW CT GE,ST GE, HRSG Deltak CT Frame 6B Combustion Turbine, ST SC2-22, HRSG Dino 4128 Heat Recovery Steam Generator CT 35- 42%, NCC 60% CT 1986, HRSG 2001, ST 2014 CT 168,983 hours (as of EOY 2019) Soldotna Combustion Turbine Plant Natural Gas CT 48 MW CT GE CT LM6000 Combustion Turbine Generator Peak CT 2014 CT 13,326 hours (as of EOY 2019) Bernice Lake Combustion Turbine Plant Natural Gas Soldotna Combustion Turbine Plant CT GE CT Frame 5 Combustion Turbine Peak CT 1971, CT 1978, CT 1981 Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 22 of 36 11/16/2021 5.4.2.5 Annual Electricity Production and Fuel Consumption (Existing System) Use most recent year. Replace the section (Type 1), (Type 2), and (Type 3) with generation sources Month Generation Nikiski Combined Cycle Plant (kWh) Generation Soldotna Combustion Turbine Plant (kWh) Generation Bernice Lake Combustion Plant (kWh) Fuel Consumptio n (Diesel- Gallons) Fuel Consumption Natural Gas (MCF) Peak Load MWh Minimum Load January 41,899,405 2,097 1,256 2306 368,042 1,553 1,319 February 37,527,357 109,052 1,526 415 334,878 1,563 1,351 March 39,496,815 1,000,229 203,136 2601 365,365 1,572 1,323 April 35,481,301 2,767 151,421 16 319,225 1,456 1,201 May 17,186,990 13,800,750 344,021 9 305,346 1,303 1,182 June 26,701,127 4,402,566 200,985 1036 292,899 1,288 1,071 July 32,859,596 0 3 1182 298,043 1,386 1,209 August 32,356,522 14,203 1,764 44 296,783 1,388 1,044 Septembe r 20,007,288 10,537,928 321,433 453 286,838 1,443 1,182 October 39,997,133 2,714,565 10,067 15 392,830 1,437 1,277 November 42,267,368 18,194 2,385 1974 380,941 1,683 1,348 December 41,720,850 685,731 1,376 8904 380,057 1,810 1,479 Total 407,501,750 33,288,083 1,239,373 18955 4,021,248 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. HEA has 24,613 member-owners and provides power to 35,599 meters located throughout the Kenai Peninsula. HEA sold 452 million kilowatt-hours of electricity in 2020. HEA’S latest published Equity Management Plan indicates a 1% per year growth rate over the next 15 years but actual results indicate flat to a slight decline in load due to member efficiency and conservation efforts. A significant portion of that decline was the shuttering of the LNG and fertilizer-production facilities on our systems after the rising price of natural gas made them uneconomic. 5.4.2.4 O&M and replacement costs for existing units Power Generation Thermal Generation i. Annual O&M cost for labor AEEC does not track labor & non-labor separately so O&M cost are below. This excludes natural gas costs. ii. Annual O&M cost $7,975,397 iii. Replacement schedule and cost for existing units NCC retirement 2043, SCT retirement 2054, BCT retirement 2034 Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 23 of 36 11/16/2021 Predicting the future is difficult but HEA is hopeful that the adoption of electric vehicles along with other beneficial electrification technologies will result in a return to a 1% per year load growth for the life of this project. Additionally, HEA is interconnected to a regional Alaskan grid known as the “Railbelt” via a three phase, 115 kV transmission line. The Railbelt is generally defined as the service areas of five regulated public utilities: Chugach Electric Association (Chugach), Golden Valley Electric Association (GVEA), HEA, Matanuska Electric Association (MEA), and the City of Seward Electric System (SES). This region grid covers a significant area of the state and contains the majority of the state’s population and economic activity; it extends from Homer to Fairbanks and includes areas such as Anchorage, Fairbanks, and the Matanuska-Susitna Valley. HEA can and has regularly provided power to Alaskan residents from Anchorage to Fairbanks via wholesale and economy energy sales to the other four interconnected electric utilities. 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. The technology to be used is the modern wind energy turbine, a proven, emission-free technology for generating electricity. Specifically, HEA has selected a 3.4 MW wind turbine manufactured by GE Energy, a world leader in the industry. GE turbines are one of the most widely used wind turbine in the United States and is part of a fleet of more than 62 GW of installed capacity. The turbines will be installed with a 117-meter hub height and blades that provide a 140-meter rotor diameter. This rotor diameter is optimal for use within the wind resource, such as exists on the project site. The turbine will be equipped with an extreme cold-weather package to provide reliable operation at temperatures as low as -30°C, and in survival mode (without operation) at temperatures as low as -40°C. These design parameters ensure reliable operation in the conditions expected in Alaska and at this specific project site. Given the existing wind regime, the regional electric demand, and interconnection capacity, the optimum installed capacity of the project is 30 MW. The project will be integrated to the regional electric grid through a new step-up transformer and switch gear to be located on the western side of the project site. This will permit delivery of electricity to the bulk power system. This site will have road access from the Seward Highway on newly constructed project roads. Approximately ten miles of new access road and eight miles of electric cabling is required to be installed. The proposed new access and project roads are located on steep terrain and mountain ridgelines hills. The typical design includes a 16-foot-wide roadbed with a maximum of 10 percent of slope and maximum 135-foot turn radius to accommodate the long loads. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 24 of 36 11/16/2021 5.4.4.1 Proposed Power Generation Units Unit # Resource/ Fuel type Design capacity (kW) Make Model Expected capacity factor Expected life (years) Expected Availability 9 Wind 30,000 GE 3.4-140 48.3 25 94.6% 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. Because wind is a zero-cost fuel, wind projects generally operate whenever the wind is blowing. The only times the project would need to be curtailed would be if the load on the system was such that Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 25 of 36 11/16/2021 the energy produced by the wind farm was too much for the system and the BESS to handle. HEA is experienced with integrating renewable hydro power into their system and is committed to integrating wind into their system as well. HEA recently installed a battery energy storage system (BESS), partially to prepare their electric system to handle the intermittent nature of wind generation. Sized at 46.5 MW, the BESS has the ability to inject into (or absorb from) the system more power than the proposed wind facility could generate, Hence, it can immediately replace power in periods when wind speed and power production decrease. Conversely, should wind output suddenly increase beyond the turn-down ratio or ramp rate of other combustion or hydro generation assets, the BESS can be charged during those periods and largely avoid curtailment of the wind energy. With 93 MWh of energy storage capacity, the BESS could theoretically store (or stand in for) 3 hours of wind production from the proposed project. The desktop studies performed during HEA’s site selection process predicted greater energy production in winter months which matches HEA’s seasonal load profile as the lower average wind speeds in summer also match HEA’s lower system loads in summer and may provide a more suitable window for tower erection and nacelle and blade lifting and installation during summer months. Additional studies will be done to study the hourly and sub-hourly production ramp rates to determine what is necessary to integrate this project into HEA’s system while maintaining consistent power for member needs. 5.4.3.1 Expected Capacity Factor 48.3% A preliminary analysis was completed based on 200m resolution mesoscale modeled wind data showing an expected average wind speed of 14 m/s with a 120m hub height. Based upon the GE 3.4-140 h117 turbine, an expected net capacity factor of 48.3% was determined at this site. Further on-site data collection is required to both validate and refine these expectations. This NCF is inclusive of loss factors such as availability, turbine performance, wakes/blocking, electrical, environmental and curtailment. These loss factors were estimated by ReGenerate based upon industry standard values or calculated on a site-specific basis where applicable. 5.4.5.2 Annual Electricity Production and Fuel Consumption (Proposed System) Month Generation (Proposed System) (kWh) Generation (Type 2) (kWh) Generation (Type 3) (kWh) Fuel Consumption (Diesel- Gallons) Fuel Consumption [Other] Secondary load (kWh) Storage (kWh) January 13,033,599 February 13,321,407 March 11,169,698 April 10,525,556 May 8,469,783 June 7,825,641 July 7,250,025 August 8,058,629 September 10,018,465 October 11,347,865 November 12,512,803 December 13,485,869 Total 127,019,340 Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 26 of 36 11/16/2021 5.4.6 Proposed System Operating and Maintenance (O&M) Costs O&M costs can be estimated in two ways for the standard application. Most proposed renewable energy projects will fall under Option 1 because the new resource will not allow for diesel generation to be turned off. Some projects may allow for diesel generation to be turned off for periods of time; these projects should choose Option 2 for estimating O&M. Option 1: Diesel generation ON For projects that do not result in shutting down diesel generation there is assumed to be no impact on the base case O&M. Please indicate the estimated annual O&M cost associated with the proposed renewable project. Option 2: Diesel generation OFF For projects that will result in shutting down diesel generation please estimate: 1. Annual non-fuel savings of shutting off diesel generation 2. Estimated hours that diesel generation will be off per year. 3. Annual O&M costs associated with the proposed renewable project. 1. $ 2. Hours diesel OFF/year: 3. $550,000 annual estimate Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 27 of 36 11/16/2021 5.5 Performance and O&M Reporting For construction projects only 5.5.1 Metering Equipment Please provide a short narrative, and cost estimate, identifying the metering equipment that will be used to comply with the operations reporting requirement identified in Section 3.15 of the Request for Applications. N/A 5.5.2 O&M reporting Please provide a short narrative about the methods that will be used to gather and store reliable operations and maintenance data, including costs, to comply with the operations reporting requirement identified in Section 3.15 of the Request for Applications N/A SECTION 6 – ECONOMIC FEASIBILITY AND BENEFITS 6.1 Economic Feasibility 6.1.1 Economic Benefit Annual Lifetime Anticipated Diesel Fuel Displaced for Power Generation (gallons) Anticipated Fuel Displaced for Heat (gallons) Total Fuel displaced (gallons) Anticipated Diesel Fuel Displaced for Power Generation ($) Anticipated Fuel Displaced for Heat ($) Anticipated Power Generation O&M Cost Savings Anticipated Thermal Generation O&M Cost Savings Total Other costs savings (taxes, insurance, etc.) Total Fuel, O&M, and Other Cost Savings $12,332,307 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 Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 28 of 36 11/16/2021 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. In addition to a lower cost of energy arising from HEA’s avoided cost for natural gas, this wind project allows HEA to diversify their energy sources and therefore be less sensitive to increasing natural- gas prices and less vulnerable to gas availability issues. To the extent that HEA reduces their gas consumption, the life of finite gas resources in Cook Inlet is extended for all users in the region and seasonal gas availability issues are diminished. If financed by HEA, the debt service and depreciation costs would be nearly constant in 2024/2025 dollars and therefore decreasing, in real dollars, throughout the project projected 25-year life meaning that in addition to an initial downward pressure on consumer rates, the project’s output would continue to resist the inflationary pressure of HEA’s combustion assets. 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 Logistical, supply-chain and tax policy risks are detailed in the table below: Risk Importance Mitigation Strategy Unexpected increase in turbine component or delivery costs High Early coordination with turbine vendors to protect against price volatility Labor shortages for construction or operations phases Medium Establish a labor resource plan in advance of construction activities Foreign exchange risk with European or Asian based turbine manufacturers Low Explore domestic content options Lack of federal tax incentive extension Medium Vigilant monitoring of developments in Washington Lack of crane availability in Alaska Medium Proactive and early discussions with BoP providers Difficulties in site deliveries due to challenges with shipping in Alaska High Coordination with turbine vendors, self- performance of certain scope items 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 Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 29 of 36 11/16/2021 the project as well as the private sector benefits and complete the table below. See Section 1.6 in the Request for Applications for more information. N/A 6.2 Other Public Benefit Describe the non-economic public benefits to Alaskans over the lifetime of the project. For the purpose of evaluating this criterion, public benefits are those benefits that would be considered unique to a given project and not generic to any renewable resource. For example, decreased greenhouse gas emission, stable pricing of fuel source, won’t be considered under this category. Some examples of other public benefits include: • The project will result in developing infrastructure (roads, trails, pipes, power lines, etc.) that can be used for other purposes • The project will result in a direct long-term increase in jobs (operating, supplying fuel, etc.) • The project will solve other problems for the community (waste disposal, food security, etc.) • The project will generate useful information that could be used by the public in other parts of the state • The project will promote or sustain long-term commercial economic development for the community This project will include a project road up one or more ridgelines. While the USFS, as the landowner would establish land-use conditions, it is likely that they would allow non-motorized public access (plus motorized project vehicles needed for maintenance work) thereby expanding summertime access for hikers and mountain bikers and wintertime access to backcountry skiers. Strava “heatmaps” of the area show extensive use of a much shorter such road to the north, in all seasons, for recreational access beyond the highway corridor. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 30 of 36 11/16/2021 SECTION 7 – SUSTAINABILITY Describe your plan for operating the completed project so that it will be sustainable throughout its economic life. At a minimum for construction projects, a business and operations plan should be attached and the applicant should describe how it will be implemented. See Section 11. 7.1.1 Operation and Maintenance Demonstrate the capacity to provide for the long-term operation and maintenance of the proposed project for its expected life • Provide examples of success with similar or related long-term operations • Describe the key personnel that will be available for operating and maintaining the infrastructure. • Describe the training plan for existing and future employees to become proficient at operating and maintaining the proposed system. • Describe the systems that will be used to track necessary supplies • Describe the system will be used to ensure that scheduled maintenance is performed The facility will be remotely operated and monitored utilizing HEA’s existing SCADA infrastructure from the existing HEA Dispatch Center which is staffed 24 hours a day, 7 days a week, 365 days a year. Scheduled site inspections, planned and unplanned maintenance will be conducted by HEA’s exiting roving Operations & Maintenance crew that currently maintains and operates HEA’s unmanned thermal generation plants in Nikiski, Soldotna and Seldovia. Existing personnel will provide the labor needed to operate and maintain the facility. Existing company vehicles, tooling and equipment currently utilized by the roving operations and maintenance crew will be utilized to conduct onsite work. HEA operates the Bradley Lake Hydro Facility for the State of Alaska and is experience at operating and maintaining equipment in remote areas. HEA would use its existing maintenance scheduling, inventory control, outage scheduling, warehousing and accounting procedures to coordinate and track scheduled and unscheduled maintenance on these new assets. HEA plans to use its own employees to operate and maintain any new generation assets. 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. This generation asset will be owned and operated by AEEC / HEA which will use established and existing utility accounting practices, procedures, financial systems, accounting personnel, and outside independent audits to account for operational and capital costs. HEA rates are set by the member-elected Board of Directors on an annual basis (and modified each mid-year). HEA develops its annual budget to cover all its operational expenses, debt service, fuel costs, and margins required to comply with lender’s loan covenants, HEA’s own capital-credits policy, and sufficient to fund system maintenance and upgrades. Those rates (tariffs) are then reviewed and approved by the Regulatory Commission of Alaska. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 31 of 36 11/16/2021 As part of the existing AEEC / HEA generation fleet revenues would be collected through HEA’s existing monthly billing process and systems. 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) HEA / AEEC expects to add this environmentally-friendly, beneficial, renewable-energy project to AEEC’s generation portfolio without negatively impacting rates. This will depend on the final actual cost of the project, any grants, direct pay tax incentives, legislative appropriations, power- production-incentives, greenhouse-gas, and / or renewable-energy credits received and the capital financing terms of the project. Operational and capital costs will be covered through revenues received from the sale of power to HEA’s members. The purchased-power rates are set by HEA’s member elected Board of Directors and reviewed and approved by the Regulatory Commission of Alaska. Since HEA is a not-for-profit entity, no rate of return is incorporated into the rates that HEA charges its members. HEA provides power at cost plus an allowed RCA specified operational margin. As mentioned above it is HEA’s hope that this project will not increase the HEA’s current rates (https://www.homerelectric.com/member-services/my-bill/rates/) but will provide a downward pressure on rates upon commissioning and into the future. 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. Since the generation asset will be owned and operated by AEEC / HEA which are RCA certificated utilities, no power purchase / sales agreement will be needed. The generation will be incorporated into AEEC’s existing generation portfolio that provides power to HEA members. Since HEA is a not-for-profit entity, no rate of return is incorporated into the rates that HEA charges its members. HEA provides power at cost plus an allowed, RCA-specified operational margin. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 32 of 36 11/16/2021 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. HEA / AEEC plans to specify and solicit quotes for the equipment and resources required to compete the resource assessment. AEEC will continue to engage with landowners. If this grant application makes the cut for what is proposed to the legislature, AEEC will begin the process of pursuing land use permits or a lease required to erect a meteorological tower. AEEC will also pursue other permits required to install the MET tower all in advance of grant award so that come July the resource assessment activities can immediately begin. 8.2 Demand- or Supply-Side Efficiency Upgrades If you have invested in energy efficiency projects that will have a positive impact on the proposed project, and have chosen to not include them in the economic analysis, applicants should provide as much documentation as possible including: 1. Explain how it will improve the success of the RE project 2. Energy efficiency pre and post audit reports, or other appropriate analysis, 3. Invoices for work completed, 4. Photos of the work performed, and/or 5. Any other available verification such as scopes of work, technical drawings, and payroll for work completed internally. HEA/AEEC has installed the largest Battery Energy Storage System (BESS) in Alaska. It has been tested, found able to exceed the maximum discharge rates specified in procurement contracts, and will allow more flexible, efficient operation of our current thermal and future renewable assets. With capacities of 46.5 MW and 93 MWh, this $41M project was untaken to give HEA the ability to bring large intermittent projects online without incurring the costs of rapidly cycling thermal units and without adversely affecting the Railbelt grid. SECTION 9 – LOCAL SUPPORT AND OPPOSITION Describe local support and opposition, known or anticipated, for the project. Include letters, resolutions, or other documentation of local support from the community that would benefit from this project. Provide letters of support, memorandum of understandings, cooperative agreements between the applicant, the utility, local government and project partners. The documentation of support must be dated within one year of the RFA date of November 16, 2021. Please note that letters of support from legislators will not count toward this criterion. Included as Attachment B are letters of support from the following: Erin McKittrick, the Board President, Alaska Electric and Energy Cooperative. Peter Micciche, Alaska State Senator, District O. Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 33 of 36 11/16/2021 Cook Inlet Keeper, environmental advocacy group. Kenai Peninsula Economic Development District. Resolution supporting the project from the Kenai Peninsula Borough Resilience and Security Advisory Commission. SECTION 10 – COMPLIANCE WITH OTHER AWARDS Identify other grants that may have been previously awarded to the Applicant by AEA for this or any other project. Describe the degree you have been able to meet the requirements of previous grants including project deadlines, reporting, and information requests. Homer Electric Association through its wholly own subsidiary Kenai Hydro, completed some Phase I Reconnaissance studies, which were completed in January 2009 and were partially funded by a $100,000 AEA grant. Kenai Hydro received partial funding for Phase II activities in the amount of $2,000,000 through two separate awards of $816,000 and of $1,184,400 through AEA Renewable Energy Grants. Kenai Hydro complied with all terms of the grant agreements from previously award grants, which included timely quarterly progress reports, delivery of agreed upon deliverables, and closeout of the grants. 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. Attachment D: Summit Lake Wind Site Reconnaissance Data SECTION 12 – LIST OF ADDITIONAL DOCUMENTATION SUBMITTED FOR CONSIDERATION In the space below, please provide a list of additional information submitted for consideration. Attachment A: Resumes, submitted as a separate file Attachment C: Board Resolution & Authorization Attachment E: BESS Informational Flyer Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 31 of 33 11/16/2021 SECTION 13 – AUTHORIZED SIGNERS FORM Community/Grantee Name: Regular Election is held: Date: Authorized Grant Signer(s): Printed Name Title Term Signature I authorize the above person(s) to sign Grant Documents: (Must be authorized by the highest ranking organization/community/municipal official) Printed Name Title Term Signature Grantee Contact Information: Mailing Address: Phone Number: Fax Number: Email Address: Federal Tax ID #: Please submit an updated form whenever there is a change to the above information. Bradley P. Janorschke General Manager N/A 907-235-8551 907-235-3323 Alaska Electric & Energy Cooperative, Inc Annually June 3977 Lake Street, Homer, AK 99603 bjanorschke@homerelectric.com 92-0177236 Bradley P. Janorschke General Manager N/A 907-235-8551 907-235-3323 Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 32 of 33 11/16/2021 SECTION 14 – ADDITIONAL DOCUMENTATION AND CERTIFICATION SUBMIT THE FOLLOWING DOCUMENTS WITH YOUR APPLICATION: A. Contact information and resumes of Applicant’s Project Manager, Project Accountant(s), key staff, partners, consultants, and suppliers per application form Section 3.1, 3.4 and 3.6. Applicants are asked to provide resumes submitted with applications in separate electronic documents if the individuals do not want their resumes posted to the project web site. B. Letters or resolutions demonstrating local support per application form Section 9. C. For projects involving heat: Most recent invoice demonstrating the cost of heating fuel for the building(s) impacted by the project. D. Governing Body Resolution or other formal action taken by the applicant’s governing body or management per RFA Section 1.4 that: • Commits the organization to provide the matching resources for project at the match amounts indicated in the application. • Authorizes the individual who signs the application has the authority to commit the organization to the obligations under the grant. • Provides as point of contact to represent the applicant for purposes of this application. • Certifies the applicant is in compliance with applicable federal, state, and local, laws including existing credit and federal tax obligations. E. An electronic version of the entire application on CD or other electronic media, per RFA Section 1.7. F. CERTIFICATION The undersigned certifies that this application for a renewable energy grant is truthful and correct, and that the applicant is in compliance with, and will continue to comply with, all federal and state laws including existing credit and federal tax obligations and that they can indeed commit the entity to these obligations. Print Name Signature Title Date Bradley P. Janorschke General Manager January 18, 2022 Renewable Energy Fund Round 14 Grant Application – Standard Form AEA 23001 Page 36 of 36 11/16/2021 AEEC Summit Lake Wind REF Round 14 Application Attachment A: Resumes (attached as a separate file) AEEC Summit Lake Wind REF Round 14 Application Attachment B: Letters of Local Support To whom it may concern, Homer Electric Association (HEA) is a member-owned electric cooperative serving customers on the Kenai Peninsula, governed by a nine-member board. As a democratically elected body, our board represents the interests of HEA’s more than 24,000 members, and speaks on their behalf. In our commitment to providing affordable and reliable electricity, we regularly review the cooperative’s finances, analyzing cost drivers, risks, and opportunities. Natural gas costs are responsible for around a third of members’ bills. This gas is only available from a single source, and at the time of our last contract negotiation, only from a single provider. The board has determined that this reliance on a single energy source is a substantial risk to our members. We have created an ambitious renewable energy policy to address this issue, seeking 50% renewable energy by 2025. We have determined that incorporating diverse renewable sources of energy into our energy portfolio will benefit HEA members, reduce our vulnerability to price or supply shocks, and reduce upward pressure on electric rates. Extensive desktop modeling shows that the East Foreland, Ninilchik/Anchor Point, Summit Lake, and Caribou Hills sites described in these applications represent opportunities to develop wind energy on the Kenai Peninusla for less than the current costs of gas-fired electricity. HEA’s recent construction of a BESS gives us a significant ability to integrate this variable energy. To determine feasibility, any wind project needs on-the-ground data from a meteorological tower. I encourage AEA to fund these requests for met tower installations. The resulting data will be critical to HEA’s efforts to diversify our energy sources. Data produced at these sites will be available not just to HEA, but also to other utilities and independent power producers. Railbelt utilities are doing substantial work to coordinate planning efforts and improve transmission. Any wind energy development resulting from these studies will benefit HEA members, and may have the potential to benefit electricity customers across the Railbelt. Sincerely, Erin McKittrick Board President, Alaska Electric and Energy Cooperative (Alaska Electric and Energy Cooperative is a generation and transmission cooperative with HEA as it’s sole member, sharing a governing body. AEEC is responsible for generating and providing all the energy to HEA) Session Address: Alaska State Capitol, Rm. 111 Juneau, Alaska 99801-1182 Phone: (907) 465-2828 Toll Free: (800) 964-5733 Interim Address: 145 Main Street Loop, Ste. 226 Kenai, Alaska 99611-7771 Phone: (907) 283-7996 Fax: (907) 283-8127 Senator Peter A. Micciche Alaska State Legislature President of the Senate Senator.Peter.Micciche@akleg.gov January 17,2022 Grants Administrator Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 Dear Administrator: I support Homer Electric Association's request for grant funding of feasibility analyses of prospective wind-energy generation sites in the Caribou Hills, Ninilchik/Anchor Point, East Foreland, and Summit Lake areas. Any one of these projects could almost double HEA's renewable energy portfolio and assist the State of Alaska and the Cooperative's goals to produce 50 percent of Alaska's electrical energy from renewable resources by 2025. While no single project will meet these goals, a diverse portfolio of inexpensive intermittent wind and solar energy with firm hydro and natural-gas generation is likely to provide the lowest cost of reliable power. As a practical matter, integrating all or some of these projects into HEA’s energy portfolio results in supply diversification from HEA’s current 86% dependency on a single vendor and results in energy security. This project is consistent with the State of Alaska’s own renewable energy goal and the HEA’s Board of Director’s goal to produce 50 percent of their electrical energy from renewable resources by 2025. Any of these projects that advance to completion could be a significant portion of those goals. Golden Valley Electric Association receives wind energy from Eva Creek; Chugach and Matanuska Electric from Fire Island, and Kodiak has achieved lower energy costs through their Senator.Peter.Micciche@akleg.gov combination of wind and hydro. Homer Electric staff are hopeful that these prospects offer as good or better economics due to their proximity to existing roads and/or transmission and good to great wind resources which hopefully can be confirmed through these proposed feasibility studies. I appreciate the efforts of Homer Electric Association to bring renewable energy to the Kenai Peninsula and believe these wind resources studies deserve to be ranked highly in the Round XIV of the Alaska Energy Authority's Renewable Energy Grant Program. Thank you for your consideration of this funding request. Sincerely, Senator Peter A. Micciche District O Grants Administrator Alaska Energy Authority 813 West Northern Lights Blvd. Anchorage, AK 99503 January 15, 2022 Dear Alaska Energy Authority Grants Administrator: As a community organization with a mission to protect the Cook Inlet watershed and the life it sustains, Cook Inletkeeper fully supports Homer Electric Association's Renewable Energy Fund grant application for feasibility analyses of prospective wind energy sites in the Caribou Hills, Ninilchik/Anchor Point, East Forelands, and Summit Lake areas. Bringing wind power to the Kenai Peninsula would help lower energy prices currently being driven upward by the economics of Cook Inlet natural gas. HEA’s generation is 85% gas-fired, and a sole producer, Hilcorp, is able to meet the utility’s requirements for delivering that gas. Depending on deliverability of a single fuel from a single company makes the Kenai Peninsula’s energy system highly vulnerable to both physical disruptions and to market conditions that in recent decades have made local gas much more expensive than in the Lower 48. Diversifying HEA's energy sources will strongly benefit Kenai Peninsula homes and businesses. Wind generation, and the storage needed for the grid to support its variable output, are both mature technologies ripe for deployment. As of 2020, analysts have ranked wind facilities among those with the lowest levelized cost of power – a measure of a project’s lifetime cost divided by its lifetime energy production. In Alaska, large-scale wind generation has been successfully built on Fire Island, Eva Creek, and Kodiak, where a combination of wind and hydropower has drastically lowered energy costs. If explored and developed, the peninsula's largely untapped wind resources can contribute significantly to the goal, held by both HEA and the state, of achieving 50% renewable energy by 2025. HEA has carefully chosen its four study sites to balance energy potential with the logistical costs of study and construction – placing them near existing roads and/or transmission – making them cost-effective opportunities to start bringing wind generation to the Kenai Peninsula. If built alongside dispatchable storage and hydroelectricity, intermittent wind and solar power can give HEA a diverse, economical generation portfolio that counters the inflation of energy prices, unshackles the energy we rely on from a unstable and increasingly expensive gas market, and phases out climate- damaging carbon emissions. HEA’s wind exploration plans are important steps to these worthy goals, and deserve a high ranking in your Renewable Energy Fund recommendations to the legislature. Sincerely, Sue Mauger, Science & Executive Director Kaitlin Vadla, Central Peninsula Regional Director Ben Boettger, Energy Organizer AEEC Summit Lake Wind REF Round 14 Application Attachment C: Board Resolution & Authorization Alaska Electric and Energy Cooperative, Inc. 3977 Lake Street  Homer, Alaska 99603  (907) 235-8551 RESOLUTION 01.2022.01 GRANT FUNDING AUTHORIZATION FOR SUMMIT LAKE WIND PROJECT BE IT RESOLVED that Alaska Electric & Energy Cooperative, Inc. (AEEC) hereby authorizes the General Manager to proceed with the Alaska Energy Authority (AEA) application process to seek grant funding for the Summit Lake Wind project. CERTIFICATION I, Jim Duffield, do hereby certify that I am the Secretary/Treasurer of Alaska Electric & Energy Cooperative, Inc., and that the foregoing resolution was adopted at a meeting of the Directors of Alaska Electric & Energy Cooperative, Inc., held on January 11, 2022, at which meeting a quorum was present. Jim Duffield, Secretary/Treasurer Alaska Electric and Energy Cooperative, Inc. 3977 Lake Street  Homer, Alaska 99603  (907) 235-8551 CERTIFICATE OF GENERAL MANAGER OF ALASKA ELECTRIC AND ENERGY COOPERATIVE, INC. (AEEC) IN SUPPORT OF SUMMIT LAKE WIND PROJECT GRANT APPLICATION I am the General Manager of Alaska Electric and Energy Cooperative, Inc. (the “Cooperative”). I am authorized by the Board of Directors of the Cooperative pursuant to Board Policy 203, and by formal action of the Board of Directors of the Cooperative at a meeting held on January 11, 2022 to certify as follows: 1.The Board of Directors of the Cooperative has authorized the application for project funding and agrees that the Cooperative will honor the match amounts contained in the application to which this certificate is attached. 2.The Cooperative is in good standing with respect to any existing credit and federal tax obligations. Signed and dated in Kenai, Alaska, on January 11, 2022. ____________________________________ Bradley P. Janorschke General Manager AEEC Summit Lake Wind REF Round 14 Application Attachment D: Summit Lake Wind Site Reconnaissance Data 3 Site elevation (m) 1363 Wind class S Wind speed (m/s) 14 Net capacity factor (%) 48.3 Site access conditions 3 (fair) BoP conditions 3 (fair) Interconnection conditions 3 (fair) Site 2 4 old 5 6 AEEC Summit Lake Wind REF Round 14 Application Attachment E: BESS Informational Flyer Battery ENERGY STORAGE SYSTEM potential savings Fuel Reduction: 477,074 MCF/yr CO2 Total Reduction: 28,320.35 tons/yr CO2 Reduction/Day: 77.59 tons/day Fuel Efficiency Increase: 11.49% (*Based on actual vs. modeled for January - June 2019) For more details contact: Brad Janorschke HEA General Manager (907) 283-2312 bjanorschke@ homerelectric.com The BESS Project is a 93 megawatt hour (MWh) energy storage system sited at our Soldotna, Alaska Facilities as depicted above. BESS will be in service in late 2021 and has a projected cost of $38 million. BESS site Regulation, spinning reserve and emergency reserve. Integration of renewables (wind, solar, tidal). Islanding or Bradley Lake outages no longer require a second thermal unit. Potential to sell Spin/Regulation. Provides system stability by reducing frequency swings and load sheds. Helps to stabilize energy costs during islanding events. benefitsBATTERY SUPPLY 37 battery units with integrated chargers and inverters, control system and monitoring. 93 mwh storage 46 mw for 2 hours delivered power soldotna combustion turbine facility soldotna substation Alaska Electric & Energy Cooperative, Inc.